Computer connectivity business DisplayLink has staged one of the most remarkable fightbacks in the annals of the Cambridge UK technology cluster.The company is poised for a surge into profit – having rallied from the corporate equivalent of a life support machine. And it is set to launch next generation technology to cash in on high growth markets ranging from home cinema and boardroom displays to mobiles and tablets.
Having grown turnover 50 per cent year-on-year in each of the last two years, the company has shot from a position where it was in danger of running out of money to one where it is sitting on a healthy pile of cash and investing heavily in R & D.
The company has broken even, revived headcount and stopped the cycle of having to go back to investors year after year with the begging bowl. Chairman Graham O’Keeffe puts the revival down to single minded focus on the company’s core technology and believes its fortunes will only get better.
For the global business with a Cambridge headquarters the USB is its USP.
Road warriors across the planet are using DisplayLink, which develops hardware and software solutions to enable easy connectivity between monitors and computing devices over standard interfaces such as USB, Ethernet and wireless networks.
OEM partners say DisplayLink’s technology increases productivity and ease-of-use in the multi-display workspace; it is deployed to millions of users through globally branded PC products including universal docking stations, monitors, projectors, zero client systems and display adapters.
O’Keeffe says: “USB is simple, which is why every peripheral has gone USB. Your mouse, keyboard, printer, iPod, webcam and hard drives have all made the switch due to the plug and play simplicity of USB. So why use the clunky old VGA monitor connector designed in 1987 and go through the pain of installing a graphics card to connect an additional monitor? DisplayLink USB graphics has been proven to provide a much easier way.”
A former investment partner with one of DisplayLink’s backers – Atlas Venture – O’Keeffe has the advantage of having viewed the turnround opportunity both from an investment perspective and the vantage point of an experienced business builder in his own right.
In an exclusive interview with Business Weekly, O’Keeffe said: “Too many startups fail to focus on the element of the business that will leverage most value. A lot of startups, especially in the technology space, try to take on too many potential applications and end up failing on multiple fronts.
“When we refocused at DisplayLink to leverage our core strengths our fortunes revived. My message to all Cambridge startups would be to keep it simple. Do one thing and do it well. Focus internationally on the big global market and attack it: Put all your wood behind one arrow and fire it as far as you can.
“Investors don’t invest in ideas – they back the team and the market. If you can’t convey the potential of your technology to them in 15 seconds you’re dead in the water.”
The new, vastly improved DisplayLink these days focuses on selling its universally accepted technology to enterprise computer channels – typically focusing on the needs of IT managers with Forbes 5000 companies. DisplayLink has managed to sell the value of its solutions to OEMs and these partners have acted as hot gospellers and taken the technology at a stroke to countless markets in new geographies.
Its latest chips support an unprecedented array of multi-monitors, allowing users to handle their emails in one window, Excel documents, say, in another – perhaps Word in another window – and cut and paste data between them. That’s a Godsend if, for example, you need to copy information from a spreadsheet into a legal document.
O’Keeffe foresees big business for DisplayLink in emerging or growing markets, such as home cinema, boardroom displays, mobile applications and the tablet market via Android. “Enterprise connectivity as a whole is a massive market for us. Our USB graphics increasingly allow users to wirelessly connect to a range of systems wherever they happen to land with cheaper, lighter, more efficient and productive technology.”
At its loss-making peak, DisplayLink employed 125 people. Headcount dipped to 95 but has grown again to 105 and will hit 115 by the end of the year. Most of those (around 75 staff) work at the Cambridge mother ship.
Five (mainly sales) staff are based in California, about 20 in Poland and 10 sales people in Asia. Although fewest people are employed in the US, the States remains DisplayLink’s biggest market. “It’s where all the PC giants are based,” O’Keeffe says.
Some of the company’s least expensive products sell well in China and European sales are healthy. Dell and other giants of the PC world are fertile hunting ground for DisplayLink.
O’Keeffe doesn’t underestimate the change in fortune that has allowed the board to concentrate on building the business and developing opportunities with new products rather than having to firefight all the time and worry about finances. He said: “It’s lovely having enough cash to develop a new generation of chip and not having to go back to investors for more money. We have had to raise money pretty much every year before this. Companies can so easily get used to losing money and get stuck in the rut of ‘another year, another funding round.’
“It’s so important to stop that cycle; to get to break even and start generating strong cash. We are now growing as fast as we want to and I don’t need to burn cash to accelerate that pace of expansion. My goal is to maintain a healthy cash balance and grow as fast as we can within that scenario.
“If we see a hyper-growth opportunity then we wouldn’t rule out a $10m-$20m funding round but that’s not the current plan. Two years ago we were flat and running out of money. In that kind of position it’s hard to convince investors that if they give us more cash we will guarantee growing 50 per cent year on year.
“That situation has now been turned on its head and gives us much more clout with investors and strength in global markets.”
• PHOTOGRAPH SHOWS: DisplayLink chairman, Graham O’Keeffe