Description
Unlocking The Potential Of The UKs Hidden Innovators
Unlocking the potential of the UK’s Hidden Innovators
April 2008
Julie Logan, Chris Hendry, Nigel Courtney, James Brown
Cass Business School, City University London
2 3 Unlocking the potential of the UK’s Hidden Innovators
Contents
Introduction by Gordon Frazer, Microsoft UK 4
Executive summary 5
Report context and objectives 8
Barriers and enablers for Hidden Innovators 22
People who become entrepreneurs at 50+ 22
UK citizens of Indian origin 25
Entrepreneurs who have a disability 28
Insights and recommendations 32
Annex A: Innovation and the Entrepreneurship Process 36
Annex B: Interview brief 37
Annex C: The collection of case studies 38
Acknowledgments
We would like to thank all of our case study respondents
(they are listed in the text) and all of those who attended
the focus groups.
We would also like to thank Professor Monder Ram, Prime, the
British Dyslexia Association, Action for the Blind, Xtraordinary
People and TIE (The Indus Entrepreneurs) for their support.
The potential economic contribution of Hidden Innovators 12
The secrets of success 14
A version of the report suitable for visually impaired individuals can be downloaded from:
www.cass.city.ac.uk/centive/current/entrepreneurship_innovation.html
5 Unlocking the potential of the UK’s Hidden Innovators 4 Unlocking the potential of the UK’s Hidden Innovators
The Enterprise Strategy Whitepaper launched
in March by the Department for Business,
Enterprise and Regulatory Reform highlighted
the need for the UK to create a culture of
Enterprise, Innovation and Creativity. We firmly
believe in that need and support these goals.
Our role as a technology leader is to help foster
and sustain the conditions in which individuals,
teams and organisations can continue to grow
and prosper – discovering new answers to the
personal and business challenges of our time.
An entrepreneurial mindset can not so much be taught
in our schools and universities, although they do have
an important role to play, but needs to be nurtured
through all parts of our culture today. We have
developed a tendency to imagine that it is only the
younger members of our society who have novel ideas
or are able to establish creative businesses. This is
simply not the case, but although the evidence is clear
that older entrepreneurs create more sustainable
companies for example, we are still struggling to adapt
our thinking. At Microsoft, we want to support all parts
of society towards achieving their ambitions.
I believe that creating a renewed culture of
entrepreneurialism and innovation requires four key
elements. It needs relevant and accessible role models,
it needs an effective and targeted business support
framework, it needs a simple regulatory environment
and above all it requires individuals to have the
confidence in their experience, in their networks and in
their desire to take an idea and run with it. One of the
ways in which we help people realise their goals is
through the support we give to entrepreneurs – start
ups, small businesses and social enterprises.
As an enabler of innovation and entrepreneurialism,
technology is an extremely powerful tool. It provides a
platform on which new ideas can be built, it breaks
down barriers to entry for new businesses and allows
access to markets far beyond traditional boundaries.
However, it is not a panacea. As this report shows it is
the people who make their businesses successful, who
take on challenges and keep looking for solutions until
they have overcome them.
In commissioning this research with Cass Business
School, we wanted to look beyond those elements
already well served with support and encouragement
at the ‘Hidden Innovators’, the areas of our society that
have in the past been marginalised but which will be a
rich source of fresh thinking in the future. I hope that
their insights and experiences can be a guide and
inspiration.
As the demographics of the UK change and as we move
towards a predominantly knowledge based economy
we need to encourage all elements of our society to
contribute their ideas, their talents and their enterprise
if we are to maintain our competitive advantage in a
global market. The research shows that by tapping into
our ‘Hidden Innovators’, we could generate an
additional £9 billion for the economy by 2012.
At Microsoft, our mission is to help businesses and
people realise their full potential and we are committed
to helping the UK to become an innovation powerhouse
on the world stage. Our software and tools both online
and offline help people and businesses to be successful
every day. Through our partner community and R&D
investments, we facilitate and encourage innovation to
spread and grow. Equipping people with the skills to
harness technology effectively is a key priority for us
and we are working hard through developments in the
latest Windows, Office and SharePoint technologies to
make our platform and software as accessible as
possible to all groups in society.
I hope you find this report stimulating and a useful
contribution to informing new thinking about how we
create an enduring and inclusive innovation culture
across the UK.
The economic context
The technology revolution has meant that Britain is moving
quickly towards a knowledge based economy. Taking a lead from
the US, where entrepreneurship accounts for 80% of new jobs
created and is a driving force for innovation, the UK government
has funded a variety of initiatives aimed at stimulating
entrepreneurship and innovation, particularly in the young.
These initiatives will produce a new generation of entrepreneurs.
But what of others in the UK who are talented, have ideas and
could help us compete?
The UK is a diverse society made up of many minority groups.
Some are very entrepreneurial and have embraced the innovation
agenda. Others have not pursued opportunities. What could be
done to unlock the innovation and entrepreneurial potential of
all UK citizens?
Research goals
This study sets out to investigate how all groups could become
involved in the innovation agenda. The study also examines the
economic potential of some of these groups.
Three groups were chosen to represent the many diverse
minorities that exist within the UK:
• UK citizens of Indian origin
• People with a disability
• People who become entrepreneurs at 50+
Research findings
The cases profile the experiences of these successful
entrepreneurs and the lessons they learnt in the course of
bringing innovations to market. They bring out issues that are
distinctive to these groups and suggest how the UK can make
greater use of their potential contribution. However, although
the problems they face are distinctive the value of looking at such
different groups is that it can also highlight common issues for
UK culture, institutions and policy. The experiences of these three
groups suggest a number of ways in which the innovation
agenda and entrepreneurship can be advanced in the UK:
Recommendations
Make financial support and investment more
equitable across all groups
It is good to see that the Government’s new Enterprise Strategy
references targeted support for the over 50s. Although the details
are thin at this stage, we would urge policy makers to provide
equivalent support to the over 50s as they do to younger people.
According to Prime, after three years, the success rate for business
start-ups is 70% for over 50’s compared to 28% for younger
groups. The report demonstrates that a well resourced and
targeted approach to supporting ethnic minority groups has
paid significant dividends to date.
Business support services must take diversity seriously
It is essential to ‘take diversity seriously’. Those from minority
groups can become successful innovators and entrepreneurs and
have much to offer the UK, but they may need tailored business
support. In addition, advisors need awareness training; it is not
helpful to tell a disabled potential entrepreneur they would be
better ‘to stay on benefits’.
Government should strive to change the
image of entrepreneurship
For many making money is not the primary reason for starting a
company. Entrepreneurs are often motivated by an altruistic goal
– the desire to make a difference or do something that produces
social benefits. There is also a need to make entrepreneurship
sound less macho. We are constantly told that entrepreneurs
work 24/7 which prevents many groups from considering
entrepreneurship as an option. Carers, older people and the
disabled can create successful ventures even if they are part
time, and new technology provides a platform.
It is essential to get the message out via the media that
entrepreneurship is for all and the reasons for taking part can
be about improving society, making a difference or fulfiling
a dream as well as making money.
Introduction
by Gordon Frazer,
Managing Director, Microsoft UK
Executive summary
We must build the entrepreneurial
self confidence of the UK. This is
particularly important for minority
groups who may already feel at
a disadvantage.
Creating an enterprise culture for the many
7 Unlocking the potential of the UK’s Hidden Innovators 6 Unlocking the potential of the UK’s Hidden Innovators
Encourage improvement as well as innovation
Innovation may be the recipe for economic well being, but by
focusing so much attention on innovation, people who think their
ideas are insufficiently ‘innovative’, can be discouraged from
starting ventures. They too, can contribute to the vitality of the
UK economy. We should also profile successful entrepreneurs
who have built companies based on incremental improvements.
Build the entrepreneurial self confidence of the
nation and of minority groups in particular
We must build the entrepreneurial self confidence of the UK. This
is particularly important for minority groups who may already feel
at a disadvantage. An individual’s entrepreneurial self confidence
can be increased by a combination of appropriate role models
to inspire, mentoring and coaching, training opportunities
to practice enterprise skills, and experiential learning.
The need for tailored encouragement and support
• The need to provide role models to inspire
The problem for minority groups is that they may lack relevant
role models. Role models need to be similar in background
so that individuals can visualise their own pathway to success
(such as Levi Roots, well known for his “Reggae Reggae Sauce”
venture as featured on Dragon’s Den).
• The need for tailored support
Practical support also needs to be tailored to specific
requirements. For example, older entrepreneurs often need
particular encouragement and positive reinforcement that their
business idea will work. The organisation known as PRIME (the
Prince’s Initiative for Mature Enterprise) fulfils a valuable role
here through its understanding of their needs and motivations.
We need more organisations such as this.
• Appropriate coaching and mentoring and improved
training for advisors
Small business advisors often lack experience in new venture
creation, and are therefore unable to respond usefully to the
particular and immediate problems new entrepreneurs require
help with. This implies better training for business advisors and
a different pattern of recruitment by encouraging more serial
entrepreneurs to get involved in coaching and mentoring.
• The need for ongoing business growth mentoring if UK
firms are to grow
Those in this study reported difficulty in finding advice when
they experienced typical growth problems, such as managing
cash flow, broadening their skill base, and recruiting the right
people. There is a need for ongoing support as the venture
develops. ICT could play an important role here; online
mentoring may provide a solution, offering access to
experienced mentors on a needs basis.
• The need for a continuum of support
It is important, that policy makers recognise the multifaceted
character of ‘advice’ – from signposting and information,
through to coaching and mentoring and that this support is
provided as the entrepreneur progresses along his/her pathway
to success.
Entrepreneurship and self employment
It is necessary to differentiate between entrepreneurship and self
employment and tailor policy to meet the needs of each group.
Both are important to the nation, but for many years
entrepreneurship has been treated as a way out of unemployment
and policy has been developed to facilitate this agenda.
Entrepreneurship is now linked to the knowledge economy and
policy must be tailored to this aim if we are to encourage our
most innovative and entrepreneurial start ups.
The economic case
If just 10% of the 8 million economically inactive could move
into self-employment as entrepreneurs, based upon Prime figures
there would be an increase in GDP of over £56 billion. (Average
turnover of businesses run by the PRIME group of £70,000
1
)
Targeted support for the Black and Minority Ethnic (BME)
community together with similar support for the over 50’s could
produce an additional £9 billion for the economy. This assumes a
50% survival rate for BME businesses (BME founders from all age
groups), and a 70% survival rate for the over 50’s. (PRIME data
suggests that whilst that companies founded by younger
entrepreneurs have a failure rate of up to 72%, those started
by older entrepreneurs have a 70% survival rate
2
).
Executive summary
1
Prime 2004 Towards a
50+ Enterprise Culture –
www.primeinitiative.org.
uk
2
Prime op cit
It is essential to get the
message out via the media that
entrepreneurship is for all and the
reasons for taking part can be
about improving society, making
a difference or fulfiling a dream
as well as making money.
8 Unlocking the potential of the UK’s Hidden Innovators 9 Unlocking the potential of the UK’s Hidden Innovators
Report context and objectives
The competitive
challenge for the UK
The global economic context
The technology and communications revolution is fundamentally
changing the nature of the global economy. The shift towards
knowledge-based jobs is contributing to a 21st Century work
revolution, placing a greater emphasis on innovation, skills and
the creative economy, driven by entrepreneurial small and
medium-sized businesses.
To ensure future competitiveness, the UK faces a number
of opportunities and challenges:
• Adapting to an increasingly knowledge-based economy
• Fostering a climate that supports and enables innovation
and entrepreneurship
• Ensuring the right mix of skills and a ready supply
of innovators and entrepreneurs
• Managing significant societal shifts in terms of an ageing
population and a fast-changing ethnic mix
In the US, entrepreneurship accounts for 80% of new jobs created
and is a driving force for innovation. During the past ten years
the UK government has focused on the development of the
knowledge economy as the key to economic growth, and much
is being done to encourage entrepreneurship and innovation
to replicate successful US initiatives. For example, Regional
Development Agencies are promoting and supporting new
venture creation, and universities have been provided with
funding so they can develop the infrastructure to support
academic researchers in science and technology to
commercialise their inventions.
Government organisations have been established to promote
research and development of new technologies within the life
science and IT industries. In addition, much support is being
given to Small and Medium sized businesses.
Unlocking the innovation/entrepreneurial
potential of all groups
But where do we find the talented people who will continue
to makes these ideas happen and help us compete?
There has been a particular focus on encouraging young people
to develop enterprising skills and embrace new opportunities
for innovation. A range of new initiatives has been launched
targeting the innovators of the future. The work of organisations
such as NESTA and Enterprise Insight has raised the nation’s
awareness of the opportunities that exist.
Funding has been provided to Schools and Universities to
encourage them to introduce enterprise teaching as part of the
curriculum, and leading business schools such as Cass Business
School teach students about innovation, product development
and new venture creation.
Organisations such as Young Enterprise and the Prince’s Youth
Business Trust provide coaching and mentoring to encourage the
young to seize new opportunities and embrace entrepreneurship.
These initiatives are successfully promoting innovation, but they
are aimed at a small percentage of the population. University
researchers are increasingly bringing new innovations to the
market place and young people will create the next generation
of innovators and entrepreneurs, particularly once they have some
business experience. But what about the rest of society, could
they be encouraged to embrace entrepreneurship?
Part of the solution must be to make better use of the pools of
talent that have previously been underutilised. In the UK alone,
eight million people regard themselves as unable to work, as the
result of either disability or a combination of enforced early
retirement and redundant skills.
There is a clear need to do more to recognise the talents,
insights and experience of all groups – including older people,
ethnic minorities and the disabled. These include many people
who have proven experience, specific and in-depth marketplace
knowledge, and special insights into serving the needs of
particular customer groups.
Defining innovation
We define innovation as “the successful commercial exploitation
of new ideas”
3
. New firms are a primary source of such innovation,
developing new products and services to meet unmet needs, and
new business models to deliver these in effective, cheaper, more
profitable ways. Information and Communications Technology
(ICT) is often and increasingly core to this innovation in what firms
deliver and how they deliver it. While established large firms are
also a source of innovation, Small-Medium Enterprises (SMEs) are
increasingly outperforming their larger competitors
4
. The creation
and growth of entrepreneurial new firms is thus of crucial
importance to economic dynamism and to innovation in the
economy, and for this reason, they are the focus of this study.
Unlocking the potential of
the UK’s Hidden Innovators
Research goals
This study sets out to investigate how UK society can become
more involved in the innovation agenda, with a focus on the
over 50s, UK Indian entrepreneurs and those with a disability,
to reflect the diverse minorities in the UK today.
It estimates the potential economic value of these “hidden
innovators” to the UK, and gives recommendations on how
we can create the conditions to enable these groups to thrive.
It asks how these groups can be more in touch with the need for
innovation and entrepreneurship, and what will help them. What
factors similarly can influence the creation of new ventures
generally in the UK?
The report also explores how our “hidden innovators” have
latched on to the potential of technology to make their ideas
happen – from being simply a necessary support to the business,
to providing new ways of doing business through the web.
In summary, the study explores the psyche of modern-day Britain
and society’s relationship with innovation. It looks broadly at the
political, economic, sociological and technological conditions
that are necessary for innovation and creativity to flourish, and
examines the pathways and barriers to innovation that exist
for certain of the UK’s minority groups.
Research scope and structure
Based on an analysis of existing data and ‘what if’ scenarios, we
have estimated the potential economic value of these groups.
A key feature of the study is a range of in-depth profiles of
successful entrepreneurs, which provide a first hand insight into
how individuals from each group have managed to overcome
barriers and achieve business success.
First, we examine the secrets of their success, which provide
useful learnings and pathways for others to follow.
Second, we identify issues particular to each of the three
groups, for maximising their potential to greater effect –
including special attributes and resources that equip them
to become entrepreneurs and some of the barriers they have
had to overcome.
These insights, combined with an analysis of existing literature
on the challenges facing these groups, help to inform
recommendations for creating a more inclusive innovation
and entrepreneurial culture in the UK for these and other
groups to thrive.
The report draws together a robust body of knowledge about
the entrepreneurial start-up process and what makes for
entrepreneurial success (See Annex A). Our findings add
new insights to these.
These themes are explored in the interviews with our
entrepreneurs (Annex B), and the resulting in-depth cases
(Annex C) provide rich evidence of the importance of these
issues in a vivid way that we hope is inspirational and instructive.
To test and develop our findings in terms of the wider policy
issues, we also convened a series of focus groups on each of the
three groups. We are most grateful to all those who participated
in both the cases and focus groups.
Report context and objectives
3
Gann & Dodgson,
(2007). Innovation
Technology: How new
technologies are
changing the way we
innovate. London:
NESTA: 7.
4
Developing the Future
(2007). Microsoft, p26.
Part of the solution must be
to make better use of the pools
of talent that have previously
been underutilised.
We are moving to a situation where
people will live longer, be more
active for longer ... and will need to
generate an income.
11 Unlocking the potential of the UK’s Hidden Innovators 10 Unlocking the potential of the UK’s Hidden Innovators
Report context and objectives
The three groups
Three groups were chosen to represent the many diverse
minorities that exist within the UK:
• People who become entrepreneurs at 50+
• UK citizens of Indian origin
• People with a disability
Thirteen case studies featuring successful entrepreneurs from
these three groups were researched to investigate the pathways
and barriers to their success. They were all self-starters, without
the benefit of inherited wealth. They were also all scalable
with growth prospects and ambitions, rather than just
‘life-style’ businesses.
Entrepreneurs at 50+
One in six people in the UK is over sixty-five. By 2031, the average
age of the population will climb from 39 to 44
5
. We
are moving to a situation where people will live longer, be more
active for longer, may require increased healthcare, and will need
to generate an income if they are to have a reasonable quality of
life. In the USA, the over-50s are making a significant contribution
to the innovation and entrepreneurship agenda. They could also
do so in the UK.
The five cases featuring older entrepreneurs are:
Tony Baxter founded Sandcliff AB in 1994 as a consultancy
organisation, advising clients in the public sector on strategic
management issues, with a particular focus on fund raising. Prior
to this he had an early career in the music industry, followed by
a number of senior management positions including the National
Trust and Great Ormond Street Hospital.
Derek Broomfield founded Focus Cooling in 2002. This is an
air-conditioning energy management company that offers
installation and maintenance services to industrial and
commercial customers. Derek’s earlier career had followed a
conventional pattern of apprenticeship followed by engineering
work, culminating in senior management positions in the air
conditioning industry.
Tony Howell started an on-line auction web site for white truffles
in 2007. Previously Tony worked in financial institutions in the City
for a number of years, most recently as a treasury consultant.
He quit this profession in 2005 and became involved in designing
and installing CCTV and control systems for commercial premises,
before setting up whitetruffleauction.com.
Professor Peter Jenner founded Proximagen in 2003 as a
drug discovery and development company, focused on novel
therapeutics to improve the quality of life for patients suffering
from neurodegenerative diseases such as Parkinson’s and
Alzheimer’s disease. Peter is a career scientist who has worked
in this area for many years.
Sally Walton started Carry a Bag in 2006 to manufacture
environmentally friendly shopping bags as an alternative to the
plastic bag. The bags are handmade using strong ‘Fair Trade’
organic cotton ticking lined with recycled home furnishing fabrics.
Sally’s earlier career was in writing and illustrating books on
interior design and arts and crafts products.
UK citizens of Indian origin
The UK is a very diverse society, which receives migrants from
many nations. Some of these nations, such as India, have a
tradition of entrepreneurship. In the US, migrants create more
new ventures than any other group and their contribution to
the knowledge economy through technology-based start-ups is
significant. Whilst migrants are making a valuable contribution
to the UK economy, the percentage of start-ups – particularly
technology-based start-ups – has until recently lagged behind
that of other groups. Furthermore, the level of innovation and
entrepreneurship exhibited by different ethnic minority groups is
very varied. Indian entrepreneurs have been relatively successful
in the UK. By exploring their pathways and barriers to innovation
we seek to learn how other ethnic groups can increase their level
of entrepreneurship activity.
The four cases featuring Indian entrepreneurs are:
Rami Ranger came to England in 1971, and started Sea, Air and
Land Forwarding Ltd in 1987 to ship unaccompanied baggage
back to Africa for immigrants and visitors. Sun Oil Ltd grew
directly out of this in 1995 as a food distribution company,
and now has a turnover of £60 million.
Pinky Lilani came to England in 1977, and after raising a family,
established Spice Magic in 2001 to market her book on Indian
cookery. From this, she branched out into a range of other
activities, including marketing spices and consulting to
food companies.
Suchit Punnose came to the UK in 1995 with ambitions to run his
own business from an early age. He started as a broker facilitating
import and export transactions, and after a series of further
ventures, established Red Ribbon Property Investments Plc as a
boutique asset management firm for high net worth individuals
to invest in property in India.
Neelesh Marik came to the UK in 1999 as UK Head of Sales for
Infosys, following degrees at the Indian Institute of Technology
(Mumbai) and Institute of Management (Bangalore), and a career
in sales and marketing, management consultancy and IT. He
founded Value Chain International in 2006 with four Infosys
Indian colleagues.
Entrepreneurs with a disability
In the UK, as in many cultures, people with disabilities contribute
to the economy by starting entrepreneurial ventures. This study
examines the contribution to the knowledge economy of those
with dyslexia and visual impairment.
The British Dyslexia Association
6
suggests 10% of the general
population suffer from a degree of dyslexia. However, recent
studies indicate that about 19% of UK entrepreneurs are dyslexic,
and that the proportion in the US is almost double this
7
.
New information technologies have the capability to liberate and
empower visually impaired people in the UK, over two-thirds of
whom are unable to gain any form of employment. The State
does offer generous grants (up to £16,000) to buy computer
equipment and special software – but the paradox is that
applicants are only eligible if they have a job. Technology has
also played a major role in helping many dyslexics overcome
their difficulties.
The four cases featuring dyslexic or partially-sighted
entrepreneurs are:
John Cavill left school at 16 with no qualifications and became an
engineering apprentice. He moved into sales and marketing with
high tech firms in the USA, and despite his dyslexia pioneered
networking technologies as director of a subsidiary for ten
years. At 40, he gathered a ‘dream team’ of expert colleagues
and founded Logical Networks. When sales hit £50 million he
sold the firm, and now runs Intermezzo Ventures to assist
budding entrepreneurs.
Janette Beetham did poorly at school. Later both she and her son
were diagnosed with dyslexia, but with determination she gained
a degree in her 30s. Divorce liberated her to test her business
ideas. After trying a shop, she launched evening-belle.co.uk
to reach and interact with many more clients via the web.
Integration of this virtual shop window with order entry
systems enables Janette to run her business from anywhere.
Roger Wilson-Hinds achieved academic success despite his
blindness and rose to senior jobs in education. But he was
uncomfortable as an employee and, when 50, he and his wife,
Margaret Wilson-Hinds, started a successful business to supply
ICT equipment and teach other blind people how to use it. Illness
struck. While recovering, Roger resolved to create and give away
screen reader software to any blind person. Now with 100,000
users, ‘Thunder’ is gaining large fees for developing variants.
David Murdock has been visually impaired since birth. After
being bolshie and outspoken at school (as he is the first to
acknowledge), he progressed to post-graduate studies, but then
found no-one would employ him. With two blind friends he
identified an unmet need – access to many corporate websites
does not comply with the Disability Discrimination Act.
Clarifeye.com solves this problem for firms, and now also
offers integrated systems for professional firms.
5
see
www.statistics.gov.uk.
Sources: Mid-year
population estimates:
Office for National
Statistics, General
Register Office for
Scotland, Northern
Ireland Statistics and
Research Agency.
Published on 22 August
2007
The report also explores how our
“hidden innovators” have latched
on to the potential of technology to
make their ideas happen – from
being simply a necessary support to
the business, to providing new ways
of doing business through the web.
Report context and objectives
6
see www.bdadyslexia.org.uk
7
Logan, 2008
UK economy could grow by 10% if we tap
potential of over 50s
Prime suggest the economy would be 10% larger if employment
patterns for the over 50’s were the same today as they were in
1979
8
. In 1979, 84% of men between 50 and 65 were working
now it is only 73%. Encouraging this group to embrace
entrepreneurship could go someway to turning this figure around.
This would increase GDP from £1,300 billion
9
to £1,430 billion.
75% of the 1.3 million on incapacity benefit say they would like
to work. If just 10% of these could be encouraged to create a
new venture this could mean a further 97,500 new ventures.
If just 10% of the 8 million economically inactive could move
into self-employment as entrepreneurs, based upon Prime figures
there would be an increase in GDP of over £56 billion. (Average
turnover of businesses run by this group is £70,000 – Prime 2004).
In the US a third of entrepreneurs are over 55 (US Census 2002).
If the UK had the same dynamic, there would be 18% more
entrepreneurial ventures. This should not be overlooked,
particularly as the current over 50s are much younger in
outlook and have better health than in the past.
Targeted support to older and disabled groups could lead to an
extra 34,000 new businesses a year by 2012 – worth at least an
extra £1.6 billion per year.
Governments in the UK have wanted to integrate immigrant
communities and overcome relative poverty and pockets of
disadvantage. As a result, the BME community have received
specialised support and training for enterprise because they
experienced particular barriers to entrepreneurship, including lack
of confidence, lack of funding and lack of role models. Targeted
support for this group seems to have been a phenomenal success,
with a 12% increase in the creation of new ventures year-on-year
for the past four years
10
.
The barriers experienced by the BME community are many of the
same barriers that older and disabled groups face. If specialist
training and mentoring was available together with access to
funding for these groups, it could enable them to follow the
pattern exhibited by the BME community. The Enterprise report
2005
11
prepared by Enterprise Insight suggest there are 400,000
new ventures created every year. At least 15% of these start ups
are created by the over 55’s.
An increase in start ups by this group of a similar 12% a year
could result in an increase in the number of new start ups by
34,000 in total after four years. Whilst figures show that about
two thirds of start ups fail, Prime suggests 70% of new ventures
created by the over 50’s succeed. We can therefore estimate
that after four years there will be an additional 23,800 new
ventures contributing at least a further £1.6 billion turnover
to the economy.
Continued targeted support for the BME community, together
with similar support for the over 50s, could produce an additional
£9 billion
12
for the economy (assuming a 50% survival rate for
BME businesses from all age groups, and a 70% survival rate for
the over 50s).
Better support for dyslexics could add an extra
560,000 entrepreneurs to the UK economy
Dyslexics make up 19% or 600,000 of the 3.5 million
entrepreneurial population in the UK but in the US 35% of
entrepreneurs are dyslexic
13
. The fundamental difference between
the two groups seems to be their level of self-confidence. As
there is a similar incidence of dyslexia in the general UK and US
adult populations, one might expect a similar incidence in the
entrepreneurial population. If dyslexics in the UK were provided
with tailored training and mentoring to increase their skills and
confidence, there could be an increase in the number of dyslexics
creating new ventures. If US rates were matched a further 560,000
dyslexic UK entrepreneurs would exist.
Furthermore, it is estimated that up to 50% of the UK prison
population are dyslexic and many of those on drugs are dyslexic.
Entrepreneurship training may be one way to encourage this
group to pursue an alternative career and reduce the numbers
of re-offenders.
13 Unlocking the potential of the UK’s Hidden Innovators 12 Unlocking the potential of the UK’s Hidden Innovators
The potential economic contribution
of hidden innovators
8
Prime 2004 Towards a
50+ Enterprise Culture –
www.primeinitiative.
org.uk
9http://www.statistics.gov.
uk/downloads/theme_ec
onomy/Blue_Book_2007_
web.pdf
10
Barclays 2005 –
www.newsroom.barclays.
co.uk
11http://www.makeyourm
ark.org.uk/policy/policy_
documents
12
Figures for average turn
over of start ups taken
from data ot
www.berr.gov.uk
13
Logan, J. (2008). Op cit
Whilst figures show that about two
thirds of start ups fail, Prime
suggests 70% of new ventures
created by the over 50’s succeed.
15 Unlocking the potential of the UK’s Hidden Innovators 14 Unlocking the potential of the UK’s Hidden Innovators
The secrets of success
The trigger
The trigger to starting a business is often some kind
of disruptive event. Whether a person takes an idea for
a new business forward, however, depends on various
pre-disposing and enabling factors.
The trigger
Three kinds of common trigger occur – economic necessity (for
example, loss of a job), divorce, and health scares. However, five of
the thirteen entrepreneurs took a conscious decision to start out
on their own independent of some disruptive event. Significantly,
this included three of the older entrepreneurs. For them, there
was a complex range of driving motives and enabling factors – an
accumulation of expertise that made entrepreneurship seem
possible, but also a sense of wanting to re-establish control
in their lives:
“I was in my early 50s and had seen other people in this
situation approaching the end of their working life and becoming
increasingly less well-regarded. I could see people being sidelined
and not having control over their environment and this prospect
did not appeal. I like being in control and in charge.”
All entrepreneurs seek to realise a desire for control,
self-realisation and autonomy to some degree.
Pre-disposing factors
While role models and family are frequent factors giving support,
the most conspicuous reasons are prior job experience and
education in ensuring expertise. Eight of the businesses were
established from this. However, it is not just any job experience,
but experience that prepares one for running a business, and
initially in a relatively safe environment, that is needed:
“Before you plunge into a business, get experience working for
someone else so you can learn, because there’s a lot more than
meets the eye. Use their base to learn the tricks. Then you can
judge – if you’re not fit for a small job, you’re not fit for a big job.
Running a corner shop was probably the most important factor in
my success. I learnt a lot about running a business, and it gave me
a financial start.”
Enabling factors
However, what distinguishes the level of new business creation
is the supportiveness of the social, cultural and economic
infrastructure, especially the availability of finance. Minority
groups face distinctive barriers, but sometimes have special
assets and advantages.
The secrets of success – What can we learn from
successful innovators and entrepreneurs?
Why do entrepreneurs start businesses? How do they go
about setting them up? What personal resources do they
need? What are some of the key skills? How do they
create the basis for future growth? Here we give insights
into our entrepreneurs’ success, and the lessons for
others to follow.
The following illustration explains the typical path an
entrepreneur follows when setting up a business, from
the initial trigger through to business set up and growth
phases. Using this process, we follow our “hidden
innovators” and identify their secrets of success.
Figure 1 puts these findings and insights together into a map to show the ‘pathways to innovation and entrepreneurship’.
17 Unlocking the potential of the UK’s Hidden Innovators 16 Unlocking the potential of the UK’s Hidden Innovators
The secrets of success
Find a value creating idea
A successful idea creates value for someone. Ideas often
come from work experience, hobbies and enthusiasms.
But they also arise from reshaping existing value chains
to meet needs differently. This gives rise to innovative
business models that disrupt how competitors operate.
Many new successful businesses involve novel routes
to market and novel ways of sourcing what they need.
Create value
Previous work experience opened the eyes of many of our
entrepreneurs to an opportunity to do something new. In four
cases this was combined with a particular passion or hobby:
“My experience in the financial trading industry has shown me
that whenever there is something that has value, then there is an
opportunity to set up a trading platform to bring buyers and sellers
together. Fresh white truffles have a very high value; in fact by
weight more expensive than gold. The idea of a white truffle
auction seemed too good an opportunity to miss out on”.
Reshape the value chain
Eight of the cases have developed original ways of doing
business, and many are highly innovative in their marketing
approach. ICT has opened up many opportunities for this – from
the white truffle auction website, to software for value chain re-
engineering, to the use of advanced web marketing tools. Often,
such ideas confront scepticism and resistance. As John Cavill’s US
suppliers said about his idea of simultaneously using direct and
indirect channels to market:
“There would be no trust in the channel; people won’t understand;
it won’t work and we can’t support it – so we won’t supply. You’ll
be out of business in a year.”
His eventual sale of the business for £50 million disproved that:
“Lots of people now use a dual channel business model.
It is disruptive, and you have to earn people’s trust.”
Similarly, when the husband and wife team of blind
entrepreneurs, Roger and Margaret Wilson-Hinds, determined
to give away their ‘Thunder’ screen reader software free to blind
users, people ridiculed their “non-business model”. But they saw
this as the quickest way to change the lives of blind people, and
the way to ensure strong long-term income streams from the
national and international institutions that could really pay for it:
“The web offers peer-group support and networking [especially
valuable to blind people] and viral marketing. With very little
money you can be round the world. Saying ‘it’s free; try it’
breaks all the traditional rules.”
Develop and screen the idea
Ideas go through a 3-stage process – finding, developing,
and screening an idea. Entrepreneurs shape their ideas
through discussions with others and through their social
networks. Writing a business plan is a way of refining
and providing a reality check on an idea as a practicable
business proposition. However, there is disagreement
about the necessity and desirability of time spent on
this, and on other formal preparations such as market
research. On many occasions, it is necessary to grab
opportunities during a short ‘window of opportunity’.
Shape ideas with other people, and seize
opportunities – you don’t necessarily have
to write a business plan
Despite what students are taught and what would-be
entrepreneurs are told by small business advisors, hardly any
of our entrepreneurs wrote a business plan or did systematic
market research prior to setting up their business. However, all
those entrepreneurs who developed a business from their prior
work experience went through a long period of moulding their
ideas first. In fact, they did intensive preparation. This shows
what really counts – observing and thinking about a market
opportunity and testing it over and over in one’s mind, and
realistically assessing one’s skills and the resources that will be
needed. Business plans are supposed to expose these things,
but are often merely tokenistic:
“I set up a business and then did a business plan. This is not quite
true – I had one week to make up my mind, and I did a very
sketchy outline plan. There was a government scheme, which paid
£50 a week for new business starters, which I took advantage of. I
didn’t do formal market research, but I knew a lot about the size of
the market, the nature of the people in it and what they wanted.
And I decided to exploit my skills. I didn’t talk to anybody. I think
this may be regarded as a weakness of mine, in that I tend to go
and do things without reference to other people. I do not easily
take advice – I listen to it and evaluate it, but then make up my
own mind.”
Above all, the true entrepreneur is someone who acts, and
doesn’t just plan. They have to be decisive, grabbing a
‘window of opportunity’ before it passes:
“I do think one part of the entrepreneurial spirit is to get things
done as quickly as possible.”
Build networks – they are a valuable resource
Many start a venture drawing on existing networks. Value Chain
International was started by five friends – “we knew each other
as friends and colleagues, as we all had leadership positions
for Infosys in various parts of the world”. This gave access to
technical knowledge, extensive knowledge of the market,
and to financial backers.
John Cavill contacted people he’d worked with in the IT network
industry to assemble his dream team:
“What got me over the hurdles was the combination of my track
record, my network of contacts, experience of the sector, reputation,
relationships with manufacturers, and a proven ability to deal with
bankers and accountants.”
Others may have to create their business networks. Networks are
crucial, and recognising opportunities to build them marks out
the true entrepreneur as in Pinky Liliani’s experience:
“Don’t just talk to those who you think may be able to help you.
Take an interest in everyone you meet.”
“My experience in the financial
trading industry has shown me
that whenever there is something
that has value, then there is an
opportunity to set up a trading
platform to bring buyers and
sellers together.“
“I do think one part of the
entrepreneurial spirit is to get
things done as quickly as possible.”
The secrets of success
19 Unlocking the potential of the UK’s Hidden Innovators 18 Unlocking the potential of the UK’s Hidden Innovators
The secrets of success
Minimise resources
People often make the mistake of thinking they need
large sums of money to start a business. Increasingly,
new businesses can be started with limited capital.
‘Resource parsimony’ is an important attribute of
a successful start-up and a successful entrepreneur.
You often don’t need a lot of resources to start up
Only two businesses started with significant funding – Value
Chain International with angel investors and the founders’ private
resources; and Proximagen with an AIM flotation for its drug
pipeline. The rest relied on a typical mix of personal savings,
small grants, and bank loans. Janette Beetham’s business is typical:
“It was set up on a shoestring, with no borrowings”
As Rami Ranger argues:
"For a service business, you don’t need much. You offer your
personal services. I’d go round the electrical businesses in
Tottenham Court Road, giving them my card and building my
relationship with the store managers, who would then recommend
me to their customer for transportation. My initial business was
built on word of mouth. In a service industry, it is only satisfied
customers who will recommend you.”
The other side of this is a continuing desire
to minimise financial exposure:
“I’ve never taken a risk, I was very careful. If you have a rich father,
you can take risks. With my humble background, I could never ever
take a chance. Only desperate people take desperate measures. If
you take risks, you’re not a business person. In business, you take
calculated risks.”
This does not mean, however, that businesses started in this way
are destined to remain small. Rami Ranger’s Sun Oil has grown
to a £60 million a year turnover in 20 years, and David Murdock’s
Clarifeye.com anticipates £4 million sales in its 2nd year, and has
plans for expansion through a chain of franchises – all through
internally generated funds and reinvestment.
ICT enables businesses to do many things much cheaper and to
reach many more customers at great distances more easily,
opening up novel channels to market.
Do deals
Entrepreneurs sell to customers, not to markets. This
means understanding what people value and will pay
for as potential customers. Selling is a key skill, but it
is frequently misinterpreted as getting people to buy
something they don’t want. On the contrary, selling
means understanding customers and what they value.
It is a skill deployed in a wide range of ways. Thus,
successful entrepreneurs create value for customers,
for suppliers, and for themselves. ‘Doing deals’ is a
key process in shaping mutual shared value for all.
Sell to customers
Many would-be entrepreneurs talk about ‘markets’, not
‘customers’. This is one of the key bits of learning new
entrepreneurs have to discover, and what marks out the effective
business person – visualising and relating to customers as real
people, with defined characteristics, which make them want to
buy your product or service. Recognising and appreciating the
customer is notable across all our entrepreneurs. The customer
is someone they visualise as a person, with very distinct needs
and characteristics:
“I wanted to see what IT could do for people’s lives. You have to able
to see the other’s person’s point of view. People [like the blind] who
can’t get a job are less likely to be able to articulate their need.”
In a service business, it means understanding how important
the service might be to the other person, and looking after
them carefully:
“Empathy for the customer is very important. You won’t succeed
if the customer doesn’t need it. You must imagine how this man is
going to sell. It’s my responsibility that this is sold to the end-user.
You must manage your customer. Don’t let him over-stock. Have
a long-term feeling for the customer.”
This ‘personalising’ of the customer, however, is analytical
(thinking systematically about markets) as well as concrete
(having a clear image of the customer):
“My approach has been to segment the market, and there are
only three sectors that I go for. The rest I disregarded. Within those
target markets, we know who the prime purchasers are, and these
will be chief executives and principals, rather than departmental
heads. We know who those people are, and we keep track of their
movements from one organisation to another, and aim to develop
personal relationships.”
Do deals that create mutual value
Mark McCormack once advised – “All things being equal, people
will buy from a friend. All things being unequal, people will also
buy from a friend. Make friends.”
Rami Ranger perfectly expresses the same sentiment:
“I make strategic alliances with local people. I get my first local
contact by selling them the branded product. I then say, there’s a
secondary brand that’s cheaper, so why don’t you put them both
together on the shelf, and we can both make more money. And I
then give them free samples to taste. To gain something, you have
to lose something.”
Similarly, Janette Beetham:
“Get your supplier into some kind of partnership, so that if he let’s
you down, he’s letting himself down.”
Such relationships become long-term assets of the business –
something accountants recognise when they put a financial value
on this as ‘goodwill’.
“If you take risks, you’re not a
business person. In business,
you take calculated risks.”
“Get your supplier into some kind
of partnership, so that if he let’s you
down, he’s letting himself down.”
The secrets of success
21 Unlocking the potential of the UK’s Hidden Innovators 20 Unlocking the potential of the UK’s Hidden Innovators
The secrets of success
Grow
Finally, innovation often also requires organisational
innovations. New businesses need to think how they
can engage and motivate people, and new entrepreneurs
are often keen to imbue a business with their own
personality. The way a business is set up from the
beginning can affect its ability to grow in the longer
term. Most certainly, there will be new challenges in
managing growth – in recruitment, maintaining
motivation and enthusiasm, and continuing to
manage cash carefully.
Create better organisations
Older entrepreneurs are particularly aware of the need and
opportunity to create novel ways of running a business, which
often comes from their own frustrations in battling with
bureaucracy. Typically, this means giving employees a
financial stake:
“One of the objectives of setting up the company was to give
greater financial stability to some of these [university] research
workers. Now they are in the company, they have a personal stake
in its financial viability and can make a personal contribution
rather than be dependent on grants.”
In some cases their employment philosophy directly serves
the business offering – as the website of David Murdock’s
Clarifeye.com says:
“The majority of our team members have some form of disability.
Because of this, we experience first hand the difficulties badly
designed websites bring.”
“The majority of our team members
have some form of disability.
Because of this, we experience first
hand the difficulties badly designed
websites bring.”
The secrets of success
23 Unlocking the potential of the UK’s Hidden Innovators 22 Unlocking the potential of the UK’s Hidden Innovators
Barriers and enablers for Hidden Innovators
The number of businesses being set up by
people aged over 50 is on the increase
15
,
with older entrepreneurs now accounting
for approximately 15% of all business
start-ups in England and Wales. This
compares with 10% a decade earlier. In
part, this is due to demographic shifts,
with more than a third of the UK
population due to be over 55 by 2025,
compared with currently one in four.
Redundancy, early retirement, and
dissatisfaction with previous jobs are
other contributing factors.
Other key statistics
16
include:
• Nearly a fifth of older entrepreneurial
start-ups are founded using redundancy
payments, and more than half are in a
business area the entrepreneur
previously worked in.
• The average turnover for businesses
owned by the over 50s is £70,000,
compared with a national average of
£104,000. But while this suggests a
slower growth rate, only 27% of older
owner-managers are relying on the
business as the family’s sole source
of income.
• Older entrepreneurs have extensive
levels of industrial and management
experience, superior personal networks
and a stronger financial base
17
– in
short, they possess more social, human
and financial capital – and face fewer
business risks at this stage of their lives
than younger people. Older people
seem to think more clearly about
objectives and pitfalls.
• But they have less education than
younger entrepreneurs, may have
failing health, and are affected by
family life cycles. Conventional wisdom
suggests they are risk-averse, but the
evidence is incomplete and conflicting
18
.
Their approach is better described
as prudent.
• Businesses started by the over-50s
have higher survival rates than those of
younger entrepreneurs – in some cases
as much as three times better. But they
exhibit slower rates of growth in terms
of employment and sales, than
businesses established by PRIME
age individuals
19
.
• The majority of older entrepreneurs are
male
20
. On the other hand they have
lower levels of health, energy and
productivity and suffer from an
ageist view of their prospects.
On the face of it, these findings
are moderately encouraging, but as
Smallwood and Obiamiwe
21
point out:
“Impressive though this achievement is,
however, it has to be set against the stark
fact that there are nevertheless more
people over 50 who are economically
inactive now than there were in 1997…
The population is ageing, and the number
of people in the 50+ age group is growing
at twice the rate of the population
generally. As a result, despite the progress
made, the number of economically inactive
over-50s is not falling and seems unlikely to
over the foreseeable future without fresh
initiatives.”
The problem is recognised by government,
and being addressed by PRIME (the
Prince’s Initiative for Mature Enterprise),
a not-for-profit company that aims to
improve opportunities for the over-50s
and encourage them to consider self-
employment and enterprise. PRIME
argues
22
that more could be done to
create a favourable environment for
business support, to create the
foundations for an expanding 50+
entrepreneurial society.
Key case themes
Being enterprise-ready
Entrepreneurial qualities and inclinations
are often dormant in the older
entrepreneur. All five older case studies
showed signs of entrepreneurial
behaviour in their earlier career, and it
has taken some critical event to bring it
into the open. The triggering event is
therefore important – perhaps especially
so for older entrepreneurs.
Readiness to continue learning
A particular personality characteristic of
the older entrepreneur, is the ability to go
on learning, all entrepreneurs require this
in some measure but it matters more the
older a person gets:
“I think it very much depends on the
person – everybody has a physical age
and a mental age. I always think that the
age at which they have stopped listening
to new music or new ideas is the age at
which they have stopped developing.
So if you have stopped in your "life
development" then I do not think it
is a good idea to start a new business”.
(Tony Baxter)
This could be a good indicator of the
‘enterprise ready’ versus the ‘enterprise
unready’ (or ‘unsuited’) older person. The
latter will require much more work to
prepare them.
Consuming passions and interests
The business created is frequently a
reflection of personal interests or a
consuming passion to make a difference:
“It was a book that was ahead of its time
and my research for it had fired me up.
My response to this rejection was that if
I am going to do something, I’m going to
do something that I really care about.”
(Sally Walton)
Peter Jenner’s company resulted from
a lifetime of scientific research to
alleviate the effects of Alzheimer’s
and Parkinson’s disease:
“Money was one motivation, but
alleviating the symptoms of Parkinson’s
was another. I do a lot of work with
support groups up and down the country
and when you look these people in the
eye, you can understand the gulf between
our research and their practical needs.
We aim to reduce the gap.”
Interestingly, none of the older
entrepreneurs were in it just for ‘life-style’
businesses to provide an income. Most
wanted to create businesses that would
last and become substantial, sustainable
revenue generating enterprises.
This suggests the extent of true
entrepreneurship among the older
population may be greatly underrated.
Accumulated social, human
and financial capital
The cases confirm clearly how the older
entrepreneur is able to draw on previous
experience, know-how, social networks,
and personal financial resources. This, and
the passion they bring to it, may be why
such businesses started by people in their
50s have a greater tendency to survive.
Derek Broomfield and Peter Jenner were
both acknowledged technical experts in
their very different fields, which gave
them access to a range of other skills,
especially when the need came to
employ others; Tony Howell transferred
his knowledge and experience of on-line
trading in financial services to his idea for
white truffle auctions; Tony Baxter had a
thorough insight into his market from
having worked in it for years.
The late 30s are regarded as the optimum
time to start a business for similar
reasons, but at 50 this experience is
still, or even more, valid.
Specific needs for support –
confidence-raising, mentoring
and advice
Despite the advantages of experience, the
‘new’ older entrepreneur still may need
some support. This is likely to be around
giving confidence to take the initial step,
since the fear of failure can build up over
the years. Our entrepreneurs, however,
were all strong-minded, independent
types. PRIME has found that around a
quarter of would-be older entrepreneurs
just need a little encouragement and
reassurance, and then are ready to go.
Barriers and enablers for Hidden Innovators
Robert Hisrich
14
suggests that entrepreneurial
characteristics and innovative ideas can be found among
all groups in all societies. But what distinguishes the level
of new business creation is the supportiveness of the
social and economic infrastructure, especially the
availability of finance. In this section, we consider the
barriers and enablers that face each group. Some of
these are distinctive to their situation; some are shared
problems. We highlight key issues and recommendations
for policy.
People who become entrepreneurs at 50+
14
Hisrich, R.D. & Peters, P.
(2002, 5th ed.).
Entrepreneurship. New
York: McGraw-Hill/Irwin
15
Patel, S. H. and C. Gray
(2006), The Grey
Entrepreneurs in the UK,
IKD Working Paper No.
18, Milton Keynes: Open
University
16
op. cit.
17
Weber, P. and M.
Schaper (2004),
‘Understanding the Grey
Entrepreneur’, Journal of
Enterprising Culture, 12
(2), 147-164
18
Hart, M., Anyadike-
Danes, M and R.
Blackburn, (2007),
Entrepreneurship and
Age in the UK:
Comparing Third Age
and Prime Age New
Ventures Across the
Regions, Small Business
Research Centre,
Kingston University
19
Peters et al., 1999
20
Weber, P. and M.
Schaper (2004), ibid.
21
Smallwood, C. and L.
Obiamiwe (2008),
Improving Employment
Prospects for the over
50s London: Prince’s
Initiative for Mature
Enterprise
22
PRIME (2004), Towards
a 50+ Enterprise Culture,
London: PRIME Initiative
Ltd
Businesses started by
the over-50s have
higher survival rates
than those of younger
entrepreneurs – in
some cases as much
as three times better.
A particular ...
characteristic of the
older entrepreneur,
is the ability to go
on learning, all
entrepreneurs require
this in some measure
... it matters more the
older a person gets.
“Money was one
motivation, but
alleviating the
symptoms of
Parkinson’s was
another.”
24 25 Unlocking the potential of the UK’s Hidden Innovators Unlocking the potential of the UK’s Hidden Innovators
Barriers and enablers for Hidden Innovators
Their greater need is for coaching,
mentoring and advice on specific
problems, often after the business has
been going for a while. PRIME recognises
this as a critical issue and puts
considerable effort into designing
appropriate mentoring schemes. A key
role of a mentor is to provide emotional
support when the initial glow may have
faded, the going gets tough, and the
informal management procedures that
contributed to the early excitement and
success may no longer be sufficient:
“This was my biggest mistake. Turnover
doubled but costs escalated and profit
went down. We never got out of this cycle,
costs were almost impossible to control.
I did not have the determination from any
of the people that I employed, who were
psychologically tuned to be employees
rather than consultants and for two years
it was very rocky. So I shrunk the business
down to a virtual business again and
bought in consultants whenever I needed
to use them.” (Tony Baxter)
Derek Broomfield also had to overcome
growth problems in the second year
of the business, when his company was
growing quickly and he was losing
control of his cash flow.
The older entrepreneur is assumed to
have some advantage here, because
of years of experience in a large
organisation where their management
skills have been developed.
However, our five entrepreneurs have
typically only been on the margins of
corporate life, or not had to handle
growth or turnaround issues (although
neither would most corporate managers).
They therefore turn to training, mentoring,
and consultants, but often have difficulty
getting exactly the help they need.
Age is not an issue
An interesting characteristic is that none
of our five older entrepreneurs like to
be labelled as such. They rarely mention
their age, or regard age as an issue. They
talk about the generic problems and the
challenges of being an entrepreneur, and
actively resist the idea of being treated
as a ‘special needs’ group or classed
as ‘over-50s’. Obviously, this helps because
entrepreneurs need to be forward-looking.
Research studies and the support
environment help to pigeon-hole this
group by referring to them as ‘grey
entrepreneurs’, ‘third age entrepreneurs’,
and so forth. ‘Mid-Career Entrepreneurs’
23
has the advantage of being unrelated to
age – and certainly loses the associations
with ‘retirement’. If the characteristic of
the older entrepreneur is not to think of
themselves as ‘old’, there is a ‘Catch-22’
here – how to signal help and advice is
available while down-playing age.
Recommendations for
Government and agencies
1. Start-up support services need to
be tailored to suit individual
circumstances. Older entrepreneurs
are highly individualistic and are
often impatient with conventional
support services.
2. In the early start-up stage, a few
sessions with a ‘counsellor’ to provide
confidence to overcome teething
issues and build self-confidence can
be useful. But at later stages the
entrepreneur will need more
professional ‘business advice’
and possibly very specific
strategic consultancy.
3. Although entrepreneurs often find
their own mentors through personal
contacts, formal networks and Business
Clubs are also a potential source, but
they may need to broaden their reach
and role. Organisations like PRIME are
regarded as effective and helpful.
More could be done to encourage the
exchange of views between PRIME
and similar organisations (such as the
Indian networking organisation, TIE).
4. Older entrepreneurs seek contact with
emerging trends in industry, and to
belong to sector-specific networks and
clubs, not to meet other older people.
5. Cases about older entrepreneurs
provide good role models and good
news stories.
6. Small changes to regulations and the
benefits system (for example, to the
‘six months on benefits rule’ and
waiving tuition fees and charges on
some longer training courses) can
make a significant impact while
starting up a business.
Among minority ethnic groups, those of
Indian origin have a reputation for being
successful entrepreneurs, which is
confirmed by figures for Indian-owned
businesses in the UK. As a relatively
successful group, Indian entrepreneurs
thus reflect not so much the problems
faced, as lessons for success.
Studies of the broader community of Black
and Minority Ethnic (BME) businesses
emphasise the need to distinguish
between the different groups that make
up this large and diverse category. The
report on ‘Enterprising People Enterprising
Places’
24
by the National Employment
Panel and Ethnic Minority Business Forum
provides an authoritative summary of
statistics and issues relating to BME
businesses and BME entrepreneurs:
• There are an estimated 100,000 BME
owned or managed businesses in the UK
(10% of all UK businesses), of which
60,000 are based in London.
• This reflects the concentration of ethnic
minorities in a few urban centres –
London, Birmingham, Leicester,
Manchester and Leeds/Bradford.
• BME businesses have traditionally been
concentrated in just a few sectors –
primarily service-based in retailing,
catering, and transport.
• There is a massive generational shift in
the motivation for new start-ups of BME
businesses – from economic necessity to
the more typical motivation for SMEs
generally, to take advantage of a
market opportunity.
• This is broadening the sectoral character
of the new businesses created, to
include IT, business services, and the
creative industries.
• BME businesses make less use of
support and advice, whether provided
by Government agencies or professional
advisors such as accountants and
lawyers. Instead, they rely more on
family and friends for advice.
• However, among the newer kind of
businesses run by a younger, better-
educated age group, conventional
sources of professional advice and
funding are preferred.
• Ethnic minority new entrepreneurial
activity is higher than in the white
population (7.4% compared with 4.7%),
and particularly marked among the
younger, 18-34 age group.
• Extrapolation from the relative size of
this age group suggests the number of
new BME businesses could rise by 50%
over the next few years (up by 51,000).
These findings are rather positive for
entrepreneurship among BMEs. However,
certain problems persist:
• BME owner/managers remain frustrated
by the lack of effective advice to help
with actual business problems. The small
business support services remain out of
touch with the needs of this group, this
has been often noted
25
, but continues
despite various initiatives. Business Links
has been under the management of the
Regional Development Agencies since
2005, so this may now be changing.
Problems include the confusing
proliferation of services (leading to
unproductive competition to meet
Government targets), lack of relevant
expertise, services not tailored to BME
needs, and simply unawareness among
BME businesses as to what is available.
Proposed solutions have therefore
centred on improving awareness,
culturally sensitive delivery methods,
and credible providers
26
– including
delivery based on better engagement
and interaction with BME communities.
On the other hand, research shows that
even ethnic business associations and
community-based organisations are not
a major source of start-up advice for
BME entrepreneurs
27
.
• There continues to be a widespread
perception that raising finance for BME
firms is a serious problem. However, this
is more complex than may appear.
Ethnicity is only one factor, with
location, sector, firm size, and age
being other issues. For example, BME
businesses in traditional sectors tend
to need money primarily for new or
expanded premises in order to grow. As
such businesses tend to be concentrated
in deprived urban areas, banks are less
willing to lend. The practice of ‘redlining’
therefore is indirectly, if inadvertently
discriminatory. Moreover, BME
businesses mistakenly often seek loans
rather than mortgages for this purpose.
Against this background, what do our
cases of UK Indian entrepreneurs reveal?
How do they fit this ‘mould’? What
characteristics do they exhibit that may
be distinctive to Indian entrepreneurs?
How do their problems compare? What
issues are raised that may require a
policy response? Again, we draw on
our case studies and the insights of our
focus group.
UK citizens of Indian origin
Barriers and enablers for Hidden Innovators
23
Rae, D. (2005), ‘Mid-
career Entrepreneurial
Learning’, Education and
Training, 47 (8/9), 562-
574
24
National Employment
Panel and Ethnic
Minority Business Forum
(2005). Enterprising
People Enterprising
Places. London: National
Employment Panel.
25
Ram, M. & Smallbone,
D. (2003), ‘Policies to
support ethnic minority
enterprise: the English
experience’,
Entrepreneurship &
Regional Development,
15, 151-166.
26
Ram, M. & Smallbone,
D. (2003), op cit
27
Ram, M. & Jones, T.
(2002), Ethnic Minority
Business in the UK: A
Review of Research and
Policy Developments,
Centre for Research in
Ethnic Minority
Entrepreneurship, De
Montfort University.
A key role of a
mentor is to provide
emotional support
when the initial glow
may have faded.
‘Mid-Career
Entrepreneurs’ has
the advantage of being
unrelated to age –
and certainly loses
the associations
with ‘retirement’.
Extrapolation from the
relative size of this age
group suggests the
number of new BME
businesses could rise
by 50% ...
26 Unlocking the potential of the UK’s Hidden Innovators 27 Unlocking the potential of the UK’s Hidden Innovators
Barriers and enablers for Hidden Innovators
Key case themes
Generational shift
The four businesses are markedly
different, reflecting the generational
change taking place. While the food
distribution company, Sun Oil Ltd, could
not now operate worldwide without
logistics software management and the
internet, it is a traditional business. Spice
Magic, promoting Indian cooking and
spices, is even more so. In contrast, the
two newer businesses run by young
Indians are deeply based on ICT.
Neelesh Marik has degrees from the
Indian Institute of Technology (Mumbai)
and Institute of Management (Bangalore),
which led to a career in sales and
marketing, management consultancy and
IT, eventually leading to the position of
UK Head of Sales for the Indian
technology consultancy company, Infosys.
In 2006, he co-founded Value Chain
International to help firms manage their
supply chains more efficiently
using IT.
This shift affecting BME businesses is
eloquently described by Rami Ranger, a
first generation entrepreneur who came
to the UK in 1971 (with a degree) and
experienced the stunted job prospects
and discrimination that drove him to
become an entrepreneur:
“Normally any country employs
immigrants as the labouring class, to
do jobs the host country doesn’t want to
do. Ethnic Asians were forced to go into
business, corner shop businesses, because
they couldn’t get good money elsewhere.
But now 30-40 years down the road, there
are Indians who have big businesses, and
others going into healthcare, IT, into big
sophisticated businesses working for
others in accounts, consulting, and in
the City. Our next generation of Indians
will not do corner shops. Tamils have
come; Afghans have come; Somalis have
come. So more and more Tamils are now
doing corner shops. So it’s a progression.”
The change is being driven, not just
by new opportunities in ICT or other
sectors and through higher education,
but by pressures on older lines of
business (clothing, food, and retail)
from multinationals, which are closing
off what were once the staple trade of
immigrant communities.
Networking and
international business
UK Indian entrepreneurs are particularly
strong in certain characteristics that are
important for entrepreneurship. They
emphasise personal networking and show
strong networking skills; they have an
international focus; and their view of
selling, deal making, and marketing is
based in a personalised view of the
customer relationship. As Pinky Liliani said:
“Don’t just talk to those who you think
may be able to help you. Take an interest
in everyone you meet.”
There is obviously a danger in attributing
special cultural qualities to one group.
Sociability and networks may be a central
part of Indian life, but this is true also for
many other communities. Thus, while
relevant for networking and the habit of
personalising the customer relationship,
it is not unique. It is the internationalising
of networks that is particularly interesting,
and perhaps rather special.
For example, Neelesh Marik’s team of
Indian colleagues started up Value Chain
International while scattered round the
world in their different Infosys offices. All
five came from the same elite higher
education institutions in India and had
retained their friendship links through
15 years of top management experience.
The international character of Indian
networks rests on something broader and
deeper, however. As the members of our
Indian focus group pointed out, Indians
in the UK come primarily from just two
areas and communities – Gujurat
and Punjab:
“The Sindhi community go all over the
world and maintain their links. This
‘diaspora’ is an important part of
explaining the relative entrepreneurial
success of the Indian community. If there’s
an element of distinctiveness, it’s here. You
have to look at the patterns of migration.
You’re really just looking at people from
these two States. A lot of people from
Kerala are in the Middle East, but they are
drawn solely by the oil industry. The
Gujurati community [which came to
England when expelled from Uganda by
Idi Amin and formed the cornerstone of
the new-wave small business Indian
entrepreneurs in the UK in the 1970s]
were in Africa for 150 years, so they had
already had to acquire their survival skills”.
This internationalism is likely to play
an increasingly important part in the
creation of viable growth-oriented,
new high technology businesses, which
need to operate in international markets
very quickly.
It is fostered by such organisations
as TIE (The Indus Entrepreneurs), an
international networking organisation
that mentors and links Indian
entrepreneurs around the world.
Networks for micro-finance
Strong community networks also underpin
habits of raising finance, especially the
need for micro-finance in the very earliest
stages of setting up a business. There is a
marked tendency for Indian entrepreneurs
to rely on informal finance from friends
and family. However, this is a not a ‘gift
culture’, but one that encourages
entrepreneurial business standards. It is
‘structured informal system’, with strict
terms of borrowing and repayment
enforced by group norms, reflecting a
community structure itself governed by
strong norms of behaviour and honour.
Other national cultures and sub-cultures
have similar practices and export them
as members emigrate and gather in
new surroundings.
Mentors, role models and advice
The role of personal networks is evident
also in the way the four entrepreneurs
have set up and grown their businesses.
They have relied little, if at all, on the
kind of support much talked about
now and promoted by Business
Support Services, especially in relation
to BME businesses – advice, coaching
and mentoring.
However, they all have a strong attitude
of wanting to put something back into
the Indian and wider Asian community,
by giving their own services as mentors.
Neelesh Marik, for example, is a member
of TIE (The Indus Entrepreneurs network);
and Pinky Liliani mentors for the Prince
of Wales trust and serves a number of
other charities.
This begins to address the problem that
when entrepreneurs seek advice and
support, they will often look for someone
who has themself been successful and
whom they can relate to – whether role
model, advisor, coach or mentor.
The wider problem is, then, the existence
of sufficient ready role models from that
particular group, which creates a ‘chicken
and egg’ problem in encouraging minority
group entrepreneurship. The Indian
community has made strong progress in
this respect: others have some way to go.
Ethnic minority groups need sufficient
entrepreneurial role models who are
perceived as ‘authentic’ and can provide
relevant mentoring and advice.
Recommendations for Government
and agencies
1. The UK is regarded as favourable to
entrepreneurship, but attitudes to risk
remain conservative. Institutionally, this
is reflected in the bankruptcy process
and laws, and at a personal and
business level in the attitude to failure
generally. The latter is reflected in
attitudes to lending and investment. In
the US, venture capitalists want to hear
about failure in order to know what the
person did about it – which is, after all,
a better test of how they will deal with
inevitable business problems, and will
achieve an effective return on
investment. In the UK, lenders are said
to be only interested in perceived
success. There are issues here
for government and the
investment community.
2. There is a continuing need to reflect
the diversity within the BME
community, and the distinctive
problems of different groups. This
includes especially the way institutions
(banks, government agencies) discount
and fail to recognise the distinctive
problems of BME groups vis-à-vis
established White businesses. This can
lead to the inadvertent racism of such
practices as ‘redlining’ in bank lending.
The UK – unlike the USA and the
Nordic countries – invariably relies on
voluntarism to solve such problems,
rather than collect data and publicly
audit private practices. The
longstanding failure of Business
Links to collect comprehensive data
on BME businesses is indicative of
this shortcoming.
3. On the other hand, treating BME
businesses as a special case may itself
not be helpful. Like the over-50s, our
Indian entrepreneurs see themselves
as entrepreneurs, facing characteristic
entrepreneurial challenges with
entrepreneurial qualities. Our cases are,
indeed, not typical of BME businesses in
inner city areas, where the focus of small
business policy is quite reasonably with
entrepreneurship as a way out of
unemployment and combating social
exclusion. Alleviating unemployment,
however, is not necessarily the same as
creating entrepreneurial businesses, and
may tend to perpetuate the
marginalisation of some groups.
Entrepreneurship and SMEs involve
objectives that are potentially at odds
28
.
A change in mind-set might help both
to reflect the real problems of inner city
BMEs and encourage growth-oriented
entrepreneurs.
Barriers and enablers for Hidden Innovators
28
Blackburn, R. & Ram,
M. (2006), ‘Fix or
fixation? The
contributions and
limitations of
entrepreneurship and
small firms to combating
social exclusion’,
Entrepreneurship &
Regional Development,
18, 73-89.
There is a continuing
need to reflect the
diversity within the
BME community,
and the distinctive
problems of
different groups.
29 Unlocking the potential of the UK’s Hidden Innovators 28 Unlocking the potential of the UK’s Hidden Innovators
In an effort to channel appropriate
assistance, social services in their various
policy guises try to categorise disabled
clients as having either physical disability
or learning disability. The reality is often
more complex. The loss of a limb may
be obvious to an observer, but effective
coping strategies may be concerned as
much with an attitude of mind. A learning
disability can stem from a brain injury, but
the spectrum of causes can extend to
perceptual problems and personality traits.
Some of the more recently documented
learning disabilities may have physical or
behavioural roots, or both. For example,
dyslexia can be a function of pathways
between brain lobes; but, equally, it can be
concerned with learning styles that differ
from those of the mainstream for whom
today’s education system was designed.
Action for Blind People
29
is a UK national
charity set up 150 years ago to improve
employment opportunities for blind and
partially sighted people. ‘Visage’ is a
£3 million UK and European employment
project sponsored by the London
Development Agency which has invested
in a series of projects over the last two
years
30/31
. Barbara Morton, as director of
both, with colleagues has carried out
research into employment and
entrepreneurship among the blind
and partially sighted:
• 66% of visually-impaired people
of working age are unemployed
• Most see themselves as being unable
to get a job
• Most are unemployed for a considerable
time before attempting self employment
• Most have low expectations of income
and look to replace their benefits and
have the dignity of work or control over
their work environment
• In a survey Visage carried out with
clients, only 1/3rd had accessed
mainstream business support
• 15-20% of visually impaired people
investigating a business start up actually
start their business (in line with the
norm for other groups)
• But they achieve a 95% sustainability
rate after 3 years (well above the norm).
Research by Boylan and Burchardt
31
into
barriers to self-employment for disabled
people similarly found that:
“Self-employment is an important source
of paid work for disabled people,
especially part-time self-employment.
Among women, self-employment
represents a significantly higher
proportion of paid work for disabled
women than for non-disabled women,
even after controlling for differences in
age and educational qualifications.
Moreover, for both men and women,
disabled people currently out of work
appear to be more open to the idea of
self-employment than their non-disabled
counterparts.” (p43)
However, the self-employed disabled
earn only half the income of able-
bodied people.
The traditional solution for blind people
deemed amenable to training was to
become a telephonist or a self-employed
piano tuner. Over the last nine years,
‘Visage’ has acted as an incubator and
fostered businesses run by and employing
visually impaired people who are now
engaged in such diverse lines as digital
archiving, catering, logistics management
and office supplies.
In a report in 2007, Visage’ describes
favourably a model used in France,
Belgium and Sweden – the Business &
Employment Cooperative (BEC) – for
fostering entrepreneurial start-ups
31/32
.
This allows the budding entrepreneur to
remain on state benefits while developing
a marketable offering. Once the fledgling
business is ready to be spun off it repays
10% of sales to the BEC. In 2005 BECs
were developing 90 firms with a combined
turnover of €16.5 million.
The situation concerning dyslexia and
entrepreneurship is subtly different.
Perhaps because the condition is not
obvious to the casual observer,
stereotypical or prejudiced reactions are
less likely to be provoked. In fact, dyslexic
entrepreneurs are often viewed as
charismatic figures. Sir Richard Branson
is a case in point.
McClelland coined the term ‘nAch’
to describe the propensity among
entrepreneurs to have a high need to
achieve
33
. Successive studies substantiate
the finding that, by the same token,
dyslexics tend to fare poorly at school and
this can leave them driven to prove they
are not inferior
34/35
.
The compensatory coping strategies they
develop often include increased creativity
and better than average skills in oral
communication, delegation and problem-
solving. As these are all ideal attributes
for an entrepreneur it would suggest
that dyslexics (about 10% of the UK adult
population) will exhibit an increased
propensity to emerge as entrepreneurs.
In fact, research in the UK has found that
19% of UK entrepreneurs claim to be
dyslexic, while in the USA, where business
failure is less of an anathema and more a
rite of passage, research shows that 35% of
entrepreneurs claim to have some dyslexic
traits and 23% are highly dyslexic
36
. The
same research shows that dyslexic
managers tend to stay with their firms
for a shorter time than non-dyslexics
and often had more than one
successful venture.
Entrepreneurs with a disability
Barriers and enablers for Hidden Innovators Barriers and enablers for Hidden Innovators
29http://www.actionforbli
ndpeople.org.uk/
30
for details, go tohttp://www.visage-
equal.org.uk
31
Boylan, A & Burchardt,
T. (2002) Barriers to self-
employment for disabled
people. Report prepared
for the Small Business
Service. See
www.berr.gov.uk/files/file
38357.pdf
32
Morton, B., Irvine, A. &
Whitbourn, C. (2007)
Business Incubation
Model, Action for Blind
People. Viahttp://www.actionforblin
dpeople.org.uk/
33
McClelland (1967) The
Achieving Society
34
Nicolson, R.I., &
Fawcett, A.J. (1999).
Developmental Dyslexia:
The Role of the
Cerebellum. Dyslexia: An
International Journal of
Research and Practice, 5
(3): 155-177.
35
Reid G and Kirk J.
(2001) Dyslexia in adults:
education and
employment, Chichester.
Wiley.
36
Logan. J. (2008)
Analysis of the incidence
of dyslexia in
entrepreneurs and its
implications. USASBE
2008 conference San
Antonio US
(http://www.usasbe.org/
conference/2008/.
66% of visually-
impaired people of
working age are
unemployed
The compensatory
coping strategies they
develop often include
increased creativity
and better than
average skills in
oral communication,
delegation and
problem-solving.
Key case themes
Determination to succeed to
overcome difficulties at school
and work
Both entrepreneurs with dyslexia
encountered difficulties at school and
dropped out early without significant
qualifications. On the other hand, both
blind entrepreneurs succeeded in
pursuing tertiary education, but only
after being firmly discouraged on the
grounds that it would be pointless.
Again, later, when both were highly
qualified, they had great difficulty
persuading anyone to employ them.
As a result, they attribute the root of
their success to a determination to prove
they were not stupid or useless. As John
Cavill put it:
“I felt a high need for achievement. I had
to demonstrate that I was not as dumb as
people thought”.
The standard curriculum is clearly
unsuited to people with a disability.
Janette Beetham had left school as soon
as she could “…feeling that I wasn’t good
at anything academic”.
As a young, visually impaired graduate,
David Murdock was stunned by the
response he received from civil servants
at job centres:
“Stick on your benefits, you won’t get
a job; it’s not worth your time.”
However, all four entrepreneurs had
happy childhood's in families that
provided strong social support, but
limited experience of entrepreneurship.
Their role models upheld family values
and self-confidence, rather than business
acumen. Without this to help them
overcome rejection elsewhere, they
might not have succeeded at all.
‘Difficult’ people
Experiences at school and work like these
will either destroy confidence or provoke
a fight-back. It made two of our case
subjects into disruptive and aggressive
youths and troublemakers who later had
to learn to change themselves.
David Murdock recalls that at school
“I got no help at all. I was flippant, bolshie
and outspoken.” After graduating Roger
Wilson-Hinds became a door-to-door
salesman (“To do this well you have to
like people and not mind rejection”), and
later, as Head Teacher of a special school
for blind children, was made redundant
“for being too radical”. Both eventually
mastered people skills, but still refuse to
suffer fools gladly.
“I began to see that
success is achieved
through people,
not just through
technologies and
processes; and not
by lone entrepreneurs
but by entrepreneurial
teams.”
31 Unlocking the potential of the UK’s Hidden Innovators 30 Unlocking the potential of the UK’s Hidden Innovators
Achieve control and self-esteem
This background of struggle and learning
to fight rejection acted as a driving force
to their becoming entrepreneurs –
through a need to survive, to control
their working environment, to build self-
esteem, and fulfil a dream.
Most saw themselves as unemployable in
a corporate environment. Two found that
self-employment was the only way to
satisfy the need for an income; while the
other two were sacked by their employers
– one on several occasions. Paradoxically,
this experience was liberating and
enabled them to focus on a long-held
objective to be their own boss (the
‘trigger’). As Janette Beetham said,
“I became ‘me’ at forty-three!”
Coping strategies
Dyslexics and the visually impaired who
overcome their disabilities tend to
manage in different ways. Dyslexics
develop coping strategies as children that
serve them well in business, learning to
delegate to others who don’t have their
problems with the written language and
becoming team workers:
“I began to see that success is achieved
through people, not just through
technologies and processes; and not
by lone entrepreneurs but by
entrepreneurial teams.”
On the other hand, blind children can
easily become over-dependent on their
parents or carers. To avoid this, they can
become fiercely self-dependent:
“I don’t see myself as a good team
worker. I don’t mind being in a team
as long as I’m the boss”.
And:
“I prefer to do things for myself …
but I now see that I have to be more
reasonable. A few years ago I was fine
as long as everybody agreed with me!”
Needs for training, advice,
coaching, mentoring
The difficulties they have to overcome
create strong needs for training, advice,
coaching and mentoring – not only to
acquire interpersonal or business skills,
but also because they have to work
harder to influence and educate funders,
distributors and customers to appreciate
what they offer. At some point, advice,
mentoring and counselling has become
critical for all four, but to get help of the
right kind has not been easy.
The background of advisors in small
business agencies and sector advisory
bodies (typically, as managers in large
companies or banks) tends to be
inappropriate for understanding such
clients, or the ICT-mediated business
models they have created, or even the
problems they face in the immediate
18 months after starting a business.
A mission to put something back
Having succeeded themselves, (like the
Indian entrepreneurs) they are committed
to creating advisory support systems to
help others in the same position. Janette
Beetham recalls “receiving lots of advice
and a small grant, but what I needed was
mentoring and business counselling”,
which prompted her to qualify as an
enterprise advisor and business
counsellor. Roger Wilson-Hinds laments
going to frequent “business breakfasts”
looking for advice, and wasting a lot of
time “when we should have just got on
with it”. Today he is a trustee of the Blind
Business Association Charitable Trust
37
,
helping blind people get into work. John
Cavill has trodden a similar path. He now
serves as an advisor to the British Dyslexia
Association’s
38
Board of Trustees to help
others with dyslexia, and runs Intermezzo
Ventures
39
to offer consultancy, coaching
and teaching to budding entrepreneurs.
After a long search David Murdock did
find a mentor, who has now become a
valued business partner.
Life-time learners
After their early difficulties, entrepreneurs
with a disability tend to become ‘lifetime
learners’ as mature adults and regularly
undertake further studies. Recognising
the value of learning, it makes them also
willing to advise and counsel others.
The liberating effect of ICT
For those with a disability, new forms of
ICT are an increasingly vital enabler. In
daily life, ICT allows the disabled to do
more of the things that non-disabled
people take for granted. At work, ICT can
compensate for disadvantages by helping
to level the playing field and even allow
particular acuities to deliver a competitive
advantage.
As David Murdock’s Clarifeye.com
website says: “Testing by a group of
disabled people who are directly affected
by badly designed websites, will mean the
advice you receive will guarantee your
website will become accessible.”
Like all new enterprises today, which
make extensive use of office automation
tools and the internet, Janette Beetham’s
business website enables her to reach her
customers and for them to interact with
her ‘virtual shopfront’; while her order
processing systems means she can
manage and run her businesses from
anywhere in the world.
But others have gone further. For John
Cavill, Roger Wilson-Hinds and David
Murdock, ICT forms the very essence of
the novel offerings upon which their
enterprises are founded.
Each employs ICT in innovative ways in
combination with design, consultancy
and installation services to create
new markets.
In fact, without ICT, their offerings and
their contributions to society and the
economy simply could not exist.
Recommendations for Government
and agencies
1. Networking groups that allow potential
entrepreneurs with a disability to meet
successful entrepreneurs (‘role models’)
like themselves are inspirational and
informative in giving relevant advice.
Promote initiatives that provide such
role models and networks.
2. Training initiatives that encourage
those with disabilities to gain new
venture creation skills are essential.
Organisations like the School for Social
Entrepreneurs and projects such as
‘Visage’ do this well.
3. However, since many from these groups
will feel that the standard curriculum has
already failed them, innovative teaching
approaches are required. Such
approaches will highlight inter-personal
and communication skills delivered by
means of mentoring, counselling and
coaching. The reality that these are
expensive and scarce teaching skills is a
barrier that must be broken down.
4. Ensure that advisors for SMEs and start-
ups are equipped to evaluate ICT-
mediated business models.
5. Work towards creating a trained cadre
of mentors and counsellors to carry an
enterprise through the start-up phase.
6. Liberate the latent reservoir of
talent emerging among disability
entrepreneurs. Many wish to ‘put
something back’ and share their
experiences to help others. This can be
informal and unpaid, or involve a paid
non-executive role, or an equity stake
in an embryonic business.
7. Making money is important to these
groups, but ‘making a difference’ is an
equal, if not stronger motivation. They
did not start their ventures to become
wealthy – although some have done
so – and they have needed to earn a
living which was denied them in
conventional ways. But their main
motivation was to achieve an ambition
and change the status quo facing such
people as themselves – usually by
means of an innovative product or
service that fulfiled an unmet need.
The way entrepreneurship is talked
about should recognise this motivation.
8. The liberating effect of new
information and communications
technologies (ICT) offers a way forward
that is immediately available. Every day
this is easier to use and less expensive.
Technology does not have to be ultra
high-tech; the benefit flows from the
appropriate combination and
application of current capabilities. A
modest grant for IT tools and internet
connectivity plus relevant training can
dramatically accelerate new enterprise
by people with a disability.
Barriers and enablers for Hidden Innovators
37
seehttp://www.bbact.org.uk/
38
seehttp://www.bdadyslexia.o
rg.uk/
39
seehttp://www.intermezzo-
ventures.com/
At work, ICT can
compensate for
disadvantages by
helping to level the
playing field and
even allow particular
acuities to deliver a
competitive advantage.
Liberate the
...reservoir of
talent emerging
among disability
entrepreneurs.
Many wish to ‘put
something back’
and share their
experiences to
help others.
Barriers and enablers for Hidden Innovators
33 Unlocking the potential of the UK’s Hidden Innovators 32 Unlocking the potential of the UK’s Hidden Innovators
Insights and recommendations
The featured cases illustrate many essential lessons for
potential entrepreneurs. This includes the need for passion and
determination in the face of difficulty, the requirement to create
value around an opportunity, and the importance of embracing
innovation. The cases show how these entrepreneurs have used
ICT to create value around opportunities, build new business
models, promote their ventures and streamline processes.
They also highlight aspects that may not always be fully
understood: for example, the way entrepreneurs ‘personalise’
the customer relationship and the way they bring innovation
into their processes and business models.
Above all, the cases illustrate the barriers that are distinctive to
the groups featured in this study and suggest how the UK can
make greater use of the potential contribution that such groups
and other similar unheralded ‘hidden innovators’ can make.
These entrepreneurs succeeded despite having additional barriers.
But what of those who are not quite so brave?
We now turn our attention to recommendations that may
have significance for many groups within UK.
1. Make financial support and investment more
equitable across all groups
As this report demonstrates, it is increasingly clear that older
people, in addition to disabled and ethnic groups offer
considerable entrepreneurial potential and it is good to see that
the Government’s new Enterprise Strategy references targeted
support for the over 50s. Although the details are thin at this
stage, we would urge policy makers to provide equivalent support
to the over 50s as they do to younger people, especially as they
seem better placed as a group to set up and run a more
successful and sustainable business, based on years of experience
and insights. According to Prime, after three years, the success
rate for business start-ups is 70% for over 50’s compared to
28% for younger groups. The report demonstrates that a well
resourced and targeted approach to supporting ethnic minority
groups has paid significant dividends to date.
Action required
Provide more financial support to over 50s and disabled groups
to encourage more sustainable and successful business start-ups.
2. Take diversity seriously
This study of ‘hidden innovators’ points to the essential
requirement to ‘take diversity seriously’; we must recognise
differences and the distinct needs of groups that may be
marginalised. This is a particular refrain in research that highlights
the diversity of black and minority ethnic groups but older
entrepreneurs and those with a disability likewise have
distinct needs.
These cases illustrate how they also have particular strengths and
talents for entrepreneurship, and can furnish novel insights into
products and services. This is particularly true of our visually
impaired entrepreneurs, with their appreciation of the needs
of better-adapted products for people with visual impairments.
Just as the dyslexics have developed compensating abilities, our
visually impaired entrepreneurs have found in ICT the opportunity
to excel and discover latent talents and ideas for new products.
While the use of ICT across the sample mirrors that in new
businesses generally – from being simply a necessary support to
the business, to providing new ways of doing business through
the web and creating a business round this – our visually impaired
entrepreneurs have latched onto ICT as a liberating tool to
enhance people’s lives.
Action required
The entrepreneurial spark is present in many individuals it must
be nurtured rather than quashed by lack of understanding of
their particular needs. Training must be made available to
business advisors and other support organisations so they do
not place additional barriers in front of potential entrepreneurs.
How can they know whether it is better for someone to stay on
benefits rather than start a new venture? That decision is not
theirs to make.
3. Change the language and image of entrepreneurship
Many of the entrepreneurs in this study did not think of
themselves as entrepreneurs, and some do not like the label.
The cases clearly illustrate that in most cases the desire to make
money was not the primary reason for starting a company. Along
with the need to make a living, it is notable that entrepreneurs
are often motivated by an altruistic goal – the desire to make a
difference, to do something that produces social benefits – or just
to realise a personal dream of some kind. We need to change the
lexicon of entrepreneurship to include some of these terms.
There is also a need to make entrepreneurship sound less male;
we are constantly told that entrepreneurs work 24/7 which
prevents many groups from considering entrepreneurship
as an option. Carers, older people and the disabled can
create successful ventures even if they are part time, and
new technology provides a platform.
Action required
Initiate a campaign to make entrepreneurship inclusive. Profile
a wider range of role models in the media and change the
terminology used. Encourage more use of technology platforms
to facilitate entrepreneurship for those who may need to work
mainly at home.
4. Increase the entrepreneurial self confidence
(self-efficacy) of the nation and of minority groups
in particular
Our focus groups suggested people in the UK do not feel
confident in their ability to become entrepreneurs. This is
combined with a fear of failure, which may be why more people
do not create new ventures. This insight is confirmed by research
from Gem (2006)
40
which suggests that up to sixty percent of the
population do not believe they could create a successful new
venture. The combination of role models, mentoring, coaching
and training would help to overcome this by increasing
‘entrepreneurial self efficacy’.
‘Entrepreneurial self-efficacy’ can be defined as the strength
of an individual’s belief that he or she can successfully perform
the varied tasks that make up the entrepreneurial role
41
. It is a
multidimensional construct linked with task groups such as
marketing, innovation, management, risk-taking, and
financial control.
The literature, including the work of McCelland
42
, clearly supports
the need for role models as a way to increase the entrepreneurial
self-efficacy of a nation; while the growing body of research based
on the work of Albert Bandura
43/44
and Lucas and Cooper
45
suggests that an individual’s entrepreneurial self efficacy can be
increased by a combination of role models to inspire, mentoring
and coaching, training opportunities to practice enterprise skills,
and experiential learning.
Action required
Building ‘entrepreneurial self-efficacy’ will help the UK to grow
more innovative start-up companies. In order for this to happen
there is a need for more tailored support and advice.
5. The need for tailored encouragement and support
Most people – and certainly those in this study – need
encouragement and support to take the first step towards
entrepreneurship. There is widespread recognition of this
need and the different ways of providing it.
• The right role models – Many entrepreneurs will describe
how they have been inspired by particular role models. The
problem for disadvantaged and minority groups is that they
may lack relevant role models. Role models need to be similar
in background. If you have a disability, meeting a successful
entrepreneur with a disability is far more inspirational than
meeting a high profile entrepreneur whose achievements
seem unattainable.
• Tailored support – Practical support also needs to be tailored
to specific requirements. For example, older entrepreneurs
often need particular encouragement and positive
reinforcement that their business idea will work. The
organisation known as PRIME (the Prince’s Initiative for
Mature Enterprise) fulfils a valuable role here through its
understanding of their needs and motivations; while
entrepreneurship training for mature adults requires a
‘contextual’, discovery-based approach
46/47
. The visually
impaired and dyslexic similarly have very specific issues and
problems to do with their disability – innovative training
helped both with the interpersonal and communication skills
they lacked because of their education and disability.
Insights and recommendations
40
Gem 2006,
www.gemconsortium.org
41
Chen, C. C., P.G. Greene,
& A. Crick. 1998. Does
entrepreneurial self-
efficacy distinguish
entrepreneurs from
managers? Journal of
Business Venturing, 13:
295-316
42
McClelland (1967) op
cit
43
Bandura, A. 1977. Social
Learning Theory. Upper
Saddle River, NJ: Prentice
Hall
44
Bandura, A. 1997. Self-
efficacy: The Exercise of
Control. New York: W.H.
Freeman and Company
45
Lucas W. A. & Cooper S.
Y. (2004) Enhancing Self-
efficacy to Enable
Entrepreneurship: the
Case of CMI’s
Connections. MIT Sloan
Working Paper No.
4489-04
46
Jones, A.M. & Hendry,
C. (1994), ‘The Learning
Organisation: Adult
Learning and
Organisational
Transformation’, British
Journal of Management,
5, 2, 153-162
47
Rae, D. (2005), op cit
The combination of role models,
mentoring, coaching and training
would help to overcome this by
increasing ‘entrepreneurial self
efficacy.
35 Unlocking the potential of the UK’s Hidden Innovators 34 Unlocking the potential of the UK’s Hidden Innovators
• Appropriate coaching and improved training for advisors –
Most new businesses need some form of support to get
started. The classic UK support system is typically geared to
developing business plans to flesh out the business
proposition. But this may not be suitable for these groups,
certainly it is insufficient, and is not how most of our
entrepreneurs got started.
One of the strongest messages coming from the cases and
focus groups was how inadequate and inappropriate the
advice system is. Small business advisors are seen as invariably
lacking experience in new venture creation, and are therefore
unable to respond usefully to the particular and immediate
problems new entrepreneurs want help with. The nature of
their role is also inappropriate – being geared to ‘giving
advice’, whereas what is often needed is coaching. This implies
better training for business advisors and a different pattern of
recruitment by encouraging more serial entrepreneurs to get
involved in coaching.
• Increase the number of mentors – From early on having a
mentor is invaluable – especially when the new entrepreneur
starts to encounter new problems and challenges. While
organisations such as PRIME and TIE (The Indus Entrepreneurs)
highlight this, they cannot themselves be mentors, but must
rely on volunteers to give their time. Mutual help
organisations, such as the UK’s Academy of Entrepreneurs
48
,
dedicated to supporting established businesses, can also
help through one-to-one coaching.
In practice, many of our entrepreneurs found mentors in all
sorts of places through their own networks, and networks are
indeed a vital resource. Indian entrepreneurs seem to have
particular skills and resources in networking. Older
entrepreneurs, who have a history of employment to draw on,
may also have an advantage, through accumulating networks
of business contacts over the years. Others without this
employment history, including older women entrepreneurs,
are less fortunate. There are increasing numbers of networking
groups, locally and nationally providing extended “sites of
interaction”. Nevertheless, finding a mentor who can be
both friend and critical ally remains a personal and
unpredictable process.
• Business growth mentoring – The entrepreneurs in this study
suggested there is a need for ongoing mentoring. Older
entrepreneurs may have useful social capital that helps them
to start-up but they are still just as vulnerable, as all new SMEs
are, to typical growth problems, such as managing cash flow,
broadening their skill base, and recruiting the right people.
All therefore need access to continuing sources of support,
particularly mentors. ICT could play an important role;
on line mentoring may provide a solution, offering access to
experienced mentors on a needs basis. But mentoring itself is
not a single panacea, and good mentors are liable to remain
in short supply.
Action required
There is a need for a continuum of support, it is important, that
policy makers recognise the multifaceted character of ‘advice’ –
from signposting and information, through to coaching and
mentoring. What this indicates, above all, is that different forms
of so-called ‘advice’ involve quite different roles, and have
different salience as a new business develops. Our business
advisory services need to respond to this agenda.
6. Encourage improvement as well as innovation
During our focus groups it became apparent that the language
of innovation can be both stimulating and a turn-off. As a rallying
cry or remedy for the UK’s ‘problems’ it may discourage people
who think their ideas are insufficiently ‘innovative’, when they
may have much to contribute to the vitality of the UK economy.
A successful idea is often a simple solution that fills a gap, or is
an incremental improvement. A number of our entrepreneurs
recognised their ideas were like this, but yet there were strong
businesses and money to be made from them.
Action required
Profile successful entrepreneurs who have built strong companies
based upon ‘doing something better’.
Insights and recommendations Insights and recommendations
7. Differentiate between self-employment and
entrepreneurship and tailor policy to meet the
particular needs of each group
Finally, we need to emphasise: self-employment is not
entrepreneurship. Small business policy in the UK has for many
decades used the creation of small businesses as a way of
alleviating unemployment. Government small grant schemes
for start-up (in their various guises) are likely to do little
more than enable one-person businesses. This is laudable:
self-employment makes a valuable contribution and can also
lead to growing businesses.
But it is based in a misconception and contradiction. The social
objective to alleviate unemployment and increase social inclusion
through self-employment is different from the economic objective
of facilitating entrepreneurship and creating growth-oriented
businesses. The support measures required and the skills
necessary in the agencies delivering them are consequently
very different.
This problem affects not only those in deprived urban areas with
high unemployment, and hence those concentrations of black
and minority ethnic groups in these areas, but also older and
disability groups, where the focus of policy is to get them out
of unemployment. This is a limiting perspective on what they
can achieve, and on what those who are entrepreneurially
minded seek.
Elements of the benefits system (such as those involving grants
for equipment and training, and the ‘6-month rule’) create
obstacles for older and disability entrepreneurs, and are not about
supporting entrepreneurship effectively, but guarding against
abuse of the benefits system. They are thus rooted in the
‘unemployment’ agenda, not in the ‘entrepreneurship’ agenda.
The policy focus is therefore actually part of the problem, as far as
‘hidden innovators’ are concerned. Since it is tied into a model of
entrepreneurship as a way out of unemployment, it tends to
perpetuate the marginalisation of certain social groups.
Action required
A change in mind-set and policy is required so that both the self
employed and growth oriented entrepreneurs receive the tailored
support that is specific to their needs, this might help both to
meet the real problems of marginalised groups and encourage
growth-oriented entrepreneurs.
In conclusion
There are improvements that can be made so that we can unlock
the innovative and entrepreneurial potential of all groups within
UK society. UK government can encourage these changes,
particularly those relating to the small business advisory service.
We also need new initiatives that encourage more serial
entrepreneurs to become involved in mentoring and coaching.
Experiential training should be open to all. The training initiatives
for the young which have included: meeting guest entrepreneurs,
preparing business plans and in some cases running a business for
a short time have worked well. Could some of this training be
replicated for others in the UK?
There is also a requirement for more organisations such as Prime
who can meet the specific needs of minority groups. Prime is very
successful and this model could be replicated.
Finally the media have a role to play. They can change how they
portray entrepreneurs, increase the diversity of role models that
are profiled, and run stories on some of the support organisations
such as Prime.
A successful idea is often a simple
solution that fills a gap, or is an
incremental improvement.
48
seehttp://www.chiefexecutiv
e.com
37 Unlocking the potential of the UK’s Hidden Innovators 36 Unlocking the potential of the UK’s Hidden Innovators
There is by now a robust body of knowledge about the
entrepreneurial start-up process and what makes for
entrepreneurial success, which includes the following themes:
• The entrepreneurial trigger to starting a business is often some
kind of disruptive event in a person’s life, which causes them to
attempt something new
50
.
• What determines whether or not someone takes an idea for a
new business forward, however, are various pre-disposing and
enabling factors, including their previous work environment,
role models, family, cultural support, a country’s social and
economic infrastructure, and availability of finance.
• The entrepreneurial process is basically the same everywhere
and most countries are not short of people with ideas: what
differs is the relative supportiveness of countries’ social and
economic infrastructures, and the availability of finance.
• A successful idea (‘opportunity’) is one that creates value for
someone
51
, on a sufficient scale to sustain a business. Ideas
often come from work experience, hobbies and enthusiasms,
and social environments that people already know well.
• But they also arise from reshaping existing value chains to
meet needs differently. People perceive opportunities
differently, which is why some people become entrepreneurs
and others not
52
. This gives rise to innovative business models
that disrupt how competitors operate. Many new successful
businesses thus involve novel routes to market and novel ways
of sourcing what they need.
• Ideas go through a 3-stage process – finding, developing, and
screening the idea. Entrepreneurs shape their ideas through
discussions with others, sometimes over a lengthy period of
time: the process of opportunity formation is a social process
53
.
• An entrepreneur’s social networks are therefore a vital
resource
54
, both in shaping an idea and in implementing
it through the resources they need to put together.
• Writing a business plan is a way of refining and providing a
reality check on an idea as a practicable business proposition.
However, there is disagreement about the necessity and
desirability of time spent on this (and on other formal
preparations such as market research): on many occasions,
it is necessary to grab opportunities during a short ‘window
of opportunity’
55
.
• People often make the mistake of thinking they need large
sums of money to start a business. Increasingly, new businesses
can be started with limited capital. ‘Resource parsimony’ is
an important attribute of a successful start-up and a
successful entrepreneur
56
.
• Entrepreneurs sell to customers, not to markets. This means
understanding what people value and will pay for as potential
customers. Sometimes, the innovator is ahead of their
customers in understanding this, and then they have to
educate them in a product or service’s features.
• Selling is a key skill – Mark McCormack famously wrote
57
that
selling is what Harvard Business School failed to teach. This
remains true of almost all business schools. Selling is frequently
misconstrued as getting people to buy something they don’t
want. On the contrary, selling means, first and foremost,
understanding customers and what they value. It is a skill,
moreover, deployed in a wide range of ways, part of the wider
class of influencing skills. Thus, successful entrepreneurs create
value for customers, for suppliers, and for themselves
58
.
• ‘Doing deals’ is a key process in shaping mutual shared value,
and the IP of the small business is often tied up in the
personalised resource networks that result.
• Innovation often also requires organisational innovations
59
–
at the very least, new businesses need to think how they can
engage and motivate people, and new entrepreneurs are often
keen to imbue a business with their own personality.
We explored these themes in the interviews with our
entrepreneurs (Annex B), and developed the flow chart (Figure 1)
to describe the links among these processes.
A) Background
1. Please briefly outline your career as an entrepreneur – how you
first set up in business, and where this has led you (e.g. have
you moved on to set up any subsequent businesses? what you
are focusing on now?).
2. Can you tell us a little about your background, your family and
schooling? Were there any influences that made you more or
less likely to consider starting your own business.
3. Were there any significant role models in your early life that
influenced your career decisions?
4. Did your background act as a positive, negative or
neutral driver for an entrepreneurial career? Has being
(dyslexic/partially sighted/Indian/older) had any influence
on the decision to start your own business and the
subsequent journey?
B) The idea
5. Can you tell us the story of the enterprise you have created –
what it is, how you created it – the business idea, where the
idea came from?
6. Did you have any other ideas that you thought were workable
but did not take forward into a business? If so, why did you
not proceed with these?
7. Why did you start up a business of your own? What triggered
it? What were your personal ambitions in doing this? Why then
– how old were you, what were you doing at that time (e.g.
what employment)? Did you start on your own or with a team?
What is the business model?
8. What did you do to prepare yourself before launching this
business? Did you talk to many people to develop your idea or
to get advice? Did you test it in any way before launching it?
Did you carry out market research? How long did all this take?
Was there any pressure to act quickly?
C) Implementation
9. What did you then have to do to get it started? What
resources did you have to pull together (people, finance,
equipment, facilities, first customers, etc)? Was this difficult?
What surprised you in starting this business that you
hadn’t expected?
10.Have you had particular support or help from being part of a
(dyslexic/partially-sighted/Indian/older) group, from others
in the same position or from organisations representing it?
11.Equally, have you had to face particular problems, which have
been difficult to overcome? Why? What would have made your
task easier?
12.During the process of starting your business to whom did
you go for advice, did you make use of any government small
business support services or any other agencies? Have
you found the UK environment supportive to small and
medium enterprises?
D) Development
13.What qualities, characteristics, skills, experience did you/do you
have that helped you succeed? What other things helped you
succeed (e.g. friends and family support, mentors, putting
together a good team, luck, etc)?
14.How did the business then develop, how has the business
grown? What were the key events, the ups and downs? What
did you find the hardest things to do, the most challenging?
What gave you your biggest problems? How did you
overcome these?
15.Did technology play any part in your business or your success?
16.What aspects of your business would you describe as
innovative? Is it novel or an incremental improvement of an
existing offering?
E) Lessons learned
17.What are the most important lessons or learnings you have
taken from these experiences? What would you do differently
another time? What advice would you give other people like
you who might wish to start a business?
18.[Optional question:] How does this compare with previous
ventures? What helped you from your first venture? What did
you do differently in what followed?
Annex A: The entrepreneurship process Annex B: Interview brief
50
Hisrich, R.D. & Peters, P.
(2002, 5th ed.).
Entrepreneurship. New
York: McGraw-Hill/Irwin
51
Muzyka, D. (2000),
‘Spotting the market
opportunity’, in S. Birley
& D. Muzyka (eds.),
Mastering
Entrepreneurship,
London: Pearson,
pp.31-34
52
Developing the Future,
2007 (2007) Microsoft
Inc. p34
53
de Koning, A. (2000),
‘Meeting people to
shape opportunities –
the entrepreneur’s way’,
in S. Birley & D. Muzyka
(eds.), Mastering
Entrepreneurship,
London: Pearson,
pp.180-183
54
Dubini, P. & Aldrich, H.
(1991), ‘Personal and
Extended Networks are
Central to the
Entrepreneurial Process’,
Journal of Business
Venturing, 6: 305-313
55
Stevenson, H.H. (2000),
‘The six dimensions of
entrepreneurship’, in S.
Birley & D. Muzyka (eds.),
Mastering
Entrepreneurship,
London: Pearson,
pp.8-13
56
McGrath, R. G. (2000),
‘The parsimonious path
to profit’, in S. Birley & D.
Muzyka (eds.), Mastering
Entrepreneurship,
London: Pearson,
pp.42-46
57
McCormack, M.H.
(1984). What They Don’t
Teach You at Harvard
Business School. London:
Collins
58
Roberts, M., Stevenson,
H.H., Sahlman, W.A.,
Marshall, P. &
Hamermesh, R.G. eds.
(2006). New Business
Ventures and the
Entrepreneur. 6th ed.
New York:
McGraw-Hill/Irwin
59
Rothwell, R. (1992),
‘Successful Industrial
Innovation: Critical
Factors for the 1990s’,
R&D Management, 22,
3: 221-239
39 Unlocking the potential of the UK’s Hidden Innovators 38 Unlocking the potential of the UK’s Hidden Innovators
The examples feature entrepreneurs from several UK
communities: people of Indian descent, people with a
disability, people who become entrepreneurs in middle
age. Their candour and willingness to collaborate have
made this study possible and we are most grateful.
In every case, the subject entrepreneurs have
depended in large measure, and continue to depend,
on the application of new information and
communications technologies.
Looking back, Neelesh believes that the Indian approach to
education has been a positive driver for his entrepreneurial
career. “I never actually practiced as a mechanical engineer, but I
consider that it gave me an analytical and structured quantitative
approach to business issues. This is something that was developed
during the MBA. The strict entry examination to get into the
Institute has given me a sense of the value of rigour. I went on
to do the MBA as part of a ‘herd mentality’ – all my peers were
doing the same thing. That’s a good thing to do rather than
follow the influence of a role model.”
Neelesh’s first job was with Coats Viyella, a British multinational
in the textile and clothing market. Coats’s subsidiary in India
made threads and clothing accessories and was perceived to be
a very well respected blue chip company. After doing a two
month summer vacation internship he was offered a job as
a management trainee. Within five years he had moved
to a position of senior branch manager on the sales and
marketing side.
Subsequently he went into the mainstream consumer products
industry and worked for Coca-Cola where he was in charge of
franchise operations for the bottling plants in Bombay. “I stayed
for 2 years before being headhunted to join Andersen Consulting
in their sales, marketing and consumer products division in India.
At that time Andersen were hiring people with an industrial
background to blend with the people that had grown up
as consultants.”
The Idea
In the fifteen years since then he has undertaken a variety of
jobs and gained experience: “in a whole host of things, including
sales and marketing in manufacturing and consumer products,
management consultancy and information technology. I joined
Infosys and was appointed as UK head of sales and marketing.
This was the reason for moving to the UK. In 2006, together with
four other Infosys employees, I set up Value Chain International.”
They had all been working in the corporate environment
for between 10 and 20 years and were looking round for
opportunities to move into ownership of a new enterprise.
Neelesh was one of five individuals in a team spearheaded by
the chief executive officer that set up Value Chain international in
2006. “We did some brainstorming around a few ideas and came
across an interesting technology framework and a number of
small companies that were related to this technology framework.”
They put the company together by buying the intellectual
property for the technology framework, by acquiring the
small related companies and merging it all into one operation.
“So it was not a completely ‘ground-up, from-a-garage’ type of
operation”. The team were all working for Infosys at the time
and most of Infosys’ business is writing bespoke software and
packaging it as a service for large multinational clients –
so they were familiar with this market.
The team knew each other as friends and colleagues. They all
had leadership positions for Infosys in various parts of the world:
Neelesh was in the UK then; two colleagues were in Australia,
one in India and one in America. So the process took a lot of
conference calls and working at the weekend to put it together.
Neelesh recalls that the idea developed from being “an interest,
to a hobby, to a passion and then to a company. It was the
availability of the technology framework software that was
the catalyst, making us put it together”.
The software had been written by one individual who did not
have enough time, or inclination, to develop it any further. A
number of things came together: the availability of the software;
the willingness of the companies to make a fresh start under new
ownership; and the availability of finances from various sources.
“We were in a situation where we had all these jewels which were
under-leveraged.”
Neelesh and his colleagues did consider some other ideas for
possible offerings in the information management space. “We
were looking at alternatives but this was the most attractive
proposition and it was the one we decided to run with. We
modelled a number of possibilities. The general problem we
wanted to solve is what we call ‘info smog’ – the notion that most
companies have too much information and not enough insight.”
The value add proposition was to bring a number of things
together and construct an offering that was attractive to the
market and ready for the market. In short, it enables a client
company to ‘monetise’ their information. That is, to make their
information more valuable and thereby to improve customer
relationships by introducing a number of fiscal and
management disciplines. All this is underwritten by
the technology framework software.
Neelesh reflects that his immediate ambitions are to see the
company through a few more years of consolidation and growth.
Annex C: The collection of case studies
A collection of case studies of the UK’s hidden innovators
Neelesh Marik and Value Chain International 38
Pinky Lilani and Spice Magic 42
Rami Ranger and Sun Oil Ltd 44
Suchit Punnose and Red Ribbon 48
John Cavill and Logical Networks 50
Janette Beetham and evening-belle.co.uk 54
Roger and Margaret Wilson-Hinds and screenreader.net 57
David Murdock and clarifeye.com 60
Derek Broomfield and Focus Cooling 63
Sally Walton and ‘Carry a Bag’ 66
Tony and Nadia Howell and whitetruffleauction.com 69
Peter Jenner and Proximagen 72
Tony Baxter and Sandcliff AB Ltd 75
Neelesh Marik and
Value Chain International
The background
Neelesh Marik came to the UK about eight years ago when his
employer, Infosys, a very large Indian company, appointed him
as UK head of sales and marketing. He became a British citizen.
In 2006 Neelesh and four business colleagues founded Value
Chain International.
The company’s press office describes the firm as ‘a global
information management company founded by a high calibre
team of seasoned IT professionals and alumni from the best
engineering schools in India and elsewhere. Headquartered in
Melbourne, Australia and with offices in Singapore, India, UK and
USA, Value Chain International helps businesses become more
agile by operating as a real-time enterprise. Its extensive
information management capabilities enable clients to transform,
aggregate, bundle, distribute, monetise, monitor and control
information within an enterprise’s extended value chain, thus
empowering users to sense and respond just-in-time to rapidly
occurring business events.’
Neelesh and his younger sister were born and brought up in
India. Their father was a chartered accountant and worked in
large corporate companies.
Neelesh had studied up until higher secondary level in India. His
schooling happened across two cities: St Saviours, a well-known
Christian missionary school in Calcutta, and Southpoint High
School in Bombay, which was recently voted as one of the top
four or five schools in India. He then went to the Indian Institute
of Technology in Bombay to do mechanical engineering. The first-
degree course lasted for four years and then he immediately did
a two-year MBA at the Institute of Management in Bangalore,
finishing in 1994.
When asked about influences on his career decisions, Neelesh
recalls that as a child his grandfather was a significant role model
– he was a very illustrious civil engineer in a company in British
India and he was well renowned in his sphere. Neelesh met other
role models among his peer group at the Indian Institute of
technology (IITs). “This Institute is regarded as one of the best
technical institutions in the world. Some even rate it higher than
MIT. At school my big ambition was to go to this institution where
they would typically get 700,000 applicants, with only 2000
accepted. My role models were people who had managed to get
accepted. In this sense the brand name was a role model for me.”
41 Unlocking the potential of the UK’s Hidden Innovators 40 Unlocking the potential of the UK’s Hidden Innovators
“We are still at quite a formative stage, but in the longer term my
career could move into other entrepreneurial ventures. When we
started in 2006 the head office was in Australia – largely because
the two partners including the chief executive officer were based in
that country. But our markets in the UK and in the US are now
larger.It will take a few more years to establish the market value
of the company and whether we continue to run with it or sell up,
only time will tell.”
In preparation for launching Value Chain International the
founders spoke to a number of people. It was mainly friends
and colleagues whose brains they picked. “We did not do a
tremendous amount of market research but we looked at the
information management space and the business process
management space, which we knew about partly because
of our earlier careers.”
They also looked at published reports in specific market areas that
were available to the public. The most intense part of planning
took about five months and it took about a one-year from start
to finish to get from idea to launch.
The business is in two sections – content and collaboration. The
content business is geared towards media and publishing where
their target markets are well established mature businesses and
the major publishers. This is a big company category where
the firm proposes solutions to meet the particular conditions
of the sector.
The collaboration business is more for companies in the medium-
sized business sector for which the offering is concerned with
process collaboration. This area is in an earlier stage of
development and a number of different industry sectors are
being explored. The result is a mix of businesses at different
stages of maturity. The intention is to balance the financial risk.
Implementation
Most of the resources the founders needed were in the
companies that we were acquiring. The senior management team
was already in place and it consisted of the five founders. Finance
came from a number of angel investors and private resources.
This angel investment covered the cost of getting other resources
such as infrastructure, offices and information technology. These
resources enabled the team to get the business into shape. Now it
has achieved a larger scale some refinancing is required and over
the next three months they will be looking for finance in the
capital markets.
Neelesh recalls that the team had many surprises and “the
pleasant surprises were smaller than the unpleasant surprises”.
On the people front “We had taken over a number of companies
and we had to find out who were the employees that we wanted
to retain and who we didn’t. We were looking to people who could
do long haul rather than short haul”. The operational front also
brought surprises.
These were chiefly concerned with the assumptions that they
had made as part of the business definition in terms of market
opportunities, costs and so on.
Neelesh acknowledges that the founders took a lot more things
for granted then they would do now. But because they were all
working full-time for Infosys and trying to plan the enterprise in
their spare time there was not a lot of opportunity to explore
every situation in depth. They had some difficult times at the start
but the business ‘pulled through’ and is now cash flow positive
and stable.
The founders had to rely on each other’s resilience and strength
of intention rather than depend on any support from their Indian
background. However, three months after the firm was launched
Neelesh joined an association called The Indus Entrepreneurs
(TiE Silicon Valley;http://www.tiesv.org/). TiE is a worldwide
organisation which started in Silicon Valley about 20 years ago.
Globally there are about 700 or 800 chartered members who are
entrepreneurs and something like 20,000 to 30,000 ordinary
members. The London chapter has been going for about
10 years. The meetings are a good opportunity to network
and meet people in a similar position.
Neelesh has found TiE to be an excellent forum and would
recommend membership to anybody who wanted to start up a
business. “TiE is a very good network as you can draw upon the
advice and support of experienced individuals who have been
through a similar journey. The mentoring program in TIE is very
good. Although the advice is sometimes indirect I have known
people who have benefited directly, for example by being put in
touch with a source of finance. During the last 12 months we have
had a number of difficult points and being able to draw upon this
resource has been valuable.”
When asked about particular problems that have been difficult to
overcome Neelesh jokes that he and his colleagues prayed a lot.
The members of the management team had to create their own
support system for each other and muddle through. “We also
had our families to see us through and put up with this level of
uncertainty. My wife is a freelance language interpreter but her
time is taken up at the moment by looking after our child.”
It was particularly difficult in London because everything is more
expensive. This made the ‘burn rate’ of resources very high and
required an increased level of business in the UK to cover costs.
The company is now about 400 people. Five are in the US, three
in the UK, six in Australia, two in Singapore and these are either
in management or in sales and marketing. The rest are in India:
“They are the guys that do the work”.
The founders had some contact with the UK Department of Trade
and Industry and the City of London. However, as they felt they
had sufficient knowledge to set up the company they did not
seek government support for small businesses. In Neelesh’s view
the UK is not an especially difficult place in which to do business.
“We are working with mature international companies in the
media and publishing world. We were the “new boy on the block
with a difficult concept to sell” and these were the obstacles rather
than the nature of the UK business climate. But because we had
a customer base that had been built up from the companies we
acquired at start-up we were not starting entirely from scratch.”
Development
Neelesh recalls that the main challenges the founders faced
were balancing cash flow and making all ends meet without
compromising on customer service, and without stopping
investing for the future. Another big challenge is managing the
attrition of good people. Secondly, he feels the firm is still at a
slightly uncertain stage and so managing to keep hold of good
people is an important issue – especially in a market where
these skills are much in demand.
The third big problem is the co-ordination of management
strategy across three continents. They get together as frequently
as possible but increasingly rely on data communication systems
such as Skype for telephone conference calls. “We overcome these
problems by combination of individual and group effort to ‘push
the envelope’ in the direction in which we want to go. We believe
we have a ‘never say die’ attitude.”
Value Chain International is purely a technology business and
it makes extensive use of communications technology in order
to operate. In addition intellectual property is an ongoing issue.
“This is an intellectual property based business and as we operate
all over the world we need to make sure that we are protected in
all these different countries.”
The founders consider the area where the enterprise is most
innovative is in its business model. The revenue from the customer
comes in three streams. First there is the classic, old-fashioned
consultancy fee which is paid on a rate basis. Then there is a license
fee for use of the company’s intellectual property.
The third element is a revenue sharing or ‘gain-sharing’ scheme
which is based on the business benefit that the firm’s
recommendations deliver to the client company. “So the more
we are able to reduce the costs of an operation or to increase the
company’s revenue, then the more money we make and as this
rolls forward into the future beyond the immediate cost of doing
the work, future revenues are assured.”
Lessons learned
In the last 18 months there has been a lot of personal growth.
Neelesh recognises that in his own case he has developed a
tolerance for ambiguity. He observes that in conventional jobs in
large organisations everything is structured and laid out – so the
need to deal with ambiguity is small. But in the entrepreneurial
world situations that are usually not well structured and so the
entrepreneur has got to learn to cope with ambiguity. “This is
particularly difficult for a mechanical engineer but it has been
the area of greatest learning and development for me.”
Interpersonal effectiveness is the next biggest thing, as the
management team has to work effectively together despite the
problems of being located in different continents. This is not
just about being able to work with people but it is also about
tolerating different professional styles because each person has a
different professional style or way of working. Neelesh reflects
that in an ideal world everyone would have the same professional
style and then everything would be harmonious. “But that is not
the case so the ability to be able to live with that knowledge and
respect each other’s professional style is very important as without
that everything could fall apart. This is not particularly an Indian
capability. We are no longer a purely Indian company. We now
have a number of nationalities working for us particularly at
the management level outside India. We exist in a multi-
cultural environment.”
When asked for his advice to others who may wish to start a
business Neelesh reckons the main lesson he has learned is the
need to think through assumptions very carefully. “We would have
done things differently from a risk management perspective. You
need to be able to balance speed with caution. You can be very
cautious and not move at all. There is a saying that the safest
ship is the one in harbour – but that is not it where it is supposed
to be. The trick is not to proceed at a speed where you are making
decisions that are flaky and tenuous and have not been carefully
thought through.”
In Neelesh’s view this is the sort of thing that experience can
bring: “This is a ‘gut feel’ oriented business – ultimately the
most important lesson is that you have to make decisions.”
42 Unlocking the potential of the UK’s Hidden Innovators 43 Unlocking the potential of the UK’s Hidden Innovators
Pinky Lilani and Spice Magic
The background
When you meet Pinky Lilani her warmth and passion are the first
things you notice. She was born in India in the 1950’s where she
attended an Irish convent school. Pinky went on to University
where she completed a first degree in educational psychology
and a post graduate qualification. She met her husband thirty
years ago. They married after a whirlwind romance and left
for England in 1977.
In India Pinky had servants so had not learned to cook. When she
arrived in the UK this was one of the first things that she tackled.
She soon found that she very much enjoyed cooking and that
she had an ability to put together excellent Indian food using
simple techniques.
Pinky is a confident person and believes her confidence and
ability to talk to people has helped immensely in developing her
company. Her background meant that she was confident meeting
and talking to people at all levels. In fact, her interest in those
around her is a very visible characteristic. It is easy to understand
how this trait has helped her to gain an understanding of people’s
needs and to develop a company that responds to those needs.
Pinky has also made a great success of other endeavours that are
equally enterprising but not for her own benefit. She is the
founder of the Asian Women of Achievement Awards. These
awards honour Asian women from all walks of life in the areas of
Arts & Culture, Media, Public Sector and Business. The impressive
judging panel, high profile sponsors and strong media support,
combined with a very competent event management team,
have helped the Asian Women of Achievement Awards create
an unrivalled platform for the talents of Asian women in the UK.
Patrons include Cherie Booth QC and Her Highness Begum
Inaara Aga Khan.
In 2006 she set up a new Award for women of all backgrounds –
The Women of the Future Awards – again with high profile judges
and Princess Zahra Aga Khan and Cherie Booth as Patrons. This
was followed closely by the setting up of the Inspirational
Women's Network with LloydsTSB and the Ambassadors
Programme with Merrill Lynch.
In addition, Pinky is a mentor with the Prince’s Youth Business
Trust, a member of the Asia House special project committee, the
Mayor of Croydon’s charity committee and the European Women
of Achievement Awards. And she helped to set up the Women’s
Interfaith Network to encourage communication and
understanding between women of different faiths.
The Idea
While Pinky was learning to cook she decided to gain some
additional qualifications in the UK so that she would feel
equipped to teach in further education. She completed a Diploma
in Management Studies; a Diploma in Marketing and a Certificate
in Education. Having completed this further course of study, Pinky
started teaching cookery at adult education classes. Initially this
was a part-time role whilst her two sons were growing up.
This interest in teaching and her enjoyment of cooking led
to a new project which eventually resulted in a highly
successful enterprise.
Pinky realised that people were very interested in Indian cookery
but felt it was too complicated. In the late 1990s there were few
Indian cookbooks. Madhur Jaffrey had written several but Pinky
thought there was room for another cookery book with simple,
easy to follow recipes.
Although Pinky did not carry out formal market research, the
interest from her students and those around her convinced her
there would be a market for the book. She borrowed the money
to publish the book from her husband – a successful Indian
businessman and accountant.
Rather typically, when Pinky needed an editor she got on the
telephone to Sainsbury’s food magazine and asked if they could
recommend an editor who would work for her on a freelance
basis. As a result she was put in touch with a young woman who
turned out to be an excellent editor just starting out in her career.
This newly appointed editor did not know anything about Indian
cookery so everything had to be simplified. Pinky believes this is
why the resulting book is so easy to understand and meets the
need of its target audience.
Implementation
The book was published in 2001. Pinky took it to book shops
but found that no one would stock it because she was unknown
author. This setback may have dampened some peoples’ spirits
but Pinky took it in her stride. She used her marketing talents
to generate interest in her book. What she did is a good
example of the way Pinky uses her network to support her
business endeavours.
That year Miss India had won the Miss World title. Pinky knew a
journalist at The Times Newspaper and invited him to cook at her
home with Miss World. The journalist wrote an excellent article
entitled ‘I could hardly stop my Pakoras from igniting’. He also
detailed how people could get hold of the book.
Within two weeks Pinky had received 500 cheques through
the post: “This was the first breakthrough”.
Pinky then took the article to Waterstones along with the book
and asked if she could demonstrate the recipes – particularly
her spicy potatoes – in their stores and sell the book at the same
time. They readily agreed and Pinky started travelling the country
demonstrating her recipes and selling her books in bookshops.
Development
Having established her cooking classes and book sales, Pinky found
that people were asking her where they could buy the spices she
uses when cooking.This led to the idea of the ‘Spice Box’ – quickly
followed by a list of other accessories people could buy. Pinky
observes that “… along the way there are many opportunities
but you have to be open to these”.
Pinky suggests that many people are only interested in talking
to particular types of people, perhaps those who are already
successful, but she has made it her practice to talk to people from
all walks of life. In the process she has found people to be warm
and willing to help her. For example: she says that when she is
travelling she always strikes up a conversation with those around
her because you get to meet such interesting people.
This interest in others led to another breakthrough for her
business. On one journey she met a person who had impressive
American networks in the UK – and has also turned out to
become an excellent friend. Whilst visiting this friend’s family
in the US, Pinky would often shop at Wholefoods, an upmarket
grocery store. She decided to ask if she could do a cookery demo
and sell her books … and to her surprise and delight, they agreed!
Pinky’s company continued to grow. In addition to teaching
cookery and selling related products she started to use her
cooking skills as a feature of corporate training days designed to
improve team-building and management performance. She has
also acted as development consultant with some of the major
food companies in Europe, including Sharwoods, and has advised
Sainsbury’s, Safeway and Tesco on a range of Indian food
products to be stocked.
Technology has played a small but vital part in her business.
Her website is used both to promote the business but also
for bookings and sales and to promote her social
entrepreneurship endeavours.
During the time she has been developing her business, Pinky has
been able to turn to family and friends for the support and advice
she has needed. As a result she has not used Business Link or any
other government agency.
Pinky’s passion and joy for life really are infectious. This passion
and ability to engage with all-comers have certainly contributed
to her success in business. She is a skilled networker and, whilst
she tells you that she has never carried out formal market
research, her ability to network means that she has been able
to test ideas on those around her.
Rather than go to people’s homes to demonstrate her cooking,
Pinky makes a habit of inviting people to her own house to
cook and take part in supper parties so they can network
while enjoying her cooking. And these days she also gives
after dinner speeches.
Lessons learned
On reflection, Pinky feels that her business success is down to her
ability to network and just to ‘get on and do things and … make it
happen’. She is convinced that people must not be shy about
networking in order to build the business.
When she started her venture Pinky was able to borrow the
money she required from her husband but, in her view, if you
have a good business idea you can get funding and this is much
easier now than when she started in the 1990s.
When asked what advice she would give other potential Asian
entrepreneurs, Pinky suggests that you must not be afraid to “get
out there and try to make your venture work and not just to talk to
people who one thinks may be able to help but to take an interest
in everyone you meet”.
45 Unlocking the potential of the UK’s Hidden Innovators 44 Unlocking the potential of the UK’s Hidden Innovators
Rami Ranger and Sun Oil Ltd
Background
Rami Ranger was born in the West Punjab, the youngest of eight
children, in what is now Pakistan. After the assassination of his
father, a prominent Sikh who supported a united India, his family
fled to present-day India at Partition: “My mother was the real
heroine. She brought us up, having lost her country, ancestral
home, and family breadwinner.”
In 1971, he came to the UK to further his education in law, having
completed a BA in History and Political Science in his native India.
However, education in the UK proved expensive and in order to
survive, he decided to find a job. He started as a chef in a fast
food chain, and through hard work within a year he became a
Store Manager and then District Manager in charge of ten stores.
His aim was to make money to complete his studies. Instead, he
became so successful in his job that he abandoned his study
plans: “All my brothers were highly educated and successful.
My aim was to prove myself and to reach a similar level.
“Since I was not highly educated in a secure job, it worked as
an incentive for me to try my luck in business. Once you become
educated, you start to think much more than people in ordinary
jobs. Educated people as a rule worry a lot more than those who
have little to lose in entering a new venture. The educated will
always think before doing something; the less educated after
they have done something.”
When the owner decided to sell his business, Rami was offered
the chance to buy a franchise. He declined because of the night
work, as he now had a young family. Instead, he got a job as a
salesman, which meant a lot of travelling. Because of this and his
young family, he decided to buy his own corner shop, as a lot of
other Asian immigrants were doing: “Ethnic Asians were forced to
go into business because they couldn’t get jobs that paid well and
offered promotion. Our luck changed in 1974 when Idi Amin
expelled the rich Asians from Uganda. Those Asians who came
here were educated and wealthy. As getting jobs was difficult,
they bought corner shops to survive.”
Rami and his wife ran their corner shop for a couple of years, but
due to the long hours and poor quality of life, he decided to go
seek employment with a good company. He joined an electrical
retail chain and was doing very well, but found that the
promotion prospects for an Indian were limited. So, once again,
he decided to start his own business: “I always say, when a bad
employer doesn’t look after his staff, the staff either work for the
competition or start their own business. So I started my own
service business, where I didn’t need a great deal of capital. In the
electrical chain, I was shipping electronic goods abroad especially
to Africa. I thought it would be an ideal business to try my luck in.”
The Idea
“They say adversity brings out the best in you. I was unfairly
treated by my employer, who would always keep me short staffed
in order to make me work under extreme pressure. The last straw
was when I went to see the General Manager to complain about
this unsatisfactory situation. Instead of being sympathetic, he was
very rude and blamed me for my unhelpful attitude. He said, ‘you
know whose name is outside the shop? Then you must do as I tell
you’. Since I had to accept the situation, starting my own business
was the most sensible thing to do.”
He then met someone who was already in the trading business,
who suggested he come and work with him, which he did initially.
But after 18 months he realised his partner wasn’t giving
customers what they need, and the business wasn’t moving
forward: “Had he been a good partner, I would have stayed
with him. But he was taking money out of the company, and not
investing. I wanted to grow it. I’d seen how not to do it, and how
it could be done better.”
The business he set up was forwarding unaccompanied baggage
overseas, initially electrical goods, for immigrants to send back
home to Africa. He started this from a shed in Hayes in 1987.
“Unaccompanied baggage is very big business, especially for those
visiting, because it’s a lot cheaper than taking it as accompanied
baggage. Visitors to Britain always have excess luggage, and
immigrants like to send gifts home. In those days it was easier
for people to buy from England than from Hong Kong or Japan.
In Africa, there is a great demand for luxury goods.”
The target customers were visitors from the developing countries
like Nigeria, Ghana, Kenya, etc. Visitors from India were not many
in those days, and as a result accounted for only 1% of business.
This first company was Sea, Air and Land Forwarding Ltd (SALF).
Although this has grown into a multi-million pound business
exporting commercial goods, transporting people’s effects by sea,
air and land is still a major part of the business.
Implementation
Setting up this first business is a classic case of using minimal
resources for finance, equipment and facilities, and relying on –
and building – social capital:
“For a service business, you don’t need much. You offer your
personal services. I’d go round the electrical businesses in
Tottenham Court Road, giving them my card and building my
relationship with the store managers, who would then recommend
me to their customer for transportation. My initial business was
built on word of mouth. In a service industry, it is only satisfied
customers who will recommend you.”
In this, Rami also first demonstrated his appreciation of the
importance of service, understanding what was important
to his customers: “When people entrust you with their valuable
possessions, you must put their mind to rest and ensure safe
delivery. It could be something personally valuable such as their
wedding photographs.”
The result was this seemingly unpromising business went from
strength to strength: “… Anyone can ship goods. The one who adds
value with a professional service will win in the end. For example,
I would always shrink-wrap suitcases, so that they did not get
marked or damaged in transit. It’s my honour, my reputation
is on that cargo.”
Now, the business (and its sister company, Sun Oil Ltd, set up in
1995) operates from three large warehouses at Greenford, shrink-
wrapping and bubble-wrapping a wide range of goods by
machine. But the principle of carefully wrapping unaccompanied
baggage so it arrives intact was established from the beginning,
with Rami doing this by hand from a lock-up shed he’d hired:
“You have self-storage places. It cost me £120 a month to get a
little shed. I’d bring the cargo there, pack it, go to the airline, weigh
it, pay for the handling. There was very little overhead for me;
it was all profit.”
His need for finance and support at this time was therefore
minimal, although, importantly, he had built up some capital from
his shop, as well as learning basic business skills, including looking
after your customer: “Running a corner shop was probably the
most important factor in my success. I learnt a lot about running a
business. It gave me a financial start. Living above the shop saved
me a lot, gave me a lot of financial benefit. It gave me a lot of
financial cushioning for later. I bought the business for £30,000,
sold it for £50,000, when house prices were only £40,000. Although
corner shop people may not realise, it can be very lucrative. It also
showed the importance of looking after the pennies. And how to
deal with the customer. If you don’t look after them, they will go.”
When he’d bought that shop, he had had some trouble getting a
loan, so the money he saved from it was invaluable when he set
up again – “The first bank said I was too ambitious. But I had
tenacity, and went to another bank and explained my financial
plan, and got a loan straight away. Banks are now readier to lend
to immigrants.” Likewise, he had had little need for support from
small business agencies, and has never used them, although he
recognises others may benefit – “A lot of people have. As a
successful businessman, I have very little time. But those who
can use the system can benefit.”
Rami’s early success thus owed much to the business skills he’d
slowly developed through a series of jobs and experiences, his
empathy with customers, and his inherent personal qualities:
“To be successful in business, you have to have three things –
self-respect, family honour, and work ethic.”
These skills became increasingly evident as he built his businesses.
Development
Through word of mouth, the freighting business snowballed,
and from shipping electrical goods, he was asked to source other
products to customers in Africa where rich people wanted to
buy British products, but had problems getting them reliably from
suppliers: “This was a blessing in disguise. I was amazed because
I was able to eliminate profit centres from suppliers, and save
customers transport costs of £4-500 per container. The business
just grew and grew and grew.”
The tremendous growth from this first business was able to
finance the more capital-intensive second business, Sun Oil Ltd,
which was established 8 years later in 1995. Not only had he built
up capital, but he could now get credit and buy properties,
including the warehouses to which he then moved his business.
The result is that 20 years from starting as a one-man business
from a small shed, his companies now employ 70-80 people
(mostly fellow immigrants and Indians) and ship over 2,500
container lorry loads a year with a combined turnover of
£50 million and continued growth at 30% a year. In 1999 he
received the Queen’s Award for Export Achievement, and in
2005 was made an MBE for services to British Business and
the Asian Community.
As forward freight and exporting businesses operating in so
many far-flung countries, the businesses rely intensely on IT, using
specially designed software to integrate all the paperwork for
freight forwarding, and their container loads tracked through
the shipping lines’ systems. 1995 was indeed a good time to
start a trading business, since “I couldn’t be in 60 countries
without the internet”.
47 Unlocking the potential of the UK’s Hidden Innovators 46 Unlocking the potential of the UK’s Hidden Innovators
In 1995, Sun Oil Ltd was set up to market British supermarket
goods featuring blue-chip brands by Unilever, Nestle, McVities,
etc. in small countries where they did not have offices. Bulk
product was ‘broken down’ into smaller quantities and multiple
products consolidated into container loads for small local
distributors. Sun Oil’s development shows Rami’s appreciation,
first, of ‘finding the right product for the right market’: “You must
identify the right product for the right market. For example, I’m
based in England. I have to ask myself, why do people come to
England? If I make a cheap product in this country, I’m doomed
from the start. So being in England, I have to provide products they
cannot buy elsewhere. So quality is very important. Any product
we develop is a quality-based product. I’m catering for the top end
of the market in 3rd world countries.”
Second, it shows his understanding of the person he is actually
selling to, and the need to support his customer’s own business:
“Empathy for the customer is very important. You won’t succeed if
the customer doesn’t need it. You must imagine how this man is
going to sell. It’s my responsibility that this is sold to the end-user.
You must manage your customer. Don’t let him over-stock. Have a
long-term feeling for the customer. Let him take half to start, not
double. Think of the implications, the repercussions. Manage and
support the customer through the distributor. I say to the customer,
if you lose I will refund you.”
The first step with Sun Oil was to market branded supermarket
products. As he got to know his customers in these local markets,
he then saw the opportunity to market secondary brands
alongside these that were similar to these well-known brands. At
this point, a third key business skill comes in – recognising where
money could be made by cutting out costs and how this could be
made to appeal to customers by sharing this saving with them.
As Rami emphasises, “Profit is sanity; turnover is vanity.
“People tend to buy brands. It’s a feel-good factor. Brand leaders
become brands with very heavy advertising. But I have to have
a different way. I give the same quality product. I give a
manufacturer a specification that will taste like the brand. People
acquire that taste. I cannot give them anything that will not taste
like that. So you must understand your subject. I have to give them
the same ingredients, the same taste, but at half the price, because
I’m not going to spend on the advertising. As a result, I keep costs
low, at 30-40% less than the brand.
“Business is all about mergers, acquisitions, and strategic alliances.
I make strategic alliances with local people. To gain something, you
have to lose something. I get my first local contact by selling them
the branded product. I then say, there’s a secondary brand that’s
cheaper, so why don’t you put them both together on the shelf, and
we can both make more money. And I then give them free samples
to taste.”
Sun Oil products are thus branded products exclusive to Sun Oil,
which keep close to the appearance of the original brand in terms
of colour (which can’t be copyrighted), but not so close as to
infringe the trademark – products such as Golden Country,
Royalty, Pure Heaven, English Breeze, Bullet, Toilet Guard.
“I’m not here to invent the wheel, but to copy, and that also needs
skills. I go to small countries where these big boys don’t want to go.
Caribbean islands, with populations of half a million, 200,000;
Cyprus, Malta, Seychelles, Mauritius. It’s all about finding a niche.
Supplying to 60 countries, with a turnover of £1million a week, for
a guy who started in business with £2.”
The next step? Rami now has a “grand idea” to go into
manufacturing, beginning with Sun Oil making its own drinks.
While backward integration is generally regarded as risky for a
small business because it means compounding the risk in one
product, Rami has thought this out with his customary attention
to cutting out costs. At present, Sun Oil buys in drinks from
Belgium, Spain, Austria and Scotland, incurring heavy transport
costs to bring them to London for exporting – annually, 1,000
trucks at £1,000 per load. One manufacturer in Wales will reduce
these costs considerably.
Lessons
Rami’s story offers many lessons for budding entrepreneurs,
and about how new immigrants to the UK can realise their
entrepreneurial talents.
First, there is the value of getting experience in a small, relatively
safe business environment: “Before you plunge into a business, get
experience working for someone else so you can learn, because
there’s a lot more than meets the eye. Use their base to learn the
tricks. Then you can judge – if you’re not fit for a small job, you’re
not fit for a big job. Running a corner shop was probably the most
important factor in my success. I learnt a lot about running a
business. It gave me a financial start.”
Second, at each stage, he has mastered what he was doing and
broadened out gradually (although ultimately with great success),
in each case with SALF and Sun Oil building up from few to many
products. In this, he addresses an issue about entrepreneurs as
risk-takers in which there is a good deal of misunderstanding
because of the way a few who are dramatically successful as
wheeler-dealers are held up as examples:
“I’ve never taken a risk, I was very careful. If you have a rich father,
you can take risks. With my humble background, I could never ever
take a chance. Only desperate people take desperate measures. If
you take risks, you’re not a business person. In business, you take
calculated risks.”
This has bred an attitude to look always at the cost of what he
(and others) were doing, and where economies could be made.
Third, there are important insights about customers –
understanding markets at a strategic level in terms of where
there are niche openings that competitors have ignored, but
then having “empathy” for the customer as a person, so you
know what is valuable to them in terms of taste, quality, economy,
reliability, etc. His approach to markets and dealings with
customers have consequently been ‘innovations’ of his own,
not taken from textbooks.
Fourth, there is the personal quality he brings to his business –
identifying in a very personal way with the product and service,
and using every opportunity to sell the business. The first is
summed up in his comment, “It’s my honour, my reputation is
on that cargo.” The second we loosely refer to as networking:
“Networking is very important. I became a member of all sorts of
political clubs and social clubs. Meeting people is very important,
because everyone now and again will need my services. They may
like to move house; they have excess baggage; they’re going to
America for studies, they have books. They say hidden talent is no
talent, so you need to put yourself about, and tell people you meet
what you do. My business card was like seeds – I’m throwing them
in the field, you never know which will germinate.
“Before we sell anything, we have to sell ourself. They say business is
done on golf courses, which is true, because people are more relaxed,
and you’re equal. If I were to make an appointment in an office, it’s
difficult. But the same guy I can bump into, have a few drinks, he’s in
a good mood, he wants to be polite, not show off his powers. I
recommend people to join as many organisations as they can.”
Finally, Rami has strong advice to immigrants about how to get
on: “Normally any country employs immigrants as the labouring
class, to do jobs the host country doesn’t want to do. Ethnic Asians
were forced to go into business, corner shop businesses, because
they couldn’t get good money elsewhere.
But now 30-40 years down the road, there are Indians who have
big businesses, and others going into healthcare, IT, into big
sophisticated businesses working for others in accounts, consulting,
and in the City. But our next generation of Indians will not do
corner shops. Tamils have come; Afghans have come; Somalis
have come. So more and more Tamils are now doing corner shops.
So it’s a progression.
“Europeans coming in now will progress as fast in 5-10 years,
which took Asians 20-30 years. Because they are European, they
have more advantages in the culture, religion, etc. They will have
difficulty, but not as much as the Asians. But only those immigrants
will progress who are willing to change and adapt. Those who just
want to hold onto their backward practices, which made them poor
in the first place, will have a problem.
“The species that will survive in the future will not be the intelligent
ones, or the stronger. The ones that will survive will be those who
can adapt to change.“
But can the government do anything to make things smoother
for immigrants starting in business?
“The British government has already done a lot. At times, we
have to be tough with immigrants. If the immigrant comes to a
successful club, and says change it for me, that defeats it. In the
long run, they themselves will suffer, because they will not be able
to integrate as fast. It can work against the immigrant.
“The UK is a good environment for business. I didn’t find any
problems, except when I was working for someone. Then I did
find a problem.”
49 Unlocking the potential of the UK’s Hidden Innovators 48 Unlocking the potential of the UK’s Hidden Innovators
Suchit Punnose and Red Ribbon
Background
Suchit Punnose came to the UK in 1995. He started as a broker
facilitating import and export transactions over a decade ago,
mainly because it was a business that required little or no capital.
He moved into buying goods and importing them for sale using
trading profits from broking and help from his family. He says: “I
learned very early on that I would get bored easily if there was no
challenge left in what I was doing and thus set about looking for
a business that would give me variety of challenges”.
Suchit became a self-trained management consultant offering his
clients business plans and financial projections. Suchit was a
consultant with a difference. Different because he already had
experience of running his own company. He has owned
businesses in retail, vehicle rental and leasing, accountancy,
advertising and printing. He started meeting and interacting with
entrepreneurs who wanted to plan their future ventures and raise
funding for their businesses. “I found myself researching for these
businesses which increased my knowledge on various sectors such
as retail, distribution, and media”. He then moved on to business
incubation, investing seed capital into businesses and mentoring
the managing director or key driver.
Suchit graduated in history and feels that a degree in liberal arts
is an excellent foundation for entrepreneurs. “The diversity of
stimulation offered through a non-professional and non-science
curriculum is an advantage”. His business commitments have
prevented him from undertaking an MBA as yet but he is keen
to undertake further study in the future.
He comes from a family with a history in business. His grandfather
was a businessman and investor who had a significant influence
on him during his childhood. “My grandfather did not necessarily
encourage me to become an entrepreneur but always motivated
me to do something spectacular that would make my life
rewarding. He taught me the following basics of business. One,
it is not easy to be in business. Two, you will have very challenging
phases in business. Three, your word is your honour. If you commit
to delivering, then you had better do it at any cost. Four, it is ok to
fail. Failure is the stepping stone to success”.
Suchit believes his Indian background has been a neutral factor
rather than a driver for entrepreneurship. Furthermore he has not
met any particular resistance to his business ideas or to himself
since coming to the UK twelve years ago. He has no doubt that
his relationship with his grandfather is the single most crucial
factor defining who he is.
The Idea
Red Ribbon Property Investments Plc is a boutique asset
management firm that offers a range of services. These include
an advisory service to listed funds, packaging and promoting
bespoke funds for medium and large Independent Financial
Advisors and for accountancy firms, and assisting wealthy
individuals to invest in property in India.
Suchit started Red Ribbon as a firm offering secure joint venture
platforms for ‘high net worth’ individuals who did not have the
time or expertise to do property development in the UK. He has
developed the business into an asset management firm. He chose
property “… because it is the most popular asset class offering the
best returns over a ten to fifteen year period”.
He has had other business ideas but believes it is important to
focus on one idea at any given time. “I do have ideas on business
opportunities, but will only progress it if I am able to invest seed
capital and if I am able to find a good manager for the project”.
Suchit started his own business for a variety of reasons. He
recognised that by the age of fifteen he had developed strong
leadership skills. He always wanted to be the one to take the lead
– in fact, he could not see himself working for anyone else. “It is
the challenge and the sense of absolute freedom to do what you
want to do that has prompted me to become an entrepreneur. The
realisation that this freedom could be both good and bad for my
career helped me balance my decision making process”.
Implementation
Suchit had to bring together a number of resources to start the
new venture. The initial idea was formulated as a result of his
personal experience in property development and consultancy.
Next, he needed to find a co-investor who was on the same
wave-length and had the same risk profile. Finally he had to test
the market for the service – which he did by promoting the firm
to suitable clients. But it was gut feeling rather than clinical
market research that he used to decide whether to pursue
this opportunity.
After finding the co-investor, he went about putting together
a board of senior directors with distinguished records of
accomplishment. It was hard work to convince these directors to
lend their name to the company, especially when the company
was conducting investment business. His negotiation skills and
personality became very helpful in achieving this.
Looking back, Suchit reflects that he knew from the outset that
the asset management sector is highly competitive and capital
intensive and he expected that the growth curve would be long.
However, “… what excited me was the scalability of the business.
I found it surprising that a creative solution offering access to
emerging markets with an innovative fee structure could find
new markets very quickly”.
Suchit did not make use of any government agencies during the
process of starting his business and did not go for formal advice.
As a relative newcomer to the UK he had to rely mainly on his
own business acumen. To reinforce this he has found it very
useful to attend CityZone, a networking organisation hosted
by Cass Business School. He is also trying to join The Academy
of Chief Executives, a mentoring organisation for chief
executives who meet to discuss problems and learn from
other established entrepreneurs.
Development
Red Ribbon has grown to become a niche service provider in a
highly competitive sector in financial services. It now has the UK’s
first inheritance tax mitigation scheme offering access to the
property development market in India. Key steps in the
development of the firm have included acquiring fund
packaging skills, gaining insight into the various possible
structures, and finding professionals who offer good quality
administrative services.
The business relies heavily on new information and
communications technologies. “We have a very proactive
internet marketing programme where advanced web marketing
tools are used to promote our business.” (seehttp://www.redribbonproperty.com)
When asked about the qualities that have helped him succeed,
Suchit highlights two: having a positive outlook and being
tenacious. He believes you must have the ability to convince
people and so both oral and written communication skills are
essential. He also believes there is no such thing as a short-term
gain. All plans have to be aligned to long-term gains.
In Suchit’s view, the business is innovative because it combines
a tax efficient structure with very low overheads and an unusual
fee structure.
Lessons learned
Suchit believes the UK environment is an excellent environment to
start up and grow a venture. Against this background each of his
new ventures has taught him valuable new lessons. He suggests
that as you progress along the entrepreneurship path you
constantly learn. “It is a myriad of things from my learning
curve from previous ventures and not just one thing”.
Suchit is very clear about the advice he could offer to other
people like him who might wish to start a business.
“Be ready to face failures and learn from it.
“There is nothing wrong in failing a few attempts. But be sure
to learn from them.
“Be honest about your strength and weaknesses.
“Never be emotionally attached to businesses – know when to cut
losses and get out.
“Be sure that you are getting into the right
sector at the right time.”
51 Unlocking the potential of the UK’s Hidden Innovators 50 Unlocking the potential of the UK’s Hidden Innovators
John Cavill and Logical
Networks
The background
John Cavill’s office occupies a wing of his magnificent Palladian
mansion in Berkshire. It was not always so.
John left school at 16 years of age to begin his career as an
electronics apprentice with the Royal Aircraft Establishment,
Bedford. He subsequently joined Unilever Research as a research
and development engineer. In his early twenties John moved into
a sales and marketing career and spent 7 years working for US
electronics manufacturers including DataTech/Penril and Fairchild
Test Systems, where he was European Sales Manager. In 1979 John
founded and was Managing Director of a new UK subsidiary of
Data Translation Inc. When LAN (Local Area Networking)
technology first emerged in the early 1980’s, John recognised the
potential business opportunity and set up a specialist networking
division, which subsequently became a market leader in its field.
In late 1988 John founded and was Chairman and Managing
Director of Logical Networks plc, a UK networking services
business which was VC funded by 3i plc. Logical Networks grew
rapidly at an annual rate of over 55% and in 1997, when sales
reached £50m and staff numbered around 200, the company was
acquired by Datatec – a Johannesburg Stock Exchange Top 40
public company with annual worldwide sales for 1999 of
US$1.1Bn. John became a main Board director of Datatec Limited
but left the firm in June 2000 to found Intermezzo Ventures Ltd,
a new venture research and consultancy company.
In 1995 John received an EFER (European Foundation for
Entrepreneurship Research) award as ‘One of Europe’s Top 500
Dynamic Entrepreneurs’ and in 1998 was nominated by 3i plc
for the ‘FT/Cartier Venturer of the Year Award’. John is a visiting
fellow at Henley Management College, and a DBA Research
Associate undertaking doctoral research into the characteristics
of entrepreneurial teams.
Now in his 50s, John’s current business interests include non
exec Chairman and lead investor in Creating Careers Ltd a
leading UK online learning company. He is also a member of
the Institute of Directors (IOD) interview panel for Chartered
Director Accreditation.
There are no entrepreneurs in John’s family. His father was
a wood machinist with no ambitions to be a manager; his mother
dedicated her life to bringing up John, his older sister and
younger brother and sister, in their modest council house home.
John struggled at school. He failed the 11-plus and left school
at 16 with an O-level in technical drawing. “I was very good at
practical subjects but struggled with learning by rote and was
subsequently not very good at passing exams. It was much later
when I realised I was dyslexic. When I was young the condition was
not recognised but it is better understood today. It tends to run in
families; my 21-year old son has it but he’s coping quite well at
university. It’s likely that my father was also dyslexic as, although
he was a good craftsman and well respected, he avoided moving
into a management role and never seemed to write things down.”
Having gained an engineering apprenticeship at the Royal Aircraft
Establishment in Bedfordshire, where his father worked, the
biggest influence on John’s career was John himself. Hard work
was rewarded with the prize for Best Apprentice “… but as an
engineering apprentice I had to wear overalls and noticed that
other lads of my age were wearing smart clothes to work – they
were electronic apprentices. I wanted to transfer but when I asked
my father for advice all he could offer was good wishes as he didn’t
understand anything about electronics and thought I should stick
with a career in instrumentation engineering.” John’s application
for a transfer was refused – he had no qualifying O or A-levels
and needed to take a foundation course in electronics to stand
any chance. As he was already studying engineering on day
release and classes at work he had to sign up for an evening
course in electronics.
John finally got his transfer and five years later qualified as an
electronics engineer – immediately leaving the RAE and joining an
electronics research and development team at Unilever Research.
It was here that he developed an earlier ambition to become a
company director. “Some my friends’ fathers had their own firms.
They enjoyed an enviable standard of living compared with my
family – we had no car and no television. I set myself a target:
to be a director or have my own business before I was 30.”
Looking back, John perceives that being dyslexic was a driver.
“I felt a high need for achievement. I had to demonstrate that I was
not as dumb as people thought”. Eventually this determination led
to a business school MA and currently to doctoral studies.
But back then he wanted to gain business experience so he
moved away from engineering into a sales and marketing career
working for American electronics companies in Europe. He was in
his element – and relished the entrepreneurial ethos. “A person
with dyslexia is likely to be a ‘right brain’ thinker and a ‘people
person’. I began to see that success is achieved through people,
not just through technologies and processes; and not by lone
entrepreneurs but by entrepreneurial teams.”
The Idea
John’s idea for an enterprise began to form when he was at
Fairchild. America’s domestic market for IT was dominated by
proprietary offerings from IBM and Digital Equipment. John saw
an opportunity for a toolset of open architecture products that
worked with these to provide tailored, rather than integrated,
solutions. He also saw that European companies wanted IT
components from the US.
John was now 29 and his target deadline was looming. He created
a business plan for marketing a portfolio of data acquisition and
image processing products for R&D departments and research
universities. He took a week’s leave while on a business trip to
Fairchild’s headquarters in California and pitched to six
companies. One of these, Data Translation, invited him to set up
a UK subsidiary, based on his business plan, to sell their products
and those of other US manufacturers, and agreed to fund the
start-up. So John achieved his goal of a directorship by the
age of 30.
The new company later exploited a Xerox invention, the ‘local
area network’, with considerable success. He perceived that
networking technologies could enable end users to assemble
IT components by IBM, Digital Equipment and others to create
a ‘best of breed solution’ that precisely matched their needs.
Data Translation Inc went public and John built up the UK
subsidiary steadily. After nine years, it was earning more from
re-selling other firms’ wares than the parent company’s and no
longer fitted well in the group.
This idea of network systems integration and value added
distribution services was way ahead of the curve and it was
several years before it was copied. Today it is a major line of
business for firms such as Accenture but, when John was hatching
the idea, he had no competitors. Indeed, very few people had the
knowledge or experience to understand the concept. This created
a dilemma: he needed to create a ‘centre of excellence’ to build
an interest in networking and systems integration in order to
generate a clientele ready to buy his services.
John became single-minded in pursuit of his goal. His proposal to
Data Translation of a management buy-out was favourably
received but, much to his amazement, it fell through at the last
minute and he was summarily dismissed. Suddenly John had to
fight a double crisis – now nearly 40 he had to find a new income
while pursuing a claim for wrongful dismissal. For some time John
had been fostering an idea for a completely new offering. After a
harrowing six months he won his claim against his former
employer and was released from ‘gardening leave’.
John contacted the best people he had worked with at various
companies over the previous 15 or so years and canvassed his
idea. His enthusiasm and leadership soon enabled him to
assemble a team of four top flight managers and specialists
ready to join his proposed digital networking enterprise, to
be named Logical Networks, as soon as he had acquired the
necessary funding.
However, some venture capitalists he approached ridiculed his
two-pronged business model. They believed that by training
resellers to design networks he would spawn an army of
competitors who would destroy his embryonic business within
a year.
On the other hand, the private equity firm 3i Group saw the merit
of John’s track record of establishing a successful subsidiary for
Data Translation and of his appropriately skilled ‘dream team’.
These factors, combined with 3i’s preference not to have to drive
the businesses it invests in – especially when they are highly
innovative – removed the imperative of a seat on the board.
Implementation
So, six months after being fired by Data Translation, John’s master
plan started to fall into place and his Logical Networks business
idea became a reality. He surmises that what had got him over
the hurdles was the combination of his track record, his network
of contacts, experience of the sector, reputation, relationships with
manufacturers, and his proven ability to deal with bankers and
accountants.
Now he had to develop a longer-term plan. However, he was
disturbed to find that several of the US suppliers he had been
banking on were dubious about his innovative business model.
They disliked his idea of simultaneously developing direct and
indirect channels to market. “They said there would be no trust
in the channel; people wouldn’t understand. ‘It won’t work and
we can’t support – so we won’t supply. You’ll be out of business
in a year’.”
But they were proved wrong about the business model and a year
later they were clamouring at John’s door. “Lots of people now use
a dual channel business model. It is disruptive and you have to
earn people’s trust. Companies sending staff for training have to
be certain you won’t pass any of their knowledge to competitors.
On the other hand, the model enables you to hone the highest
level of technical skills with the same staff dealing with the top end
and the lower end of the market. From an early stage this enabled
us to win and undertake multi-million pound projects.”
53 Unlocking the potential of the UK’s Hidden Innovators 52 Unlocking the potential of the UK’s Hidden Innovators
John is philosophical about the lack of peer group support
during his formative years which forced him to make his own way.
“Knowledge about dyslexia has only emerged in the last 20 years.
When I was younger no-one knew what it was.” Having prevailed,
John now serves as an advisor to the British Dyslexia Association’s
Board of Trustees to help others with dyslexia.
He found the same lack of support from government agencies.
In the early days Business Link approached Logical Networks on
several occasions. “Unfortunately they didn’t understand a high
growth business like ours or the technology market. Their people
were from more traditional SMEs or were retired bank managers
and were unable to add value to ‘gazelles’.”
John has seen the situation improve. The South East England
Development Agency (SEEDA) has developed suitable coaching
and mentoring programmes after recognising that the traditional
approach which suits lifestyle start-ups doesn’t work with high
growth businesses. Other useful assistance for ‘gazelles’ includes
Enterprise Hub networks based on university campuses.
Development
John identifies three factors that enabled him to succeed: a need
for achievement, the right skills and experience, and having an
excellent team. “Success comes from recognising an opportunity
when no-one else sees it and taking advantage of it. But I’m not
sure about ‘luck’; it’s more about planning”.
John’s family has been unable to help him in his career. His
brother is a software developer who gives priority to family
matters and his sisters have both been hard-working
administrators but are also un-ambitious. None of his extended
family have demonstrated any entrepreneurial tendencies, apart
from two distant uncles who were shop keepers.
John observes three types of people: “those who won’t recognise
an opportunity if it hits them in the face; those who see it but miss
the boat because they don’t have any drive or imagination; and
those who see it from a distance, grab it and run with it”.
When asked how he grew Logical Networks John’s response is
unequivocal: quality of service. “Well educated people generally
want to work for the big companies; I sought people with
enthusiasm and dedication”. To illustrate the point he recalls that
when he needed to hire the first telesales person a recruitment
agency produced the unlikeliest candidate: a 19 year old then
working as a butcher at Sainsburys.
However, his determination to get into the computer industry and
his night school studies persuaded John to offer a three-month
trial. The recruit learned fast; studying technical manuals by night
and challenging the firm’s engineers the next day. Before long he
was successfully moving through the ranks and eventually selling
multi-million pound deals to banks.
“After I sold Logical Networks he was headhunted by a US
company to set up a subsidiary in Europe. Start-up companies
need bright young people like this who are driven by a need for
achievement.” People working for the largest IT companies started
to join John’s firm as it became more established.
From the outset John believed it was vital for Logical Networks
to use what they were selling in order to prove they could
implement the technology. The first deal the new business
secured was to solve a problem for BT that had defeated BT’s
own engineers. Shortly after, when the firm still only had 12
employees, they designed a network to integrate the dealing
room front and back office for Mitsubishi Bank. “We were the
only ones who could demonstrate that it could be done and this
qualified us to tender for the installation.” Logical Networks beat
multinational competitors to win the £half-million contract.
“High level technical skills, service quality and novel marketing
techniques gave us a very professional image from day one.
We never looked like a start-up. It enabled us to punch above
our weight.”
The new business was highly innovative in two ways. Firstly its
offering was to combine and connect various new networking
technologies to create business solutions that until then had not
been possible. Indeed, the offering was so new that very few
people understood it and as yet, nothing had been written about
it other than technical user manuals. Also due to his legal battle
with Data Translation, John was unable to approach any of his
previous clients.
Secondly, he had to create an innovative marketing approach.
One of the founding partners wrote a book to explain computer
networking. John bought lists and wrote to all the IT directors and
buyers in the UK. The offer of a free copy of the book in return
for a two-page questionnaire for his database produced a
response rate of over 10% – a rate so extraordinarily high that
John’s backers, 3i plc, persuaded him to present his techniques to
its investment directors at their national conference, sharing the
stage with an advertising guru from Saatchi & Saatchi.
Lessons learned
John is very clear that the key success factor in business is people.
“You have to surround yourself with good people. You must pay a
great deal of attention to hiring the right people. If they have a
problem regarding their job role you must help them develop.
Everyone at Logical Networks had a personal development budget
– right down to storeman and receptionist.
“But if they can’t respond you have to let them go. If you don’t, the
good people leave and the bad people stay. It must be the same
rule for everybody. On one occasion I summarily dismissed one of
the founding partners rather than ignore his disruptive behaviour.”
John reflects that entrepreneurs tend to be strong-minded. “They
want to make the decisions and maintain an internal locus of
control. Some seem to need to micro-manage – but, to enable high
growth, you have to give people their head and accept that
sometimes they will make the wrong decision”.
The firm that bought Logical Networks was looking for high
growth. In the subsequent two years the parent company
acquired 29 businesses in the networking domain. With a seat on
the main board John was tasked to target and acquire firms in
Europe. He left in 2000 when the dotcom bubble was at its height
and people were investing recklessly in business start-ups that
they really didn’t understand and therefore couldn’t support.
John saw no future in this and decided to establish Intermezzo
Ventures Ltd to offer consultancy, coaching and teaching to
budding entrepreneurs. Intermezzo has no employees but
identifies and helps promising start-ups by involving seasoned
entrepreneurs who understand the market and could invest as a
business angel. This service is backed by his own original research
into the characteristics of entrepreneurial teams, which he is
conducting at Henley Management College
[see www.intermezzo-ventures.com].
John concludes with a smile: “There is life after exit”.
55 Unlocking the potential of the UK’s Hidden Innovators 54 Unlocking the potential of the UK’s Hidden Innovators
Janette Beetham and
evening-belle.co.uk
Background
When Janette Beetham left school the possibility of becoming
entrepreneur never crossed her mind. “I had hundreds of ideas but
I was not in the right environment to go forward with them and
not with people who could encourage me.”
During her twenties and thirties Janette was strongly influenced
by her husband’s tendency to be risk-averse and seek out a safe
and secure lifestyle. It was only after her marriage failed that
things started to change: “I became ‘me’ at forty-three!”
It was then, while helping a friend to buy a wedding dress, that
Janette discovered how difficult it was for larger women to buy
suitable clothes for a ‘special occasion’. Janette was surprised to
learn that a majority of wedding dresses are sourced in China,
with classic styles up to size 30 typically on a six week delivery
period. This left the purchaser having to rely on the importer
to carry out final fitting adjustments.
Janette travelled the length and breadth of the country seeking
UK manufacturers and this convinced her there was a gap in the
market which created an opportunity for her to start her own
business. In 2002, she registered the name Bridal Belle Ltd and
rented a small office with storage space in a seaside town in
rural Kent.
In parallel Janette continued to work as an adviser and trainer for
Business Link Kent. In the process she fully explored the potential
cost advantages of selling via the world wide web. With the help
of two web designers she met through her work Janette launched
www.evening-belle.co.uk as a virtual business and decided it was
more convenient to run this from home.
Having mastered the skills to manage an online business Janette
started a second – Room Beautiful Ltd – to market interior
furnishings (roombeautiful.com). She is currently planning
a third business on similar lines – Garden Beautiful Ltd.
Janette’s first school was in a pretty tough area but she passed the
11-plus and went to a grammar school. However, she recalls: “I
was like a fish out of water and I left as soon as I could and feeling
that I wasn’t good at anything academic. It was only when I went
to university at the age of 32 that it was realised I was dyslexic.”
She reflects that two hundred years ago people needed practical
skills more than abilities with numbers and text. Dyslexic people
process information in a different way from the majority and can
face challenges in acquiring numeracy and literacy. With the
benefit of hindsight, Janette observes that she had started
to develop coping strategies from a young age.
Janette describes her parents as ‘quite needy’. Her mother was
the eldest of a family of five children. She was a young carer and
looked after all her siblings as well as her parents; one infirm and
one disabled. Her father “… was orphaned at the age of six and ‘hit
the road’ on his own at the age of 13. At one time he sold from a
suitcase on London’s Oxford Street to make ends meet. He lived a
long and full life and I spent many happy hours listening to his
money-making ideas – from hatching chicks and selling them to pet
shops to being a self-employed ‘runner’ for a London chemist when
he was 18. He went on to have some quite responsible sales
manager jobs - tapping into his flair for sales and communication.
He hardly ever wrote anything – but he was a real survivor”.
Looking back, Janette believes that both her parents were dyslexic
and she now knows that her own son has inherited the condition.
Janette believes that her father’s ability to spot an opportunity
is part of her own make-up. Her grandmother was also an
important influence: “She was in a wheelchair and constantly
faced all sorts of challenges and access problems … but she never
let anything get her down.”
After the break-up of her marriage Janette sought counselling.
The person she met introduced her to Neuro-Linguistic
Programming and she found this extremely helpful. She has gone
on to become an NLP practitioner and, since the diagnosis of her
son as dyslexic, has used this skill to help others as well as herself
through work with the British Dyslexia Association (BDA) and
the Prince’s Trust.
Once Janette was on her own, following the separation from
her husband, this background helped her to give her business
ideas a go.
The Idea
Janette’s school days had been fruitless but by the age of 32 a
desire to learn had compelled her to enroll at university to study
Art and Tourism and Leisure studies (specialising in Service
Management and Service Marketing). It was only at this point
that her dyslexia was diagnosed and she worked on developing
additional strategies for coping with her condition. Tony Buzan’s
‘mind mapping’ technique is one that Janette adapted and
uses constantly.
The drawing of links between issues and concepts comes naturally
to her – art was the one subject at which she excelled at school.
“Everything I do is mind-mapped so I don’t forget anything. It has
transformed my life.”
But there was still a long way to go: “I’ve always wanted to
prove myself to myself and rise to a challenge … but I lacked
the confidence.”
Janette had followed up her original idea for Bridal Belle Ltd with
extensive market research. She identified a type of customer who,
needing an evening dress but having little time to look, was
reluctant to go to a High Street chain and risk wearing the same
expensive dress as another guest. Typically, the big stores have
very limited stock and offer a maximum size of 22. And when
lines are out of stock, replenishments are on six weeks delivery.
The unique selling proposition would be always to stock 40
dresses in a variety of sizes up to 30, to offer online consultation,
and to ensure a delivery period of 2 weeks for made-to-order
garments. Furthermore, Janette would have to be able to run the
business alongside her daily work. Initially her venture involved
renting a local small unit. But trying to combine the role of office
based business-woman with fee-earning work during a
transitional stage proved too difficult.
In her late thirties Janette had attended a variety of training
courses put on by Business Link programme. In 2002, part of
her daily work meant undertaking assignments for Business Link
which, at that time, was helping many people set up in business
in her local area under a dedicated business initiative for East
Kent. Through this she met two exceptionally skilled people
who were honing a software package that allowed two-way
communication with customers that was fully integrated with
back-office functions such as invoicing and stock control. Janette
acquired the package and has found it invaluable. It was ideal for
the transfer from shop to online service – which was “set up on a
shoestring, with no borrowings.”
Implementation
The NLP counselling and training had really boosted Janette’s
confidence. Now in her early forties, she “had serial ideas and now
I had someone to run to. But you need to be hungry before you
will make any money.”
Janette initially found suitable suppliers in Yorkshire and has
subsequently located more by attending exhibitions. After the
colleague she had during these early travels went her own way:
“I decided to keep the idea going on my own’.
Janette’s life experiences have obliged her to be self-sufficient.
At a personal level she has been greatly helped by the NLP
counsellor friend. She has also benefited from the advice offered
to her son by a colleague at the British Dyslexia Association. This
came too late to help her with her business ambitions but has
been re-assuring because they suggest coping strategies that
affirm those she developed for herself.
“My experiences have toughened me up. The public in general are
nice … but there are some horrible people out there.” As a trainer,
Janette has gained empathy from working with prisoners and
disabled people. “I will go the extra mile … but I can’t abide cheats.”
When asked if government small business support service gave
her any help Janette recalls “receiving lots of advice and a small
grant but what I needed was mentoring and business counselling.
It probably goes back to my schooling – which was too rigid, too
prescriptive. I need to be able to bounce ideas off someone with
experience. So I had to go outside Business Link and I found a
mentor through my interest in social enterprise. We help each
other.”
This sort of help encouraged Janette to become a qualified
Business Counsellor at Level 4 and gain a level 5 Vocationally
Related Qualification in Social Enterprise Business Advice. “In fact
what I needed at the outset is what I do for other people now –
but there is no-one out there financing this type of support”.
The people Janette met during this time have helped her to
combine learning and practice and to make her own way. Her
quest for business knowledge has led her to undertake a series
of university courses in business and management. These, in
turn, have enabled her to gain work as a trainer at various
government-sponsored agencies such as Eastbourne and District
Enterprise Agency (EDEAL) and Business Link and as well as
voluntary sector organisations like the BDA and the Prince’s Trust.
More recently Janette has found the Federation of Small
Businesses (www.fsb.org.uk) “… to be great. They help you
counsel yourself and check how you respond to a problem”.
Successive training and consultancy assignments led to the role
of coordinator for Kent and Medway Social Enterprise Network.
However, funding for this ran out in July 2007: “I was made
redundant and became fully self-employed.”
Her continued interest in social enterprise has left Janette with
a strong desire to help others to set up their own businesses.
And her VRQ5 qualification enabled her to secure a contract
with Business Link to develop a workbook to support
social entrepreneurs.
57 Unlocking the potential of the UK’s Hidden Innovators 56 Unlocking the potential of the UK’s Hidden Innovators
All this has enabled her to maintain an external income stream for
four years while launching and growing Evening-belle.co.uk.
Janette reflects that trying to do so many things at once has been
very difficult. “But having teenage children can certainly help with
the IT!”
Development
Because of the nature of her business Janette has had to develop
and foster a virtual team – and building a team like this takes
time. It now includes a mentor, a key supplier, the two web
developers and a bank manager. “Unfortunately the first bank
manager was awful and I had to move to a different bank.
Everyone must feel part of a team, with barriers down.”
When reflecting on her recipe for success, Janette is very clear.
“Tenacity. The ability to rise to a challenge. You have to feel you
are moving forward.” Other local businesses have also been
supportive. For example in providing the initial office space
at a reduced rent.
Given that her business is targeting a niche market that is widely
distributed across the country it soon became obvious that
setting up in an accessible local public location could not respond
to that wider community. Switching to a web-based service meant
that managing the business could be done at home and
combined with fee-earning activities for clients.
These factors have proved essential during the start-up phase.
Firstly because it has allowed earnings to be ploughed back to
develop the business and, secondly, because: “It was almost
exactly a year from having the idea to getting my first order.”
Evening-belle.co.uk is now ticking up three orders a week,
potentially worth up to £100,000 per annum. But Janette’s
abiding fear is that her reliance on suppliers could cause her to let
down a client over an order. She sees that the time is coming to
bring in a professional manager to put in the time and effort to
progress development to the next stage. And the possibility that
this would lead to a sale of the business would allow her to apply
more time to developing her other businesses.
Janette believes that without technology her venturing would have
been impossible: “Trying to run it from a shop would have taken
100% of my time.” The capability to trade online has been vital.
This is especially important when one aims at a niche market
sector whose constituents represent only a small proportion
of the general public.
A well-designed website that search engines discern to be
relevant can be as visible as that of a multinational enterprise.
When good design is combined with software that integrates
customer-facing and back office facilities a small trader can
enjoy reduced costs and less reliance on bank support.
The technology Janette uses fitted her key requirement – not to
limit her ideas. “The technology gives me complete administrative
control. It enables me to manage referrals and keyword searches
and it integrates purchase orders. I could run this business from
anywhere in the world; I’d just need someone to parcel and
despatch the goods.”
Lessons learned
Janette’s experiences have prepared her to envisage further
opportunities. “I’ve learned so much; but not just about selling
dresses. For example, get your supplier into some kind of
partnership so that if he let’s you down, he’s letting himself down.
The skills I’ve got now mean I’m ready to help more with social
enterprise – where there is so much need.”
She now feels empowered to do anything she sets her mind to
and is keen to develop an idea for an ‘easy on’ clothing range
that uses special fasteners. And she is interested in the concept
of ‘asset lock’ that helps start-ups to reinvest profits (see
www.cicregulator.gov.uk).
Janette observes empathy between people setting up in business,
especially if they have learning challenges. Her advice is to find
some free workshops via Business link or the local Enterprise
Agency, link up with like-minded people and develop a network.
“You need to find people to talk to. Your family or partner may feel
threatened by risk and try to talk you out of your idea. Try to find a
counsellor with business experience.”
In Janette’s view the key ingredient for entrepreneurial success is:
“Make your own decisions”.
Roger and Margaret Wilson-
Hinds and screenreader.net
The background
Roger Wilson-Hinds and his wife Margaret have been blind since
birth. Both have had rewarding careers in teaching and then
running an IT supply and training business. But in 1998 disaster
struck. At the age of 60, Roger became seriously ill and all work
had to stop.
While recuperating he suddenly saw with great clarity a new goal
– to open up information literacy to blind people anywhere. This
ambitious objective demanded the development of free software
that can read out a digital file or web page displayed on a
computer screen.
Although their ‘non-business model’ was ridiculed, Roger and
Margaret persevered for six self-funded years. In 2004 a technical
breakthrough finally meant their screenreader, dubbed ‘Thunder’,
was ready to be given away (viahttp://www.screenreader.net/).
Already some 100,000 blind people around the world rely on
Thunder and its future is secured by strong income streams
for producing variations commissioned by national and
international institutions.
Roger perceives that his many and varied life experiences have
contributed to this outcome. At 21, as a social sciences graduate,
he set out to earn his living as a door-to-door salesman. He felt
deep uncertainty but refused to let his blindness get in the way.
“To do this well you have to like people and not mind rejection.”
After succeeding as a salesman Roger decided to become a
teacher. This led to a period as an education adviser to families
and local authorities. Then he was appointed Head Teacher of a
special school for blind children. After being made redundant “for
being too radical” Roger joined RNIB (Royal National Institute for
the Blind) in the 1980s as development manager where he helped
blind people to take advantage of new technologies.
At school Roger had found it hard to concentrate. Weekly hospital
appointments and numerous operations disrupted studies and he
came to feel that he and his peers were viewed as ‘cataracts, not
people’. “Those in authority were mapping out our lives for us –
telling us we could become telephonists”.
Roger remembers an exception to the rule – John Lorrimer, a
blind teacher at his junior school. “He taught us to play chess and
solve problems and believe in our own brain.” Realising he was
surrounded by clever people motivated Roger not to fail and he
started to study harder. This led to Worcester grammar school for
blind people and from there to university. But all this studying
finally finished off what little reading sight he had.
The career paths of both Roger and Margaret were subtly
influenced by their family background. Margaret’s father rose
to become a senior Civil Servant and was awarded the OBE for
services to blind people. Roger’s family members have always
preferred ‘safe jobs rather than being self-employed’. His parents
were modest, working class and normally-sighted but he and his
two brothers were all born blind. “Dad was very much
instrumental in encouraging us to make things, repair our own
bikes, build crystal sets and listen to short wave radios. So this laid
the path for an interest in technology, of course”. Later, Roger was
also influenced by Archbishop Trevor Huddlestone’s book against
apartheid. “I was for the underdog and actually got arrested for
demonstrating at a Test Match versus South Africa at Edgebaston.”
Roger does not feel his blindness has had either a positive or
negative effect on him: “I haven’t allowed my blindness to be
relevant. It is part of me; it’s who I am.”
The Idea
Roger was made redundant by RNIB in 1992 when he was 52 and,
needing an income, he and Margaret decided to set up in business
as a disability training company. They won a government contract
to teach blind people to use computers and they sold the
necessary IT hardware and software to these customers. At that
time any blind person who had a job could get a government
grant for up to £14,000 for IT hardware and training. “Social
inclusion is supposed to be mandatory; in reality it’s about
‘freedom to pay’.”
The venture proved very profitable, but in 1998 Roger was
diagnosed with cancer and all work stopped abruptly. The IT
business was immediately given to a close friend – who has
continued its success and today employs nine staff.
While being treated in hospital and heavily sedated, Roger had
an extraordinary and life-changing experience. “A near-death
experience really switches you on. I acquired an absolute
knowledge of what I had to do.”
58 59 Unlocking the potential of the UK’s Hidden Innovators Unlocking the potential of the UK’s Hidden Innovators
It was suddenly crystal clear to Roger that he must do something
to help the 80% of blind people who, being unable to get a job,
were ineligible for a government grant and therefore were
effectively denied access to the online world. “The idea was to
open up information literacy to blind people anywhere. Giving
away something valuable was definitely not a sensible business
idea. But I saw what IT could do if freed up from business
commercialism. And I felt I had the contacts and the skills
and the money to do it.”
Roger was well aware of a type of IT application called a
screenreader. In essence, this is software that scans text on the
computer screen and uses a speech output device to ‘speak’ it to
the user. RNIB markets a robust example named ‘Jaws’. In the US,
Serotek offers an equivalent called ‘Freedom Box’. Typically, these
products retail for about £1000 per user.
Roger envisaged a low-cost or no-cost application that would not
compete because it was aimed at a different target market – the
many blind people around in the world who have little or no
disposable income.
Roger and Margaret sought help from various government-
sponsored initiatives. All the Business Link people they met
seemed to be engineers who ‘understood marginal costs but
could not see that the web is different’. “The web offers peer-
group support and networking and viral marketing. With very little
money you can be round the world. Saying ‘It’s free; try it’ breaks
all the traditional rules”.
They attended ‘business breakfasts’ and visited executives of blind
societies. “It was a distraction but part of the learning curve when
you are a disruptive technologist. We wasted an awful lot of time
trying to be sensible – we should have just got on with it”. Roger is
philosophical about it today and, as a trustee of the Blind
Business Association Charitable Trust (www.bbact.org.uk) he tries
to help blind people get into work.
Implementation
In 2000, when Roger was 60, he and Margaret paid to attend a
course at the School for Social Entrepreneurs
(http://www.sse.org.uk/) which had been founded by Lord Young
at Bethnal Green in London. There were classes for ten weeks
followed by nine months of supervised work on a business idea.
Roger and Margaret realised that if they wanted to implement
their idea they had no alternative – they would have to fund it
themselves. They discussed their idea with one of their long-time
friends, Paul – a university professor of computer studies who is
normally-sighted and clearly enjoys a challenge.
The visually-impaired community could offer no support. “Quite
the opposite really. And help from RNIB was minimal. To be fair, if
someone had approached me with the idea in the 1990s when our
IT firm was doing so well, I would have rubbished it.”
They struggled with the technology. The key problem for any
screenreader application software is that video drivers conflict
with speech output devices. Paul had written the code for
‘Narrator’, a speech accessory in Microsoft XP 2000. Microsoft in
Cambridge is researching speech recognition and put Paul in
touch with the Disability branch at Microsoft’s Seattle
headquarters. “They’ve been very helpful. Paul went to Seattle and
was given access to the ‘hooks’ in the source code.”
Roger found the UK business environment to be quite hostile to
his new idea. “It was not long after the dotcom bubble had burst.
Software was a no-no. No-one I approached could get their head
round the idea of a useful but free application. The best case was
when a senior man from Tesco came to see us – they charge
charities many thousands to place a link on the Tesco website. He
was completely baffled that we wished to give our product away.”
On the other hand, Microsoft supports constant innovation and
was interested in the solution as a freestanding or bundled
commercial offering … “but this would not have suited ordinary
blind people who have no money”. No money was given and none
was requested. It took two years to develop the software manuals
and a further two years of testing. Roger had to resume doing
some training to bring in money to pay a web designer.
Finally, in 2005, Paul achieved the necessary technical
breakthrough and ‘Thunder’ was ready for launch at the Sight
Village exhibition in Birmingham where it caused something of a
sensation. “We won’t patent it – it’s all Microsoft technology – but
we were at least a year ahead of the pack”.
Development
Roger recalls a lecture by Dr Michael Tobin on blind people
tending to be passive. Because they are so dependent on parents
and carers they feel they have to please them constantly. Roger
recognised that he had been quite reserved when young. It had
been easier to be passive and he ‘hadn’t shouted for himself’. It
made him realise: “It’s in the head. You must be undaunted and
stop seeking people’s approval.”
This made him want to see what IT can do for people’s lives. “You
have to be able to see the other person’s point of view. People who
can’t get a job are less likely to be able to articulate their need.”
So he enrolled on an “IT for All” course but “it was too slow; I got
chucked off the course.” The experience convinced him that
starting up a technology-based business does not demand a
really deep understanding of the technology: “but you must
understand what it can do for what you want to achieve.”
When asked about the importance of having a good team, Roger
is disarmingly candid. “I don’t see myself as a good team worker
but you can’t do it all on your own. I don’t mind being in a team as
long as I’m the boss. I’m pig-headed … and don’t seem to mellow
with age”.
Development of the business was very slow at first; between 2000
and 2005 take-up was minimal. It was only after it was finally
decided to give Thunder away free that the business really started
to take off.
Shortly afterwards, the European Blind Union suggested that an
EU grant might be available for translations of Thunder. They put
Roger in touch with a German company that undertook all the
form-filling. Within two months, in January 2006, five partners
had joined forces and a grant of €240,000 was made to fund
French, Italian, German, Slovak and Estonian versions of Thunder.
The influx of cash enabled Roger to give up doing the IT training
sessions and the recently recruited professional fund-raiser has
already secured a further £55,000 from the Esmée Fairbairn
Foundation to produce a learning disability programme.
Today Thunder has 88,000 users of whom 70,000 are unregistered.
“The download laws and data protection vary in different countries.
We let anyone download what they want without having to reveal
their identity. But the world is full of spoilers; when we reach
100,000 we will insist on registration.”
The product is wholly dependent on technology. Roger recalls
that “The IT has been a real headache – it disturbs the dream. But
not any more. We receive wonderful emails from around the world.
I’ve just had one from three blind lads who had downloaded our
free screenreader in an internet café in Lagos.”
Roger reflects that the most innovative aspect of the business has
been its business model, namely; to give the product away free
and make money from associated project work. He recalls that
the agencies set up to assist start-ups interpreted this as ‘a
complete lack of a business model’. “With a modern technology-
enabled product one has to be willing to cast off traditional
business models. The capital cost of the equipment in my office
was less than three thousand pounds; compare that to the cost
of a factory!”
Lessons learned
Roger reflects that in the 90s the government would pay him for
three days to train one blind person in the rudiments of IT. Now,
people can take the Thunder screenreader and do it on their own.
“There is constant change in IT; one can’t plateau. So many
brilliant young people are doing wonderful things. I say to the
more mature person with a bright idea: ‘don’t wait; do it now’.”
Roger is sure that the way his screenreader business developed
was influenced by his earlier entrepreneurial experience. “It is very
easy to think short term, to take what’s going and make some
money – as we did in the 90s. But there’s always something long
term you could do that would be better. Our screenreader is
fabulous, it’s streets ahead, it’s mega, it’s the tops!”
61 Unlocking the potential of the UK’s Hidden Innovators 60 Unlocking the potential of the UK’s Hidden Innovators
David Murdock and
clarifeye.com
Background
David Murdock is the owner manager of a thriving technology
business based in Glasgow. As a young post-graduate he set up
his own business in 2003 “because no-one would give me a job”.
David has been visually impaired since birth. He had a difficult
time at school in his native Scotland but, after being turned away
by numerous universities, he was finally given the chance to excel.
He gained a degree in molecular biology and progressed to the
doctoral programme. But microscope work took its toll on the
little reading vision he had – so he switched to a postgraduate
course in computer programming.
Now married, the time had come to stop being a student and start
earning a living. But how? He and two blind student friends on his
IT course tried to identify a service that was not being offered in the
region. The option that appealed to them most was a service that
would ensure a company’s website complied with the UK’s Disability
Discrimination Act and was accessible to anyone, despite any
physical, sensory or cognitive disability they may have.
And so clarifeye.com was born.
David recalls that his great grandfather was an entrepreneur
although that business passed down another branch of the family.
David’s parents have salaried jobs; his mother is a teacher and his
father a distribution manager. They have always been very
supportive and they enabled him to go to a private school:
“… where I got no help at all. I was flippant, bolshie and outspoken.
In a group I could see the solution straight away and would get
impatient.” And the sudden death of his older brother made
him an angry person.
David feels he has overcome most of that now but believes the
education system has let him down badly. After four years he
moved to a grammar school with a visually impaired unit to do
his ‘Highers’ in preparation for a university place. David found this
unit to be ‘an incredible hindrance’ and he only attended one
class a week. “I prefer to do things for myself … but I now see that
I have to be more reasonable.”
When asked about the influence of role models David reflects:
“I’ve never been able to model myself on somebody else. I might
admire a person but I don’t try to emulate them. It takes a lot for
me to ask for advice. I tend to bottle it up inside.”
Getting to university was to be yet another challenge. Although
he had done well enough in his exams to warrant a place,
interview after interview ended abruptly when his blindness
became apparent. “They were very rude. At one university I was
literally cold-shouldered out of the building.” But as we’ve seen,
once he did secure a place, there was no holding him back.
The Idea
As part of the IT course, David and two blind friends, Adil and
Gaffar, had researched ‘accessibility’ – the design of computer
systems so they are usable by people with a disability. For
example, Adil needs to use a screenreader (see our case study on
‘Thunder’) while David can just discern text if it is in a very large
font. They presented their findings to a group of IT directors.
“There was no response but it had raised my own awareness of the
need … and there was a personal annoyance factor.”
After graduating, David went to the job centre. There he was
repeatedly told, in no uncertain terms, ‘stick on your benefits, you
won’t get a job; it’s not worth your time’. “I didn’t bother to go
back – instead I went trekking in Alaska.”
On his return the three friends decided to make their own luck
and try to develop the opportunity presented by the Disability
Discrimination Act. At that time some of the major IT
consultancies were offering corporate clients a website
accessibility review as a supplementary service. No-one was doing
it as their only offering and, in particular, no-one was doing it
who was disabled.
David, then 25, registered Clarifeye Ltd with Companies House in
October 2003. Adil would be the salesman, Gaffar would do the
books and accounts, David would do the technical work.
They hawked their idea round to Scottish Enterprise where they
were advised on business planning and referred to Business
Gateway. “They didn’t understand what Clarifeye could do. They
just saw us as three blind guys asking for money.”
However, Business Gateway did suggest an approach to the
Prince’s Scottish Youth Business Trust (http://www.psybt.org.uk), a
charity that promotes and supports self-employment and business
creation amongst young people. “The PSYBT gave us lots of help
… and three thousand pounds to buy some IT equipment. The deal
is, if you are successful you have to put something back in.”
Implementation
The set up costs of the business were minimal. Clarifeye is an
IT-based solution and the partners were able to work from
their own homes.
The trio told everyone they could about the offering. “None of us
had much business training; we were learning as we went along.”
The breakthrough came in January 2004 when Goldman Sachs
was referred to them by Blind in Business – a London-based
charity that helps to ease the transition between education
and employment for visually impaired individuals
(http://www.blindinbusiness.org.uk). The bank was shocked to be
told their recruitment pages were badly coded and inaccessible to
anyone who relied on a screenreader. The partners specified what
had to be done and the bank’s IT staff put it right.
Blue-chip companies tend to have numerous websites each with
constantly changing content. For example, David cleaned up 20 of
Proctor and Gamble’s websites and now has a contract to review
them annually. Advertising and attendance at exhibitions has
delivered scant results; the business has grown mainly through
word-of-mouth recommendations.
Apart from Blind in Business, David has found that organisations
that represent visually-impaired people, such as RNIB (the Royal
National Institute of Blind People), have been of little help to his
business. “When I started Clarifeye it was a business for blind
people by blind people. Not now. I don’t carry a white stick, so
people are not aware. It’s just a business.”
During the start-up phase it was not economically viable to rent a
workshop. The business had to be run as a virtual organisation.
Because they could work remotely and communicate by email,
the partners started to acquire clients in America. David reckons
he has never met or spoken on the phone with half of Clarifeye’s
clients; Adil made the contacts.
Nevertheless, the work enabled the partners to meet many
people and build up a panel of specialist sub-contractors. When,
after a year or so, both Adil and Gaffar decided to accept full-
time posts elsewhere, David’s self-reliance made him comfortable
to run the company alone. “But getting a reliable accountant was
difficult. The first one I appointed filed the accounts late and
caused me a lot of unnecessary trouble.”
David also discovered he was not a natural salesperson. “I was
surprised how resistant people were when I told them how bad
their websites were! I had to learn how to talk to people; I had to
change my personality.” He now talks to clients differently. He asks
what they want their website to do for them, who they want to
reach, what benefits they hope to gain.
David reflects that government small business support services
offer ‘quite a bit of help to get start-ups off the ground’. However,
he deplores they way the government has removed tax relief for
SMEs. “The tax waiver on the first ten thousand pounds of profits
was replaced by an extra 3.5% on pensions. It was apparently to
gain short term popularity but it leaves you worse off.”
Development
David’s friends and family have been very supportive: no money
but lots of moral support. “You have to have persistence. Things
don’t always go to plan. You don’t get the money you’re looking
for. You have to learn to talk yourself up and sell yourself at a
premium rate.” But this persistence can have a heavy price.
“It cost me my marriage. I spent too much time working;
my wife took second place.”
David now has several teams of programmers. “That was another
new learning curve. A few years ago I was fine as long as
everybody agreed with me!”
When asked if luck has played a part in his success, David reflects
on the importance of meeting the right person at the right time.
“Business success is about people and contacts. Remember: it’s not
what you know but who you know.”
While developing Clarifeye he met up with an accomplished
salesman. He also met an experienced businessman who was to
become his mentor.
Both are normally sighted and they proposed a new partnership
with David that would be an IT solutions company which was not
concerned solely with visual impairment. They would invest in the
new business – Clarifeye Computer Systems – which, in parallel
with the original Clarifeye business – would operate from a retail
shop to sell and repair IT hardware. This would be supplemented
with ‘Big in IT’ – a ‘paperless office’ consultancy that would help
professional clients such as lawyers to streamline business processes
and benefit from web development services.
David’s mentor “… has taught me about business processes and
the new way of doing business; assigning tasks so you can go out
and make money; developing the business so that it is scalable
both horizontally and vertically.”
The shop was opened a year ago and Big on IT is now getting on
its feet. After achieving a first year turnover of £250,000 from a
standing start profits are being re-invested to build up the
business.
There are grand plans. Work on vertical development is focusing
on building a niche market share and securing wholesale
purchasing deals. Horizontal growth will take the business from a
single shop to a chain and franchises. David, now 29, and his
partners confidently expect year two sales to hit £4 million.
62 63 Unlocking the potential of the UK’s Hidden Innovators Unlocking the potential of the UK’s Hidden Innovators
Clarifeye is an IT service that is delivered by a virtual team
that could not function without advanced information and
communication technologies. “What we offer clients is technology
solutions put together in new ways that change the way people do
their work – be it to solve problems, to reduce paperwork or to
reach customers.” As an illustration David cites an IT solution he
delivered to one client; a database task that used to take three
days is now a minute’s work.
In David’s view, Clarifeye is innovative because no-one else
offers the same service as a single service and because, as its
website conveys:
“The majority of our team members have some form of disability.
Because of this, we experience first hand the difficulties badly
designed websites bring, and are best positioned to advise you and
make sure your website is not breaking the law and is reaching its
full customer potential.
“We are often asked how we can be so sure that our service ensures
the best advice for the design of user friendly and accessible
websites. The answer is simple: automated tests and technical
analysis by a consultant can fail, but the additional level of testing by
a group of disabled people who are directly affected by badly
designed websites, will mean the advice you receive will guarantee
your website will become accessible.”
Lessons learned
When asked what he has learned from his experiences as an
entrepreneur, David highlights the need for “… policies and
procedures. Instead of trial and error, do it the right way from the
start. Train people and induct them quickly. Give them manuals.”
His advice to other visually impaired people who might wish to
start a business comes straight from the heart: “Think carefully
before you do it. Business and friendships don’t mix – it can lead to
conflicts; it can even put your health at risk. Define the roles; put it
all down on paper.”
And he ends with an exhortation: “Don’t let visual impairment set
you apart. The only difference is the distance from eyes to paper.
Prove them wrong when they say you can’t. You have to find out
for yourself how far you can go.”
Derek Broomfield and
Focus Cooling
The background
Derek Broomfield is the son of a career soldier. He grew up in
Cyprus, Germany and the UK moving regularly throughout his
child hood. He became something of a rebel and whilst he did
quite well academically in his early life he lost interest as he
became older. When his father retired from the Army, Derek
was a few months away from finishing his education.
As a result of this final disruption he left school without any
qualifications and signed up for an apprenticeship in air
conditioning engineering. “My father said to me: ‘your brother
is training to be an electrician so you can either train for air
conditioning or plumbing’. There was little choice in the matter.”
Derek thought that air conditioning sounded new and interesting
so he chose that. His father took him along to a local company
for an interview and he was told he could start on the
following Monday.
Derek recalls that his rebelliousness at this time meant he “… was
not always customer friendly, particularly if the customers were
‘foolish’.” Learning that the customer is always right was a very
important lesson for him.
Derek completed his apprenticeship and proved himself to
be a capable engineer. He was ambitious and in due course
he achieved senior management positions, firstly in the air
conditioning industry and then in facilities management in
the building industry.
However, Derek became disillusioned with working for large
organisations. He hated the bureaucracy. He also disliked the way
people around him were being sidelined or dismissed when they
reached a certain age. Furthermore, he felt the customers were
not getting the best deal.
The stress, long hours and lack of work life balance had already
led to divorce so he was ready for a change. He also believed he
could offer customers a better service than they were currently
getting from larger companies which were more interested in
appeasing their shareholders than their customers.
His brother was a successful small business owner having started
out as an apprentice in the electrical industry and his brother-in-
law ran a successful printing company.
These people around him proved to be valuable role models.
So, when two former colleagues asked him to join their successful
small air-conditioning company he jumped at the chance. This
opportunity proved to be pivotal: “As a Director of this small
company I gained the experience and self belief that I could run
my own venture and build something of value.”
The Idea
After working with these colleagues for some time Derek became
sure he could be more successful if he went out on his own. He
had always been interested environmental issues and believed
there was a need for a service that offered more eco-friendly
ways of heating and cooling buildings.
In 2002, at the age of 49, he founded an air-conditioning energy
management company that he named Focus Cooling. The new
company set out to offer installation and maintenance services
to industrial and commercial customers.
He did not carry out formal market research prior to starting
but had talked about it with his many contacts.
Derek initially funded the company himself with £30,000 of
savings. He only produced a business plan when he needed to
raise additional funding and approached all of the High Street
banks. National Westminster bank was the only one which would
provide a loan facility – and then only on condition that his family
home if the house was used as collateral.
For Derek this meant that he had to grow the business more
slowly than he had anticipated. because he did not have the
resources to take on very large projects until the company had
established a firm financial base.
Although he had held senior management positions in the air-
conditioning industry and had been trained in management
Derek felt a need to gain new skills to grow his business. He
attended a Dale Carnegie communications course and a business
growth programme at the University of Bristol.
Implementation
At the outset the business engaged two engineers and used
numerous sub-contractors. It has since grown rapidly and
expanded into the energy management field. In addition, Derek
has invested in training on new eco-friendly energy management
solutions and works with customers in partnership to help them
make their buildings more energy efficient.
65 Unlocking the potential of the UK’s Hidden Innovators 64 Unlocking the potential of the UK’s Hidden Innovators
Initially the company was run from a bedroom at home but this
proved to be difficult. Derek did not feel it was professional
enough – particularly once he started employing more people.
He purchased a commercial property to house the company and
he now sublets surplus space to other small business people in
the building and surveying industry. “This has proved very useful
because it means that I have a network of like minded people on
the doorstep – all with very useful contacts.”
More recently Derek has changed the focus of the company
to include consultancy services and expert diagnoses. This has
meant employing engineering graduates with post-graduate
qualifications. Derek does not have these qualifications himself
but firmly believes that this level of expertise is essential if the
company is to be really successful.
Derek believes the government is not on the side of small
business. He sees the Chancellor’s removal of taper relief on
taxable profits as just another indication of the government’s
lack of understanding of the psyche of the entrepreneur.
He also fears that the increase in bureaucracy is stifling growing
companies. This increase in bureaucracy means that even with
some staff to help, the directors of small companies must
constantly strive to keep up to date with the latest regulations
and health and safety legislation. “All this means that running
a venture in the early stages is a ‘24/7’ job.”
On the two occasions that he has sought advice from the
government’s small business support agency, Business Link,
Derek has found them less than helpful. On the first occasion
he required advice for a patent and on the second he needed
advice about exporting. Now, when he feels the need for advice
he talks to his accountant and financial manager, or the
company secretary or friends who are also entrepreneurs
in the same industry.
Derek’s wife comes from an entrepreneurial background and runs
a small business support centre. She has also been an informal
source of advice.
Development
Derek comes across as a slightly reserved man but when speaking
about his area of expertise he displays both passion and a wealth
of knowledge. He has quite a few business ideas that he could
take forward but is too busy with the existing company to start
up anything else.
Technology plays an important part in the business. It enables
plans of buildings and internal installations to be sent in digital
format to consultants acting for customers. This has reduced
the time it takes to quote and detail can be checked very
quickly. Derek was initially resistant to using IT himself and
has had to learn.
Derek is more expert on the technical side of the business
than the day to day running of the financial side of the business.
Recognising that the tight control of finance is essential, Derek
has employed experts to run the parts of the company that he is
less skilled at running.
As a result he has recently taken on a masters-level graduate who
is helping him invest in technology that will allow the company to
work in closer partnership with its customers.
The biggest problem he has had to overcome is the lack of
experienced staff within the industry. The difficulty of finding
enough talented staff has prevented him from expanding the
business at the rate he would have liked. He has even tried to
employ workers from overseas but the lack of skilled engineers
does not seem confined to the UK.
Derek’s response to this shortage has been to invest heavily in
training. However, he has become irritated by the poaching of his
experienced and well-trained staff by larger companies who do
not invest in training and can therefore offer better salary
packages. To combat this Derek has decided to offer shares in
the company to his employees both to motivate them and also
to ensure they stay committed.
This share option scheme has also enabled him to motivate the
two new graduates he has taken on. Both are essential for taking
the company forward and also for succession planning. “I have
learned how useful this extra level of expertise is for the venture.
But I’ve also found it is very difficult to keep these young graduates
inspired and motivated. It’s a fine balance. They want to grow the
company more quickly than is sensible or feasible. And I also have
to manage the fact that my older engineers are now being led by
much younger individuals.”
Focus Cooling is currently in the process of acquiring a small
heating company to complement and expand the air-conditioning
business. This will enable a progression into ‘eco-friendly’ heating
and cooling solutions and Derek sees this move as further
evidence of the innovative nature of his enterprise.
Lessons learned
Derek puts his success down to his determination to provide
expertise and a good service at a fair cost. He has also become
well known in the industry as a technical expert and this has
helped him develop a wealth of contacts. He has differentiated
his business by specialising in highly technical services and by
bringing in people whose skills supplement his own.
Most recently he has employed a graduate with a Masters-level
degree in engineering. He is expected to become a junior partner
and enable Derek to develop the consultancy side of the business.
However, Derek also finds the business all consuming and he still
struggles to maintain a work/life balance.
One thing that came as a surprise was the length of time larger
companies take to pay small companies. In the second year of the
business the venture was growing quickly and almost failed
because it lost control of cash flow. Large sums had been paid in
advance to suppliers of specialist air-conditioning units.
But then several large customers decided to take over 90 days to
pay for these units to be installed. In order to pay the wages and
the suppliers Derek and his wife had to put the rest of their
personal savings into the company. Without this commitment
the business may well have gone under.
The company now has a full time credit controller in post and
no-one is allowed to build up a back log of overdue invoices.
Now, new clients must pay a deposit for large installations. In
addition the company has established a good credit record with
its suppliers so it no longer has to pay in advance for products.
These steps have made things easier.
Looking back, Derek considers his finest achievement is that, over
the years, he has trained a number of people who have gone on
to build small companies. And many of these new businesses now
provide him with a pool of reliable subcontractors that he can
turn to when he encounters peaks of activity.
67 Unlocking the potential of the UK’s Hidden Innovators 66 Unlocking the potential of the UK’s Hidden Innovators
Sally Walton and ‘Carry a Bag’
The background
Sally Walton started Carry a Bag in 2006 to manufacture
environmentally friendly shopping bags as an alternative to the
plastic bag. The bags are handmade in Hastings East Sussex using
strong ‘Fair Trade’ organic cotton ticking lined with recycled home
furnishing fabrics such as table cloths or curtains. The patterns
vary so that every single bag is unique.
Sally’s father was a test pilot for the RAF but before she was born
he died while testing a plane in Florida. After a spell living with
her mother’s parents in Leicester, Sally and her mother emigrated
to South Africa when she was five. After school she did three
years at art school and then worked in a record shop. South Africa
was “a wonderful opportunity to grow up in a very exciting and
wild environment.”
Back in London, Sally continued studying art and design at
degree level, but this stopped when she got married and stayed
at home to bring up four children. Her husband worked as an
illustrator and she started working with him to create books on
interior design, arts and crafts, and folk art. “ We were always
freelance ... I have not worked in an office since 1975. We got used
to living on our wits and did quite well at it and got established as
authors and illustrators. There is a big market in America for this
kind of hands-on arts and crafts book.”
This all stopped rather dramatically at the time of 9/11, which
coincided with the Frankfurt book fair for that year. “Suddenly the
whole market in America closed down and we had to think of
other things to do. I looked at the job market and found myself
unemployable … I did not ‘tick’ one box. In some cases I did not
even understand the description of the job advertised by the
employment agency.”
Sally had not stayed for the final year of her degree at Middlesex
so she did not have that qualification. “I had nothing but a
huge amount of experience and a lot of potential to do
something interesting.”
Sally had become very interested in the environmental
movement. The last book that she and her husband produced
together was in 1999 and called Eco-Deco. This was a book about
design using recycled materials but the major publishers rejected
it on the grounds that they ‘did not want to have anything to do
with rubbish’. “It was a book that was ahead of its time and my
research for it fired me up. My response to this rejection was that if
I am going to do something I’m going to do something that I really
care about.”
Sally went to the local business enterprise people to see if there
was a grant available. The answer was ‘no’, but there was a course
on entrepreneurship that was about to start and had places
available. It lasted six months, with one teaching day every two
weeks and mentoring sessions in between. “We had a workbook
that we had to get through and this was a really strange situation
for me. At the end of the course I was ready to go and there was a
grant of 1500 pounds. I found somebody to create a web site to my
design and I launched my new business in June 2006.
The Idea
The 9/11 atrocity in 2001 had a profound effect on precisely the
sort of business Sally and her husband were in. “We had about ten
projects going with a very large publisher in Bond Street in London,
with extensive American interests. The way this business works is
that in September everybody goes to Frankfurt for the annual
book fair, and there the business is done. That year nobody from
America went to Frankfurt and the whole thing collapsed.”
At this point Sally decided that she had to choose one particular
thing out of a number of different possibilities, and focus on it
exclusively. “I have worked for many years with my husband and
we became moderately expert at a lot of things without being pre-
eminent in any one particular area of work. I realised that to start
a successful company I had to focus on something specific and the
‘carry a bag’ idea was the most promising one.”
She wanted to make a really big impact with this idea because
she felt passionately about it. “I had to do it. I wanted to become
associated with the idea that you don’t use plastic bags anymore.
This issue has become very high profile and I now feel that I am
in the right place at the right time. 18 months ago, people were
surprised that there might be a business opportunity in this area.”
When reflecting on the more innovative aspects of her business,
Sally highlights that what is different is that she enhances the
‘eco bag’ offering by introducing an element of fashion and style.
“I had my target market in mind and it was typified by Jamie
Oliver’s wife. Someone who cares about the environment and likes
to be seen to be caring about the environment … but who also
wants to use well-designed products to look fashionable
and smart.”
Her premise is that in order to make people carry the bags when
they go shopping, they have got to be practical and stylish. “I
contrast this with the Sainsbury’s ‘I am not a plastic bag’ initiative
where they got a top fashion designer to design a re-usable
shopping bag and then sold a limited edition in the stores for five
pounds. This initiative attracted colossal press and media attention
with the consequence that their bags became desirable items in
their own right and were being re-sold on eBay for 400 pounds.”
In Sally’s opinion this totally misses the point of what the bag is
supposed to be. “In my view it should be a bag that you want to
take out to do your shopping, rather than a design item that you
buy for its investment value.”
Sally likes to use the bag to get messages across. “It is one of my
strengths is that I am able to come up with snappy slogans. This
year we are going with the slogan ‘A bag is not just for Christmas’.”
Implementation
Sally started entirely on her own and was looking for a grant to
finance the purchase of sewing equipment. Her postcode area is
regarded as ‘depressed’ and attracts redevelopment grants so
Sally was seeking one when she heard of the enterprise training
course. “I was interested in doing it because I had always felt a
stranger to accounting. We had always had somebody to look
after that side of things but I felt the need to learn more about
it for myself, as you can sometimes feel vulnerable if you don’t
understand things. I did do a business plan and I loved it. I am
a writer and love writing. So the business plan became a
challenge for me to produce something interesting and decorative.
It looked like something out of a Sunday supplement by the time
I had finished”.
The course ended in February 2006 but the grant money did
not come through until April. Sally spent the cash on sewing
machines and on producing high quality postcards featuring the
bags which she sent to every magazine editor she could think of.
The web site was ready in June. “At the launch I had my bag
featured in Country Living and that was an enormous factor.
For two months the phone never stopped ringing and what with
other placements the run-up to Christmas was very successful as
it was featured in a lot of places as an ‘eco-friendly’ product to give
for Christmas.”
Currently the bags are made by a number of home workers in
St Leonards. Sally has found it quite hard to work with people in
the UK: “Many of the casual workers want to have a cash-based,
off the books business, and if you go to a factory then it is just is so
much more expensive than India.”
Development
In January 2007, Sally received a call to say she was going to be
featured on ‘Daily Candy’. “I did not know what this was but it
turned out to be a daily bulletin that goes out to journalists in
fashion and retail industries. It features a new product every day.
Within ten minutes of the article appearing the website server had
crashed and we were overwhelmed by the response. Most of it was
from people inquiring for details but there were also a number of
huge orders offered. These included Disney Corporation which
wanted to put the bag in the British Pavilion at EPCOT in Florida.”
At the time Sally was not in a position to take on this level of
business. So she embarked on a process of finding large scale
manufacturing facilities in the UK. Although she came close to
finalising one particular option, she eventually decided to
outsource a major order from Aveda – a very big American
cosmetics company with green credentials – to a manufacturing
facility in India, which she knew about through her supplier of fair
trade cotton. The order was to produce 1200 bags for Aveda’s
annual conference. “This is my first big outsource experiment. I’m
going to do the Aveda job through Bishopston Trading”.
At that time Sally was making use of ‘BizFizz’ – a government-
sponsored initiative started by the New Economics Foundation
and The Civic Trust that provides support for new businesses (see
www.bizfizz.org.uk). It was her contact there who told her about
Bishopston. This business was started by Carolyn Whitwell in 1985.
Initially the firm imported fair trade organic cotton but they now
have a manufacturing plant in India to make clothes (see
www.bishopstontrading.co.uk).
Bishopston is the supplier of the cotton Sally uses – so the Aveda
bags will be made in India. “My contact with Bishopston is through
a smaller trading organisation in Wales, but the point is that the
bags will be made at the location where I have always bought my
fair trade cotton. I was quite reluctant to do this in one sense as I
would prefer to get them made in this country but it is so much
cheaper to get them made in India, and also I feel that it will do
a lot to support the local economy out there.”
Sally was pleasantly surprised to find that Aveda were happy for
the bag to have her brand printed on it as well as their company
name. “And there is also a tag that says ‘Sally Walton with love’
that connects my name to the brand.”
Sally did not talk to many people about her idea at the start up
stage but her children were helpful. All of them work in the media
and public relations industry. Her eldest son is a creative director
at an agency and his connections in the media and fashion
business proved to be useful.
As the business has grown, she now feels the need to consult with
other people and think through her options. Sally came second in
an Intel ‘older entrepreneurs’ competition and so came close to
winning mentoring support from Simon Woodroffe of Yo Sushi
and Dragons Den, and an older entrepreneur himself.
69 Unlocking the potential of the UK’s Hidden Innovators 68 Unlocking the potential of the UK’s Hidden Innovators
Simon Woodroffe put her in touch with PRIME – the UK national
organisation dedicated to helping people aged over 50 set up in
business (seehttp://www.primeinitiative.org.uk/). She did an
interview and was featured on PRIME’s web site as a case study.
However, her attitude is that she would use PRIME but, as she
still feels young, she does not wish to be ‘put in a box as an
older entrepreneur’.
Other sources of advice are closer to home and to her passion for
the environment. “The people that started the Green and Blacks
organic chocolate business are friends of mine and they live locally.
They started off with the same ethical focus that I have and have
built up a major brand.” They are the people who advised Sally to
go for the Bishopston trading operation and set up manufacturing
to be done in India.
Sally’s enterprise depends in large measure on new information
technologies. However, she is struggling with the management of
these technologies. The man who designed her web site “did a
fantastic job and produced exactly what I wanted. But he suddenly
gave up the business and went off to run a nightclub”.
While searching for a replacement, Sally was put in touch with an
IT services firm with green credentials – for example it uses green
electricity to run its servers. For a time Sally found this firm
satisfactory and she was able to put stuff on the site and take it
off as she saw fit. For example designs with a short life span
would go up on the site and come off within a matter of days or
weeks. But “… more recently the IT person has taken more control
over the content of the web site and I feel that it is slipping away
from my control. This worries me. The web site is crucial to the
successful growth of this company and I want to have more
control over it.”
Sally is looking forward to growing the firm into a more
substantial operation. “I tend to get scared by small things such
as design details that I may have left off a particular customer
request. Things that stress me are quite small things but the big
things are more fun.”
Lessons learned
Sally does not recall being influenced by any role models but feels
strongly that her background has helped her enormously.
“I feel that I do not fit into any category. I don’t fit into any
particular country or nationality. I feel hugely attached to my
family because this is something I have made but beyond that
I do not feel any real attachments.”
Looking back at her experiences and the factors that have
helped her business to succeed, Sally reckons “… it all goes back
to my childhood. Everything about me just makes me want to
be an individual.
I am not a team player but I could be a team leader.”
One of Sally’s current concerns is trademarks and the question of
whether she should try to trademark ‘carry a bag’. She did get
expert legal trademark advice on this and was told that it would
be difficult and expensive because it was a description rather than
a name. “The alternative is to trade for three years and then apply
on the basis that it is an established brand. So I let it go.”
But six months ago Sally discovered that someone else had
applied to trademark the name and, contrary to the advice that
she had been given, it had been accepted. So Sally was advised to
re-apply on the basis that the name had now been accepted as a
trademark but that she had a prior claim.
Fortunately the other applicant withdrew and Sally’s claim is
going ahead “… but this is costing a lot of money that I could have
been spending on fabric and workers.”
Sally has sought out government-sponsored support services for
small businesses – the training course is an obvious example – but
“…they don’t see things in the way that I see them. They seem to
have a narrow local focus that is concerned mainly with creating
opportunities in local communities, rather than giving me advice
on how to set up what could be a major operation. They are used
to dealing with people who have very local and specific problems
and trying to help them resolve them. I am way ahead of them in
my vision for what is possible with this company. I do need
somebody – such as a mentor – who can be more supportive to my
ambitions. I would love to be able to talk to somebody about my
ambitions in a confidential, consultative basis – almost a ‘shrink’-
type role – so that I could feel confident about where my ambitions
could lead.”
Tony and Nadia Howell and
whitetruffleauction.com
The background
Tony & Nadia Howell established White Truffle Auction in 2007.
Nadia started her career in the food industry in 1986, when she
established her own restaurant in London. The following year her
interest expanded to the supply side of the business, including
sourcing fresh Italian truffles for sale to restaurants and to
individual clients.
Truffle hunting in Italy is often a family tradition and Nadia has
worked with the same group of Italian hunters for over 20 years.
Tony has worked in financial institutions in the City for over
20 years, most recently as a treasury consultant. He quit this
profession in 2005 and became involved in designing and
installing CCTV and control systems for commercial premises. This
venture continues to operate but in 2007 Tony decided to focus
on developing and managing whitetruffleauction.com.
Tony Howell was born and brought up in Kingston. His mother,
who is Italian, came to the UK in the 1960s. His father is English
and was a General Post Office engineer.
Tony achieved 13 O-levels – “I think this was as a result of
competition with my friend” – but at A-level he did not get the
grades required for university and had the option of repeating
the examinations one year later or joining NatWest Bank on a
training scheme.
His career in corporate finance led to a position with HSBC
as a treasury consultant, looking after a number of FT-SE 100
companies and advising them on ‘interest rate hedging’
opportunities and joint ventures in emerging markets.
The job with HSBC involved a lot of late night working and
dealing with very substantial sums of money. At the turn of
the millennium the stress brought on a health scare and Tony
concluded that he needed to get a balance between work and
family life.
In a strange way the health scare had given him the confidence to
take on a new challenge. “I always had that entrepreneurial streak
but I never had the push to do anything about it”.
Tony left HSBC in 2005 and set up his first venture in partnership
with a lifelong friend. This is a security business, which designs
and installs surveillance systems on commercial premises.
But Tony could not stop thinking about the massive opportunity
presented by the fact that his wife knew the food importing
business. “My experience in the financial trading industry has
shown me that whenever there is something that has value then
there is an opportunity to set up a trading platform to bring buyers
and sellers together. Fresh White Truffles have very high value; in
fact by weight they are more expensive than gold, and there is no
trading platform for them. There is the annual Alba market each
year in Piedmont in Italy. The business concept is to bring this
market online to a global auction.”
The Idea
Tony’s belief that high value opportunities are the more
interesting ones convinced him that the idea of a white truffle
auction was too good an opportunity to miss out on. The
business idea was to capitalise on Nadia’s truffle experience and
run a separate venture from the food importing business.
He thought about it over a period of five years, did a lot of
research on the Internet and spoke to his wife and some of her
contacts in Italy. He needed to find out if it had been tried before
and if it could be started as a business idea. His Italian contacts
told him that one or two people had tried to do it before but that
it had not worked out. He decided that his experience in financial
trading coupled with his wife’s contacts in Italy gave him a better
chance of success. He set up the business in 2007.
Some of the ideas are modelled on eBay, but the white truffle
auction has some distinctive features, not the least of which is
that the product is fresh and must be consumed within days,
so there is much more emphasis on ‘real time’ trading. The
auction process lasts 24 hours and as it works globally there are
complications to do with time zones. Registered customers are
informed immediately by text message that an auction has
started and are invited to submit a bid, including a maximum
price they are prepared to pay. So they can then go to sleep
and check in the morning to see if their bid has been successful.
The proposition to the supplier is that s/he will get a global
market opportunity for 24 hours and a much higher price. “The
business model is innovative because I have done it in such a way
as I am not committed myself. What I am doing is creating a
trading environment for truffles that is aimed at helping farmers
with traditional ideas about markets. What we are doing is giving
them the opportunity to put their products onto a global market.”
71 Unlocking the potential of the UK’s Hidden Innovators 70 Unlocking the potential of the UK’s Hidden Innovators
The web site design itself has some novel features. There is a lot
of information provided on it that is promotional and does not
require registration. But in order to participate in an auction, the
potential purchaser has to register. Most of these people are ‘high
net worth’ individuals who are sensitive about revealing contact
details. So Tony has gone to considerable lengths to ensure the
privacy and security of his clients’ information “… and from a
technical point of view I have a pretty good understanding as to
how the web site works and can update it myself.”
Implementation
There was no special financial pressure. The main work that had
to be done was to set up the operational web site and there was
time pressure on this because the selling season for white truffles
is in the three months prior to Christmas. So the web site had to
be available by the end of September.
Tony had experience in setting up a web site – when he was at
HSBC he had been part of a panel of ten people that designed
the HSBC e-commerce web site for the Treasury Department. But
the information technology part took a long time because of the
complications of creating an auction web site. Tony came up with
the architectural layout and how he wanted it to work and then
worked with a Web developer over a period of seven to eight
months to make it a practical auction web site.
This all went to plan, the site was ready in September and the
first auctions were held in October.
Development
The white truffle auction business is still at an early stage and real
auctions only started in earnest in the autumn of 2007. But Tony’s
intention is definitely to grow the business. “The white truffle is
the highest quality and rarest variety available and is only
harvested in the three months before Christmas. My intention
is to build a brand based on the idea of the white truffle and
expand into other truffle markets, which take place during the
rest of the year.
“The other growth opportunity is to deal with the suppliers of
preserved truffles, which are sold on a more conventional basis,
and set up an on-line retail business. This will then fit naturally
with Nadia’s food importing business in that it would be holding
stock. But the chief business will be concentrating on truffles.”
The development idea is to build a reputation and a brand for
dealing in truffles online either through the auction process for
the highest value of truffles or through a more conventional online
ordering outlet. One part of this will be to establish a greater
presence among the suppliers in Italy.
The exploitation of information and communications technology
will be absolutely essential to achieve the intended growth. The
business model is that whitetruffleauction.com takes a share of the
purchase price. The aim is to attract more and more suppliers to
the idea of selling the truffles through an online auction rather
than a conventional market and build up the business in this way.
Tony has not been to any business support groups but he has been
going to seminars and network events run by Greater London
Enterprise. Through these he has made contact with Jane Milton
who runs a company called ‘Not Just Food’. “These sorts of events
are great for networking and getting out the message.”
Although Tony has not been in contact with Business Link for the
white truffle business, he did consult them regarding the security
business and found them to be helpful on two particular issues.
The first concerned the need for advice on designing a door entry
recognition system and the second issue was connected with
knowing what regulations he had to comply with when using
subcontractors. These considerations have not been an issue in
the truffle business.
The biggest obstacle and learning curve has been the whole
concept of online marketing. Tony uses a PR consultant to deal
with conventional marketing outlets such as newspapers and
glossy magazines but online marketing is something quite new.
The challenge is to see that your name comes to the top of a
search on Google (or equivalent). The Web developer knew
something about this but the whole business of search engine
optimisation is what Tony is concentrating on at the moment.
Curiously, the nature of the truffle makes it more suitable for on-
line marketing than conventional outlets. Glossy magazines want
photographs and other materials to promote the idea of truffles
generally and how they could be used in cooking. However, this is
not something that can be done easily as truffles are typically
used quite sparingly to add flavour to other dishes. So they do
not fit into the conventional food marketing niche.
Naturally, Tony is also concerned about integrity and does not
want to let this ‘get out of hand’. “As the business expands I will
be relying on my trusted suppliers to, in effect, authorise any new
suppliers so that the quality of the product is maintained”. The
contacts with these trusted suppliers have been developed over
many years through association with his wife’s business: “It is not
like family, but they are close friends”.
Lessons learned
When asked for his advice to others who aspire to be innovative
entrepreneurs Tony notes: “One lesson that I have learned from
conventional business is that if you diversify too early, the central
core expertise gets diluted and ‘washed out’.”
But looking back on his path to becoming an entrepreneur in
middle age, Tony reflects wryly that “… I should have started
earlier and followed my inclination to go for some of these
entrepreneurial opportunities. I do plan to expand the business but
after all that I have been through I need to maintain a sensible
work life balance. I do not intend to take on more than I can cope
with. At the end of the day you need to have a passion for what
you are doing and to be able to talk to people about it.”
Tony has two cousins who are a decade older. They set up and
continue to run their own printing business, which they started
right after finishing apprenticeships. Looking back, Tony considers
that this example may unconsciously have been a big influence
on him.
Everything Tony did in the financial sector was sales-orientated.
“My ambition in retail banking was to be in charge of customer
relations and be the interface between the client and the trading
floors. When I moved into insurance that was a pure selling role
paid on a commission-only basis – so I’m used to taking risks.
At HSBC the job entailed dealing with clients and selling them
products and services. I think I can interact well with people. This is
important as effectively I am the business and so my relationships
with suppliers and customers are critical.”
73 Unlocking the potential of the UK’s Hidden Innovators 72 Unlocking the potential of the UK’s Hidden Innovators
Peter Jenner and Proximagen
The background
Professor Peter Jenner founded Proximagen in 2003. The
company joined the AIM market of the London Stock Exchange in
March 2005. Peter was born in 1946 and so was 57 at the start of
the company.
Proximagen is a drug discovery and development company
that is primarily focused on the identification and subsequent
out-licensing of novel therapeutics to improve the quality of life
for patients suffering from neurodegenerative disease such as
Parkinson’s disease and Alzheimer’s disease. The Company is
building a development pipeline to address the significant
medical needs of these patients and has made substantial
progress in four proprietary programmes. The firm anticipates
licensing its programmes following successful Phase II proof
of concept studies and commercialising carefully selected
collaborative programmes. Proximagen also generates significant
revenues from providing assessment and advisory services to
major pharmaceutical companies on their drug candidates for
these therapeutic areas. (see www.proximagen.com)
Peter reflects that he comes “…from a relatively poor working-class
background. My mother was from rural Somerset and widowed
and there were no male figures in the family. I was driven by my
mother to be the first member of the family ever to go to grammar
school and university.”
In Peter’s view he was not particularly bright at school; he gained
4 science A-levels but all with quite modest grades. “What sticks
in my mind is that immediately prior to university I read in the
newspaper that pharmacists were getting a big increase in pay.
I could see that the pharmacist living around the corner had a
pretty good lifestyle, so I thought I would study pharmacy at
university. It was there that I discovered pharmaceutical chemistry
and pharmacology, two subjects that I had not done before, and
I loved it.”
After five years of study and working in drug metabolism and
pharmacology, a job came up in the Department of Neurology
at Chelsea College and Peter changed fields completely. “The
research Professor, David Marsden, and I got on like a house on
fire and became close friends and this became the start of my
relationship with Parkinson’s disease.” Peter discovered that he
was good at addressing audiences and conveying his passion
for the subject.
Looking back he believes Marsden’s legacy has been to give his
researchers the freedom to explore new ideas, be creative and
see the big picture. “Some of my colleagues round here are much
better scientists than I am and they spend their life looking down
microscopes at single synapses, but I much prefer ‘big picture
science’, which is translatable into patient populations. This is
what turns me on and drives me. If you’re going to do that in
pharmacology then you have to work with the drug companies
and I found that I was also able to do this. I realised that I
understood the needs of the industry and took a businesslike view
of research rather than a purely academic and scientific interest.
So these companies started having me on advisory boards because
not only did I understand the research but I could see the
applicability of it.”
The Idea
Peter had had the idea of starting his own business for years
“But in an academic environment it was blooming difficult to get it
off the ground”. He kept himself going by running a consultancy
business within the university for over 20 years. He recalls that this
academic research group was very good at bringing in new drug
molecules for Parkinson’s disease and doing laboratory
assessments – turning over about a million pounds per annum.
The group used the funds to support their research activities.
“But it was quite frustrating because we were seeing other people’s
ideas going through the process of clinical trial and we were not
developing our own products.”
Despite this activity, Peter had no real new business experience
in terms of finance and legal and regulatory matters. But what
he did see was all the elements of a small drug company sitting
around his university’s campus. These included medicinal
chemistry, phase one clinical units and three teaching hospitals.
“We had the capacity to exploit some of our own ideas. I went
around banging on doors but I found the academic colleagues
were not interested in making money and the university’s
Enterprise group was not interested because of my lack of
business expertise.”
This all changed when a group of venture capitalists called IP2IPO
(now the IP Group) did what they had been doing at other
universities and bought up a tranche of rights to intellectual
property ideas. They planned to invest up to ten million pounds
in a number of startup companies.
The momentum took over and suddenly the IP Group was in
Peter’s office discussing business plans. “A joint investment board
was set up between Kings Enterprise and the venture capital
company. We got four hundred thousand pounds in seed money
and off we went from there.”
The IP group recruited the chief executive officer – a young
American with an entrepreneurial background in information
technology, a finance officer and a former colleague of Peter’s
who has been in drug development for 30 years. Peter was given
a very short period of time to come up with a number of ideas
for the joint investment board to get the seed capital. They
embarked on a roadshow and sold ideas for four new drugs,
raising 13.5 million pounds. “I literally had a quick think round the
field and thought of a few ideas and wrote them down. I continue
to have new ideas but unfortunately there is no slack in the system
to allow us to investigate them.”
When asked why he started his own business Peter notes that the
intervention of the venture capital company IP2IPO was clearly
significant. But, in addition, he recalls that he was “… a bit fed up
with academia and was going through a divorce so I was looking
to do something different and break with the past. I decided that
the best thing I could do was take up the new business challenge.”
He took early retirement but the university retained him on a 20%
basis and gave him a very generous retirement package and this
helped him make the transition.
Implementation
At the outset Peter thought the group would be able to maintain
its excellent reputation for basic research and keep a pipeline of
new ideas. But this has turned out not to be the case and
Proximagen remains reliant on bringing to market the four
products that it started with. At the time of the flotation the
company promised to develop the four ideas and bring two of
them to clinical trial within a certain number of years. “This was a
very aggressive target and so has been the priority objective. All of
the money we raised is going to bringing two of these molecules to
clinical trial.”
The original academic research group has reduced in size from
25 down to seven. One of the objectives of setting up Proximagen
was to give greater financial stability to these research workers,
who otherwise would be dependent on grants. Many transferred
to Proximagen – so their skills have been retained by the
company and they now have a personal stake in its financial
viability.
Reflecting on the resource requirements Peter notes that: “We
make use of university resources but pay rent for them. We have
a license agreement with the college, which covers ongoing
intellectual property rights. A deal was done when our building
needed to be refurbished to comply with health and
safety requirements.”
Prior to the arrival of IP2IPO Peter had discussed his ideas with
some academic colleagues, and encountered a marked lack of
interest. So he was surprised to receive strong support from the
college’s senior management, including the finance director. “They
wanted to get innovation going because they felt that the college
was generating intellectual property that was going to waste. My
family was supportive but probably did not have any real concept
of what I was proposing to do. I did not talk to anybody in the
financial world and realised later that this may have been to
my disadvantage.”
The college got a million pounds out of the flotation, which was
unprecedented, but Peter feels he has not had much support. In
fact “… when it got started I felt abandoned. I found myself
standing alone and left to get on with it. If I have doubts about
anything it is very difficult to find someone to talk to. I do feel
isolated at times and sense very much that it is down to me to
make it work.”
Peter has been very disappointed by the lack of useful and
proactive assistance available from Business Link or the (then)
Department of Trade and Industry. “I think the UK environment is
very different to the US where people are very much more willing
to ‘put their money where their mouth is’ and invest in good ideas.
In the UK there seems to be a reluctance to invest. Even when it
happens, the resources are not really sufficient to get the idea
properly launched.”
Peter sees the United States as a much richer investment area with
more tax incentives. He believes a change of ethos is needed in
the UK. “There is a lot of intellectual property around the place,
which is not being exploited. Even if someone sees an opportunity
I doubt if the support systems are in place to make it a reality. I
think it needs some education generally about the value of having
entrepreneurship in place within an institution, to take advantage
of its intellectual property. The major thing that the universities
have to learn is not to make everything so bureaucratic – you get
positively discouraged.”
This experience has taught Peter the importance of having
a business person running the operation; someone who
understands risk management, has a successful track record of
enterprise and is the sort of figure that venture capitalists and
fund managers like to see in a new business venture.
75 Unlocking the potential of the UK’s Hidden Innovators 74 Unlocking the potential of the UK’s Hidden Innovators
Development
So far Proximagen has spent 3 of the 13.5 million pounds invested
and is now approaching the heavy expenditure stage of the
process. “We have been burning money. We have molecules now
that are ready to go through to the regulatory drug approval
process and that is expensive. We do not have spare money around
to do innovative new research so we have not gone out and
aggressively promoted it. We could raise two to three million
pounds per annum but that might divert us from our main focus.
We are not aiming to produce a ‘blockbuster’ drug that will make
billions. We are aiming to produce drugs that will alleviate the
symptoms of Parkinson’s, and the side-effects of some of the
existing drugs, and make millions.”
Information technology is used extensively to keep up-to-date
with developments in the patent world and also more generally
to see what scientific progress is being made in universities and
other competitors. This raises a dilemma. “In the future, as we get
closer to market, we may increase our exposure on the Internet to
provide information about Parkinson’s disease, treatments that are
available, progress with research and new products and so on. We
are particularly concerned to keep in touch with patient groups.
On the other hand we do need to be careful about protecting our
intellectual property.”
Peter reckons that what makes Proximagen innovative is that
“… it is not a typical biotech company as most of them go for really
‘off the wall’ ideas that are based on genetic manipulation or
absolutely brand-new targets for drugs. We take a much simpler
approach based on techniques that are relatively well proven and
we go for targets that alleviate symptoms rather than the
ultimate cure.”
For example, sufferers from Parkinson’s disease in acute stages
can be immobile for six hours a day. Peter’s team is producing a
drug that will improve a patient’s quality of life by reducing that
so-called off-time by two or three hours. The team is balancing
this with other drugs that are perhaps more novel. Peter observes
that the key is to have a portfolio of products rather than invest
everything on a very high risk/high reward possibility.
Lessons learned
Now that he is sixty, Peter observes that age can have advantages.
He is viewed as a key opinion leader in his field and “that brings
some gravitas in that people think I know what I’m talking about.
So going out to talk to fund managers and investment bankers,
most of whom have no scientific background whatsoever, was not
that difficult. If you can talk convincingly about these things then
they invest in you. We had no drugs ‘on the stocks’ when IP2IPO
came – just ideas.”
When asked about the characteristics that helped him to succeed,
Peter asserts that “most of it is genetic. I really do think that either
you have got it or you haven’t.” And he reflects that it helped to
come from a family background “that was aggressive as far as
money was concerned, because we never had any”.
On the other hand, Peter can’t explain where his ideas come from.
“They just pop into my head when I might be doing something
quite mundane”. So the ability to communicate is vital. “If you
cannot communicate your ideas, then it is a complete waste of
time. You can tell pretty quickly when somebody has got the
entrepreneurial spirit – they tend to be ‘larger-than-life’,
extroverted people with driven personalities.”
Peter concedes that money was one motivation but alleviating the
symptoms of Parkinson’s Disease was just as important. “I do a lot
of work with support groups up and down the country and when
you look these people in the eye you can understand the gulf
between current research and their practical needs. We do aim to
reduce the gap. Stem cell research could result in a cure but this
could take 10 to 15 years. In the meantime patients are suffering.
What we try to do is alleviate that pain.” Accordingly the
Proximagen team tunes its research programme by talking to
patient groups and ascertaining what they see as important.
Peter sees himself as a practical scientist. “We have to go out and
sell ideas and entrepreneurship but there are obstacles to doing
this and I would put bureaucracy at the top of the list. One part of
the entrepreneurial spirit is to get things started and done as
quickly as possible rather than wait for forms to be filled in or
procedures gone through. Some people might find this problematic
but I believe it is important to have this sort of entrepreneurial
drive somewhere in the system.”
Tony Baxter and Sandcliff AB Ltd
The background
Tony Baxter’s life experience could hardly be described as
conventional. “I had what could be called a reasonable education –
I went to public school. But I left without taking any examinations
because I ran off with a rock ‘n’ roll band. And for nearly 20 years I
worked in the music industry. I did several things including
production and running a studio and a lot of work for radio
and television as well as performing and travelling.”
After trying to get out of it several times, Tony enrolled on a three
year teaching course specialising in music and history. This meant
resuming study to get the exams he needed to start the course.
He liked the learning but disliked the teaching and after a short
job in a middle school, he went back to the music business.
Tony’s father died when he was young and he never knew him.
He had been a store manager. “My mother had wanted to be a
violinist but as a single parent she had to earn a living and went
into teaching. Most of my extended family were in teaching and
believed in respectability and education. When I was eleven I won
a scholarship to Dulwich College – but I did not fit in. I was drawn
towards artistic subjects but success in sport or classical subjects
seemed to be necessary to get on. So I virtually dropped out in the
first year and was on the verge of being thrown out almost the
whole time I was there. Rock ‘n’ roll was just starting to emerge in
the 1950s and I got an offer to join a band and tour American
forces in Europe. That was the start of my career in music.”
By the time Tony had reached 40 he was getting tired of “… living
out of vans. It was a very up and down existence and I decided I
had to get into some sort of permanent role.” He tried all sorts of
things. With no qualifications whatsoever after 20 years in the
music business he had to get whatever work he could. He
eventually ended up taking a job in a department store: “I went
to Blackpool and persuaded the local store manager to let me sell
keyboards in the front hall and I was so successful that they offered
me a job on their fast track management scheme. Within two
years I had become a store manager.”
But Tony hated it and when he saw an opportunity to join the
National Trust , as a commercial manager in the Northeast, he
applied and got the job. “I found myself running a group of
National Trust shops and restaurants in the North-East region.
I learnt very quickly and was promoted to head office as marketing
manager for the National Trust.”
Tony did this for six to or seven years and having found a taste for
working in charity organisations he moved on to the Marie Curie
Cancer Care as head of fundraising, marketing, and commercial
activity. “I had ‘passed by the door of fundraising’ on several
occasions and had formed a vague idea of what went on. I set up a
chain of 200 shops in two years, but then moved on again to Great
Ormond Street Hospital, as the director of fundraising and public
affairs. That was a much bigger and higher profile job and while I
was there for three years I expanded a subsidiary in New York and
launched one in Tokyo.”
At that point, in 1994, Tony set up his own business, Sandcliff AB
Ltd. “It really pulled together all the things that I had been doing
up until that point. It was providing strategic planning, fundraising
and marketing services to charities and not-for-profit
organisations.” The consultancy business flourished and Tony
focused on public organisations such as National Health trusts,
education colleges, and museums and art galleries. Tony feels he
never had any family role models or any in the music business.
“I have never aspired to be anyone else. Music and art were
important to me but no academic subjects gave me any motivation
to work. However, my success at getting the scholarship suggests
I have some native intelligence.”
When asked how age influences an entrepreneurial career Tony
remarks: “I think it very much depends on the person – everybody
has a physical age and a mental age. I always think that people’s
age can be judged by when they stop listening to new music. At
that point they have stopped developing and it would not be a
good idea to start a new business because you have to be fleet of
foot and you have to be prepared to adapt. You have to be able to
see something and grab at it without worrying too much about the
consequences. You also need to be able to recognise
insurmountable obstacles and learn how to get round them.
You have got to have flexibility and be prepared to change your
standpoint and not go for it like a bull at a gate.”
The Idea
When he was in his early 50s, his position at Great Ormond Street
Hospital was suddenly changed and he had a week to decide
whether he would accept the changes. “I had seen other people in
this situation approaching the end of their working life and
becoming increasingly less well regarded. I could see people being
sidelined and not having any control over their environment and
this prospect did not appeal. I like being in control and in charge. I
took a conscious decision never to work for anybody again and go
out on my own and be reliant on my own skills.”
76 77 Unlocking the potential of the UK’s Hidden Innovators Unlocking the potential of the UK’s Hidden Innovators
Tony set up the Antony Baxter Partnership (later to become
Sandcliff AB Ltd) first “…and then did a very sketchy business plan.
At the time there was a government scheme which paid 50 pounds
a week for new business starters and I took advantage of it. I did
not do formal market research but I knew a lot about the size of
the market and the nature of the people in the market and what
they wanted and I decided that I would try and exploit my skills
within this situation. I did not talk to anybody. I think this may be
regarded as a weakness of mine in that I tend to go and do things
without reference to other people. I do not easily take advice –
I make up my own mind.”
The business model is a fixed fee consultancy that requires an
advance of 50% before work is started. Tony declines to work on
a commission basis. He has segmented the market and
disregarded all but three sectors: national health trusts, colleges
of education particularly further education colleges and new
universities and heritage museums and art galleries. “Within those
three target markets we know who our prime purchasers are – the
chief executives and principals. We keep track of their movements
from one organisation to another and aim to develop personal
relationships. We contact them every six months with the principal
aim of achieving a meeting to discuss funding opportunities, to
understand their situation and make some preliminary
suggestions about opportunities. It can involve the offer
of some free consultancy.
“All these people have requirements for money or new staff – the
trick is to get in front of them and persuade them that you can
deliver. Personal face-to-face contact is very important. Once you
understand what they want it is very easy to construct something
that will fulfil their needs.”
Implementation
It required determined and sustained selling to get Sandcliff
started. Tony “… went to everybody that I had ever known in any
business to find out what people wanted”. Public bodies get public
money in order to carry out their operations. Tony argues that
this only pays for the basics – the additional resources needed to
achieve excellence have to come from fundraising. Within three
months he had secured a six figure contract to project manage a
hospital appeal that was not going well.
Tony reflects that his biggest difficulty came when he started
expanding and employing staff. At this point he went to a
government small business support agency for advice.
“They appointed a consultant who took me through this period
of growth when I moved from an individual-led business to a
management-led business. This was my biggest mistake and when
it all started to go wrong. They grossly overestimated the size of
the market and scaled my operation to an unmanageable size.
They based their assumptions on the belief that the entire
population of charities was our market opportunity and projected
that turnover would be 3 million pounds. It was flawed – no other
business in our sector has achieved a turnover of this size and
we ended up with a structure that was far too expensive for
the potential.”
Looking back, Tony feels he also made the mistake of thinking
that the employees’ motivation came from being employed by
the business rather than having a stake in the business. “Turnover
doubled but costs were almost impossible to control and profit
went down. It was very difficult to get the staff to consider the
needs of the business itself, rather than their own particular role
within it. After two very rocky years I shrunk the business down
to a virtual business again, offering some of my former employees
work as freelance consultants. This turned the business around
remarkably quickly and I was soon back on track, with increasing
turnover and profit.”
Development
Sales and marketing comes naturally to Tony. “My marketing
strategy was generally to get myself known by giving presentations
and writing papers for conferences at which National Health
Service managers and college principals would be present.
I always sold at a level where people could make a decision.”
Tony tries to get himself perceived as a trusted partner rather
than a provider; to get himself regarded as someone working
within the organisation, who is sourcing skills and consultancy on
the market. “At a client meeting I always try to sit round the table
with them and never ever stand up to give a presentation. It’s
amazing the difference that makes”.
For Tony, information technology has always been extremely
important. “I almost exclusively communicate through e-mail
and I use the Internet and online databases for research and
contact information. I would be completely lost without it.”
In developing Sandcliff Tony has found the most difficult aspect
has been to find and retain staff and then to manage and
motivate them. By the early 2000s he had a staff of twelve and a
customer portfolio of 25 NHS trusts and colleges. “By this time I
was 65 and wondering what to do about it. Most of the expertise
of the business was in my head and I did not think it had any real
worth as a saleable entity.”
All this changed with an unexpected offer from a much larger
company. “They wanted to get into the public sector market and
integrate this into their existing customer portfolio of charitable
organisations. The sale went ahead and I am halfway through a
three year transition period where I continue to run the public
sector side of things.”
In parallel Tony has continued to run his music business recording
studio. He also recognised that his various jobs have involved a
good deal of recruiting and decided this is something he could
continue to do. “It is less ‘age sensitive’ when recruiting senior level
people. My own increasing age might even give me an advantage
as it adds a certain gravitas to my image”.
Having examined the opportunity thoroughly, Tony went on
a course on psychometric testing and, in 2005, set up two new
companies, a headhunting recruitment agency and a
psychometric testing consultancy. Already he has recruited
a dozen chief executives and directors for public sector jobs.
Lessons learned
Reflecting on attributes for success as an entrepreneur, Tony
singles out “preparedness to have a go and not be constrained
by convention and stories about how difficult it is”. Tony feels he is
less constrained by convention than most of his peers – and,
indeed, by people who are 20 or 30 years younger than him. Tony
confides disarmingly: “I should have been much tougher – but I
like to be liked too much. Consequently I can be too soft on people
and not ruthless enough.”
On the other hand he feels he is strong on leadership. But while
he likes to be in charge he is more interested in the bigger picture
and hates detail. “This is a weakness but I have learned to manage
it. I force myself to do administration because I know that things
will fall apart if I don’t.”
When asked about advice for others considering an
entrepreneurial life Tony concedes that David Meister’s book
‘Running a profitable consultancy business’ has been an
important influence. Meister categorises consultancies into three
groups. The first is the highly expert knowledge providers, who
are usually involved at the start of the business cycle. Tony takes
up the story: “As the cycle matures the second category comes into
play. This is the “grey-haired” consultant that trades on experience
and practical know how. The third category is the one that comes
in at the end of the business cycle and this is the “pile it high sell it
cheap” brigade which can advise on productisation and
standardisation and achieving low-cost delivery of services.
“The temptation is, as the business cycle matures you get pulled
down into category three. The aim is to maintain your position in
the cycle either by delivery of innovative new products or
consciously deciding to go down the cycle. I place my business
amongst the grey hairs. We have never pretended to be leading
edge or particularly innovative, partly because my own experience
is based on practice rather than some form of intellectual
eminence. I am not an innovator but a gatherer of other people’s
ideas. So when the temptation arises to go into I resist going into
category three by finding new market opportunities in the arena
in which I am comfortable. I don’t find new products I find
new markets”.
Tony remains bullish about opportunities for small businesses.
“Of course you have to take risks. It is hard to break into a market
but, if you have got a good product and market it properly, then
you can. It is a case of spotting the opportunity at the right time
and moving in.”
79 xxxx 78 Unlocking the potential of the UK’s Hidden Innovators
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Unlocking The Potential Of The UKs Hidden Innovators
Unlocking the potential of the UK’s Hidden Innovators
April 2008
Julie Logan, Chris Hendry, Nigel Courtney, James Brown
Cass Business School, City University London
2 3 Unlocking the potential of the UK’s Hidden Innovators
Contents
Introduction by Gordon Frazer, Microsoft UK 4
Executive summary 5
Report context and objectives 8
Barriers and enablers for Hidden Innovators 22
People who become entrepreneurs at 50+ 22
UK citizens of Indian origin 25
Entrepreneurs who have a disability 28
Insights and recommendations 32
Annex A: Innovation and the Entrepreneurship Process 36
Annex B: Interview brief 37
Annex C: The collection of case studies 38
Acknowledgments
We would like to thank all of our case study respondents
(they are listed in the text) and all of those who attended
the focus groups.
We would also like to thank Professor Monder Ram, Prime, the
British Dyslexia Association, Action for the Blind, Xtraordinary
People and TIE (The Indus Entrepreneurs) for their support.
The potential economic contribution of Hidden Innovators 12
The secrets of success 14
A version of the report suitable for visually impaired individuals can be downloaded from:
www.cass.city.ac.uk/centive/current/entrepreneurship_innovation.html
5 Unlocking the potential of the UK’s Hidden Innovators 4 Unlocking the potential of the UK’s Hidden Innovators
The Enterprise Strategy Whitepaper launched
in March by the Department for Business,
Enterprise and Regulatory Reform highlighted
the need for the UK to create a culture of
Enterprise, Innovation and Creativity. We firmly
believe in that need and support these goals.
Our role as a technology leader is to help foster
and sustain the conditions in which individuals,
teams and organisations can continue to grow
and prosper – discovering new answers to the
personal and business challenges of our time.
An entrepreneurial mindset can not so much be taught
in our schools and universities, although they do have
an important role to play, but needs to be nurtured
through all parts of our culture today. We have
developed a tendency to imagine that it is only the
younger members of our society who have novel ideas
or are able to establish creative businesses. This is
simply not the case, but although the evidence is clear
that older entrepreneurs create more sustainable
companies for example, we are still struggling to adapt
our thinking. At Microsoft, we want to support all parts
of society towards achieving their ambitions.
I believe that creating a renewed culture of
entrepreneurialism and innovation requires four key
elements. It needs relevant and accessible role models,
it needs an effective and targeted business support
framework, it needs a simple regulatory environment
and above all it requires individuals to have the
confidence in their experience, in their networks and in
their desire to take an idea and run with it. One of the
ways in which we help people realise their goals is
through the support we give to entrepreneurs – start
ups, small businesses and social enterprises.
As an enabler of innovation and entrepreneurialism,
technology is an extremely powerful tool. It provides a
platform on which new ideas can be built, it breaks
down barriers to entry for new businesses and allows
access to markets far beyond traditional boundaries.
However, it is not a panacea. As this report shows it is
the people who make their businesses successful, who
take on challenges and keep looking for solutions until
they have overcome them.
In commissioning this research with Cass Business
School, we wanted to look beyond those elements
already well served with support and encouragement
at the ‘Hidden Innovators’, the areas of our society that
have in the past been marginalised but which will be a
rich source of fresh thinking in the future. I hope that
their insights and experiences can be a guide and
inspiration.
As the demographics of the UK change and as we move
towards a predominantly knowledge based economy
we need to encourage all elements of our society to
contribute their ideas, their talents and their enterprise
if we are to maintain our competitive advantage in a
global market. The research shows that by tapping into
our ‘Hidden Innovators’, we could generate an
additional £9 billion for the economy by 2012.
At Microsoft, our mission is to help businesses and
people realise their full potential and we are committed
to helping the UK to become an innovation powerhouse
on the world stage. Our software and tools both online
and offline help people and businesses to be successful
every day. Through our partner community and R&D
investments, we facilitate and encourage innovation to
spread and grow. Equipping people with the skills to
harness technology effectively is a key priority for us
and we are working hard through developments in the
latest Windows, Office and SharePoint technologies to
make our platform and software as accessible as
possible to all groups in society.
I hope you find this report stimulating and a useful
contribution to informing new thinking about how we
create an enduring and inclusive innovation culture
across the UK.
The economic context
The technology revolution has meant that Britain is moving
quickly towards a knowledge based economy. Taking a lead from
the US, where entrepreneurship accounts for 80% of new jobs
created and is a driving force for innovation, the UK government
has funded a variety of initiatives aimed at stimulating
entrepreneurship and innovation, particularly in the young.
These initiatives will produce a new generation of entrepreneurs.
But what of others in the UK who are talented, have ideas and
could help us compete?
The UK is a diverse society made up of many minority groups.
Some are very entrepreneurial and have embraced the innovation
agenda. Others have not pursued opportunities. What could be
done to unlock the innovation and entrepreneurial potential of
all UK citizens?
Research goals
This study sets out to investigate how all groups could become
involved in the innovation agenda. The study also examines the
economic potential of some of these groups.
Three groups were chosen to represent the many diverse
minorities that exist within the UK:
• UK citizens of Indian origin
• People with a disability
• People who become entrepreneurs at 50+
Research findings
The cases profile the experiences of these successful
entrepreneurs and the lessons they learnt in the course of
bringing innovations to market. They bring out issues that are
distinctive to these groups and suggest how the UK can make
greater use of their potential contribution. However, although
the problems they face are distinctive the value of looking at such
different groups is that it can also highlight common issues for
UK culture, institutions and policy. The experiences of these three
groups suggest a number of ways in which the innovation
agenda and entrepreneurship can be advanced in the UK:
Recommendations
Make financial support and investment more
equitable across all groups
It is good to see that the Government’s new Enterprise Strategy
references targeted support for the over 50s. Although the details
are thin at this stage, we would urge policy makers to provide
equivalent support to the over 50s as they do to younger people.
According to Prime, after three years, the success rate for business
start-ups is 70% for over 50’s compared to 28% for younger
groups. The report demonstrates that a well resourced and
targeted approach to supporting ethnic minority groups has
paid significant dividends to date.
Business support services must take diversity seriously
It is essential to ‘take diversity seriously’. Those from minority
groups can become successful innovators and entrepreneurs and
have much to offer the UK, but they may need tailored business
support. In addition, advisors need awareness training; it is not
helpful to tell a disabled potential entrepreneur they would be
better ‘to stay on benefits’.
Government should strive to change the
image of entrepreneurship
For many making money is not the primary reason for starting a
company. Entrepreneurs are often motivated by an altruistic goal
– the desire to make a difference or do something that produces
social benefits. There is also a need to make entrepreneurship
sound less macho. We are constantly told that entrepreneurs
work 24/7 which prevents many groups from considering
entrepreneurship as an option. Carers, older people and the
disabled can create successful ventures even if they are part
time, and new technology provides a platform.
It is essential to get the message out via the media that
entrepreneurship is for all and the reasons for taking part can
be about improving society, making a difference or fulfiling
a dream as well as making money.
Introduction
by Gordon Frazer,
Managing Director, Microsoft UK
Executive summary
We must build the entrepreneurial
self confidence of the UK. This is
particularly important for minority
groups who may already feel at
a disadvantage.
Creating an enterprise culture for the many
7 Unlocking the potential of the UK’s Hidden Innovators 6 Unlocking the potential of the UK’s Hidden Innovators
Encourage improvement as well as innovation
Innovation may be the recipe for economic well being, but by
focusing so much attention on innovation, people who think their
ideas are insufficiently ‘innovative’, can be discouraged from
starting ventures. They too, can contribute to the vitality of the
UK economy. We should also profile successful entrepreneurs
who have built companies based on incremental improvements.
Build the entrepreneurial self confidence of the
nation and of minority groups in particular
We must build the entrepreneurial self confidence of the UK. This
is particularly important for minority groups who may already feel
at a disadvantage. An individual’s entrepreneurial self confidence
can be increased by a combination of appropriate role models
to inspire, mentoring and coaching, training opportunities
to practice enterprise skills, and experiential learning.
The need for tailored encouragement and support
• The need to provide role models to inspire
The problem for minority groups is that they may lack relevant
role models. Role models need to be similar in background
so that individuals can visualise their own pathway to success
(such as Levi Roots, well known for his “Reggae Reggae Sauce”
venture as featured on Dragon’s Den).
• The need for tailored support
Practical support also needs to be tailored to specific
requirements. For example, older entrepreneurs often need
particular encouragement and positive reinforcement that their
business idea will work. The organisation known as PRIME (the
Prince’s Initiative for Mature Enterprise) fulfils a valuable role
here through its understanding of their needs and motivations.
We need more organisations such as this.
• Appropriate coaching and mentoring and improved
training for advisors
Small business advisors often lack experience in new venture
creation, and are therefore unable to respond usefully to the
particular and immediate problems new entrepreneurs require
help with. This implies better training for business advisors and
a different pattern of recruitment by encouraging more serial
entrepreneurs to get involved in coaching and mentoring.
• The need for ongoing business growth mentoring if UK
firms are to grow
Those in this study reported difficulty in finding advice when
they experienced typical growth problems, such as managing
cash flow, broadening their skill base, and recruiting the right
people. There is a need for ongoing support as the venture
develops. ICT could play an important role here; online
mentoring may provide a solution, offering access to
experienced mentors on a needs basis.
• The need for a continuum of support
It is important, that policy makers recognise the multifaceted
character of ‘advice’ – from signposting and information,
through to coaching and mentoring and that this support is
provided as the entrepreneur progresses along his/her pathway
to success.
Entrepreneurship and self employment
It is necessary to differentiate between entrepreneurship and self
employment and tailor policy to meet the needs of each group.
Both are important to the nation, but for many years
entrepreneurship has been treated as a way out of unemployment
and policy has been developed to facilitate this agenda.
Entrepreneurship is now linked to the knowledge economy and
policy must be tailored to this aim if we are to encourage our
most innovative and entrepreneurial start ups.
The economic case
If just 10% of the 8 million economically inactive could move
into self-employment as entrepreneurs, based upon Prime figures
there would be an increase in GDP of over £56 billion. (Average
turnover of businesses run by the PRIME group of £70,000
1
)
Targeted support for the Black and Minority Ethnic (BME)
community together with similar support for the over 50’s could
produce an additional £9 billion for the economy. This assumes a
50% survival rate for BME businesses (BME founders from all age
groups), and a 70% survival rate for the over 50’s. (PRIME data
suggests that whilst that companies founded by younger
entrepreneurs have a failure rate of up to 72%, those started
by older entrepreneurs have a 70% survival rate
2
).
Executive summary
1
Prime 2004 Towards a
50+ Enterprise Culture –
www.primeinitiative.org.
uk
2
Prime op cit
It is essential to get the
message out via the media that
entrepreneurship is for all and the
reasons for taking part can be
about improving society, making
a difference or fulfiling a dream
as well as making money.
8 Unlocking the potential of the UK’s Hidden Innovators 9 Unlocking the potential of the UK’s Hidden Innovators
Report context and objectives
The competitive
challenge for the UK
The global economic context
The technology and communications revolution is fundamentally
changing the nature of the global economy. The shift towards
knowledge-based jobs is contributing to a 21st Century work
revolution, placing a greater emphasis on innovation, skills and
the creative economy, driven by entrepreneurial small and
medium-sized businesses.
To ensure future competitiveness, the UK faces a number
of opportunities and challenges:
• Adapting to an increasingly knowledge-based economy
• Fostering a climate that supports and enables innovation
and entrepreneurship
• Ensuring the right mix of skills and a ready supply
of innovators and entrepreneurs
• Managing significant societal shifts in terms of an ageing
population and a fast-changing ethnic mix
In the US, entrepreneurship accounts for 80% of new jobs created
and is a driving force for innovation. During the past ten years
the UK government has focused on the development of the
knowledge economy as the key to economic growth, and much
is being done to encourage entrepreneurship and innovation
to replicate successful US initiatives. For example, Regional
Development Agencies are promoting and supporting new
venture creation, and universities have been provided with
funding so they can develop the infrastructure to support
academic researchers in science and technology to
commercialise their inventions.
Government organisations have been established to promote
research and development of new technologies within the life
science and IT industries. In addition, much support is being
given to Small and Medium sized businesses.
Unlocking the innovation/entrepreneurial
potential of all groups
But where do we find the talented people who will continue
to makes these ideas happen and help us compete?
There has been a particular focus on encouraging young people
to develop enterprising skills and embrace new opportunities
for innovation. A range of new initiatives has been launched
targeting the innovators of the future. The work of organisations
such as NESTA and Enterprise Insight has raised the nation’s
awareness of the opportunities that exist.
Funding has been provided to Schools and Universities to
encourage them to introduce enterprise teaching as part of the
curriculum, and leading business schools such as Cass Business
School teach students about innovation, product development
and new venture creation.
Organisations such as Young Enterprise and the Prince’s Youth
Business Trust provide coaching and mentoring to encourage the
young to seize new opportunities and embrace entrepreneurship.
These initiatives are successfully promoting innovation, but they
are aimed at a small percentage of the population. University
researchers are increasingly bringing new innovations to the
market place and young people will create the next generation
of innovators and entrepreneurs, particularly once they have some
business experience. But what about the rest of society, could
they be encouraged to embrace entrepreneurship?
Part of the solution must be to make better use of the pools of
talent that have previously been underutilised. In the UK alone,
eight million people regard themselves as unable to work, as the
result of either disability or a combination of enforced early
retirement and redundant skills.
There is a clear need to do more to recognise the talents,
insights and experience of all groups – including older people,
ethnic minorities and the disabled. These include many people
who have proven experience, specific and in-depth marketplace
knowledge, and special insights into serving the needs of
particular customer groups.
Defining innovation
We define innovation as “the successful commercial exploitation
of new ideas”
3
. New firms are a primary source of such innovation,
developing new products and services to meet unmet needs, and
new business models to deliver these in effective, cheaper, more
profitable ways. Information and Communications Technology
(ICT) is often and increasingly core to this innovation in what firms
deliver and how they deliver it. While established large firms are
also a source of innovation, Small-Medium Enterprises (SMEs) are
increasingly outperforming their larger competitors
4
. The creation
and growth of entrepreneurial new firms is thus of crucial
importance to economic dynamism and to innovation in the
economy, and for this reason, they are the focus of this study.
Unlocking the potential of
the UK’s Hidden Innovators
Research goals
This study sets out to investigate how UK society can become
more involved in the innovation agenda, with a focus on the
over 50s, UK Indian entrepreneurs and those with a disability,
to reflect the diverse minorities in the UK today.
It estimates the potential economic value of these “hidden
innovators” to the UK, and gives recommendations on how
we can create the conditions to enable these groups to thrive.
It asks how these groups can be more in touch with the need for
innovation and entrepreneurship, and what will help them. What
factors similarly can influence the creation of new ventures
generally in the UK?
The report also explores how our “hidden innovators” have
latched on to the potential of technology to make their ideas
happen – from being simply a necessary support to the business,
to providing new ways of doing business through the web.
In summary, the study explores the psyche of modern-day Britain
and society’s relationship with innovation. It looks broadly at the
political, economic, sociological and technological conditions
that are necessary for innovation and creativity to flourish, and
examines the pathways and barriers to innovation that exist
for certain of the UK’s minority groups.
Research scope and structure
Based on an analysis of existing data and ‘what if’ scenarios, we
have estimated the potential economic value of these groups.
A key feature of the study is a range of in-depth profiles of
successful entrepreneurs, which provide a first hand insight into
how individuals from each group have managed to overcome
barriers and achieve business success.
First, we examine the secrets of their success, which provide
useful learnings and pathways for others to follow.
Second, we identify issues particular to each of the three
groups, for maximising their potential to greater effect –
including special attributes and resources that equip them
to become entrepreneurs and some of the barriers they have
had to overcome.
These insights, combined with an analysis of existing literature
on the challenges facing these groups, help to inform
recommendations for creating a more inclusive innovation
and entrepreneurial culture in the UK for these and other
groups to thrive.
The report draws together a robust body of knowledge about
the entrepreneurial start-up process and what makes for
entrepreneurial success (See Annex A). Our findings add
new insights to these.
These themes are explored in the interviews with our
entrepreneurs (Annex B), and the resulting in-depth cases
(Annex C) provide rich evidence of the importance of these
issues in a vivid way that we hope is inspirational and instructive.
To test and develop our findings in terms of the wider policy
issues, we also convened a series of focus groups on each of the
three groups. We are most grateful to all those who participated
in both the cases and focus groups.
Report context and objectives
3
Gann & Dodgson,
(2007). Innovation
Technology: How new
technologies are
changing the way we
innovate. London:
NESTA: 7.
4
Developing the Future
(2007). Microsoft, p26.
Part of the solution must be
to make better use of the pools
of talent that have previously
been underutilised.
We are moving to a situation where
people will live longer, be more
active for longer ... and will need to
generate an income.
11 Unlocking the potential of the UK’s Hidden Innovators 10 Unlocking the potential of the UK’s Hidden Innovators
Report context and objectives
The three groups
Three groups were chosen to represent the many diverse
minorities that exist within the UK:
• People who become entrepreneurs at 50+
• UK citizens of Indian origin
• People with a disability
Thirteen case studies featuring successful entrepreneurs from
these three groups were researched to investigate the pathways
and barriers to their success. They were all self-starters, without
the benefit of inherited wealth. They were also all scalable
with growth prospects and ambitions, rather than just
‘life-style’ businesses.
Entrepreneurs at 50+
One in six people in the UK is over sixty-five. By 2031, the average
age of the population will climb from 39 to 44
5
. We
are moving to a situation where people will live longer, be more
active for longer, may require increased healthcare, and will need
to generate an income if they are to have a reasonable quality of
life. In the USA, the over-50s are making a significant contribution
to the innovation and entrepreneurship agenda. They could also
do so in the UK.
The five cases featuring older entrepreneurs are:
Tony Baxter founded Sandcliff AB in 1994 as a consultancy
organisation, advising clients in the public sector on strategic
management issues, with a particular focus on fund raising. Prior
to this he had an early career in the music industry, followed by
a number of senior management positions including the National
Trust and Great Ormond Street Hospital.
Derek Broomfield founded Focus Cooling in 2002. This is an
air-conditioning energy management company that offers
installation and maintenance services to industrial and
commercial customers. Derek’s earlier career had followed a
conventional pattern of apprenticeship followed by engineering
work, culminating in senior management positions in the air
conditioning industry.
Tony Howell started an on-line auction web site for white truffles
in 2007. Previously Tony worked in financial institutions in the City
for a number of years, most recently as a treasury consultant.
He quit this profession in 2005 and became involved in designing
and installing CCTV and control systems for commercial premises,
before setting up whitetruffleauction.com.
Professor Peter Jenner founded Proximagen in 2003 as a
drug discovery and development company, focused on novel
therapeutics to improve the quality of life for patients suffering
from neurodegenerative diseases such as Parkinson’s and
Alzheimer’s disease. Peter is a career scientist who has worked
in this area for many years.
Sally Walton started Carry a Bag in 2006 to manufacture
environmentally friendly shopping bags as an alternative to the
plastic bag. The bags are handmade using strong ‘Fair Trade’
organic cotton ticking lined with recycled home furnishing fabrics.
Sally’s earlier career was in writing and illustrating books on
interior design and arts and crafts products.
UK citizens of Indian origin
The UK is a very diverse society, which receives migrants from
many nations. Some of these nations, such as India, have a
tradition of entrepreneurship. In the US, migrants create more
new ventures than any other group and their contribution to
the knowledge economy through technology-based start-ups is
significant. Whilst migrants are making a valuable contribution
to the UK economy, the percentage of start-ups – particularly
technology-based start-ups – has until recently lagged behind
that of other groups. Furthermore, the level of innovation and
entrepreneurship exhibited by different ethnic minority groups is
very varied. Indian entrepreneurs have been relatively successful
in the UK. By exploring their pathways and barriers to innovation
we seek to learn how other ethnic groups can increase their level
of entrepreneurship activity.
The four cases featuring Indian entrepreneurs are:
Rami Ranger came to England in 1971, and started Sea, Air and
Land Forwarding Ltd in 1987 to ship unaccompanied baggage
back to Africa for immigrants and visitors. Sun Oil Ltd grew
directly out of this in 1995 as a food distribution company,
and now has a turnover of £60 million.
Pinky Lilani came to England in 1977, and after raising a family,
established Spice Magic in 2001 to market her book on Indian
cookery. From this, she branched out into a range of other
activities, including marketing spices and consulting to
food companies.
Suchit Punnose came to the UK in 1995 with ambitions to run his
own business from an early age. He started as a broker facilitating
import and export transactions, and after a series of further
ventures, established Red Ribbon Property Investments Plc as a
boutique asset management firm for high net worth individuals
to invest in property in India.
Neelesh Marik came to the UK in 1999 as UK Head of Sales for
Infosys, following degrees at the Indian Institute of Technology
(Mumbai) and Institute of Management (Bangalore), and a career
in sales and marketing, management consultancy and IT. He
founded Value Chain International in 2006 with four Infosys
Indian colleagues.
Entrepreneurs with a disability
In the UK, as in many cultures, people with disabilities contribute
to the economy by starting entrepreneurial ventures. This study
examines the contribution to the knowledge economy of those
with dyslexia and visual impairment.
The British Dyslexia Association
6
suggests 10% of the general
population suffer from a degree of dyslexia. However, recent
studies indicate that about 19% of UK entrepreneurs are dyslexic,
and that the proportion in the US is almost double this
7
.
New information technologies have the capability to liberate and
empower visually impaired people in the UK, over two-thirds of
whom are unable to gain any form of employment. The State
does offer generous grants (up to £16,000) to buy computer
equipment and special software – but the paradox is that
applicants are only eligible if they have a job. Technology has
also played a major role in helping many dyslexics overcome
their difficulties.
The four cases featuring dyslexic or partially-sighted
entrepreneurs are:
John Cavill left school at 16 with no qualifications and became an
engineering apprentice. He moved into sales and marketing with
high tech firms in the USA, and despite his dyslexia pioneered
networking technologies as director of a subsidiary for ten
years. At 40, he gathered a ‘dream team’ of expert colleagues
and founded Logical Networks. When sales hit £50 million he
sold the firm, and now runs Intermezzo Ventures to assist
budding entrepreneurs.
Janette Beetham did poorly at school. Later both she and her son
were diagnosed with dyslexia, but with determination she gained
a degree in her 30s. Divorce liberated her to test her business
ideas. After trying a shop, she launched evening-belle.co.uk
to reach and interact with many more clients via the web.
Integration of this virtual shop window with order entry
systems enables Janette to run her business from anywhere.
Roger Wilson-Hinds achieved academic success despite his
blindness and rose to senior jobs in education. But he was
uncomfortable as an employee and, when 50, he and his wife,
Margaret Wilson-Hinds, started a successful business to supply
ICT equipment and teach other blind people how to use it. Illness
struck. While recovering, Roger resolved to create and give away
screen reader software to any blind person. Now with 100,000
users, ‘Thunder’ is gaining large fees for developing variants.
David Murdock has been visually impaired since birth. After
being bolshie and outspoken at school (as he is the first to
acknowledge), he progressed to post-graduate studies, but then
found no-one would employ him. With two blind friends he
identified an unmet need – access to many corporate websites
does not comply with the Disability Discrimination Act.
Clarifeye.com solves this problem for firms, and now also
offers integrated systems for professional firms.
5
see
www.statistics.gov.uk.
Sources: Mid-year
population estimates:
Office for National
Statistics, General
Register Office for
Scotland, Northern
Ireland Statistics and
Research Agency.
Published on 22 August
2007
The report also explores how our
“hidden innovators” have latched
on to the potential of technology to
make their ideas happen – from
being simply a necessary support to
the business, to providing new ways
of doing business through the web.
Report context and objectives
6
see www.bdadyslexia.org.uk
7
Logan, 2008
UK economy could grow by 10% if we tap
potential of over 50s
Prime suggest the economy would be 10% larger if employment
patterns for the over 50’s were the same today as they were in
1979
8
. In 1979, 84% of men between 50 and 65 were working
now it is only 73%. Encouraging this group to embrace
entrepreneurship could go someway to turning this figure around.
This would increase GDP from £1,300 billion
9
to £1,430 billion.
75% of the 1.3 million on incapacity benefit say they would like
to work. If just 10% of these could be encouraged to create a
new venture this could mean a further 97,500 new ventures.
If just 10% of the 8 million economically inactive could move
into self-employment as entrepreneurs, based upon Prime figures
there would be an increase in GDP of over £56 billion. (Average
turnover of businesses run by this group is £70,000 – Prime 2004).
In the US a third of entrepreneurs are over 55 (US Census 2002).
If the UK had the same dynamic, there would be 18% more
entrepreneurial ventures. This should not be overlooked,
particularly as the current over 50s are much younger in
outlook and have better health than in the past.
Targeted support to older and disabled groups could lead to an
extra 34,000 new businesses a year by 2012 – worth at least an
extra £1.6 billion per year.
Governments in the UK have wanted to integrate immigrant
communities and overcome relative poverty and pockets of
disadvantage. As a result, the BME community have received
specialised support and training for enterprise because they
experienced particular barriers to entrepreneurship, including lack
of confidence, lack of funding and lack of role models. Targeted
support for this group seems to have been a phenomenal success,
with a 12% increase in the creation of new ventures year-on-year
for the past four years
10
.
The barriers experienced by the BME community are many of the
same barriers that older and disabled groups face. If specialist
training and mentoring was available together with access to
funding for these groups, it could enable them to follow the
pattern exhibited by the BME community. The Enterprise report
2005
11
prepared by Enterprise Insight suggest there are 400,000
new ventures created every year. At least 15% of these start ups
are created by the over 55’s.
An increase in start ups by this group of a similar 12% a year
could result in an increase in the number of new start ups by
34,000 in total after four years. Whilst figures show that about
two thirds of start ups fail, Prime suggests 70% of new ventures
created by the over 50’s succeed. We can therefore estimate
that after four years there will be an additional 23,800 new
ventures contributing at least a further £1.6 billion turnover
to the economy.
Continued targeted support for the BME community, together
with similar support for the over 50s, could produce an additional
£9 billion
12
for the economy (assuming a 50% survival rate for
BME businesses from all age groups, and a 70% survival rate for
the over 50s).
Better support for dyslexics could add an extra
560,000 entrepreneurs to the UK economy
Dyslexics make up 19% or 600,000 of the 3.5 million
entrepreneurial population in the UK but in the US 35% of
entrepreneurs are dyslexic
13
. The fundamental difference between
the two groups seems to be their level of self-confidence. As
there is a similar incidence of dyslexia in the general UK and US
adult populations, one might expect a similar incidence in the
entrepreneurial population. If dyslexics in the UK were provided
with tailored training and mentoring to increase their skills and
confidence, there could be an increase in the number of dyslexics
creating new ventures. If US rates were matched a further 560,000
dyslexic UK entrepreneurs would exist.
Furthermore, it is estimated that up to 50% of the UK prison
population are dyslexic and many of those on drugs are dyslexic.
Entrepreneurship training may be one way to encourage this
group to pursue an alternative career and reduce the numbers
of re-offenders.
13 Unlocking the potential of the UK’s Hidden Innovators 12 Unlocking the potential of the UK’s Hidden Innovators
The potential economic contribution
of hidden innovators
8
Prime 2004 Towards a
50+ Enterprise Culture –
www.primeinitiative.
org.uk
9http://www.statistics.gov.
uk/downloads/theme_ec
onomy/Blue_Book_2007_
web.pdf
10
Barclays 2005 –
www.newsroom.barclays.
co.uk
11http://www.makeyourm
ark.org.uk/policy/policy_
documents
12
Figures for average turn
over of start ups taken
from data ot
www.berr.gov.uk
13
Logan, J. (2008). Op cit
Whilst figures show that about two
thirds of start ups fail, Prime
suggests 70% of new ventures
created by the over 50’s succeed.
15 Unlocking the potential of the UK’s Hidden Innovators 14 Unlocking the potential of the UK’s Hidden Innovators
The secrets of success
The trigger
The trigger to starting a business is often some kind
of disruptive event. Whether a person takes an idea for
a new business forward, however, depends on various
pre-disposing and enabling factors.
The trigger
Three kinds of common trigger occur – economic necessity (for
example, loss of a job), divorce, and health scares. However, five of
the thirteen entrepreneurs took a conscious decision to start out
on their own independent of some disruptive event. Significantly,
this included three of the older entrepreneurs. For them, there
was a complex range of driving motives and enabling factors – an
accumulation of expertise that made entrepreneurship seem
possible, but also a sense of wanting to re-establish control
in their lives:
“I was in my early 50s and had seen other people in this
situation approaching the end of their working life and becoming
increasingly less well-regarded. I could see people being sidelined
and not having control over their environment and this prospect
did not appeal. I like being in control and in charge.”
All entrepreneurs seek to realise a desire for control,
self-realisation and autonomy to some degree.
Pre-disposing factors
While role models and family are frequent factors giving support,
the most conspicuous reasons are prior job experience and
education in ensuring expertise. Eight of the businesses were
established from this. However, it is not just any job experience,
but experience that prepares one for running a business, and
initially in a relatively safe environment, that is needed:
“Before you plunge into a business, get experience working for
someone else so you can learn, because there’s a lot more than
meets the eye. Use their base to learn the tricks. Then you can
judge – if you’re not fit for a small job, you’re not fit for a big job.
Running a corner shop was probably the most important factor in
my success. I learnt a lot about running a business, and it gave me
a financial start.”
Enabling factors
However, what distinguishes the level of new business creation
is the supportiveness of the social, cultural and economic
infrastructure, especially the availability of finance. Minority
groups face distinctive barriers, but sometimes have special
assets and advantages.
The secrets of success – What can we learn from
successful innovators and entrepreneurs?
Why do entrepreneurs start businesses? How do they go
about setting them up? What personal resources do they
need? What are some of the key skills? How do they
create the basis for future growth? Here we give insights
into our entrepreneurs’ success, and the lessons for
others to follow.
The following illustration explains the typical path an
entrepreneur follows when setting up a business, from
the initial trigger through to business set up and growth
phases. Using this process, we follow our “hidden
innovators” and identify their secrets of success.
Figure 1 puts these findings and insights together into a map to show the ‘pathways to innovation and entrepreneurship’.
17 Unlocking the potential of the UK’s Hidden Innovators 16 Unlocking the potential of the UK’s Hidden Innovators
The secrets of success
Find a value creating idea
A successful idea creates value for someone. Ideas often
come from work experience, hobbies and enthusiasms.
But they also arise from reshaping existing value chains
to meet needs differently. This gives rise to innovative
business models that disrupt how competitors operate.
Many new successful businesses involve novel routes
to market and novel ways of sourcing what they need.
Create value
Previous work experience opened the eyes of many of our
entrepreneurs to an opportunity to do something new. In four
cases this was combined with a particular passion or hobby:
“My experience in the financial trading industry has shown me
that whenever there is something that has value, then there is an
opportunity to set up a trading platform to bring buyers and sellers
together. Fresh white truffles have a very high value; in fact by
weight more expensive than gold. The idea of a white truffle
auction seemed too good an opportunity to miss out on”.
Reshape the value chain
Eight of the cases have developed original ways of doing
business, and many are highly innovative in their marketing
approach. ICT has opened up many opportunities for this – from
the white truffle auction website, to software for value chain re-
engineering, to the use of advanced web marketing tools. Often,
such ideas confront scepticism and resistance. As John Cavill’s US
suppliers said about his idea of simultaneously using direct and
indirect channels to market:
“There would be no trust in the channel; people won’t understand;
it won’t work and we can’t support it – so we won’t supply. You’ll
be out of business in a year.”
His eventual sale of the business for £50 million disproved that:
“Lots of people now use a dual channel business model.
It is disruptive, and you have to earn people’s trust.”
Similarly, when the husband and wife team of blind
entrepreneurs, Roger and Margaret Wilson-Hinds, determined
to give away their ‘Thunder’ screen reader software free to blind
users, people ridiculed their “non-business model”. But they saw
this as the quickest way to change the lives of blind people, and
the way to ensure strong long-term income streams from the
national and international institutions that could really pay for it:
“The web offers peer-group support and networking [especially
valuable to blind people] and viral marketing. With very little
money you can be round the world. Saying ‘it’s free; try it’
breaks all the traditional rules.”
Develop and screen the idea
Ideas go through a 3-stage process – finding, developing,
and screening an idea. Entrepreneurs shape their ideas
through discussions with others and through their social
networks. Writing a business plan is a way of refining
and providing a reality check on an idea as a practicable
business proposition. However, there is disagreement
about the necessity and desirability of time spent on
this, and on other formal preparations such as market
research. On many occasions, it is necessary to grab
opportunities during a short ‘window of opportunity’.
Shape ideas with other people, and seize
opportunities – you don’t necessarily have
to write a business plan
Despite what students are taught and what would-be
entrepreneurs are told by small business advisors, hardly any
of our entrepreneurs wrote a business plan or did systematic
market research prior to setting up their business. However, all
those entrepreneurs who developed a business from their prior
work experience went through a long period of moulding their
ideas first. In fact, they did intensive preparation. This shows
what really counts – observing and thinking about a market
opportunity and testing it over and over in one’s mind, and
realistically assessing one’s skills and the resources that will be
needed. Business plans are supposed to expose these things,
but are often merely tokenistic:
“I set up a business and then did a business plan. This is not quite
true – I had one week to make up my mind, and I did a very
sketchy outline plan. There was a government scheme, which paid
£50 a week for new business starters, which I took advantage of. I
didn’t do formal market research, but I knew a lot about the size of
the market, the nature of the people in it and what they wanted.
And I decided to exploit my skills. I didn’t talk to anybody. I think
this may be regarded as a weakness of mine, in that I tend to go
and do things without reference to other people. I do not easily
take advice – I listen to it and evaluate it, but then make up my
own mind.”
Above all, the true entrepreneur is someone who acts, and
doesn’t just plan. They have to be decisive, grabbing a
‘window of opportunity’ before it passes:
“I do think one part of the entrepreneurial spirit is to get things
done as quickly as possible.”
Build networks – they are a valuable resource
Many start a venture drawing on existing networks. Value Chain
International was started by five friends – “we knew each other
as friends and colleagues, as we all had leadership positions
for Infosys in various parts of the world”. This gave access to
technical knowledge, extensive knowledge of the market,
and to financial backers.
John Cavill contacted people he’d worked with in the IT network
industry to assemble his dream team:
“What got me over the hurdles was the combination of my track
record, my network of contacts, experience of the sector, reputation,
relationships with manufacturers, and a proven ability to deal with
bankers and accountants.”
Others may have to create their business networks. Networks are
crucial, and recognising opportunities to build them marks out
the true entrepreneur as in Pinky Liliani’s experience:
“Don’t just talk to those who you think may be able to help you.
Take an interest in everyone you meet.”
“My experience in the financial
trading industry has shown me
that whenever there is something
that has value, then there is an
opportunity to set up a trading
platform to bring buyers and
sellers together.“
“I do think one part of the
entrepreneurial spirit is to get
things done as quickly as possible.”
The secrets of success
19 Unlocking the potential of the UK’s Hidden Innovators 18 Unlocking the potential of the UK’s Hidden Innovators
The secrets of success
Minimise resources
People often make the mistake of thinking they need
large sums of money to start a business. Increasingly,
new businesses can be started with limited capital.
‘Resource parsimony’ is an important attribute of
a successful start-up and a successful entrepreneur.
You often don’t need a lot of resources to start up
Only two businesses started with significant funding – Value
Chain International with angel investors and the founders’ private
resources; and Proximagen with an AIM flotation for its drug
pipeline. The rest relied on a typical mix of personal savings,
small grants, and bank loans. Janette Beetham’s business is typical:
“It was set up on a shoestring, with no borrowings”
As Rami Ranger argues:
"For a service business, you don’t need much. You offer your
personal services. I’d go round the electrical businesses in
Tottenham Court Road, giving them my card and building my
relationship with the store managers, who would then recommend
me to their customer for transportation. My initial business was
built on word of mouth. In a service industry, it is only satisfied
customers who will recommend you.”
The other side of this is a continuing desire
to minimise financial exposure:
“I’ve never taken a risk, I was very careful. If you have a rich father,
you can take risks. With my humble background, I could never ever
take a chance. Only desperate people take desperate measures. If
you take risks, you’re not a business person. In business, you take
calculated risks.”
This does not mean, however, that businesses started in this way
are destined to remain small. Rami Ranger’s Sun Oil has grown
to a £60 million a year turnover in 20 years, and David Murdock’s
Clarifeye.com anticipates £4 million sales in its 2nd year, and has
plans for expansion through a chain of franchises – all through
internally generated funds and reinvestment.
ICT enables businesses to do many things much cheaper and to
reach many more customers at great distances more easily,
opening up novel channels to market.
Do deals
Entrepreneurs sell to customers, not to markets. This
means understanding what people value and will pay
for as potential customers. Selling is a key skill, but it
is frequently misinterpreted as getting people to buy
something they don’t want. On the contrary, selling
means understanding customers and what they value.
It is a skill deployed in a wide range of ways. Thus,
successful entrepreneurs create value for customers,
for suppliers, and for themselves. ‘Doing deals’ is a
key process in shaping mutual shared value for all.
Sell to customers
Many would-be entrepreneurs talk about ‘markets’, not
‘customers’. This is one of the key bits of learning new
entrepreneurs have to discover, and what marks out the effective
business person – visualising and relating to customers as real
people, with defined characteristics, which make them want to
buy your product or service. Recognising and appreciating the
customer is notable across all our entrepreneurs. The customer
is someone they visualise as a person, with very distinct needs
and characteristics:
“I wanted to see what IT could do for people’s lives. You have to able
to see the other’s person’s point of view. People [like the blind] who
can’t get a job are less likely to be able to articulate their need.”
In a service business, it means understanding how important
the service might be to the other person, and looking after
them carefully:
“Empathy for the customer is very important. You won’t succeed
if the customer doesn’t need it. You must imagine how this man is
going to sell. It’s my responsibility that this is sold to the end-user.
You must manage your customer. Don’t let him over-stock. Have
a long-term feeling for the customer.”
This ‘personalising’ of the customer, however, is analytical
(thinking systematically about markets) as well as concrete
(having a clear image of the customer):
“My approach has been to segment the market, and there are
only three sectors that I go for. The rest I disregarded. Within those
target markets, we know who the prime purchasers are, and these
will be chief executives and principals, rather than departmental
heads. We know who those people are, and we keep track of their
movements from one organisation to another, and aim to develop
personal relationships.”
Do deals that create mutual value
Mark McCormack once advised – “All things being equal, people
will buy from a friend. All things being unequal, people will also
buy from a friend. Make friends.”
Rami Ranger perfectly expresses the same sentiment:
“I make strategic alliances with local people. I get my first local
contact by selling them the branded product. I then say, there’s a
secondary brand that’s cheaper, so why don’t you put them both
together on the shelf, and we can both make more money. And I
then give them free samples to taste. To gain something, you have
to lose something.”
Similarly, Janette Beetham:
“Get your supplier into some kind of partnership, so that if he let’s
you down, he’s letting himself down.”
Such relationships become long-term assets of the business –
something accountants recognise when they put a financial value
on this as ‘goodwill’.
“If you take risks, you’re not a
business person. In business,
you take calculated risks.”
“Get your supplier into some kind
of partnership, so that if he let’s you
down, he’s letting himself down.”
The secrets of success
21 Unlocking the potential of the UK’s Hidden Innovators 20 Unlocking the potential of the UK’s Hidden Innovators
The secrets of success
Grow
Finally, innovation often also requires organisational
innovations. New businesses need to think how they
can engage and motivate people, and new entrepreneurs
are often keen to imbue a business with their own
personality. The way a business is set up from the
beginning can affect its ability to grow in the longer
term. Most certainly, there will be new challenges in
managing growth – in recruitment, maintaining
motivation and enthusiasm, and continuing to
manage cash carefully.
Create better organisations
Older entrepreneurs are particularly aware of the need and
opportunity to create novel ways of running a business, which
often comes from their own frustrations in battling with
bureaucracy. Typically, this means giving employees a
financial stake:
“One of the objectives of setting up the company was to give
greater financial stability to some of these [university] research
workers. Now they are in the company, they have a personal stake
in its financial viability and can make a personal contribution
rather than be dependent on grants.”
In some cases their employment philosophy directly serves
the business offering – as the website of David Murdock’s
Clarifeye.com says:
“The majority of our team members have some form of disability.
Because of this, we experience first hand the difficulties badly
designed websites bring.”
“The majority of our team members
have some form of disability.
Because of this, we experience first
hand the difficulties badly designed
websites bring.”
The secrets of success
23 Unlocking the potential of the UK’s Hidden Innovators 22 Unlocking the potential of the UK’s Hidden Innovators
Barriers and enablers for Hidden Innovators
The number of businesses being set up by
people aged over 50 is on the increase
15
,
with older entrepreneurs now accounting
for approximately 15% of all business
start-ups in England and Wales. This
compares with 10% a decade earlier. In
part, this is due to demographic shifts,
with more than a third of the UK
population due to be over 55 by 2025,
compared with currently one in four.
Redundancy, early retirement, and
dissatisfaction with previous jobs are
other contributing factors.
Other key statistics
16
include:
• Nearly a fifth of older entrepreneurial
start-ups are founded using redundancy
payments, and more than half are in a
business area the entrepreneur
previously worked in.
• The average turnover for businesses
owned by the over 50s is £70,000,
compared with a national average of
£104,000. But while this suggests a
slower growth rate, only 27% of older
owner-managers are relying on the
business as the family’s sole source
of income.
• Older entrepreneurs have extensive
levels of industrial and management
experience, superior personal networks
and a stronger financial base
17
– in
short, they possess more social, human
and financial capital – and face fewer
business risks at this stage of their lives
than younger people. Older people
seem to think more clearly about
objectives and pitfalls.
• But they have less education than
younger entrepreneurs, may have
failing health, and are affected by
family life cycles. Conventional wisdom
suggests they are risk-averse, but the
evidence is incomplete and conflicting
18
.
Their approach is better described
as prudent.
• Businesses started by the over-50s
have higher survival rates than those of
younger entrepreneurs – in some cases
as much as three times better. But they
exhibit slower rates of growth in terms
of employment and sales, than
businesses established by PRIME
age individuals
19
.
• The majority of older entrepreneurs are
male
20
. On the other hand they have
lower levels of health, energy and
productivity and suffer from an
ageist view of their prospects.
On the face of it, these findings
are moderately encouraging, but as
Smallwood and Obiamiwe
21
point out:
“Impressive though this achievement is,
however, it has to be set against the stark
fact that there are nevertheless more
people over 50 who are economically
inactive now than there were in 1997…
The population is ageing, and the number
of people in the 50+ age group is growing
at twice the rate of the population
generally. As a result, despite the progress
made, the number of economically inactive
over-50s is not falling and seems unlikely to
over the foreseeable future without fresh
initiatives.”
The problem is recognised by government,
and being addressed by PRIME (the
Prince’s Initiative for Mature Enterprise),
a not-for-profit company that aims to
improve opportunities for the over-50s
and encourage them to consider self-
employment and enterprise. PRIME
argues
22
that more could be done to
create a favourable environment for
business support, to create the
foundations for an expanding 50+
entrepreneurial society.
Key case themes
Being enterprise-ready
Entrepreneurial qualities and inclinations
are often dormant in the older
entrepreneur. All five older case studies
showed signs of entrepreneurial
behaviour in their earlier career, and it
has taken some critical event to bring it
into the open. The triggering event is
therefore important – perhaps especially
so for older entrepreneurs.
Readiness to continue learning
A particular personality characteristic of
the older entrepreneur, is the ability to go
on learning, all entrepreneurs require this
in some measure but it matters more the
older a person gets:
“I think it very much depends on the
person – everybody has a physical age
and a mental age. I always think that the
age at which they have stopped listening
to new music or new ideas is the age at
which they have stopped developing.
So if you have stopped in your "life
development" then I do not think it
is a good idea to start a new business”.
(Tony Baxter)
This could be a good indicator of the
‘enterprise ready’ versus the ‘enterprise
unready’ (or ‘unsuited’) older person. The
latter will require much more work to
prepare them.
Consuming passions and interests
The business created is frequently a
reflection of personal interests or a
consuming passion to make a difference:
“It was a book that was ahead of its time
and my research for it had fired me up.
My response to this rejection was that if
I am going to do something, I’m going to
do something that I really care about.”
(Sally Walton)
Peter Jenner’s company resulted from
a lifetime of scientific research to
alleviate the effects of Alzheimer’s
and Parkinson’s disease:
“Money was one motivation, but
alleviating the symptoms of Parkinson’s
was another. I do a lot of work with
support groups up and down the country
and when you look these people in the
eye, you can understand the gulf between
our research and their practical needs.
We aim to reduce the gap.”
Interestingly, none of the older
entrepreneurs were in it just for ‘life-style’
businesses to provide an income. Most
wanted to create businesses that would
last and become substantial, sustainable
revenue generating enterprises.
This suggests the extent of true
entrepreneurship among the older
population may be greatly underrated.
Accumulated social, human
and financial capital
The cases confirm clearly how the older
entrepreneur is able to draw on previous
experience, know-how, social networks,
and personal financial resources. This, and
the passion they bring to it, may be why
such businesses started by people in their
50s have a greater tendency to survive.
Derek Broomfield and Peter Jenner were
both acknowledged technical experts in
their very different fields, which gave
them access to a range of other skills,
especially when the need came to
employ others; Tony Howell transferred
his knowledge and experience of on-line
trading in financial services to his idea for
white truffle auctions; Tony Baxter had a
thorough insight into his market from
having worked in it for years.
The late 30s are regarded as the optimum
time to start a business for similar
reasons, but at 50 this experience is
still, or even more, valid.
Specific needs for support –
confidence-raising, mentoring
and advice
Despite the advantages of experience, the
‘new’ older entrepreneur still may need
some support. This is likely to be around
giving confidence to take the initial step,
since the fear of failure can build up over
the years. Our entrepreneurs, however,
were all strong-minded, independent
types. PRIME has found that around a
quarter of would-be older entrepreneurs
just need a little encouragement and
reassurance, and then are ready to go.
Barriers and enablers for Hidden Innovators
Robert Hisrich
14
suggests that entrepreneurial
characteristics and innovative ideas can be found among
all groups in all societies. But what distinguishes the level
of new business creation is the supportiveness of the
social and economic infrastructure, especially the
availability of finance. In this section, we consider the
barriers and enablers that face each group. Some of
these are distinctive to their situation; some are shared
problems. We highlight key issues and recommendations
for policy.
People who become entrepreneurs at 50+
14
Hisrich, R.D. & Peters, P.
(2002, 5th ed.).
Entrepreneurship. New
York: McGraw-Hill/Irwin
15
Patel, S. H. and C. Gray
(2006), The Grey
Entrepreneurs in the UK,
IKD Working Paper No.
18, Milton Keynes: Open
University
16
op. cit.
17
Weber, P. and M.
Schaper (2004),
‘Understanding the Grey
Entrepreneur’, Journal of
Enterprising Culture, 12
(2), 147-164
18
Hart, M., Anyadike-
Danes, M and R.
Blackburn, (2007),
Entrepreneurship and
Age in the UK:
Comparing Third Age
and Prime Age New
Ventures Across the
Regions, Small Business
Research Centre,
Kingston University
19
Peters et al., 1999
20
Weber, P. and M.
Schaper (2004), ibid.
21
Smallwood, C. and L.
Obiamiwe (2008),
Improving Employment
Prospects for the over
50s London: Prince’s
Initiative for Mature
Enterprise
22
PRIME (2004), Towards
a 50+ Enterprise Culture,
London: PRIME Initiative
Ltd
Businesses started by
the over-50s have
higher survival rates
than those of younger
entrepreneurs – in
some cases as much
as three times better.
A particular ...
characteristic of the
older entrepreneur,
is the ability to go
on learning, all
entrepreneurs require
this in some measure
... it matters more the
older a person gets.
“Money was one
motivation, but
alleviating the
symptoms of
Parkinson’s was
another.”
24 25 Unlocking the potential of the UK’s Hidden Innovators Unlocking the potential of the UK’s Hidden Innovators
Barriers and enablers for Hidden Innovators
Their greater need is for coaching,
mentoring and advice on specific
problems, often after the business has
been going for a while. PRIME recognises
this as a critical issue and puts
considerable effort into designing
appropriate mentoring schemes. A key
role of a mentor is to provide emotional
support when the initial glow may have
faded, the going gets tough, and the
informal management procedures that
contributed to the early excitement and
success may no longer be sufficient:
“This was my biggest mistake. Turnover
doubled but costs escalated and profit
went down. We never got out of this cycle,
costs were almost impossible to control.
I did not have the determination from any
of the people that I employed, who were
psychologically tuned to be employees
rather than consultants and for two years
it was very rocky. So I shrunk the business
down to a virtual business again and
bought in consultants whenever I needed
to use them.” (Tony Baxter)
Derek Broomfield also had to overcome
growth problems in the second year
of the business, when his company was
growing quickly and he was losing
control of his cash flow.
The older entrepreneur is assumed to
have some advantage here, because
of years of experience in a large
organisation where their management
skills have been developed.
However, our five entrepreneurs have
typically only been on the margins of
corporate life, or not had to handle
growth or turnaround issues (although
neither would most corporate managers).
They therefore turn to training, mentoring,
and consultants, but often have difficulty
getting exactly the help they need.
Age is not an issue
An interesting characteristic is that none
of our five older entrepreneurs like to
be labelled as such. They rarely mention
their age, or regard age as an issue. They
talk about the generic problems and the
challenges of being an entrepreneur, and
actively resist the idea of being treated
as a ‘special needs’ group or classed
as ‘over-50s’. Obviously, this helps because
entrepreneurs need to be forward-looking.
Research studies and the support
environment help to pigeon-hole this
group by referring to them as ‘grey
entrepreneurs’, ‘third age entrepreneurs’,
and so forth. ‘Mid-Career Entrepreneurs’
23
has the advantage of being unrelated to
age – and certainly loses the associations
with ‘retirement’. If the characteristic of
the older entrepreneur is not to think of
themselves as ‘old’, there is a ‘Catch-22’
here – how to signal help and advice is
available while down-playing age.
Recommendations for
Government and agencies
1. Start-up support services need to
be tailored to suit individual
circumstances. Older entrepreneurs
are highly individualistic and are
often impatient with conventional
support services.
2. In the early start-up stage, a few
sessions with a ‘counsellor’ to provide
confidence to overcome teething
issues and build self-confidence can
be useful. But at later stages the
entrepreneur will need more
professional ‘business advice’
and possibly very specific
strategic consultancy.
3. Although entrepreneurs often find
their own mentors through personal
contacts, formal networks and Business
Clubs are also a potential source, but
they may need to broaden their reach
and role. Organisations like PRIME are
regarded as effective and helpful.
More could be done to encourage the
exchange of views between PRIME
and similar organisations (such as the
Indian networking organisation, TIE).
4. Older entrepreneurs seek contact with
emerging trends in industry, and to
belong to sector-specific networks and
clubs, not to meet other older people.
5. Cases about older entrepreneurs
provide good role models and good
news stories.
6. Small changes to regulations and the
benefits system (for example, to the
‘six months on benefits rule’ and
waiving tuition fees and charges on
some longer training courses) can
make a significant impact while
starting up a business.
Among minority ethnic groups, those of
Indian origin have a reputation for being
successful entrepreneurs, which is
confirmed by figures for Indian-owned
businesses in the UK. As a relatively
successful group, Indian entrepreneurs
thus reflect not so much the problems
faced, as lessons for success.
Studies of the broader community of Black
and Minority Ethnic (BME) businesses
emphasise the need to distinguish
between the different groups that make
up this large and diverse category. The
report on ‘Enterprising People Enterprising
Places’
24
by the National Employment
Panel and Ethnic Minority Business Forum
provides an authoritative summary of
statistics and issues relating to BME
businesses and BME entrepreneurs:
• There are an estimated 100,000 BME
owned or managed businesses in the UK
(10% of all UK businesses), of which
60,000 are based in London.
• This reflects the concentration of ethnic
minorities in a few urban centres –
London, Birmingham, Leicester,
Manchester and Leeds/Bradford.
• BME businesses have traditionally been
concentrated in just a few sectors –
primarily service-based in retailing,
catering, and transport.
• There is a massive generational shift in
the motivation for new start-ups of BME
businesses – from economic necessity to
the more typical motivation for SMEs
generally, to take advantage of a
market opportunity.
• This is broadening the sectoral character
of the new businesses created, to
include IT, business services, and the
creative industries.
• BME businesses make less use of
support and advice, whether provided
by Government agencies or professional
advisors such as accountants and
lawyers. Instead, they rely more on
family and friends for advice.
• However, among the newer kind of
businesses run by a younger, better-
educated age group, conventional
sources of professional advice and
funding are preferred.
• Ethnic minority new entrepreneurial
activity is higher than in the white
population (7.4% compared with 4.7%),
and particularly marked among the
younger, 18-34 age group.
• Extrapolation from the relative size of
this age group suggests the number of
new BME businesses could rise by 50%
over the next few years (up by 51,000).
These findings are rather positive for
entrepreneurship among BMEs. However,
certain problems persist:
• BME owner/managers remain frustrated
by the lack of effective advice to help
with actual business problems. The small
business support services remain out of
touch with the needs of this group, this
has been often noted
25
, but continues
despite various initiatives. Business Links
has been under the management of the
Regional Development Agencies since
2005, so this may now be changing.
Problems include the confusing
proliferation of services (leading to
unproductive competition to meet
Government targets), lack of relevant
expertise, services not tailored to BME
needs, and simply unawareness among
BME businesses as to what is available.
Proposed solutions have therefore
centred on improving awareness,
culturally sensitive delivery methods,
and credible providers
26
– including
delivery based on better engagement
and interaction with BME communities.
On the other hand, research shows that
even ethnic business associations and
community-based organisations are not
a major source of start-up advice for
BME entrepreneurs
27
.
• There continues to be a widespread
perception that raising finance for BME
firms is a serious problem. However, this
is more complex than may appear.
Ethnicity is only one factor, with
location, sector, firm size, and age
being other issues. For example, BME
businesses in traditional sectors tend
to need money primarily for new or
expanded premises in order to grow. As
such businesses tend to be concentrated
in deprived urban areas, banks are less
willing to lend. The practice of ‘redlining’
therefore is indirectly, if inadvertently
discriminatory. Moreover, BME
businesses mistakenly often seek loans
rather than mortgages for this purpose.
Against this background, what do our
cases of UK Indian entrepreneurs reveal?
How do they fit this ‘mould’? What
characteristics do they exhibit that may
be distinctive to Indian entrepreneurs?
How do their problems compare? What
issues are raised that may require a
policy response? Again, we draw on
our case studies and the insights of our
focus group.
UK citizens of Indian origin
Barriers and enablers for Hidden Innovators
23
Rae, D. (2005), ‘Mid-
career Entrepreneurial
Learning’, Education and
Training, 47 (8/9), 562-
574
24
National Employment
Panel and Ethnic
Minority Business Forum
(2005). Enterprising
People Enterprising
Places. London: National
Employment Panel.
25
Ram, M. & Smallbone,
D. (2003), ‘Policies to
support ethnic minority
enterprise: the English
experience’,
Entrepreneurship &
Regional Development,
15, 151-166.
26
Ram, M. & Smallbone,
D. (2003), op cit
27
Ram, M. & Jones, T.
(2002), Ethnic Minority
Business in the UK: A
Review of Research and
Policy Developments,
Centre for Research in
Ethnic Minority
Entrepreneurship, De
Montfort University.
A key role of a
mentor is to provide
emotional support
when the initial glow
may have faded.
‘Mid-Career
Entrepreneurs’ has
the advantage of being
unrelated to age –
and certainly loses
the associations
with ‘retirement’.
Extrapolation from the
relative size of this age
group suggests the
number of new BME
businesses could rise
by 50% ...
26 Unlocking the potential of the UK’s Hidden Innovators 27 Unlocking the potential of the UK’s Hidden Innovators
Barriers and enablers for Hidden Innovators
Key case themes
Generational shift
The four businesses are markedly
different, reflecting the generational
change taking place. While the food
distribution company, Sun Oil Ltd, could
not now operate worldwide without
logistics software management and the
internet, it is a traditional business. Spice
Magic, promoting Indian cooking and
spices, is even more so. In contrast, the
two newer businesses run by young
Indians are deeply based on ICT.
Neelesh Marik has degrees from the
Indian Institute of Technology (Mumbai)
and Institute of Management (Bangalore),
which led to a career in sales and
marketing, management consultancy and
IT, eventually leading to the position of
UK Head of Sales for the Indian
technology consultancy company, Infosys.
In 2006, he co-founded Value Chain
International to help firms manage their
supply chains more efficiently
using IT.
This shift affecting BME businesses is
eloquently described by Rami Ranger, a
first generation entrepreneur who came
to the UK in 1971 (with a degree) and
experienced the stunted job prospects
and discrimination that drove him to
become an entrepreneur:
“Normally any country employs
immigrants as the labouring class, to
do jobs the host country doesn’t want to
do. Ethnic Asians were forced to go into
business, corner shop businesses, because
they couldn’t get good money elsewhere.
But now 30-40 years down the road, there
are Indians who have big businesses, and
others going into healthcare, IT, into big
sophisticated businesses working for
others in accounts, consulting, and in
the City. Our next generation of Indians
will not do corner shops. Tamils have
come; Afghans have come; Somalis have
come. So more and more Tamils are now
doing corner shops. So it’s a progression.”
The change is being driven, not just
by new opportunities in ICT or other
sectors and through higher education,
but by pressures on older lines of
business (clothing, food, and retail)
from multinationals, which are closing
off what were once the staple trade of
immigrant communities.
Networking and
international business
UK Indian entrepreneurs are particularly
strong in certain characteristics that are
important for entrepreneurship. They
emphasise personal networking and show
strong networking skills; they have an
international focus; and their view of
selling, deal making, and marketing is
based in a personalised view of the
customer relationship. As Pinky Liliani said:
“Don’t just talk to those who you think
may be able to help you. Take an interest
in everyone you meet.”
There is obviously a danger in attributing
special cultural qualities to one group.
Sociability and networks may be a central
part of Indian life, but this is true also for
many other communities. Thus, while
relevant for networking and the habit of
personalising the customer relationship,
it is not unique. It is the internationalising
of networks that is particularly interesting,
and perhaps rather special.
For example, Neelesh Marik’s team of
Indian colleagues started up Value Chain
International while scattered round the
world in their different Infosys offices. All
five came from the same elite higher
education institutions in India and had
retained their friendship links through
15 years of top management experience.
The international character of Indian
networks rests on something broader and
deeper, however. As the members of our
Indian focus group pointed out, Indians
in the UK come primarily from just two
areas and communities – Gujurat
and Punjab:
“The Sindhi community go all over the
world and maintain their links. This
‘diaspora’ is an important part of
explaining the relative entrepreneurial
success of the Indian community. If there’s
an element of distinctiveness, it’s here. You
have to look at the patterns of migration.
You’re really just looking at people from
these two States. A lot of people from
Kerala are in the Middle East, but they are
drawn solely by the oil industry. The
Gujurati community [which came to
England when expelled from Uganda by
Idi Amin and formed the cornerstone of
the new-wave small business Indian
entrepreneurs in the UK in the 1970s]
were in Africa for 150 years, so they had
already had to acquire their survival skills”.
This internationalism is likely to play
an increasingly important part in the
creation of viable growth-oriented,
new high technology businesses, which
need to operate in international markets
very quickly.
It is fostered by such organisations
as TIE (The Indus Entrepreneurs), an
international networking organisation
that mentors and links Indian
entrepreneurs around the world.
Networks for micro-finance
Strong community networks also underpin
habits of raising finance, especially the
need for micro-finance in the very earliest
stages of setting up a business. There is a
marked tendency for Indian entrepreneurs
to rely on informal finance from friends
and family. However, this is a not a ‘gift
culture’, but one that encourages
entrepreneurial business standards. It is
‘structured informal system’, with strict
terms of borrowing and repayment
enforced by group norms, reflecting a
community structure itself governed by
strong norms of behaviour and honour.
Other national cultures and sub-cultures
have similar practices and export them
as members emigrate and gather in
new surroundings.
Mentors, role models and advice
The role of personal networks is evident
also in the way the four entrepreneurs
have set up and grown their businesses.
They have relied little, if at all, on the
kind of support much talked about
now and promoted by Business
Support Services, especially in relation
to BME businesses – advice, coaching
and mentoring.
However, they all have a strong attitude
of wanting to put something back into
the Indian and wider Asian community,
by giving their own services as mentors.
Neelesh Marik, for example, is a member
of TIE (The Indus Entrepreneurs network);
and Pinky Liliani mentors for the Prince
of Wales trust and serves a number of
other charities.
This begins to address the problem that
when entrepreneurs seek advice and
support, they will often look for someone
who has themself been successful and
whom they can relate to – whether role
model, advisor, coach or mentor.
The wider problem is, then, the existence
of sufficient ready role models from that
particular group, which creates a ‘chicken
and egg’ problem in encouraging minority
group entrepreneurship. The Indian
community has made strong progress in
this respect: others have some way to go.
Ethnic minority groups need sufficient
entrepreneurial role models who are
perceived as ‘authentic’ and can provide
relevant mentoring and advice.
Recommendations for Government
and agencies
1. The UK is regarded as favourable to
entrepreneurship, but attitudes to risk
remain conservative. Institutionally, this
is reflected in the bankruptcy process
and laws, and at a personal and
business level in the attitude to failure
generally. The latter is reflected in
attitudes to lending and investment. In
the US, venture capitalists want to hear
about failure in order to know what the
person did about it – which is, after all,
a better test of how they will deal with
inevitable business problems, and will
achieve an effective return on
investment. In the UK, lenders are said
to be only interested in perceived
success. There are issues here
for government and the
investment community.
2. There is a continuing need to reflect
the diversity within the BME
community, and the distinctive
problems of different groups. This
includes especially the way institutions
(banks, government agencies) discount
and fail to recognise the distinctive
problems of BME groups vis-à-vis
established White businesses. This can
lead to the inadvertent racism of such
practices as ‘redlining’ in bank lending.
The UK – unlike the USA and the
Nordic countries – invariably relies on
voluntarism to solve such problems,
rather than collect data and publicly
audit private practices. The
longstanding failure of Business
Links to collect comprehensive data
on BME businesses is indicative of
this shortcoming.
3. On the other hand, treating BME
businesses as a special case may itself
not be helpful. Like the over-50s, our
Indian entrepreneurs see themselves
as entrepreneurs, facing characteristic
entrepreneurial challenges with
entrepreneurial qualities. Our cases are,
indeed, not typical of BME businesses in
inner city areas, where the focus of small
business policy is quite reasonably with
entrepreneurship as a way out of
unemployment and combating social
exclusion. Alleviating unemployment,
however, is not necessarily the same as
creating entrepreneurial businesses, and
may tend to perpetuate the
marginalisation of some groups.
Entrepreneurship and SMEs involve
objectives that are potentially at odds
28
.
A change in mind-set might help both
to reflect the real problems of inner city
BMEs and encourage growth-oriented
entrepreneurs.
Barriers and enablers for Hidden Innovators
28
Blackburn, R. & Ram,
M. (2006), ‘Fix or
fixation? The
contributions and
limitations of
entrepreneurship and
small firms to combating
social exclusion’,
Entrepreneurship &
Regional Development,
18, 73-89.
There is a continuing
need to reflect the
diversity within the
BME community,
and the distinctive
problems of
different groups.
29 Unlocking the potential of the UK’s Hidden Innovators 28 Unlocking the potential of the UK’s Hidden Innovators
In an effort to channel appropriate
assistance, social services in their various
policy guises try to categorise disabled
clients as having either physical disability
or learning disability. The reality is often
more complex. The loss of a limb may
be obvious to an observer, but effective
coping strategies may be concerned as
much with an attitude of mind. A learning
disability can stem from a brain injury, but
the spectrum of causes can extend to
perceptual problems and personality traits.
Some of the more recently documented
learning disabilities may have physical or
behavioural roots, or both. For example,
dyslexia can be a function of pathways
between brain lobes; but, equally, it can be
concerned with learning styles that differ
from those of the mainstream for whom
today’s education system was designed.
Action for Blind People
29
is a UK national
charity set up 150 years ago to improve
employment opportunities for blind and
partially sighted people. ‘Visage’ is a
£3 million UK and European employment
project sponsored by the London
Development Agency which has invested
in a series of projects over the last two
years
30/31
. Barbara Morton, as director of
both, with colleagues has carried out
research into employment and
entrepreneurship among the blind
and partially sighted:
• 66% of visually-impaired people
of working age are unemployed
• Most see themselves as being unable
to get a job
• Most are unemployed for a considerable
time before attempting self employment
• Most have low expectations of income
and look to replace their benefits and
have the dignity of work or control over
their work environment
• In a survey Visage carried out with
clients, only 1/3rd had accessed
mainstream business support
• 15-20% of visually impaired people
investigating a business start up actually
start their business (in line with the
norm for other groups)
• But they achieve a 95% sustainability
rate after 3 years (well above the norm).
Research by Boylan and Burchardt
31
into
barriers to self-employment for disabled
people similarly found that:
“Self-employment is an important source
of paid work for disabled people,
especially part-time self-employment.
Among women, self-employment
represents a significantly higher
proportion of paid work for disabled
women than for non-disabled women,
even after controlling for differences in
age and educational qualifications.
Moreover, for both men and women,
disabled people currently out of work
appear to be more open to the idea of
self-employment than their non-disabled
counterparts.” (p43)
However, the self-employed disabled
earn only half the income of able-
bodied people.
The traditional solution for blind people
deemed amenable to training was to
become a telephonist or a self-employed
piano tuner. Over the last nine years,
‘Visage’ has acted as an incubator and
fostered businesses run by and employing
visually impaired people who are now
engaged in such diverse lines as digital
archiving, catering, logistics management
and office supplies.
In a report in 2007, Visage’ describes
favourably a model used in France,
Belgium and Sweden – the Business &
Employment Cooperative (BEC) – for
fostering entrepreneurial start-ups
31/32
.
This allows the budding entrepreneur to
remain on state benefits while developing
a marketable offering. Once the fledgling
business is ready to be spun off it repays
10% of sales to the BEC. In 2005 BECs
were developing 90 firms with a combined
turnover of €16.5 million.
The situation concerning dyslexia and
entrepreneurship is subtly different.
Perhaps because the condition is not
obvious to the casual observer,
stereotypical or prejudiced reactions are
less likely to be provoked. In fact, dyslexic
entrepreneurs are often viewed as
charismatic figures. Sir Richard Branson
is a case in point.
McClelland coined the term ‘nAch’
to describe the propensity among
entrepreneurs to have a high need to
achieve
33
. Successive studies substantiate
the finding that, by the same token,
dyslexics tend to fare poorly at school and
this can leave them driven to prove they
are not inferior
34/35
.
The compensatory coping strategies they
develop often include increased creativity
and better than average skills in oral
communication, delegation and problem-
solving. As these are all ideal attributes
for an entrepreneur it would suggest
that dyslexics (about 10% of the UK adult
population) will exhibit an increased
propensity to emerge as entrepreneurs.
In fact, research in the UK has found that
19% of UK entrepreneurs claim to be
dyslexic, while in the USA, where business
failure is less of an anathema and more a
rite of passage, research shows that 35% of
entrepreneurs claim to have some dyslexic
traits and 23% are highly dyslexic
36
. The
same research shows that dyslexic
managers tend to stay with their firms
for a shorter time than non-dyslexics
and often had more than one
successful venture.
Entrepreneurs with a disability
Barriers and enablers for Hidden Innovators Barriers and enablers for Hidden Innovators
29http://www.actionforbli
ndpeople.org.uk/
30
for details, go tohttp://www.visage-
equal.org.uk
31
Boylan, A & Burchardt,
T. (2002) Barriers to self-
employment for disabled
people. Report prepared
for the Small Business
Service. See
www.berr.gov.uk/files/file
38357.pdf
32
Morton, B., Irvine, A. &
Whitbourn, C. (2007)
Business Incubation
Model, Action for Blind
People. Viahttp://www.actionforblin
dpeople.org.uk/
33
McClelland (1967) The
Achieving Society
34
Nicolson, R.I., &
Fawcett, A.J. (1999).
Developmental Dyslexia:
The Role of the
Cerebellum. Dyslexia: An
International Journal of
Research and Practice, 5
(3): 155-177.
35
Reid G and Kirk J.
(2001) Dyslexia in adults:
education and
employment, Chichester.
Wiley.
36
Logan. J. (2008)
Analysis of the incidence
of dyslexia in
entrepreneurs and its
implications. USASBE
2008 conference San
Antonio US
(http://www.usasbe.org/
conference/2008/.
66% of visually-
impaired people of
working age are
unemployed
The compensatory
coping strategies they
develop often include
increased creativity
and better than
average skills in
oral communication,
delegation and
problem-solving.
Key case themes
Determination to succeed to
overcome difficulties at school
and work
Both entrepreneurs with dyslexia
encountered difficulties at school and
dropped out early without significant
qualifications. On the other hand, both
blind entrepreneurs succeeded in
pursuing tertiary education, but only
after being firmly discouraged on the
grounds that it would be pointless.
Again, later, when both were highly
qualified, they had great difficulty
persuading anyone to employ them.
As a result, they attribute the root of
their success to a determination to prove
they were not stupid or useless. As John
Cavill put it:
“I felt a high need for achievement. I had
to demonstrate that I was not as dumb as
people thought”.
The standard curriculum is clearly
unsuited to people with a disability.
Janette Beetham had left school as soon
as she could “…feeling that I wasn’t good
at anything academic”.
As a young, visually impaired graduate,
David Murdock was stunned by the
response he received from civil servants
at job centres:
“Stick on your benefits, you won’t get
a job; it’s not worth your time.”
However, all four entrepreneurs had
happy childhood's in families that
provided strong social support, but
limited experience of entrepreneurship.
Their role models upheld family values
and self-confidence, rather than business
acumen. Without this to help them
overcome rejection elsewhere, they
might not have succeeded at all.
‘Difficult’ people
Experiences at school and work like these
will either destroy confidence or provoke
a fight-back. It made two of our case
subjects into disruptive and aggressive
youths and troublemakers who later had
to learn to change themselves.
David Murdock recalls that at school
“I got no help at all. I was flippant, bolshie
and outspoken.” After graduating Roger
Wilson-Hinds became a door-to-door
salesman (“To do this well you have to
like people and not mind rejection”), and
later, as Head Teacher of a special school
for blind children, was made redundant
“for being too radical”. Both eventually
mastered people skills, but still refuse to
suffer fools gladly.
“I began to see that
success is achieved
through people,
not just through
technologies and
processes; and not
by lone entrepreneurs
but by entrepreneurial
teams.”
31 Unlocking the potential of the UK’s Hidden Innovators 30 Unlocking the potential of the UK’s Hidden Innovators
Achieve control and self-esteem
This background of struggle and learning
to fight rejection acted as a driving force
to their becoming entrepreneurs –
through a need to survive, to control
their working environment, to build self-
esteem, and fulfil a dream.
Most saw themselves as unemployable in
a corporate environment. Two found that
self-employment was the only way to
satisfy the need for an income; while the
other two were sacked by their employers
– one on several occasions. Paradoxically,
this experience was liberating and
enabled them to focus on a long-held
objective to be their own boss (the
‘trigger’). As Janette Beetham said,
“I became ‘me’ at forty-three!”
Coping strategies
Dyslexics and the visually impaired who
overcome their disabilities tend to
manage in different ways. Dyslexics
develop coping strategies as children that
serve them well in business, learning to
delegate to others who don’t have their
problems with the written language and
becoming team workers:
“I began to see that success is achieved
through people, not just through
technologies and processes; and not
by lone entrepreneurs but by
entrepreneurial teams.”
On the other hand, blind children can
easily become over-dependent on their
parents or carers. To avoid this, they can
become fiercely self-dependent:
“I don’t see myself as a good team
worker. I don’t mind being in a team
as long as I’m the boss”.
And:
“I prefer to do things for myself …
but I now see that I have to be more
reasonable. A few years ago I was fine
as long as everybody agreed with me!”
Needs for training, advice,
coaching, mentoring
The difficulties they have to overcome
create strong needs for training, advice,
coaching and mentoring – not only to
acquire interpersonal or business skills,
but also because they have to work
harder to influence and educate funders,
distributors and customers to appreciate
what they offer. At some point, advice,
mentoring and counselling has become
critical for all four, but to get help of the
right kind has not been easy.
The background of advisors in small
business agencies and sector advisory
bodies (typically, as managers in large
companies or banks) tends to be
inappropriate for understanding such
clients, or the ICT-mediated business
models they have created, or even the
problems they face in the immediate
18 months after starting a business.
A mission to put something back
Having succeeded themselves, (like the
Indian entrepreneurs) they are committed
to creating advisory support systems to
help others in the same position. Janette
Beetham recalls “receiving lots of advice
and a small grant, but what I needed was
mentoring and business counselling”,
which prompted her to qualify as an
enterprise advisor and business
counsellor. Roger Wilson-Hinds laments
going to frequent “business breakfasts”
looking for advice, and wasting a lot of
time “when we should have just got on
with it”. Today he is a trustee of the Blind
Business Association Charitable Trust
37
,
helping blind people get into work. John
Cavill has trodden a similar path. He now
serves as an advisor to the British Dyslexia
Association’s
38
Board of Trustees to help
others with dyslexia, and runs Intermezzo
Ventures
39
to offer consultancy, coaching
and teaching to budding entrepreneurs.
After a long search David Murdock did
find a mentor, who has now become a
valued business partner.
Life-time learners
After their early difficulties, entrepreneurs
with a disability tend to become ‘lifetime
learners’ as mature adults and regularly
undertake further studies. Recognising
the value of learning, it makes them also
willing to advise and counsel others.
The liberating effect of ICT
For those with a disability, new forms of
ICT are an increasingly vital enabler. In
daily life, ICT allows the disabled to do
more of the things that non-disabled
people take for granted. At work, ICT can
compensate for disadvantages by helping
to level the playing field and even allow
particular acuities to deliver a competitive
advantage.
As David Murdock’s Clarifeye.com
website says: “Testing by a group of
disabled people who are directly affected
by badly designed websites, will mean the
advice you receive will guarantee your
website will become accessible.”
Like all new enterprises today, which
make extensive use of office automation
tools and the internet, Janette Beetham’s
business website enables her to reach her
customers and for them to interact with
her ‘virtual shopfront’; while her order
processing systems means she can
manage and run her businesses from
anywhere in the world.
But others have gone further. For John
Cavill, Roger Wilson-Hinds and David
Murdock, ICT forms the very essence of
the novel offerings upon which their
enterprises are founded.
Each employs ICT in innovative ways in
combination with design, consultancy
and installation services to create
new markets.
In fact, without ICT, their offerings and
their contributions to society and the
economy simply could not exist.
Recommendations for Government
and agencies
1. Networking groups that allow potential
entrepreneurs with a disability to meet
successful entrepreneurs (‘role models’)
like themselves are inspirational and
informative in giving relevant advice.
Promote initiatives that provide such
role models and networks.
2. Training initiatives that encourage
those with disabilities to gain new
venture creation skills are essential.
Organisations like the School for Social
Entrepreneurs and projects such as
‘Visage’ do this well.
3. However, since many from these groups
will feel that the standard curriculum has
already failed them, innovative teaching
approaches are required. Such
approaches will highlight inter-personal
and communication skills delivered by
means of mentoring, counselling and
coaching. The reality that these are
expensive and scarce teaching skills is a
barrier that must be broken down.
4. Ensure that advisors for SMEs and start-
ups are equipped to evaluate ICT-
mediated business models.
5. Work towards creating a trained cadre
of mentors and counsellors to carry an
enterprise through the start-up phase.
6. Liberate the latent reservoir of
talent emerging among disability
entrepreneurs. Many wish to ‘put
something back’ and share their
experiences to help others. This can be
informal and unpaid, or involve a paid
non-executive role, or an equity stake
in an embryonic business.
7. Making money is important to these
groups, but ‘making a difference’ is an
equal, if not stronger motivation. They
did not start their ventures to become
wealthy – although some have done
so – and they have needed to earn a
living which was denied them in
conventional ways. But their main
motivation was to achieve an ambition
and change the status quo facing such
people as themselves – usually by
means of an innovative product or
service that fulfiled an unmet need.
The way entrepreneurship is talked
about should recognise this motivation.
8. The liberating effect of new
information and communications
technologies (ICT) offers a way forward
that is immediately available. Every day
this is easier to use and less expensive.
Technology does not have to be ultra
high-tech; the benefit flows from the
appropriate combination and
application of current capabilities. A
modest grant for IT tools and internet
connectivity plus relevant training can
dramatically accelerate new enterprise
by people with a disability.
Barriers and enablers for Hidden Innovators
37
seehttp://www.bbact.org.uk/
38
seehttp://www.bdadyslexia.o
rg.uk/
39
seehttp://www.intermezzo-
ventures.com/
At work, ICT can
compensate for
disadvantages by
helping to level the
playing field and
even allow particular
acuities to deliver a
competitive advantage.
Liberate the
...reservoir of
talent emerging
among disability
entrepreneurs.
Many wish to ‘put
something back’
and share their
experiences to
help others.
Barriers and enablers for Hidden Innovators
33 Unlocking the potential of the UK’s Hidden Innovators 32 Unlocking the potential of the UK’s Hidden Innovators
Insights and recommendations
The featured cases illustrate many essential lessons for
potential entrepreneurs. This includes the need for passion and
determination in the face of difficulty, the requirement to create
value around an opportunity, and the importance of embracing
innovation. The cases show how these entrepreneurs have used
ICT to create value around opportunities, build new business
models, promote their ventures and streamline processes.
They also highlight aspects that may not always be fully
understood: for example, the way entrepreneurs ‘personalise’
the customer relationship and the way they bring innovation
into their processes and business models.
Above all, the cases illustrate the barriers that are distinctive to
the groups featured in this study and suggest how the UK can
make greater use of the potential contribution that such groups
and other similar unheralded ‘hidden innovators’ can make.
These entrepreneurs succeeded despite having additional barriers.
But what of those who are not quite so brave?
We now turn our attention to recommendations that may
have significance for many groups within UK.
1. Make financial support and investment more
equitable across all groups
As this report demonstrates, it is increasingly clear that older
people, in addition to disabled and ethnic groups offer
considerable entrepreneurial potential and it is good to see that
the Government’s new Enterprise Strategy references targeted
support for the over 50s. Although the details are thin at this
stage, we would urge policy makers to provide equivalent support
to the over 50s as they do to younger people, especially as they
seem better placed as a group to set up and run a more
successful and sustainable business, based on years of experience
and insights. According to Prime, after three years, the success
rate for business start-ups is 70% for over 50’s compared to
28% for younger groups. The report demonstrates that a well
resourced and targeted approach to supporting ethnic minority
groups has paid significant dividends to date.
Action required
Provide more financial support to over 50s and disabled groups
to encourage more sustainable and successful business start-ups.
2. Take diversity seriously
This study of ‘hidden innovators’ points to the essential
requirement to ‘take diversity seriously’; we must recognise
differences and the distinct needs of groups that may be
marginalised. This is a particular refrain in research that highlights
the diversity of black and minority ethnic groups but older
entrepreneurs and those with a disability likewise have
distinct needs.
These cases illustrate how they also have particular strengths and
talents for entrepreneurship, and can furnish novel insights into
products and services. This is particularly true of our visually
impaired entrepreneurs, with their appreciation of the needs
of better-adapted products for people with visual impairments.
Just as the dyslexics have developed compensating abilities, our
visually impaired entrepreneurs have found in ICT the opportunity
to excel and discover latent talents and ideas for new products.
While the use of ICT across the sample mirrors that in new
businesses generally – from being simply a necessary support to
the business, to providing new ways of doing business through
the web and creating a business round this – our visually impaired
entrepreneurs have latched onto ICT as a liberating tool to
enhance people’s lives.
Action required
The entrepreneurial spark is present in many individuals it must
be nurtured rather than quashed by lack of understanding of
their particular needs. Training must be made available to
business advisors and other support organisations so they do
not place additional barriers in front of potential entrepreneurs.
How can they know whether it is better for someone to stay on
benefits rather than start a new venture? That decision is not
theirs to make.
3. Change the language and image of entrepreneurship
Many of the entrepreneurs in this study did not think of
themselves as entrepreneurs, and some do not like the label.
The cases clearly illustrate that in most cases the desire to make
money was not the primary reason for starting a company. Along
with the need to make a living, it is notable that entrepreneurs
are often motivated by an altruistic goal – the desire to make a
difference, to do something that produces social benefits – or just
to realise a personal dream of some kind. We need to change the
lexicon of entrepreneurship to include some of these terms.
There is also a need to make entrepreneurship sound less male;
we are constantly told that entrepreneurs work 24/7 which
prevents many groups from considering entrepreneurship
as an option. Carers, older people and the disabled can
create successful ventures even if they are part time, and
new technology provides a platform.
Action required
Initiate a campaign to make entrepreneurship inclusive. Profile
a wider range of role models in the media and change the
terminology used. Encourage more use of technology platforms
to facilitate entrepreneurship for those who may need to work
mainly at home.
4. Increase the entrepreneurial self confidence
(self-efficacy) of the nation and of minority groups
in particular
Our focus groups suggested people in the UK do not feel
confident in their ability to become entrepreneurs. This is
combined with a fear of failure, which may be why more people
do not create new ventures. This insight is confirmed by research
from Gem (2006)
40
which suggests that up to sixty percent of the
population do not believe they could create a successful new
venture. The combination of role models, mentoring, coaching
and training would help to overcome this by increasing
‘entrepreneurial self efficacy’.
‘Entrepreneurial self-efficacy’ can be defined as the strength
of an individual’s belief that he or she can successfully perform
the varied tasks that make up the entrepreneurial role
41
. It is a
multidimensional construct linked with task groups such as
marketing, innovation, management, risk-taking, and
financial control.
The literature, including the work of McCelland
42
, clearly supports
the need for role models as a way to increase the entrepreneurial
self-efficacy of a nation; while the growing body of research based
on the work of Albert Bandura
43/44
and Lucas and Cooper
45
suggests that an individual’s entrepreneurial self efficacy can be
increased by a combination of role models to inspire, mentoring
and coaching, training opportunities to practice enterprise skills,
and experiential learning.
Action required
Building ‘entrepreneurial self-efficacy’ will help the UK to grow
more innovative start-up companies. In order for this to happen
there is a need for more tailored support and advice.
5. The need for tailored encouragement and support
Most people – and certainly those in this study – need
encouragement and support to take the first step towards
entrepreneurship. There is widespread recognition of this
need and the different ways of providing it.
• The right role models – Many entrepreneurs will describe
how they have been inspired by particular role models. The
problem for disadvantaged and minority groups is that they
may lack relevant role models. Role models need to be similar
in background. If you have a disability, meeting a successful
entrepreneur with a disability is far more inspirational than
meeting a high profile entrepreneur whose achievements
seem unattainable.
• Tailored support – Practical support also needs to be tailored
to specific requirements. For example, older entrepreneurs
often need particular encouragement and positive
reinforcement that their business idea will work. The
organisation known as PRIME (the Prince’s Initiative for
Mature Enterprise) fulfils a valuable role here through its
understanding of their needs and motivations; while
entrepreneurship training for mature adults requires a
‘contextual’, discovery-based approach
46/47
. The visually
impaired and dyslexic similarly have very specific issues and
problems to do with their disability – innovative training
helped both with the interpersonal and communication skills
they lacked because of their education and disability.
Insights and recommendations
40
Gem 2006,
www.gemconsortium.org
41
Chen, C. C., P.G. Greene,
& A. Crick. 1998. Does
entrepreneurial self-
efficacy distinguish
entrepreneurs from
managers? Journal of
Business Venturing, 13:
295-316
42
McClelland (1967) op
cit
43
Bandura, A. 1977. Social
Learning Theory. Upper
Saddle River, NJ: Prentice
Hall
44
Bandura, A. 1997. Self-
efficacy: The Exercise of
Control. New York: W.H.
Freeman and Company
45
Lucas W. A. & Cooper S.
Y. (2004) Enhancing Self-
efficacy to Enable
Entrepreneurship: the
Case of CMI’s
Connections. MIT Sloan
Working Paper No.
4489-04
46
Jones, A.M. & Hendry,
C. (1994), ‘The Learning
Organisation: Adult
Learning and
Organisational
Transformation’, British
Journal of Management,
5, 2, 153-162
47
Rae, D. (2005), op cit
The combination of role models,
mentoring, coaching and training
would help to overcome this by
increasing ‘entrepreneurial self
efficacy.
35 Unlocking the potential of the UK’s Hidden Innovators 34 Unlocking the potential of the UK’s Hidden Innovators
• Appropriate coaching and improved training for advisors –
Most new businesses need some form of support to get
started. The classic UK support system is typically geared to
developing business plans to flesh out the business
proposition. But this may not be suitable for these groups,
certainly it is insufficient, and is not how most of our
entrepreneurs got started.
One of the strongest messages coming from the cases and
focus groups was how inadequate and inappropriate the
advice system is. Small business advisors are seen as invariably
lacking experience in new venture creation, and are therefore
unable to respond usefully to the particular and immediate
problems new entrepreneurs want help with. The nature of
their role is also inappropriate – being geared to ‘giving
advice’, whereas what is often needed is coaching. This implies
better training for business advisors and a different pattern of
recruitment by encouraging more serial entrepreneurs to get
involved in coaching.
• Increase the number of mentors – From early on having a
mentor is invaluable – especially when the new entrepreneur
starts to encounter new problems and challenges. While
organisations such as PRIME and TIE (The Indus Entrepreneurs)
highlight this, they cannot themselves be mentors, but must
rely on volunteers to give their time. Mutual help
organisations, such as the UK’s Academy of Entrepreneurs
48
,
dedicated to supporting established businesses, can also
help through one-to-one coaching.
In practice, many of our entrepreneurs found mentors in all
sorts of places through their own networks, and networks are
indeed a vital resource. Indian entrepreneurs seem to have
particular skills and resources in networking. Older
entrepreneurs, who have a history of employment to draw on,
may also have an advantage, through accumulating networks
of business contacts over the years. Others without this
employment history, including older women entrepreneurs,
are less fortunate. There are increasing numbers of networking
groups, locally and nationally providing extended “sites of
interaction”. Nevertheless, finding a mentor who can be
both friend and critical ally remains a personal and
unpredictable process.
• Business growth mentoring – The entrepreneurs in this study
suggested there is a need for ongoing mentoring. Older
entrepreneurs may have useful social capital that helps them
to start-up but they are still just as vulnerable, as all new SMEs
are, to typical growth problems, such as managing cash flow,
broadening their skill base, and recruiting the right people.
All therefore need access to continuing sources of support,
particularly mentors. ICT could play an important role;
on line mentoring may provide a solution, offering access to
experienced mentors on a needs basis. But mentoring itself is
not a single panacea, and good mentors are liable to remain
in short supply.
Action required
There is a need for a continuum of support, it is important, that
policy makers recognise the multifaceted character of ‘advice’ –
from signposting and information, through to coaching and
mentoring. What this indicates, above all, is that different forms
of so-called ‘advice’ involve quite different roles, and have
different salience as a new business develops. Our business
advisory services need to respond to this agenda.
6. Encourage improvement as well as innovation
During our focus groups it became apparent that the language
of innovation can be both stimulating and a turn-off. As a rallying
cry or remedy for the UK’s ‘problems’ it may discourage people
who think their ideas are insufficiently ‘innovative’, when they
may have much to contribute to the vitality of the UK economy.
A successful idea is often a simple solution that fills a gap, or is
an incremental improvement. A number of our entrepreneurs
recognised their ideas were like this, but yet there were strong
businesses and money to be made from them.
Action required
Profile successful entrepreneurs who have built strong companies
based upon ‘doing something better’.
Insights and recommendations Insights and recommendations
7. Differentiate between self-employment and
entrepreneurship and tailor policy to meet the
particular needs of each group
Finally, we need to emphasise: self-employment is not
entrepreneurship. Small business policy in the UK has for many
decades used the creation of small businesses as a way of
alleviating unemployment. Government small grant schemes
for start-up (in their various guises) are likely to do little
more than enable one-person businesses. This is laudable:
self-employment makes a valuable contribution and can also
lead to growing businesses.
But it is based in a misconception and contradiction. The social
objective to alleviate unemployment and increase social inclusion
through self-employment is different from the economic objective
of facilitating entrepreneurship and creating growth-oriented
businesses. The support measures required and the skills
necessary in the agencies delivering them are consequently
very different.
This problem affects not only those in deprived urban areas with
high unemployment, and hence those concentrations of black
and minority ethnic groups in these areas, but also older and
disability groups, where the focus of policy is to get them out
of unemployment. This is a limiting perspective on what they
can achieve, and on what those who are entrepreneurially
minded seek.
Elements of the benefits system (such as those involving grants
for equipment and training, and the ‘6-month rule’) create
obstacles for older and disability entrepreneurs, and are not about
supporting entrepreneurship effectively, but guarding against
abuse of the benefits system. They are thus rooted in the
‘unemployment’ agenda, not in the ‘entrepreneurship’ agenda.
The policy focus is therefore actually part of the problem, as far as
‘hidden innovators’ are concerned. Since it is tied into a model of
entrepreneurship as a way out of unemployment, it tends to
perpetuate the marginalisation of certain social groups.
Action required
A change in mind-set and policy is required so that both the self
employed and growth oriented entrepreneurs receive the tailored
support that is specific to their needs, this might help both to
meet the real problems of marginalised groups and encourage
growth-oriented entrepreneurs.
In conclusion
There are improvements that can be made so that we can unlock
the innovative and entrepreneurial potential of all groups within
UK society. UK government can encourage these changes,
particularly those relating to the small business advisory service.
We also need new initiatives that encourage more serial
entrepreneurs to become involved in mentoring and coaching.
Experiential training should be open to all. The training initiatives
for the young which have included: meeting guest entrepreneurs,
preparing business plans and in some cases running a business for
a short time have worked well. Could some of this training be
replicated for others in the UK?
There is also a requirement for more organisations such as Prime
who can meet the specific needs of minority groups. Prime is very
successful and this model could be replicated.
Finally the media have a role to play. They can change how they
portray entrepreneurs, increase the diversity of role models that
are profiled, and run stories on some of the support organisations
such as Prime.
A successful idea is often a simple
solution that fills a gap, or is an
incremental improvement.
48
seehttp://www.chiefexecutiv
e.com
37 Unlocking the potential of the UK’s Hidden Innovators 36 Unlocking the potential of the UK’s Hidden Innovators
There is by now a robust body of knowledge about the
entrepreneurial start-up process and what makes for
entrepreneurial success, which includes the following themes:
• The entrepreneurial trigger to starting a business is often some
kind of disruptive event in a person’s life, which causes them to
attempt something new
50
.
• What determines whether or not someone takes an idea for a
new business forward, however, are various pre-disposing and
enabling factors, including their previous work environment,
role models, family, cultural support, a country’s social and
economic infrastructure, and availability of finance.
• The entrepreneurial process is basically the same everywhere
and most countries are not short of people with ideas: what
differs is the relative supportiveness of countries’ social and
economic infrastructures, and the availability of finance.
• A successful idea (‘opportunity’) is one that creates value for
someone
51
, on a sufficient scale to sustain a business. Ideas
often come from work experience, hobbies and enthusiasms,
and social environments that people already know well.
• But they also arise from reshaping existing value chains to
meet needs differently. People perceive opportunities
differently, which is why some people become entrepreneurs
and others not
52
. This gives rise to innovative business models
that disrupt how competitors operate. Many new successful
businesses thus involve novel routes to market and novel ways
of sourcing what they need.
• Ideas go through a 3-stage process – finding, developing, and
screening the idea. Entrepreneurs shape their ideas through
discussions with others, sometimes over a lengthy period of
time: the process of opportunity formation is a social process
53
.
• An entrepreneur’s social networks are therefore a vital
resource
54
, both in shaping an idea and in implementing
it through the resources they need to put together.
• Writing a business plan is a way of refining and providing a
reality check on an idea as a practicable business proposition.
However, there is disagreement about the necessity and
desirability of time spent on this (and on other formal
preparations such as market research): on many occasions,
it is necessary to grab opportunities during a short ‘window
of opportunity’
55
.
• People often make the mistake of thinking they need large
sums of money to start a business. Increasingly, new businesses
can be started with limited capital. ‘Resource parsimony’ is
an important attribute of a successful start-up and a
successful entrepreneur
56
.
• Entrepreneurs sell to customers, not to markets. This means
understanding what people value and will pay for as potential
customers. Sometimes, the innovator is ahead of their
customers in understanding this, and then they have to
educate them in a product or service’s features.
• Selling is a key skill – Mark McCormack famously wrote
57
that
selling is what Harvard Business School failed to teach. This
remains true of almost all business schools. Selling is frequently
misconstrued as getting people to buy something they don’t
want. On the contrary, selling means, first and foremost,
understanding customers and what they value. It is a skill,
moreover, deployed in a wide range of ways, part of the wider
class of influencing skills. Thus, successful entrepreneurs create
value for customers, for suppliers, and for themselves
58
.
• ‘Doing deals’ is a key process in shaping mutual shared value,
and the IP of the small business is often tied up in the
personalised resource networks that result.
• Innovation often also requires organisational innovations
59
–
at the very least, new businesses need to think how they can
engage and motivate people, and new entrepreneurs are often
keen to imbue a business with their own personality.
We explored these themes in the interviews with our
entrepreneurs (Annex B), and developed the flow chart (Figure 1)
to describe the links among these processes.
A) Background
1. Please briefly outline your career as an entrepreneur – how you
first set up in business, and where this has led you (e.g. have
you moved on to set up any subsequent businesses? what you
are focusing on now?).
2. Can you tell us a little about your background, your family and
schooling? Were there any influences that made you more or
less likely to consider starting your own business.
3. Were there any significant role models in your early life that
influenced your career decisions?
4. Did your background act as a positive, negative or
neutral driver for an entrepreneurial career? Has being
(dyslexic/partially sighted/Indian/older) had any influence
on the decision to start your own business and the
subsequent journey?
B) The idea
5. Can you tell us the story of the enterprise you have created –
what it is, how you created it – the business idea, where the
idea came from?
6. Did you have any other ideas that you thought were workable
but did not take forward into a business? If so, why did you
not proceed with these?
7. Why did you start up a business of your own? What triggered
it? What were your personal ambitions in doing this? Why then
– how old were you, what were you doing at that time (e.g.
what employment)? Did you start on your own or with a team?
What is the business model?
8. What did you do to prepare yourself before launching this
business? Did you talk to many people to develop your idea or
to get advice? Did you test it in any way before launching it?
Did you carry out market research? How long did all this take?
Was there any pressure to act quickly?
C) Implementation
9. What did you then have to do to get it started? What
resources did you have to pull together (people, finance,
equipment, facilities, first customers, etc)? Was this difficult?
What surprised you in starting this business that you
hadn’t expected?
10.Have you had particular support or help from being part of a
(dyslexic/partially-sighted/Indian/older) group, from others
in the same position or from organisations representing it?
11.Equally, have you had to face particular problems, which have
been difficult to overcome? Why? What would have made your
task easier?
12.During the process of starting your business to whom did
you go for advice, did you make use of any government small
business support services or any other agencies? Have
you found the UK environment supportive to small and
medium enterprises?
D) Development
13.What qualities, characteristics, skills, experience did you/do you
have that helped you succeed? What other things helped you
succeed (e.g. friends and family support, mentors, putting
together a good team, luck, etc)?
14.How did the business then develop, how has the business
grown? What were the key events, the ups and downs? What
did you find the hardest things to do, the most challenging?
What gave you your biggest problems? How did you
overcome these?
15.Did technology play any part in your business or your success?
16.What aspects of your business would you describe as
innovative? Is it novel or an incremental improvement of an
existing offering?
E) Lessons learned
17.What are the most important lessons or learnings you have
taken from these experiences? What would you do differently
another time? What advice would you give other people like
you who might wish to start a business?
18.[Optional question:] How does this compare with previous
ventures? What helped you from your first venture? What did
you do differently in what followed?
Annex A: The entrepreneurship process Annex B: Interview brief
50
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pp.31-34
52
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de Koning, A. (2000),
‘Meeting people to
shape opportunities –
the entrepreneur’s way’,
in S. Birley & D. Muzyka
(eds.), Mastering
Entrepreneurship,
London: Pearson,
pp.180-183
54
Dubini, P. & Aldrich, H.
(1991), ‘Personal and
Extended Networks are
Central to the
Entrepreneurial Process’,
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Stevenson, H.H. (2000),
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entrepreneurship’, in S.
Birley & D. Muzyka (eds.),
Mastering
Entrepreneurship,
London: Pearson,
pp.8-13
56
McGrath, R. G. (2000),
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Muzyka (eds.), Mastering
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London: Pearson,
pp.42-46
57
McCormack, M.H.
(1984). What They Don’t
Teach You at Harvard
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39 Unlocking the potential of the UK’s Hidden Innovators 38 Unlocking the potential of the UK’s Hidden Innovators
The examples feature entrepreneurs from several UK
communities: people of Indian descent, people with a
disability, people who become entrepreneurs in middle
age. Their candour and willingness to collaborate have
made this study possible and we are most grateful.
In every case, the subject entrepreneurs have
depended in large measure, and continue to depend,
on the application of new information and
communications technologies.
Looking back, Neelesh believes that the Indian approach to
education has been a positive driver for his entrepreneurial
career. “I never actually practiced as a mechanical engineer, but I
consider that it gave me an analytical and structured quantitative
approach to business issues. This is something that was developed
during the MBA. The strict entry examination to get into the
Institute has given me a sense of the value of rigour. I went on
to do the MBA as part of a ‘herd mentality’ – all my peers were
doing the same thing. That’s a good thing to do rather than
follow the influence of a role model.”
Neelesh’s first job was with Coats Viyella, a British multinational
in the textile and clothing market. Coats’s subsidiary in India
made threads and clothing accessories and was perceived to be
a very well respected blue chip company. After doing a two
month summer vacation internship he was offered a job as
a management trainee. Within five years he had moved
to a position of senior branch manager on the sales and
marketing side.
Subsequently he went into the mainstream consumer products
industry and worked for Coca-Cola where he was in charge of
franchise operations for the bottling plants in Bombay. “I stayed
for 2 years before being headhunted to join Andersen Consulting
in their sales, marketing and consumer products division in India.
At that time Andersen were hiring people with an industrial
background to blend with the people that had grown up
as consultants.”
The Idea
In the fifteen years since then he has undertaken a variety of
jobs and gained experience: “in a whole host of things, including
sales and marketing in manufacturing and consumer products,
management consultancy and information technology. I joined
Infosys and was appointed as UK head of sales and marketing.
This was the reason for moving to the UK. In 2006, together with
four other Infosys employees, I set up Value Chain International.”
They had all been working in the corporate environment
for between 10 and 20 years and were looking round for
opportunities to move into ownership of a new enterprise.
Neelesh was one of five individuals in a team spearheaded by
the chief executive officer that set up Value Chain international in
2006. “We did some brainstorming around a few ideas and came
across an interesting technology framework and a number of
small companies that were related to this technology framework.”
They put the company together by buying the intellectual
property for the technology framework, by acquiring the
small related companies and merging it all into one operation.
“So it was not a completely ‘ground-up, from-a-garage’ type of
operation”. The team were all working for Infosys at the time
and most of Infosys’ business is writing bespoke software and
packaging it as a service for large multinational clients –
so they were familiar with this market.
The team knew each other as friends and colleagues. They all
had leadership positions for Infosys in various parts of the world:
Neelesh was in the UK then; two colleagues were in Australia,
one in India and one in America. So the process took a lot of
conference calls and working at the weekend to put it together.
Neelesh recalls that the idea developed from being “an interest,
to a hobby, to a passion and then to a company. It was the
availability of the technology framework software that was
the catalyst, making us put it together”.
The software had been written by one individual who did not
have enough time, or inclination, to develop it any further. A
number of things came together: the availability of the software;
the willingness of the companies to make a fresh start under new
ownership; and the availability of finances from various sources.
“We were in a situation where we had all these jewels which were
under-leveraged.”
Neelesh and his colleagues did consider some other ideas for
possible offerings in the information management space. “We
were looking at alternatives but this was the most attractive
proposition and it was the one we decided to run with. We
modelled a number of possibilities. The general problem we
wanted to solve is what we call ‘info smog’ – the notion that most
companies have too much information and not enough insight.”
The value add proposition was to bring a number of things
together and construct an offering that was attractive to the
market and ready for the market. In short, it enables a client
company to ‘monetise’ their information. That is, to make their
information more valuable and thereby to improve customer
relationships by introducing a number of fiscal and
management disciplines. All this is underwritten by
the technology framework software.
Neelesh reflects that his immediate ambitions are to see the
company through a few more years of consolidation and growth.
Annex C: The collection of case studies
A collection of case studies of the UK’s hidden innovators
Neelesh Marik and Value Chain International 38
Pinky Lilani and Spice Magic 42
Rami Ranger and Sun Oil Ltd 44
Suchit Punnose and Red Ribbon 48
John Cavill and Logical Networks 50
Janette Beetham and evening-belle.co.uk 54
Roger and Margaret Wilson-Hinds and screenreader.net 57
David Murdock and clarifeye.com 60
Derek Broomfield and Focus Cooling 63
Sally Walton and ‘Carry a Bag’ 66
Tony and Nadia Howell and whitetruffleauction.com 69
Peter Jenner and Proximagen 72
Tony Baxter and Sandcliff AB Ltd 75
Neelesh Marik and
Value Chain International
The background
Neelesh Marik came to the UK about eight years ago when his
employer, Infosys, a very large Indian company, appointed him
as UK head of sales and marketing. He became a British citizen.
In 2006 Neelesh and four business colleagues founded Value
Chain International.
The company’s press office describes the firm as ‘a global
information management company founded by a high calibre
team of seasoned IT professionals and alumni from the best
engineering schools in India and elsewhere. Headquartered in
Melbourne, Australia and with offices in Singapore, India, UK and
USA, Value Chain International helps businesses become more
agile by operating as a real-time enterprise. Its extensive
information management capabilities enable clients to transform,
aggregate, bundle, distribute, monetise, monitor and control
information within an enterprise’s extended value chain, thus
empowering users to sense and respond just-in-time to rapidly
occurring business events.’
Neelesh and his younger sister were born and brought up in
India. Their father was a chartered accountant and worked in
large corporate companies.
Neelesh had studied up until higher secondary level in India. His
schooling happened across two cities: St Saviours, a well-known
Christian missionary school in Calcutta, and Southpoint High
School in Bombay, which was recently voted as one of the top
four or five schools in India. He then went to the Indian Institute
of Technology in Bombay to do mechanical engineering. The first-
degree course lasted for four years and then he immediately did
a two-year MBA at the Institute of Management in Bangalore,
finishing in 1994.
When asked about influences on his career decisions, Neelesh
recalls that as a child his grandfather was a significant role model
– he was a very illustrious civil engineer in a company in British
India and he was well renowned in his sphere. Neelesh met other
role models among his peer group at the Indian Institute of
technology (IITs). “This Institute is regarded as one of the best
technical institutions in the world. Some even rate it higher than
MIT. At school my big ambition was to go to this institution where
they would typically get 700,000 applicants, with only 2000
accepted. My role models were people who had managed to get
accepted. In this sense the brand name was a role model for me.”
41 Unlocking the potential of the UK’s Hidden Innovators 40 Unlocking the potential of the UK’s Hidden Innovators
“We are still at quite a formative stage, but in the longer term my
career could move into other entrepreneurial ventures. When we
started in 2006 the head office was in Australia – largely because
the two partners including the chief executive officer were based in
that country. But our markets in the UK and in the US are now
larger.It will take a few more years to establish the market value
of the company and whether we continue to run with it or sell up,
only time will tell.”
In preparation for launching Value Chain International the
founders spoke to a number of people. It was mainly friends
and colleagues whose brains they picked. “We did not do a
tremendous amount of market research but we looked at the
information management space and the business process
management space, which we knew about partly because
of our earlier careers.”
They also looked at published reports in specific market areas that
were available to the public. The most intense part of planning
took about five months and it took about a one-year from start
to finish to get from idea to launch.
The business is in two sections – content and collaboration. The
content business is geared towards media and publishing where
their target markets are well established mature businesses and
the major publishers. This is a big company category where
the firm proposes solutions to meet the particular conditions
of the sector.
The collaboration business is more for companies in the medium-
sized business sector for which the offering is concerned with
process collaboration. This area is in an earlier stage of
development and a number of different industry sectors are
being explored. The result is a mix of businesses at different
stages of maturity. The intention is to balance the financial risk.
Implementation
Most of the resources the founders needed were in the
companies that we were acquiring. The senior management team
was already in place and it consisted of the five founders. Finance
came from a number of angel investors and private resources.
This angel investment covered the cost of getting other resources
such as infrastructure, offices and information technology. These
resources enabled the team to get the business into shape. Now it
has achieved a larger scale some refinancing is required and over
the next three months they will be looking for finance in the
capital markets.
Neelesh recalls that the team had many surprises and “the
pleasant surprises were smaller than the unpleasant surprises”.
On the people front “We had taken over a number of companies
and we had to find out who were the employees that we wanted
to retain and who we didn’t. We were looking to people who could
do long haul rather than short haul”. The operational front also
brought surprises.
These were chiefly concerned with the assumptions that they
had made as part of the business definition in terms of market
opportunities, costs and so on.
Neelesh acknowledges that the founders took a lot more things
for granted then they would do now. But because they were all
working full-time for Infosys and trying to plan the enterprise in
their spare time there was not a lot of opportunity to explore
every situation in depth. They had some difficult times at the start
but the business ‘pulled through’ and is now cash flow positive
and stable.
The founders had to rely on each other’s resilience and strength
of intention rather than depend on any support from their Indian
background. However, three months after the firm was launched
Neelesh joined an association called The Indus Entrepreneurs
(TiE Silicon Valley;http://www.tiesv.org/). TiE is a worldwide
organisation which started in Silicon Valley about 20 years ago.
Globally there are about 700 or 800 chartered members who are
entrepreneurs and something like 20,000 to 30,000 ordinary
members. The London chapter has been going for about
10 years. The meetings are a good opportunity to network
and meet people in a similar position.
Neelesh has found TiE to be an excellent forum and would
recommend membership to anybody who wanted to start up a
business. “TiE is a very good network as you can draw upon the
advice and support of experienced individuals who have been
through a similar journey. The mentoring program in TIE is very
good. Although the advice is sometimes indirect I have known
people who have benefited directly, for example by being put in
touch with a source of finance. During the last 12 months we have
had a number of difficult points and being able to draw upon this
resource has been valuable.”
When asked about particular problems that have been difficult to
overcome Neelesh jokes that he and his colleagues prayed a lot.
The members of the management team had to create their own
support system for each other and muddle through. “We also
had our families to see us through and put up with this level of
uncertainty. My wife is a freelance language interpreter but her
time is taken up at the moment by looking after our child.”
It was particularly difficult in London because everything is more
expensive. This made the ‘burn rate’ of resources very high and
required an increased level of business in the UK to cover costs.
The company is now about 400 people. Five are in the US, three
in the UK, six in Australia, two in Singapore and these are either
in management or in sales and marketing. The rest are in India:
“They are the guys that do the work”.
The founders had some contact with the UK Department of Trade
and Industry and the City of London. However, as they felt they
had sufficient knowledge to set up the company they did not
seek government support for small businesses. In Neelesh’s view
the UK is not an especially difficult place in which to do business.
“We are working with mature international companies in the
media and publishing world. We were the “new boy on the block
with a difficult concept to sell” and these were the obstacles rather
than the nature of the UK business climate. But because we had
a customer base that had been built up from the companies we
acquired at start-up we were not starting entirely from scratch.”
Development
Neelesh recalls that the main challenges the founders faced
were balancing cash flow and making all ends meet without
compromising on customer service, and without stopping
investing for the future. Another big challenge is managing the
attrition of good people. Secondly, he feels the firm is still at a
slightly uncertain stage and so managing to keep hold of good
people is an important issue – especially in a market where
these skills are much in demand.
The third big problem is the co-ordination of management
strategy across three continents. They get together as frequently
as possible but increasingly rely on data communication systems
such as Skype for telephone conference calls. “We overcome these
problems by combination of individual and group effort to ‘push
the envelope’ in the direction in which we want to go. We believe
we have a ‘never say die’ attitude.”
Value Chain International is purely a technology business and
it makes extensive use of communications technology in order
to operate. In addition intellectual property is an ongoing issue.
“This is an intellectual property based business and as we operate
all over the world we need to make sure that we are protected in
all these different countries.”
The founders consider the area where the enterprise is most
innovative is in its business model. The revenue from the customer
comes in three streams. First there is the classic, old-fashioned
consultancy fee which is paid on a rate basis. Then there is a license
fee for use of the company’s intellectual property.
The third element is a revenue sharing or ‘gain-sharing’ scheme
which is based on the business benefit that the firm’s
recommendations deliver to the client company. “So the more
we are able to reduce the costs of an operation or to increase the
company’s revenue, then the more money we make and as this
rolls forward into the future beyond the immediate cost of doing
the work, future revenues are assured.”
Lessons learned
In the last 18 months there has been a lot of personal growth.
Neelesh recognises that in his own case he has developed a
tolerance for ambiguity. He observes that in conventional jobs in
large organisations everything is structured and laid out – so the
need to deal with ambiguity is small. But in the entrepreneurial
world situations that are usually not well structured and so the
entrepreneur has got to learn to cope with ambiguity. “This is
particularly difficult for a mechanical engineer but it has been
the area of greatest learning and development for me.”
Interpersonal effectiveness is the next biggest thing, as the
management team has to work effectively together despite the
problems of being located in different continents. This is not
just about being able to work with people but it is also about
tolerating different professional styles because each person has a
different professional style or way of working. Neelesh reflects
that in an ideal world everyone would have the same professional
style and then everything would be harmonious. “But that is not
the case so the ability to be able to live with that knowledge and
respect each other’s professional style is very important as without
that everything could fall apart. This is not particularly an Indian
capability. We are no longer a purely Indian company. We now
have a number of nationalities working for us particularly at
the management level outside India. We exist in a multi-
cultural environment.”
When asked for his advice to others who may wish to start a
business Neelesh reckons the main lesson he has learned is the
need to think through assumptions very carefully. “We would have
done things differently from a risk management perspective. You
need to be able to balance speed with caution. You can be very
cautious and not move at all. There is a saying that the safest
ship is the one in harbour – but that is not it where it is supposed
to be. The trick is not to proceed at a speed where you are making
decisions that are flaky and tenuous and have not been carefully
thought through.”
In Neelesh’s view this is the sort of thing that experience can
bring: “This is a ‘gut feel’ oriented business – ultimately the
most important lesson is that you have to make decisions.”
42 Unlocking the potential of the UK’s Hidden Innovators 43 Unlocking the potential of the UK’s Hidden Innovators
Pinky Lilani and Spice Magic
The background
When you meet Pinky Lilani her warmth and passion are the first
things you notice. She was born in India in the 1950’s where she
attended an Irish convent school. Pinky went on to University
where she completed a first degree in educational psychology
and a post graduate qualification. She met her husband thirty
years ago. They married after a whirlwind romance and left
for England in 1977.
In India Pinky had servants so had not learned to cook. When she
arrived in the UK this was one of the first things that she tackled.
She soon found that she very much enjoyed cooking and that
she had an ability to put together excellent Indian food using
simple techniques.
Pinky is a confident person and believes her confidence and
ability to talk to people has helped immensely in developing her
company. Her background meant that she was confident meeting
and talking to people at all levels. In fact, her interest in those
around her is a very visible characteristic. It is easy to understand
how this trait has helped her to gain an understanding of people’s
needs and to develop a company that responds to those needs.
Pinky has also made a great success of other endeavours that are
equally enterprising but not for her own benefit. She is the
founder of the Asian Women of Achievement Awards. These
awards honour Asian women from all walks of life in the areas of
Arts & Culture, Media, Public Sector and Business. The impressive
judging panel, high profile sponsors and strong media support,
combined with a very competent event management team,
have helped the Asian Women of Achievement Awards create
an unrivalled platform for the talents of Asian women in the UK.
Patrons include Cherie Booth QC and Her Highness Begum
Inaara Aga Khan.
In 2006 she set up a new Award for women of all backgrounds –
The Women of the Future Awards – again with high profile judges
and Princess Zahra Aga Khan and Cherie Booth as Patrons. This
was followed closely by the setting up of the Inspirational
Women's Network with LloydsTSB and the Ambassadors
Programme with Merrill Lynch.
In addition, Pinky is a mentor with the Prince’s Youth Business
Trust, a member of the Asia House special project committee, the
Mayor of Croydon’s charity committee and the European Women
of Achievement Awards. And she helped to set up the Women’s
Interfaith Network to encourage communication and
understanding between women of different faiths.
The Idea
While Pinky was learning to cook she decided to gain some
additional qualifications in the UK so that she would feel
equipped to teach in further education. She completed a Diploma
in Management Studies; a Diploma in Marketing and a Certificate
in Education. Having completed this further course of study, Pinky
started teaching cookery at adult education classes. Initially this
was a part-time role whilst her two sons were growing up.
This interest in teaching and her enjoyment of cooking led
to a new project which eventually resulted in a highly
successful enterprise.
Pinky realised that people were very interested in Indian cookery
but felt it was too complicated. In the late 1990s there were few
Indian cookbooks. Madhur Jaffrey had written several but Pinky
thought there was room for another cookery book with simple,
easy to follow recipes.
Although Pinky did not carry out formal market research, the
interest from her students and those around her convinced her
there would be a market for the book. She borrowed the money
to publish the book from her husband – a successful Indian
businessman and accountant.
Rather typically, when Pinky needed an editor she got on the
telephone to Sainsbury’s food magazine and asked if they could
recommend an editor who would work for her on a freelance
basis. As a result she was put in touch with a young woman who
turned out to be an excellent editor just starting out in her career.
This newly appointed editor did not know anything about Indian
cookery so everything had to be simplified. Pinky believes this is
why the resulting book is so easy to understand and meets the
need of its target audience.
Implementation
The book was published in 2001. Pinky took it to book shops
but found that no one would stock it because she was unknown
author. This setback may have dampened some peoples’ spirits
but Pinky took it in her stride. She used her marketing talents
to generate interest in her book. What she did is a good
example of the way Pinky uses her network to support her
business endeavours.
That year Miss India had won the Miss World title. Pinky knew a
journalist at The Times Newspaper and invited him to cook at her
home with Miss World. The journalist wrote an excellent article
entitled ‘I could hardly stop my Pakoras from igniting’. He also
detailed how people could get hold of the book.
Within two weeks Pinky had received 500 cheques through
the post: “This was the first breakthrough”.
Pinky then took the article to Waterstones along with the book
and asked if she could demonstrate the recipes – particularly
her spicy potatoes – in their stores and sell the book at the same
time. They readily agreed and Pinky started travelling the country
demonstrating her recipes and selling her books in bookshops.
Development
Having established her cooking classes and book sales, Pinky found
that people were asking her where they could buy the spices she
uses when cooking.This led to the idea of the ‘Spice Box’ – quickly
followed by a list of other accessories people could buy. Pinky
observes that “… along the way there are many opportunities
but you have to be open to these”.
Pinky suggests that many people are only interested in talking
to particular types of people, perhaps those who are already
successful, but she has made it her practice to talk to people from
all walks of life. In the process she has found people to be warm
and willing to help her. For example: she says that when she is
travelling she always strikes up a conversation with those around
her because you get to meet such interesting people.
This interest in others led to another breakthrough for her
business. On one journey she met a person who had impressive
American networks in the UK – and has also turned out to
become an excellent friend. Whilst visiting this friend’s family
in the US, Pinky would often shop at Wholefoods, an upmarket
grocery store. She decided to ask if she could do a cookery demo
and sell her books … and to her surprise and delight, they agreed!
Pinky’s company continued to grow. In addition to teaching
cookery and selling related products she started to use her
cooking skills as a feature of corporate training days designed to
improve team-building and management performance. She has
also acted as development consultant with some of the major
food companies in Europe, including Sharwoods, and has advised
Sainsbury’s, Safeway and Tesco on a range of Indian food
products to be stocked.
Technology has played a small but vital part in her business.
Her website is used both to promote the business but also
for bookings and sales and to promote her social
entrepreneurship endeavours.
During the time she has been developing her business, Pinky has
been able to turn to family and friends for the support and advice
she has needed. As a result she has not used Business Link or any
other government agency.
Pinky’s passion and joy for life really are infectious. This passion
and ability to engage with all-comers have certainly contributed
to her success in business. She is a skilled networker and, whilst
she tells you that she has never carried out formal market
research, her ability to network means that she has been able
to test ideas on those around her.
Rather than go to people’s homes to demonstrate her cooking,
Pinky makes a habit of inviting people to her own house to
cook and take part in supper parties so they can network
while enjoying her cooking. And these days she also gives
after dinner speeches.
Lessons learned
On reflection, Pinky feels that her business success is down to her
ability to network and just to ‘get on and do things and … make it
happen’. She is convinced that people must not be shy about
networking in order to build the business.
When she started her venture Pinky was able to borrow the
money she required from her husband but, in her view, if you
have a good business idea you can get funding and this is much
easier now than when she started in the 1990s.
When asked what advice she would give other potential Asian
entrepreneurs, Pinky suggests that you must not be afraid to “get
out there and try to make your venture work and not just to talk to
people who one thinks may be able to help but to take an interest
in everyone you meet”.
45 Unlocking the potential of the UK’s Hidden Innovators 44 Unlocking the potential of the UK’s Hidden Innovators
Rami Ranger and Sun Oil Ltd
Background
Rami Ranger was born in the West Punjab, the youngest of eight
children, in what is now Pakistan. After the assassination of his
father, a prominent Sikh who supported a united India, his family
fled to present-day India at Partition: “My mother was the real
heroine. She brought us up, having lost her country, ancestral
home, and family breadwinner.”
In 1971, he came to the UK to further his education in law, having
completed a BA in History and Political Science in his native India.
However, education in the UK proved expensive and in order to
survive, he decided to find a job. He started as a chef in a fast
food chain, and through hard work within a year he became a
Store Manager and then District Manager in charge of ten stores.
His aim was to make money to complete his studies. Instead, he
became so successful in his job that he abandoned his study
plans: “All my brothers were highly educated and successful.
My aim was to prove myself and to reach a similar level.
“Since I was not highly educated in a secure job, it worked as
an incentive for me to try my luck in business. Once you become
educated, you start to think much more than people in ordinary
jobs. Educated people as a rule worry a lot more than those who
have little to lose in entering a new venture. The educated will
always think before doing something; the less educated after
they have done something.”
When the owner decided to sell his business, Rami was offered
the chance to buy a franchise. He declined because of the night
work, as he now had a young family. Instead, he got a job as a
salesman, which meant a lot of travelling. Because of this and his
young family, he decided to buy his own corner shop, as a lot of
other Asian immigrants were doing: “Ethnic Asians were forced to
go into business because they couldn’t get jobs that paid well and
offered promotion. Our luck changed in 1974 when Idi Amin
expelled the rich Asians from Uganda. Those Asians who came
here were educated and wealthy. As getting jobs was difficult,
they bought corner shops to survive.”
Rami and his wife ran their corner shop for a couple of years, but
due to the long hours and poor quality of life, he decided to go
seek employment with a good company. He joined an electrical
retail chain and was doing very well, but found that the
promotion prospects for an Indian were limited. So, once again,
he decided to start his own business: “I always say, when a bad
employer doesn’t look after his staff, the staff either work for the
competition or start their own business. So I started my own
service business, where I didn’t need a great deal of capital. In the
electrical chain, I was shipping electronic goods abroad especially
to Africa. I thought it would be an ideal business to try my luck in.”
The Idea
“They say adversity brings out the best in you. I was unfairly
treated by my employer, who would always keep me short staffed
in order to make me work under extreme pressure. The last straw
was when I went to see the General Manager to complain about
this unsatisfactory situation. Instead of being sympathetic, he was
very rude and blamed me for my unhelpful attitude. He said, ‘you
know whose name is outside the shop? Then you must do as I tell
you’. Since I had to accept the situation, starting my own business
was the most sensible thing to do.”
He then met someone who was already in the trading business,
who suggested he come and work with him, which he did initially.
But after 18 months he realised his partner wasn’t giving
customers what they need, and the business wasn’t moving
forward: “Had he been a good partner, I would have stayed
with him. But he was taking money out of the company, and not
investing. I wanted to grow it. I’d seen how not to do it, and how
it could be done better.”
The business he set up was forwarding unaccompanied baggage
overseas, initially electrical goods, for immigrants to send back
home to Africa. He started this from a shed in Hayes in 1987.
“Unaccompanied baggage is very big business, especially for those
visiting, because it’s a lot cheaper than taking it as accompanied
baggage. Visitors to Britain always have excess luggage, and
immigrants like to send gifts home. In those days it was easier
for people to buy from England than from Hong Kong or Japan.
In Africa, there is a great demand for luxury goods.”
The target customers were visitors from the developing countries
like Nigeria, Ghana, Kenya, etc. Visitors from India were not many
in those days, and as a result accounted for only 1% of business.
This first company was Sea, Air and Land Forwarding Ltd (SALF).
Although this has grown into a multi-million pound business
exporting commercial goods, transporting people’s effects by sea,
air and land is still a major part of the business.
Implementation
Setting up this first business is a classic case of using minimal
resources for finance, equipment and facilities, and relying on –
and building – social capital:
“For a service business, you don’t need much. You offer your
personal services. I’d go round the electrical businesses in
Tottenham Court Road, giving them my card and building my
relationship with the store managers, who would then recommend
me to their customer for transportation. My initial business was
built on word of mouth. In a service industry, it is only satisfied
customers who will recommend you.”
In this, Rami also first demonstrated his appreciation of the
importance of service, understanding what was important
to his customers: “When people entrust you with their valuable
possessions, you must put their mind to rest and ensure safe
delivery. It could be something personally valuable such as their
wedding photographs.”
The result was this seemingly unpromising business went from
strength to strength: “… Anyone can ship goods. The one who adds
value with a professional service will win in the end. For example,
I would always shrink-wrap suitcases, so that they did not get
marked or damaged in transit. It’s my honour, my reputation
is on that cargo.”
Now, the business (and its sister company, Sun Oil Ltd, set up in
1995) operates from three large warehouses at Greenford, shrink-
wrapping and bubble-wrapping a wide range of goods by
machine. But the principle of carefully wrapping unaccompanied
baggage so it arrives intact was established from the beginning,
with Rami doing this by hand from a lock-up shed he’d hired:
“You have self-storage places. It cost me £120 a month to get a
little shed. I’d bring the cargo there, pack it, go to the airline, weigh
it, pay for the handling. There was very little overhead for me;
it was all profit.”
His need for finance and support at this time was therefore
minimal, although, importantly, he had built up some capital from
his shop, as well as learning basic business skills, including looking
after your customer: “Running a corner shop was probably the
most important factor in my success. I learnt a lot about running a
business. It gave me a financial start. Living above the shop saved
me a lot, gave me a lot of financial benefit. It gave me a lot of
financial cushioning for later. I bought the business for £30,000,
sold it for £50,000, when house prices were only £40,000. Although
corner shop people may not realise, it can be very lucrative. It also
showed the importance of looking after the pennies. And how to
deal with the customer. If you don’t look after them, they will go.”
When he’d bought that shop, he had had some trouble getting a
loan, so the money he saved from it was invaluable when he set
up again – “The first bank said I was too ambitious. But I had
tenacity, and went to another bank and explained my financial
plan, and got a loan straight away. Banks are now readier to lend
to immigrants.” Likewise, he had had little need for support from
small business agencies, and has never used them, although he
recognises others may benefit – “A lot of people have. As a
successful businessman, I have very little time. But those who
can use the system can benefit.”
Rami’s early success thus owed much to the business skills he’d
slowly developed through a series of jobs and experiences, his
empathy with customers, and his inherent personal qualities:
“To be successful in business, you have to have three things –
self-respect, family honour, and work ethic.”
These skills became increasingly evident as he built his businesses.
Development
Through word of mouth, the freighting business snowballed,
and from shipping electrical goods, he was asked to source other
products to customers in Africa where rich people wanted to
buy British products, but had problems getting them reliably from
suppliers: “This was a blessing in disguise. I was amazed because
I was able to eliminate profit centres from suppliers, and save
customers transport costs of £4-500 per container. The business
just grew and grew and grew.”
The tremendous growth from this first business was able to
finance the more capital-intensive second business, Sun Oil Ltd,
which was established 8 years later in 1995. Not only had he built
up capital, but he could now get credit and buy properties,
including the warehouses to which he then moved his business.
The result is that 20 years from starting as a one-man business
from a small shed, his companies now employ 70-80 people
(mostly fellow immigrants and Indians) and ship over 2,500
container lorry loads a year with a combined turnover of
£50 million and continued growth at 30% a year. In 1999 he
received the Queen’s Award for Export Achievement, and in
2005 was made an MBE for services to British Business and
the Asian Community.
As forward freight and exporting businesses operating in so
many far-flung countries, the businesses rely intensely on IT, using
specially designed software to integrate all the paperwork for
freight forwarding, and their container loads tracked through
the shipping lines’ systems. 1995 was indeed a good time to
start a trading business, since “I couldn’t be in 60 countries
without the internet”.
47 Unlocking the potential of the UK’s Hidden Innovators 46 Unlocking the potential of the UK’s Hidden Innovators
In 1995, Sun Oil Ltd was set up to market British supermarket
goods featuring blue-chip brands by Unilever, Nestle, McVities,
etc. in small countries where they did not have offices. Bulk
product was ‘broken down’ into smaller quantities and multiple
products consolidated into container loads for small local
distributors. Sun Oil’s development shows Rami’s appreciation,
first, of ‘finding the right product for the right market’: “You must
identify the right product for the right market. For example, I’m
based in England. I have to ask myself, why do people come to
England? If I make a cheap product in this country, I’m doomed
from the start. So being in England, I have to provide products they
cannot buy elsewhere. So quality is very important. Any product
we develop is a quality-based product. I’m catering for the top end
of the market in 3rd world countries.”
Second, it shows his understanding of the person he is actually
selling to, and the need to support his customer’s own business:
“Empathy for the customer is very important. You won’t succeed if
the customer doesn’t need it. You must imagine how this man is
going to sell. It’s my responsibility that this is sold to the end-user.
You must manage your customer. Don’t let him over-stock. Have a
long-term feeling for the customer. Let him take half to start, not
double. Think of the implications, the repercussions. Manage and
support the customer through the distributor. I say to the customer,
if you lose I will refund you.”
The first step with Sun Oil was to market branded supermarket
products. As he got to know his customers in these local markets,
he then saw the opportunity to market secondary brands
alongside these that were similar to these well-known brands. At
this point, a third key business skill comes in – recognising where
money could be made by cutting out costs and how this could be
made to appeal to customers by sharing this saving with them.
As Rami emphasises, “Profit is sanity; turnover is vanity.
“People tend to buy brands. It’s a feel-good factor. Brand leaders
become brands with very heavy advertising. But I have to have
a different way. I give the same quality product. I give a
manufacturer a specification that will taste like the brand. People
acquire that taste. I cannot give them anything that will not taste
like that. So you must understand your subject. I have to give them
the same ingredients, the same taste, but at half the price, because
I’m not going to spend on the advertising. As a result, I keep costs
low, at 30-40% less than the brand.
“Business is all about mergers, acquisitions, and strategic alliances.
I make strategic alliances with local people. To gain something, you
have to lose something. I get my first local contact by selling them
the branded product. I then say, there’s a secondary brand that’s
cheaper, so why don’t you put them both together on the shelf, and
we can both make more money. And I then give them free samples
to taste.”
Sun Oil products are thus branded products exclusive to Sun Oil,
which keep close to the appearance of the original brand in terms
of colour (which can’t be copyrighted), but not so close as to
infringe the trademark – products such as Golden Country,
Royalty, Pure Heaven, English Breeze, Bullet, Toilet Guard.
“I’m not here to invent the wheel, but to copy, and that also needs
skills. I go to small countries where these big boys don’t want to go.
Caribbean islands, with populations of half a million, 200,000;
Cyprus, Malta, Seychelles, Mauritius. It’s all about finding a niche.
Supplying to 60 countries, with a turnover of £1million a week, for
a guy who started in business with £2.”
The next step? Rami now has a “grand idea” to go into
manufacturing, beginning with Sun Oil making its own drinks.
While backward integration is generally regarded as risky for a
small business because it means compounding the risk in one
product, Rami has thought this out with his customary attention
to cutting out costs. At present, Sun Oil buys in drinks from
Belgium, Spain, Austria and Scotland, incurring heavy transport
costs to bring them to London for exporting – annually, 1,000
trucks at £1,000 per load. One manufacturer in Wales will reduce
these costs considerably.
Lessons
Rami’s story offers many lessons for budding entrepreneurs,
and about how new immigrants to the UK can realise their
entrepreneurial talents.
First, there is the value of getting experience in a small, relatively
safe business environment: “Before you plunge into a business, get
experience working for someone else so you can learn, because
there’s a lot more than meets the eye. Use their base to learn the
tricks. Then you can judge – if you’re not fit for a small job, you’re
not fit for a big job. Running a corner shop was probably the most
important factor in my success. I learnt a lot about running a
business. It gave me a financial start.”
Second, at each stage, he has mastered what he was doing and
broadened out gradually (although ultimately with great success),
in each case with SALF and Sun Oil building up from few to many
products. In this, he addresses an issue about entrepreneurs as
risk-takers in which there is a good deal of misunderstanding
because of the way a few who are dramatically successful as
wheeler-dealers are held up as examples:
“I’ve never taken a risk, I was very careful. If you have a rich father,
you can take risks. With my humble background, I could never ever
take a chance. Only desperate people take desperate measures. If
you take risks, you’re not a business person. In business, you take
calculated risks.”
This has bred an attitude to look always at the cost of what he
(and others) were doing, and where economies could be made.
Third, there are important insights about customers –
understanding markets at a strategic level in terms of where
there are niche openings that competitors have ignored, but
then having “empathy” for the customer as a person, so you
know what is valuable to them in terms of taste, quality, economy,
reliability, etc. His approach to markets and dealings with
customers have consequently been ‘innovations’ of his own,
not taken from textbooks.
Fourth, there is the personal quality he brings to his business –
identifying in a very personal way with the product and service,
and using every opportunity to sell the business. The first is
summed up in his comment, “It’s my honour, my reputation is
on that cargo.” The second we loosely refer to as networking:
“Networking is very important. I became a member of all sorts of
political clubs and social clubs. Meeting people is very important,
because everyone now and again will need my services. They may
like to move house; they have excess baggage; they’re going to
America for studies, they have books. They say hidden talent is no
talent, so you need to put yourself about, and tell people you meet
what you do. My business card was like seeds – I’m throwing them
in the field, you never know which will germinate.
“Before we sell anything, we have to sell ourself. They say business is
done on golf courses, which is true, because people are more relaxed,
and you’re equal. If I were to make an appointment in an office, it’s
difficult. But the same guy I can bump into, have a few drinks, he’s in
a good mood, he wants to be polite, not show off his powers. I
recommend people to join as many organisations as they can.”
Finally, Rami has strong advice to immigrants about how to get
on: “Normally any country employs immigrants as the labouring
class, to do jobs the host country doesn’t want to do. Ethnic Asians
were forced to go into business, corner shop businesses, because
they couldn’t get good money elsewhere.
But now 30-40 years down the road, there are Indians who have
big businesses, and others going into healthcare, IT, into big
sophisticated businesses working for others in accounts, consulting,
and in the City. But our next generation of Indians will not do
corner shops. Tamils have come; Afghans have come; Somalis
have come. So more and more Tamils are now doing corner shops.
So it’s a progression.
“Europeans coming in now will progress as fast in 5-10 years,
which took Asians 20-30 years. Because they are European, they
have more advantages in the culture, religion, etc. They will have
difficulty, but not as much as the Asians. But only those immigrants
will progress who are willing to change and adapt. Those who just
want to hold onto their backward practices, which made them poor
in the first place, will have a problem.
“The species that will survive in the future will not be the intelligent
ones, or the stronger. The ones that will survive will be those who
can adapt to change.“
But can the government do anything to make things smoother
for immigrants starting in business?
“The British government has already done a lot. At times, we
have to be tough with immigrants. If the immigrant comes to a
successful club, and says change it for me, that defeats it. In the
long run, they themselves will suffer, because they will not be able
to integrate as fast. It can work against the immigrant.
“The UK is a good environment for business. I didn’t find any
problems, except when I was working for someone. Then I did
find a problem.”
49 Unlocking the potential of the UK’s Hidden Innovators 48 Unlocking the potential of the UK’s Hidden Innovators
Suchit Punnose and Red Ribbon
Background
Suchit Punnose came to the UK in 1995. He started as a broker
facilitating import and export transactions over a decade ago,
mainly because it was a business that required little or no capital.
He moved into buying goods and importing them for sale using
trading profits from broking and help from his family. He says: “I
learned very early on that I would get bored easily if there was no
challenge left in what I was doing and thus set about looking for
a business that would give me variety of challenges”.
Suchit became a self-trained management consultant offering his
clients business plans and financial projections. Suchit was a
consultant with a difference. Different because he already had
experience of running his own company. He has owned
businesses in retail, vehicle rental and leasing, accountancy,
advertising and printing. He started meeting and interacting with
entrepreneurs who wanted to plan their future ventures and raise
funding for their businesses. “I found myself researching for these
businesses which increased my knowledge on various sectors such
as retail, distribution, and media”. He then moved on to business
incubation, investing seed capital into businesses and mentoring
the managing director or key driver.
Suchit graduated in history and feels that a degree in liberal arts
is an excellent foundation for entrepreneurs. “The diversity of
stimulation offered through a non-professional and non-science
curriculum is an advantage”. His business commitments have
prevented him from undertaking an MBA as yet but he is keen
to undertake further study in the future.
He comes from a family with a history in business. His grandfather
was a businessman and investor who had a significant influence
on him during his childhood. “My grandfather did not necessarily
encourage me to become an entrepreneur but always motivated
me to do something spectacular that would make my life
rewarding. He taught me the following basics of business. One,
it is not easy to be in business. Two, you will have very challenging
phases in business. Three, your word is your honour. If you commit
to delivering, then you had better do it at any cost. Four, it is ok to
fail. Failure is the stepping stone to success”.
Suchit believes his Indian background has been a neutral factor
rather than a driver for entrepreneurship. Furthermore he has not
met any particular resistance to his business ideas or to himself
since coming to the UK twelve years ago. He has no doubt that
his relationship with his grandfather is the single most crucial
factor defining who he is.
The Idea
Red Ribbon Property Investments Plc is a boutique asset
management firm that offers a range of services. These include
an advisory service to listed funds, packaging and promoting
bespoke funds for medium and large Independent Financial
Advisors and for accountancy firms, and assisting wealthy
individuals to invest in property in India.
Suchit started Red Ribbon as a firm offering secure joint venture
platforms for ‘high net worth’ individuals who did not have the
time or expertise to do property development in the UK. He has
developed the business into an asset management firm. He chose
property “… because it is the most popular asset class offering the
best returns over a ten to fifteen year period”.
He has had other business ideas but believes it is important to
focus on one idea at any given time. “I do have ideas on business
opportunities, but will only progress it if I am able to invest seed
capital and if I am able to find a good manager for the project”.
Suchit started his own business for a variety of reasons. He
recognised that by the age of fifteen he had developed strong
leadership skills. He always wanted to be the one to take the lead
– in fact, he could not see himself working for anyone else. “It is
the challenge and the sense of absolute freedom to do what you
want to do that has prompted me to become an entrepreneur. The
realisation that this freedom could be both good and bad for my
career helped me balance my decision making process”.
Implementation
Suchit had to bring together a number of resources to start the
new venture. The initial idea was formulated as a result of his
personal experience in property development and consultancy.
Next, he needed to find a co-investor who was on the same
wave-length and had the same risk profile. Finally he had to test
the market for the service – which he did by promoting the firm
to suitable clients. But it was gut feeling rather than clinical
market research that he used to decide whether to pursue
this opportunity.
After finding the co-investor, he went about putting together
a board of senior directors with distinguished records of
accomplishment. It was hard work to convince these directors to
lend their name to the company, especially when the company
was conducting investment business. His negotiation skills and
personality became very helpful in achieving this.
Looking back, Suchit reflects that he knew from the outset that
the asset management sector is highly competitive and capital
intensive and he expected that the growth curve would be long.
However, “… what excited me was the scalability of the business.
I found it surprising that a creative solution offering access to
emerging markets with an innovative fee structure could find
new markets very quickly”.
Suchit did not make use of any government agencies during the
process of starting his business and did not go for formal advice.
As a relative newcomer to the UK he had to rely mainly on his
own business acumen. To reinforce this he has found it very
useful to attend CityZone, a networking organisation hosted
by Cass Business School. He is also trying to join The Academy
of Chief Executives, a mentoring organisation for chief
executives who meet to discuss problems and learn from
other established entrepreneurs.
Development
Red Ribbon has grown to become a niche service provider in a
highly competitive sector in financial services. It now has the UK’s
first inheritance tax mitigation scheme offering access to the
property development market in India. Key steps in the
development of the firm have included acquiring fund
packaging skills, gaining insight into the various possible
structures, and finding professionals who offer good quality
administrative services.
The business relies heavily on new information and
communications technologies. “We have a very proactive
internet marketing programme where advanced web marketing
tools are used to promote our business.” (seehttp://www.redribbonproperty.com)
When asked about the qualities that have helped him succeed,
Suchit highlights two: having a positive outlook and being
tenacious. He believes you must have the ability to convince
people and so both oral and written communication skills are
essential. He also believes there is no such thing as a short-term
gain. All plans have to be aligned to long-term gains.
In Suchit’s view, the business is innovative because it combines
a tax efficient structure with very low overheads and an unusual
fee structure.
Lessons learned
Suchit believes the UK environment is an excellent environment to
start up and grow a venture. Against this background each of his
new ventures has taught him valuable new lessons. He suggests
that as you progress along the entrepreneurship path you
constantly learn. “It is a myriad of things from my learning
curve from previous ventures and not just one thing”.
Suchit is very clear about the advice he could offer to other
people like him who might wish to start a business.
“Be ready to face failures and learn from it.
“There is nothing wrong in failing a few attempts. But be sure
to learn from them.
“Be honest about your strength and weaknesses.
“Never be emotionally attached to businesses – know when to cut
losses and get out.
“Be sure that you are getting into the right
sector at the right time.”
51 Unlocking the potential of the UK’s Hidden Innovators 50 Unlocking the potential of the UK’s Hidden Innovators
John Cavill and Logical
Networks
The background
John Cavill’s office occupies a wing of his magnificent Palladian
mansion in Berkshire. It was not always so.
John left school at 16 years of age to begin his career as an
electronics apprentice with the Royal Aircraft Establishment,
Bedford. He subsequently joined Unilever Research as a research
and development engineer. In his early twenties John moved into
a sales and marketing career and spent 7 years working for US
electronics manufacturers including DataTech/Penril and Fairchild
Test Systems, where he was European Sales Manager. In 1979 John
founded and was Managing Director of a new UK subsidiary of
Data Translation Inc. When LAN (Local Area Networking)
technology first emerged in the early 1980’s, John recognised the
potential business opportunity and set up a specialist networking
division, which subsequently became a market leader in its field.
In late 1988 John founded and was Chairman and Managing
Director of Logical Networks plc, a UK networking services
business which was VC funded by 3i plc. Logical Networks grew
rapidly at an annual rate of over 55% and in 1997, when sales
reached £50m and staff numbered around 200, the company was
acquired by Datatec – a Johannesburg Stock Exchange Top 40
public company with annual worldwide sales for 1999 of
US$1.1Bn. John became a main Board director of Datatec Limited
but left the firm in June 2000 to found Intermezzo Ventures Ltd,
a new venture research and consultancy company.
In 1995 John received an EFER (European Foundation for
Entrepreneurship Research) award as ‘One of Europe’s Top 500
Dynamic Entrepreneurs’ and in 1998 was nominated by 3i plc
for the ‘FT/Cartier Venturer of the Year Award’. John is a visiting
fellow at Henley Management College, and a DBA Research
Associate undertaking doctoral research into the characteristics
of entrepreneurial teams.
Now in his 50s, John’s current business interests include non
exec Chairman and lead investor in Creating Careers Ltd a
leading UK online learning company. He is also a member of
the Institute of Directors (IOD) interview panel for Chartered
Director Accreditation.
There are no entrepreneurs in John’s family. His father was
a wood machinist with no ambitions to be a manager; his mother
dedicated her life to bringing up John, his older sister and
younger brother and sister, in their modest council house home.
John struggled at school. He failed the 11-plus and left school
at 16 with an O-level in technical drawing. “I was very good at
practical subjects but struggled with learning by rote and was
subsequently not very good at passing exams. It was much later
when I realised I was dyslexic. When I was young the condition was
not recognised but it is better understood today. It tends to run in
families; my 21-year old son has it but he’s coping quite well at
university. It’s likely that my father was also dyslexic as, although
he was a good craftsman and well respected, he avoided moving
into a management role and never seemed to write things down.”
Having gained an engineering apprenticeship at the Royal Aircraft
Establishment in Bedfordshire, where his father worked, the
biggest influence on John’s career was John himself. Hard work
was rewarded with the prize for Best Apprentice “… but as an
engineering apprentice I had to wear overalls and noticed that
other lads of my age were wearing smart clothes to work – they
were electronic apprentices. I wanted to transfer but when I asked
my father for advice all he could offer was good wishes as he didn’t
understand anything about electronics and thought I should stick
with a career in instrumentation engineering.” John’s application
for a transfer was refused – he had no qualifying O or A-levels
and needed to take a foundation course in electronics to stand
any chance. As he was already studying engineering on day
release and classes at work he had to sign up for an evening
course in electronics.
John finally got his transfer and five years later qualified as an
electronics engineer – immediately leaving the RAE and joining an
electronics research and development team at Unilever Research.
It was here that he developed an earlier ambition to become a
company director. “Some my friends’ fathers had their own firms.
They enjoyed an enviable standard of living compared with my
family – we had no car and no television. I set myself a target:
to be a director or have my own business before I was 30.”
Looking back, John perceives that being dyslexic was a driver.
“I felt a high need for achievement. I had to demonstrate that I was
not as dumb as people thought”. Eventually this determination led
to a business school MA and currently to doctoral studies.
But back then he wanted to gain business experience so he
moved away from engineering into a sales and marketing career
working for American electronics companies in Europe. He was in
his element – and relished the entrepreneurial ethos. “A person
with dyslexia is likely to be a ‘right brain’ thinker and a ‘people
person’. I began to see that success is achieved through people,
not just through technologies and processes; and not by lone
entrepreneurs but by entrepreneurial teams.”
The Idea
John’s idea for an enterprise began to form when he was at
Fairchild. America’s domestic market for IT was dominated by
proprietary offerings from IBM and Digital Equipment. John saw
an opportunity for a toolset of open architecture products that
worked with these to provide tailored, rather than integrated,
solutions. He also saw that European companies wanted IT
components from the US.
John was now 29 and his target deadline was looming. He created
a business plan for marketing a portfolio of data acquisition and
image processing products for R&D departments and research
universities. He took a week’s leave while on a business trip to
Fairchild’s headquarters in California and pitched to six
companies. One of these, Data Translation, invited him to set up
a UK subsidiary, based on his business plan, to sell their products
and those of other US manufacturers, and agreed to fund the
start-up. So John achieved his goal of a directorship by the
age of 30.
The new company later exploited a Xerox invention, the ‘local
area network’, with considerable success. He perceived that
networking technologies could enable end users to assemble
IT components by IBM, Digital Equipment and others to create
a ‘best of breed solution’ that precisely matched their needs.
Data Translation Inc went public and John built up the UK
subsidiary steadily. After nine years, it was earning more from
re-selling other firms’ wares than the parent company’s and no
longer fitted well in the group.
This idea of network systems integration and value added
distribution services was way ahead of the curve and it was
several years before it was copied. Today it is a major line of
business for firms such as Accenture but, when John was hatching
the idea, he had no competitors. Indeed, very few people had the
knowledge or experience to understand the concept. This created
a dilemma: he needed to create a ‘centre of excellence’ to build
an interest in networking and systems integration in order to
generate a clientele ready to buy his services.
John became single-minded in pursuit of his goal. His proposal to
Data Translation of a management buy-out was favourably
received but, much to his amazement, it fell through at the last
minute and he was summarily dismissed. Suddenly John had to
fight a double crisis – now nearly 40 he had to find a new income
while pursuing a claim for wrongful dismissal. For some time John
had been fostering an idea for a completely new offering. After a
harrowing six months he won his claim against his former
employer and was released from ‘gardening leave’.
John contacted the best people he had worked with at various
companies over the previous 15 or so years and canvassed his
idea. His enthusiasm and leadership soon enabled him to
assemble a team of four top flight managers and specialists
ready to join his proposed digital networking enterprise, to
be named Logical Networks, as soon as he had acquired the
necessary funding.
However, some venture capitalists he approached ridiculed his
two-pronged business model. They believed that by training
resellers to design networks he would spawn an army of
competitors who would destroy his embryonic business within
a year.
On the other hand, the private equity firm 3i Group saw the merit
of John’s track record of establishing a successful subsidiary for
Data Translation and of his appropriately skilled ‘dream team’.
These factors, combined with 3i’s preference not to have to drive
the businesses it invests in – especially when they are highly
innovative – removed the imperative of a seat on the board.
Implementation
So, six months after being fired by Data Translation, John’s master
plan started to fall into place and his Logical Networks business
idea became a reality. He surmises that what had got him over
the hurdles was the combination of his track record, his network
of contacts, experience of the sector, reputation, relationships with
manufacturers, and his proven ability to deal with bankers and
accountants.
Now he had to develop a longer-term plan. However, he was
disturbed to find that several of the US suppliers he had been
banking on were dubious about his innovative business model.
They disliked his idea of simultaneously developing direct and
indirect channels to market. “They said there would be no trust
in the channel; people wouldn’t understand. ‘It won’t work and
we can’t support – so we won’t supply. You’ll be out of business
in a year’.”
But they were proved wrong about the business model and a year
later they were clamouring at John’s door. “Lots of people now use
a dual channel business model. It is disruptive and you have to
earn people’s trust. Companies sending staff for training have to
be certain you won’t pass any of their knowledge to competitors.
On the other hand, the model enables you to hone the highest
level of technical skills with the same staff dealing with the top end
and the lower end of the market. From an early stage this enabled
us to win and undertake multi-million pound projects.”
53 Unlocking the potential of the UK’s Hidden Innovators 52 Unlocking the potential of the UK’s Hidden Innovators
John is philosophical about the lack of peer group support
during his formative years which forced him to make his own way.
“Knowledge about dyslexia has only emerged in the last 20 years.
When I was younger no-one knew what it was.” Having prevailed,
John now serves as an advisor to the British Dyslexia Association’s
Board of Trustees to help others with dyslexia.
He found the same lack of support from government agencies.
In the early days Business Link approached Logical Networks on
several occasions. “Unfortunately they didn’t understand a high
growth business like ours or the technology market. Their people
were from more traditional SMEs or were retired bank managers
and were unable to add value to ‘gazelles’.”
John has seen the situation improve. The South East England
Development Agency (SEEDA) has developed suitable coaching
and mentoring programmes after recognising that the traditional
approach which suits lifestyle start-ups doesn’t work with high
growth businesses. Other useful assistance for ‘gazelles’ includes
Enterprise Hub networks based on university campuses.
Development
John identifies three factors that enabled him to succeed: a need
for achievement, the right skills and experience, and having an
excellent team. “Success comes from recognising an opportunity
when no-one else sees it and taking advantage of it. But I’m not
sure about ‘luck’; it’s more about planning”.
John’s family has been unable to help him in his career. His
brother is a software developer who gives priority to family
matters and his sisters have both been hard-working
administrators but are also un-ambitious. None of his extended
family have demonstrated any entrepreneurial tendencies, apart
from two distant uncles who were shop keepers.
John observes three types of people: “those who won’t recognise
an opportunity if it hits them in the face; those who see it but miss
the boat because they don’t have any drive or imagination; and
those who see it from a distance, grab it and run with it”.
When asked how he grew Logical Networks John’s response is
unequivocal: quality of service. “Well educated people generally
want to work for the big companies; I sought people with
enthusiasm and dedication”. To illustrate the point he recalls that
when he needed to hire the first telesales person a recruitment
agency produced the unlikeliest candidate: a 19 year old then
working as a butcher at Sainsburys.
However, his determination to get into the computer industry and
his night school studies persuaded John to offer a three-month
trial. The recruit learned fast; studying technical manuals by night
and challenging the firm’s engineers the next day. Before long he
was successfully moving through the ranks and eventually selling
multi-million pound deals to banks.
“After I sold Logical Networks he was headhunted by a US
company to set up a subsidiary in Europe. Start-up companies
need bright young people like this who are driven by a need for
achievement.” People working for the largest IT companies started
to join John’s firm as it became more established.
From the outset John believed it was vital for Logical Networks
to use what they were selling in order to prove they could
implement the technology. The first deal the new business
secured was to solve a problem for BT that had defeated BT’s
own engineers. Shortly after, when the firm still only had 12
employees, they designed a network to integrate the dealing
room front and back office for Mitsubishi Bank. “We were the
only ones who could demonstrate that it could be done and this
qualified us to tender for the installation.” Logical Networks beat
multinational competitors to win the £half-million contract.
“High level technical skills, service quality and novel marketing
techniques gave us a very professional image from day one.
We never looked like a start-up. It enabled us to punch above
our weight.”
The new business was highly innovative in two ways. Firstly its
offering was to combine and connect various new networking
technologies to create business solutions that until then had not
been possible. Indeed, the offering was so new that very few
people understood it and as yet, nothing had been written about
it other than technical user manuals. Also due to his legal battle
with Data Translation, John was unable to approach any of his
previous clients.
Secondly, he had to create an innovative marketing approach.
One of the founding partners wrote a book to explain computer
networking. John bought lists and wrote to all the IT directors and
buyers in the UK. The offer of a free copy of the book in return
for a two-page questionnaire for his database produced a
response rate of over 10% – a rate so extraordinarily high that
John’s backers, 3i plc, persuaded him to present his techniques to
its investment directors at their national conference, sharing the
stage with an advertising guru from Saatchi & Saatchi.
Lessons learned
John is very clear that the key success factor in business is people.
“You have to surround yourself with good people. You must pay a
great deal of attention to hiring the right people. If they have a
problem regarding their job role you must help them develop.
Everyone at Logical Networks had a personal development budget
– right down to storeman and receptionist.
“But if they can’t respond you have to let them go. If you don’t, the
good people leave and the bad people stay. It must be the same
rule for everybody. On one occasion I summarily dismissed one of
the founding partners rather than ignore his disruptive behaviour.”
John reflects that entrepreneurs tend to be strong-minded. “They
want to make the decisions and maintain an internal locus of
control. Some seem to need to micro-manage – but, to enable high
growth, you have to give people their head and accept that
sometimes they will make the wrong decision”.
The firm that bought Logical Networks was looking for high
growth. In the subsequent two years the parent company
acquired 29 businesses in the networking domain. With a seat on
the main board John was tasked to target and acquire firms in
Europe. He left in 2000 when the dotcom bubble was at its height
and people were investing recklessly in business start-ups that
they really didn’t understand and therefore couldn’t support.
John saw no future in this and decided to establish Intermezzo
Ventures Ltd to offer consultancy, coaching and teaching to
budding entrepreneurs. Intermezzo has no employees but
identifies and helps promising start-ups by involving seasoned
entrepreneurs who understand the market and could invest as a
business angel. This service is backed by his own original research
into the characteristics of entrepreneurial teams, which he is
conducting at Henley Management College
[see www.intermezzo-ventures.com].
John concludes with a smile: “There is life after exit”.
55 Unlocking the potential of the UK’s Hidden Innovators 54 Unlocking the potential of the UK’s Hidden Innovators
Janette Beetham and
evening-belle.co.uk
Background
When Janette Beetham left school the possibility of becoming
entrepreneur never crossed her mind. “I had hundreds of ideas but
I was not in the right environment to go forward with them and
not with people who could encourage me.”
During her twenties and thirties Janette was strongly influenced
by her husband’s tendency to be risk-averse and seek out a safe
and secure lifestyle. It was only after her marriage failed that
things started to change: “I became ‘me’ at forty-three!”
It was then, while helping a friend to buy a wedding dress, that
Janette discovered how difficult it was for larger women to buy
suitable clothes for a ‘special occasion’. Janette was surprised to
learn that a majority of wedding dresses are sourced in China,
with classic styles up to size 30 typically on a six week delivery
period. This left the purchaser having to rely on the importer
to carry out final fitting adjustments.
Janette travelled the length and breadth of the country seeking
UK manufacturers and this convinced her there was a gap in the
market which created an opportunity for her to start her own
business. In 2002, she registered the name Bridal Belle Ltd and
rented a small office with storage space in a seaside town in
rural Kent.
In parallel Janette continued to work as an adviser and trainer for
Business Link Kent. In the process she fully explored the potential
cost advantages of selling via the world wide web. With the help
of two web designers she met through her work Janette launched
www.evening-belle.co.uk as a virtual business and decided it was
more convenient to run this from home.
Having mastered the skills to manage an online business Janette
started a second – Room Beautiful Ltd – to market interior
furnishings (roombeautiful.com). She is currently planning
a third business on similar lines – Garden Beautiful Ltd.
Janette’s first school was in a pretty tough area but she passed the
11-plus and went to a grammar school. However, she recalls: “I
was like a fish out of water and I left as soon as I could and feeling
that I wasn’t good at anything academic. It was only when I went
to university at the age of 32 that it was realised I was dyslexic.”
She reflects that two hundred years ago people needed practical
skills more than abilities with numbers and text. Dyslexic people
process information in a different way from the majority and can
face challenges in acquiring numeracy and literacy. With the
benefit of hindsight, Janette observes that she had started
to develop coping strategies from a young age.
Janette describes her parents as ‘quite needy’. Her mother was
the eldest of a family of five children. She was a young carer and
looked after all her siblings as well as her parents; one infirm and
one disabled. Her father “… was orphaned at the age of six and ‘hit
the road’ on his own at the age of 13. At one time he sold from a
suitcase on London’s Oxford Street to make ends meet. He lived a
long and full life and I spent many happy hours listening to his
money-making ideas – from hatching chicks and selling them to pet
shops to being a self-employed ‘runner’ for a London chemist when
he was 18. He went on to have some quite responsible sales
manager jobs - tapping into his flair for sales and communication.
He hardly ever wrote anything – but he was a real survivor”.
Looking back, Janette believes that both her parents were dyslexic
and she now knows that her own son has inherited the condition.
Janette believes that her father’s ability to spot an opportunity
is part of her own make-up. Her grandmother was also an
important influence: “She was in a wheelchair and constantly
faced all sorts of challenges and access problems … but she never
let anything get her down.”
After the break-up of her marriage Janette sought counselling.
The person she met introduced her to Neuro-Linguistic
Programming and she found this extremely helpful. She has gone
on to become an NLP practitioner and, since the diagnosis of her
son as dyslexic, has used this skill to help others as well as herself
through work with the British Dyslexia Association (BDA) and
the Prince’s Trust.
Once Janette was on her own, following the separation from
her husband, this background helped her to give her business
ideas a go.
The Idea
Janette’s school days had been fruitless but by the age of 32 a
desire to learn had compelled her to enroll at university to study
Art and Tourism and Leisure studies (specialising in Service
Management and Service Marketing). It was only at this point
that her dyslexia was diagnosed and she worked on developing
additional strategies for coping with her condition. Tony Buzan’s
‘mind mapping’ technique is one that Janette adapted and
uses constantly.
The drawing of links between issues and concepts comes naturally
to her – art was the one subject at which she excelled at school.
“Everything I do is mind-mapped so I don’t forget anything. It has
transformed my life.”
But there was still a long way to go: “I’ve always wanted to
prove myself to myself and rise to a challenge … but I lacked
the confidence.”
Janette had followed up her original idea for Bridal Belle Ltd with
extensive market research. She identified a type of customer who,
needing an evening dress but having little time to look, was
reluctant to go to a High Street chain and risk wearing the same
expensive dress as another guest. Typically, the big stores have
very limited stock and offer a maximum size of 22. And when
lines are out of stock, replenishments are on six weeks delivery.
The unique selling proposition would be always to stock 40
dresses in a variety of sizes up to 30, to offer online consultation,
and to ensure a delivery period of 2 weeks for made-to-order
garments. Furthermore, Janette would have to be able to run the
business alongside her daily work. Initially her venture involved
renting a local small unit. But trying to combine the role of office
based business-woman with fee-earning work during a
transitional stage proved too difficult.
In her late thirties Janette had attended a variety of training
courses put on by Business Link programme. In 2002, part of
her daily work meant undertaking assignments for Business Link
which, at that time, was helping many people set up in business
in her local area under a dedicated business initiative for East
Kent. Through this she met two exceptionally skilled people
who were honing a software package that allowed two-way
communication with customers that was fully integrated with
back-office functions such as invoicing and stock control. Janette
acquired the package and has found it invaluable. It was ideal for
the transfer from shop to online service – which was “set up on a
shoestring, with no borrowings.”
Implementation
The NLP counselling and training had really boosted Janette’s
confidence. Now in her early forties, she “had serial ideas and now
I had someone to run to. But you need to be hungry before you
will make any money.”
Janette initially found suitable suppliers in Yorkshire and has
subsequently located more by attending exhibitions. After the
colleague she had during these early travels went her own way:
“I decided to keep the idea going on my own’.
Janette’s life experiences have obliged her to be self-sufficient.
At a personal level she has been greatly helped by the NLP
counsellor friend. She has also benefited from the advice offered
to her son by a colleague at the British Dyslexia Association. This
came too late to help her with her business ambitions but has
been re-assuring because they suggest coping strategies that
affirm those she developed for herself.
“My experiences have toughened me up. The public in general are
nice … but there are some horrible people out there.” As a trainer,
Janette has gained empathy from working with prisoners and
disabled people. “I will go the extra mile … but I can’t abide cheats.”
When asked if government small business support service gave
her any help Janette recalls “receiving lots of advice and a small
grant but what I needed was mentoring and business counselling.
It probably goes back to my schooling – which was too rigid, too
prescriptive. I need to be able to bounce ideas off someone with
experience. So I had to go outside Business Link and I found a
mentor through my interest in social enterprise. We help each
other.”
This sort of help encouraged Janette to become a qualified
Business Counsellor at Level 4 and gain a level 5 Vocationally
Related Qualification in Social Enterprise Business Advice. “In fact
what I needed at the outset is what I do for other people now –
but there is no-one out there financing this type of support”.
The people Janette met during this time have helped her to
combine learning and practice and to make her own way. Her
quest for business knowledge has led her to undertake a series
of university courses in business and management. These, in
turn, have enabled her to gain work as a trainer at various
government-sponsored agencies such as Eastbourne and District
Enterprise Agency (EDEAL) and Business Link and as well as
voluntary sector organisations like the BDA and the Prince’s Trust.
More recently Janette has found the Federation of Small
Businesses (www.fsb.org.uk) “… to be great. They help you
counsel yourself and check how you respond to a problem”.
Successive training and consultancy assignments led to the role
of coordinator for Kent and Medway Social Enterprise Network.
However, funding for this ran out in July 2007: “I was made
redundant and became fully self-employed.”
Her continued interest in social enterprise has left Janette with
a strong desire to help others to set up their own businesses.
And her VRQ5 qualification enabled her to secure a contract
with Business Link to develop a workbook to support
social entrepreneurs.
57 Unlocking the potential of the UK’s Hidden Innovators 56 Unlocking the potential of the UK’s Hidden Innovators
All this has enabled her to maintain an external income stream for
four years while launching and growing Evening-belle.co.uk.
Janette reflects that trying to do so many things at once has been
very difficult. “But having teenage children can certainly help with
the IT!”
Development
Because of the nature of her business Janette has had to develop
and foster a virtual team – and building a team like this takes
time. It now includes a mentor, a key supplier, the two web
developers and a bank manager. “Unfortunately the first bank
manager was awful and I had to move to a different bank.
Everyone must feel part of a team, with barriers down.”
When reflecting on her recipe for success, Janette is very clear.
“Tenacity. The ability to rise to a challenge. You have to feel you
are moving forward.” Other local businesses have also been
supportive. For example in providing the initial office space
at a reduced rent.
Given that her business is targeting a niche market that is widely
distributed across the country it soon became obvious that
setting up in an accessible local public location could not respond
to that wider community. Switching to a web-based service meant
that managing the business could be done at home and
combined with fee-earning activities for clients.
These factors have proved essential during the start-up phase.
Firstly because it has allowed earnings to be ploughed back to
develop the business and, secondly, because: “It was almost
exactly a year from having the idea to getting my first order.”
Evening-belle.co.uk is now ticking up three orders a week,
potentially worth up to £100,000 per annum. But Janette’s
abiding fear is that her reliance on suppliers could cause her to let
down a client over an order. She sees that the time is coming to
bring in a professional manager to put in the time and effort to
progress development to the next stage. And the possibility that
this would lead to a sale of the business would allow her to apply
more time to developing her other businesses.
Janette believes that without technology her venturing would have
been impossible: “Trying to run it from a shop would have taken
100% of my time.” The capability to trade online has been vital.
This is especially important when one aims at a niche market
sector whose constituents represent only a small proportion
of the general public.
A well-designed website that search engines discern to be
relevant can be as visible as that of a multinational enterprise.
When good design is combined with software that integrates
customer-facing and back office facilities a small trader can
enjoy reduced costs and less reliance on bank support.
The technology Janette uses fitted her key requirement – not to
limit her ideas. “The technology gives me complete administrative
control. It enables me to manage referrals and keyword searches
and it integrates purchase orders. I could run this business from
anywhere in the world; I’d just need someone to parcel and
despatch the goods.”
Lessons learned
Janette’s experiences have prepared her to envisage further
opportunities. “I’ve learned so much; but not just about selling
dresses. For example, get your supplier into some kind of
partnership so that if he let’s you down, he’s letting himself down.
The skills I’ve got now mean I’m ready to help more with social
enterprise – where there is so much need.”
She now feels empowered to do anything she sets her mind to
and is keen to develop an idea for an ‘easy on’ clothing range
that uses special fasteners. And she is interested in the concept
of ‘asset lock’ that helps start-ups to reinvest profits (see
www.cicregulator.gov.uk).
Janette observes empathy between people setting up in business,
especially if they have learning challenges. Her advice is to find
some free workshops via Business link or the local Enterprise
Agency, link up with like-minded people and develop a network.
“You need to find people to talk to. Your family or partner may feel
threatened by risk and try to talk you out of your idea. Try to find a
counsellor with business experience.”
In Janette’s view the key ingredient for entrepreneurial success is:
“Make your own decisions”.
Roger and Margaret Wilson-
Hinds and screenreader.net
The background
Roger Wilson-Hinds and his wife Margaret have been blind since
birth. Both have had rewarding careers in teaching and then
running an IT supply and training business. But in 1998 disaster
struck. At the age of 60, Roger became seriously ill and all work
had to stop.
While recuperating he suddenly saw with great clarity a new goal
– to open up information literacy to blind people anywhere. This
ambitious objective demanded the development of free software
that can read out a digital file or web page displayed on a
computer screen.
Although their ‘non-business model’ was ridiculed, Roger and
Margaret persevered for six self-funded years. In 2004 a technical
breakthrough finally meant their screenreader, dubbed ‘Thunder’,
was ready to be given away (viahttp://www.screenreader.net/).
Already some 100,000 blind people around the world rely on
Thunder and its future is secured by strong income streams
for producing variations commissioned by national and
international institutions.
Roger perceives that his many and varied life experiences have
contributed to this outcome. At 21, as a social sciences graduate,
he set out to earn his living as a door-to-door salesman. He felt
deep uncertainty but refused to let his blindness get in the way.
“To do this well you have to like people and not mind rejection.”
After succeeding as a salesman Roger decided to become a
teacher. This led to a period as an education adviser to families
and local authorities. Then he was appointed Head Teacher of a
special school for blind children. After being made redundant “for
being too radical” Roger joined RNIB (Royal National Institute for
the Blind) in the 1980s as development manager where he helped
blind people to take advantage of new technologies.
At school Roger had found it hard to concentrate. Weekly hospital
appointments and numerous operations disrupted studies and he
came to feel that he and his peers were viewed as ‘cataracts, not
people’. “Those in authority were mapping out our lives for us –
telling us we could become telephonists”.
Roger remembers an exception to the rule – John Lorrimer, a
blind teacher at his junior school. “He taught us to play chess and
solve problems and believe in our own brain.” Realising he was
surrounded by clever people motivated Roger not to fail and he
started to study harder. This led to Worcester grammar school for
blind people and from there to university. But all this studying
finally finished off what little reading sight he had.
The career paths of both Roger and Margaret were subtly
influenced by their family background. Margaret’s father rose
to become a senior Civil Servant and was awarded the OBE for
services to blind people. Roger’s family members have always
preferred ‘safe jobs rather than being self-employed’. His parents
were modest, working class and normally-sighted but he and his
two brothers were all born blind. “Dad was very much
instrumental in encouraging us to make things, repair our own
bikes, build crystal sets and listen to short wave radios. So this laid
the path for an interest in technology, of course”. Later, Roger was
also influenced by Archbishop Trevor Huddlestone’s book against
apartheid. “I was for the underdog and actually got arrested for
demonstrating at a Test Match versus South Africa at Edgebaston.”
Roger does not feel his blindness has had either a positive or
negative effect on him: “I haven’t allowed my blindness to be
relevant. It is part of me; it’s who I am.”
The Idea
Roger was made redundant by RNIB in 1992 when he was 52 and,
needing an income, he and Margaret decided to set up in business
as a disability training company. They won a government contract
to teach blind people to use computers and they sold the
necessary IT hardware and software to these customers. At that
time any blind person who had a job could get a government
grant for up to £14,000 for IT hardware and training. “Social
inclusion is supposed to be mandatory; in reality it’s about
‘freedom to pay’.”
The venture proved very profitable, but in 1998 Roger was
diagnosed with cancer and all work stopped abruptly. The IT
business was immediately given to a close friend – who has
continued its success and today employs nine staff.
While being treated in hospital and heavily sedated, Roger had
an extraordinary and life-changing experience. “A near-death
experience really switches you on. I acquired an absolute
knowledge of what I had to do.”
58 59 Unlocking the potential of the UK’s Hidden Innovators Unlocking the potential of the UK’s Hidden Innovators
It was suddenly crystal clear to Roger that he must do something
to help the 80% of blind people who, being unable to get a job,
were ineligible for a government grant and therefore were
effectively denied access to the online world. “The idea was to
open up information literacy to blind people anywhere. Giving
away something valuable was definitely not a sensible business
idea. But I saw what IT could do if freed up from business
commercialism. And I felt I had the contacts and the skills
and the money to do it.”
Roger was well aware of a type of IT application called a
screenreader. In essence, this is software that scans text on the
computer screen and uses a speech output device to ‘speak’ it to
the user. RNIB markets a robust example named ‘Jaws’. In the US,
Serotek offers an equivalent called ‘Freedom Box’. Typically, these
products retail for about £1000 per user.
Roger envisaged a low-cost or no-cost application that would not
compete because it was aimed at a different target market – the
many blind people around in the world who have little or no
disposable income.
Roger and Margaret sought help from various government-
sponsored initiatives. All the Business Link people they met
seemed to be engineers who ‘understood marginal costs but
could not see that the web is different’. “The web offers peer-
group support and networking and viral marketing. With very little
money you can be round the world. Saying ‘It’s free; try it’ breaks
all the traditional rules”.
They attended ‘business breakfasts’ and visited executives of blind
societies. “It was a distraction but part of the learning curve when
you are a disruptive technologist. We wasted an awful lot of time
trying to be sensible – we should have just got on with it”. Roger is
philosophical about it today and, as a trustee of the Blind
Business Association Charitable Trust (www.bbact.org.uk) he tries
to help blind people get into work.
Implementation
In 2000, when Roger was 60, he and Margaret paid to attend a
course at the School for Social Entrepreneurs
(http://www.sse.org.uk/) which had been founded by Lord Young
at Bethnal Green in London. There were classes for ten weeks
followed by nine months of supervised work on a business idea.
Roger and Margaret realised that if they wanted to implement
their idea they had no alternative – they would have to fund it
themselves. They discussed their idea with one of their long-time
friends, Paul – a university professor of computer studies who is
normally-sighted and clearly enjoys a challenge.
The visually-impaired community could offer no support. “Quite
the opposite really. And help from RNIB was minimal. To be fair, if
someone had approached me with the idea in the 1990s when our
IT firm was doing so well, I would have rubbished it.”
They struggled with the technology. The key problem for any
screenreader application software is that video drivers conflict
with speech output devices. Paul had written the code for
‘Narrator’, a speech accessory in Microsoft XP 2000. Microsoft in
Cambridge is researching speech recognition and put Paul in
touch with the Disability branch at Microsoft’s Seattle
headquarters. “They’ve been very helpful. Paul went to Seattle and
was given access to the ‘hooks’ in the source code.”
Roger found the UK business environment to be quite hostile to
his new idea. “It was not long after the dotcom bubble had burst.
Software was a no-no. No-one I approached could get their head
round the idea of a useful but free application. The best case was
when a senior man from Tesco came to see us – they charge
charities many thousands to place a link on the Tesco website. He
was completely baffled that we wished to give our product away.”
On the other hand, Microsoft supports constant innovation and
was interested in the solution as a freestanding or bundled
commercial offering … “but this would not have suited ordinary
blind people who have no money”. No money was given and none
was requested. It took two years to develop the software manuals
and a further two years of testing. Roger had to resume doing
some training to bring in money to pay a web designer.
Finally, in 2005, Paul achieved the necessary technical
breakthrough and ‘Thunder’ was ready for launch at the Sight
Village exhibition in Birmingham where it caused something of a
sensation. “We won’t patent it – it’s all Microsoft technology – but
we were at least a year ahead of the pack”.
Development
Roger recalls a lecture by Dr Michael Tobin on blind people
tending to be passive. Because they are so dependent on parents
and carers they feel they have to please them constantly. Roger
recognised that he had been quite reserved when young. It had
been easier to be passive and he ‘hadn’t shouted for himself’. It
made him realise: “It’s in the head. You must be undaunted and
stop seeking people’s approval.”
This made him want to see what IT can do for people’s lives. “You
have to be able to see the other person’s point of view. People who
can’t get a job are less likely to be able to articulate their need.”
So he enrolled on an “IT for All” course but “it was too slow; I got
chucked off the course.” The experience convinced him that
starting up a technology-based business does not demand a
really deep understanding of the technology: “but you must
understand what it can do for what you want to achieve.”
When asked about the importance of having a good team, Roger
is disarmingly candid. “I don’t see myself as a good team worker
but you can’t do it all on your own. I don’t mind being in a team as
long as I’m the boss. I’m pig-headed … and don’t seem to mellow
with age”.
Development of the business was very slow at first; between 2000
and 2005 take-up was minimal. It was only after it was finally
decided to give Thunder away free that the business really started
to take off.
Shortly afterwards, the European Blind Union suggested that an
EU grant might be available for translations of Thunder. They put
Roger in touch with a German company that undertook all the
form-filling. Within two months, in January 2006, five partners
had joined forces and a grant of €240,000 was made to fund
French, Italian, German, Slovak and Estonian versions of Thunder.
The influx of cash enabled Roger to give up doing the IT training
sessions and the recently recruited professional fund-raiser has
already secured a further £55,000 from the Esmée Fairbairn
Foundation to produce a learning disability programme.
Today Thunder has 88,000 users of whom 70,000 are unregistered.
“The download laws and data protection vary in different countries.
We let anyone download what they want without having to reveal
their identity. But the world is full of spoilers; when we reach
100,000 we will insist on registration.”
The product is wholly dependent on technology. Roger recalls
that “The IT has been a real headache – it disturbs the dream. But
not any more. We receive wonderful emails from around the world.
I’ve just had one from three blind lads who had downloaded our
free screenreader in an internet café in Lagos.”
Roger reflects that the most innovative aspect of the business has
been its business model, namely; to give the product away free
and make money from associated project work. He recalls that
the agencies set up to assist start-ups interpreted this as ‘a
complete lack of a business model’. “With a modern technology-
enabled product one has to be willing to cast off traditional
business models. The capital cost of the equipment in my office
was less than three thousand pounds; compare that to the cost
of a factory!”
Lessons learned
Roger reflects that in the 90s the government would pay him for
three days to train one blind person in the rudiments of IT. Now,
people can take the Thunder screenreader and do it on their own.
“There is constant change in IT; one can’t plateau. So many
brilliant young people are doing wonderful things. I say to the
more mature person with a bright idea: ‘don’t wait; do it now’.”
Roger is sure that the way his screenreader business developed
was influenced by his earlier entrepreneurial experience. “It is very
easy to think short term, to take what’s going and make some
money – as we did in the 90s. But there’s always something long
term you could do that would be better. Our screenreader is
fabulous, it’s streets ahead, it’s mega, it’s the tops!”
61 Unlocking the potential of the UK’s Hidden Innovators 60 Unlocking the potential of the UK’s Hidden Innovators
David Murdock and
clarifeye.com
Background
David Murdock is the owner manager of a thriving technology
business based in Glasgow. As a young post-graduate he set up
his own business in 2003 “because no-one would give me a job”.
David has been visually impaired since birth. He had a difficult
time at school in his native Scotland but, after being turned away
by numerous universities, he was finally given the chance to excel.
He gained a degree in molecular biology and progressed to the
doctoral programme. But microscope work took its toll on the
little reading vision he had – so he switched to a postgraduate
course in computer programming.
Now married, the time had come to stop being a student and start
earning a living. But how? He and two blind student friends on his
IT course tried to identify a service that was not being offered in the
region. The option that appealed to them most was a service that
would ensure a company’s website complied with the UK’s Disability
Discrimination Act and was accessible to anyone, despite any
physical, sensory or cognitive disability they may have.
And so clarifeye.com was born.
David recalls that his great grandfather was an entrepreneur
although that business passed down another branch of the family.
David’s parents have salaried jobs; his mother is a teacher and his
father a distribution manager. They have always been very
supportive and they enabled him to go to a private school:
“… where I got no help at all. I was flippant, bolshie and outspoken.
In a group I could see the solution straight away and would get
impatient.” And the sudden death of his older brother made
him an angry person.
David feels he has overcome most of that now but believes the
education system has let him down badly. After four years he
moved to a grammar school with a visually impaired unit to do
his ‘Highers’ in preparation for a university place. David found this
unit to be ‘an incredible hindrance’ and he only attended one
class a week. “I prefer to do things for myself … but I now see that
I have to be more reasonable.”
When asked about the influence of role models David reflects:
“I’ve never been able to model myself on somebody else. I might
admire a person but I don’t try to emulate them. It takes a lot for
me to ask for advice. I tend to bottle it up inside.”
Getting to university was to be yet another challenge. Although
he had done well enough in his exams to warrant a place,
interview after interview ended abruptly when his blindness
became apparent. “They were very rude. At one university I was
literally cold-shouldered out of the building.” But as we’ve seen,
once he did secure a place, there was no holding him back.
The Idea
As part of the IT course, David and two blind friends, Adil and
Gaffar, had researched ‘accessibility’ – the design of computer
systems so they are usable by people with a disability. For
example, Adil needs to use a screenreader (see our case study on
‘Thunder’) while David can just discern text if it is in a very large
font. They presented their findings to a group of IT directors.
“There was no response but it had raised my own awareness of the
need … and there was a personal annoyance factor.”
After graduating, David went to the job centre. There he was
repeatedly told, in no uncertain terms, ‘stick on your benefits, you
won’t get a job; it’s not worth your time’. “I didn’t bother to go
back – instead I went trekking in Alaska.”
On his return the three friends decided to make their own luck
and try to develop the opportunity presented by the Disability
Discrimination Act. At that time some of the major IT
consultancies were offering corporate clients a website
accessibility review as a supplementary service. No-one was doing
it as their only offering and, in particular, no-one was doing it
who was disabled.
David, then 25, registered Clarifeye Ltd with Companies House in
October 2003. Adil would be the salesman, Gaffar would do the
books and accounts, David would do the technical work.
They hawked their idea round to Scottish Enterprise where they
were advised on business planning and referred to Business
Gateway. “They didn’t understand what Clarifeye could do. They
just saw us as three blind guys asking for money.”
However, Business Gateway did suggest an approach to the
Prince’s Scottish Youth Business Trust (http://www.psybt.org.uk), a
charity that promotes and supports self-employment and business
creation amongst young people. “The PSYBT gave us lots of help
… and three thousand pounds to buy some IT equipment. The deal
is, if you are successful you have to put something back in.”
Implementation
The set up costs of the business were minimal. Clarifeye is an
IT-based solution and the partners were able to work from
their own homes.
The trio told everyone they could about the offering. “None of us
had much business training; we were learning as we went along.”
The breakthrough came in January 2004 when Goldman Sachs
was referred to them by Blind in Business – a London-based
charity that helps to ease the transition between education
and employment for visually impaired individuals
(http://www.blindinbusiness.org.uk). The bank was shocked to be
told their recruitment pages were badly coded and inaccessible to
anyone who relied on a screenreader. The partners specified what
had to be done and the bank’s IT staff put it right.
Blue-chip companies tend to have numerous websites each with
constantly changing content. For example, David cleaned up 20 of
Proctor and Gamble’s websites and now has a contract to review
them annually. Advertising and attendance at exhibitions has
delivered scant results; the business has grown mainly through
word-of-mouth recommendations.
Apart from Blind in Business, David has found that organisations
that represent visually-impaired people, such as RNIB (the Royal
National Institute of Blind People), have been of little help to his
business. “When I started Clarifeye it was a business for blind
people by blind people. Not now. I don’t carry a white stick, so
people are not aware. It’s just a business.”
During the start-up phase it was not economically viable to rent a
workshop. The business had to be run as a virtual organisation.
Because they could work remotely and communicate by email,
the partners started to acquire clients in America. David reckons
he has never met or spoken on the phone with half of Clarifeye’s
clients; Adil made the contacts.
Nevertheless, the work enabled the partners to meet many
people and build up a panel of specialist sub-contractors. When,
after a year or so, both Adil and Gaffar decided to accept full-
time posts elsewhere, David’s self-reliance made him comfortable
to run the company alone. “But getting a reliable accountant was
difficult. The first one I appointed filed the accounts late and
caused me a lot of unnecessary trouble.”
David also discovered he was not a natural salesperson. “I was
surprised how resistant people were when I told them how bad
their websites were! I had to learn how to talk to people; I had to
change my personality.” He now talks to clients differently. He asks
what they want their website to do for them, who they want to
reach, what benefits they hope to gain.
David reflects that government small business support services
offer ‘quite a bit of help to get start-ups off the ground’. However,
he deplores they way the government has removed tax relief for
SMEs. “The tax waiver on the first ten thousand pounds of profits
was replaced by an extra 3.5% on pensions. It was apparently to
gain short term popularity but it leaves you worse off.”
Development
David’s friends and family have been very supportive: no money
but lots of moral support. “You have to have persistence. Things
don’t always go to plan. You don’t get the money you’re looking
for. You have to learn to talk yourself up and sell yourself at a
premium rate.” But this persistence can have a heavy price.
“It cost me my marriage. I spent too much time working;
my wife took second place.”
David now has several teams of programmers. “That was another
new learning curve. A few years ago I was fine as long as
everybody agreed with me!”
When asked if luck has played a part in his success, David reflects
on the importance of meeting the right person at the right time.
“Business success is about people and contacts. Remember: it’s not
what you know but who you know.”
While developing Clarifeye he met up with an accomplished
salesman. He also met an experienced businessman who was to
become his mentor.
Both are normally sighted and they proposed a new partnership
with David that would be an IT solutions company which was not
concerned solely with visual impairment. They would invest in the
new business – Clarifeye Computer Systems – which, in parallel
with the original Clarifeye business – would operate from a retail
shop to sell and repair IT hardware. This would be supplemented
with ‘Big in IT’ – a ‘paperless office’ consultancy that would help
professional clients such as lawyers to streamline business processes
and benefit from web development services.
David’s mentor “… has taught me about business processes and
the new way of doing business; assigning tasks so you can go out
and make money; developing the business so that it is scalable
both horizontally and vertically.”
The shop was opened a year ago and Big on IT is now getting on
its feet. After achieving a first year turnover of £250,000 from a
standing start profits are being re-invested to build up the
business.
There are grand plans. Work on vertical development is focusing
on building a niche market share and securing wholesale
purchasing deals. Horizontal growth will take the business from a
single shop to a chain and franchises. David, now 29, and his
partners confidently expect year two sales to hit £4 million.
62 63 Unlocking the potential of the UK’s Hidden Innovators Unlocking the potential of the UK’s Hidden Innovators
Clarifeye is an IT service that is delivered by a virtual team
that could not function without advanced information and
communication technologies. “What we offer clients is technology
solutions put together in new ways that change the way people do
their work – be it to solve problems, to reduce paperwork or to
reach customers.” As an illustration David cites an IT solution he
delivered to one client; a database task that used to take three
days is now a minute’s work.
In David’s view, Clarifeye is innovative because no-one else
offers the same service as a single service and because, as its
website conveys:
“The majority of our team members have some form of disability.
Because of this, we experience first hand the difficulties badly
designed websites bring, and are best positioned to advise you and
make sure your website is not breaking the law and is reaching its
full customer potential.
“We are often asked how we can be so sure that our service ensures
the best advice for the design of user friendly and accessible
websites. The answer is simple: automated tests and technical
analysis by a consultant can fail, but the additional level of testing by
a group of disabled people who are directly affected by badly
designed websites, will mean the advice you receive will guarantee
your website will become accessible.”
Lessons learned
When asked what he has learned from his experiences as an
entrepreneur, David highlights the need for “… policies and
procedures. Instead of trial and error, do it the right way from the
start. Train people and induct them quickly. Give them manuals.”
His advice to other visually impaired people who might wish to
start a business comes straight from the heart: “Think carefully
before you do it. Business and friendships don’t mix – it can lead to
conflicts; it can even put your health at risk. Define the roles; put it
all down on paper.”
And he ends with an exhortation: “Don’t let visual impairment set
you apart. The only difference is the distance from eyes to paper.
Prove them wrong when they say you can’t. You have to find out
for yourself how far you can go.”
Derek Broomfield and
Focus Cooling
The background
Derek Broomfield is the son of a career soldier. He grew up in
Cyprus, Germany and the UK moving regularly throughout his
child hood. He became something of a rebel and whilst he did
quite well academically in his early life he lost interest as he
became older. When his father retired from the Army, Derek
was a few months away from finishing his education.
As a result of this final disruption he left school without any
qualifications and signed up for an apprenticeship in air
conditioning engineering. “My father said to me: ‘your brother
is training to be an electrician so you can either train for air
conditioning or plumbing’. There was little choice in the matter.”
Derek thought that air conditioning sounded new and interesting
so he chose that. His father took him along to a local company
for an interview and he was told he could start on the
following Monday.
Derek recalls that his rebelliousness at this time meant he “… was
not always customer friendly, particularly if the customers were
‘foolish’.” Learning that the customer is always right was a very
important lesson for him.
Derek completed his apprenticeship and proved himself to
be a capable engineer. He was ambitious and in due course
he achieved senior management positions, firstly in the air
conditioning industry and then in facilities management in
the building industry.
However, Derek became disillusioned with working for large
organisations. He hated the bureaucracy. He also disliked the way
people around him were being sidelined or dismissed when they
reached a certain age. Furthermore, he felt the customers were
not getting the best deal.
The stress, long hours and lack of work life balance had already
led to divorce so he was ready for a change. He also believed he
could offer customers a better service than they were currently
getting from larger companies which were more interested in
appeasing their shareholders than their customers.
His brother was a successful small business owner having started
out as an apprentice in the electrical industry and his brother-in-
law ran a successful printing company.
These people around him proved to be valuable role models.
So, when two former colleagues asked him to join their successful
small air-conditioning company he jumped at the chance. This
opportunity proved to be pivotal: “As a Director of this small
company I gained the experience and self belief that I could run
my own venture and build something of value.”
The Idea
After working with these colleagues for some time Derek became
sure he could be more successful if he went out on his own. He
had always been interested environmental issues and believed
there was a need for a service that offered more eco-friendly
ways of heating and cooling buildings.
In 2002, at the age of 49, he founded an air-conditioning energy
management company that he named Focus Cooling. The new
company set out to offer installation and maintenance services
to industrial and commercial customers.
He did not carry out formal market research prior to starting
but had talked about it with his many contacts.
Derek initially funded the company himself with £30,000 of
savings. He only produced a business plan when he needed to
raise additional funding and approached all of the High Street
banks. National Westminster bank was the only one which would
provide a loan facility – and then only on condition that his family
home if the house was used as collateral.
For Derek this meant that he had to grow the business more
slowly than he had anticipated. because he did not have the
resources to take on very large projects until the company had
established a firm financial base.
Although he had held senior management positions in the air-
conditioning industry and had been trained in management
Derek felt a need to gain new skills to grow his business. He
attended a Dale Carnegie communications course and a business
growth programme at the University of Bristol.
Implementation
At the outset the business engaged two engineers and used
numerous sub-contractors. It has since grown rapidly and
expanded into the energy management field. In addition, Derek
has invested in training on new eco-friendly energy management
solutions and works with customers in partnership to help them
make their buildings more energy efficient.
65 Unlocking the potential of the UK’s Hidden Innovators 64 Unlocking the potential of the UK’s Hidden Innovators
Initially the company was run from a bedroom at home but this
proved to be difficult. Derek did not feel it was professional
enough – particularly once he started employing more people.
He purchased a commercial property to house the company and
he now sublets surplus space to other small business people in
the building and surveying industry. “This has proved very useful
because it means that I have a network of like minded people on
the doorstep – all with very useful contacts.”
More recently Derek has changed the focus of the company
to include consultancy services and expert diagnoses. This has
meant employing engineering graduates with post-graduate
qualifications. Derek does not have these qualifications himself
but firmly believes that this level of expertise is essential if the
company is to be really successful.
Derek believes the government is not on the side of small
business. He sees the Chancellor’s removal of taper relief on
taxable profits as just another indication of the government’s
lack of understanding of the psyche of the entrepreneur.
He also fears that the increase in bureaucracy is stifling growing
companies. This increase in bureaucracy means that even with
some staff to help, the directors of small companies must
constantly strive to keep up to date with the latest regulations
and health and safety legislation. “All this means that running
a venture in the early stages is a ‘24/7’ job.”
On the two occasions that he has sought advice from the
government’s small business support agency, Business Link,
Derek has found them less than helpful. On the first occasion
he required advice for a patent and on the second he needed
advice about exporting. Now, when he feels the need for advice
he talks to his accountant and financial manager, or the
company secretary or friends who are also entrepreneurs
in the same industry.
Derek’s wife comes from an entrepreneurial background and runs
a small business support centre. She has also been an informal
source of advice.
Development
Derek comes across as a slightly reserved man but when speaking
about his area of expertise he displays both passion and a wealth
of knowledge. He has quite a few business ideas that he could
take forward but is too busy with the existing company to start
up anything else.
Technology plays an important part in the business. It enables
plans of buildings and internal installations to be sent in digital
format to consultants acting for customers. This has reduced
the time it takes to quote and detail can be checked very
quickly. Derek was initially resistant to using IT himself and
has had to learn.
Derek is more expert on the technical side of the business
than the day to day running of the financial side of the business.
Recognising that the tight control of finance is essential, Derek
has employed experts to run the parts of the company that he is
less skilled at running.
As a result he has recently taken on a masters-level graduate who
is helping him invest in technology that will allow the company to
work in closer partnership with its customers.
The biggest problem he has had to overcome is the lack of
experienced staff within the industry. The difficulty of finding
enough talented staff has prevented him from expanding the
business at the rate he would have liked. He has even tried to
employ workers from overseas but the lack of skilled engineers
does not seem confined to the UK.
Derek’s response to this shortage has been to invest heavily in
training. However, he has become irritated by the poaching of his
experienced and well-trained staff by larger companies who do
not invest in training and can therefore offer better salary
packages. To combat this Derek has decided to offer shares in
the company to his employees both to motivate them and also
to ensure they stay committed.
This share option scheme has also enabled him to motivate the
two new graduates he has taken on. Both are essential for taking
the company forward and also for succession planning. “I have
learned how useful this extra level of expertise is for the venture.
But I’ve also found it is very difficult to keep these young graduates
inspired and motivated. It’s a fine balance. They want to grow the
company more quickly than is sensible or feasible. And I also have
to manage the fact that my older engineers are now being led by
much younger individuals.”
Focus Cooling is currently in the process of acquiring a small
heating company to complement and expand the air-conditioning
business. This will enable a progression into ‘eco-friendly’ heating
and cooling solutions and Derek sees this move as further
evidence of the innovative nature of his enterprise.
Lessons learned
Derek puts his success down to his determination to provide
expertise and a good service at a fair cost. He has also become
well known in the industry as a technical expert and this has
helped him develop a wealth of contacts. He has differentiated
his business by specialising in highly technical services and by
bringing in people whose skills supplement his own.
Most recently he has employed a graduate with a Masters-level
degree in engineering. He is expected to become a junior partner
and enable Derek to develop the consultancy side of the business.
However, Derek also finds the business all consuming and he still
struggles to maintain a work/life balance.
One thing that came as a surprise was the length of time larger
companies take to pay small companies. In the second year of the
business the venture was growing quickly and almost failed
because it lost control of cash flow. Large sums had been paid in
advance to suppliers of specialist air-conditioning units.
But then several large customers decided to take over 90 days to
pay for these units to be installed. In order to pay the wages and
the suppliers Derek and his wife had to put the rest of their
personal savings into the company. Without this commitment
the business may well have gone under.
The company now has a full time credit controller in post and
no-one is allowed to build up a back log of overdue invoices.
Now, new clients must pay a deposit for large installations. In
addition the company has established a good credit record with
its suppliers so it no longer has to pay in advance for products.
These steps have made things easier.
Looking back, Derek considers his finest achievement is that, over
the years, he has trained a number of people who have gone on
to build small companies. And many of these new businesses now
provide him with a pool of reliable subcontractors that he can
turn to when he encounters peaks of activity.
67 Unlocking the potential of the UK’s Hidden Innovators 66 Unlocking the potential of the UK’s Hidden Innovators
Sally Walton and ‘Carry a Bag’
The background
Sally Walton started Carry a Bag in 2006 to manufacture
environmentally friendly shopping bags as an alternative to the
plastic bag. The bags are handmade in Hastings East Sussex using
strong ‘Fair Trade’ organic cotton ticking lined with recycled home
furnishing fabrics such as table cloths or curtains. The patterns
vary so that every single bag is unique.
Sally’s father was a test pilot for the RAF but before she was born
he died while testing a plane in Florida. After a spell living with
her mother’s parents in Leicester, Sally and her mother emigrated
to South Africa when she was five. After school she did three
years at art school and then worked in a record shop. South Africa
was “a wonderful opportunity to grow up in a very exciting and
wild environment.”
Back in London, Sally continued studying art and design at
degree level, but this stopped when she got married and stayed
at home to bring up four children. Her husband worked as an
illustrator and she started working with him to create books on
interior design, arts and crafts, and folk art. “ We were always
freelance ... I have not worked in an office since 1975. We got used
to living on our wits and did quite well at it and got established as
authors and illustrators. There is a big market in America for this
kind of hands-on arts and crafts book.”
This all stopped rather dramatically at the time of 9/11, which
coincided with the Frankfurt book fair for that year. “Suddenly the
whole market in America closed down and we had to think of
other things to do. I looked at the job market and found myself
unemployable … I did not ‘tick’ one box. In some cases I did not
even understand the description of the job advertised by the
employment agency.”
Sally had not stayed for the final year of her degree at Middlesex
so she did not have that qualification. “I had nothing but a
huge amount of experience and a lot of potential to do
something interesting.”
Sally had become very interested in the environmental
movement. The last book that she and her husband produced
together was in 1999 and called Eco-Deco. This was a book about
design using recycled materials but the major publishers rejected
it on the grounds that they ‘did not want to have anything to do
with rubbish’. “It was a book that was ahead of its time and my
research for it fired me up. My response to this rejection was that if
I am going to do something I’m going to do something that I really
care about.”
Sally went to the local business enterprise people to see if there
was a grant available. The answer was ‘no’, but there was a course
on entrepreneurship that was about to start and had places
available. It lasted six months, with one teaching day every two
weeks and mentoring sessions in between. “We had a workbook
that we had to get through and this was a really strange situation
for me. At the end of the course I was ready to go and there was a
grant of 1500 pounds. I found somebody to create a web site to my
design and I launched my new business in June 2006.
The Idea
The 9/11 atrocity in 2001 had a profound effect on precisely the
sort of business Sally and her husband were in. “We had about ten
projects going with a very large publisher in Bond Street in London,
with extensive American interests. The way this business works is
that in September everybody goes to Frankfurt for the annual
book fair, and there the business is done. That year nobody from
America went to Frankfurt and the whole thing collapsed.”
At this point Sally decided that she had to choose one particular
thing out of a number of different possibilities, and focus on it
exclusively. “I have worked for many years with my husband and
we became moderately expert at a lot of things without being pre-
eminent in any one particular area of work. I realised that to start
a successful company I had to focus on something specific and the
‘carry a bag’ idea was the most promising one.”
She wanted to make a really big impact with this idea because
she felt passionately about it. “I had to do it. I wanted to become
associated with the idea that you don’t use plastic bags anymore.
This issue has become very high profile and I now feel that I am
in the right place at the right time. 18 months ago, people were
surprised that there might be a business opportunity in this area.”
When reflecting on the more innovative aspects of her business,
Sally highlights that what is different is that she enhances the
‘eco bag’ offering by introducing an element of fashion and style.
“I had my target market in mind and it was typified by Jamie
Oliver’s wife. Someone who cares about the environment and likes
to be seen to be caring about the environment … but who also
wants to use well-designed products to look fashionable
and smart.”
Her premise is that in order to make people carry the bags when
they go shopping, they have got to be practical and stylish. “I
contrast this with the Sainsbury’s ‘I am not a plastic bag’ initiative
where they got a top fashion designer to design a re-usable
shopping bag and then sold a limited edition in the stores for five
pounds. This initiative attracted colossal press and media attention
with the consequence that their bags became desirable items in
their own right and were being re-sold on eBay for 400 pounds.”
In Sally’s opinion this totally misses the point of what the bag is
supposed to be. “In my view it should be a bag that you want to
take out to do your shopping, rather than a design item that you
buy for its investment value.”
Sally likes to use the bag to get messages across. “It is one of my
strengths is that I am able to come up with snappy slogans. This
year we are going with the slogan ‘A bag is not just for Christmas’.”
Implementation
Sally started entirely on her own and was looking for a grant to
finance the purchase of sewing equipment. Her postcode area is
regarded as ‘depressed’ and attracts redevelopment grants so
Sally was seeking one when she heard of the enterprise training
course. “I was interested in doing it because I had always felt a
stranger to accounting. We had always had somebody to look
after that side of things but I felt the need to learn more about
it for myself, as you can sometimes feel vulnerable if you don’t
understand things. I did do a business plan and I loved it. I am
a writer and love writing. So the business plan became a
challenge for me to produce something interesting and decorative.
It looked like something out of a Sunday supplement by the time
I had finished”.
The course ended in February 2006 but the grant money did
not come through until April. Sally spent the cash on sewing
machines and on producing high quality postcards featuring the
bags which she sent to every magazine editor she could think of.
The web site was ready in June. “At the launch I had my bag
featured in Country Living and that was an enormous factor.
For two months the phone never stopped ringing and what with
other placements the run-up to Christmas was very successful as
it was featured in a lot of places as an ‘eco-friendly’ product to give
for Christmas.”
Currently the bags are made by a number of home workers in
St Leonards. Sally has found it quite hard to work with people in
the UK: “Many of the casual workers want to have a cash-based,
off the books business, and if you go to a factory then it is just is so
much more expensive than India.”
Development
In January 2007, Sally received a call to say she was going to be
featured on ‘Daily Candy’. “I did not know what this was but it
turned out to be a daily bulletin that goes out to journalists in
fashion and retail industries. It features a new product every day.
Within ten minutes of the article appearing the website server had
crashed and we were overwhelmed by the response. Most of it was
from people inquiring for details but there were also a number of
huge orders offered. These included Disney Corporation which
wanted to put the bag in the British Pavilion at EPCOT in Florida.”
At the time Sally was not in a position to take on this level of
business. So she embarked on a process of finding large scale
manufacturing facilities in the UK. Although she came close to
finalising one particular option, she eventually decided to
outsource a major order from Aveda – a very big American
cosmetics company with green credentials – to a manufacturing
facility in India, which she knew about through her supplier of fair
trade cotton. The order was to produce 1200 bags for Aveda’s
annual conference. “This is my first big outsource experiment. I’m
going to do the Aveda job through Bishopston Trading”.
At that time Sally was making use of ‘BizFizz’ – a government-
sponsored initiative started by the New Economics Foundation
and The Civic Trust that provides support for new businesses (see
www.bizfizz.org.uk). It was her contact there who told her about
Bishopston. This business was started by Carolyn Whitwell in 1985.
Initially the firm imported fair trade organic cotton but they now
have a manufacturing plant in India to make clothes (see
www.bishopstontrading.co.uk).
Bishopston is the supplier of the cotton Sally uses – so the Aveda
bags will be made in India. “My contact with Bishopston is through
a smaller trading organisation in Wales, but the point is that the
bags will be made at the location where I have always bought my
fair trade cotton. I was quite reluctant to do this in one sense as I
would prefer to get them made in this country but it is so much
cheaper to get them made in India, and also I feel that it will do
a lot to support the local economy out there.”
Sally was pleasantly surprised to find that Aveda were happy for
the bag to have her brand printed on it as well as their company
name. “And there is also a tag that says ‘Sally Walton with love’
that connects my name to the brand.”
Sally did not talk to many people about her idea at the start up
stage but her children were helpful. All of them work in the media
and public relations industry. Her eldest son is a creative director
at an agency and his connections in the media and fashion
business proved to be useful.
As the business has grown, she now feels the need to consult with
other people and think through her options. Sally came second in
an Intel ‘older entrepreneurs’ competition and so came close to
winning mentoring support from Simon Woodroffe of Yo Sushi
and Dragons Den, and an older entrepreneur himself.
69 Unlocking the potential of the UK’s Hidden Innovators 68 Unlocking the potential of the UK’s Hidden Innovators
Simon Woodroffe put her in touch with PRIME – the UK national
organisation dedicated to helping people aged over 50 set up in
business (seehttp://www.primeinitiative.org.uk/). She did an
interview and was featured on PRIME’s web site as a case study.
However, her attitude is that she would use PRIME but, as she
still feels young, she does not wish to be ‘put in a box as an
older entrepreneur’.
Other sources of advice are closer to home and to her passion for
the environment. “The people that started the Green and Blacks
organic chocolate business are friends of mine and they live locally.
They started off with the same ethical focus that I have and have
built up a major brand.” They are the people who advised Sally to
go for the Bishopston trading operation and set up manufacturing
to be done in India.
Sally’s enterprise depends in large measure on new information
technologies. However, she is struggling with the management of
these technologies. The man who designed her web site “did a
fantastic job and produced exactly what I wanted. But he suddenly
gave up the business and went off to run a nightclub”.
While searching for a replacement, Sally was put in touch with an
IT services firm with green credentials – for example it uses green
electricity to run its servers. For a time Sally found this firm
satisfactory and she was able to put stuff on the site and take it
off as she saw fit. For example designs with a short life span
would go up on the site and come off within a matter of days or
weeks. But “… more recently the IT person has taken more control
over the content of the web site and I feel that it is slipping away
from my control. This worries me. The web site is crucial to the
successful growth of this company and I want to have more
control over it.”
Sally is looking forward to growing the firm into a more
substantial operation. “I tend to get scared by small things such
as design details that I may have left off a particular customer
request. Things that stress me are quite small things but the big
things are more fun.”
Lessons learned
Sally does not recall being influenced by any role models but feels
strongly that her background has helped her enormously.
“I feel that I do not fit into any category. I don’t fit into any
particular country or nationality. I feel hugely attached to my
family because this is something I have made but beyond that
I do not feel any real attachments.”
Looking back at her experiences and the factors that have
helped her business to succeed, Sally reckons “… it all goes back
to my childhood. Everything about me just makes me want to
be an individual.
I am not a team player but I could be a team leader.”
One of Sally’s current concerns is trademarks and the question of
whether she should try to trademark ‘carry a bag’. She did get
expert legal trademark advice on this and was told that it would
be difficult and expensive because it was a description rather than
a name. “The alternative is to trade for three years and then apply
on the basis that it is an established brand. So I let it go.”
But six months ago Sally discovered that someone else had
applied to trademark the name and, contrary to the advice that
she had been given, it had been accepted. So Sally was advised to
re-apply on the basis that the name had now been accepted as a
trademark but that she had a prior claim.
Fortunately the other applicant withdrew and Sally’s claim is
going ahead “… but this is costing a lot of money that I could have
been spending on fabric and workers.”
Sally has sought out government-sponsored support services for
small businesses – the training course is an obvious example – but
“…they don’t see things in the way that I see them. They seem to
have a narrow local focus that is concerned mainly with creating
opportunities in local communities, rather than giving me advice
on how to set up what could be a major operation. They are used
to dealing with people who have very local and specific problems
and trying to help them resolve them. I am way ahead of them in
my vision for what is possible with this company. I do need
somebody – such as a mentor – who can be more supportive to my
ambitions. I would love to be able to talk to somebody about my
ambitions in a confidential, consultative basis – almost a ‘shrink’-
type role – so that I could feel confident about where my ambitions
could lead.”
Tony and Nadia Howell and
whitetruffleauction.com
The background
Tony & Nadia Howell established White Truffle Auction in 2007.
Nadia started her career in the food industry in 1986, when she
established her own restaurant in London. The following year her
interest expanded to the supply side of the business, including
sourcing fresh Italian truffles for sale to restaurants and to
individual clients.
Truffle hunting in Italy is often a family tradition and Nadia has
worked with the same group of Italian hunters for over 20 years.
Tony has worked in financial institutions in the City for over
20 years, most recently as a treasury consultant. He quit this
profession in 2005 and became involved in designing and
installing CCTV and control systems for commercial premises. This
venture continues to operate but in 2007 Tony decided to focus
on developing and managing whitetruffleauction.com.
Tony Howell was born and brought up in Kingston. His mother,
who is Italian, came to the UK in the 1960s. His father is English
and was a General Post Office engineer.
Tony achieved 13 O-levels – “I think this was as a result of
competition with my friend” – but at A-level he did not get the
grades required for university and had the option of repeating
the examinations one year later or joining NatWest Bank on a
training scheme.
His career in corporate finance led to a position with HSBC
as a treasury consultant, looking after a number of FT-SE 100
companies and advising them on ‘interest rate hedging’
opportunities and joint ventures in emerging markets.
The job with HSBC involved a lot of late night working and
dealing with very substantial sums of money. At the turn of
the millennium the stress brought on a health scare and Tony
concluded that he needed to get a balance between work and
family life.
In a strange way the health scare had given him the confidence to
take on a new challenge. “I always had that entrepreneurial streak
but I never had the push to do anything about it”.
Tony left HSBC in 2005 and set up his first venture in partnership
with a lifelong friend. This is a security business, which designs
and installs surveillance systems on commercial premises.
But Tony could not stop thinking about the massive opportunity
presented by the fact that his wife knew the food importing
business. “My experience in the financial trading industry has
shown me that whenever there is something that has value then
there is an opportunity to set up a trading platform to bring buyers
and sellers together. Fresh White Truffles have very high value; in
fact by weight they are more expensive than gold, and there is no
trading platform for them. There is the annual Alba market each
year in Piedmont in Italy. The business concept is to bring this
market online to a global auction.”
The Idea
Tony’s belief that high value opportunities are the more
interesting ones convinced him that the idea of a white truffle
auction was too good an opportunity to miss out on. The
business idea was to capitalise on Nadia’s truffle experience and
run a separate venture from the food importing business.
He thought about it over a period of five years, did a lot of
research on the Internet and spoke to his wife and some of her
contacts in Italy. He needed to find out if it had been tried before
and if it could be started as a business idea. His Italian contacts
told him that one or two people had tried to do it before but that
it had not worked out. He decided that his experience in financial
trading coupled with his wife’s contacts in Italy gave him a better
chance of success. He set up the business in 2007.
Some of the ideas are modelled on eBay, but the white truffle
auction has some distinctive features, not the least of which is
that the product is fresh and must be consumed within days,
so there is much more emphasis on ‘real time’ trading. The
auction process lasts 24 hours and as it works globally there are
complications to do with time zones. Registered customers are
informed immediately by text message that an auction has
started and are invited to submit a bid, including a maximum
price they are prepared to pay. So they can then go to sleep
and check in the morning to see if their bid has been successful.
The proposition to the supplier is that s/he will get a global
market opportunity for 24 hours and a much higher price. “The
business model is innovative because I have done it in such a way
as I am not committed myself. What I am doing is creating a
trading environment for truffles that is aimed at helping farmers
with traditional ideas about markets. What we are doing is giving
them the opportunity to put their products onto a global market.”
71 Unlocking the potential of the UK’s Hidden Innovators 70 Unlocking the potential of the UK’s Hidden Innovators
The web site design itself has some novel features. There is a lot
of information provided on it that is promotional and does not
require registration. But in order to participate in an auction, the
potential purchaser has to register. Most of these people are ‘high
net worth’ individuals who are sensitive about revealing contact
details. So Tony has gone to considerable lengths to ensure the
privacy and security of his clients’ information “… and from a
technical point of view I have a pretty good understanding as to
how the web site works and can update it myself.”
Implementation
There was no special financial pressure. The main work that had
to be done was to set up the operational web site and there was
time pressure on this because the selling season for white truffles
is in the three months prior to Christmas. So the web site had to
be available by the end of September.
Tony had experience in setting up a web site – when he was at
HSBC he had been part of a panel of ten people that designed
the HSBC e-commerce web site for the Treasury Department. But
the information technology part took a long time because of the
complications of creating an auction web site. Tony came up with
the architectural layout and how he wanted it to work and then
worked with a Web developer over a period of seven to eight
months to make it a practical auction web site.
This all went to plan, the site was ready in September and the
first auctions were held in October.
Development
The white truffle auction business is still at an early stage and real
auctions only started in earnest in the autumn of 2007. But Tony’s
intention is definitely to grow the business. “The white truffle is
the highest quality and rarest variety available and is only
harvested in the three months before Christmas. My intention
is to build a brand based on the idea of the white truffle and
expand into other truffle markets, which take place during the
rest of the year.
“The other growth opportunity is to deal with the suppliers of
preserved truffles, which are sold on a more conventional basis,
and set up an on-line retail business. This will then fit naturally
with Nadia’s food importing business in that it would be holding
stock. But the chief business will be concentrating on truffles.”
The development idea is to build a reputation and a brand for
dealing in truffles online either through the auction process for
the highest value of truffles or through a more conventional online
ordering outlet. One part of this will be to establish a greater
presence among the suppliers in Italy.
The exploitation of information and communications technology
will be absolutely essential to achieve the intended growth. The
business model is that whitetruffleauction.com takes a share of the
purchase price. The aim is to attract more and more suppliers to
the idea of selling the truffles through an online auction rather
than a conventional market and build up the business in this way.
Tony has not been to any business support groups but he has been
going to seminars and network events run by Greater London
Enterprise. Through these he has made contact with Jane Milton
who runs a company called ‘Not Just Food’. “These sorts of events
are great for networking and getting out the message.”
Although Tony has not been in contact with Business Link for the
white truffle business, he did consult them regarding the security
business and found them to be helpful on two particular issues.
The first concerned the need for advice on designing a door entry
recognition system and the second issue was connected with
knowing what regulations he had to comply with when using
subcontractors. These considerations have not been an issue in
the truffle business.
The biggest obstacle and learning curve has been the whole
concept of online marketing. Tony uses a PR consultant to deal
with conventional marketing outlets such as newspapers and
glossy magazines but online marketing is something quite new.
The challenge is to see that your name comes to the top of a
search on Google (or equivalent). The Web developer knew
something about this but the whole business of search engine
optimisation is what Tony is concentrating on at the moment.
Curiously, the nature of the truffle makes it more suitable for on-
line marketing than conventional outlets. Glossy magazines want
photographs and other materials to promote the idea of truffles
generally and how they could be used in cooking. However, this is
not something that can be done easily as truffles are typically
used quite sparingly to add flavour to other dishes. So they do
not fit into the conventional food marketing niche.
Naturally, Tony is also concerned about integrity and does not
want to let this ‘get out of hand’. “As the business expands I will
be relying on my trusted suppliers to, in effect, authorise any new
suppliers so that the quality of the product is maintained”. The
contacts with these trusted suppliers have been developed over
many years through association with his wife’s business: “It is not
like family, but they are close friends”.
Lessons learned
When asked for his advice to others who aspire to be innovative
entrepreneurs Tony notes: “One lesson that I have learned from
conventional business is that if you diversify too early, the central
core expertise gets diluted and ‘washed out’.”
But looking back on his path to becoming an entrepreneur in
middle age, Tony reflects wryly that “… I should have started
earlier and followed my inclination to go for some of these
entrepreneurial opportunities. I do plan to expand the business but
after all that I have been through I need to maintain a sensible
work life balance. I do not intend to take on more than I can cope
with. At the end of the day you need to have a passion for what
you are doing and to be able to talk to people about it.”
Tony has two cousins who are a decade older. They set up and
continue to run their own printing business, which they started
right after finishing apprenticeships. Looking back, Tony considers
that this example may unconsciously have been a big influence
on him.
Everything Tony did in the financial sector was sales-orientated.
“My ambition in retail banking was to be in charge of customer
relations and be the interface between the client and the trading
floors. When I moved into insurance that was a pure selling role
paid on a commission-only basis – so I’m used to taking risks.
At HSBC the job entailed dealing with clients and selling them
products and services. I think I can interact well with people. This is
important as effectively I am the business and so my relationships
with suppliers and customers are critical.”
73 Unlocking the potential of the UK’s Hidden Innovators 72 Unlocking the potential of the UK’s Hidden Innovators
Peter Jenner and Proximagen
The background
Professor Peter Jenner founded Proximagen in 2003. The
company joined the AIM market of the London Stock Exchange in
March 2005. Peter was born in 1946 and so was 57 at the start of
the company.
Proximagen is a drug discovery and development company
that is primarily focused on the identification and subsequent
out-licensing of novel therapeutics to improve the quality of life
for patients suffering from neurodegenerative disease such as
Parkinson’s disease and Alzheimer’s disease. The Company is
building a development pipeline to address the significant
medical needs of these patients and has made substantial
progress in four proprietary programmes. The firm anticipates
licensing its programmes following successful Phase II proof
of concept studies and commercialising carefully selected
collaborative programmes. Proximagen also generates significant
revenues from providing assessment and advisory services to
major pharmaceutical companies on their drug candidates for
these therapeutic areas. (see www.proximagen.com)
Peter reflects that he comes “…from a relatively poor working-class
background. My mother was from rural Somerset and widowed
and there were no male figures in the family. I was driven by my
mother to be the first member of the family ever to go to grammar
school and university.”
In Peter’s view he was not particularly bright at school; he gained
4 science A-levels but all with quite modest grades. “What sticks
in my mind is that immediately prior to university I read in the
newspaper that pharmacists were getting a big increase in pay.
I could see that the pharmacist living around the corner had a
pretty good lifestyle, so I thought I would study pharmacy at
university. It was there that I discovered pharmaceutical chemistry
and pharmacology, two subjects that I had not done before, and
I loved it.”
After five years of study and working in drug metabolism and
pharmacology, a job came up in the Department of Neurology
at Chelsea College and Peter changed fields completely. “The
research Professor, David Marsden, and I got on like a house on
fire and became close friends and this became the start of my
relationship with Parkinson’s disease.” Peter discovered that he
was good at addressing audiences and conveying his passion
for the subject.
Looking back he believes Marsden’s legacy has been to give his
researchers the freedom to explore new ideas, be creative and
see the big picture. “Some of my colleagues round here are much
better scientists than I am and they spend their life looking down
microscopes at single synapses, but I much prefer ‘big picture
science’, which is translatable into patient populations. This is
what turns me on and drives me. If you’re going to do that in
pharmacology then you have to work with the drug companies
and I found that I was also able to do this. I realised that I
understood the needs of the industry and took a businesslike view
of research rather than a purely academic and scientific interest.
So these companies started having me on advisory boards because
not only did I understand the research but I could see the
applicability of it.”
The Idea
Peter had had the idea of starting his own business for years
“But in an academic environment it was blooming difficult to get it
off the ground”. He kept himself going by running a consultancy
business within the university for over 20 years. He recalls that this
academic research group was very good at bringing in new drug
molecules for Parkinson’s disease and doing laboratory
assessments – turning over about a million pounds per annum.
The group used the funds to support their research activities.
“But it was quite frustrating because we were seeing other people’s
ideas going through the process of clinical trial and we were not
developing our own products.”
Despite this activity, Peter had no real new business experience
in terms of finance and legal and regulatory matters. But what
he did see was all the elements of a small drug company sitting
around his university’s campus. These included medicinal
chemistry, phase one clinical units and three teaching hospitals.
“We had the capacity to exploit some of our own ideas. I went
around banging on doors but I found the academic colleagues
were not interested in making money and the university’s
Enterprise group was not interested because of my lack of
business expertise.”
This all changed when a group of venture capitalists called IP2IPO
(now the IP Group) did what they had been doing at other
universities and bought up a tranche of rights to intellectual
property ideas. They planned to invest up to ten million pounds
in a number of startup companies.
The momentum took over and suddenly the IP Group was in
Peter’s office discussing business plans. “A joint investment board
was set up between Kings Enterprise and the venture capital
company. We got four hundred thousand pounds in seed money
and off we went from there.”
The IP group recruited the chief executive officer – a young
American with an entrepreneurial background in information
technology, a finance officer and a former colleague of Peter’s
who has been in drug development for 30 years. Peter was given
a very short period of time to come up with a number of ideas
for the joint investment board to get the seed capital. They
embarked on a roadshow and sold ideas for four new drugs,
raising 13.5 million pounds. “I literally had a quick think round the
field and thought of a few ideas and wrote them down. I continue
to have new ideas but unfortunately there is no slack in the system
to allow us to investigate them.”
When asked why he started his own business Peter notes that the
intervention of the venture capital company IP2IPO was clearly
significant. But, in addition, he recalls that he was “… a bit fed up
with academia and was going through a divorce so I was looking
to do something different and break with the past. I decided that
the best thing I could do was take up the new business challenge.”
He took early retirement but the university retained him on a 20%
basis and gave him a very generous retirement package and this
helped him make the transition.
Implementation
At the outset Peter thought the group would be able to maintain
its excellent reputation for basic research and keep a pipeline of
new ideas. But this has turned out not to be the case and
Proximagen remains reliant on bringing to market the four
products that it started with. At the time of the flotation the
company promised to develop the four ideas and bring two of
them to clinical trial within a certain number of years. “This was a
very aggressive target and so has been the priority objective. All of
the money we raised is going to bringing two of these molecules to
clinical trial.”
The original academic research group has reduced in size from
25 down to seven. One of the objectives of setting up Proximagen
was to give greater financial stability to these research workers,
who otherwise would be dependent on grants. Many transferred
to Proximagen – so their skills have been retained by the
company and they now have a personal stake in its financial
viability.
Reflecting on the resource requirements Peter notes that: “We
make use of university resources but pay rent for them. We have
a license agreement with the college, which covers ongoing
intellectual property rights. A deal was done when our building
needed to be refurbished to comply with health and
safety requirements.”
Prior to the arrival of IP2IPO Peter had discussed his ideas with
some academic colleagues, and encountered a marked lack of
interest. So he was surprised to receive strong support from the
college’s senior management, including the finance director. “They
wanted to get innovation going because they felt that the college
was generating intellectual property that was going to waste. My
family was supportive but probably did not have any real concept
of what I was proposing to do. I did not talk to anybody in the
financial world and realised later that this may have been to
my disadvantage.”
The college got a million pounds out of the flotation, which was
unprecedented, but Peter feels he has not had much support. In
fact “… when it got started I felt abandoned. I found myself
standing alone and left to get on with it. If I have doubts about
anything it is very difficult to find someone to talk to. I do feel
isolated at times and sense very much that it is down to me to
make it work.”
Peter has been very disappointed by the lack of useful and
proactive assistance available from Business Link or the (then)
Department of Trade and Industry. “I think the UK environment is
very different to the US where people are very much more willing
to ‘put their money where their mouth is’ and invest in good ideas.
In the UK there seems to be a reluctance to invest. Even when it
happens, the resources are not really sufficient to get the idea
properly launched.”
Peter sees the United States as a much richer investment area with
more tax incentives. He believes a change of ethos is needed in
the UK. “There is a lot of intellectual property around the place,
which is not being exploited. Even if someone sees an opportunity
I doubt if the support systems are in place to make it a reality. I
think it needs some education generally about the value of having
entrepreneurship in place within an institution, to take advantage
of its intellectual property. The major thing that the universities
have to learn is not to make everything so bureaucratic – you get
positively discouraged.”
This experience has taught Peter the importance of having
a business person running the operation; someone who
understands risk management, has a successful track record of
enterprise and is the sort of figure that venture capitalists and
fund managers like to see in a new business venture.
75 Unlocking the potential of the UK’s Hidden Innovators 74 Unlocking the potential of the UK’s Hidden Innovators
Development
So far Proximagen has spent 3 of the 13.5 million pounds invested
and is now approaching the heavy expenditure stage of the
process. “We have been burning money. We have molecules now
that are ready to go through to the regulatory drug approval
process and that is expensive. We do not have spare money around
to do innovative new research so we have not gone out and
aggressively promoted it. We could raise two to three million
pounds per annum but that might divert us from our main focus.
We are not aiming to produce a ‘blockbuster’ drug that will make
billions. We are aiming to produce drugs that will alleviate the
symptoms of Parkinson’s, and the side-effects of some of the
existing drugs, and make millions.”
Information technology is used extensively to keep up-to-date
with developments in the patent world and also more generally
to see what scientific progress is being made in universities and
other competitors. This raises a dilemma. “In the future, as we get
closer to market, we may increase our exposure on the Internet to
provide information about Parkinson’s disease, treatments that are
available, progress with research and new products and so on. We
are particularly concerned to keep in touch with patient groups.
On the other hand we do need to be careful about protecting our
intellectual property.”
Peter reckons that what makes Proximagen innovative is that
“… it is not a typical biotech company as most of them go for really
‘off the wall’ ideas that are based on genetic manipulation or
absolutely brand-new targets for drugs. We take a much simpler
approach based on techniques that are relatively well proven and
we go for targets that alleviate symptoms rather than the
ultimate cure.”
For example, sufferers from Parkinson’s disease in acute stages
can be immobile for six hours a day. Peter’s team is producing a
drug that will improve a patient’s quality of life by reducing that
so-called off-time by two or three hours. The team is balancing
this with other drugs that are perhaps more novel. Peter observes
that the key is to have a portfolio of products rather than invest
everything on a very high risk/high reward possibility.
Lessons learned
Now that he is sixty, Peter observes that age can have advantages.
He is viewed as a key opinion leader in his field and “that brings
some gravitas in that people think I know what I’m talking about.
So going out to talk to fund managers and investment bankers,
most of whom have no scientific background whatsoever, was not
that difficult. If you can talk convincingly about these things then
they invest in you. We had no drugs ‘on the stocks’ when IP2IPO
came – just ideas.”
When asked about the characteristics that helped him to succeed,
Peter asserts that “most of it is genetic. I really do think that either
you have got it or you haven’t.” And he reflects that it helped to
come from a family background “that was aggressive as far as
money was concerned, because we never had any”.
On the other hand, Peter can’t explain where his ideas come from.
“They just pop into my head when I might be doing something
quite mundane”. So the ability to communicate is vital. “If you
cannot communicate your ideas, then it is a complete waste of
time. You can tell pretty quickly when somebody has got the
entrepreneurial spirit – they tend to be ‘larger-than-life’,
extroverted people with driven personalities.”
Peter concedes that money was one motivation but alleviating the
symptoms of Parkinson’s Disease was just as important. “I do a lot
of work with support groups up and down the country and when
you look these people in the eye you can understand the gulf
between current research and their practical needs. We do aim to
reduce the gap. Stem cell research could result in a cure but this
could take 10 to 15 years. In the meantime patients are suffering.
What we try to do is alleviate that pain.” Accordingly the
Proximagen team tunes its research programme by talking to
patient groups and ascertaining what they see as important.
Peter sees himself as a practical scientist. “We have to go out and
sell ideas and entrepreneurship but there are obstacles to doing
this and I would put bureaucracy at the top of the list. One part of
the entrepreneurial spirit is to get things started and done as
quickly as possible rather than wait for forms to be filled in or
procedures gone through. Some people might find this problematic
but I believe it is important to have this sort of entrepreneurial
drive somewhere in the system.”
Tony Baxter and Sandcliff AB Ltd
The background
Tony Baxter’s life experience could hardly be described as
conventional. “I had what could be called a reasonable education –
I went to public school. But I left without taking any examinations
because I ran off with a rock ‘n’ roll band. And for nearly 20 years I
worked in the music industry. I did several things including
production and running a studio and a lot of work for radio
and television as well as performing and travelling.”
After trying to get out of it several times, Tony enrolled on a three
year teaching course specialising in music and history. This meant
resuming study to get the exams he needed to start the course.
He liked the learning but disliked the teaching and after a short
job in a middle school, he went back to the music business.
Tony’s father died when he was young and he never knew him.
He had been a store manager. “My mother had wanted to be a
violinist but as a single parent she had to earn a living and went
into teaching. Most of my extended family were in teaching and
believed in respectability and education. When I was eleven I won
a scholarship to Dulwich College – but I did not fit in. I was drawn
towards artistic subjects but success in sport or classical subjects
seemed to be necessary to get on. So I virtually dropped out in the
first year and was on the verge of being thrown out almost the
whole time I was there. Rock ‘n’ roll was just starting to emerge in
the 1950s and I got an offer to join a band and tour American
forces in Europe. That was the start of my career in music.”
By the time Tony had reached 40 he was getting tired of “… living
out of vans. It was a very up and down existence and I decided I
had to get into some sort of permanent role.” He tried all sorts of
things. With no qualifications whatsoever after 20 years in the
music business he had to get whatever work he could. He
eventually ended up taking a job in a department store: “I went
to Blackpool and persuaded the local store manager to let me sell
keyboards in the front hall and I was so successful that they offered
me a job on their fast track management scheme. Within two
years I had become a store manager.”
But Tony hated it and when he saw an opportunity to join the
National Trust , as a commercial manager in the Northeast, he
applied and got the job. “I found myself running a group of
National Trust shops and restaurants in the North-East region.
I learnt very quickly and was promoted to head office as marketing
manager for the National Trust.”
Tony did this for six to or seven years and having found a taste for
working in charity organisations he moved on to the Marie Curie
Cancer Care as head of fundraising, marketing, and commercial
activity. “I had ‘passed by the door of fundraising’ on several
occasions and had formed a vague idea of what went on. I set up a
chain of 200 shops in two years, but then moved on again to Great
Ormond Street Hospital, as the director of fundraising and public
affairs. That was a much bigger and higher profile job and while I
was there for three years I expanded a subsidiary in New York and
launched one in Tokyo.”
At that point, in 1994, Tony set up his own business, Sandcliff AB
Ltd. “It really pulled together all the things that I had been doing
up until that point. It was providing strategic planning, fundraising
and marketing services to charities and not-for-profit
organisations.” The consultancy business flourished and Tony
focused on public organisations such as National Health trusts,
education colleges, and museums and art galleries. Tony feels he
never had any family role models or any in the music business.
“I have never aspired to be anyone else. Music and art were
important to me but no academic subjects gave me any motivation
to work. However, my success at getting the scholarship suggests
I have some native intelligence.”
When asked how age influences an entrepreneurial career Tony
remarks: “I think it very much depends on the person – everybody
has a physical age and a mental age. I always think that people’s
age can be judged by when they stop listening to new music. At
that point they have stopped developing and it would not be a
good idea to start a new business because you have to be fleet of
foot and you have to be prepared to adapt. You have to be able to
see something and grab at it without worrying too much about the
consequences. You also need to be able to recognise
insurmountable obstacles and learn how to get round them.
You have got to have flexibility and be prepared to change your
standpoint and not go for it like a bull at a gate.”
The Idea
When he was in his early 50s, his position at Great Ormond Street
Hospital was suddenly changed and he had a week to decide
whether he would accept the changes. “I had seen other people in
this situation approaching the end of their working life and
becoming increasingly less well regarded. I could see people being
sidelined and not having any control over their environment and
this prospect did not appeal. I like being in control and in charge. I
took a conscious decision never to work for anybody again and go
out on my own and be reliant on my own skills.”
76 77 Unlocking the potential of the UK’s Hidden Innovators Unlocking the potential of the UK’s Hidden Innovators
Tony set up the Antony Baxter Partnership (later to become
Sandcliff AB Ltd) first “…and then did a very sketchy business plan.
At the time there was a government scheme which paid 50 pounds
a week for new business starters and I took advantage of it. I did
not do formal market research but I knew a lot about the size of
the market and the nature of the people in the market and what
they wanted and I decided that I would try and exploit my skills
within this situation. I did not talk to anybody. I think this may be
regarded as a weakness of mine in that I tend to go and do things
without reference to other people. I do not easily take advice –
I make up my own mind.”
The business model is a fixed fee consultancy that requires an
advance of 50% before work is started. Tony declines to work on
a commission basis. He has segmented the market and
disregarded all but three sectors: national health trusts, colleges
of education particularly further education colleges and new
universities and heritage museums and art galleries. “Within those
three target markets we know who our prime purchasers are – the
chief executives and principals. We keep track of their movements
from one organisation to another and aim to develop personal
relationships. We contact them every six months with the principal
aim of achieving a meeting to discuss funding opportunities, to
understand their situation and make some preliminary
suggestions about opportunities. It can involve the offer
of some free consultancy.
“All these people have requirements for money or new staff – the
trick is to get in front of them and persuade them that you can
deliver. Personal face-to-face contact is very important. Once you
understand what they want it is very easy to construct something
that will fulfil their needs.”
Implementation
It required determined and sustained selling to get Sandcliff
started. Tony “… went to everybody that I had ever known in any
business to find out what people wanted”. Public bodies get public
money in order to carry out their operations. Tony argues that
this only pays for the basics – the additional resources needed to
achieve excellence have to come from fundraising. Within three
months he had secured a six figure contract to project manage a
hospital appeal that was not going well.
Tony reflects that his biggest difficulty came when he started
expanding and employing staff. At this point he went to a
government small business support agency for advice.
“They appointed a consultant who took me through this period
of growth when I moved from an individual-led business to a
management-led business. This was my biggest mistake and when
it all started to go wrong. They grossly overestimated the size of
the market and scaled my operation to an unmanageable size.
They based their assumptions on the belief that the entire
population of charities was our market opportunity and projected
that turnover would be 3 million pounds. It was flawed – no other
business in our sector has achieved a turnover of this size and
we ended up with a structure that was far too expensive for
the potential.”
Looking back, Tony feels he also made the mistake of thinking
that the employees’ motivation came from being employed by
the business rather than having a stake in the business. “Turnover
doubled but costs were almost impossible to control and profit
went down. It was very difficult to get the staff to consider the
needs of the business itself, rather than their own particular role
within it. After two very rocky years I shrunk the business down
to a virtual business again, offering some of my former employees
work as freelance consultants. This turned the business around
remarkably quickly and I was soon back on track, with increasing
turnover and profit.”
Development
Sales and marketing comes naturally to Tony. “My marketing
strategy was generally to get myself known by giving presentations
and writing papers for conferences at which National Health
Service managers and college principals would be present.
I always sold at a level where people could make a decision.”
Tony tries to get himself perceived as a trusted partner rather
than a provider; to get himself regarded as someone working
within the organisation, who is sourcing skills and consultancy on
the market. “At a client meeting I always try to sit round the table
with them and never ever stand up to give a presentation. It’s
amazing the difference that makes”.
For Tony, information technology has always been extremely
important. “I almost exclusively communicate through e-mail
and I use the Internet and online databases for research and
contact information. I would be completely lost without it.”
In developing Sandcliff Tony has found the most difficult aspect
has been to find and retain staff and then to manage and
motivate them. By the early 2000s he had a staff of twelve and a
customer portfolio of 25 NHS trusts and colleges. “By this time I
was 65 and wondering what to do about it. Most of the expertise
of the business was in my head and I did not think it had any real
worth as a saleable entity.”
All this changed with an unexpected offer from a much larger
company. “They wanted to get into the public sector market and
integrate this into their existing customer portfolio of charitable
organisations. The sale went ahead and I am halfway through a
three year transition period where I continue to run the public
sector side of things.”
In parallel Tony has continued to run his music business recording
studio. He also recognised that his various jobs have involved a
good deal of recruiting and decided this is something he could
continue to do. “It is less ‘age sensitive’ when recruiting senior level
people. My own increasing age might even give me an advantage
as it adds a certain gravitas to my image”.
Having examined the opportunity thoroughly, Tony went on
a course on psychometric testing and, in 2005, set up two new
companies, a headhunting recruitment agency and a
psychometric testing consultancy. Already he has recruited
a dozen chief executives and directors for public sector jobs.
Lessons learned
Reflecting on attributes for success as an entrepreneur, Tony
singles out “preparedness to have a go and not be constrained
by convention and stories about how difficult it is”. Tony feels he is
less constrained by convention than most of his peers – and,
indeed, by people who are 20 or 30 years younger than him. Tony
confides disarmingly: “I should have been much tougher – but I
like to be liked too much. Consequently I can be too soft on people
and not ruthless enough.”
On the other hand he feels he is strong on leadership. But while
he likes to be in charge he is more interested in the bigger picture
and hates detail. “This is a weakness but I have learned to manage
it. I force myself to do administration because I know that things
will fall apart if I don’t.”
When asked about advice for others considering an
entrepreneurial life Tony concedes that David Meister’s book
‘Running a profitable consultancy business’ has been an
important influence. Meister categorises consultancies into three
groups. The first is the highly expert knowledge providers, who
are usually involved at the start of the business cycle. Tony takes
up the story: “As the cycle matures the second category comes into
play. This is the “grey-haired” consultant that trades on experience
and practical know how. The third category is the one that comes
in at the end of the business cycle and this is the “pile it high sell it
cheap” brigade which can advise on productisation and
standardisation and achieving low-cost delivery of services.
“The temptation is, as the business cycle matures you get pulled
down into category three. The aim is to maintain your position in
the cycle either by delivery of innovative new products or
consciously deciding to go down the cycle. I place my business
amongst the grey hairs. We have never pretended to be leading
edge or particularly innovative, partly because my own experience
is based on practice rather than some form of intellectual
eminence. I am not an innovator but a gatherer of other people’s
ideas. So when the temptation arises to go into I resist going into
category three by finding new market opportunities in the arena
in which I am comfortable. I don’t find new products I find
new markets”.
Tony remains bullish about opportunities for small businesses.
“Of course you have to take risks. It is hard to break into a market
but, if you have got a good product and market it properly, then
you can. It is a case of spotting the opportunity at the right time
and moving in.”
79 xxxx 78 Unlocking the potential of the UK’s Hidden Innovators
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