QIB Q4 – Funds and other animals
On Thursday 6th December Engine Shed hosted the final Quarterly Investment Briefing for the year at Framework on King Street in Bristol. A gathering…Read more
Engine Shed’s Let’s Chat series shines the spotlight on our all-important stakeholders that form a vital part of Engine Shed. This month we sat down to chat with angel investor, and ex-chair of ARM, Robin Saxby, to get his take on the current environment for entrepreneurs, what he looks for when investing in tech, and the key features a company needs to succeed.
For those that don’t know much about you, what are you doing at the moment and what is your background?
I’m an Electronic Engineering graduate from the University of Liverpool, 1968. My first job was designing colour television receivers, when colour TV was just starting. Through that I got involved in microchips designing with Plessey Semiconductors, a chip that contained 50 resistors and 50 transistors – now today’s chips contain billions of transistors.
I had a passion for engineering and wealth creation and an early part of my career was with Motorola Semiconductors from 1973 – 1984. Motorola taught me about sales, marketing, applications, finance, management and leadership. I was also exposed to a range of technologies from gate arrays to microprocessors.
In 1984, I had my first CEO role in a security company going from access control to security gates. It was a two-year baptism of fire, working for a boss who didn’t believe in admitting mistakes and ruled through fear. We had very different cultural values, but the experience toughened me up. Then I worked for European Silicon Structures (ES2), a startup doing direct write on wafer with e-beam machines from 1986-1990. One of my offices in that period was in Silicon Valley and I also gained exposure to Japan. Then, I was headhunted to be the founding CEO of ARM Holdings PLC, as a spinout of Acorn, with finance coming from Apple and VLSI technology, both in Silicon Valley. There were 12 ex Acorn founding engineers plus myself and we turned ARM technology into the global RISC standard, taking the company public in 1998. We were 30x over subscribed, listing the company on both the NASDAQ (New York) and London stock markets. I, and 200 engineers, became wealthy on floatation and I retired from ARM in 2007, having done 100 plus quarterly earnings statements.
People advised me that ‘to retire is to expire’. So now I am an Angel investor and mentor to various tech startups. Three of these are headquartered in Bristol – GraphCore, Xmos, and Blu Wireless, all of whom have their origin in Engine Shed [a la SETsquared Bristol incubator]. I’m also a visiting professor at my alma mater, the University of Liverpool, and I mentor and guide startup companies through the Royal Academy Engineering’s Enterprise Hub. I hope to help these companies learn from my mistakes and I can connect them to my network of contacts. I see my role as a catalyst to help make positive progress, hopefully.
You’ve achieved many things so far, what are you most proud of and why?
ARM is now seen as a big success story; more than 120 billion ARM chips, built by ARM’s Semiconductor Partners, have been shipped, meaning that as many people use an ARM Powered product as have basic sanitation. Key applications are mobile phones, tablets, networking, automotive and consumer electronics. Most electronic products across our planet today contain some ARM technology. I’m personally most proud of the fact that ARM technology has improved people’s lives, enabling commerce in poor areas, providing better control of water and energy and crop yields
I’ve been “Sir” Robin since 2001 but I’m very pleased that ARM goes from strength to strength without me. ARM success is about great people working together in great teams across our planet. Unicef and ARM are now working on a project to improve lives. It’s called Vision 2030 aiming to solve through the use of technology some of the world’s biggest problems. The satisfaction comes through improving things, not just making money.
I consider myself fortunate to have followed my passion for engineering, to have had a successful career working with global lifelong friends and to have helped create a more effective way of working.
How has the entrepreneur environment evolved over the past ten or so years?
Today there is a greater awareness of the role of the entrepreneur than in the early 90s. There’s a realisation that entrepreneurs create jobs and improve the wealth of nations. However it takes a lot of hard work and energy to turn a startup into a successful business, with many set backs along the way. You need tenacity and determination to succeed. We learn by making mistakes. Today, the world is more complex and there’s a wider range of opportunities so it’s important to evolve a world’s best strategy in order to succeed. It’s not an easy journey. You need passion and energy, and be prepared to fail and pick yourself up and have another go to eventually survive and prosper.
What are the main challenges for any would-be entrepreneur if they are thinking about setting out now?
They are not different from any other time. It’s about coming up with a better solution to a problem than incumbent suppliers. Success comes from engaging world class demanding customers to get your technology used by them. If you look back at history, of the top 100 companies of 100 years ago, only two typically still exist today in any market. Companies form, become successful, fail, and disappear. When ARM started, the number one mobile phone company was Motorola, then Ericsson, and next Nokia that enabled ARM’s early success. Later came Blackberry, and now we’ve the iPhone and Samsung Galaxy. The reality is that in technology development, innovation is easier to create in a startup with fresh ideas, than in a large corporation who’s focus on quarterly earnings makes innovation harder to implement.
Today, the world is even more globally connected and interdependent than when we started ARM. As markets, India and China are on the rise. Competitors exist across the planet. Great technology comes from the work of lots of people across the globe collaborating. To be successful, you have to be the world’s best at something. You have to be honest though about how and where you can be the world’s best. In the case of ARM, we realised that RISC microprocessors were faster than incumbent CISC processors and with the invention of Thumb could be used for mobile phones. ARM had better performance over cost and power consumption. In a startup, it is easier to see new emerging space that larger suppliers might miss.
Startups need access to markets. Sometimes partnering with larger corporations can be helpful as you can leverage their sales channels. I also recommend startups to take a global view and identify what the biggest problems are that they can help fix.
You’ve invested in a number of companies, what makes you excited about them, what do you look for?
I believe that all these companies have world beating technology: BluWireless has high speed wireless (60GHz), Graphcore’s Machine Learning architecture is potentially the world’s best and XMOS’ technology is great for handling lots of microphones. When I look at a start up team I ask- ‘Do they have something that is world leading?’ Secondly, what is the quality of the team and can they deliver? The CEO as leader is pretty important but you also ask how might the team evolve? No team is ever complete or perfect. Use consultants and part timers until you can afford full time staff.
How did you get to hear about Engine Shed?
I first heard about Engine Shed through BluWireless. I was giving a talk at a Global Semiconductor Association (GSA) event in London. After my talk, somebody in the audience suggested I might become an angel investor in BluWireless so I hopped on a train down to Bristol.
How would you describe Engine Shed?
It’s an active buzzing place for startups to be part of; with lots of people with experience and passion to call on for help. It has a good culture and ethos. Nick as the leader is well connected within the city, university, venture and engineering communities and he helps make things happen.
What do you think about Bristol’s startup scene? Is there anyone you’ve got your eye on?
There is a lot of diverse talent, experience and enthusiasm, maybe under selling itself a bit. I’d encourage everyone to look outwards, to think globally and get better connected. I think more can be gained by collaborating with others within say a 40-mile radius of Bristol to create a stronger outward facing message. The companies I’ve invested in are more focused on their customers in Silicon Valley, India, China and the UK than they are in just considering Bristol issues.
Developing an economic ecosystem can be challenging, what are the key features that are needed for success?
Firstly, think big not small. And then look outwards. Overall, people and funding are primarily needed as well as being joined up. Globally you need to ask the question “How do you take what you have and team up to make 2+2 = 4?”
I’m speaking in Liverpool next week; they opened a joint University campus in China 10 years ago, called Xi’an Jiaotong-Liverpool University. This partnership has brought benefits to the cities of Liverpool and Suzhou. Thinking globally whilst acting locally is always a good idea. I’d recommend you considering who are the best strong global partners to complement local strength.
What sort of role does Engine Shed have in developing an ecosystem that is self-sufficient?
In terms of roles for Engine Shed, we live in a capitalist society focused on making money, but the gaps between the haves and the have nots are as big as they have ever been. So a major role for Engine Shed is the work with school kids, teachers, and connecting them. Engine Shed is aware of local problems and is working to fix them. Kids want to do something useful and worthwhile, not just make money these days. So there is an evolving role for Engine Shed, based on the history, property, space, incubation and so on. What’s the next phase? I hope my discussion will help Nick and University of Bristol work it out.
This evening we’re talking about how to boost the amount of finance available to growing technology businesses in this area and whether there’s a role for a local fund – and whether it can also have a positive impact on entrepreneurship generally.
Is there anything lacking or is there a weakness in the UK business scene that prevents an ecosystem from being inclusive and sustainable?
One new problem, currently, is uncertainty in the world generally. It’s unclear where the referendum’s result will lead and new potential trade wars add to the uncertainty. My advice to startup businesses is to team with strong global partners who can add value to your offering and vice versa. Today’s globally successful businesses generally find ways around political barriers. In the early days of ARM we benefited from a European collaborative R & D programme called OMI and I hope that we will be able to continue to collaborate in future ESPRIT programmes. GSM and Bluetooth started life as EU standards. But I say to engineers, don’t worry about politics, face realities. You need to find friends anywhere in the world that share a common vision, that you can trust and add value to your offering
Globalisation and technological change have contributed to improving people’s lives. Looking inwards and backwards is unlikely to improve the lot of the human race. Equally bureaucracy should be avoided and systems and organisations need to be continually reviewed and refreshed. Today, people are more likely to die of obesity than in a war or fighting. Life expectancy is improving and cures have been found for many diseases.
Engine Shed encourages collaboration between public sector bodies and academics as well as businesses – how and why is collaboration important for business?
The pace of business is very quick whereas the pace of academia is slower and the pace of government is slower still so recognise the different paces. Reality is that for really good research, universities are the best place to do it, pushing boundaries with business making things happen. The shorter government funded projects are very useful.
Projects funded by government enable innovation. The semiconductor sector was kick-started by the space race in the USA. What I look for is ‘where is the win-win through collaboration’? How do we do things better together than working separately?
Why do you feel it is important for someone with your successes to work with young entrepreneurs? What does that bring to them?
Experience basically. When young, you are trained to pass exams and be top of the class. In life to succeed, you don’t need to win every time, life is about collaboration and teamwork. Hopefully, I give them more confidence to succeed. The young have more energy and are up to date with the latest stuff. Talking to young people keeps me alert, active and up to speed.
Finally, the B-word, what’s your advice to businesses so that they can move through the transition with ease?
Basically ignore it and do what you have to do. Hire people where you need them, don’t wait for government to make a decision, just do it. For one of my startups recently, this meant moving out of the UK. It was the right thing for the business, so we did it. When ARM went public, LSI Logic founder Wilf Corrigan wrote me a congratulatory letter explaining how he had to move to the USA to be successful whereas as I had created a global success headquartered in Cambridge. Now ARM is owned by SoftBank with a HQ in Japan. Softbank, however, has a global 100B$ fund, employing people in the UK that has invested in one of my startups and a positive of a weaker pound is our salaries are lower for overseas employers. In life, it’s better to look for opportunity rather than worry over problems. An ideal outcome for me, however, would be a refreshed Europe with the UK at the top table. Being part of a larger community is likely to yield a greater influence.