News - Midlands
Dr Jones and the Holy Grail
Look one way out of Dr Cliff Jones' office and the brooding, beautiful Malvern Hills cast a giant shadow, soaring skywards. Turn the other and you come face to face with a menacing, ugly 10ft iron fence.
The contrast couldn't be greater, but it just so happens that what lies behind that fence remains Malvern's - and probably still the region's - biggest untold business success story. A story that has also made Dr Jones the entrepreneur he is today.
"It's funny, I heard on the radio the other day a piece about Malvern and there they were at it again, describing the town as the land of Elgar and the Malvern Hills. But what about the flipping radar," he says.
Flipping radar indeed. As any self-respecting history buff will tell you, ever since the Second World War, Malvern, and the fiercely guarded site behind the fence, has played a crucial role in the development of telecommunications and radar research. Research that continues to this day in the fields of silicon chip, laser and infra-red research and satellite communication.
The problem is that the outside world hasn't a clue what goes on behind the barbed wire. A string of particularly unsexy names hasn't helped - past incarnations have included the Royal Signals Radar Establishment (RSRE) and the Defence Evaluation & Research Agency (DERA). Until recently the business was entirely owned by the government so external PR was never high up the agenda. But times are changing fast under its new far sexier mantle Qinetiq, not least as it heads towards a full flotation (panel overleaf), which will finally put Malvern's great scientific legacy firmly on the international map.
Ironically, the day I meet Jones at his offices at the Malvern Hills Science Park the front page of that day's Financial Times is devoted to how the planned part-privatisation is set to make a number of key Qinetiq executives rather rich.
The irony isn't lost on Jones, who spent the best part of 15 years behind Qinetiq's walls. "I suppose I could have been one of those executives. Instead here I am running a business with no income and no profit," he jokes. After a couple of hours in his company it is quite clear that he wouldn't have had it any other way. Nothing ventured, nothing gained.
Jones's links with Malvern go back to his undergraduate days when his studies for a physics degree at what was then Wolverhampton Polytechnic led him to a research project at RSRE. The contacts he gained in those years would prove invaluable when, while later employed as part of the giant GEC empire, he was seconded back to RSRE. "By the mid 1980s I was effectively doing three things at the same time. Working on a PhD from Hull in experimental physics (under the world famous liquid cystal scientist Professor George Gray), working for GEC, and working for RSRE."
Jones explains that the specific driver at the time was that both organisations were looking at hang on the wall TV technology. "RSRE were looking at it from a purely defence viewpoint because they were desperate to get flat panel displays into ships etc, so they were funding most of the major studies into the technology," he says.
Jones ended up full time at RSRE where by the early 1990s the true potential of commercialising what their studies were looking at was becoming apparent. He himself led one of RSRE's first commercially-minded projects, a four-year Anglo-Japanese programme with Sharp looking into the feasibility of using liquid crystal display technology in flat screen TVs. Today flat screens may be commonplace, but back then it was revolutionary stuff.
"We were right there at the cutting edge, Malvern was right at the heart of all this. At the same time others were looking into the feasibility of using thin film transfer techniques for flat screens. Ultimately this was the technology that won the day. If ours had won, I wouldn't be sitting here now talking to you, my name would be known the world over."
Jones doesn't regret the experience. "OK we weren't successful, but most scientists probably spend about 40 years working on just a few papers. We really went for it.
I have had a failure if you like, something that did not make it through to product. But I learnt an awful lot. It could have worked."
Failure though isn't something Jones cares to consider with Zbd, a project that would catapult him over the RSRE fence to his present home. The origins of the company and its unique LCD product (see side panel) came out of the work Jones was doing with Sharp. In fact Zbd's display was actually first patented way back in 1995, with Jones inventing the screen together with DERA colleague Guy Bryan-Brown.
"Guy and I had been working on the product for a few years but it wasn't until 1998 that I fully realised its commercial potential. I was at a conference in the US showing off the technology where for the first time someone said they would give me money to develop the programme. A venture capitalist (VC) said to us he would give us $5m. On that plane journey back home I realised that a spin-out was what I wanted to do. I got back and said to Guy that if someone is prepared to fund this technology in a way we could not dream of doing at DERA then we have got to create a spin-out. It didn't take him long to agree."
In the event the unnamed VC didn't come up with the cash right away - however ironically he would come on board at a later date as a backer. "To this day he doesn't recall that initial offer," adds Jones.
Jones needn't have worried. Seed funding courtesy of the Prelude Trust (lead investor), Dow Chemical Company and TTP Ventures was soon raised and the company was born in 2000. "No less than twenty patents relevant to what we were doing were owned by DERA so as part of the shareholding equation DERA got a stake in the company related to the intellectual property they were transferring over," explains Jones, who naturally put money into the venture himself too. Zbd has since had two more funding rounds and raised in the region of £38m in total.
Yet five years down the line Zbd still has nothing to show for the cash. No contracts, no-one buying the product. What's gone wrong? "For the first few years we made the mistake of looking at too many different things," admits Jones. "The mistake we made, and I think it's a common one in our industry, was to think our competitors were more important than our customers. VCs in our industry are always looking for the next big thing, there is always this big pressure. We looked at too many possible uses for the technology, there was no focus."
A stronger focus came belatedly with the recruitment of Clive Mayne as chief operating officer. "Clive has since done wonders. Really sorted us out and made us far more focused. He shifted our focus purely onto the retail sector," says Jones.
Jones admits that five years is a long time to not see the fruits of his or anyone else's labour. But Zbd, with a fair wind behind it, could be on the cusp of something big. "It's definitely crunch time for us. We need to raise another £35-10m over the next year and need one more funding round before we can be cash positive," adds Jones.
All hope is now pinned on some crucial trials due to start in the autumn with a number of UK supermarkets. Jones says the trials will take two to three months, which if successful should lead to a pilot study for a further six months. He enthuses: "We are confident that the supermarkets like what we are showing them so far."
The potential of Zbd's technology in supermarkets is huge, so Jones is deliberately being very specific with the trials. "We are very much concentrating displays on certain parts of the store such as fruit and veg counters and wine counters where information can change daily. Ultimately this is a big field. There is a whole gamut of technology for stores to choose from. The big benefit of what we have is that it plugs into existing networks in stores and it is low cost for the operator to run."
Success in the trials and the company really could fly. Production channels in the Far East via Zbd's partner and leading LCD manufacturer Varitronix are ready and waiting. Failure and, well, it could be time for something else. "It is all very black and white at the moment," admits Jones. "But people need to believe us. It's really time for us now to prove we are a serious player, at some point we have to start to deliver."
And time to deliver for those original investors too. "Inevitably those investors are looking for their exit, but at the moment they are naturally biding their time until we have proven ourselves in the market." If all goes to plan a secondary buyout, alterative investment market (AIM) flotation or even a trade sale is likely in the near future, he adds.
Jones stresses that while there is no-one else doing what his company is doing, the wider display market remains an active one in the spin-out arena. "There are actually a number of spin-out display companies and lots of really good innovative companies coming out of the UK, yet to be honest this is despite the fact that there isn't a massive infrastructure here. It is simply clever people doing clever things," he says.
Jones' wider views on the state of our science industry are as revealing as his own technology. "In other countries it is almost easier for spin-outs. Take Holland for instance where everyone is simply coming out of Phillips. In terms of worldwide technology we punch well above our weight.
"However, I'm worried about the long-term future of UK science. What is the situation going to be in 10 to 20 years? Students these days are not finishing their university course and saying I want to do a PhD in anything like the numbers they used to. Why? Because they are so heavily overdrawn. Their first priority on leaving is get employment. If less people start going through traditional research and development (R&D) channels then what is this going to do to our competitiveness?
"Twenty years ago I wanted to become an academic and the environment was such that I was able to achieve that. That knowledge then gave me the ability to create a spin-out company. Today if you are 21 and have a £315,000 overdraft it's different. The end result is surely that our competitiveness will be reduced. We are restricting people from choosing a R&D career."
Jones isn't just talking from the hip. A graphic example of the worrying trend is illustrated by the make-up of an Oxbridge masters course that he runs on display technology. "There are never any British people on the course. What message does this send? My class is full of students from the Far East. When you go to China, Japan and Taiwan you see the opposite happening as in our education system. Over there more and more people are going into university and not leaving until they have done their standard R&D training. Over there universities are strongly tied to companies, they are working with companies, working alongside industry. It's not rocket science to say that we need more support over here from the government, more government funding of PhDs. Tuition fees are not helping."
Zbd itself stands at one end of one of Gordon Brown's much-loved "technology corridors", corridors that - so the theory goes - will one day soon be full of fantastic spin-outs and technology businesses that will make millions and make the Midlands a fantastically productive place again.
In Worcestershire's case the idea is that the length of the A38 can provide that corridor from Qinetiq, via Rover, and onto Birmingham University. Quips Jones: "To be honest I cannot work out what the A38 corridor is, other than you've got Qinetiq at one end and the University of Birmingham at the other. Surely what's more important is creating the right environment in a more general sense. If you have people who have done R&D and who are commercially minded they can then create companies. But where are commercially minded R&D scientists going to come from given present circumstances?"
Jones stresses that he doesn't want to be perceived as overly negative, after all as he adds, Qinetiq is a "fantastic asset" for the Midlands. "Within our own company a third have PhDs and of these almost all came out of Qinetiq. Its flotation really will put Malvern and the Midlands on the world map. We must grasp that."
Who knows, Zbd itself may also soon be on that map too. A recent award as Ernst & Young's Midlands entrepreneur of the year in science and technology has certainly raised Jones' own profile. But the stress of making a spin-out work is clear. "Yeah, this is stressful. But I want Zbd to be a success and will stick with it," says Jones.
Beyond retail LCD displays, Jones still has one eye on future inventions too, saying there is plenty more he could do in other fields. He also fancies one day working from within business rather than fighting to get in from the outside. "Personally in my next life I would like to find a problem that has a market and create solutions from within a company rather than the other way round." Though that, of course, would be far too easy.
The contrast couldn't be greater, but it just so happens that what lies behind that fence remains Malvern's - and probably still the region's - biggest untold business success story. A story that has also made Dr Jones the entrepreneur he is today.
"It's funny, I heard on the radio the other day a piece about Malvern and there they were at it again, describing the town as the land of Elgar and the Malvern Hills. But what about the flipping radar," he says.
Flipping radar indeed. As any self-respecting history buff will tell you, ever since the Second World War, Malvern, and the fiercely guarded site behind the fence, has played a crucial role in the development of telecommunications and radar research. Research that continues to this day in the fields of silicon chip, laser and infra-red research and satellite communication.
The problem is that the outside world hasn't a clue what goes on behind the barbed wire. A string of particularly unsexy names hasn't helped - past incarnations have included the Royal Signals Radar Establishment (RSRE) and the Defence Evaluation & Research Agency (DERA). Until recently the business was entirely owned by the government so external PR was never high up the agenda. But times are changing fast under its new far sexier mantle Qinetiq, not least as it heads towards a full flotation (panel overleaf), which will finally put Malvern's great scientific legacy firmly on the international map.
Ironically, the day I meet Jones at his offices at the Malvern Hills Science Park the front page of that day's Financial Times is devoted to how the planned part-privatisation is set to make a number of key Qinetiq executives rather rich.
The irony isn't lost on Jones, who spent the best part of 15 years behind Qinetiq's walls. "I suppose I could have been one of those executives. Instead here I am running a business with no income and no profit," he jokes. After a couple of hours in his company it is quite clear that he wouldn't have had it any other way. Nothing ventured, nothing gained.
Jones's links with Malvern go back to his undergraduate days when his studies for a physics degree at what was then Wolverhampton Polytechnic led him to a research project at RSRE. The contacts he gained in those years would prove invaluable when, while later employed as part of the giant GEC empire, he was seconded back to RSRE. "By the mid 1980s I was effectively doing three things at the same time. Working on a PhD from Hull in experimental physics (under the world famous liquid cystal scientist Professor George Gray), working for GEC, and working for RSRE."
Jones explains that the specific driver at the time was that both organisations were looking at hang on the wall TV technology. "RSRE were looking at it from a purely defence viewpoint because they were desperate to get flat panel displays into ships etc, so they were funding most of the major studies into the technology," he says.
Jones ended up full time at RSRE where by the early 1990s the true potential of commercialising what their studies were looking at was becoming apparent. He himself led one of RSRE's first commercially-minded projects, a four-year Anglo-Japanese programme with Sharp looking into the feasibility of using liquid crystal display technology in flat screen TVs. Today flat screens may be commonplace, but back then it was revolutionary stuff.
"We were right there at the cutting edge, Malvern was right at the heart of all this. At the same time others were looking into the feasibility of using thin film transfer techniques for flat screens. Ultimately this was the technology that won the day. If ours had won, I wouldn't be sitting here now talking to you, my name would be known the world over."
Jones doesn't regret the experience. "OK we weren't successful, but most scientists probably spend about 40 years working on just a few papers. We really went for it.
I have had a failure if you like, something that did not make it through to product. But I learnt an awful lot. It could have worked."
Failure though isn't something Jones cares to consider with Zbd, a project that would catapult him over the RSRE fence to his present home. The origins of the company and its unique LCD product (see side panel) came out of the work Jones was doing with Sharp. In fact Zbd's display was actually first patented way back in 1995, with Jones inventing the screen together with DERA colleague Guy Bryan-Brown.
"Guy and I had been working on the product for a few years but it wasn't until 1998 that I fully realised its commercial potential. I was at a conference in the US showing off the technology where for the first time someone said they would give me money to develop the programme. A venture capitalist (VC) said to us he would give us $5m. On that plane journey back home I realised that a spin-out was what I wanted to do. I got back and said to Guy that if someone is prepared to fund this technology in a way we could not dream of doing at DERA then we have got to create a spin-out. It didn't take him long to agree."
In the event the unnamed VC didn't come up with the cash right away - however ironically he would come on board at a later date as a backer. "To this day he doesn't recall that initial offer," adds Jones.
Jones needn't have worried. Seed funding courtesy of the Prelude Trust (lead investor), Dow Chemical Company and TTP Ventures was soon raised and the company was born in 2000. "No less than twenty patents relevant to what we were doing were owned by DERA so as part of the shareholding equation DERA got a stake in the company related to the intellectual property they were transferring over," explains Jones, who naturally put money into the venture himself too. Zbd has since had two more funding rounds and raised in the region of £38m in total.
Yet five years down the line Zbd still has nothing to show for the cash. No contracts, no-one buying the product. What's gone wrong? "For the first few years we made the mistake of looking at too many different things," admits Jones. "The mistake we made, and I think it's a common one in our industry, was to think our competitors were more important than our customers. VCs in our industry are always looking for the next big thing, there is always this big pressure. We looked at too many possible uses for the technology, there was no focus."
A stronger focus came belatedly with the recruitment of Clive Mayne as chief operating officer. "Clive has since done wonders. Really sorted us out and made us far more focused. He shifted our focus purely onto the retail sector," says Jones.
Jones admits that five years is a long time to not see the fruits of his or anyone else's labour. But Zbd, with a fair wind behind it, could be on the cusp of something big. "It's definitely crunch time for us. We need to raise another £35-10m over the next year and need one more funding round before we can be cash positive," adds Jones.
All hope is now pinned on some crucial trials due to start in the autumn with a number of UK supermarkets. Jones says the trials will take two to three months, which if successful should lead to a pilot study for a further six months. He enthuses: "We are confident that the supermarkets like what we are showing them so far."
The potential of Zbd's technology in supermarkets is huge, so Jones is deliberately being very specific with the trials. "We are very much concentrating displays on certain parts of the store such as fruit and veg counters and wine counters where information can change daily. Ultimately this is a big field. There is a whole gamut of technology for stores to choose from. The big benefit of what we have is that it plugs into existing networks in stores and it is low cost for the operator to run."
Success in the trials and the company really could fly. Production channels in the Far East via Zbd's partner and leading LCD manufacturer Varitronix are ready and waiting. Failure and, well, it could be time for something else. "It is all very black and white at the moment," admits Jones. "But people need to believe us. It's really time for us now to prove we are a serious player, at some point we have to start to deliver."
And time to deliver for those original investors too. "Inevitably those investors are looking for their exit, but at the moment they are naturally biding their time until we have proven ourselves in the market." If all goes to plan a secondary buyout, alterative investment market (AIM) flotation or even a trade sale is likely in the near future, he adds.
Jones stresses that while there is no-one else doing what his company is doing, the wider display market remains an active one in the spin-out arena. "There are actually a number of spin-out display companies and lots of really good innovative companies coming out of the UK, yet to be honest this is despite the fact that there isn't a massive infrastructure here. It is simply clever people doing clever things," he says.
Jones' wider views on the state of our science industry are as revealing as his own technology. "In other countries it is almost easier for spin-outs. Take Holland for instance where everyone is simply coming out of Phillips. In terms of worldwide technology we punch well above our weight.
"However, I'm worried about the long-term future of UK science. What is the situation going to be in 10 to 20 years? Students these days are not finishing their university course and saying I want to do a PhD in anything like the numbers they used to. Why? Because they are so heavily overdrawn. Their first priority on leaving is get employment. If less people start going through traditional research and development (R&D) channels then what is this going to do to our competitiveness?
"Twenty years ago I wanted to become an academic and the environment was such that I was able to achieve that. That knowledge then gave me the ability to create a spin-out company. Today if you are 21 and have a £315,000 overdraft it's different. The end result is surely that our competitiveness will be reduced. We are restricting people from choosing a R&D career."
Jones isn't just talking from the hip. A graphic example of the worrying trend is illustrated by the make-up of an Oxbridge masters course that he runs on display technology. "There are never any British people on the course. What message does this send? My class is full of students from the Far East. When you go to China, Japan and Taiwan you see the opposite happening as in our education system. Over there more and more people are going into university and not leaving until they have done their standard R&D training. Over there universities are strongly tied to companies, they are working with companies, working alongside industry. It's not rocket science to say that we need more support over here from the government, more government funding of PhDs. Tuition fees are not helping."
Zbd itself stands at one end of one of Gordon Brown's much-loved "technology corridors", corridors that - so the theory goes - will one day soon be full of fantastic spin-outs and technology businesses that will make millions and make the Midlands a fantastically productive place again.
In Worcestershire's case the idea is that the length of the A38 can provide that corridor from Qinetiq, via Rover, and onto Birmingham University. Quips Jones: "To be honest I cannot work out what the A38 corridor is, other than you've got Qinetiq at one end and the University of Birmingham at the other. Surely what's more important is creating the right environment in a more general sense. If you have people who have done R&D and who are commercially minded they can then create companies. But where are commercially minded R&D scientists going to come from given present circumstances?"
Jones stresses that he doesn't want to be perceived as overly negative, after all as he adds, Qinetiq is a "fantastic asset" for the Midlands. "Within our own company a third have PhDs and of these almost all came out of Qinetiq. Its flotation really will put Malvern and the Midlands on the world map. We must grasp that."
Who knows, Zbd itself may also soon be on that map too. A recent award as Ernst & Young's Midlands entrepreneur of the year in science and technology has certainly raised Jones' own profile. But the stress of making a spin-out work is clear. "Yeah, this is stressful. But I want Zbd to be a success and will stick with it," says Jones.
Beyond retail LCD displays, Jones still has one eye on future inventions too, saying there is plenty more he could do in other fields. He also fancies one day working from within business rather than fighting to get in from the outside. "Personally in my next life I would like to find a problem that has a market and create solutions from within a company rather than the other way round." Though that, of course, would be far too easy.