Modest Massarella content to keep his RFeye on the long-term prize
Wireless industry entrepreneur Alistair Massarella is not the type to walk the streets bawling his accomplishments through a loud hailer.
He prefers to let his teams and technology do the talking and the understated but effective approach has paid dividends over a long period for this quiet man of the Cambridge cluster.
It will not be obvious to many that the modest Massarella has founded or co-founded four companies while he has been in Cambridge – two of which have been sold and two others that are still thriving.
Adaptive Broadband was sold to a US company for $18 million; Cambridge Broadband is still going well, Custom Autotech was sold to a UK company and CRFS is profitable and increasing sales at an impressive strike rate.
CRFS – co-founded by Alistair and another serial comms business builder, David Cleevely, in 2007 – pioneered the concept of remote, distributed, real-time networks of spectrum sensors for continuous 24/7 monitoring of the RF environment.
The RFeye Node is considered the most cost-effective wideband RF sensor available on the market today, fully networkable with outstanding speed, sensitivity and versatility and housed in a robust enclosure designed to withstand extreme environmental conditions.
The new RFeye Nexus receiver extends the state of the art for high end SIGINT and TSCM applications, offering unsurpassed speed and RF performance, a massive 80MHz instantaneous bandwidth and full rate PCIe data streaming.
CRFS serves customers in the military and intelligence communities, police, homeland security and public safety, as well as many civilian customers including spectrum agencies and regulators, sports and public venues, airports and prisons.
Headquartered in Cambridge UK and with a wholly-owned company in the US, CRFS also has a large network of agents and distributors around the world and additionally partners with OEMs, system integrators and value-added resellers.
Looking back, Alistair reckons he already had entrepreneurial blood coursing through his veins when he was still at primary school. “I can remember at 10 years old trying to sell old aerial masts that were bent into the shape of go karts – the idea being to sell them as a go-kart. Sales were not great!
“Then while studying at college for my degree the concept of having a business started to kick in. Its easy to say you have a company; its harder to have a company that can sustain itself and make money.”
With a PhD in telecommunications engineering from British Telecom Research laboratories and as a member of the Institute of Engineering Technology, Massarella’s pedigree in the segment is writ large. It is his success from the outset in helping to form and then grow hi-tech success stories that deserves to be elucidated.
The breakthrough came in Cambridge in the mid-’90s – and at a relatively late age for a budding entrepreneur. He recalls: “While working as a standards engineer at Olivetti Research in 1996 I was first introduced to hi-tech spin outs, shares, share options, phantom share options and all night development/coding sessions to meet a demo the next day!
“The idea of co-founding an organisation with other like-minded individuals was something that appealed to me.
“I was 31 years old. I came to this quite late as I had done a PhD after getting my degree and then went off to Antarctica for a few years. We founded Adaptive Broadband, a point to multi-point microwave access systems venture, which we sold a year later to California Microwave (now Adaptive Broadband Corporation).”
He didn’t volunteer it, but California Microwave paid $11 million cash for Adaptive and laid down another $7m related to targets.
Most of the revenues were split equally between Olivetti and Oracle and staff at Adaptive continued to work in Cambridge following the acquisition.
Professor Andy Hopper, a director of Adaptive and the lab, said at the time that the Americans had bought the technology in the same way that a venture capitalist would. The laboratory had form in the marketplace, having previously spun off two other enterprises – Telemedia Systems and Virata.
Alistair then co-founded Cambridge Broadband in 2000. The business has $40m revenues and is still running as a successful international company. He says: “At Olivetti we did the spin-outs with Andy Hopper for Adaptive Broadband and Cambridge Broadband. These companies had multiple founders. It was an exciting time.
“After stepping down from Cambridge Broadband I wanted to do something on my own and I approached David Cleevely at the Cambridge Angels. David and Andy have been a huge driving force and influence behind the success I have had to date.
“I wrote a business plan over the summer and presented to the Cambridge Angels group. CRFS was funded by the Angels with some other smaller funds coming in later to top up subsequent rounds to the tune of several hundred thousand pounds.”
Did that process prove stressful or problematical? “Stress in not the correct word. Anxious that we got the money in the bank to start developing would be a better way of describing the experience.
“By the time a company builds to 30 employees there is more of a determination to make sure that it can pay those people based on sales!
“Hiring good people remains the greatest challenge. Companies must always hire the best possible people.
“This can be tricky as being a startup generally you have to really look after the small amount of cash you have. So keeping salaries low is important and giving people share option incentives is important.
“The time it takes to make sure you have the right people is also critical but a drag when you are desperately trying to develop rapidly.
“Of course the alternative is to have such a good idea that you can raise money at a good valuation, have an oversubscribed round and then pay for good people to join. In the long run this works out cheaper for the founders. The key thing is getting that good valuation to raise the cash with as little dilution as possible.
“If I did this again, I would certainly pay to get good people on board early. It will always save you so much time and money in the future. Easier said than done, though.”
Massarella acknowledges the amount of red tape that can strangle the growth of some young businesses but, despite the challenges says he has not found the process stressful. “It’s just great being your own boss,” he says. “You always need to remember that cash is king and as long as you have a runway of at least a few months then all is good.”
Having said that, he says he owes a tremendous debt to Cambridge Angels, not just for their cash but also for the moral support they have given through times of lean and plenty. He said: “I can’t thank the Cambridge Angels enough for supporting me through the tight cash times. We are now very profitable but without them life would have been a little bit different.
“One day I hope to do the same for others with the same aspirations as I had but need a leg up. David Cleevely and Robert Sansom have shown me great support which means I don’t mind putting in the long hours to make sure the business works.”
Massarella also pays tribute to a strong CRFS board: “Ruth Martin came on board first and really made a big difference getting us up and running. Stewart Hyde then added the technical horsepower we needed to start making a difference. And of course our investors were really helpful on many levels over and above putting money into the company.”
Unlike a great many young entrepreneurs with a ‘get rich quick’ mindset, Alistair is content to play the long game. “One day we might contemplate a trade sale for CRFS but I am more than happy to continue building the company and in no rush to sell out. I am having too much of a good time.
“Nor do I have regrets as such. If I was starting again I would raise more money early on. It’s a bit of a Catch 22 on dilution but will be cheaper for a business in the long run. And I would say to the new generation of business founders, ‘It’s all in the team. Build the team.”
Massarella would like to see more State support for entrepreneurs if the UK wants to build more – and more sustainable – businesses capable of thriving in the face of global competition. He says: “The only reason CRFS is where it is today is down to the Cambridge Angels. Now we need to make the landscape more attractive for entrepreneurs who are willing to bust a gut building companies and hiring people to work for businesses exporting goods and services to the rest of the world.
“This has to be based around tax breaks for the founders and those willing to invest in those organisations. This includes bridging loan facilities when times get tight between purchase orders and deliveries. The only people who can do that are the investors close to the business,
“This saves the monolithic banks the trouble of saying no because they do not understand the businesses which approach them. I truly believe that Cambridge and the UK can scale many more companies on the international stage – but vision is key here.
“The scaling process requires the board of directors and executive team to share the same strategy to achieve the vision of where they want the organisation to go.”