Cleevely plumbs Cambridge into superstar status
Serial entrepreneur, investor and influencer David Cleevely was inspired to start his own consultancy by the Cambridge Phenomenon – now he is a central part of it.
As chairman of Cambridge Wireless, co-founder of Cambridge Network and a super-angel he is helping new generations of startups gain global traction. To think – his talent almost went down the drain as his gap year turned into a tap year!
He recalls: “I was working as a freelance plumber between school and university and thought about developing a franchise model – and thought hard about doing that rather than uni!”
David’s thoughts had crystallised by the time he was finishing his PhD. “I wanted to start a consultancy because I had already got experience in that. And I wanted to do it in Cambridge because SQW had just published The Cambridge Phenomenon report and I thought this would be a great place to start it.”
The consultancy was to become flesh as the globally-respected telecoms thought-leader, Analysys.
David says: “After I finished the PhD I went to work at a consultancy in London to learn the tricks of the trade before starting my own business. I was 31 when I founded Analysys and growing my first company has been one of the most exciting and challenging things I have ever done.”
All our Torchbearers have been asked whether they had a business plan or even knew how to compile one. The majority of responses indicate that business plan documents seldom formed part of the startup armoury. David said: “Consultancy doesn’t need much of a business plan. You go hunting for business. But you do need a strategy and mine was based on working for people who knew me from previous jobs, getting projects which were just a bit too big and slowly recruiting people to grow the business.”
The startup Analysys operated around about the breadline and sometimes, as David well recalls, there was hardly a crust to be had!
“An old friend who had his own small company bought us the first computer and printer and let me repay the loan slowly. Otherwise I bootstrapped. It was pretty tough – one year I didn’t pay myself anything at all.
“Growing the business proved hugely stressful. I found it difficult to recruit people and cash was always a worry. It was worse in a way because at least when the company was small I could save it from disaster by not paying myself.
“Recruitment was the biggest headache. When you are small people don’t want to take risks. Getting admin and finance systems in place was also tricky.
“Despite what people think, consultancies are finely balanced and without proper project management, billing and other systems you can easily make a loss. Then there was brand and marketing: getting larger projects with big clients took a long time because you needed to build a track record.”
So did he ever wonder why he bothered?
“No. As I say, growing my first company has been one of the most exciting and challenging things I have ever done. It has probably taken years off my life, but I don’t regret it. I made plenty of mistakes – hiring the wrong people, letting projects get out of control. The biggest was not selling in 2000 when the market was going bonkers.
“I just couldn’t believe how stupid people were being. I know now that this is how markets work and you should’t think you know better!”
So who did he lean on when times got tough? “Geoff Walsham, my former PhD supervisor, was a great help. Most importantly I could never have done it without the support of my wife Ros: looking back on it I am amazed how much faith she had in me when things were so rough and we had three small kids.”
It should be added here that those not so small kids any longer are following in father’s footsteps. Both sons are running exciting startups – Adam is now CEO of Camnutra and Matthew CEU of 10to8, steering the business with Nigel Playford’s son, Tom. Olivia has trained as a doctor and is currently on a world tour with her partner. “I suspect when she gets back she will do something entrepreneurial as well,” says David.
Despite early trials and tribulations Analysys became a global telecoms consultancy whose reports consistently went to the heart of the real issues in the industry. They helped inform government and corporate policy on communications.
Here’s the meat of the matter. “We grew to about £12 million turnover, survived the great crash of 2001, grew the business some more and I sold it in 2004 to a company that had approached us back in 2000. I walked away with cash – which is a miracle in a people-based business.”
David pretty much had to go it alone in founding and growing Analysys in the early years. “I talked to some people when I was setting up and at the beginning had one partner but bought him out because he wasn’t able to commit to full time – he had a very lucrative job elsewhere.
“Later on everyone who worked at the company got share options and profited from the sale, by which time I owned about 60 per cent of the business. I signed a non disclosure about the sale. But consultancies rarely sell for more than 1X revenue.”
Analysys Mason Group, as it became, went on to be regarded as the world’s largest specialist adviser to the telecoms, ICT and digital media industry and acquired Redbox Consulting whose extensive portfolio of global clients included leading players such as BT, Vodafone, Optus, Etisalat, Tiscali, Ericsson, and ONO.
As a founder of Cambridge Network and Cambridge Wireless, of which he is also chair, David has always been able to leverage good connections right up to No.10.
On networking he says: “Some things were vital: for example I gave a speech at the Queens’ College engineering dinner and ended up with four recruits – one of whom, Jim Warwick, became the head of software and has played a major role in Abcam which I founded with Jonathan Milner in 1998.
“Analysys used to run workshops and conferences as part of its marketing, but because 80 per cent of our business was abroad and most of our clients were very large we did almost no business or networking in Cambridge.
“That changed after I co-founded Cambridge Network; the people I was then in touch with were vital to the success of Abcam. That led to Cambridge Wireless and Cambridge Angels, without whom I would never have managed to do all the things I have done post Analysys.”
Those things include financially kickstarting Abcam, which is now also a world leader – some call it the Apple of Antibodies – in the supply of protein research tools to life scientists across the planet.
David recalls: “By the mid-’90s I’d seen that the internet was going to be big and tried a few things within Analysys. But it was a chance meeting with Jonathan Milner that led to setting up Abcam. I put up most of the money, brought in the web expertise from Analysys, became chairman and mentored Jonathan. We floated in 2006 and the company is now a member of Cambridge’s $1 billion club with a market cap as we speak of £911.56 million.
“Since then I’ve co founded one other company and sold it and have about six others ‘on the go’ where I am chairman or a director. All are doing well, though they all have ups and downs. One in particular has the potential to be very significant.”
Relentlessly positive, David still admits to frustration as he sees young companies making the same old mistakes. “I see the same problems regurgitated over and over: All the time! I find it difficult sometimes to realise that for many these problems are new!”
His only regret is a minor one: “Given my time again, I’d have sold Analysys in 2000. I would have had more starting cash and could have developed some of the other interests soon after the crash. It is all about timing and 20/20 hindsight!”
He urges young entrepreneurs to pursue their passions in business. “If they asked for my advice I would tell them to keep an open mind, network, look out for opportunities, hone your own skills – but above all do what really excites you; don’t bother with the rest.”
Dr Cleevely believes SMEs are short-changed by government and big business in the UK and says this is costing the economy valuable GDP. He says: “UK government and big businesses don’t buy enough from smaller, fast-growing companies. If they did that we would have much more economic growth and more high profile companies like the US.
“In terms of the local cluster, Cambridge needs to be more upfront about what it does, how it works and how successful we are. There’s a lot of untapped value here for the rest of the UK.”
In saying that, Dr Cleevely still believes that Cambridge is moving in the right direction in terms of building successful international companies. “Cambridge is better at scaling up than everyone thinks,” he says. “We have a small base so you would not expect many large companies. In fact we have grown 14 companies worth over $1bn.
“This is extraordinary for a market town! So I think our success rate is fantastic. Of course we could do better, but as more companies grow and we recycle management and entrepreneurial talent I think Cambridge is better placed than almost anywhere else to achieve scale-up.”