Build a close, trusting team around you

Gwyn Humphreys reveals what he wished he'd known when starting up his business.

Bradford Particle Design (BPD) was a huge amount of fun, but was probably the most "total commitment" activity of my life - and in embarking on setting up and running your own company, one of the key things you must bear in mind at the beginning is that your family will need to be very understanding, and long-suffering.

They will bear the brunt of all the bad things that happen (and there will be plenty of those, even in a successful company), and also you are likely to be "away" much of the time, whether it be late nights or travelling. However, the joy and huge satisfaction that comes with success is what it is all about - and the competitive nature of academic research should stand you in good stead in this regard!

Indeed it is the success that you should be driven by - and in business that will bring its own financial rewards, which should really be viewed as a secondary, although gratifying result.

In no particular order, here are a few of the key things that I learned along the way and some of them were learned by doing things the wrong way first.

Setting up the company and negotiating with the university (assuming it is a spin-out company!)

Expect this to be a surreal experience. Universities are by their nature totally risk-averse - no surprise there. However, companies are all about risk. You are proposing to take a huge risk with your life, family and income and all the University will see is a huge opportunity.

If they do not secure the maximum possible equity, they will be blamed later if the company is very successful. Equity is like land - once the moment of creation is done with, they stop making it.

Your negotiation position at the beginning is therefore very weak, but it is worth persevering and taking as long as it takes to do a good deal. A good (and therefore fair) deal must recognise the nurture and support which you have had from the university, but also the risk and commitment which you are taking on. In the end both parties are keen on success and the deal must not be so skewed as to de-motivate the founders, as this will lead to failure in most cases.

Think and plan ahead for ALL eventualities

Things seldom go to plan in a small company, and we found it extremely valuable to plan the main strategy (on any issue) but then to ruminate on all the other possible scenarios. Consequently, when things did not go according to the main strategy, we could easily shift our planning and actions. This way, as far as possible, we were always ahead of the game.

"No one person can realistically grow a significant international business. Build a team ethos, and play to each others' strengths."

Build a close, trusting team around you

No one person can realistically grow a significant international business. Build a team ethos, and play to each others' strengths. Companies are not ego trips for the founders. Your staff are key to the success of the business - make sure that you treat them fairly. Encourage staff to grow with the company; the skills and loyalty of your staff are paramount. However, an equally important point is that you MUST deal with difficult personnel issues firmly and promptly; such issues (especially in small companies) do not go away - and they take up increasing time and energy and distract you from running the business. Take good HR advice early!

Many of the problems later encountered by small companies are created early in their lives

For example; keep organisational structures simple, until you need to diversify them. Avoid too many internal meetings - they will lead to "meetings-lock", the equivalent of traffic grid-lock; people get to perceive that they are only valued if they are seen at meetings and the amount of actual work that gets done decreases drastically. Consider restricting internal meetings to only one or two days a week.

Make maximum use of all the commercial contacts which you have made during your research career

You will have credibility with such contacts, and it is well worth trying very hard to get them to collaborate with the new company very early in its life. Your credibility with investors will often be greatly enhanced by having early deals with significant companies; it validates the technology of your company and it reduces their perceived risk. Furthermore, early revenues may reduce or eliminate the need to seek venture capital funding. The first equity investment will always be one of the most expensive, and all revenues will help to limit the cash required from the VC funding. In this context, grants are really valuable, BUT only if they lead to your objectives, and are not distractions, managerially and/or technically.

Paradoxically, although the new company has sprung from your technology and scientific developments, the success of the company will probably be much more dependent in terms of its success on non-technical issues. HR, financial and business development aspects of the company, along with careful nurture of the intellectual property resources, are likely to be the key issues which will determine success - although of course the technology base is a fundamental given.

"You will spend too much of your life running the company for it not to be also great fun."

Finally, you will be under continual stress as you create and grow the company. You will learn to cope with this, but do ensure that the company is also fun. You will spend too much of your life running the company for it not to be also great fun. So, as you embark on this new venture, I wish you real luck and much fun.