22/11/10

By Hatty Stafford Charles

nCipher founder, consultant and mentor, Alex van Someren, talks to Hatty Stafford Charles about spotting the right opportunities at the right time.

First Steps

There are plenty of stories about entrepreneurs starting young, but Alex van Someren was barely in his teens when he approached a new company in his home town of Cambridge and demanded a bit of holiday work. Acorn Computers got the deal of the decade when Alex and his brother, Nicko turned up on the doorstep and a relationship which continues to this day was established with Acorn founder Hermann Hauser. Alex and Nicko turned around their first project in 24 hours (translating a Star Wars game) using a computer they were given by their new boss.

The confidence in Alex shown by Hauser is something Alex has never forgotten and he believes that sensible entrepreneurs will always respect persistence and hard work whatever the age of the applicant. “Hermann’s attitude is something worth emulating and although opportunities won’t just fall into your lap, if you go and out and take them, that attitude will be recognised by genuinely entrepreneurial companies,” Alex says, dismissing any suggestion that young engineers and programmers could ever replicate his early success.

The holiday work continued throughout his school years, payment being made in the form of bits and pieces of hardware, and when Alex was 17, he went to work full time at Acorn, abandoning any idea of further formal education, but in receipt of a proper salary at last. However, his innately innovative character found a corporate role to be a poor fit, and within a couple of years he left to set up independently as a consultant. The context of this move reflects the times and Alex’s ability to spot where innovation would find customers. The mid-1980s was still early days in modern computing, with PCs beginning to appear in homes as well as offices and a greater reliance by individuals on computers coming to the fore.

Quality Control

There was plenty of work across a range of fields and Alex led teams working on innovation in broadcast television, publishing and animatronics among others. The need for gold-standard quality control became very apparent; “one project was developing an Autocue ™ system. It was a demanding application but it still had to work every day.

We had to respect the need for the quality of the project above all else.” Alex cites Steve Jobs of Apple as someone else who understands the need to put quality first and give the customer what they want without bothering them with the detail. “People need to intuitively understand how to work a product — it is for the product developer to make it operate that way,” he points out. This attention to detail stood Alex in good stead when developing systems for financial services, which we will cover later.

Making Things Better

Ask Alex about how entrepreneurs should bring products to market and he makes the distinction you might expect from a consultant; are you responding to customer demand or
speculatively building something you like the idea of? Whilst there is always room for entirely new products, innovators and investors need to be very cautious about market size and realistic about product potential. He employs a useful analogy — are you trying to push a rope or is the market going to pull it? Examples of this approach abound in Alex’s career and looking at his standout achievements demonstrates it.

He noticed that whilst laser printers where terrifically expensive, the printing element was relatively cheap. The old printers were effectively replicating what was going on in the computer in order to process the printing on the page.

Alex developed a system whereby the image went directly from the computer to the printer, so that the printer did not need to process the document and thus reducing the cost by half, enabling organisations like schools to share printers and print documents in a way, which would have been previously unaffordable.

He also worked with his father and brother creating products which made Acorn computers many times faster. These simple systems could be bolted on to existing machines. Now, not only were the van Somerens selling products with a substantial ready-made market, they were also beating Acorn to the draw by getting them into the market first.

Then there is nCipher which is the perfect example of identifying a gap in a rapidly growing market and employing old-fashioned graft to fix the problem. As more and more people began to shop and undertake financial transactions online, the secure software required to process payment was clearly unable to cope with the volume and speed required by prestigious customers such as Amazon, EBay, Hotmail and share brokering firms. Alex van Someren was able to put it all together and create a hardware product which could be attached to companies’ servers and make fast, secure payments possible. A previous chance encounter with Celtic House and thence Terry Matthews put the money into the project and nCipher was born.

Tech in the UK

More recently, Alex took the opportunity to bring technology into the UK by working for UKTI’s Global Entrepreneur Programme. By encouraging high-tech companies to come to Britain, not only does the country benefit financially, but we “improve the entrepreneurial gene pool”. Alex has been keen to promote “lots of incubation and development programmes”. His Cambridge background makes him evangelical about the value of environments where skill sets can easily be brought together and expertise is readily on hand.

He is strongly of the view that, as mentioned above, entrepreneurs and investors are careful to evaluate fully the potential of new technology. He regards as crucial the ability to produce a prototype and says that investors expect innovators to find a way to get this done. “Not just to prove the technology but as a form of sweat equity. It will also demonstrate the value of the team; as we know, investors invest in teams to a much greater extent than they invest in ideas,” he says. As someone who has put together some exceptional teams he should know, and the ability of a team to overcome hurdles is what makes it successful.

However, he believes in the need for a practical work/life balance. “I have worked long hours, but they are not the only thing,” he says. He built nCipher whilst his children were small and he made sure that he was able to be at home with them, even if he was back on the phone after they had gone to bed. Alex is dismissive of the sometimes absurd executive competition about who gets up earliest in order to put in the hours at the gym. “Work/life balance is important to productivity,” he adds, “intellectual stimulation and fitness are important and effective time management should make this possible.”

Amadeus

Earlier this year, Alex was asked to join Amadeus Capital Partner’s Amadeus and Angels Seed Fund which he felt was perfect for his skills set. As a nice completion of the circle, Amadeus was cofounded by Alex’s old friend Hermann Hauser.

Alex has stopped all other work for now and is focusing exclusively on Amadeus, as he takes the view that he is under an obligation both to entrepreneurs and investors to give them all that he can.

One challenge he faces is to talk about his mistakes and make clients understand that these are part of developing a business. “Obstacles are there to be worked around and most of the learning in business is from this,” he says. Although he has worked hard, discovered and taken advantage of opportunities, he freely admits that chance has also played its part. “The acquisition I paid the most for was probably the worst decision and the one I paid the least
for was the best. There is an element of luck but that has to be combined with a pragmatic approach.” It has been quite a change to be on the investment side rather than fund-raising, but it is a challenge that Alex is clearly relishing.

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