"There's probably no better place to start a technology business than Cambridge," says Andy Harter, Founder and CEO of RealVNC – and he should know, having set up one of the cluster's biggest success stories. Ahead of next week’s Business Awards Week launch event, where he will be speaking, he talks about his business and Cambridge’s continued growth.
Founder views: Andy Harter, Founder and Chief Executive Officer, RealVNC
What makes your business distinctive?
Unusually for a high tech software company, we have grown organically without external investment. We've had customers and been profitable from day one, with compound annual growth rate of 50% for the past 12 years, and it's very sustainable. We have some fantastic projects and products in the pipeline which will generate even greater growth.
The original technology and ideas are nearly 20 years old, and there are now over a billion copies of the software. One of the reasons we’ve succeeded is we have kept the technology simple and adaptable, so it has endured. We’ve also been able to anticipate new markets, products and devices that didn't exist at the time. Now VNC technology is on more different kinds of computer than any other software application ever.
We sell shrink-wrapped products which have been the core of our business. In parallel we’ve built up an OEM licensing revenue stream which is royalty bearing and is beginning to overtake revenue from product sales. As ARM has shown, this business model means you can achieve a lot with a modest size of company. We are about 100 people, all here in Cambridge, about two-thirds engineers. We're still a very engineering-led company and we reinvest very heavily in R&D, in new products, new markets and new applications.
You have to find ways to make work fun and enjoyable. It’s not just about a comfortable working environment and a good company culture, it’s also about involving people by giving them genuine responsibility. I believe business has an economic obligation to improve the human capital of the UK, so we try to do mentoring and personal development really well. If more of our staff become entrepreneurs, that’s brilliant, as long as they don't all walk out at the same time!
Another thing we’re very proud of is our corporate social responsibility. Our staff are very actively involved and we have a substantial programme of financial sponsorship to the arts, charities and so on. It's about getting involved as a company and as individuals.
What is the greatest challenge your business faces?
I would have to say the biggest challenge is to stay true to the underlying simplicity of the technology and the business. One of the advantages of not having any external funding is that we are able to take a longer term view than perhaps we would if we were venture funded. We have a number of parallel business plans that we are developing, some with a 10 year game-plan.
The Internet of Things means there will be more and more devices for which our technology is appropriate. Where you have sophisticated possibilities to manage things remotely, I think our software could be extremely relevant. If we had the pressure of an early return on external investment, I think we would have been forced to specialise and complicate a product and to concentrate on one market.
In reality, there is no one great challenge, there are just lots of little things that we work through. We have goals and ambitions and targets and we just try to achieve them. Recruitment and retention are highly competitive, and you have to keep up with the local market expectations. But we’ve found that providing interesting work and opportunities to lead and have influence are important differentiators that help to attract and keep people.
What are the greatest challenges Cambridge faces?
Managing and sustaining growth is the fundamental issue. I am pro-growth, and developing infrastructure is vital, whether it’s transport and housing, or the leisure and support businesses you need to go with it. But how does Cambridge organise itself? Who plans it out? Should business have more input? Or the university? Doing it effectively is the challenge – planning to 2030 and beyond.
The cluster is 50 or 60 years old, fourth generation. It has billion pound turnover companies but there could be more. But if the region simply expands physically and attracts more people, would we lose some of the magic which is Cambridge? It’s a fairly dense cluster and people do bump into each other and work together a lot. If we get too big, certainly some of the networking wouldn't be as easy or so good; there would be fewer chance meetings on the morning train to London or cycling across town. Forget six degrees of separation - in Cambridge it's more like one and a half! Achieving growth without losing the magic, that’s a challenge.
The digital infrastructure is also critically important. I still can't get a proper phone signal in my house in the city centre: I've had better phone coverage in the middle of South America! In a high tech city we ought to have the best, sparkliest broadband. To me, that's as important as the A14.
Who or what has influenced you personally in your business career?
I've drawn influences from many different figures. Yes, it has a great university which is why I came to study in 1980, but more than that it had the computer cluster starting around it. Andy Hopper and Hermann Hauser gave me my first summer job with Acorn; they taught me a valuable lesson–- which is to give people real things to do. As a young fresh-faced undergraduate I was allowed to write software which was used in production. I believe that if you don't tell people what their limits are, and you don't pigeon-hole them, they'll surprise themselves and you may be pleasantly surprised too.
I knew Maurice Wilkes and Roger Needham very well. Their knowledge was broad, and their counsel always wise. They understood entrepreneurs and business and enjoyed enormously their dealings with industry. It’s a culture that perpetuates in the Computer Laboratory, which is one of the most successful business hatcheries that the university has.
What do you think is the best thing about Cambridge?
There's something in the water, isn't there? It's got a mix of all sorts of really important ingredients and they come together in this crucible which gets everybody bouncing off each other – ideas, expertise, knowledge, experience, bright people, money – there's probably no better place to start a technology business than Cambridge and of course there is the backdrop of one of the best universities in the world. There are angel investors, VC funds, organisations like Cambridge Network and others; facilities, the science parks, the business incubators. It’s all here, and a pool of talent – people who have done it all before who you can tap into.
They say success breeds success, and perhaps the quality of the context sets the expectations quite high. The other thing that Cambridge does well is to have fun and not always take itself completely seriously. We love parties, and have had lots of excuses recently to break out the champagne and cake. We celebrated when we won our third Queen’s Award for Enterprise last year, closely followed by the Royal Academy of Engineering MacRobert Award –and we're still in shock about that one. It's amazing for a small software company to win that award; it's the UK's longest standing and most prestigious award for engineering innovation and commercialisation and the roll call includes Jaguar Land Rover, Arup and British Aerospace. For us to be in the same constellation is fantastic. And great fun!
Andy Harter was in conversation with Judi Coe, Cambridge Network Editor
RealVNC was founded in 2002 by the original developers of VNC to promote, enhance and commercialize VNC.