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updated 8:35 AM BST, Oct 24, 2014
Technology and life sciences news from the Cambridge cluster

On the button: ANT co-founder, Borris Fell's startup story

Ant staff around a computer, working.David 'Borris' Fell never went to university, never studied business and never showed any early entrepreneurial flair outside of selling a bag of grow your own mushrooms to his mum. Like so many of the Acorn era, he did all his learning as he went along.

Borris moved to Cambridge where technical jobs were relatively abundant, did some consultancy and began to work on a project with three friends (including the brothers Alex and Nicko van Someren) which resulted in the production of an ethernet card for the Acorn Archimedes.

Its popularity led the group to start chanelling sales through an independent business account in 1993 and ANT Ltd was born, complete with workshop above a shop, de rigueur for bootstrapped Cambridge startups of the period.

As well as ethernet cards, ANT added related client software including web browsers, FTP and email, what was known as the internet suite.

However, the UK home-grown computer industry began to fade and the Acorn market evaporate so ANT Ltd repositioned, dropping hardware entirely and keeping its main software product, the browser. Three founders moved on, Borris stayed and consultant, Simon Woodward was hired, eventually becoming chief executive.

In 1996, when Acorn won the reference design contract for Oracle's Network Computer, ANT's browser was selected for it. This was ANT Mark 2 as Borris calls it, which also signalled the move away from standard desktop to the embedded market, before the company swiftly moved sideways again into the TV space it occupies today.

One angel, three VC rounds and a London IPO later, ANT Software is focused on being the company behind the red button. Its software is sold to TV and set-top box manufacturers and TV operators, providing the interactivity tools and experience we now expect with our television programmes.

EARLY DAYS

"It started as an informal activity and it took off when we worked out how much money our stock represented. We decided we ought to formalise this, so that created ANT Ltd as a company.

We spent a couple of years selling hardware to the Acorn market, transitioned into the internet suite, then in 1996 abandoned the idea of hardware and physical stock.

THE PIVOT

It was around then that Larry Ellison of Oracle had the idea for the NC, network computer, Acorn won the reference design contract and our browser was selected to go in that.

"We decided to entirely move out of the Acorn hobbyist desktop space and entirely focus on the embedded space and in particular TV usage and we've been present in browser used in TV since. What that means has got more complex and changed over the years, but it's been a continuous path since then.

We were in essence at the beginning of Mark 2. The nature of the customer transitioned totally too because it had been individual-led users and it now transformed to being manufacturing customers, so rather than large numbers of small deals we went for small numbers of large deals.

It was incredibly sensitive to cash flow, when you're starting that type of operation your focus tends to be 'is there enough cash to pay the next payroll?' As you grow you can gradually move that focus on to the overall value of the deal.

FUNDING

"Initial funding was from selling the cards, a profitable activity. It wasn't until 1998/1999 that we started going down the funding route to drive expansion. We did an angel round which was mainly from high-net worth individuals in Cambridge.

After the angel round there was three VC rounds and then the IPO [on AIM, £11.2m fundraising, £30m market cap], which gave some exit to early investors and working capital.

TOUGHEST PROBLEM - FIRST CUSTOMER

"With Mark 2 - that's really the business that has grown to what we have today - the issue we had to tackle is an issue companies will tackle with any product: your first customer is going on faith rather than a reference from a previous customer.

If you're trying to bootstrap the business this is an even more difficult proposition and at the time you're probably more focused on the timing of the cash than the size of the deal long term, but you have to get past that point.

Our first customer was the first time I saw a projector hooked up to a computer, 1997, still quite rare. Myself and Simon [Woodward] were sat in a big meeting room with the contract up on the screen with six or seven people from this particular customer, going through it word by word until they were happy with it which wasn't until 11.30 that night.

That was quite a different experience to anything we were doing at that point. As you go on you'll hire people who specialise in legal council or similar, but when you're at a very early stage, you don't have lots of individuals for all these roles.

Some of it you're making up, some of it you're desperately trying to work out, some of it you may fall down.

CASH

"The theme of a lot of the early stuff will be cash management until there's enough that you can stop thinking about it it's cash management, cash management, cash management.

That's really what the angel round lets you do, it finally gives you a chance to move to a longer vision and then when you move to VC you push that time boundary out further.

We probably wouldn't have succeeded without the VC funding, mainly because there was this hiatus in 2000/2001 following the dot com bubble burst, the knock on effect of which was a freezing of expenditure everywhere. It didn't really matter whether you were directly, indirectly or remotely connected, all finance departments went into a mode that it's not worth mentioning the invoice unless you're desperate and if you're desperate you're going to have to wait your turn.

The cash reserve helped us get through that and that's part of why you look for funding, to accelerate growth or a combination of accelerating growth and some managing of cash flow.

RECRUITMENT

"The thing that took me five years to appreciate was just how important the early hires are.

What you're seeking is people with a reasonable time commitment to the firm. You will have a level of uncertainty over cash so they have to be resilient to that uncertainty. If a person leaves and that's 20-25 per cent of the business, managing that transition just gets very complex, you really need some continuity.

When you bring the very early people in, you're reporting structure is incredibly informal and pretty flat, but as you grow you need a reporting hierarchy. One thing that's easy not to think of at the very start is when someone comes in early, is their growth through more technical responsibility or will they pick up a team that reports to them?

Someone who's capable of growing more and more technical responsibility may not be appropriate for building up a team of 5, 10 or whatever.

RISKY BUSINESS

"You need an atypical acceptance that the future could be turbulent. If you want to found something, unless you're lucky enough on day one to have somebody give you a cash card which means you don't have to think about it you need to be ready for that.

It's not productive to spend large amounts of time thinking about whether you'll get where you want to go. If anything's going to change the outcome it's getting on, selling and creating rather than worrying. That by itself can be a learning curve.

ADVICE FOR ENTREPRENEURS

"One. Try to find a way of benefiting from other people's learning. So much of what you're going to do is not new so it's pointless working it out from the first principles, which is very time consuming and expensive. Don't learn everything from scratch, is fundamental.

Two. Don't underestimate the importance of the early hires. We thought we understood the importance of the early hires and five years later you realise you didn't quite, you don't understand the growth cycle and how things will change.

Three. If you don't have sight of how a company grows your understanding and expectation of how the funding's going to work can be a little naive.

As opposed to Silicon Valley investment, where they believe in the idea and there's generally a pile of cash that lets you get on growing the idea for a reasonable length of time - if they don't like the idea, there's no cash - in the UK and to some extent Cambridge, you can get a small amount of cash, but in about a month's time a chunk of the management team is going to be devoted to raising more cash and you can almost get to a mode of operation where for the next three to five years you're in permanent VC raising mode."