Alasdair Rawsthorne reveals what he wished he'd known when starting up his business.
I founded Transitive almost seven years ago, based on the fruits of five years research at the University of Manchester. Here are a few things that I wish I I'd known back then!
When we started the original research project back in 1995, we always knew that if we were successful, we could probably find a market outlet for the technology.
Originally, we would have been very happy licensing the technology for a few hundred thousand, but as we engaged with potential customers, our hopes became more ambitious, not because anyone offered us money, but because we became increasingly convinced that we could solve real, meaningful industry problems with our technology.
But it then took two years from the start of our serious search for investment until we closed our first funding round and started the company. It then took another two years hard graft before we signed our first meaningful production contract.
This was so much longer than anyone had originally thought or planned. I wish I'd known just how long it takes to convince customers, even ones who are willing to bet on new technologies.
Have a look at Forbes Magazine's "Midas List" of the top 100 technology venture capitalists. Now work out how you are going to get one of those people to invest in your company and sit on your board.
The common perception of top-tier VCs is of people with large address books, who can call influential people in your industry on your behalf. That was mine, too. But when you have one of these people on your side, you actually get far more.
They don't have to make phone calls on your behalf; they are routinely engaged with all the movers and shakers in the technology industry, and eat, breathe and sleep the dynamics in the whole industry.
You may be deeply steeped in your business, but they are deeply steeped in the industry, and have a breadth of experience and business insight that will save you literally years of exploring blind alleys.
You may find it difficult to attract these giants in the early stages; you may need to consciously bootstrap yourself to that level. You may find, with some top-tier VCs that you end up parting with more equity than a less demanding investor might be happy with - but it's worth every percent.
On day one, you own the vision of your operation, and you also own all of its challenges. I was Transitive's marketing, sales, CFO, VP of engineering, head of HR, office manager, IT specialist, and a hundred other things.
As the company grows, you hand over many of those tasks to other people. Make sure you recruit people into those roles who can narrower and narrower, hopefully to a point where you can concentrate on the things you do better than anyone else.
But sometimes, just sometimes, you wake up with a feeling of nostalgia for the days when every single thing that happened to your baby operation, happened within your attention span. And you feel a sense of bereavement that there is stuff happening that you don't even know about!
You hold the vision for your new company. It's your dream, and you've put all the ingredients together and you have set the initial direction, both strategically and tactically. However, you have also assembled a team of strong people, each with their own ideas of what's right and what needs doing right now.
Hopefully, you've appointed real experts in all of the different areas that you need, so you can trust their judgment and give them the autonomy and responsibility they really need to be successful.
Occasionally you will see things happen that cause you to think "hold on, that's not right!" You will be tempted to trust the judgment of the expert - but occasionally, they may make decisions which, although sensible and justified individually, start to depart from your original vision, strategy or your product positioning when taken together.
Learning when to step in and challenge these decisions, and when to trust your experts, is the hardest thing I've done, and I think I've got it wrong on too many occasions.
Apple's announcement of the product that uses our software was a huge media event in June 2005. The first products were introduced in January 2006, to rave reviews, and the last of the previous generation were replaced just 7 months later - an extraordinarily successful transition in the computer industry.
So now, everything should be easy! Our success story should proceed ahead, and everyone else in the industry should be looking at our ingredient in Apple's success and saying, "I want a piece of that, too!"
Wrong. Our other customers each operate in a different segment of the computer market, and each is convinced that the requirements of their end-users are so different that our technology can't possibly work for them; computer servers are different from Apple laptops, and embedded systems, and hand-portable systems, and defence systems, and so on.
Everyone in each of these different segments needs to be convinced, point-by-point, that we can deliver them real value. We know we're getting closer to the "tipping point", when greed will drive our customers more than fear, but we still have a way to go.
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Nesta Operating Company, a company limited by guarantee registered in England and Wales with company number 7706036 and charity number 1144091. Registered as a charity in Scotland number SC042833.
