Cambridge Computer Lab chief urges home-grown model
Andy Hopper, head of the Cambridge University Computer Laboratory, intends to encourage future startups and spin-outs to base themselves in the UK – preferably Cambridge.
As 188 companies have been founded by Laboratory staff and graduates to date, that undertaking could carry a highly significant payback for the Cambridge technology cluster.
Professor Hopper says: “The Computer Laboratory must be one of the biggest wealth and job creation engines in the country.”
His rationale for recommending a Cambridge or at least UK base for new ventures is lucid. The organic growth to world-class by a pair of 2002 spin-outs from the Laboratory – Cambridge-based RealVNC and Ubisense – has created a new paradigm: One that engenders what Professor Hopper calls “wholesome” businesses and eradicates interference from offshore investors.
Both were entirely angel-funded by the founders and contemporaries.
Both have resisted the siren calls of Lorelei VCs and avoided the pressure of having to shoehorn activities into an unrealistic timeframe before an IPO or other exit.
Both have been commercially focused from Day One, averting the need for heavy borrowing, underpinning growth and profitability.
Both have kept the founders involved for the full nine years as figureheads and hot gospellers for the business.
According to Professor Hopper, the fortunes of RealVNC and Ubisense “prove that capitalism works.”
In an exclusive interview with Business Weekly, he said: “This issue of wealth creation for technology businesses is an important one that needs to be aired.
“You can’t say – as many do – that there is no money available or appetite to fund good technology propositions because there clearly is. The success of these two companies proves that.
“Both RealVNC and Ubisense are doing well and are keeping shareholders happy. It shows what can be done if you concentrate on the core business without the distraction of a fight with investors seeking an exit – the double or quits mentality.
“That is why I am very keen that companies have their headquarters in the UK and will encourage startup and spin-out companies to be based in Cambridge, with no offshore interference in decision making.”
Professor Hopper – one of the UK’s leading ‘dontrepreneurs,’ as Business Weekly christened academic entrepreneurs in a Cambridge University supplement 15 years ago – is chairman of both companies. Each emerged from the Computer Lab in 2002 after Olivetti withdrew and before AT&T assumed patronage.
RealVNC which, as its name suggests, sells VNC technology to a range of industries globally, remains private and profitable with no external investors. It recently emerged from Buckingham Palace with two Queen’s Awards – the only company this year to ‘do the double.’
With over 100 million software downloads, VNC is a de facto standard for remote control. VNC has been used widely in hundreds of different products and applications, from helpdesks to virtualisation.
Part of its published mantra reflects the company culture: “Keep it fun – look after your team as they are the ones that really make the difference.”
Ubisense, which pioneers Real Time Location Systems for accurate tracking of people and things, has just emerged from a spectacular IPO in London but the float was strictly on the company’s terms and not to satisfy cash-hungry VCs.
It has “crossed the chasm in its own time and in its own way,” according to Professor Hopper. Ubisense now has millions in the bank and is under no pressure to dissipate its war chest. And that’s the beauty of the Ubisense/ RealVNC model, says Professor Hopper.
“Angel funders can alter their timetable and horizons because they are not hurtling after an exit. We can – and have done – sit down with angel investors if our progress to certain targets is delayed and explain why that has happened and what we intend to do about it. Such an approach is likely to spook VC investors
“Every technology business I can think of has seen its original proposition evolve into something completely different by the time it hits the market. Virata, another very successful Cambridge company and computer Lab spin-out, was a classic example. It started out as an ATM business (Asynchronous Transfer Mode) and ended up doing brilliantly pioneering ADSL.
“VCs are also prone to jettisoning the founders much too soon. In fact, I would question whether they should ever do that at all. If you want to be successful and sustainable you don’t throw out the founders.
“They have a knowledge and a passion that has made your business everything it is. They have shaped the company’s ethics and culture. If you want to start a new business or take the existing one into new areas you will need more of the founders’ knowledge and passion.
“Instead of looking at the balance sheet and an exit as the priorities of growing a business, VCs should pay regard to human capital. Both RealVNC and Ubisense have done so and grown wholesome, organic, sustainable companies where the people – shareholders, managers and staff – have smiles on their faces.”