How a Tech Journalist and a Music Producer Built a Multi-Million Pound Sex Toy Company

Lovehoney is the UK’s biggest online adult retailer and currently employs over 170 staff. According to their website, 1 in 3 sex toys sold in the UK comes from their warehouse in Bath. I caught up with founders Richard Longhurst and Neal Slateford to take a look back at their startup days and understand how the once journalist and music producer came to found a multi-million pound sex toy company…

Richard, who is the former editor of .net magazine and PC Format, said the pair knew they wanted to work in e-commerce before the idea for Lovehoney was born…

RL: “When I was little I always wanted to have a shop and sell things and because we were internet nerds it was fitting to have a shop on the internet. The attraction of building websites is like having an ant farm, you build something and you let all the ants, all the people, crawl all over it and see what they do.”

As Neal, a former music producer (and one half of DNA), is quick to point out, there wasn’t a huge amount of e-commerce sites back in 2002…

NS: “It was quite difficult then because there weren’t loads of agencies around. There were a few but they were incredibly expensive, so if you wanted to get a website made you had to chuck £100,000 at it. We thought we had a bit of an advantage because we knew lots of people from Future [Future Plc where Neal and Richard worked for a time] who could do it for cheap basically.”

The idea behind Lovehoney came when Richard decided to add an adult section to an online shopping directory he was working on…

RL: “I already told you where you could buy a lawnmower or a new pair of trousers or some shoes, so I thought okay, I’ll add in some adult shops. What I noticed about them was that they were all technically very, very bad, really bad functionality, really, really bad design, really hard to navigate and they presented the product information very, very badly. They didn’t describe the products in any way and didn’t even have photographs of the sex toys out of their boxes so you couldn’t even see what you were buying. Customer service was awful and they wouldn’t ever promise a dispatch date, and would say things like ‘oh if we don’t have it in stock we’ll just send you something else and that’s tough tits’.”

The more Richard looked into the adult e-commerce industry, the more he realised just what a profitable market it was…

RL: “They [the retailers] also had affiliate schemes where you could earn a commission on referred sales. Amazon typically will pay you 5% commission on referred sales but these sites were paying 25% and were awful! That was a lightbulb moment, like hang on a minute, if they can afford to pay me 25% for sending them a sale, well they must be making an absolute fortune.”

And it wasn’t just other online adult retailers that demonstrated a gap in the market says Neal…

NS: “We knew that the stuff was high margin… we went to Erotica, a sort of consumer show, just for research and it was all that stuff that was on those websites, all this dreadful packaging, people with trestle tables, just awful. And it [the show] was packed and people were just thrusting money at it so we thought we only have to be half decent to be measurably better than anyone else.”

While Neal and Richard had clearly identified a gap in the market, I was interested to know how they had felt about their careers in adult retail. Did they have a real passion for sex toys, and if not, how were they so passionate in their work?

RL: “I think on the passion side of it, it was the passion for being nerds and the e-commerce end and the joy of just producing a website. It didn’t really matter what it sold. Fun for us back in the day was go home, browse the internet and read all the e-commerce blogs and web development blogs… For startups I would say certainly do something you’re interested in because I think it will make a very long day if you were having to spend a lot of time on a business you had no interest in. It’s easier to be passionate about something you’re interested in. It helped that there were 2 of us, certainly because then you can either get twice as much done or only have to do half as much.”

NS: “We’d had people say ‘to start your own business you’re going to have to work 28 hours a day and its going be an awful struggle blah blah blah’, but this certainly wasn’t the case with us. When we started, we used to work 9-5 and we work even less now.”

It wasn’t always going to be sex toys says Neal, but he does admit that working in the industry provides the pair with plenty of laughs…

NS: “We looked into lots of different things, we looked at cross stitching, quite seriously, and we looked at retro kids toys as well, but we just thought sex toys would be more of a laugh. I’m passionate about growing the business and having fun. It’s exciting to see the business growing and to look at all of the new things we can do. It’s nice making things and now we’re designing and manufacturing stuff. It’s great to be able to come up with an idea or do a deal and then see that through to it being sold in thousands of places. That’s very satisfying. I guess because it’s sex, it’s just funny. It would have been more fun than cross stitching.”

Back in the early days of Lovehoney, Neal and Richard were having to work part time to supplement their venture. I wanted to know how they decided to take the leap and commit to Lovehoney full time…

RL: “We didn’t have enough money coming in [from part time jobs], so we just got to the point, maybe six months in, and said if we’re going to make a go of this we’ve got to give it our full attention. So we both agreed to shelve any other work that we were doing and just stick it into Lovehoney and live off our savings.”

NS: “I think within about 3 months, maybe even sooner than that, I remember sending an email to Rich saying ‘I think we’re on to something here’. In April that year, when we sold our first one, we had 3 orders and then by July we had about 250, and August was nearly 400. By the end of the first year we were up to 1000 orders a month, £37,000 in revenue.”

So what made Lovehoney so popular? How did they stand out against their competitors?

NS: “We both make each other laugh and we both think we’re funny. Our natural instinct is to make a joke about everything. When we came along, as far as this market was concerned, it was pornographic: ‘she’s gonna love it, give it to her hard, etc’. We wanted to diffuse it by saying ‘well, look sex is about fun’ and that was our pitch really. We always tried to make it pretty lighthearted and we always refer to customers as ‘you and your partner’ rather than ‘him and her’ or making any assumptions about how people were sexually orientated. You want it to be fun, don’t you?”