Life at the sharp end of hi-tech
Wednesday 12 May 1999
In his view, it is the lack of what rap musicians would call attitude rather than a any real shortage of cash that is to blame for Britain's failure to turn the steady flow of bright ideas emanating from its universities into the new Microsofts and SAPs.
"They still mortgage their homes in America," Mr Jones says. "But they are probably more prepared to do it. Here, the most able people have had 10-15 years of career behind them. They have families, they have homes and they are not prepared to take the plunge."
He should know. In 1982, he quit a well-paid job with US electronics giant General Datacom, then one of the world leaders in modem technology, and mortgaged his house to fund a leap in the dark. He and a group of senior engineers had suggested that the firm could make a fortune by adapting its modems to meet the demands of the burgeoning European market.
"It was," he says, " a classic case of not-invented-here syndrome. I told them `if you won't do it, I will do it on my own'." The gamble paid off. His firm, Steebek, hit the market just as demand for computer modems took off in the UK. Soon the big American manufacturers who had failed to anticipate the shift in the marketplace were knocking on Bob Jones's door.
He eventually sold Steebek to Dowty, the British aerospace and electronics group which was later taken over by TI. With the proceeds, he was able to pay his debts and found a new company, Mayze Systems, which targeted banks and airlines that needed specialised high-capacity modems. Mayze was also sold to Dowty.
Having a track record obviously helped with finance. His success was starting to be noticed by the venture capitalists. In 1992 Schroder Ventures and Greylock, an American venture capital firm put up pounds 2.1m for Mr Jones's third venture, Sonix, which he claims, without a shred of inhibition, singlehandledly created the market for ISDN-based Local Area Networks. Once again the timing was impeccable. ISDN was still very new. Sonix quickly captured 46 per cent of the UK market. In May 1995 it was sold to 3Com, the US hi-tech communications group for pounds 50m - a 25-fold return on the initial investment. Schroder Ventures was impressed enough to offer him a job advising it on IT ventures.
Equiinet, his latest venture, involves technology that allows companies to receive e-mails centrally and then sort them so that they can be handled by the right person within the firm. It can also log them - which is particularly helpful to accountancy or law firms who need to have a record of everything.
Britain is still a hi-tech backwater compared with the US and Germany. "It is tougher to raise money, it is tougher to get the best people, it is tougher to get an exit," Mr Jones says. But things are improving. Ten years ago, he says, the eyes of the average City venture capitalist would have glazed over at a business plan from a hi-tech entrepreneur. Mr Jones says: "The default option when you don't understand something has to be no." Now there are half a dozen specialist technology funds with the expertise to weigh up technology-based ventures.
The Government too is making noises about targeting the small entrepreneur. But Mr Jones is sceptical how many of Gordon Brown's schemes will be followed through.
But his big bugbear is UK big business. In the US, established technology firms source components from fledgling businesses. Often they bankroll staff who have an idea they want to pursue. It is an example, he says, UK companies ought to follow.
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