With shares and property on the floor, investors could do worse than take a look at the innovators and inventors pointing the way out of recession, say Edward Devlin and Neil Tague.
Grafton Street, Manchester. A blowy March evening and technology entrepreneurs, potential investors and interested observers are heading to the University of Manchester Incubator Company. Welcome to the Dragon’s Lair.
Dragon’s Lair – no points for originality but everyone knows what to expect – is an occasional event thought up by Manoj Ranaweera, founder of interactive business documents provider edocr, and one of those consummate compilers of business networks who can’t stop himself buzzing around a room introducing people to each other.
Eight ideas are pitched to a panel of dragons that include Scott Fletcher, chief executive of the all-conquering technology solutions group ANS, a2e principal Amin Amiri and Aquarius Equity Partners man Alex Stevenson. As the presentations close, the pitchers’ sleeves are being tugged at by people wanting to know more.
Now more than ever, with more common ways of turning a small pile of money into a bigger pile of money closed off, it could be appropriate to hook up with the bright sparks doing something different that just might be the next big thing. Ideas are all around us, but how do you pick the winners?
Mark Rahn, investment manager at early stage venture capitalist MTI, says: “There are three important factors. First is market; you need to have a large market opportunity. Second, the technology needs to have something that is intrinsically valuable, usually this is intellectual property or patents. Third, you need world-class management, but not necessarily at the start.”
Phil Tapsell, founder of TechVenture Solutions, adds: “The companies that stand out have a clear vision.
They have done that strategic road mapping exercise – an essential part of the recipe for success that many do not do. They have also determined who their best-fit target customers are.
“They know what they have to do, and if they don’t have the necessary skills in-house they find it and bring it in, whether it be a business coach, a consultant or a non-executive director – but only capable ones prepared to role their sleeves up and do more than just eat biscuits at meetings.”
As far as Rahn is concerned, there is no choice: “If you don’t invest in innovation the recession will hit you really hard.”
Human Recognition Systems
“Government is anti-innovation,” says Neil Norman, founder and chief executive of Human Recognition Systems (HRS) in Liverpool. He thinks there’s a belief that in the US risk should be encouraged as a gateway to opportunity. In the UK “we do not engender a culture of risk-taking with innovation,” he says.
HRS has contracts with the Ministry of Defence, Department of Health, BAA and top construction and retail companies to provide biometric identity recognition technology. The company’s iris recognition technology is used in 110 prisons in England to control the levels of methadone given to heroin addicts and ensure correct doses are given.
Norman says the main characteristic for innovators is persistence: “Genius is not enough; education, even, is not the answer. I have seen Cambridge graduates who couldn’t run a sandwich shop.
You have to be thick-skinned and not give up at the first, second, third or even fourth attempt.”
At HRS innovation is not just an abstract concept, it is a core value encouraged daily. Once a month HRS engages in “imagination harvesting” – a version of Dragons’ Den called the Hornets’ Nest. Staff write their ideas on a giant whiteboard and any product that reaches the market gains them 5 per cent of the revenue for two years. HRS has won three £1.5m contracts in the past 12 months and £2.5m in this year’s order book.
Ravensoft UK
Ravensoft UK, a subsidiary of Finnish software development business Ravensoft, has launched a mobile phone application that can extend the battery life of a Nokia smartphone by up to 30 per cent. The branded Battery Extender manages power-draining applications and features such as GPS and Bluetooth.
Dr Chris Byrne, head of operations and strategy for the UK, said company research has shown that a phone with a typical battery life of four days can be extended by more than 25 hours with the application.
It monitors battery levels and will dim screen brightness and cut back inactive features to save power. Users can customise their own profiles to suit their needs or choose from a variety of pre-programmed profiles.
Ravensoft UK has received notification from Ovi, Nokia’s online equivalent of the Apple store, that the application has passed the quality assurance process and will be offered in the store later this year. It is also available on other web application sites. The company is planning to launch a corporate version later in the year.
The Battery Extender has been developed in-house at Manchester Science Park. Byrne says the location is crucial, providing easy access to contacts of liked-minded companies and invitations to events, such as tenant showcases, where ideas can be swapped and commented on.
Corporation Pop
Dom Raban, managing director of Manchester design agency Corporation Pop, is out of this world.
He is creating virtual environments where companies can share information without having to board a train or plane.
Corporation Pop started as a traditional design company but is now heavily involved in the virtual world of Second Life, where users interact through avatars – online versions of themselves. It may sound like a game for teenagers but Raban insists it is a viable platform for businesses and educational institutions to save money.
“With pressures on budget and the need to be green, it makes sense to get together virtually,” he says. “It’s not as good as face-to-face meetings but the savings are immense.”
Corporation Pop organised a virtual graduation ceremony for BP senior managers who had finished a long-distance learning course with Manchester Business School. The agency created a private space and avatars of the staff and the pro-vice chancellor, interacting with the graduates via their PCs.
Raban is also working with Manchester Metropolitan University so a module on the university’s film and media course can be delivered through Second Life. It’s expected to go live in September. Corporation Pop is one of less than 20 UK companies recognised by Linden Labs – maker of Second Life – as a full-service solution provider.
Arvia
Clean technology company Arvia is a spin-out from the University of Manchester’s School of Chemical Engineering. It has developed a continuous, low- cost, low-maintenance process for the removal of pollutants from water for the industrial and municipal sectors.
“Our technology removes the pollutant, then destroys it onsite and renders it down to harmless gases.
There is no waste product requiring secondary treatment,” says chief executive Martin Keighley.
The Arvia process relies on an absorbent carbon-based material called Nyex, which is electrically reactivated for continuous reuse. Keighley says: “Our technology is very much like computer technology; we like to think of it as a plug-and-play approach.”
The company received £800,000 of investment from private individuals, the Liverpool Seed Fund and the UMIP Premier Fund, a multimillion-pound pot dedicated to the commercialisation of outstanding businesses coming out of Manchester University, managed by MTI.
In its second year, Keighley sees global potential to provide a solution to issues of sustainable energy and dwindling natural resources, but says the firm needs to crawl before it walks.
The company has scooped numerous prizes for its technology including the Water Award in the Institution of Chemical Engineers Awards for Innovation and Excellence 2008.
Also in: May 2009
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A special plea
If recessions serve any purpose at all, it is to give businesses a chance to focus on what is important, profitable and sustainable.
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Insider Interview: Rob Cotton
He has driven NCC Group hard. He’s led two buyouts, floated the business and delivered steady growth. But does he really get the credit he deserves? Michael Taylor tries to work him out.
