28 May, 2015 - 15:07 By Tony Quested

Companies can fail but their technology holds a legacy

The swift salvage of power electronics company Amantys from administration was a salutary lesson for science & technology entrepreneurs setting out their stalls in Cambridge in a bid to win customers from around the world.

German industrial heavyweight MR has had a long relationship with Amantys and appreciated the potential of the young company’s power switching technology.

When it learned that Amantys had gone bust after failing to secure investment it took MR only a few weeks to move in, hoover up the key assets and IP and secure the future of the business under new ownership.

Cynics might argue that had MR been that close to the situation it could simply have bailed out Amantys with a short to medium term investment. Realists would reason that all is fair in love, war and business and that MR can better use its cash to leverage Amantys’ potential using its own market expertise, established staff and customer networks.

Amantys is doubly fortunate in that its name lives on. On the face of it the business failed. In reality it merely failed to attract investment. The core technology survives and has every chance to thrive.

Over the last quarter-century we have seen Cambridge biotech and hi-tech businesses come and go through alleged company failures. The science or technology, however, has merely changed ownership and in 99 per cent of cases been commercialised successfully by bigger, more established enterprises.

There is more Cambridge-born science & technology in commercial use on the planet than most market observers will be aware of – because the company commercialising it is in the US, Europe or Asia.

The anchor in the ever-raging seas of starting and growing S & T businesses is the strength of the core Intellectual Property. You may not make the best of it commercially but someone, somewhere will be able to.

Would IoT pioneer Neul have gone under had CEO Stan Boland not had the wit and knowhow to get in touch with Huawei? I can think of several companies in the Cambridge pantheon that either had near-death experiences or actually expired before being resuscitated in a manner that would have drawn fan mail from Lazarus.

The legacy technology from Zeus in Cambridge is now being maximised by Brocade, the Silicon Valley top gun. Yet founder Adam Twiss is honest enough to admit that Zeus had one foot in the grave on at least one occasion. DisplayLink was dicing with extinction before Graham O’Keeffe and John Lee gave it the kiss of life.

Serial biotech entrepreneur Andy Richards remembers at least five near-death experiences in the formative days of Chiroscience. Through upward acquisition the core science has been shown to be world-class. A strong management just outweighed a lack of cash to negotiate a sale in the nick of time. Essentially, the science was strong.

So you can see that a lack of cash at the right times can kill a business – as can poor management. Both together are the equivalent of a cyanide pill. So to succeed it is fair to assume that adequate cash and a strong management team will generally realise the full potential of good technology that has a validated market.

One wonders whether ARM, Cambridge’s richest and most successful ever technology business, would have been strangled at birth in different circumstances. ARM’s founders were frustrated at what they regarded as Acorn mismanagement and almost bit off their own umbilical cord linking the enterprises. Acorn management knew shareholders were clambering over them to get a slice of ARM.

Stan Boland again played a key role in effecting a civilised solution. ARM has seized its opportunity and grabbed global glory while Acorn has preserved its legacy as a world-class technology enabler.

Was Ionica a failure? The then new-age telecoms company was the first Cambridge business to be valued at £1 billion never mind a billion dollars. It went bust because the technology worked in remote territories that a non-PR Britain used to call the Third World and which we now dub developing or emerging nations. It did not work consistently to full capability in crowded towns and cities.

Had Ionica kept to the rainforests and not tried to break BT in urban Britain it could have out-muscled ARM in the global pantheon. But a failure? 

As I reported in March 2009: “The last rites are about to be read over the richest corpse in Cambridge business history.” In 10 years since the administration process started, £43 million total cash had been distributed to shareholders. Following the last windfalls the directors called a meeting where Ionica was placed into voluntary liquidation.

Ironically the meeting was at London Bridge where Ionica showed the institution a thing or two about falling down. Some failure! And I maintain the technology was a winner, so that makes it a strategic failing of management.

There is another issue that deserves airing about science and technology that companies decide NOT to commercialise. They decide this, not because the science or technology doesn’t work but because they perceive more value in other S & T within the business. Who’s to say they have made the right decision in what to showcase and what to shelve?

At one local biotech company I met a former NHS scientist attracted to the corporate arena who told me about legions of good scientific research that had been consigned to mothballs and forgotten by management.

I suggested at the time that there was a case for a new Cambridge business – let’s say Light Blue Skies – to take science & technology that companies had put on the back burner and get relevant teams to assess potential for commercialisation. The young Cambridge startup Healx is doing exactly this in the area of rare diseases, matching medically safe and approved remedies that have not been exploited commercially to some of the rarest disorders in the world.

What a waste of billions of man and woman hours – plus billions of pounds in research costs – expended in the labs of Cambridge, the UK and the world at large to leave potential solutions to problems of business or society rusting and rotting in dust-clogged archives.

​And all on the whim of a founder or manager who may not have seen the potential of the core IP.

We are a wiser world now and it still seems crazy to me that we don’t use our cumulative wit and wherewithal to turn these technological dinosaurs into dragons of disruption.
 

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