The entrepreneur who gave his own money away to strangers to hit the jackpot
8 min read
09 October 2015
It’s a phrase that is normally associated with bad media headlines and political controversy, but for former graphic designer Chris Holbrook, “Post Code Lottery” has been very good news.
He founded freepostcodelottery.com in 2001 and has seen growth rates of 300 per cent year-on-year. The company organises a free prize draw held every day and players sign up free of charge on the site with their postcode and then check every day to see if they’ve won.
The prize is £150 per day and it rolls over if unclaimed and, with more than 120,000 daily unique users now, Holbrook has given away £83,000 since the site started just a few years ago. All of the revenue is from advertising, offers and surveys that appear on the site.
Holbrook started the company while working as a full-time web developer by giving away £10 per day to a randomly selected, computer-generated postcode. Since then, the user base has exploded to over 100,000 per day and he now sends out over £220 per day, or £80,000 per annum, for a main draw plus some smaller draws. Holbrook has now left his job to focus on FPL which is making enough profit to support his London-based family.
“I had the idea in my head for a while and I felt like I was turning into one of those people who talks about ‘their great idea’ all the time instead of actually doing it,” he said. “I had no idea FreePostcodeLottery.com would become as successful as it has. It was more about getting it done than wanting to be a successful entrepreneur.”
In 2007 he was listening to the news on the radio about a cancer drug called Herceptin. The reporter described its provision by the NHS as a “postcode lottery”. “I had recently admired a website called the milliondollarhomepage.com, which sold one million pixels of advertising space to individual advertisers for one million dollars,” says Holbrook. “The two things sparked in my head and four years later FreePostcodeLottery.com was born.”
He had come to London to pursue a career as a freelance web developer, having left his job in marketing. The two skill sets have become extremely useful in getting FreePostcodeLottery.com off the ground, while investment for the new site came largely from his own pocket.
“I had all the necessary skills to get the site built – it just took a lot of time to get it out there,” he recalled. The only costs, apart from hosting, were £10 per day as that was the starting daily prize fund. It took six months to build up enough traffic to make back the daily £10 in advertising revenue and he pointed out that, until then, he was effectively giving his money to strangers every day.
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However, that situation changed as awareness of the site grew. “I think the idea of an ad-funded free online lottery was a good one and, at the time at least, a novel one,” he said. “But I think the reason it’s been successful is because I wouldn’t allow it not to be. I have an obsessive quality which is sometimes a deficiency when I set my mind to getting something done.
“I remember when the daily signups fell below expectations I taught myself PR. I would find and follow influential personal finance bloggers on Twitter about featuring FreePostcodeLottery.com – for example Nick Smith from FreeStuff.co.uk who saw the potential very early on and posted about it.”
As users joined up they started to form a community around the site, which has really helped with engagement and retention, so much so that the site won the award for Best Website in the Communities category in the Website of the Year Awards last year. It is now these users that are helping Holbrook to get the word out and moderate comments from others.
One frustration is that FreePostcodeLottery.com is constantly pigeon-holed as a gambling website although, as Holbrook is keen to point out, since it’s free it can’t really be described as gambling. He has even gone out of his way to block gambling advertisers.
The regulator, the BBFC, has classified FreePostcodeLottery.com as a “gambling” website and this means users often find it blocked on public WiFi spots and even on their own mobile networks. Google won’t allow him to advertise through them unless he obtains a gambling licence, something he describes as “just weird.”
“The most difficult thing I face is still the same as it always was,” he said. And it’s one that many businesses face. “Bad feedback still hurts. Quite often someone will get the wrong end of the stick and assume that I’m up to no good and either post a comment or send an accusatory email. The can easily be offset by the much more plentiful supply of lovely comments, compliments, and even poems! But it still bothers me,” he admitted.
His solution to this and other challenges is simple. “I’ve found that being authentic really helps,” he says. “People like a story and a real person. Since I started showing my face, talking to my users and using my real name, the community has flourished around me. I jokingly refer to them as my “army” now, but there’s a lot of truth to it.”
Holbrook believes that there’s a long way to go to grow the user base and increase the prize fund in the UK. “I estimate that we can grow 50 to 100 times bigger over the next five years and be giving away tens of thousands of pounds every day,” he said.
“Secondly, there are plans for international expansion. I’ll be launching a site in Germany in the coming months, with a US version to follow shortly after.” Given its success so far, the further expansion of FreePostcodeLottery.com looks like a pretty safe bet.