Tuesday 29th August 2006
A tale of two spin-outs
in association with Ernst & YoungThe reputation and quality of British science is globally recognised. But can it be converted into the creation of world-beating businesses? Cliff Jones and Kevin Matthews provide two good reasons to be optimistic. When Cliff Jones was a scientist, it never occurred to him to start a spin-out. His career had been very academic. But in 1998 he was at a US conference to talk about the technology he was working on at the then government agency Defence Evaluation and Research Agency (now known as QinetiQ). He got talking to a venture capitalist who said that he would put up $5 million for Jones to develop it. Jones got back to the UK and talked to his co-inventor Guy Bryan-Brown. ‘We immediately knew we wanted to start our own firm,’ he says. Since 20 of the necessary patents were owned by the Agency, it took a major stake in the new business, called ZBD. Jones and his colleagues raised an initial £1.5 million of venture capital in July 2000, with Prelude Ventures, TTP Ventures and Dow Chemical Ventures coming in as seed investors; a second round followed in 2001. The American who put the idea into his head has become an investor. The technology that has obsessed Jones for the past ten years is the development of a new type of zero-power liquid crystal display. The image it generates stays on display even when the power is switched off. Supermarkets can use it for displaying pricing and product information instead of printed labels, as it can be updated instantly. As it uses no power, the cost, says Jones, ‘is a fraction of existing LCD displays.’ ZBD has developed colour versions and can produce varying shades of grey. ‘It’s a completely new technology, unlike anything in existence,’ says Jones. ‘The global market in the retail sector is worth over £4 billion and then we are looking at applications such as iPod screens, eBooks, PDA screens and televisions. It’s applicable for anything that has a display and uses a battery.’ Developing this technology, says Jones, has been incredibly difficult. ‘My last ten years haven’t been three-day weeks where I go home at 4pm. I’m talking about 12-hour days, six days a week, month after month, year-in year-out, during which time I have registered 40 patents. But I’m a born problem-solver; it is built into me. Some people get demotivated by problems; I have spent my entire career searching for problems that I can pit myself against. It’s what I get out of bed for.’ Becoming an entrepreneur was initially a strange experience for Jones. ‘As an academic you can chase any problem you see. It doesn’t matter if they need to be solved or not. Entrepreneurs need to be more focused. You have got investors to please and customers to satisfy, so the key is to learn when to let ideas and problems go.’ He has enjoyed the help and support he has received in the past five years. ‘In the academic world, everyone is in competition with each other. People want to show off. Entrepreneurs are so willing to share advice. It is a surprise.’ When ZBD started, Jones says that this was one of their mistakes: ‘we looked at too many things. We thought our competition was more important than our customers – it’s a common mistake in our industry. And venture capitalists are always looking for the next big thing, so there is big pressure from them. We looked at too many possible uses for the technology so there was no focus.’
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