Sticking a needle in a map and deciding to relocate one’s business to the pin point might not seem the most strategic way to move a business forward, but in Portable Add-Ons Ltd’s case, it worked. The blind-faith method of relocation was how the founders of the Guildford, Surrey-based distributors of extras for portable computers, chose their base. New Zealanders Nigel Parry and John Holden say neither had ever visited Guildford when they chose it: the fact Guildford had a Research Park was just luck. Parry, Portable Add-Ons managing director, and Holden, the sales director, had started working together in New Zealand, moving on to Australia, where they made the decision to move to the UK. While in Australia, Parry says they realised Personal Computer Memory Card International Association compatible products were going to be big business and they moved to the UK to exploit what they believed would be huge opportunities. Portable Add-Ons sells a variety of PCMCIA products to corporate resellers.
Perhaps flotation
It was established in the UK in February 1992; it now employs 13 people; is about to take on a representative in Manchester; has a turnover of UKP4m; and is even thinking of European expansion and perhaps flotation. The company’s original start-up costs were covered by shareholders’ investment. Parry said We’ve gone from zero to UKP4m. We want to get to UKP20m within three years or so and spread our coverage. This is likely to mean a search for venture capital. One of Portable Add-Ons neighbours on the Research Park, the designer and manufacturer of network management solutions, Network Managers Ltd is also considering a capital injection. Two years older than Portable Add-Ons, Network Managers was formed when Paul Whitehouse left Retix (UK) Ltd, with the licence to network management software, and has been funded privately since then. In a considerably competitive market, Network Managers has not only held its own but grown steadily, opening offices in Boston and San Jose in the US and Frankfurt, Germany, and now employs 70 people. For the company, the opening of the US offices has opened up an whole new customer base. It now has some 5% of the worldwide market in open management systems and its deal with IBM, which is using its products for NetView for Windows, can only enhance Network Managers’ standing in the American market. Its flagship product is NMC Vision, an application for multi-protocol, local and/or wide area network environments. But while Portable Add-Ons and Network Managers are willing to court the UK venture capital market, one Research Park resident has given up on it. Distributed Information Processing Ltd, a company specialising in hand-held computers, this June sold its development arm, DIP Research, to Phoenix Technologies Ltd, Norwood, Massachusetts, for an undisclosed sum, simply because getting investment to carry on design and development work was proving impossible.
By Maya Anaokar
DIP was formed by David Frodsham and Peter Baldwin after they left Psion Plc. It was funded by private investors, and originally concentrated on developing software for the Psion Organiser, but in the late 1980s, it had the idea for its own hand-held computer. Frodsham said there was so little interest amongs UK venture capitalists that the idea was very nearly abandoned. It was only saved when a news report on US television highlighted DIP’s plight and Atari Corp came up with the development money. The success of the Portfolio attracted Sharp Corp of Japan and for it, DIP developed the PC 3000. Both these products were very successful for DIP, but Sharp and Atari never sold as many as they thought they ought, simply because they put the Portfolio and 3000 straight into high street shops. This had the effect that few other companies wanted to venture into the hand-held market and DIP Research found itself functioning more and more as a custom body shop. By 1992 it was working with Phoenix and so the sale seemed a logical step. DIP Research offices will become Phoenix’s European headquarters and devel
opment will still take place there. DIP will plough the money into DIP Systems Ltd, the software and sales section, but as Systems’ managing director Oliver Tucker admits, I know we’re not as sexy as we once were. It’s very different being able to say to a customer, ‘This is something we’ve developed ourself’ than ‘Here’s something we’re selling’. DIP Ltd retains the name DIP Research but Tucker says it is highly unlikely the company will ever venture back into research. Another Research Park company that is not even going to bother with the UK venture capital market is the increasingly successful 3Soft Ltd, which designs and sells library building blocks for integrated circuit design. Orginally formed in 1976 by Mark-Eric Jones and called MEJ Electronics Ltd, the company, which is still totally self financed, has steadily grown to a turnover of UKP1.5m and this year transfered it headquarters to Santa Clara, California; it is in the US that 3Soft is most likely to seek venture capital. Jones said the move was because the market is so much larger in the States and his confidence has been borne out; although the American office opened just over a year ago, sales from that office account for more than 70% of the company’s total revenue.
Design consultancy
Jones adds that if a condition of getting funding is making the company an American one, then that is what it will do. The name change was chosen to reflect 3Soft’s niche as a third party seller of these types of design aids. When the company started out, it was a design consultancy making electronic products for other companies. It also designed a lot of integrated circuits and built up a selection of essentially off-the shelf designs, which at that time was unique. NEC Corp heard about this selection and licensed the library; not a financial killing but hugely important for a small Guildford-based company. This was followed by deals with Fujitsu Ltd and Texas Instruments Inc and others, and by 1992 MEJ Electronics realised it was not a generic design company any more, but a highly specialised organisation providing complex logic functions for customers’ design needs. We realised we were running two businesses and the one we had started as a sideline was growing faster and the prospects for it were better than those for new electronic products, Jones explained. Its main product is the MacroWare 2.1, a library of pre-designed and tested standard functions aimed at speeding up the design process. A licence to use it costs UKP40,000. 3Soft also sell Premium MegaMacro Designs, complex logic functions that are not as commonly used. As for money, Jones says 3Soft is looking to raise $3m. He says 3Soft will be attractive to investors; despite its growth, it employs only 15 people and integrated circuit design complexity will continue to double every two years.
