My first million: how to turn a hangover into £3.5m

Mike Anstey's idea for salon entertainment came to him on a visit to the hairdresser following a heavy night. And it soon became clear that he'd spotted a profitable gap in the market.

In 2002 an electronics consultant with a hangover, Mike Anstey, sat in a hair salon, "with a fairly woolly head from a Friday night, and not in a great frame of mind to be conversing and looking at myself in the mirror". Wouldn't it be nice, he thought to himself, if instead of doing that he could retreat into himself with an interactive touch screen of some kind? It sounds like a rather weak basis for a business, but with a bit more thought, Anstey had convinced himself that there was a gap in the market for salon entertainment. It might not be the best reflection of our introverted times, he says, but these days people want to watch what they want to watch, "in their own space".

Anstey contacted manufacturers in Malaysia and China who could provide him with the correct screens and software. Then he sold his house, nagged his friends and family for cash, and ended up with start-up capital of £160,000. A comprehensive business plan was put together and pitched to some of the big names in the hair industry L'Oral and Wella. Both brands wanted the opportunity to sell their own products to a captive audience' through an interactive service. They came on board, followed soon after by Audi and Now Magazine, whose advertising would be carried on the wireless network. Within six months of starting in 2003, Anstey had 60 screens in six salons, with revenue streams coming from sponsorship, competitions, and a variety of companies advertising their wares on the small LCD screens he'd now installed. "We've got six or seven different strong revenue streams, which makes it powerful."

By 2004, Anstey had raised another £1m to install a further 500 screens in 100 salons. "The joy with I-Vu at the time, and this is still the case today, is that it was small and niche-y, but with the opportunity to be massively scaleable, which is the key element here...there are 23,500 hair salons in the UK. The only companies with more locations are newsagents."

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Next came expansion into the US, where contacts with the likes of L'Oral and Toni & Guy helped I-Vu set up an initial 600 screens. That total now stands at 7,000 and counting. And with 500,000 hair salons in America, the opportunities for expansion are huge. This explains how I-Vu took only six months to raise another £40m from a group of private investors to fund their expansion into Europe, further into the US and even into the Middle East between now and 2010. "We want to be the biggest network outside TV which is a fairly significant statement", he says. Turning over just £3.5m today, it's certainly an ambitious one.

"But you know, we have to have those statements, we're probably the only network that can do it, because of the scaleability options." He seems pretty convinced of this, but then why shouldn't he? Five years ago his biggest market was the UK, now it's the US, where he's already sold twice as many screens. "We are very pleased, we do expect the US to be a major market for us. But you know we don't want to be tempting fate."

Jody Clarke

Jody studied at the University of Limerick and she has been a senior writer for MoneyWeek for more than 15 years. Jody is experienced in interviewing, for example in her time she has dug into the lives of an ex-M15 agent and quirky business owners who have made millions. Jody’s other areas of expertise include advice on funds, stocks and house prices.