Lawrence Jones, founder and CEO of UKFast

Megabuyte, March 2016. 

Screen Shot 2016-03-04 at 11.36.36The Megabuyte Interview: Lawrence Jones

It’s late in the day by the time I meet Lawrence Jones, and I’m pretty sure our meeting is infringing upon the cocktail hour that’s already well underway at the Baglioni. The Kensington hotel where Jones likes to stay in London is aptly described on Google Maps as “posh lodgings on Hyde Park”, but the CEO of UKFast is casual in jeans and t-shirt. “We’ve just launched eCloud Flex,” says Jones as coffee is served. “It’s a flexible, pay-as-you-go product that I think was missing in our portfolio.”

UKFast provides hosting and data centre services to UK businesses, so when the market wanted pay-as-you-go, that’s what UKFast made. But at its core, UKFast is about relationships: “We offer that Best-of-British service, and I’m very proud about that. … We have a pod system where all our customers get dealt with by the same people, day in and day out. Each pod has four technical people, a couple of experienced managers and account managers, so we’re able to do project management and business development while also being technical and very hands-on.”

Then the caffeine kicks in, or maybe it’s just Jones getting into it, because it very soon becomes clear that Manchester’s own UKFast really isn’t like the other kids. About 250 people work for the company now, a bit more if you include those working in areas like security and building – UKFast builds its own data centres, literally. Jones nods when I call it a “DIY approach” – they build other things too, like desks: “We created a building company within the organisation, so we have plumbers, electricians, critical power directors.” With all these people around, why should Jones buy desks if he could build them? “Our desks change colour depending on the status of the person. If you’re on a conference call, it goes purple. If you need some help, it goes orange. It’s a bit of fun!” He laughs. It’s not just the desks: there’s also the Japanese garden, the auditorium, the bar, the gym (featuring spinning, yoga, and personal training for directors) – the dog kennel’s currently under construction.

The creativity gene
The cost of doing all this in-house is negligible, says Jones, and it saves so much time – not to mention how you can link everything together if you make it yourself. “We’re a technology company and we’re very creative, and I think that needs to come out in everything we do. We wrote our own telephone system, our own software for accounts, our own launch platform. Our eCloud Flex is all open stack, but built on our proprietary software. We design and build everything it in-house.” The importance of this was stressed to Jones a few years ago, when he lost a team member to Facebook, and realised his competitors aren’t in Manchester or London – they’re global. So Jones went to look at how they did it at Google. “I realised nobody has a monopoly on creativity, and actually, creativity doesn’t have to cost an awful lot of money. Creativity is the difference between average and great.”

The UKFast brand of creativity isn’t just for the staff: “We’ve built services [for customers] that you wouldn’t necessarily expect in a hosting provider. We have a clean room with forensic guys dressed in beekeeper outfits to rebuild a hard drive, so if somebody lost their data we can recover it [ourselves].” Ok, I say, but why not just outsource things like that to specialists? Jones won’t hear it – he employs the best people: “Why wouldn’t I? I have 30,000 servers – something’s going to go wrong!” Having watched customers wait days to get their data back, at a steep cost, Jones decided to take the service approach: “Let’s do this in-house, and not charge for it.”

Jones looks for what he calls the “paper round gene” when hiring people at UKFast – that’s the willingness to work hard and do what it takes to succeed. His own metaphorical paper round was at the Chorister School in Durham, where he had a scholarship. Young Lawrence would come home with more money than he had when he started the semester. “My mum went to the maths teacher, asking, ‘What on earth is going on? Is he stealing this money?’” Jones laughs – what he’d do was buy sweets from the other kids at the beginning of term, and sell it back at a premium when they’d run out. “There was always an entrepreneurial side! But it was partly driven by the fact that we were never well off, and my parents always struggled.”

The Jones family business
Jones went back to his native Wales at 13 after his voice broke early – a brutal fate for a choir boy. “I came back to Wales and concentrated on rugby, piano, and cricket. I stayed there till I was 16, when my parents couldn’t afford to keep me in school anymore, and went to Manchester to seek my fortune.” Jones’ piano skills led to founding the Music Design Company, which he sold to Granada in 1997. UKFast was established two years later.

“I was about 30 at the time. I’d gone to New York and was just enjoying life: writing music, doing watercolours in Central Park, playing chess in Washington Square Gardens.” You pay $5 to play there, Jones explains, and he didn’t win much back then. “But I’d probably win now. I’ve spent a lot of time learning chess! … The internet was absolutely booming, and I knew I had to do something with that.” Jones went back to Britain and met “an amazing girl” called Gail, who became the UKFast cofounder and later, his wife. “Gail’s our Commerce Director. She’s an amazing woman. I’m creative and imaginative, she’s organised and straight. What I lack, she has in abundance, and vice versa. We’re the yin and yang. I couldn’t run UKFast without her, wouldn’t want to.”

The inspiration behind UKFast, or rather the frustration, was Jones’ attempt at hosting a website called “I thought, ‘If this is genuinely the service the British are getting, this is what we need to be doing.’ It was so naïve in hindsight, because we didn’t really know anything about technology – I was a musician, Gail was a chemist – and we didn’t have a huge amount of money. But what we did have was a reason and passion. … We’ve passed all our early expectations – I originally wanted to go back to writing music. The idea was to get £1 million saved and I’d build a recording studio, write music and wear scruffy clothes and be Bohemian. But I’ve gone way past that!” Jones did build his recording studio in the end, but the music has given way to another dream: “UKFast is an all-consuming family. Gail has three kids to look after, soon four – I have 250.”

Jones (47) and Gail are parents to Tegan, Poppy and Coco, with a fourth daughter arriving this summer: “I’m trying to get Gail to slow down, but she works really hard. She loves it!” They don’t have a nanny but they have a chef, “otherwise you spend your life cooking”. Date nights are Tuesdays and Fridays, he adds: “Those are our nights together, no matter what.” He recommends it – great discipline in a marriage. Not that they have an embargo on talking about work during those nights: “Oh no, we do. We have the calculators out, those little black books are everywhere” – he points to a pile of notebooks in the chair next to me. “We’ll look at our goals, we’ll be ticking stuff off. It’s non-stop, but it’s who we are.”

Building a nurturing company
Much of the risk in building UKFast has been mitigated by recurring revenues, says Jones. He learned this from his days renting out grand pianos – he had about ten of them, charging £30 a week; “I don’t think I’ve ever really, since then, taken a massive risk.” Of course, Jones is well aware that nothing he’s done would generally be considered cautious. But once he’s done his calculations, it just doesn’t feel like such a risk to him anymore. “What I would say is, never go for broke. Never spend everything you have, because if it doesn’t go to plan – when does anything ever go to plan? Things always take longer, and they always cost more. … If you are flexible with your goals, then you have half a chance.”

The merit of standing on your own two feet was stressed to Jones during the early days of UKFast, after he’d been making hay selling mobile upgrades. “We built the very first bulk text messaging system in Britain, and ended up being the fastest-growing supplier of Orange phones. … It went from nothing to being a massive part of the business.” But then one day UKFast managed to text the entire board of Orange, who loved the bulk texts – until they realised it was external. “They were furious because they hadn’t come up with the idea, and cut us off without warning.” They eventually came back, but it was too late. “My wife and I sat down and asked ourselves, ‘Do we really want to be selling Orange’s network, or do we want to be building our own?’ UKFast wasn’t a mobile network, but it was physical, cables under the ground. We thought, ’We’re small, but at least we’re in charge of our own destiny.’ So we decided we would never re-sell something of that size as a core product … because if they decide to pull the plug, you’re dead.”

Asked how worked out how to manage 250 people after the startup days, Jones cites listening, reading and getting it wrong: “I’ve lost some brilliant people over the years by not understanding how to get them to the next level. But now, we understand. Now we have a good business that nurtures people. And if there’s no room for them to grow, you can advise them to set up another business, and then fund that.” He can be pretty hands-on at times, Jones admits, but his favorite thing to do is find someone talented, hand them something, and watch them develop it. This has led to the UKFast University, a cloud and e-commerce Master’s degree with Manchester Metropolitan University, and an apprenticeship programme with the Dean Trust; Jones feels strongly about giving back to Manchester, the city that took him in. “But when people say, ‘How have you done it? How has Lawrence Jones done it?’ I tell them, ‘It has nothing to do with me. It’s these guys who’ve done it.’”

The ultimate motivation
Jones is refreshingly direct when he talks, and surprisingly open about his life – his blog on is kept fresh with business advice and personal development insights. Most remarkable is the story of the Pic Blanc avalanche in 2001, which almost claimed Jones’ life when he was buried under snow for more than eight minutes. I ask him about it because he’s written about it several times, and it’s only later I learn he doesn’t usually discuss it. But there’s no doubt the experience changed Jones’ life in a profound, enduring way:

“When you’re being suffocated and you’re conscious that you are dying – it doesn’t take very long. You go to sleep pretty quickly. But those few minutes feel like a lifetime. … When you wake up from a situation like that, there’s a lot going through your head. It took me weeks to work out, was I really alive? I was convinced I had died, because I was aware I was dying.” People would come up to him in hospital afterwards, touching his arm for good luck, Jones says, laughing. “But I’ve got goosebumps just thinking about it. When you know you’ve been given a second opportunity, I can wholeheartedly promise you that not a day goes past in my life without trying to make an effort.”

The next effort for UKFast is Secarma, the ethical hacking arm: “Our customers need it. We spent 16 years getting people onto the internet, and we now need to spend the next 16 protecting them.” Jones recently came back from Le Farinet, his hotel in Switzerland, having taken some of his staff skiiing in an effort to cure their back-to-work blues. “All the businesses are complementary, even the hotel. They all work to help and support each other. I’ll never end up owning something like a dog food factory – that wouldn’t make any sense. But I might end up owning a power station.” Maybe a wind farm, I suggest, and Jones counters with hydro-electrics. The UKFast centres already run on green energy actually – it costs extra, but Jones thinks it’s the right thing to do.

Then follows a five minute detour into power grids, and I ask Jones if there’s any topic he can’t get enthused about? He laughs: “People ask me, ‘How can you be so upbeat all the time?’ But listen, life’s difficult and life can throw you some really nasty curveballs. But you can be grateful. Some people say, ‘I have nothing to be grateful for.’ Well, I’m grateful for the air I breathe. When you’ve had it taken away from you – something as simple as just breathing air, walking around Hyde Park this morning. It’s a beautiful, glorious day, looking at the sunshine.”

Meet Kash, the most exciting payment startup in town

FusionWire, January 2016.

kash wpMeet Kash, the most exciting payment startup in town

Kash isn’t your average scrappy payment startup – the billion dollar retailers have already started knocking. We met with co-founder Kaz Nejatian in San Francisco, to talk about how this startup is gunning to replace credit cards.

At first glance, Kash could be mistaken for just another payment technology startup, although one with a particularly bold goal: to become the retail payment method of choice. Nothing about Kash’s offices in San Francisco’s SoMa district pegs the company as remarkable; as is the case for many of the City’s early startups, searching for Kash’s offices leaves you concerned you’re about to walk into someone’s flat. But no, this is the right place, says CEO and co-founder Kaz Nejatian as he lets me in, explaining how there are six Bitcoin companies in the building, which neighbours Pinterest and AirBnB.

In his hoodie and ‘Toronto Law’ t-shirt, Nejatian brings out water in mason jars as he explains how four people work for Kash in SF and three more in Canada – this count should double this year. But this is by no means a bootstrapped operation. Kash’s ambitious plan to become the retail payment method of choice has some big-name backers: first Y Combinator, then investors including Tim Draper and Green Visor Capital – and in September, former Visa CEO Joe Saunders joined the Kash board, alongside Square founding member Sam Wen. In other words: the Kash plan may be bold, but the talent pool is deep. Nejatian tells a compelling story, and after an hour in his company it’s hard not to get onboard with the excitement.

The quick and cheap alternative
The key to what Kash does, is letting people pay for things using direct debit: “We’re the only direct debit company in the US,” says Nejatian. “In the US, there’s no instant payment system that’s affordable.” The alternatives are the credit card networks, which are quick but expensive – or the Automated Clearing House network, which is cheap but takes several days. Kash adds an API on top of the banking network, which then allows people to log into their bank accounts and pay directly, at low cost. It’s all done and dusted in about two seconds.

This all sounds great, but still – getting people to change a behaviour as fundamental as credit and debit card payments is a tall order. It’s not like Kash is the first to have tried? Nejatian nods, eager to explain. First of all it’s easy: the payment is done within the browser, with no app required, and the technology is available to 93% of US consumers. The low rates are a key issue for merchants choosing Kash: instead of paying the usual 4-5% transaction fee to clear card payments, e-commerce merchants pay 0.5% with Kash. This enables them to either pocket the difference, or pass this saving on to their customers.

“We do incredibly well everywhere we’re deployed. We’ve just deployed across a major e-commerce retailer – our e-commerce product came out less than five weeks ago! On this e-commerce route, we do over 25% of transactions. In the first week there, we beat every brand of cards.” Right now, about 400 companies use Kash, with several more in the pipeline. In about three months, a “multi-billion dollar company” with physical outlets in fifty states will join this number – Kash can be used both online and in-store.

The reception from the established banking industry has been positive, says Nejatian: “There are banks that really like us, and we have big and small partner banks. But credit card transactions are the single largest source of revenue for American banks, so there are obviously banks that are nervous about that revenue going away.” Nejatian hopes to partner with more banks, but accepts it will take time. “The regulators here take a much dimmer view towards innovation [than in the UK]. It’s not as easy for banks here to say they want to have a fintech innovation hub that lets startups do whatever they want.” Nejatian shrugs; the Canadian national was previously a banking lawyer in New York, making it easier for Kash to navigate this issue.

The anti-fraud guarantee
Another appealing feature of Kash is how merchants are protected from chargebacks, which in the US can be significant. Then there’s how the technology boasts being highly resistant to fraud. Kash will cover fraudulent transactions up to $100k, says Nejatian: “But we haven’t had a single case of fraud.” Asked to explain how they’ve managed to create a system that makes this possible, Nejatian compares standard card payments to a game of Chinese Whispers: you swipe your card and it starts a chain: to the gateway, the bank, the network, and many more steps beyond:

“Instead, we have an algorithm that clears transactions, determined fraud, and moves money around. We use literally hundreds of factors to determine fraud, credibility, and creditworthiness. None of those factors we use are used by credit card companies.” Nejatian asks if I have a $5 note on me. “If I have the serial number that’s on your bill, I couldn’t spend that $5, right?” I look at the note in my hand. “But if I knew the 16 digits on your credit card, I could buy myself a Louis Vuitton purse tomorrow.” He laughs. “If you were to design a payment system today, you wouldn’t say, ‘Let’s clear money using 20 random digits!’ Because that doesn’t make any sense.”

Most of the security features in the Kash algorithm are kept secret – Nejatian will go as far as saying one of them is your IP address, but there are several dozen more. “We know information about you that your bank doesn’t know, and doesn’t want to know. … When we know those things, we don’t have to rely on numbers.”

A passion project
Having a catalogue of big name supporters to point to has been good for Kash as it pushes ahead with its ambitious goal. “But I think what makes us impressive to our merchants is when they see results. 80% reduction in transaction fees – that’s real to people.” Nejatian pauses. “I come from a long line of retailers. We moved from Iran to Canada when I was 12, and we had a corner store. I would go through our bank statements and look at credit card fees, and every month the credit card companies were making more money from my mom’s store than my mom was. Every single month. That’s true for most merchants in the US and Canada.” Nejatian was 14 years old when he decided he wanted to do something about this. “I’ve been thinking about this for a really long time! It’s nice to have a plug that a lot of people are using, and like. It’s having a real impact in the world.”

While getting small retailers onboard is Nejatian’s hobby, he knows full well it’s the billion-dollar chains that are going to make Kash a success. Progress has also been aided by the US’s recent migration to chip and PIN cards, which changed the landscape for card fraud by driving it online. “We honestly didn’t expect e-commerce [takeup] to grow as fast as it has,” says Nejatian. The company started in 2012, but the first few years were spent building the tech from scratch – the actual product is less than a year old. Even more amazingly, this growth has happened without a sales team, as it’s all been word of mouth. “But we’re building a payment company – it will take a while! I’ve waited twenty years to start the company. I can wait twenty more years for it to become a big company.”

The goal is to take Kash global: “The payment system is broken virtually everywhere. It’s bad in the US, but it’s terrible in Africa and Asia. … Moving money should be frictionless. Ideally moving money shouldn’t cost you. We have a long way to go.” Nejatian describes Kash as his mission in life, and considering his enthusiasm it’s hard to doubt his sincerity as he explains he didn’t start Kash to run his own company, but to make payments more affordable for people. “I want this to exist. I think we’ll be the ones to do it. But even if we’re not, I’d want this to exist.”

Katie Potts, founder of Herald Investment Management

Megabuyte, 2016. Original article

katie potts wpThe Megabuyte Interview: Katie Potts
There’s a certainty about Katie Potts. Hints to this fact start long before meeting her, as people’s complimentary statements are accompanied by subtly raised eyebrows. The impression continues upon arrival at Herald Investment Management’s classic office on Charterhouse Square, where I’m asked to please move to the opposite side of the table: “She likes to sit on this side.” Enter Potts – she doesn’t usually give interviews, she mentions more than once, as the press usually wants tips and you run the risk of distorting the market. I nod, noting it down: no tips.

As the founder and lead fund manager of Herald Investment Management, Potts has built a career on spotting opportunities at the small end of the market. Potts established what’s now one of the few remaining dedicated technology funds in 1993, and it becomes immediately clear that this macro view has resulted in a staggering level of industry knowledge. It’s slightly intimidating at first, but there’s no need for concern: Potts is outspoken, yes, but she’s also completely devoid of pretense or bluster. She’ll ask your opinion about what she’s said, and what’s more, she’ll ask you questions if she suspects there’s something you may know. Both rare traits indeed, yet arguably vital factors in the art of understanding the big picture.

Speaking of overviews, I ask Potts if she thinks the technology sector is underrated in the UK. “We don’t have the big winners they have in the States,” she says, in what I’m learning is her typically practical and well-informed manner. The big winners in the US has not only made the sector more popular there, she says, but it’s also ensured more profits that can be recycled into ever-bigger dreams. There are signs of that happening in the UK, says Potts, pointing to the money going into the London venture market. “But for the people chasing the next dot-com: I’m not sure it’s what I call tech.” There’s no shortage of entrepreneurism, Potts is quick to add: “But speaking in the purest engineering sense, my suspicion is, a lot is digital media rather than technology. That’s more an extension of advertising or the creative industries.” But, I venture, there are startups writing their own stacks? Potts nods: there are gray areas. “But a lot of it, I think, is front-end rather than back-end. A lot of the companies we were looking at who’ve have raised money – things like [food delivery app] Deliveroo – it’s not tech!“

There are certainly UK startups with viable business models, says Potts. But she’s concerned that the decline of the old engineering giants that people would aspire to work for – Marconi, GNK, Ferranti, STC, Rolls-Royce – means we’re no longer training young people for the next generation of (true) technology businesses. Entrepreneurism may be compensating for some of this, but back to whether the listed UK tech industry is underrated, Potts has another point to make:

“[There’s been] a dramatic reduction of weightings by professional long-term investors, pension funds and insurance companies. They were good quality shareholders, because they had a long-term view and were responsible owners of shares.” This stems from changes in regulation, tax and accounting rules: “There are no longer tax incentives to own UK equities, from a dividend point of view. … Insurance companies are almost out of equities, because they have to apply a bigger discount rate for regulatory purposes.” Some of these consequences are unintended, adds Potts, but it’s nevertheless led to more short-term investment attitudes: “One shareholder earning 10% is better quality than 10 shareholders earning 1%. When you earn 10%, you don’t have a short-term trading mentality. You care about the business.”

Value at the small end
The holdings of the Herald Investment Trust, which Potts launched in 1994, include plenty of the usual suspect from the listed technology sector in the UK and abroad, as well as a good number of lesser known companies. “There’s better value at the small end, because there are so few people who play in this,” says Potts. Each holding makes up a very small percentage of the fund as a whole – in part because the market has become less efficient: “There’s a worrying shortage of co-investors. … Because of the money leaving the market, there’s been undue pressure to deliver short-term performance, at the expense of making sure you’re investing properly for the firm to be competitive in the long-term.”

Herald held its 21st birthday party in February, and Potts invited the companies who’d made her more than £4 million – there were 66 names on the list. “We had quite a good turnout!” The average holding period of those companies was 13.9 years. In terms of what she looks for, Potts describes herself as value-oriented: “I want to work out how big the market is, how quickly the company might grow, and also grow into a low PE. … Some people would think what I do is rather risky – investing in early-stage lossmaking businesses. But to me, there’s huge risk in buying something like Facebook, because the valuation is already $250 billion. That has to be quite a lot of downside! Whereas at a small rate, you can buy 10% in a company for £1 million. You can lose £1 million, but you could make £10 million quite easily.”

Looking at Potts’ experience from 21 years at Herald, plus several years before – does she feel this has provided a unique perspective to make investment calls? “There was the ‘02 bust, and the ‘08 bust – and we’ve had eight years of recovery.” She thinks about it for a moment. “From my perspective, it’s not frightening now. Even having had such a strong run, it’s not as frightening as it was in 2000.” She remembers the first quarter in 2000, feeling like her skills were redundant as the valuations made no sense to her. “I’d been taking money out of the market in December ‘99 and stocks had gone up 100% after I’d sold. It was pretty frightening, because my valuation compass didn’t work! But a year later, my sales in December ‘99 looked quite sensible after all. I don’t remotely feel like that now. PE valuations are sensible. What worries me more is the structure of the market, and the lack of quality shareholders.”

This is a concern listed companies share, says Potts: “I think that’s one of the [reasons] the quoted market is dying: management don’t like short-term pressures. Nor do they like the bureaucracy of reports and accounts that you have to produce as part of the regulatory framework.” I mention how several CEOs of private equity-owned companies have echoed this in Megabuyte interviews: the freedom to make long-term choices in a growth stage is often a key reason for choosing to be unlisted. “How interesting,” says Potts, asking for more details, and for specific company names. Herald has raised two VC funds too, but Potts isn’t doing another one – it’s been challenging to raise follow-on money, leading to heavy dilution. But it’s been a good exercise, she says, something every fund manager could benefit from doing: “I think there’s too much top-down fund management now, and not a lot of bottom-up.”

Winners and losers
Potts started her career at GNK, which provided her scholarship to study Engineering Science at Oxford. She spent five years at Baring Investment Management before joining the UK electronics research team at SG Warburg in 1988, where she made a name for herself in the industry. She won’t say too much about that though, nor will she volunteer anything remotely personal. But her modest recollection of establishing Herald in 1993 speaks of conviction and determination:

“I’ve always been passionate that smaller companies could offer more growth than larger companies,” she says, referencing her pre-Herald days as a broker. “I became a fund manager, thinking I would offer a vehicle to my clients who found it difficult investing in smaller companies. I raised the money from my pension fund clients.” Herald was created as a vehicle to mitigate the liquidity risk of smaller companies: “But that’s the whole point of Herald: you’re supposed to take a higher risk. But none of the losses have been noticeable to shareholders, because we have a diversified portfolio. We’ve made 10 times our money in far more stocks have have gone bust!” She laughs, but in a moment she’ll back up this claim with a torrent of numbers.

It goes wrong sometimes of course – not very recently, mind. But Potts can easily name her biggest losses: that’s Plasmon, which did large disc drives – they went bust; Ingenta, which is still in business as Publishing Technology; and MAID, which became Dialog – that was a £4million loss: “Those are my three worst-performing investments, engraved on my heart!” She laughs. “I’ve had other companies go bust, but not on the scale of £4 million.” The circumstances have been different each time, says Potts, but the most important factor is management: “There are certain people I wouldn’t invest in again, if I haven’t had a very nice experience. That’s why it does help, having experience and a track record and getting to know people.”

Equally, Potts knows the names of her biggest wins, which she’s happy to report are on a much larger scale. “The biggest profit is about £34 million – that’s Imagination Technologies so it changes every day.” Other big wins include Diploma, Telecom Plus, Autonomy, Advent Software, SDL, Northgate Information Solution. “I’m very proud of the fact that we’ve compounded at 17.6% a year in the UK over 21 years. We haven’t done as well in overseas markets, but I think people would be surprised how well we’ve done in the UK. … It shows we got the timing right, of selling in the bubble and buying back in the bust.” So in total, Herald’s assets have appreciated by £600 million after expenses, interest and dividends paid – about £500 million of this has come from the UK portfolio. This is on £95 million in raised capital, less £45 million in share buybacks, confirms Potts.

The patience approach
The original concept for Herald has been well and truly proven then, I say, and she nods: “Yes. But I was thinking that if we fund enough small companies, we’ll eventually have some big companies. It’s a sadness that although we’ve been successful at making money, creating jobs and saving jobs, our real money is being made by selling out rather than trading up.” Having said that, Potts thinks tech is a fun sector to be in: “You’re providing to every market: insurance, retail, the government, the consumer. There’s always some innovation, always something coming along.”

It’s important not to get too carried away with fashions, says Potts, whose ultimate advice is to not be too greedy. “But equally, some of my best returns have been made when I put some money into a company that’s gone wrong, but the case is still fundamentally valid. You have a chance to average, and then you have a worthwhile stake as it comes right.” Good companies will often disappoint a little at first, as fundraising is all about telling your story in the most appealing manner: “You just have to be prepared for things to take longer. I’m sensitive to how we are different from a lot of investors: we will regularly make investments that we expect to be dead money for a couple of years. … It takes time for real businesses to come through.”

Tapped in: The cashless tipping point is here

FusionWire, 2015.

Screen Shot 2015-10-22 at 12.37.04Tapped in: The cashless tipping point is here

For the first time, there’s a way to pay even easier than cash. We spoke to MasterCard and the UK Cards Association about how contactless is quickly becoming our favourite way to pay.

If you ask people about contactless payment, you’ll soon find that the thing they want to talk about is the Tube. The Oyster habit, Transport for London’s smartcard ticket that lets you tap in and out, has ensured a smooth transition to using our bank cards or mobile handsets in the same manner. Because getting people to change their behaviour isn’t just about making new technologies available to them – they have to want to use them.

“Contactless payments has been a slow burn for quite a few years in the UK, but in the last few years it’s really started to take off,” says Mike Cowen, European Head of Emerging Payments Products at MasterCard. The surge in contactless payments is far greater than can be explained just by more shops getting the kit to accept it, explains Cowen. This suggests the shift has just as much to do with culture: “We see a lot of people do their first contactless payment with Transport for London. It fits with the behaviours we’ve observed previously: there’s a barrier to overcome to do the first tap. But once they’ve done three or four, they tend to stick with it.”

Because if you’ve tapped in and out of the Tube, why not just tap to pay for a coffee on the way out of the station? It’s taken people a little while to realise how that little wave symbol on their card means they don’t have to use a PIN for small purchases, but there’s been a lot of noise around contactless lately. The arrival of Apple Pay has been particularly helpful, as people are now aware it’s possible to use a mobile handset to pay as well. “These things take on momentum,” says Cowen, explaining how you’ll always have the early adopters who jump in first. “But then you have a big chunk of the population, particularly around payment, who’re cautious around trying something new. But then they see other people doing it and that there’s no problem, and that builds their confidence.”

A method even easier than cash
By 2020, all end-of-sale payment terminals across the EU will be contactless-enabled, MasterCard has declared. This means we’re approaching an age when we may be able to say, for the first time, that there’s a payment method more convenient than cash: one single tap, and no need to make change or to get to an ATM. In the UK, we’re already taking to contactless with gusto: in the first half of the year, £2.5 billion was spent contactlessly – that’s more than we spent the whole of the year before, according to the UK Cards Association.

“The numbers reflect a growing awareness of the technology, and what it has to offer in terms of a really slick consumer experience,” says David Baker, head of the payment innovations unit at the UK Cards Association, the card payments industry trade body. “Contactless wins on speed and convenience, compared to other payment mechanics available at the point of sale.”

In September, the limit on contactless payments rose to £30 in the UK, meaning the spending volumes are likely to increase even more. Baker says the staggered increase in the limit has to do with caution as the industry learns: how the new technology works, and how it’s accepted by the consumer. Other countries, like the US and Australia, already allow higher contactless spending, suggesting we might see the UK limit rise again. Risk control has been another factor in the rollout of contactless, but so far, the system has proven reasonably robust, says Mike Cowen at MasterCard, pointing out that fraud on contactless is one of the lowest of any kinds of payment: “We’re always concerned about fraud, but at the moment, the industry is doing a pretty good job at managing it. That applies in particular to contactless.”

Towards the cashless society
While financial organisations have an economic incentive for driving more payments through electronic channels, there are arguably good reasons why this shift could be a positive factor for society at large. The cost of cash ranges from 0.5% to 1.5% percent of GDP, depending on the country, according to research from MasterCard. Cash-intensive economies are less productive per capita, MasterCard concluded in a 2012 paper, which found a correlation between countries with high cash use and problems like fraud and bribery, not to mention how people often favour cash when they don’t trust their governments.

But even in the UK, where most people use electronic payments, we’re still very fond of notes and coins. 48% of UK money transactions were cash-based last year, according to the Payments Council. (The organisation is now part of Payments UK.) This is the first time electronic payments via cards or transfers have overtaken cash in the UK. The Payments Council said it expects cash volumes to fall by 30% over the next 10 years, as increasing use of contactless and mobile payments are driving the trend.

“Cash has been around for thousands of years, and it’s ingrained in our society,” says David Baker at the UK Cards Association. “Just like the cheque is difficult to get rid of, cash will take a long, long time to disappear. Those over 50 are probably more wedded to cash, but my kids – the millennials – they’re not that bothered by cash, and make payments to their mobile phones quite naturally nowadays. But it’s going to be a generation or two, before we ever reach that truly cashless society.”

Innovations in cashless technology
Only 4.4% of people in the UK go so far to rarely use any cash at all, according to the Payments Council. One reason for this is probably because there are still lots of places that remain cash-only: small shops, certain pubs, car boot sales, the dog walker. The cost of implementing cashless technology can be a significant barrier: “Back when we implemented chip and PIN, there was an enormous cost of upgrading points-of-sale to accept chipped cards,” says Baker. But the move towards contactless has been a lot simpler: “With contactless, only a few years later, the technology was already there: essentially all you had to change was the reader.”

Spending a day without cash is becoming easier now that small retailers are increasingly accepting cards – in the past they’ve often held out due to cost. “There’s been a lot of innovation around that in recent years,” says Mike Cowen at MasterCard. mPOS (mobile point-of-sale) devices have become popular with small businesses; these are typically small, low cost payment terminals which don’t have communication capabilities built into the device itself, but instead connect to a mobile phone. “They tend to be inexpensive, and packaged in such a way that the point of entry is very affordable for small businesses,” says Cowen, explaining how the the cost of accepting card payments depends on the agreement between the retailer and their bank. “Extending the reach of card payment is probably the most critical thing for moving towards a cashless society.”

Both Cowen and Baker consider the rising number of choices when it comes to payment methods to be a good thing, as it increases awareness and boosts competition. “Payments is not a one-size-fits-all world. People have different preferences,” says Cowen. Baker is in shares this sentiment, but believes we’ll eventually see some consolidation: “We’ll probably start to see some of the mobile phone apps converge. As consumers, you don’t want eight different payment mechanics on your device. That’s confusing for you, and for the retailer. … But you need innovation to spark off interest, and get things moving.”

All change: How digital is changing the High Street bank branch

FusionWire, 2015.

Screen Shot 2015-10-22 at 12.36.57All change: How digital is changing the High Street bank branch

Digital banking probably won’t kill off physical bank branches – but the role of branches is certainly changing. We spoke with Nationwide and Handelsbanken about the future of the High Street branch.

Handelsbanken branches aren’t like the other UK High Street bank branches. This is immediately clear as I arrive to visit the bank’s Holborn location: 77 Kingsway has no exterior sign revealing what’s inside. Reassured by the receptionist, I sign the visitors’ log and make my way to the first floor, where branch manager Toni Virtanen comes to the door, alerted by the doorbell. Most customers make appointments before visiting the branch, Virtanen confirms, but they do get some walk-ins, and he’s always happy to show people around.

This branch, covering the area around London’s Holborn, is in a classic office building, but around the country you’ll get all sorts – some branches are even in Victorian houses. The otherness of Handelsbanken’s take on branches continues inside: there are no cashiers here, nor any queues; instead the Holborn branch is fully open-plan with bankers to the left, and a welcoming Scandinavian-style kitchen to the right. This is one of several nods to the Swedish mothership – Handelsbanken is a proud Swedish institution from 1871 – although the UK operations are run as a fully British bank.

If you’re not familiar with Handelsbanken, it’s possibly because they don’t advertise. But those who’ve heard of them will often know they’re lauded as one of the few UK retail banks currently opening branches, as opposed to closing them. Handelsbanken now has about 200 branches in the UK, after three years of having opened about 20 every year. Because as far as Handelsbanken is concerned, reports of the death of the physical bank branch have been greatly exaggerated:

“The industry seems to believe that customers either want digital, or they want physical banking. That, in my experience, isn’t the case at all,” says Virtanen. “People will want the convenience of a good digital offering, but that doesn’t mean customers don’t want to be able to speak to somebody who can make a decision.” In other words, the Handelsbanken app is for when you want to do things like make transfers, but if you lose your card, need a mortgage, get married, or someone has died, you have the branch: “That’s when you want to have a bank that knows you and that you can have a conversation with, as opposed to ending up in a call centre somewhere,” says Virtanen. “I don’t think the digital channel in any way takes away from the type of physical offering we have.”

Back to personal banking
The idea behind the Handelsbanken approach is that the bank branch is far from dying – but its function is changing. The fact that Handelsbanken doesn’t handle cash (they have arrangements with other banks for your occasional piggy bank pay-in needs) is a big hint: these branches are meant to be places for meeting bankers to talk about financial decisions. “Our branches tend to have experienced bankers with the ability to give advice if you want a mortgage, or if you’ve inherited some money and want to have a conversation about what to do with it,” says Virtanen. “The day-to-day payments, that’s very well taken care of by the digital channel. But when making the biggest financial decisions, people tend to want to have a conversation.”

Handelsbanken has carved out a niche for itself in the UK by offering something of a return to the old-school personal banking relationship. Each branch of Handelsbanken operates under the so-called Church Spire principle, meaning its manager has the autonomy to make lending decisions and set pricing, within a set framework. “We believe the manager closest to the customer is the one who best understands the risk. I don’t think somebody sitting in an ivory tower will understand my customer better than I do,” says Virtanen, who tries to meet and speak with all the branch’s customers personally.

“Part of what I love about our small patch is that I can walk across it in about half an hour,” says Virtanen. He points to the map on the wall, outlining the branch’s coverage area: east to west from Charing Cross Road to Farringdon Road, and then north to south from Euston Road to the Embankment. “We had a visitor from Sweden a few months ago. Normally when we have visitors we walk the patch, to show them the area we cover from the top of our Church Spire. That day we bumped into four customers on the way!” Because we might be in the middle of London, but for Handelsbanken, this is still genuinely local banking.

Nationwide’s digital branches
For Nationwide, knowing the face of each customer may be a stretch; as the second-largest provider of mortgages and savings products, the Building Society has a relationship with one in four adults in the UK. But the changing role of the bank branch is very much a hot topic, as Nationwide recently announced plans to invest £500 million into its 700-strong branch network over the next five years. This will mean better customer access through new locations and opening hours, more welcoming branch layout, plus new technology tools:

“We’ve looked at the services we traditionally provide and at how that’s evolving. Clearly, customers’ own technology is increasingly doing the heavy lifting of traditional transactions that were previously processed by people. Talking to both colleagues and customers, [we’ve found there’s] quite clearly a growing need for what we’re calling help, guidance and advice,” says Barnaby Davis, Divisional Director of Group Retail Strategy at Nationwide.

Branch transactions across all banks fell by 6% last year, according to the British Bankers’ Association, as the availability of digital tools mean people don’t walk into their High Street banks to make payments quite as often as they used to anymore. But what people very much still do, says Davis, is drop into branches and ask to speak to advisors about things like mortgages and investments. Often, though, advisors are busy and people are asked to make an appointment or come back later – this is the kind of thing Nationwide wants to fix in its new “help, guidance and advice” approach to branches:

“We’ve been investing heavily in video technology. We’re the first financial organisation to do this at scale, and we’ve just gone live at our 250th site,” says Davis. This means the customer who walks in without an appointment is increasingly likely to be able to speak to an advisor right away, via the high definition video link. The goal is to connect all the branches, so a customer in Barnstaple may speak to an available advisor in Brighton: “You’re fulfilling a need the customer has, which is to talk to somebody instantly.” Asked if this video connection could be made from home too, Davis says this is something they’re looking into, but the branches have better technology: “We want to make sure we create the highest quality experience. … If you’re providing high-quality and ease, the customer very quickly puts the fact that it’s video behind them and relaxes into the dialogue.”

The human element
Nationwide is also working on creating a more informal atmosphere for its in-person branch interactions: “Customers don’t always want to be in the office. They might find it claustrophobic, almost too private. They’re happy to have many of their discussions in a more casual way, on a settee or over a lunch table. It turns into a nice informality, from something that’s previously been very formal. We’re seeing a huge customer reaction to that.”

Because there’s a human element to banking that’s being ignored in the so-called death-of-the-branch dialogue, says Davis: “Nobody talks about the social and ritualistic side of banking. A lot of people equate borrowing money with seeing somebody face-to-face, for reassurance.” Davis cites himself as an example of this: he’s a prolific user of digital banking, but he also has a financial advisor and uses branch services. “Even the tech-savvy digital native often looks for face-to-face advice over important financial matters, and reassurance particularly around affordability and borrowing money.”

The conversation around the future of branches is often pegged as a competition between physical and digital space. But if Handelsbanken and Nationwide are to be believed, the future of the two are intrinsically linked, as each side compliments the other to provide a full service. Davis’ job description as Divisional Director of Group Retail Strategy is a nod to this fact: he’s charged with branch design and branch technology, as well as digital and mobile banking. This is a deliberate mo ve by Nationwide: “The development and transformation of the branch and digital go hand-in-hand. If you separate those [jobs] in two different people, you’re instantly going to get a disconnect,” asserts Davis. “By orchestrating the strategy, and having the ability to improve the development of both branch and digital, we can develop [both] services much more coherently.”

Ten top health tech innovations

BusinessLife, September 2015. Original article, p57-60.

Ten top health tech innovations 


Vital signs monitoring patch
One day, a little sticky patch for monitoring life signs may become standard for anyone who enters a hospital. That’s the hope for SensiumVitals from Toumaz Group, the British semiconductor company, which is currently undergoing clinical trials. “Our product is targeted not at intensive care, but at patients where monitoring is a manual process every 4-6 hours,” says Anthony Sethill, CEO of Toumaz. “We believe there are many clinical situations where continuous monitoring would be more effective clinically, and therefore economically.” For example, up to 30% of patients develop complications after gastrointestinal surgery. Being able to continuously monitor patients would not only mean catching problems quicker, but also that people could go home sooner and have vital signs transmitted remotely. Both these things are likely to increase patient comfort, and save money for the NHS.

Patient-controlled social networks
It’s not quite Facebook, but for people with Crohn’s Disease and other inflammatory bowel conditions, is a lifesaver. Established in 2011, this network lets users trade information about symptoms and treatments. is closely monitored by the medical estanlishment as an example of a patient-controlled social network, where people take charge of their own treatments. “This has very quickly become a global community of people sharing information about their conditions. They in turn talk to the clinicians treating them, and that has improved the dialogue globally,” says John Farenden, Director of EY’s ‘Let’s Get Digital’ initiative, which aims to support and accelerate the use of digital technologies in health and social care. “Using basic social media tools, this has made a huge impact on the lives of tens of thousands of people.”

BL2Cancer-detecting garments
Talk about a literal interpretation of wearable technology: Cyrcadia Health has developed a bra that can detect cancer. The garment is embedded with patches that track changing temperatures in the tissue, which can be indicative of tumour growth. Early trials showed a 87% success rate in detecting tumours, including in dense breast tissue where small lumps can go undetected. The idea behind the garment is not to wear it all the time, but to to provide simpler and more comfortable screening methods than some of today’s more invasive procedures.

Home dialysis
It’s the Nespresso of dialysis: Quanta Fluid Solutions is developing a compact, portable dialysis machine that people can use themselves. This could be a significant money-saver for the NHS, as people could have dialysis in the comfort of their home. “A percentage of patients are suited for home-dialysis, once they’ve been trained. We know that would save the NHS about £15,000 a year per patient,” says Martin Hunt, a Director at the NHS’s National Institute for Health Research (NIHR). Hunt heads the NIHR ‘Invention for Innovation’ programme, a translational funding scheme aimed at advancing healthcare technologies. The NIHR, whose funds only go to companies with proof of concept after robust screening, has funded Quanta twice: “Research teams need to take into account not just the medical impact, but also how new devices can provide value for money,” says Hunt. “If you get better patient outcomes, generally speaking, there should be some associated cost saving along the clinical pathway.”

Nanotechnology targeting treatments
Sending microscopic devices into the body to treat illness in a non-invasive manner is a science fiction dream that’s quickly becoming real. Earlier this year, researchers at the University of California successfully delivered treatment projectiles into the stomach of mice, in an effort to explore whether we can do this to treat stomach problems like ulcers or gastritis. A similar principle is behind antibody-drug conjugates, which are already being used to treat patients: a molecule-scale payload of cancer drugs is delivered directly to tumour sites, leaving the surrounding tissue undisturbed.

BL33D-printed body part replacements
Earlier this year, 3D printing technology from Stanmore Implants was used to create a replacement pelvis for a patient who’d lost his to cancer. The new part could be made more precisely with a 3D printer than standard methods. Another UK company using 3D printing to create body parts is Fripp Design and Research: their technology can create soft tissue organs like eyeballs, noses and ears, all based on scans from the patient. “3D printing now allow us to create new body parts, so the technology is actually no longer the problem,” says Farenden. “The challenge now is how we make best use of it and improve the outcome and experience for patients, as well keeping an eye on cost.” In an effort to make the product more commercially viable, Fripp has become the first company to use 3D technology to print directly in medical-grade silicone.

Imagine a USB stick which contains a whole laboratory – this is Christofer Toumazou’s Lab-on-a-Chip. It may sound impossible, but the tiny device provides quick results to medical tests, and can analyse DNA within minutes. Without the need of a laboratory, Lab-on-a-Chip can reveal how large a dose a patient needs of a particular medication, or whether they’re at risk for genetics-based diseases like diabetes or cancer. The technology, now being developed by DNA Electronics, could one day mean doctors looking into our future to treat us, not just our past. “Tying the genome to different risks associated with cancer is likely to become increasingly significant,” says Sethill at Toumaz. (Toumazou is the founder of Toumaz, but the company is not involved Lab-on-a-Chip.) “You could then use the collected data to understand which drugs give the best results, using millions of data points,” says Sethill, who predicts Big Data and analytics will become increasingly relevant in healthcare prevention.

Tissue repair wands
On Star Trek, they called it a medical tricorder: a device that heals skin and bone instantly. Here on earth, Mark Bass at the Department of Biomedical Science at the University of Sheffield has created a small handheld ultrasonic emitter that accelerates tissue repair. It’s not quite sci-fi, but the device can reduce healing times by up to 30%. That means the patient is more comfortable, and there is less chance of infection. The researchers have been able to reverse certain healing defects caused by diabetes, age and congenital disorders, and hope to soon be able to prevent the formation of chronic wounds.

BL4Video games for stroke rehabilitation
Therapy becomes play when necessary yet tedious exercises are made into a game. Looking to help stroke victims regain functionality in their arms and hands, Limbs Alive has created a Wii-style video game. Over 100,000 people in the UK suffer from strokes each year, and up to 80% never fully regain the use of their limbs. Therapeutic video games is a growing area for the NIHR, says Hunt: “We insist on patient involvement throughout the development process. It’s one thing to have a solution using a tablet computer, but for elderly patients with mobility issues, that may not work for them.” Effective video game therapies can mean reducing the cost of treatment, not to mention making a frustrating processing a little more fun, so the patient is less likely to give up.

Wearable pain relief devices
The relief of chronic pain is a big promise, but that’s what Quell does. This device from NeuroMetrix uses non-invasive nerve stimulation to tackle pain, kicking in within 15 minutes of putting on the device. A single charge provides 40 hours of relief, whether it’s back pain or nerve-related aches.. Quell was a hit at 2015’s CES, the consumer electronics tradeshow usually dominated by the newest phones, but there’s increasingly more crossover between mainstream gadgets and health, says Farenden: “Consumer technology businesses are pushing on with technologies to improve health, as we see with things like Apple Watch and Jawbone.” The jury’s out on whether the cost associated with these gadgets are actually translating to better outcomes: “But we will see people increasingly using those technologies to better understand their own health.”

BL cover

Neville Davis, Chairman

Megabuyte, 2015. 

Screen Shot 2015-09-04 at 12.05.10Neville Davis, Chairman of SecureData, Clifford Thames, Key Travel, and Fourth, plus non-exec director of Kalibrate

Neville Davis knows what his happy place looks like: four chairmanships of private equity-run businesses, plus one non-executive directorship of a listed company, to keep his hand in. “That’s what I like the best, as it gives me the right balance,” says Davis. This was the shape of the chairman’s portfolio when we met on the last day of June, but since then, a vacancy has appeared: Davis has stepped down as chairman of Fourth, as part of its ownership change.

But on the scorching hot day of our meeting, his chairmanships are as follows: Fourth (hospitality tech), SecureData (cybersecurity managed services), Clifford Thames (automotive tech), Key Travel (a non-tech business), plus a non-exec directorship of Kalibrate (petroleum tech). We’re enjoying the view of East London from Broadgate Tower, where Davis has secured a meeting room following his previous appointment with financial services group William Blair. That’s about as much as I can say about what he’s been up to today, as Davis takes the confidentiality of his charges very seriously.

Having said that, Davis is very open when it comes to sharing his opinions about the role of chairmanship, if a little reluctant to provide examples from his companies. It’s a bit like naming a favourite child: “I enjoy all the businesses I’m involved in, so I wouldn’t like to single any of them out!” We agree to discuss Fourth, as it’s timely: ECI has just exited to Insight Ventures. “It’s a fantastic business. It’s a pure play Software-as-a-Service, has been from the outset. […] I’m really positive about where the business is, what’s been achieved, and what it will achieve,” says Davis. “The new investor is very supportive and dynamic, which is a great outcome for the business. That’s one of my core beliefs: everything flows from the business being successful.”

The PE advantage
This success also means Davis will be in the market for a new mandate, probably another PE-backed company. So why this preference? “From my perspective, the balance of work between governance and added value, if I can use that phrase, is much more attractive in a PE-run business. The amount of focus on governance is much less, and I like that.” This goes to how Davis views his role as a chairman: “For me, I enjoy the added-value component of being chairman more than the governance. Of course, governance is important! But in a quoted company, you will spend a greater proportion of your time and efforts on governance, and it’s not what I really enjoy.”

Another reason for the PE preference is that Davis likes working with companies with an EBITDA of £4-10 million, a scale he thinks is well suited for private ownership. “What’s attractive about PE is a unanimity of focus on making the business successful. You have a very straightforward relationship with your shareholder, and they’ll typically sit around the boardroom table with you. Everybody is largely invested in making the business successful in a straightforward, simple way.”

As Davis’ most recent appointment, Key Travel, isn’t a tech company, there’s clearly no sector bias. But there are some rules: “My background is B2B and I have little experience in B2C. I wouldn’t get involved in retail or banking, or something that’s a long way from what I’ve done. But to understand a different sector, like travel, doesn’t really take that much time, because you already have the core basics of what business is about,” says Davis. “Management is management, and people are people. The dynamics of human beings don’t differ much.” So Davis focuses on finding good people to work with, not to mention how it’s always fun to be in a dynamic market. “I look for roles I’ll find interesting. Take Key Travel: it’s an interesting business with an ambitious and strong management team, lots of potential. [Then there’s] the fact that it was slightly leftfield of my main area of activity – that made it particularly interesting for me.”

We talk for a bit about how Key Travel may not be a tech company but it has many technology elements, similarly to how sector lines blur for Fourth, whose technology is fully mobile-enabled. Speaking of technology integration, is that an Apple Watch on Davis’ wrist? Yes it is! Davis leans forward to show me. “It’s fun, I have to admit. My wife got it for me, for my birthday.” He demonstrates some of the features. “When I first got it I wasn’t sure about it. But since I’ve had it, I haven’t had it off!” Davis laughs, but the Apple Watch is a testament to a device refined, and turned into something that grabs you.

The Compel variations
Davis (60) and his wife Karen live in Hertfordshire, outside Royston. They have two daughters, a chartered accountant and a doctor, and a son who’s doing his A-levels. “Throughout my life, my family has been the most important thing to me. So when I haven’t been at work, it’s been mostly about family.” He likes playing sports though: a bit of tennis and skiing – although he’s quick to add that’s he’s not very good. The family goes on trips together, most recently to Europe to ski. He loves going to see plays too, especially at the National Theatre in London – it will always be brilliantly acted and presented.

Originally from Sunderland, Davis went to grammar school in the north-east before moving to Canterbury to study at the University of Kent. He’s a chartered accountant by profession: “I learned with one of the big London firms. But I never wanted to be an accountant, I wanted to be a businessman.” Davis joined the company which later became Compel in 1980, taking over as CEO three years later. “Yes, I’ve had a most incredibly boring executive career!” He’s joking, because his 27 years at Compel brought no shortage of action. The long tenure was a happy accident though, says Davis, initially brought about by the fact that the company served real coffee at the interview: “It was a big factor!” He laughs, but in 1980, having proper coffee marked the company as a modern, dynamic business.

Another reason why Davis chose the company was that he wanted to join a smaller business in a more senior role, rather than the other way around. First entering as the company accountant, he soon moved up to CFO. “Then an opportunity arose to become CEO. And I said, ‘Please, can I have a go at running the business?’” Really? That must surely be a very modest recollection of what happened? Davis relents, sort of: “Well, I said, ‘I think I can do this.’ And they gave me a go. It was tremendous! The business turned around and became very successful.” Davis took the company from £5m revenue to a peak of £300m, and led the 1987 management buyout and the 1994 IPO. He eventually left Compel in 2007, when it was acquired by 2e2. “The business changed a lot. Every point where I could have done something different, I thought, ‘What would be more fun than this? What would be more stimulating and satisfying?’ And so, I stayed.”

The chairman as chameleon
When it comes to learning how to be a chairman there’s no set route, says Davis, but in order to be successful, you need to have been a CEO. “But the job of a chairman is fundamentally different from that of a CEO! The transition from CEO to chairman is one of the biggest you can make in a career,” says Davis, adding how it’s probably bigger than the move from being a CFO. Davis’ first chairmanship was industrial equipment auctioneers GoIndustry DoveBird – an enjoyable learning experience, he says, although he admits he might not have chosen the role today. “But when you begin being a chairman, as is so often the case in business, you need to get some experience! So actually, I probably still would have taken the GoIndustry job, because it got me that chairman experience,” says Davis. “I now have an extremely clear view of what the role of the chairman is, which, frankly, I didn’t really have when I started out.”

Now he knows the chairman’s job is to help and support the CEO and the board make the company successful: “The relationship between the CEO and chairman is critically important. The CEO’s role typically lonely, and very demanding. A decent chairman could help you in a million ways: a shoulder to lean on or cry on, a mentor, somebody who stimulates you, somebody to talk to.” And make no mistake: that means being the kind of chairman each individual CEO needs: “So if the CEO wants to talk to you about something which is pretty trivial in the broad scheme of things, your job to be there. Of course, in the majority of cases, the CEO is talking about important things. But sometimes there’s something aggravating within the business, and who else is he or she going to talk to about that?” Davis shrugs. ‘The chairman needs to be a chameleon, and adjust to the needs of each business.”

I ask Davis if he misses being CEO and he thinks for a while – not because he’s unsure, but because he loved being a CEO, and the answer is still no. “The nature of the chairmanship means you mustn’t want to do what the CEO does. Otherwise you’ll be a really lousy chairman! […] You need to have got to a point in your life where you have done enough of that, when you are fulfilled and satisfied and you want to do something different.” He thinks about it some more. “I spent my entire executive career in one business and now, I have this wonderful plural existence. That’s partly why I enjoy it so much: because I am involved in lots of different businesses.”

Lynn Hershman Leeson: Origins of the Species (Part 2)

This Is Tomorrow, July 2015. 

Screen Shot 2015-07-01 at 16.05.09Lynn Hershman Leeson: Origins of the Species (Part 2)
Modern Art Oxford, 2015

What is technology, but another tool for shaping our identities? Lynn Hershman Leeson has been exploring the relationship between humans and technology for over 50 years, starting in a time before technology looked anything like it does today. Her multi-disciplinary approach remains pioneering, and if Hershman Leeson is a so-called digital artist, it’s is done with much subtlety. That’s also why it works: the digital element is here to enhance the idea, not an end in itself.

The retrospective at Modern Art Oxford shows a distinct thread running through Hershman Leeson’s work, from today’s interactive pieces all the way back to the earliest drawings. The show runs chronologically, easing you in with paintings of wired figures and their shadows, the first dated to 1962. The Breathing Machine makes subtle noises in response to people passing, a mechanism which was groundbreaking at the time and eerie still today. It feels like there’s someone here with me, and it’s possible that this someone is my own shadow: I’m the one who’s creating this presence.

The Roberta Breitmore archives stretch from 1974 to 1978, when Hershman Leeson created this fascinating alter ego, going great lengths to give this artificial character a complex inner life. From the photos, Roberta seems somewhat put on, with exaggerated make-up and what is obviously a wig – she’s a shadow that’s not quite right. “I saw her as a mirror of culture,” Hershman Leeson has said, but Roberta arguably became her own person. There are letters confirming her rental agreement, and Roberta’s notes to friends. Roberta left traces like a real person, but in retrospect, how can we tell what was real and what’s just a shadow?

All the while, the nearby Breathing Machine continues to make sounds. The idea of surveillance and monitoring takes on a more obvious shape in the Dante Hotel project, although the photographs from 1973 makes you wonder why we’re so muted in our outrage about surveillance today. We know we’re being monitored to a greater extent than ever before, in the street as well as in electronic communication. But for better or worse, it’s possible that privacy as a value in and of itself is fading.

Hershman Leeson’s early works take on new meaning as the visitor encounters Agent Ruby. Just like Hershman Leeson created Roberta Breitmore, we each have the opportunity to construct a digital persona in the manner of our choosing. Agent Ruby is a creature of artificial intelligence, and she invites you to talk to her via a keyboard. “Is the internet real life?” I ask, and she answers: “If it is, I’d be surprised.” We chat a little – she’s clever, and intriguingly philosophical. Sometimes she turns the question back at you, and I’m surprised how quickly I start to feel that Ruby is interested in me.

The third section of the show contains a film curated by Modern Art Oxford, where Hershman Leeson has interviewed Oxford-based scientists and researchers about genetic technology. The Infinity Engine is presented in an immersive space with photographs and paperwork pertaining to genetic discoveries. The scientifically grown ear in the picture – is it more or less real than Agent Ruby or Roberta? The microbiologist in the film is talking about evolution: “Biology can be very scary,” he says, explaining how we must take responsibility for what we create.

The Infinity Engine is ambitious in its attempt to explore a complex issues such as genetics, but it’s less approachable than the rest of the show and it takes a minute for a link to the previous works to suggest itself. But maybe anything can be a mirror of ourselves, from synthetic biology and Agent Ruby, all the way back to Roberta and the wired shadows in the earliest paintings. We create these representations and they can be whatever we make them, good or ugly. I get up from my seat after the film, and for a moment I can’t find the exit from the laboratory-like room. All I can see are the slightly warped walls, mirroring back to me numerous versions of my own twisted image.

Mike Norris, CEO of Computacenter

Megabuyte, 2015.

Screen Shot 2015-06-05 at 12.33.56Mike Norris, CEO of Computacenter
Computacenter is pretty much the only job Mike Norris has ever had. He’s been the CEO for 20 years now, after joining the company forever ago, in 1984 to be exact. So does Norris know where Computacenter begins and he ends?

“Oh it’s shaped me, certainly, without a doubt. Whether I shaped it as well, that’s the question!” Norris thinks for a moment. We’re sitting in the London offices of the European infrastructure services group, where Norris is in an eye-catching purple tie contrasting a sparse office; the CEO spends most of his time in Hatfield. “I’ve had some influence over the company, yes. You can’t run it for over 20 years and not influence it. If I haven’t, they pay me too much!” Norris laughs. He does that a lot, somehow managing to come across as very cheerful but also quite serious at the same time. I suppose that’s a brand of confidence that comes after three decades in the same organisation: there’s no question about the company you can’t handle.

And Norris seems to like the questions too: “I quite enjoy being a public company. I like the fact I have a share price out there every day. I like that I get my homework marked in public.” Of course, Norris knows that just over 40% of the shareholders sit around his boardroom table, providing some protection. “Unless I fall out with those directors, then I’d have no protection at all!” He laughs. “But there’s protection to think a little bit more long term.”

European outlook
On that note, the Computacenter story over the past few years has been dominated by solid performance in the UK, offset by weakness in Germany and France. The company’s efforts to remedy the problems have been more successful in the former territory, but Norris won’t blame the market: “The situation in France has more to do with us than the market. To an extent, the German and UK businesses are very similar, but our French business looks different from the outside.” He explains how a British customer would identify Computacenter as a provider of server virtualisation, a company that runs infrastructure, or helps you look after your users: “In the UK and Germany, they put us in this infrastructure support box. But ask a French person and they would say: ‘They’re a reseller’. And that would be truthful.”

That’s not a bad space, says Norris: “But it’s not the place I want to be. We have to reposition our French business to be more akin to the UK. And that’s really easy to say and much harder to do, because you have to change a lot. You have to change attitudes, take a more consultative approach, think more long-term. You then have to get customers to believe that you’ve done it. It takes a long time.” Computacenter has done it in Belgium, Switzerland, Germany and the UK, says Norris, “but we’ve found it much harder to make that transition in France than we have anywhere else”.

Despite speculation that it might be better to sell up and be done with it, Norris is sticking it out in France. Because this is most certainly an European business: “‘Computacenter enabling users throughout Europe – open bracket – excluding France – closed bracket.’ That doesn’t have the same ring to it, does it!” Although Europe is the focus these days, a few times Norris goes to cite “the world” as the goal, suggesting a bigger target down the line: “But I try not to be pretentious. Just like my building.” He waves a hand around; the somewhat tired-looking building in increasingly trendy Southwark is due for a sprucing up. But nothing too excessive, adds the CEO – being too spendy doesn’t look good.

Still the salesman
Norris started at Computacenter as a salesman, an attitude that seems to have stuck: “Oh you have to read people. I’m a salesman, yes absolutely. I’m a B2B sales guy though, which is slightly different. If people don’t buy it from me, they’re going to buy it from somebody else. I’m not developing a need. But I’m a salesman. I love it – it’s the best part of the job.”

Computacenter has a “customer-led, sales-driven” tactic, says Norris, as I bring up how the company literature promises “More cloud, less fluff”. This description is either defensive or no-nonsense, depending on your outlook, and Norris is definitely in the latter camp. “Look, we need to have a view, we need to have innovative solutions. But equally, I see so many people get disconnected from their customers, trying to push something they just aren’t interested in, at least not at this moment. […] You have to have a view, but you don’t need much more than that.”

Computacenter was less than three years old when Norris joined in 1984, a year after getting his degree in Computer Science and Mathematics from the University of East Anglia. He tells the story of going on a company boat party the weekend before he was due to start, recalling the details vividly. “This guy came up to me and said, ‘Oh Computacenter’s great, you’ll love it! [Founder] Phil Hulme is great!’ Then he added: ‘But it’s probably not quite as good as it used to be.’” Norris sighs, exasperated. “People are always like, ‘Well, it’s not as much fun as it used to be.’ That’s such a stupid statement!” There were times in the 80s, says Norris, when the company was “pretty under-financed” and they had to get on the phones to collect debts at the end of the month, or they wouldn’t make payroll. “That gets you focused! But we haven’t had that problem for 25 years. If that’s ‘not as good as it used to be’ – then I’ll take that, thank you very much! But we were a young company then. Young in age of the company, and young in age of ourselves.”

Norris never expected to be at Computacenter all this time later, he’s quick to add. “Did I ever expect to run a company of this size? No. Did I ever expect to earn the money I’ve earned? No. What we’ve done with the organisation has afforded me an amazing career and an amazing life. So yes, this company has shaped me, absolutely.”

A patient approach
Getting from the bottom to the top was a lot easier back when Computacenter had 300 people though, compared to today’s 14,000. “I massively believe in promoting from within,” says Norris. “I really believe, when I walk away one day, it will carry on and it will do better. As long as you pick the right people. It’s not an organisation where I do everything, far from it. I think this is an incredibly empowered organisation. I just do the flair bits and the top side.” Norris takes a moment to list people running other companies who’s had a stint at his company. “The alumni around the industry is probably better from Computacenter than any other UK company. I’m quite – am I proud of that?” He does that a lot: asks himself questions and answers them. The answer here is that they can’t all rise to the top at Computacenter, so fair enough.

“The thing about Computacenter is that we’re trying to build a corporation, and not just make a buck. I don’t spend time thinking about… “ He pauses. “I’ve made enough money, for now. I don’t spend time thinking how to hike the share price and flog this and spin it back and buy this and leverage that, and all that short-term corporate finance stuff. I don’t care about that. We’re trying to deliver a great service for our customers, improve our margins, make more money and invest it back in the business – typically, organically.” Norris is on a roll. “It’s a billion market cap, just shy, and I want it to be 2 billion, or 3 billion! I want it to be a world leader. I want it to push on and grow and be big and successful! That, I get a kick out of.”

That last sentence aside, most of what Norris says comes across as practical and pretty down to earth, so it’s no surprise to hear him cite patience as the biggest lesson of his career: “In my experience, most people screw up more through reacting too quickly than too slowly.” Good news is never quite as good as it seems, nor is bad news as bad as you think. “Give it a bit of time, a bit of thought, and you’re in a much better situation than if you overreacted.” Like the German acquisition in 2002: the initial indication was £325 million, but two years later, Computacenter got the asset for £36 million. Some of that was the market, Norris adds: “But it would have been easy to chase it. You asked how closely linked I am to this company. I think you treat the money like it’s your own when you’ve been here as long as I have.”

A spirit for competition
Norris admits he’s far from cavalier in his approach, but will defend against critics accusing the company of being too conservative. Because the best part of the job is to compete: “When you’re bidding, when you’re plotting, when you’re scheming, when you’re designing something new – whether that’s financing, selling to a customer, creating a proposition. Anything that makes us more competitive and helps us to win is fun. But the real fun is the winning! That’s the only thing.” The UK operations must make for good fun for Norris then, but outspoken as he is, he won’t get too excited about the outlook of the IT services sector: “It’s okay. It’s a tough industry. It’s a slog!”

Norris is not one for buzzwords either: “I get a bit, ‘Have you learned nothing?’ We’ve been doing this all these years. This is evolution, not revolution. The cloud is not a revolution, it’s just a logical step along the road. This industry over-hypes, and that’s boring. But if you don’t go along with the hype, you’re seen as a luddite. And you go, “No, I’m just sensible!” I’m saying, it’s not as as dramatic an effect on the industry as some people would have you believe.”

Norris (53) lives in Totteridge in North London, which is handy for getting to Hatfield. He’s married to Jacqui and they have three daughters, two living nearby and one still at home. “We’re all very close.” The whole family likes spending time at the holiday house in Spain. “I’m a bit boyish in my hobbies though, even though I have three daughters. I play golf now. When I was younger I played rugby and cricket. I love all ball sports.” The two eldest daughters both work in IT: “Did I encourage them? I didn’t encourage it, but I helped one, and the other one just went and got a job. They have a good work ethic. I’m quite pleased with that.”

We chat for a bit about the pros and cons about staying in the same company for so long. Norris points to how Thatcher said she wanted to ‘go on and on and on’: “And you just think, ‘ugh!’” He laughs. “There are pros and cons to it. I think there are more pros than cons, but I would do, wouldn’t I? You have to keep fresh, keep doing things a bit different. […] It’s a great organisation to run. It’s incredibly humbling to have so much support from so many people. I’m a lucky guy. I am the luckiest person I know.”

Lee Wade, CEO and co-founder of Exponential-e

Megabuyte, April 2015. Original article.

Screen Shot 2015-04-02 at 11.28.54The Megabuyte Interview: Lee Wade
“Let me start by saying one thing: I’m not interested in me. I’m interested in this company.” Exponential-e CEO Lee Wade sets the tone for our chat literally the moment I walk into his office, located near London’s Aldgate. I take my seat and sip my water with some apprehension: this sort of start rarely makes for a good interview. But I needn’t have worried: Wade is the lynchpin for his company’s unique culture of pioneering innovation. Not to mention when a CEO is as dedicated to his company as Wade is to Exponential-e, there’s a thin line between the company’s spirit and the person at the top.

Take Wade’s whiteboard wall in his office: it’s filled with notes, cuttings, charts and pictures. “There’s all manner of stuff up there. Look here,” says Wade, getting up from his seat for the first of several times during our chat. “Here are our competitors,” he points to a list. “Here’s their gross margins, their turnovers. That’s just a benchmark, but we beat every one of them except one, and this year we’ve matched their gross margins at 53%. It’s all random stuff up here. This is Harvard’s trapezium of innovation,” he says, pointing to a figure, and then to some fish swimming in bowls: “These fish tanks are our equivalent. These are the drivers of the Exponential-e business: applied innovation and dynamic disruption.”

Innovation on tap
The fish tanks are the business plan, explains Wade: cloud and connectivity specialist Exponential-e delivers two innovations every year, one major and one minor. This lets them swim alone for a bit, as it takes the competition two to four years to catch up and jump into their tank, by which time Exponential-e has moved on. “If you’re swimming in the tank alone you have leadership and exponential growth. That’s our proposition.” Wade has lectured extensively on this over the years, since before Harvard published its model on innovation. “It’s a growth model! Growth by innovation. Regardless of your market, boom or bust times, the model works. It’s held us in good stead.”

He points to another chart: “Here’s all the innovations we’ve had over the past 13 years. Many of them are world leading, and some of them are still a world first. ”Last August’s launch of the Desktop-as-a-Service GPU is one example. “DaaS has been around for years, but GPU, meaning high-powered processor accessed from the cloud, that’s the innovative part.” It enables industries such as the graphics sector to access powerful servers on a pay-as-you-go basis: “It cracks the capex issues all these companies face. We used the VMware’s Horizon Desktop-as-a-Service, Nvidia’s GPU card, and our own cloud infrastructure. It took us about 18 months. No one has done this ever before.”

This little breakthrough caught the attention of Nvidia, who has invited Exponential-e to work with them on their next graphics card and put that in the cloud too. While the investor community knows Exponential-e for its sector-leading organic growth, what the big-name competitors know the £60m revenue company for is its ability to deliver complex, bespoke jobs. Another chart: “This is the complex network we built for NBC for delivering high definition pictures of the royal wedding.” The big players needed nine months to do it, says Wade, whose team did it in eight weeks.

So what’s the secret, I ask; how do you nurture and maintain this feisty attitude to innovation beyond the startup phase? Wade sits down. “The esprit de corps of Exponential-e – do you know the phrase? It’s the strapline of the French Foreign Legion. It means a strong sense of enthusiasm and dedication to a common goal that unites a group of people. […] We got our brand values from a survey of our customers and employees: they thought we were smart and capable, approachable, strong, innovative, full of integrity.” Hiring smart people is vital: “I know meritocracy is a philosophical idealism, but we are as close as you can get. If someone’s earned it, you have to give it to them. I made a sales trainee the sales director after three years. Our managing director, he now runs the company, I took him on as a trainee from university.”

Three years to version 3.0
Right now, Exponential-e is working on transitioning the company into what Wade calls a world class citizen – or Exponential-e 3.0. And this has been the plan all along, Wade assures me: “It’s our culture that drives the company. All these things we’ve talked about add up to this: Exponential-e 3.0. That’s been on our wall for ten years.” Well, there’s one thing that’s changed: the scope has expanded, from Europe to the world. “What I’m seeking here is about one thing, and one thing only. Recognition! Because we believe we are the best at what we do in the world.”

Wade pauses for a moment. “When I was raising the money to start this company, I got thrown out of venture capitalist company offices. They said: ‘Hold on a minute, you and this company whose name I can’t even pronounce, you’re going to take on the world’s biggest telecoms companies and beat them at their own game?’ There was one guy, and I’ll tell you what he said: ‘You’re absolutely mad.’” This was during the dot-com bust years, when ‘internet’ was a swear word in the City. “But nothing’s changed. We’ve always had this goal.”

Version 3.0 will be presented this year, and Wade hopes the goal of world class citizenry will be reached after three years: “That’s when I’m done. I’ll hand it off!” He snaps his fingers. “Then I can rest easy, saying: ‘We did it! We got there! I knew we would. I never doubted it for a minute.’” There’s a lot of work left to do still, in terms of the company’s internal systems, but when it comes to the world of cloud and infrastructure, Wade is confident the company is already a leader. Right now, for example, Exponential-e is on a bidding shortlist alongside three household names: “We’re not being shortlisted just to sharpen their pencils. It’s because they know the superiority of our cloud offering. And you know what? We’re going to win! We’re going to beat those three because they cannot do what we can do. […] That’s what I told the VC guys 14 years ago: ‘We’re going to beat them at their own game.’”

Of course, for a plucky little London company of 300+ people to have this sterling reputation means a lot of phone calls where Wade has to tell suitors he’s not selling. “I was just talking to one this morning. I was a bit blunt, I said: ‘We’re not interested in private equity or a trade sale, please don’t contact us again.’” He laughs. One of these suitors with deeper pockets would probably be able to roll out Exponential-e’s world domination plans faster, Wade admits, but the plan is firm: This year, the company will look to roll out globally, probably focusing on Singapore, Sydney and Tokyo first, then New York and Amsterdam. “Our results this year are our best ever, and when our annual results get made public I get inundated with more of these suitors trying to buy us. But three years on, when we hit that 3.0 mark, then I might be interested.”

Timing and education
Exponential-e’s biggest strength – constant innovation – also represents the company’s biggest challenge. “We get things wrong all the time. Sometimes we misjudge when the market is right for an innovation,” says Wade. He lists a few examples, but the whole company was actually on the brink of collapsing before it even began in 2002, as the market wasn’t quite ready for its main product at the time: ethernet. “We were knocking on doors, and people said: ‘What’s ethernet?’ […] And I thought: ‘We’re going to go bust!’ We only had a small amount of cash burn money, to last us six months.” So Wade tasked a PR company with getting Exponential-e and ethernet on the front page of a newspaper. “There’s the front page, on the wall,” he says, pointing to a page from ‘Communications News’ with the headline: “Service provider launch at ethernet WAN market”. The story was then picked up by the bigger papers. “So then when we called up companies they said: ‘Oh we’ve been reading about that!’ That newspaper headline saved our life.”

Innovation only works when it’s complemented by an educational aspect, Wade has learned: “Our success is based on the continuum of education we’re doing – roadshows, launches, workshops, PR – to let the world know what we’re doing, as well as training of our Academy people.” The Exponential-e Academy is a true passion project for Wade, who brings it up several times. The Academy is run in-house and anyone can apply, but they have to have three attributions: ambition, aspiration, and industriousness. “At the end of three years, you should have attained an earnings potential of £100k a year, and we succeed at this all the time,” says Wade. “I tell people: give it ten years and you can be on top of any industry you want. Think ten years ahead and you will get there! But you have to live it, breathe it, dream it, sleep it – you have to sacrifice many things along the way.”

Ambition, aspiration and industriousness
Wade describes himself as a workaholic, and as someone who’s not really interested in money. “I fear the end of the line – the company being world class. I fear it, because what do you do then? One thing that does get me out of bed in the morning … “ Wade pauses. “Going back many years, I’m an academic, I did my masters in econometrics at University College London. Our Academy is so successful at what it does. If I built another one over there, in its own redbrick building,” he says, pointing across the street. “It would have a waiting list. […] The thing the Academy is really selling is the confidence to face off to the captains of industry. To sit down and tell them where they’re going wrong, and how they can solve it. The Academy is probably what I’m most proud of in this company,” says Wade. “That’s really what gets me out of bed: imparting knowledge, and creating opportunities for young people. If I’m not doing that, what the hell is all this about?”

Wade (56) lives in Essex, and has five children. “One thing my kids were brought up with – like with the Academy – is how ambition, aspiration and industriousness will get you everywhere. My kids were never given pocket money, they had to earn it. It teaches you the value of money,” says Wade. “None of my children chose university. They weren’t interested in the slightest. In spite of my encouragement! But I never tried to push them into it, because I know university doesn’t mean everything. No one forced me to consider university either. I went to one of the worst schools in Britain, growing up in Hoxton.” Wade laughs, remembering how run-down the now-trendy area was back then. He gets up and walks over to a picture on the whiteboard. “This is Hoxton Square. That’s St Monica’s school and church, that’s the youth club I went to. This is the football team. That’s me there!” He points to one of the boys in the line-up. “Funny how time changes you.”