BQ Scotland Spring 2016 by We Are UMi

Powering down How one energy company is helping clients use less

Live Debate Do directors really know what’s expected of them?

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Eyes on the prize Sir Chris Hoy seeks new conquests in business

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EDITOR’S VIEW SCOTLAND ISSUE 23 Scotland is blessed with some amazing natural resources, from the strong winds that turn the blades of our offshore wind turbines to the fierce seas that stimulate our marine energy devices and the abundant rainfall that fills the dams of our hydro-electric schemes. But our nation’s green economy is about much more than just generating electricity from renewable energy. In this ‘green’ issue, we look beyond wind turbines and solar panels to explore some of the stories of people who are tackling climate change in different ways, saving money and cutting greenhouse gas emissions at the same time. We start with cover-boy Sir Chris Hoy, who is continuing to fly the flag for cycling now that he’s gone from Olympic athlete to budding entrepreneur. And yes, he is as nice in real life as he comes across on the telly. Fiona Houston, BQ Scotland’s emerging entrepreneur of the year in 2015, highlights the need to harvest our food sustainably as she goes about building up her Mara Seaweed business. Once we’ve finished eating, Joe and Lucy Frankel emphasise the need for recycling as they stand ready to compost their Vegware packaging and utensils alongside our food waste. Food and the environment are also high on the agenda over our Business Lunch as journalist Karen Peattie meets Olga Kozlova, director of the Converge Challenge, which has a prize fund of £150,000 for students and staff at Scotland’s universities who have ideas for businesses. Alexander Lamley, chief executive of the Connections networking group, is looking to inject a wee bit of that entrepreneurial spirit into the professions, harnessing the energy that entrepreneurs demonstrate and feeding it into accountants, bankers and lawyers. Energy efficiency and managing the power that we use are also key parts of the ‘green’ agenda, as Alastair Martin – founder of technology firm Flexitricity – explains. Big businesses are in on the act too, with Kevin Greenhorn revealing why energy giant SSE wants its customers to cut their bills; essential reading for all penny-pinching entrepreneurs. Niall Stuart, chief executive of trade body Scottish Renewables, paints a picture about why we need to look beyond simply generating renewable energy to how we heat our homes and fuel our transport. He argues that it’s time for Scotland to set further ambitious targets to guide the next decade of industrial development. With the Scottish Parliament elections looming in May, we also ask key entrepreneurs and advisors what should be at the top of the in-tray for the next finance secretary. With more powers being devolved to Holyrood, there’s never been a more important time for you to get out there and use your votes. Peter Ranscombe, Editor, BQ Scotland

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CONTENTS

Spring 16

A WINNER’S F0CUS

TIDE’S HARVEST Scotland’s seaweed is becoming a global brand

Sir Chris Hoy is translating success on the cycling track to the world of business

MOTORING Donald Boyd takes a spin in the latest BMW 7 Series

NO IDEA OFF LIMITS Olga Kozlova welcomes all projects to the Converge Challenge

MAKING CONNECTIONS

Alexander Lamley has successfully revived a networking organisation with a difference

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Celebrating and inspir ing entrepreneurship

FEATURES

REGULARS

HATCHING AN IDEA RBS’s Entrepreneurial Spark business accelerator hub

ON THE RECORD Business people present a wish-list to Scotland’s next government

P O W E R P L AY Profile of a power company that believes less is more

BUSINESS UPDATE A roundup of business new from around the nation

CONVERGE CHALLENGE £150,000 up for grabs to academic entrepreneurs

AS I SEE IT Niall Stuart on how we must think beyond a generation

NO IDEA OFF LIMITS Olga Kozlova welcomes all projects to the Converge Challenge

COMMERCIAL PROPERT Y A look at Scotland’s latest deals

CO M P L E T E PAC K AG E Packaging from plants is proving to be a world beater

IN THE LIMELIGHT BQ Emerging Entrepreneur Dinner 2016

S PA R K O F G E N I U S Alastair Martin helps match power generation to power need

EQUIPMENT A look at the McLaren 570S

MOTORING Donald Boyd takes a spin in the latest BMW 7 Series

BIT OF A CHAT Jock Yuler on the news behind the headlines

SPECIAL FEATURE

INTERNATIONAL TRADE

Celebrating the exporting achievements of businesses across Scotland, as we profile the HSBC Scottish Export Awards 2016 in association with Scottish Enterprise

DIRECTORS BEWARE

ON WINE Derek May pops downstairs for a tipple

Live Debate looks at board member’s duties

ON THE RECORD bqlive.co.uk/breakfast

Entrepreneurs add to next finance secretary’s in-tray With May’s Holyrood elections fast approaching, BQ Scotland editor Peter Ranscombe asked entrepreneurs and their advisors what actions they’d like to see taken by the next Scottish Government

Clyde Blowers boss: Jim McColl

Scots go to the polls on 5 May to elect the 129 Members of the Scottish Parliament, who are expected to serve until the rescheduled election in 2021. With more powers being devolved from Westminster, the focus on Holyrood has never been more intense. So what measures do entrepreneurs and their advisors want to see the next Scottish Government put in place to support businesses north of the Border? Lord Willie Haughey, founder of City Refrigeration, and Clyde Blowers boss Jim McColl have very specific requests of the next finance secretary. “Hopefully in the next parliament the government could find a way to ensure banks are more amenable to supporting start-up

and early stage businesses,” said Haughey, highlighting a concern still shared by many small companies since the 2008 global financial crisis. McColl added: “I would like the next Scottish Government to have the power over capital gains tax, allowing it to adjust entrepreneurial relief and roll-over relief for entrepreneurs to stimulate more entrepreneurial activity and make Scotland a more attractive place for entrepreneurs to grow their businesses. However, this is currently a reserved issue and would need negotiation with Westminster to take control of these powers. “A second action I would like the Scottish Government to take would be to put in place a structure to support trade credit for small and medium-sized enterprises (SMEs), standing behind bank guarantees for exporting and for domestic contracts for SMEs. The organisation should also be able to provide loans to small companies. This would be a major step forward for entrepreneurs in Scotland.” Investment also strikes a chord with Jim Duffy, founder and “chief executive optimist” at Entrepreneurial Spark, the chain of business accelerator centres. “While there are schemes out there that provide tax incentives, such as the Seed Enterprise Investment Scheme, with new powers coming to Holyrood, what is the Scottish Government going to do to support entrepreneurs and encourage people to invest in start-ups? “If the Scottish Government could set its own entrepreneur tax regime incentives, or even add to existing incentives, then we could bring more cash into the market and see the return on this in the jobs created and additional revenue going into the economy.”

Duffy highlighted the 50-50 split between men and women on last year’s [2015’s] Entrepreneurial Spark programme and challenged the next Holyrood administration to “identify ten female role models who have raised investment and developed a successful business, and showcase them to the nation”. He adds: “My question to the First Minister is – how innovative are our other enterprise agencies? How could we maximise the potential of our young entrepreneurs by doing this differently? What about opening a revamped version of Business Gateway with innovation at the heart of the business model? “It’s easy to say it’s up to the entrepreneur to think outside the box, but if those who are supposed to be coaching and enabling them can’t do so, how are we ever going to create a truly brilliant generation of entrepreneurs?” As chief executive of VIS Entertainment in the 1990s and now as chairman of 4J Studios, Chris van der Kuyl has his finger on the pulse of the computer games industry. In his role as chairman of Entrepreneurial Scotland – the body created in 2014 by the merger of the Entrepreneurial Exchange and the Saltire Foundation – he also has an interest in stimulating innovation and growth in other sectors. “I would urge the next Scottish Government to support Entrepreneurial Scotland’s vision – for Scotland to become the most entrepreneurial society in the world,” he says. “There are great examples of entrepreneurial behaviour in the business sector, supported by our networks within a very well connected entrepreneurial ecosystem. We need more of this. And the potential is there – just look at what’s happening in the tech sector at the moment.” n

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Edinburgh’s science festival struts its stuff on international stage Ambitious plans have been unveiled by the Edinburgh International Science Festival to grow its overseas operations, as Peter Ranscombe reports

First lady: Michelle Obama at the Codecrackers workshop Since it was launched in 1989, the Edinburgh International Science Festival (EISF) has created a wealth of memories for children and their parents, from the madcap on-stage experiments of Dr Bunhead to the mass participation psychological surveys carried out by Professor Richard Wiseman. Now the festival is preparing to entertain and educate even bigger audiences as it expands its overseas presence. The festival already delivers a selection of activities outside the UK, ranging from running entire science festivals like those in Abu Dhabi and Bangalore through to consultancy work and creating bespoke events for government agencies and corporate clients. The festival has also carried out work in China, Germany and Qatar, where Michelle Obama, the First Lady of the United States, visited the EISF’s ‘codecrackers’ workshop in November during an international conference for teachers.

“Our international turnover has exceeded our domestic turnover for four out of the past five years,” explains festival director Simon Gage. “Our domestic sales stand at about £2m each year, with our international sales peaking at £2.75m.” The EISF has unveiled plans to grow its overseas income from £2m in 2016 to £5m by 2018 and estimates that the total size of the market for its services is around £25m. Projects planned for 2016 and 2017 include working with science festivals in Malaysia and Saudi Arabia. To fuel its expansion plans, the festival has appointed Darrell Williams as its first chief operating officer. Williams – who is a veteran of arts organisations including the Edinburgh Festival Theatre and the Macrobert Arts Centre in Stirling – will run the UK operations, freeing up Gage to concentrate on international expansion.

As well as selling tickets for its flagship festival, which takes place in Edinburgh each year for two weeks around Easter, the organisation also brings in money through sponsorship and by providing science shows for schools. The two operating companies – one for the domestic work and one for overseas – are both not-forprofit entities and are owned by a charity, which reinvests any surplus to develop its shows. In 2015, more than 105,000 people attended 270 shows in almost 40 venues throughout Edinburgh, including the City Arts Centre, the National Museum of Scotland, and Summerhall, the venue in the former Royal (Dick) Vet School. “I think one of the attractions for overseas customers – especially those in the Middle East – is the quality of our shows,” explains Gage. “We have a strong reputation for quality and that appeals to a lot of clients. “We develop our own shows and have a warehouse full of resources, including our Lego robots, our codecrackers workshop on cyber-security, and an operating theatre with six cubicles, which is the only one of its kind in the world. “As well as our physical assets, we also have our creative team. A lot of science festivals will use volunteers, but we pay our staff and we train them to a very high level. In the UK, we have 35 permanent members of staff – and that figure has more than doubled in the past five years – and we also take on a further 130 people for our peak period during the science festival in Edinburgh. “For the Abu Dhabi science festival, for example, we had 150 people working for us on the project and we delivered training for 1,000 local staff to ensure the quality of the events were up to our own high standard.” The 2016 Edinburgh International Science Festival runs from 26 March to 10 April. Find out more at www.sciencefestival.co.uk n

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A fair day’s pay Roseanna Cunningham, Cabinet Secretary for Fair Work, Skills & Training, explains why she thinks entrepreneurs should support Scotland’s living wage

This year has seen interest in and coverage of the living wage reach impressive new highs. From barely a handful of accredited employers a little over a year ago, Scotland now has more than 470 organisations that guarantee a living wage for their staff aged over 18. The new rate of £8.25, announced in November, moves the living wage on considerably from last year’s rate of £7.85. The heightened level of interest is testament to all the organisations across the public, private and third sectors that have recognised the benefits of paying a fair wage to their staff. This marks excellent progress in our aim to have 500 employers signed up by the end of March and I’d like to thank the Poverty Alliance for leading the campaign to get more employers involved. A mix of small businesses and large corporations across a wide variety of sectors has shown that the benefits of paying the living wage far exceed the challenges in overcoming any barriers to paying it. But what are the benefits? And how could they

possibly mitigate an increase in your payroll costs? Well, you might be surprised. Research published earlier this year showed that living wage employers believed they were able to retain high-calibre staff and attract more qualified applicants to a range of posts. Just as importantly, paying the living wage can see your staff morale improve, absentee rates drop and levels of productivity increase. And that’s before you even get to the reputational benefits of being seen to be a living wage employer. There is satisfaction in knowing that your employees and their families will have a higher standard of living thanks to you taking such an important step. But don’t just take the idea of a more positive working environment from me. Anna West, human resources and training manager at CMS Window Systems, said: “Since implementing the living wage, we have seen a 40% reduction in days lost due to sickness. In real terms this means we gained 68 more days of production compared to the same period last year.”

Utopia Computers also reported 100% staff retention, and has experienced a 32% increase in sales, which it has attributed to higher levels of staff productivity. More than 81% of Scottish employees now receive the living wage or higher, part of our commitment to tackling low pay. Each new accreditation can bring a salary uplift for lower-paid members of staff, adding to the number of Scottish employees receiving at least £8.25 an hour. The Scottish Government has set an example in becoming the first UK government to be accredited in June last year and we are also encouraging all organisations bidding for public sector contracts to pay it. And of course, I cannot stress enough that the national living wage the UK Government is introducing in April is in absolutely no way a real living wage. It is simply a higher national minimum wage, dressed up in a different name and, while any increase in the minimum wage is welcome, it blatantly discriminates against the under 25s. It also attempts to hijack the successful living wage brand. At the very least this will create confusion among employers and the wider public but could ultimately undermine the hard work that has gone into understanding the living wage and the importance of paying it. But, as we continue to promote the real living wage, we need even more organisations to recognise the benefits to their staff, their reputation and their efficiency and sign up for accreditation and support those on the lowest pay. We need your help, as employers, to tackle low pay in a non-discriminatory fashion and recognise the real difference that paying the living wage can make to working people. As we approach the end of March – and the target for having 500 accreditations – we want as many employers as possible to become accredited as we seek to raise the bar for as many people in Scotland as possible. Paying the living wage makes good business sense so why not take the step towards being an accredited employer? n

BUSINESS UPDATE Scott-Moncrieff

Succession planning is back on the agenda Succession planning was always a hot topic when markets were buoyant. However, recession meant many businesses put planning on hold, and only now is succession seeing a resurgence. Marc Shenken of Scott-Moncrieff looks at some different ways to secure the future of your business. While the most common exit route is the trade sale, MBO/MBI, share options and solvent liquidations may also be appropriate for your business. Across the board, the rule is to plan ahead – give yourself a good 12 months to assess the options before any transaction. The trade sale often gives rise to the greatest return as the purchaser tends to be a third party willing to pay a competitive market value, and there can be tax advantages if Entrepreneurs’ Relief (ER) applies. However, there can be a number of practical difficulties. These may range from earn-outs (which can have their own complicated tax treatments) to more emotional issues, such as how the new owners will structure and run the company post-sale. An MBO / MBI will generally provide a slightly lower return as the seller and the acquiring management tend to work together to achieve a shared goal. However, these transactions are likely to evolve over the years representing lower levels of risk to both parties. The deal can generally be structured to provide the seller with a similar tax treatment to a trade sale while ER remains available if the qualifying conditions are met. The acquirers in this case tend to be current (or prospective) employees which means Employment Related Security rules can apply to the transaction and should be considered up front. Failure to do so can result in sizable income tax liabilities.

If neither of these routes are appropriate, there are other ‘softer’ mechanisms that can be used to ensure an effective line of succession. Since the introduction of Companies Act 2006 it has become very straightforward for companies to repurchase their own shares. There are a number of conditions that need to be met, not least that the company is solvent, but it is relatively easy to assess the situation up front. It can also be possible for an existing shareholder to sell shares back to the company and benefit from ER on the disposal. Consequently, a purchase of own shares has become an increasingly popular route to structure the exit of one shareholder (or group of shareholders) from a trading business, where the remaining shareholder(s) wish to carry on. Share options are also a very useful tool when it is important to provide “golden handcuffs” to key employees to assist in longer term succession planning. There are a number of ways to implement a share option scheme. In particular, Enterprise Management Incentives (EMI) are very popular as HMRC will provide advance assurance on the tax treatment, the employees can often benefit from ER on the disposal of the option (or the shares

“It is important that the shareholding and wind up process is reviewed before the company ceases to trade to ensure that Entrepreneurs’ Relief will apply.” that they acquire as a result of the option) and the company can obtain additional tax relief depending on the construct of the option. Finally, if no other options apply, it might be desirable to sell all the assets of a company and formally wind it up. The sale of the assets may give rise to a corporation tax charge restricting the amount of cash available for distribution to the shareholders. However, once again ER may apply to the liquidation process where certain conditions are met. It is important that the shareholding and wind up process is reviewed before the company ceases to trade to ensure that Entrepreneurs’ Relief will apply. Planning for the future, of late, has been a luxury that most could ill afford. However, for those that have resolved to stand back or move aside to let the next generation take things forward, there are many options available. This article was written prior to the Budget 2016.

Marc Shenken is a tax partner at Scott-Moncrieff, leading accountants and business advisers in Edinburgh, Glasgow and Inverness. marc.shenken@scott-moncrieff.com www.scott-moncrieff.com

BUSINESS UPDATE Jarvie launches Delupo furniture brand The entrepreneur behind Glasgow-based agency Jarvie-Design – which has worked with clients including Lakeland, Linn Products and The Macallan – has launched his own furniture brand, Delupo. Scott Jarvie, who trained at Glasgow’s College of Building & Printing and Edinburgh Napier University, has included pieces of furniture and lighting in his debut collection, which is entirely made in Scotland. Jarvie said: “In recent years, furniture has become regarded by many as a disposable purchase. “This is obviously unsustainable from an environmental standpoint, but also leads to a decline in people’s appreciation of fine craftsmanship. “With Delupo, we want to make pieces people will want to keep, cherish and use forever.” The initial range includes a dining table, a low console table and a bed, all in solid hardwood timber, along with a light-emitting diode (LED) suspended light, and a rug in merino wool and silk. Jarvie-Design has also worked with Glasgow Museums, the National Endowment for Science, Technology & the Arts (Nesta) and Strathclyde Partnership for Transport (SPT). Jarvie has exhibited in Milan, New York, London and Glasgow, plus at the Noise Festival, where

he won Zaha Hadid’s Curator’s Choice Award. He has also worked with designer Thomas Heatherwick, architects’ firm Elder & Cannon, and sculptor Jacki Parry.

New dawn for BioQuarter team as Sunergos launches Edinburgh BioQuarter’s commercialisation team, which helps academics and clinicians from NHS Lothian and the University of Edinburgh to set up businesses, has turned itself into a spin-out company. The team has been spun-out from the university, which remains its sole owner, and renamed Sunergos Innovations, which means a ‘fellow worker’ or ‘helper’ in Greek. The team will continue to help commercialise ideas developed by the health board and the university, and will also take on other university clients throughout Scotland and the North of England. Sunergos is considering approaching the stock markets later in the year to raise funds. Mike Capaldi, chief executive at Sunergos, told BQ Scotland: “The original funding for Edinburgh BioQuarter was designed to last for five years and so the plan was always to spin-out the commercialisation team. “One of the things that has frustrated us over the past five years as we’ve been building companies and spinning them out has been the fact that the ecosystem up here is poor. “When you compared the investment

Light Fantastic: Scott Jarvie has launched his own furniture and lighting brand

environment here for university spin-outs with the environment in the ‘golden triangle’ between Cambridge, Imperial and Oxford then it’s night and day. If you look at companies like Imperial Innovations and IP Group then they have invested £500 million into university life science spin-outs over the past ten years – compare that with funding into Scottish universities over the same period, which is in order of magnitude less. We have a concern that there’s a lot of really nice technology in the North that never gets off the launch-pad because so much money is attracted down into the South-East of England. You have to start somewhere, so we want to start building the ecosystem and working with other universities to strengthen their commercialisation. It’s a step-by-step process. Sunergos will work with any spin-out companies from the University of Edinburgh, building on its specialisation in life sciences and expanding into engineering, including microelectronics and sensors. The BioQuarter was created in 2007 by Scottish Enterprise, the University of Edinburgh, NHS Lothian and American commercial property firm Alexandria Real Estate to develop a science park surrounding the new Royal Infirmary of Edinburgh at Little France on the edge of the city. The site is already home to Nine, an incubation centre for life science companies, and the Scottish Centre for Regenerative Medicine.

BUSINESS UPDATE

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WEBSITE OF THE QUARTER

TOP TWEETS Great to see so many #EDGEAlumni feature in the @HSBC_UK Scottish Export Awards in association with @scotent! https://t.co/ c2BQpOT6kv – @ScottishEDGE

www.brewgooder.co.uk brings together social entrepreneurship and craft brewing

Huge congratulations to our pitching winner & winner of £1K @joindouble @b_greenock #GoDoEdinburgh @RBSGroup – @ESparkGlobal

QUO TE OF THE QUAR TER “So there we have it. Top tip, PR people: if you are writing to a correspondent or editor, announce that you are ‘reaching out’ at your peril.” Public relations consultant Hamish Thompson, who compiled a list of the most-annoying jargon Welch revives Atterley fashion brand Mike Welch, the entrepreneur who last year sold his Borders-based Blackcircles tyre website to Michelin, is reviving the collapsed Atterley online fashion brand. Atterley fell into the hands of administrators from accountancy firm KPMG on 5 January. Welch – who, alongside former Tesco chief executive Sir Terry Leahy, was one of the investors behind the original Atterley – has bought the firm’s intellectual property from the administrators through his Welch Group investment vehicle. He now plans to turn the brand into an online platform for independent retailers. Welch, who featured in BQ Scotland back in 2011, said: “The previous Atterley team did an excellent job of establishing a high-quality offer and reputation to a very loyal audience and it was a shame to see it end. We saw the investment opportunity to take the Atterley brand on and back a team to deliver an innovative and exciting new proposition to the same audience.” Welch left his job as a tyre fitter at the age of 16 to start his first online tyre sales business. He later worked with Sir Tom Hunter at Kwik Fit before founding Blackcircles in 2001.

#ConvergeC – Converge Challenge 2016 is now open - go to http://convergechallenge.com £150,000 prize fund! http://youtu.be/s4vSrFeWBBU? – @ConvergeC

College partners with ice cream maker Jannettas, the family-run ice cream business in St Andrews, has teamed up with Dundee & Angus College to create two special training courses for its staff. In the first partnership of its kind for the college’s Hospitality, Retail & Tourism department, eight members of staff from the Fife ice cream company have taken part in four evening classes. The students have been looking at the latest technology and methods for semifrozen desserts such as ice-cream gateaux, meringues and lolly pops. They have also developed their patisserie and cake-making skills. Chief lecturer Albert Close said: “From our perspective, we want to build closer links in what is a fast-moving hospitality industry to help bridge the gap between the student and the workplace, so the opportunity to work with a local business and identify their training needs provides us with a great template for doing the same with others, while also arming our students with up-to-date knowledge.” Owen Hazel, co-owner of Jannettas, added: “Albert invested lots of time getting to know our business needs and the skillset of our core team prior to creating this bespoke course.”

From the Outer Hebrides, Rebecca has her #ScotSpirit … have you? http://ow.ly/YcwhI – @HIEScotland Find out why @Fishboxuk collaborated with @AFSRachel @StirUni at the #ScotKeAwards workshop http://bit.ly/1ZfFV7l – @InterfaceOnline Thinking of entering your business in #ScotEDGE8? Some great examples of pitches on @ScottishEDGE’s YouTube channel http://bit. ly/1LC1bev – @JC_Accountants 20th April in #Glasgow: your chance to get creative with your #enterprise mojo www. candoplaces.org/eventsx #Scotlandhour – @CanDoPlaces Collaborating with @CENSIS121 to enhance our global sensor & imaging systems market & put Scotland at the forefront http://ow.ly/Yohbt – @scotentCEO #TasteOurBest – delighted to receive our awards for 2015/26 from @VisitScotland – @ willowtearooms Could you help Scotland to re-imagine the future? @infventures @UNICEF_uk @chrisvdk #tech #innovation – @ EntrepScot

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MOVERS AND SHAKERS

Pigs are flying online Puddledub, the Fife-based farming and butchery business, has launched its own online store to capitalise on a surge in sales. The family-owned company, which employs more than 20 people at its Clentrie Farm near Auchtertool, is providing a homedelivery service through the website. Founder Tom Mitchell said: “During the last quarter of 2015, we saw a huge increase in sales at our butchery concession in Fife and at farm shops and delicatessens across the country. We’ve found customers are seeking complete transparency and traceability in sourcing their meat. This news is very welcome, as this goes against industry figures which indicate sales for bacon, ham and sausages fell on the whole and have been declining by up to 15%. Our boost in sales also coincided with the closure of the Forth Road Bridge in December, with restricted travel, leading many consumers looking to shop closer to home.” The Mitchell family has farmed at Clentrie since 1904, with the fourth generation of the clan now working in the business. They rear home-bred Duroc Large White Cross pigs for their bacon, ham and sausages.

Former Scottish Secretary Michael Moore has been appointed as an advisor by ‘big four’ accountancy firm PWC. Moore worked at PWC before being elected as a Liberal Democrat MP in 1997. Christine O’Neill has been re-elected as chair of Brodies, Scotland’s largest law firm for a second term. O’Neill was elected in 2013 and received unanimous support from her partners for her re-election for a further three years. She will continue to work with managing partner Bill Drummond to lead the firm. Maureen Kinsler has been elected as international chairman of intellectual property firm Marks & Clerk. Kinsler, who is based in Edinburgh, will serve for three years. Meanwhile, Glasgow-based Bob Naismith stepped down as Marks & Clerk’s UK managing partner ahead of his retirement; he was replaced by Birminghambased David Ward. Opticians’ chain Optical Express has unveiled Geraldine Meade as its new professional development director. Meade is a former managing director of eye care chain Black & Lizars. Technical and commercial energy consultancy Everoze has appointed Zoe Barnes to lead the development of its activities in Scotland. Barnes joins with more than a decade of experience in renewables working as a consultant with BVG Associates and a technology manager at Vestas. Anne Richards, chief investment officer at Aberdeen Asset Management, has been named as chief executive of M&G Investments, the UK and European asset .

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Our Enterprise wins Dundee waterfront contract The £1 billion redevelopment of Dundee’s waterfront continues, with regeneration firm Our Enterprise winning a contract to develop the £20 million Plot 2 site. The plot will include a city square next to the Malmaison hotel and two blocks of buildings created by architecture firm HTA Design. The blocks will include shop units for designers and other small businesses, flats and offices. Matthew Bell, founder and chief executive of Our Enterprise, said: “We are a young, innovative development and regeneration company with a difference. “We care about delivering projects with a social return and the highest levels of economic and environmental sustainability. “Dundee’s vision for the waterfront is a perfect match for us and we are thrilled to bring our investment, energy and drive to this groundbreaking project.”

Councillor Will Dawson, Dundee City Council’s city development convener, added: “We expect more private investment in the waterfront to emerge as the surge in interest we are currently seeing from developers begins to bear fruit. “This will produce more of the jobs and prosperity we are aiming for and it is pleasing to note that there have already been substantial community benefits resulting from the regeneration. “Our Central Waterfront is an exciting hive of activity as progress continues on a number of major projects, including Victoria & Albert Dundee and the railway station.”

“We care about delivering projects with a social return and the highest levels of economic and environmental sustainability”

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Archangels bless start-ups with £200m The amount of cash arranged for investment in early-stage companies by the Archangels business angel syndicate has broken through the £200m mark. The Edinburgh-based group, which was founded in 1992, broke through the barrier in 2015, according to recently-released figures. As well as money invested by members of the syndicate, the total also includes cash

from the Scottish Investment Bank (SIB) – the finance arm of economic development agency Scottish Enterprise – and by other co-investors. In the coming months, the amount invested by Archangels’ members alone is expected to top £100m. During 2015, Archangels arranged £13.9m across 18 funding rounds for technology businesses, consisting of £7.4m from its members, £4.1m from the SIB and £2.4m from other partners. David Ovens, Archangels’ chief operating officer,

FACT OF THE QUARTER Scotland exported £4bn of goods and services to the United States in 2014, more than to any other country said: “We continued to invest at record levels during 2015 and, in doing so, supported some of the most exciting technology companies in Scotland. Passing the £200m mark for investment arranged, with our own members set to reach the £100m investment mark in the coming months, demonstrates the strength and success of Archangels. “We are particularly proud that our investment levels have increased in recent years, which can only be good for the Scottish economy, for jobs and for entrepreneurship in Scotland.”

Raasay to get first legal distillery

MediCity Scotland welcomes first tenant Medical image analysis firm OracleBio has become the first tenant to move into MediCity Scotland, the medical technology incubator that has opened on the BioCity Scotland campus in Lanarkshire. Diane Harbison, managing director at BioCity Scotland, who featured in the winter 2015 issue of BQ Scotland, said: “I’m delighted that MediCity’s first tenant is one I already know very well, as they’ve been with us at BioCity Scotland since just after we opened in 2012. “I hope that many more exciting companies will follow their lead. “MediCity Scotland will replicate what has already been achieved on the highly successful MediCity Nottingham site and enhance what BioCity Scotland can already offer MedTech projects or early start-up companies.” BioCity Scotland opened on the site of the former Merck drug factory and has now converted one of its buildings for the more-specialist MediCity Scotland incubator. Lorcan Sherry and John Waller, two former Merck employees, founded OracleBio in 2010 and now have ten staff. BioCity Scotland expects its MediCity incubator to welcome 50 healthcare businesses over the next five years, creating more than 350 jobs in total. Funding for the centre has included £1 million from the Glasgow City Region City Deal.

Whisky brand Raasay & Borders (R&B) Distillers has been granted planning permission to build the first legal distillery on the island of Raasay in the Inner Hebrides. Construction work is expected to get underway in April, with the first spirit being produced early next year. Co-founder Alasdair Day has also unveiled plans to open a second distillery, with a public vote choosing Peebles as the preferred location for the Borders site. The company has also launched two Scotches – While We Wait, a single malt created by blending a peated and an unpeated whisky from the same unnamed distillery, and Borders, a single grain whisky. One of Day’s great-grandfathers, Allan MacDonald, came from the Hebrides, while his other great-grandfather, Richard Day was a master-blender in the Borders during the early 19th century.

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“It’s hard to pinpoint exactly why there is such a significant disparity between Scottish business owners and those in the rest of the UK, and there are probably a number of reasons for the difference in approach. “However, there’s anecdotal evidence that suggests it could be partly attributed to a cultural issue. “In Scotland, we’re traditionally less aggressive in our approach to tax planning, and it seems that the further from London you get, the more acceptance of tax changes there is, as the 3% figure suggests.”

“It’s hard to pinpoint exactly why there is such disparity between Scottish business owners and the rest of the UK” Park’s motors on with expansion strategy Gin brand enjoys a double success NB Gin is toasting a double success after the North Berwick-based spirits maker signed a distribution deal with Instil Drinks Company and was invited back to supply its drinks to Sony Music’s Brit Awards after-show party. Instil, which is part of drinks supplier Bibendum PLB Group, will distribute NB Gin, NB Gin Navy Strength and NB London Dry Citrus Vodka in England and Wales. Brands already distributed by the company include actor Dan Aykroyd’s Crystal Head Vodka, Cognac Ferrand and Plantation Rum. Vivienne Muir, chief executive at NB Gin, said: “Instil seeks out on-trend, authentic and distinctive products to fill the gaps where retailers and on-trade outlets need to differentiate themselves from their competitors and meet the increased demand of their customers for something original. “We’re truly delighted that our spirits are befitting of their portfolio, having been selected from hundreds of other potential brands from across the world, and we’re very excited about the platform this gives us to move them to the next level.” NB Gin was also invited back to Sony Music’s party after the Brit Awards following the popularity of the gin at last year’s event. Muir, who founded the company with her husband, Steve, added: “We’re thrilled to be asked back to the biggest night in British music and couldn’t be more proud of the fact that our gin is the spirit of choice for such a star-studded event.”

Scots reluctant to pay special dividends Just 3% of Scottish business owners plan to pay themselves a special dividend ahead of a tax rise in April, compared with 28% across the UK as a whole, according to a survey by accountancy firm Scott-Moncrieff. Dividend tax will rise

from 25% to 32.5% in 2016-17 for higherrate taxpayers and from 30.56% to 38.1% for additional-rate taxpayers. Paul Renz, tax partner at Scott-Moncrieff, said: “Business owners are moving quickly to take money out at a lower tax rate, but businesses in Scotland don’t seem to be taking the same action.

Macrae & Dick, the venerable Inverness-based motor retailer, has been snapped up by Park’s of Hamilton. Director Ross Park said: “We are moving in to new territory and we cannot wait to get started. “The acquisition was assisted by the support of the Bank of Scotland, in terms of funding, and that of our current partners, BMW, Jaguar Land Rover and Honda who were all supportive of increasing our representation of their brands. “We are also delighted to forge new relationships with fantastic brands such as Ford, Toyota and Mazda.” Macrae & Dick traces its roots back to 1878, when Roderick Macrae of Beauly and William Dick of Redcastle began providing horses and horse-drawn vehicles in Inverness. The business expanded into Aberdeen, Elgin, Perth and Stirling and it adds 12 showrooms to Park’s chain and takes its number of franchise partners up to 23. Director Graeme Park added: “We are thrilled to bring such a prestigious group into the Park’s portfolio and we look forward to the new challenges of extending our business. “We believe this is the right move for us. It is a purchase which sits well within our ethos and it is one which we are confident will enhance our business and add even more value.”

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Going beyond wind turbines and solar panels

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Niall Stuart, chief executive at trade body Renewables Scotland, explains why it isn’t enough just to think about how we generate the electricity coming out of our plugs, but why we need to consider how we heat our homes and power our cars too

Scotland’s 100% renewable electricity target has provided a hugely powerful focus for government and industry and helped create the green energy industry we have today. It’s not, however, a target we’re going to be able to meet. Though the reasons for that may be up for debate, the benefits of this unequivocal focus – 21,000 jobs, to name but one – have been hugely valuable for Scotland. But with less than two months to go until May’s Scottish Parliament Election, and four years until the end of the decade, now is the time to set ourselves new challenges. Ahead of that election, Scottish Renewables has set out the case for extending our own horizons beyond existing targets for 2020, and for the setting of a new vision for renewable energy in Scotland out to 2030. At its heart, that vision is designed to continue the development of our established renewable technologies while supporting the growth of new parts of the industry. But it must also reflect the need for a more strategic approach to how we grow renewables’ share of our energy needs, and the changes we need to make in the way we distribute, store and use energy as we move away from fossil fuels to cleaner alternatives. We believe that, by 2030, half of all the energy consumed in Scotland – in the form of electricity and heat, and by our transport sector – should come from renewable sources. Meeting this new goal would require a tripling of green energy from 2014 – achievable given that latest figures show we will be more than halfway there by 2020. This new objective would be a “natural next step” from the country’s existing 2020 renewables targets, and would be the most effective way to both tackle carbon emissions

and maintain secure energy supplies. It would mean the continued adoption and expansion of many already-familiar technologies, like wind, hydro, and biomass, but also a renewed focus on reducing overall energy use and on cleaning up the transport and heat sectors, which together account for 75% of our energy use. It would also mean growth in emerging technologies like electric and hydrogen vehicles, but also some that are less familiar today, but have the potential to make a major contribution tomorrow. Two perfect examples: East Lothian-based business Sunamp, which uses cutting-edge ‘phase-change materials’ to store excess electricity as heat and deliver it later as hot water; and Edinburgh-based start-up Celtic Renewables, which last year became the first company in the world to produce a biofuel capable of powering cars from residues of the whisky industry. Both these businesses are at the very forefront of renewable energy research, and both are proudly Scottish. Foreign and UK investors, too, are coming to Scotland to develop their projects, spurred on by the country’s welcoming reputation. Norwegian business Statoil is developing its Hywind floating offshore wind pilot off Aberdeenshire, and in doing so is placing Scotland at the centre of research into this hugely-promising area. Meanwhile Isle of Wight-based Sustainable Marine Energy is bringing its innovative,

cost-cutting Plat-o platform to Orkney to take advantage of the superlative supply chain and facilities that have been developed there by the European Marine Energy Centre. Our manifesto for May’s Scottish Parliamentary election sets out our ideas on how Scotland can best achieve our aspirations by focusing on the need for ambition, leadership, increased competitiveness, and innovation. Not only will these measures support growth in the next chapter of our industry, they will ensure that renewables can play a key role in meeting Scotland’s climate change targets and maximising the jobs and investment that our sector can bring to Scotland. Growth to date is exemplified by businesses like ScottishPower and SSE, which together have taken the lead in developing a domestic onshore wind industry that employs 5,400 people, and smaller players like consultancies Locogen, SgurrEnergy and Natural Power and hydro developer Green Highland Renewables, all of which provide vital services to the industry. There is a global market for companies like these, with worldwide demand for clean energy and new products like storage set to accelerate over the next decade. We believe that continued growth of renewable energy can, will, and should be one of the defining features of our economy over coming years, and that our industry can be at the very centre of efforts to build the progressive, inclusive and successful Scotland we all want to see. But that will only happen if we get the right framework in place to continue the transition in our energy system and to build on the significant progress made to date. We look forward to the debate ahead and to working with the next Scottish Government on the hugely important task of defining the future of renewable energy in Scotland. n Niall Stuart is chief executive of trade body Scottish Renewables

“Celtic Renewables last year became the first company in the world to produce a biofuel capable of powering cars from residues of the whisky industry”

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A winner’s focus Sir Chris Hoy is Britain’s most successful Olympian, but how has he translated success on the cycling track to success in the world of business? BQ editor Peter Ranscombe meets the budding entrepreneur to find out

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As the audience settled down to watch Star Wars: The Force Awakens, the excitement in the cinema was electric. But before fans immersed themselves in the world of Rey, BB-8 and Kylo Ren and were stunned by the on-screen death of one of the franchise’s major characters, they were treated to an even more shocking revelation – Olympic cycling champion Sir Chris Hoy is in fact a robot. Or a “Hoybot” to be precise. The spoof trailer, put together for car maker Nissan, played on the idea that Hoy’s sporting prowess – first on the cycling track and then in racing cars – meant television commentators had long branded him as a “machine” due to the power of his legs. And the short film shown before the Star Wars movie amusingly suggested that he was indeed a cyborg, using technology developed for Nissan’s cars to help him win races on two wheels and four. So what did it feel like to be turned into a robot on the big screen? “It was great fun – absolutely amazing,” grins Hoy as he prepares for his BQ Scotland photo-shoot at the National Cycling Centre in Manchester. The city has become a home away from home for the retired cyclist, who won six Olympic gold medals and one silver for Team GB, as well as 11 world championships and two Commonwealth golds for Scotland. “I haven’t even seen it on the big screen yet – I was invited to the Star Wars premiere but I couldn’t go because I was working. “I was sent the final edited version for approval and I thought it was well-cool. We did two days of filming with the car on an airstrip in Athens, but I wasn’t involved in the other bits of filming. I loved the idea of it – it was a bit tongue-incheek. But it also raises an interesting question about how far away we are from creating the technology that would allow us to race a fullyautomated car against human beings.” There’s something very appropriate about Hoy ending up in front of cinema audiences. Born and bred in Edinburgh, Hoy was inspired to take up cycling after watching the climax to Steven Spielberg’s 1982 classic ET: The Extra-Terrestrial, as the child stars of the film tried to escape from the authorities on their BMX bikes. “ET was the spark, that’s what really got me interested in BMX cycling,” Hoy told the audience last November at the Festival of Entrepreneurship, the companion event to the Scottish Business

Awards, both of which were supported by BQ Scotland. “I started racing in Edinburgh and all over Scotland and eventually all over the UK. “The routine would be that on Friday after school I would get in the house and do my homework and then I’d get my bag packed for the weekend. My dad would get in from work and we’d put the backseat of the car down, we’d put a single mattress in the back and the bike in next to me. I’d get a duvet and a pillow and we’d leave in the early hours of the morning. I’d sleep most of the way and that would be the start of the weekend. I’d race all weekend and then I’d get home just in time for school on Monday morning. I absolutely loved it.

It was never a case of pushy-parent syndrome; it was purely me and my parents were there to support me and guide me along the way.” Hoy began his BMX riding at the Danderhall track in Edinburgh, eventually racing on the continent and even at the world championships in the US in 1987. Around the age of 14, he joined Dunedin Cycling Club and began riding road bikes and eventually competed in track races at Meadowbank velodrome, sitting in the shadow of the 1970 and 1986 Commonwealth Games stadium. The cycling club was run by husband-and-wife team Ray and Doreen Harris, who taught him a very important lesson when it came to setting goals, a skill that served him

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well during his career as first a sportsman and now as a budding entrepreneur. “One evening during the winter, the junior riders in the club were sat down and Ray introduced the concept of goal-setting,” Hoy remembers. “He told us to write down our ultimate dream for our sport. We then wrote down our medium-term goal for the next four years and then our short-term goal for that season. Ray read out our answers to the group and I was the only person who wrote down that they wanted to be an Olympic champion. “I wasn’t even the best in our group at that point. I had the mickey taken out of me by my mates – ‘Why do you think you could become Olympic champion?’ they asked. The simple answer was that I didn’t know if I could, but I thought ‘Why limit myself?’ Rey said it was great that I had a dream but asked me how I would get there? So it all came down to setting goals. He said to write a plan and then break it down into stepping stones. That means you can forget about the long-term goal because it seems so far away and instead concentrate on each of the stepping stones or short-term goals. “As long as you have a sound plan then all you need to do is keeping hitting those small steps along the way. That was really what I did for my whole career – I used that technique. I still use it now. As a budding entrepreneur, starting out on the bottom rung of a whole new ladder, those are the steps that I’m taking.” Those steps appear to be paying off so far. Not only has Hoy teamed up with cycling retailer Evans to launch his own range of eponymous bikes, but he’s also developed his own clothing line with Vulpine, introduced a selection of cycling accessories and spare parts, created the Pure Ride spin class for the Pure Gym chain, and in March will publish his first collection of children’s books, written in partnership with Joanna Nadin. “That was one thing that I never planned,” laughs Hoy. “The idea was floated to me and I thought ‘Why not?’ I didn’t have any experience of writing children’s books and so I co-wrote them with Jo, who is an amazing author.” The series of six books, Flying Fergus, tells the story of a nine-year-old boy and the adventures he has on a rusty old bike he inherits from his father. Hoy’s own son, Callum, was born in 2014 and so is still a wee bit young to appreciate the books. “There’s a Callum in the

story and a lot of friends, family members and team mates have given me inspiration to create characters in there too,” says Hoy. “In a couple of years’ time, Callum will be old enough for me to read him the stories and then in four or five years he’ll be old enough to read them himself if he wants to.” Inspiring children to take up cycling was also one of the motivating factors for Hoy to launch his bike brand. Back in 2010, two years ahead of his final Olympic Games in London, Hoy sat down with his manager, Rob Woodhouse, to begin to plan the future once his cycling career came to an end. “When you’ve got a blank page and you could literally start from anywhere, it can be quite difficult,” explains Hoy. “Sometimes it can be good to have some parameters to work within, but we were pretty much starting from scratch. I had to decide

what the bikes would look like, who they would be for, what level we were pitching at, what kind of partner we would work with and Evans was our first choice. “Our brand matches up with the retailer – we’re trying to encourage people into cycling, we don’t want to be too elitist or exclusive. Having been to most of the Evans store throughout the country, I know that the people who work there are cyclists and are all passionate about bikes. That’s what I wanted – I didn’t want my bikes to be sold in a random store by people who didn’t care.” The adult range was introduced in 2013, swiftly followed by a selection of children’s bikes. “It was a lot more work than I thought it would be,” laughs Hoy. “I don’t know what I imagined it would be like, but it took a huge amount of effort to get the momentum going and get it

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all up-and-running and to do it properly and not fob it off to other people but to really get involved. Then you can feel proud of it and feel the end product is something that you genuinely created, it’s not just your name on it. Consumers are smart, you can’t pull the wool over their eyes and I wouldn’t want to; they know if you’ve genuinely been involved in the process and design or if you’ve just fobbed it off to someone else.” Dipping a toe into new water can be a daunting prospect, but Hoy says that he has received a warm welcome from the entrepreneurial community, both at the Scottish Business Awards and accompanying Festival of Entrepreneurship and during other business events. “Often if you’re new to something – no matter what it is, whether it’s a new sport or a new industry – there can be potentially people saying ‘He’s a newcomer, we’re not going to welcome him’ but that couldn’t be further from the truth from what I’ve experienced so far,” says Hoy. “What I’ve liked is that businesspeople are very open and very willing to share advice. They’ve not been protective or secretive at all. I’ve chatted about bikes with Horacio Pagani, the Argentinian founder of the Italian car company behind the Zonda. He’s an engineer and an entrepreneur who created a brand without a history behind it or a pedigree in motorsport, like Ferrari. It was fascinating to hear from him about how he went about creating a product and creating a brand. “Closer to home, I sat with Chris van der Kuyl at the Scottish Business Awards. He’s an amazing guy and hearing his story about Minecraft and meeting his team was inspiring. The business world in Scotland is a very close-knit community; everyone is so supportive of each other and very friendly. Chatting to Chris, you’d never know that he’s such an amazingly successful man. No pomp and ceremony about him, but when you realise what he’s achieved and what his companies have achieved then it’s amazing. I bumped into him in London a couple of weeks after that and we spent an evening catching up. It’s not just Chris though – other people have been very welcoming too.” Entrepreneurship wasn’t something that was suggested to Hoy at school. His Jiig-cal form – or “Job Ideas & Information Generator – Computer Assisted Learning”, the questionnaire filled-

“I have a great aunt who still asked my mum after the Olympics when was I going to get a proper job?” in by thousands of pupils in the 1980s and 1990s – suggested that he should become an advocate or a brewer, while his teachers told him that he couldn’t become a cyclist and that he needed to get a degree. He left school in 1994 and began studying mathematics and physics at the University of St Andrews, but it was physiology that caught his imagination and so he transferred to the University of Edinburgh to study applied sport science. “I have a great aunt who still asked my mum after the Olympics when was I going to get a proper job?” smiles Hoy. “I can understand that. I never really thought I had the skills to become an entrepreneur – I’m still not sure if I do, but what I do know is that the one thing you need as an entrepreneur is drive, that desire to push yourself and not just accept the easy answer or being told that you can’t do something. And you need to be passionate about it.” As well as demonstrating his own passion and drive on the cycling track, Hoy also had role models at home to show him what business and hard work were all about. “My dad ran his own business in the building industry,” explains Hoy. “The work ethic from my mum and dad was

immense. Mum worked on sleep studies at the hospital at night. In many ways, the whole BMX thing was a way of spending more time with my dad. Little did we know it would take off and become something we did every weekend and led into road and track cycling.” As the camera shutter whirs and the flashgun pops during the BQ Scotland photo shoot, Hoy is waiting to hear whether he’ll be racing for Nissan at the Le Mans 24-hour race in June. Having grown up with a boyhood passion for cars, Hoy got hooked on racing after a corporate track day at Jonathan Palmer’s track in Bedford. Palmer advised him to get a Caterham, which Hoy drove during a documentary he made for the BBC about world rally champion Colin McRae. He was spotted driving by the Radical race series, which invited him to take part in its entry-level championship in 2013. “It took off from there,” explains Hoy. “Nissan is an Olympic and Team GB sponsor and asked me to come on-board as an ambassador for its partnership with Team GB and, off the back of that relationship, a motorsport opportunity arose.” Hoy drove alongside teammate Charlie Robertson for Ginetta-Nissan last year and the pair won the LM P3 championship in the European Le Mans Series. Now, Hoy is looking forward to finding out if he’s been selected to take part in the legendary 24-hour Le Mans race this June. Beyond Le Mans, there’s also the small matter of the Rio Olympics in August. “I’ll be doing some punditary for the BBC,” Hoy reveals. “It’ll be very different. I’ve not been to an Olympics that I haven’t competed at. My first Olympics was Sydney and before that I’d only ever watched it on the TV. So it will bring back all the emotion that you forget about until you’re in the Olympic village or in an Olympic venue. All the excitement and the nerves and the adrenaline. When you first arrive you try to play it all down and stay calm and not let yourself get swept away by it all, but when you’re there as a spectator you can just go ‘Wow, this is all amazing’.” n To watch a video of Sir Chris Hoy’s top tips for entrepreneurs when it comes to setting goals and to find out how he copes with the pressure of an Olympic final or a Le Mans race, visit the BQ Live website at www.bqlive.co.uk/sir-chris-hoy/

Corporate Team

Louise Cent

April Bingham

Stephanie Farrell

“Bellwether Green’s broad client base impresses, with active sectors including technology, healthcare, energy and financial services. Practice head April Bingham is praised for her ‘experience and business acumen’ ” Legal 500

Edinburgh | Glasgow

www.bellwethergreen.com

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Bringing an entrepreneurial spark into a bank Royal Bank of Scotland has opened up the former executive wing in its Edinburgh head office to welcome an Entrepreneurial Spark business accelerator hub, with similar ‘hatcheries’ springing up at NatWest sites throughout the UK As he gazed around at the assembled audience, the first word out of Ross McEwan’s lips was “Wow”. More than 500 people had gathered in one of the atriums at Royal Bank of Scotland’s (RBS’s) global headquarters in Edinburgh to see the bank’s chief executive open the Entrepreneurial Spark ‘hatchery’ or business accelerator hub, with onlookers lining the balconies around the first and second floors to watch the proceedings. The hatchery forms part of RBS’s new Entrepreneurship Centre, which also includes Open Experience, the bank’s technology solutions centre. The FTSE 100 company has created the centre in what was previously the executive suite at its Gogarburn head office, with the Entrepreneurial Spark hatchery relocating from its previous home on the South Gyle business park and the technology centre moving from a basement in Edinburgh city centre. Since it was founded in 2011 by Jim Duffy, its “chief executive optimist”, Entrepreneurial Spark has spread throughout Scotland’s Central Belt, with Sir Tom Hunter supporting a hatchery in Ayrshire, Lord Willie Haughey backing a site in Glasgow and Ann Gloag guiding its Edinburgh base. The organisation has since expanded into nine locations around the UK, adding Belfast, Birmingham, Brighton, Bristol, Leeds and Manchester to its roster of sites. Moving the Edinburgh hatchery inside the bank mirrors the organisation’s strategy in other parts of the UK, with the Birmingham and Manchester operations also located inside RBS buildings. The next stage of the expansion will involve opening hubs in Cardiff, Milton Keynes and Newcastle over the course of the summer, with a London accelerator due to open next year. When it comes to the success of Entrepreneurial Spark, the numbers speak for themselves. So far, 660 businesses – or ‘chiclets’ – have been helped to accelerate their growth, with 88% of those companies still operating today, around double the normal survival rate for start-ups and high-growth firms. Together, the businesses have raised just over £45m of investment and are turning over nearly £86m a year. Along the way, they’ve created 1,800 jobs, according to the organisation’s 2015 impact

report, which was published on the day the new hatchery was opened. So what’s the secret to Entrepreneurial Spark’s success? “One of the key differences between Entrepreneurial Spark and other accelerator schemes is the mentoring that we offer,” explains Duffy. “We spend a lot of time picking the right mentors who can deliver specific support rather than just general advice. “We hone our mentors down to a team of about 20 for each hatchery. We put them into our ‘piranha pit’ so that they learn how to ask the right questions and begin to work together as a team. We don’t want mentors who are just nice – we want mentors who are sharp.” As well as the mentoring, the 80 businesses that pass through the hatchery every six months will also receive free office space, allowing them to concentrate on growing their businesses rather than dealing with the mundane and everyday details. Chiclets will also receive one-to-one business enablement, access to workshops and fortnightly event nights focusing on key elements in growing a start-up and ongoing support and development from the Entrepreneurial Spark team. Alongside the hatchery, a whole range of

business support organisations are also moving into RBS’s Entrepreneurship Centre, including Business Gateway, Edinburgh Napier University, Entrepreneurial Scotland, the Prince’s Trust in Scotland, and Scottish Edge, the grant-making body created by Duffy and Scottish Government finance secretary John Swinney. Staff from RBS will also be on-hand to offer advice and support to the residents in the hub. Alison Rose, chief executive of commercial and private banking at RBS, hopes that a wee bit of the chiclets’ entrepreneurial spirit will rub off on her bankers. “It’s not just about us helping the chiclets – they will be helping us too,” she told BQ Scotland following the launch of the Edinburgh accelerator. “With our staff spending time with the entrepreneurs, they’re really learning what start-ups and other businesses need. That’s fantastic feedback for us and helps us to train our bankers to become even better. “Fundamentally, our role is to serve our customers really well and the way you help businesses is to understand their needs. The key to being a good relationship manager is to really understand a business so you can help it over the short, medium and long term. “High-growth companies will need to understand

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“It’s an inspiring environment. It creates a bar – they’re walking into this huge RBS building and they’ve got their own space in it”

working capital or how to access export markets. Entrepreneurs and small businesses will have different needs to multi-nationals or mid-sized companies. Someone working in the agricultural sector will have different needs to someone working in the tech sector. “All of the hatcheries are being opened within our office space. The Manchester hub is on the first floor of our main building in the city and the Birmingham site is right at the heart of our corporate and commercial business.” Looking round the new Edinburgh incubator, Duffy is clearly impressed with what he sees. “This centre gives us a first-class environment for our entrepreneurs to come into and start to grow and learn,” he says. “It’s an inspiring environment. It creates a bar – they’re walking into this huge RBS building and they’ve got their own space in it. “They can see what’s happening in a big corporate. There’s so much change going on here. There are around 5,000 staff working at Gogarburn and our entrepreneurs will have the chance to talk to many of them. “Being at RBS’s global headquarters also adds to Entrepreneurial Spark’s credibility. We started off five years ago as a small social enterprise in Glasgow and now we’re working with huge behemoths like RBS and accountancy firm KPMG.” Duffy emphasises the close working relationship between his organisation and RBS. “Looking back in ten years’ time, there will be household names and FTSE100 companies that will be able to point and say ‘We were an Entrepreneurial Spark company,” adds Rose. “That would be a dream come true,” laughs Duffy. Many of Entrepreneurial Spark’s companies have already been making their presence felt. Glasgow-based chiclet DiaryDoll, an underwear brand founded by television presenter Carol Smillie and tennis player Annabel Croft, has recently won a listing for its pants in 122 Boots stores throughout the UK, adding to its listings at Debenhams and on the QVC television channel, while Lee Nazari from Birmingham-based start-up Mobile Pay Systems has secured £150,000 of private equity funding to help develop his Swoope app, which offers click-andcollect services for shops.

For further information visit www.entrepreneurial-spark.com

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Power play As managing director of SSE Enterprise Energy Solutions, Kevin Greenhorn has an unusual mission â&#x20AC;&#x201C; he works for a power company that wants to help its clients use less energy, as Peter Ranscombe discovers

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Stepping into SSE’s energy management centre (EMC) is a wee bit like walking onto the bridge of the Starship Enterprise. An entire wall of the building is taken up with a bank of giant computer monitors; while the Enterprise’s view-screen on Star Trek was used to talk to the captains of alien ships or watch strange new worlds from high above, SSE’s version displays crucial details about the amount of energy its clients are using and how much money it’s saved for them. Not bad for a non-descript office block on a business park at Stepps, near Glasgow. Standing at the heart of the EMC’s control room is Kevin Greenhorn, managing director of SSE Enterprise Energy Solutions. From his vantage point, he can watch staff sitting in front of their own computer screens monitoring individual clients’ energy usage. As he watches, EMC manager Alex Park – SSE’s Mr Scott to Greenhorn’s Captain Kirk, if you will – brings up over-arching information on the big screen from nearly 300 customers covering almost 3,000 sites. Sliding into a seat in the board room, it’s a much smaller screen that’s grabbed Greenhorn’s attention. He brings up a slide on his Microsoft Surface tablet computer. “This is the third tablet that our IT department has given me, so let’s hope I can get this one to work,” he laughs as he points to an inverted triangle on the screen. “I got fed up with people asking me what our business does, so I came up with a single slide to explain it.” The inverted triangle is split into four levels, with the broad top level labelled “energy consumption”. Around 1,000 companies compete in this arena to simply tell customers how much energy they’re consuming. The next level down is “building information”, with around 100 competitors supplying information

“I got fed up with people asking me what our business does, so I came up with a single slide to explain it”

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to clients on everything from the temperature of a building through to how many lights, refrigerators or even coffee machines are running. Then things start to get really clever. The penultimate level is “remote remedies”, in which SSE is one of five companies in the UK that can not only monitor a building’s energy usage but also take remote action to shut off lights, central heating or cooling if it’s not needed, or remotely fix problems without needing to send an engineer to the site. The final point at the foot of the triangle is labelled “energy solutions”. “This is where our business stands out because not only are we truly multi-utility – covering electricity, gas, heat, steam and water – but we are also technologyagnostic so we can plug into any building management system (BMS) from a big supplier and we can even help to arrange finance for energy-saving projects or tell people about grant funding,” explains Greenhorn, pointing to its links with venture capitalists including Scottish Equity Partners (SEP), which began running SSE Venture’s investment portfolio in 2012. “I want people to think of us as the first port of call when it comes to saving energy.” In a nutshell, SSE’s EMC can plug into a supermarket, a block of flats or any similar building and take control of its BMS. This allows engineers at Stepps to monitor and adjust a site’s energy usage so that it remains in line with the parameters laid out by the client. If a fault develops then the EMC is able to fix around 87 per cent of problems remotely, without having to send out an engineer, saving clients time as well as money. It’s not all just about the cold hard cash though. For social housing clients, SSE can monitor energy usage in individual flats and so if a vulnerable customer who always switches her kettle on between 7.30am and 8am hasn’t done so then it can alert the building’s manager. In a similar vein, if a fridge stops working in the blood bank at a hospital and it can’t be fixed remotely then the EMC can alert the relevant doctors, nurses and technicians to take action and preserve precious supplies. But why is one of the UK’s biggest power companies trying to help clients use less energy? For Greenhorn – a larger-than-life character with an infectious enthusiasm – it’s part of a broader theme at SSE.

“I want people to think of us as the first port of call when it comes to saving energy” “Doing the right thing is hugely important, no matter how big or small you are,” he says. “We’re a Scottish Living Wage employer, not just for our own staff but also we make it a condition for companies working in our supply chain. “We’re the only FTSE 100 company that has received Fair Tax Mark accreditation to show we’re transparent about the amount of tax we pay. We pay our staff to go out and take part in community days. From our Perth office, we help at a greyhound rescue centre in Fife.” SSE Enterprise is in some ways the sleeping giant within the wider group. While SSE’s retail, wholesale and networks sections generate, sell and supply gas and electricity, the enterprise division offers business-to-business services covering everything from installing electric, lighting or water systems in newlyconstructed buildings through to providing telecommunications services or even powering railway lines. Although his current job title – ‘managing director of SSE Enterprise Energy Solutions’ – may sound cumbersome, it’s not the most unwieldy

title he’s had with the company. “At one stage, I had the longest job title in the business because I was ‘managing director for business supply, contracting and international’, which was the fancy way of saying ‘Ireland’,” he laughs. While many people nowadays will work for multiple companies during their career, Greenhorn has spent all of his working life with SSE and its predecessors. But he’s worked across almost every part of the group and has seen a lot of change during that time. After graduating with a degree in mathematics with engineering technology from Napier University in Edinburgh, Greenhorn joined the North of Scotland Hydro Electric Board in 1991 as privatisation morphed it into Scottish HydroElectric. Despite its many name changes over the years, for generations of teuchters it will always affectionately be known as the “Hydro Board”. Towards the end of his graduate management scheme, Greenhorn became involved in delivering training. “As part of the privatisation, we needed to do a lot of customer service training,” he remembers. “You can imagine how

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that went down with the engineers who had to climb the pylons. But it did have its advantages though, because I met my future wife, Tania, while I was delivering training at the hydro shop in Broughty Ferry, near Dundee.” Greenhorn progressed into sales, offering electricity to commercial customers ranging from potteries in Campbeltown to aluminium smelters in Fort Willian. From there he moved into power trading, first with electricity then with oil. When Scottish Hydro Electric merged with Southern Electric in 1998, Greenhorn was the first person to move south to Maidenhead. He was on duty as commodity trading manager on 11 September, 2001, when terrorists flew planes into the World Trade Centre in New York. “We had a live audio link to the trading desks and we could hear the brokers screaming,” says Greenhorn. “It haunts me still.” After rising through the ranks to become head of energy trading, his career brought some lighter moments too, especially once he switched to be head of marketing. “SSE owned the big gasometer next to the Oval cricket ground in London,” he chuckles. “It was 2005 and England were playing Australia for the Ashes. We put a huge banner on the gasometer saying ‘Go England! Southern Electric’. Npower was sponsoring the tests, so it was not pleased.” His other marketing achievements included bringing together SSE’s disparate brands – including Scottish Hydro Electric, Southern Electric and Swalec – under the same banner, first by harmonising their corporate colours and then later introducing the now-familiar “swoosh” logo. Greenhorn then wanted to gain experience of running his own profit and loss account, and was appointed managing director of SSE Ireland, which – when he began in 2007 – consisted of just a handful of staff. The unit quickly acquired CH Power, with its ten staff and around 3,000 customers, and then benefited from the SSE’s takeover of wind farm developer Airtricity, which brought with it 28,000 supply customers. By 2012, the Irish business had grown to 800,000 customers and, as well as being chief executive of Airtricity, Greenhorn began to be handed other responsibilities, including running the business energy supply arm with its 460,000 customers and 15% market share, and then the contracting unit, leading to his lengthy job title. He became a director of the SSE Enterprise

“We can find unexpected savings. In telecoms for example, if an office is empty at night then we can switch off all of the internet-protocol (IP) phones that otherwise are sitting connected to the network drawing power”

division in 2014, with the company buying The Energy Solutions Group (ESG) from Bridgepoint Development Capital for £66m in July of that year. Although ESG is headquartered in Manchester and has a total of ten offices throughout the UK, the Stepps site remains its only EMC and continues to handle customers from across the country. Greenhorn sees major opportunities ahead for SSE’s Energy Solutions unit. As well as auctioning off contracts to supply the national grid with electricity, the UK Government has also been issuing ‘demand-side response’ (DSR) contracts as part of its Capacity Market auctions. In effect, these are contracts with companies and other organisations that will cut their power usage when asked to by the grid, helping it to cope with peaks in demand from domestic customers or drops in supply if power stations go offline or wind turbines don’t turn. “SSE won a 42 mega-watt DSR contract in the most recent Capacity Market auction, so we’re looking to see if we can work with our clients to provide some of those savings,” explains Greenhorn. High-profile users of Energy Solutions’ services already include Glasgow City Council and the London Aquatics Centre, along with a host of supermarkets and social housing associations. “It’s not just big companies and organisations that are benefiting from our services but small businesses too. A lot of companies have already installed light-emitting diodes (LEDs) for their lighting and may have even installed solar panels or a wind turbine and so they’re looking for what they can do next. That’s where we come in. “We can find unexpected savings. In telecoms for example, if an office is empty at night then we can switch off all of the internet-protocol (IP)

phones that otherwise are sitting connected to the network drawing power. For one customer, we carried out an audit of network-connected printers, which made them realise they had printers they didn’t know they had. That helped them to take some printers away or not replace them, saving more money.” When he’s not extolling the virtues of cutting energy usage and saving cash, Greenhorn is a passionate Celtic fan and enjoys playing golf. “My wife has also turned us into ‘renta-participant’ for events, so we’ve done a triathlon, half marathons, a kilt walk and the West Highland Way over the past few years,” he laughs. “We’ve also climbed a few Munros and have enjoyed a couple of kayaking holidays along the River Spey at Loch Insh.” While his own career history is impressive enough, Greenhorn is part of a high-achieving family. His brother is head of educational planning and resources at Falkirk Council, his sister is human resources director at Highland Spring, and his other brother, Stephen, created the soap River City for BBC Scotland, penned the episode of Doctor Who that introduced The Doctor’s daughter, and wrote Sunshine On Leith, the stage musical and film based on songs by The Proclaimers. Music is also a big passion for Greenhorn, who has more than 10,000 albums in his collection. “My favourite band of all-time is James, my favourite single of all-time is Song to the Siren by This Mortal Coil and my favourite album of alltime is The Bends by Radiohead,” he reels off. His choice of pets’ names even reflects his musical passions. “We have a cocker spaniel called Elvis, a cat called Scout and two chickens called Beyoncé and Audrey,” he laughs. “Beyoncé is my one.” n

COMMERCIAL PROPERTY CBRE opens bigger Aberdeen base Property consultancy CBRE has moved into a new home of its own in Aberdeen. The firm has taken a 3,250 sq ft office at 1 Albyn Terrace to house its expanding team. Two graduates – Amy Tyler and Amie Owen – have also joined the Aberdeen team. Instead of having assigned desks, staff working on the site will use an open-plan office, which is also designed to be ‘paperless’ thanks to the use of digital files. Managing director Derren McRae said: “When looking to acquire a new office we were keen to secure space that had potential to create a more forwardthinking working environment that was reflective of how we work and how we can best serve our clients. The fit-out of our new office at 1 Albyn Terrace certainly promotes increased collaboration and provides an overall improved experience for both employees and clients. We are delighted to have now moved in to the excellent new workspace and also welcome our new recruits Amy and Amie to the team.” Roddy Morrison, director and head of building consultancy in Aberdeen, added: “The team has already embraced the new workplace initiatives such as moving towards a paperless office with digital files, allowing for break-out areas for staff and clients to be created in areas we would have previously used for file and paper storage.”

Next comes to Straiton Clothing and homeware retailer Next has unveiled plans to open an anchor store at the Straiton retail park on the edge of Edinburgh. The 80,000 sq ft store, which is poised to open in June, will become the chain’s largest shop in Scotland and one of the biggest out-oftown units in the UK. The new shop will be Next’s third expansion at the retail park, having increased its footprint from its original 15,000sq ft three years ago. A total of 110 jobs will be created when the store opens. Mark Whittaker,

group property director at Peel Land & Property, which owns the site, said: “The continued investment, development and focus on design progression at Straiton have enabled Peel and Next to exchange contracts to deliver what will become the largest Next store in Scotland. “Peel has for the past five years been working hard on repositioning Straiton and we are delighted that we are now in a position to announce this truly transformational deal. “We feel Straiton is perfectly placed to position itself firmly in the upper tier of the UK retail

Expanding team: CBRE has moved its growing team into new offices in Aberdeen

hierarchy, bringing significant economic benefits to the wider Edinburgh area.” Companies that have recently leased units at Straiton include, Matalan, Nando’s, Nike, Outfit and Sofaworks.

S&W joins 1 West Regent Street Shepherd & Wedderburn has become the latest law firm to move into the office development at 1 West Regent Street in Glasgow. S&W is taking the entire 13,700sq ft third floor of the block and will move into its new office in May. Chief executive Stephen Gibb said: “Up until now, we have been pretty creative at finding ways to accommodate staff and partners in our West George Street office, but the extent to which the business is growing means that we are fast running out of space. “The additional headcount from Tods Murray, which we acquired in October 2014, and other senior hires, including a recent three-partner insolvency team from HBJ, means that staying put isn’t an option for us.” S&W will join CMS, which is leasing 22,000 sq ft over two floors. Engineering company Weir Group, professional services companies Arup and FDM Group, and media outfit Global have already taken space in the building, with Tesco’s Giraffe restaurant occupying one of three retail units on the ground floor.

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Law firm joins Gala’s exchange Commercial law firm Davidson Chalmers has taken up residence in Galashiels Transport Interchange, a £5.2m office development built to capitalise on the opening of the Borders railway. David Chalmers, which was founded in Edinburgh in 1993, has 46 staff, including 11 partners. The Gala office will be run by partner Andy Drane, who lives in nearby St Boswells. We believe the new rail link is a real game changer for the central Borders, which will open it up to new business opportunities,” said Drane. “We are therefore delighted to be opening this office in the Galashiels Interchange, a move that represents a natural progression to our long-standing commitment to the area and which will enable us to grow our client base here. “As someone whose family lives in the local area, I’m very excited about having a regular presence here to build upon the solid base we have established within the area.” Davidson Chalmers already has strong links to the area, sponsoring the Melrose rugby club ladies’ team and the ‘Vets’ tournament played in the town each year as part of the Melrose 7s rugby festival. The firm is also an-going sponsor of the Borders Book Festival and is currently supporting the work of the Borders Kids Wing appeal.

Ca’d’oro changes hands for £14m Hamilton Capital Partners (HCC) has sold the Ca’d’oro, one of Glasgow’s best-known office blocks, to an unnamed overseas investor for £14.1m. HCC, which was launched in 2009 by Direct Holidays founder John Boyle and former PricewaterhouseCoopers accountant Andrew Lapping, bought the building from insurance firm AXA in 2013 and has since spent £1.6m refurbishing the Grade A-listed icon. Patrick Ford, a partner at property consultancy Knight Frank, which has managed the site since 2013, said: “The Ca’d’oro deal demonstrates the high level of demand from overseas investors, which is becoming increasingly relevant as Glasgow’s and Scotland’s investment environment evolves into a truly global market. “Traditionally we’ve seen German and North American money coming into the city, but now we’re receiving more interest from the Middle East, Israel and other parts of Asia.” The Ca’d’oro – or “house of gold” – was built in 1872 as a shopping arcade and furniture warehouse before becoming a ballroom and restaurant in the 1920s. It was gutted by fire in 1987 but was reinstated by its then owner, the Co-operative Group. The Co-op is still one of the building’s tenants, alongside Atos IT Services and law firm Harper Macleod.

Work begins on Edinburgh office GSS Developments has started creating a £24m speculative Grade-A office development in Edinburgh. The site – at 2 Semple Street in the Exchange district – was bought last year by Aberdeen Asset Management. Demolition work is already underway, with the main contractor expected to be appointed in April and construction work predicted to begin in June. The building will include 11,000 sq ft of retail space on Lothian Road and Fountainbridge, with a further 35,000 sq ft of offices above. Paul Stevenson, director of GSS Developments, said: “Currently there are no available new build Grade-A office

developments coming out of the ground in central Edinburgh, therefore the strong appeal for potential tenants at 2 Semple Street is the absolute certainty on delivery and quality of product. ‘With a number of well-known occupier lease expiries in 2018, this delivery certainty allows us to discuss with confidence definite completion and move-in dates with occupiers. Our family has a relationship with Bank of Scotland going back nearly 50 years and this fully-funded development gives businesses, which are looking for first-class city centre space in Edinburgh’s financial district, the absolute confidence that they can start forward planning now.”

Join us at Hillington Park and be part of a business community which is home to over 500 businesses and employing over 8000 people. Hillington Park is now home to Scotland’s First Simplified Planning Zone.

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Record office occupancy at Hillington

Spie eyes move to Clyde Gateway Engineering consultancy Spie is to combine its three offices in the West of Scotland into a single site at One Rutherglen Links, the £5m development built by Clyde Gateway. Spie becomes the first tenant at the site in Rutherglen and will move more than 140 staff to the office block. Lord Smith of Kelvin, the chair of Clyde Gateway, said: “I am delighted that Spie has chosen One Rutherglen Links for its headquarters in Scotland. “There is something of a shortage of new, affordable quality office stock in and around the city-region but our commitment to speculative developments at a number of locations across Clyde Gateway will help address this gap.” Will Smith, managing director of Spie multi-technical services, added: “Spie is looking forward to becoming an occupant of this quality development and expanding its Scottish business from this excellent location.” Clyde Gateway is a £1.5 billion project to regenerate 840 hectares in the East End of Glasgow and in Rutherglen between 2008 and 2028. News of the deal came as Spie also took office space at Edinburgh Park, leasing 2,300 sq ft at Leven House, 10 Lochside Place.

Hillington Park has reported record occupancy of its office space. The Glasgow business park, which is owned by a joint venture between Oaktree Capital and the UK arm of German property company Patrizia, said the occupancy rate had hit 90%. Companies that have recently moved to the site include central heating firm FEP Heatcare, logistics outfit Schenker and Resolve Medicolegal, which provides medical experts to law firms. FES Facilities Management, LHR Business Support Centre and McNicholas Construction Services are among the tenants that have recently renewed their leases. Roddy Proudfoot, head of asset management at the site, said: “Occupancy of office premises at Hillington Park reached an all-time high recently, primarily due to the work we do with both our existing occupiers and new businesses to understand their precise requirements and provide them with the space and leasing package that best fits their needs. “We also have new-build opportunities available where office and industrial accommodation can be built quickly to a business’s own specification due to predefined planning permission already in place within our simplified planning zone (SPZ) scheme.” More than 500 businesses are based at Hillington and together they employ more than 8,000 staff.

Political impact on property Investment in commercial property throughout Scotland dropped by 11% year-on-year in 2015 to £2.12b, according to figures from commercial property consultancy Lambert Smith Hampton (LSH). Ewen White, director of capital markets at LSH in Glasgow said: “It is difficult to draw comparisons with 2014 due to the independence referendum and its impact upon the transactional market here in Scotland.” Only

17 deals took place in the final three months of 2015, compared with 36 in the months following Scotland’s decision to remain in the UK in September 2014. The average deal size dipped to £26.1m in the final quarter of 2015 from £27.6m a year earlier. Overseas investors accounted for £323m invested during the fourth quarter, while the ‘other’ sector – which includes hotels, leisure and other specialist accommodation – made up a third of the total invested. “The ‘other’ sector continues to expand as developers provide stock and investors look to boost their exposure to this increasingly important asset class.” White said:“A recurring theme during 2015 has been the numerous new entrants to the Scottish market who have identified the opportunity to acquire stock at a significant discount to the English regions. We expect this trend will continue.”

Edinburgh Park does the double Certification firm DNV GL and IT consultancy Exception have become the latest firms to take leases at Edinburgh Park. Both of the tenants have taken space at 3 Lochside Way from landlord Aston Property Ventures, which had already let part of the building to American defence contractor Lockheed Martin, which took over IT firm Amor Group in 2013. Both firms are moving to Edinburgh Park from the nearby South Gyle business park. Geoff Scott, associate director at property consultancy JLL in Edinburgh, which advised Aston on both deals, said: “The demand for space at Edinburgh Park is being driven by a combination of factors – better relative availability and lower costs than the city centre, the quality of the business environment, and its accessibility with first-class private and public transport links, including the tram network. “Supply may prove problematic for occupiers in West Edinburgh following the purchase of numbers 3, 4, 5 Lochside View by an owner occupier and the large pre-let to HSBC last year. These factors will change the landscape for West Edinburgh during 2016.”

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Entrepreneurialism is in Fiona Houston’s blood. Her dad, Adair, took their family’s old blacksmith’s shop at Gretna Green and turned it into a wedding venue and tourist attraction to which thousands of visitors flock each year. And now Houston has followed in her father’s entrepreneurial footsteps – although she’s heading in a completely different direction. Back in 2011, Houston and her friend, Xa Milne, launched Mara Seaweed, an Edinburgh-based food business that is on a mission to extol the virtues of the plants that grow below Scotland’s tideline. Mara’s seaweed flakes are now available throughout the UK, with stockists ranging from department stores like Harvey Nichols, Harrods and Marks & Spencer through to restaurants such as The Three Chimneys on Skye and tiny farm shops and delicatessens. Three years before they founded Mara, Houston and Milne had turned their shared fascination for food and its provenance into the ‘Forage Rangers’ column in Saturday’s Daily Telegraph newspaper and an accompanying book, Seaweed and Eat It: A Family Foraging and Cooking Adventure, with a foreword by Sunday Times restaurant critic AA Gill. Then, while walking along a beach in Fife, a Chinese-American friend pointed to the forests of kelp and all the other seaweeds that were growing along the shoreline and asked why no-one was harvesting it to eat? “It got me really thinking about how we had this sustainable, natural resource that has extraordinary flavours and health benefits,” explains Houston. “Nobody was harnessing this resource.” A lightbulb came on and Mara was born.

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“The UK is waking up to the health benefits of seaweed not only as an essential mineral boost – with nutrients such as iodine, potassium, magnesium, calcium, and iron – but as a natural flavour enhancer “

A shore thing By setting up Mara Seaweed, Fiona Houston is doing much more than simply following in her family’s footsteps – she’s creating a whole new global brand, rooted in the provenance of Scotland’s pristine marine environment

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Coming up with the name for the brand was the easy bit – “mara” is the name for “the sea” in Gaelic. “Having lived abroad, I knew that one thing we were very good at in Scotland was undervaluing our resources,” says Houston. “In order to build a business out of seaweed, we had to work out how to add value to a resource that up until that point had been undervalued. “We also had to be able to scale-up – we had to take what essentially was an artisan product and bring it into the mainstream. In order to do that, we needed to spend an inordinate amount of time not only looking at the demand side and the marketing side but also the supply chain.” While many business people would balk at such a challenge, Houston already had the entrepreneurial spirit that she needed, hot-wired into her DNA. Houston grew up in Gretna Green, where her family runs the famous blacksmith’s shop. The site had been a haven for runaway lovers from England since 1754 and her greatgrandfather, Hugh Mackie, had bought the Gretna Estate and opened Gretna Green Limited in 1886. The family business is still going strong today. Hugh passed the business onto his son, George, who in turn passed it onto his daughter, Moira, Houston’s mother. When Moira married Adair, he saw the potential for growing the site into not only a wedding venue but also a hotel and shopping destination, with Fiona’s brother, Alasdair, and her sister, Susan, now running the business. “Dad used to go around the working men’s clubs in the North of England, encouraging the bus drivers to stop at Gretna Green when they were taking their coach-loads of tourists up to Scotland,” Houston remembers. “He created mock weddings so the visitors would have something fun to do. “So I grew up in that entrepreneurial environment – but I was also very much a farmer’s daughter and so I had that connection to the countryside and the land. It helped me to understand the importance of provenance. “There’s a link to what I’m doing now – Dad was selling the story of a location and valuing that location, which is part of what we’re doing with Mara. The provenance of the seaweed growing in the clear cold waters is so important. Our whole mantra is ‘Nourishing the whole body and soul with goodness from the sea’ – that’s what it’s all about.” After studying philosophy, politics, economics

and management at the University of Oxford – and becoming an Oxford “Blue” after captaining the university’s lacrosse team – Houston worked for economic development agency Scottish Enterprise before shifting into journalism with broadcaster ITV. Her number came up in the green card lottery and so Houston and her nowhusband, an American citizen, moved to the US. Houston worked in the Washington bureau of the New York Times, which she remembers as being a “high-pressure environment but totally fascinating”. She shifted into freelance work, including a six-month stint as the Washington correspondent for The Scotsman newspaper, and then ghost-wrote a book about Jean-Bertrand Aristide, Haiti’s first democratically-elected president. In 2003, Houston moved back to Scotland with her husband and two babies, with a view to carrying on with her freelance journalism. “If you’re going to work in Scotland then you have to make your own luck,” she says. “It’s not London and it’s not Washington. You’re choosing to live here for a combination of reasons, including family, the environment and the culture. “Xa and I met in the school playground, because we both had children of the same age. Xa also grew up being connected to nature and, through our shared interest in food and where it comes from, we decided to pitch the idea of a book and a column, which became the ‘Forage Rangers’ feature in Saturday’s Daily Telegraph.” That interest in food and the recognition of the importance of provenance – where the

“Dad was selling the story of a location and valuing that location, which is part of what we’re doing with Mara”

food comes from – is still alive and well today in Mara, which has just received its Safe And Local Supplier Approval (Salsa) accreditation. “We’re taking the essence and authenticity of a very traditional product and we’re putting it into the modern food safety management structure,” explains Houston. “We’re taking the artisan ethic and authenticity and then scaling it up by harvesting products from various coastal communities.” Gaining Salsa accreditation has allowed Mara to win contracts from bigger customers and scale-up even further. The company has already signed a deal to supply Sodexo, the catering giant that serves meals in army bases, hospitals, offices, prisons and schools, with its big-name clients including the National Trust for Scotland, the Royal Botanic Garden Edinburgh and the Royal Horticultural Society (RHS) Chelsea Flower Show. When Houston wrote the business plan for Mara, she expected that the company would have to quickly move from simply harvesting wild seaweed under licence from the Crown Estate – which manages the seabed out to 12 nautical miles from the coast, along with half of Scotland’s foreshore on behalf of the nation – to growing its own seaweed in farms. “What we’re doing is completely game-changing because basically there is no industry in Scotland for the types of seaweed we’re dealing with,” says Houston. “We’re doing everything from scratch. We’re focusing on a variety of seasonal seaweeds – greens, reds and browns. They are at differing levels of sophistication in aquaculture terms. Dulse, which is our signature species, is 100% sustainably harvested from the seashore, but we also won a grant to look at how it could be farmed.” Mara together with Otter Ferry Seafish and the Oban-based Scottish Association for Marine Science (SAMS), part of the University of the Highlands & Islands (UHI), were awarded around £400,000 by Innovate UK, the UK Government agency previously known as the Technology Strategy Board, to look at ways of growing Dulse in tanks. Academic partnerships have been an important part of the company’s research and development work, with Mara using Interface – the public body that runs a match-making service for businesses that want to access university expertise – to team up with scientists at Abertay University in Dundee and at the Rowett Institute in Aberdeen.

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“We’ve collaborated with the Scottish Salmon Company and Loch Fyne Oysters to look at brown seaweeds,” Houston adds. “We’re looking at growing brown seaweed on ropes, because the aquaculture technology for brown seaweed is much further along. “A lot of European Union money has been pumped into growing brown seaweed as a biofuel, but that’s the reverse of what we’re trying to do. If you grow brown seaweed as a bio-fuel then you want to grow it as cheaply as possible because you’re going to burn it; but we’re looking at high-nutrient and high-flavour brown seaweeds that will have a higher value. “In the future, you could get to a stage where you’re growing seaweed in special seaweed farms in coastal communities or mussel farms are growing seaweed. At that stage, we wouldn’t have to harvest everything ourselves – instead, our role would be further up the food chain, adding value to the products and making sure the food safety standards are in place.” Switching to growing seaweed rather than relying on simply harvesting it is likely to take between three and five years, Houston estimates, but the company has already grown its revenues to around £250,000 last year, with that total forecasted to quadruple this year. The company has eight full-time staff, along with an army of seasonal part-time contractors who help with the harvesting. The growth of Mara was recognised last year when Houston won the BQ Emerging Entrepreneur Award for Scotland, one of a number of accolades in her trophy cabinet.“We’ve just closed another funding round, which has enabled us to finance our Salsa accreditation, build production capacity and employ more sales resource,” explains Houston. “With more investment on board, we now have to make sure we hit our sales targets in order to satisfy our investors. Our minimum target is to sell £750,000-worth of products during our next financial year. “Within five years, our target is £5m to £7m. There will be a lot of investment in the brand – from how we harvest the seaweed through to how we communicate our story with customers. I think half of that growth will come from the UK and the other half from overseas. The UK is waking up to the health benefits of seaweed not only as an essential mineral boost – with sought-after nutrients such as iodine, potassium, magnesium, calcium, and iron – but as a natural

flavour enhancer and a healthy an alternative to salt for seasoning.” Chefs have been queueing up to use Mara’s seaweed flakes in their cooking, including Paul Hollywood, the heart-throb judge on BBC One’s Great British Bake-Off television programme, who featured Mara’s products on his Pies and Puds programme, describing them as “inexplicably delicious”. Other cooks joining the cause have included Cyrus Todiwala from Saturday Kitchen, Rose Prince, Sarah Raven, and several Michelinstarred chefs such as Michael Smith and Brett Graham. One of the biggest challenges Houston has faced so far has been finding funding for the business. “You spend a lot of time meeting potential investors and explaining the concept to them,” she says. “If I were to do it all again then I might start looking for funding in America – they seem to get the idea much quicker there. They buy into the entrepreneur and back their idea.” Mara raised £500,000 in “friends and family” funding in 2013, with Rabbie’s tour company founder and chief executive Robin Worsnop coming on board as chairman. “Robin was a friend and he knew I was tearing my hair out looking for funding so he offered to come and take a look at the business plan,” explains

Houston. “So he approached it as a friend, but once he’d read the business plan he was impressed by the vision we had for the business and so he came on board as an investor.” The company raised a further £300,000 from a group of eight private investors, which allowed it to bring in £220,000 through the CrowdCube website and the same amount again from other individuals. The cash has enabled Houston to build the platform through which she will be able to scale-up the size of the business. One step along her business journey that Houston would prefer to forget was last year’s ill-fated appearance on BBC Two’s Dragons’ Den television programme, during which none of the dragons chose to back her plans for Mara. “Dragons’ Den was a car crash and a very unpleasant experience,” laughs Houston. “Having said that, we got a massive surge in sales and increased the awareness of our brand. But it’s not an experience I’d like to repeat – never again,” she smiles. “In contrast to that, around the same time we made it through to the finals of the BBC Food & Farming Awards for Best Producer, which were judged by a peer-reviewed panel of experts and not in the confines of a stupid television show.” n

PROFILE Converge Challenge

Scotland’s universities are bursting with creativity. Students and staff at our higher education institutions have come up with some stunning ideas for businesses over the years, from classic spin-out companies like Wolfson Microelectronics and life sciences firm Haptogen through to businesses started by graduates, such as Hubdub, which morphed into fantasy gaming website FanDuel. Converge Challenge is out to find the next generation of entrepreneurs who are ready to take their first steps on that journey. The competition is open to students, recent graduates and staff from all of Scotland’s universities and higher education research institutes, with this year’s prize and training fund having swelled from £100,000 to £150,000. It’s not just cash that’s on offer though. The challenge also provides mentoring and training to help budding entrepreneurs develop their ideas and create companies. Since the contest began in 2013, more than 450 applicants have submitted ideas with 120 entrepreneurs going on to receive training. Together, those alumni have been responsible for creating 51 companies, which now employ around 140 staff and have attracted in excess of £15m in investment. The partners that support the competition and provide training to entrepreneurs are: membership body Entrepreneurial Scotland, product design firm Fearsome, technology support outfit Informatics Ventures, law firm Morton Fraser, design agency Mortonward, and patent attorney firm Murgitroyd. Its new partners for 2016 are recruitment firm Badenoch & Clark, BQ Scotland magazine, accountancy firm Mazars, and Royal Bank of Scotland (RBS). “This an exciting year for Converge Challenge with our biggest prize fund to date and an ambitious development programme,” explains Olga Kozlova,

“At Converge we work with any industry sector, product or service-based idea and we are thrilled to announce the ‘Design and Creativity Award’, to celebrate the Year of Innovation”

Converge challenge This year’s Converge Challenge has a £150,000 prize fund on offer to students and staff from Scotland’s universities and research institutions who come up with the best ideas for starting a business

PROFILE Converge Challenge

“Converge Challenge has helped put us on the path to entrepreneurial success” director of Converge Challenge. “We are delighted to welcome our new partners on board; they each bring a wealth of experience from their respective sectors that will equip our next generation of entrepreneurs to create companies that will have an impact for Scotland. “At Converge we work with any industry sector, product or service-based idea and we are thrilled to announce the ‘Design and Creativity Award’, to celebrate the Year of Innovation, Architecture & Design. We are confident the new award will encourage a wide range of applications that will uncover yet more great examples of Scottish innovation among our higher education population.” Susan Fouquier, RBS’s regional managing director business banking in Scotland, adds: “RBS is delighted to partner this year’s Converge Challenge. Enterprise and entrepreneurship are key drivers of the Scottish economy and it offers an opportunity to bring together the very best of our commercial, higher education and research sectors to create further opportunity in Scotland. We look forward to working with this year’s ‘converge challengers’ and wish everyone the greatest success.” As well as the main Converge Challenge competition – which offers a first prize of £43,000 in cash and £28,000 in in-kind support, along with a second prize of £15,000 in cash and £14,000 in support – there are also two other categories in the contest.

The ‘KickStart’ category offers a first prize of £3,000 cash and a second prize of £2,000 cash to early-stage ideas for products and services, while the ‘Social Enterprise’ category has a first prize of £5,000 cash up for grabs, as well as a second prize of £2,000 cash. Two awards introduced during last year’s challenge will also be making a comeback: the ‘Entrepreneurial Spirit Award’, which recognises an individual rather than a project with £1,000; and the ‘KickStart Digital Entrepreneur Award’, which presents an iPad Air tablet computer to the individual or team who harnessed social media as a sales and marketing tool. New for 2016 is the “Design and Creativity Award” with a £10,000 cash prize and £14,000 in-kind support to recognise product, process or service ideas in digital media, textiles, architecture, and design as part of the celebrations for the Year of Innovation, Architecture & Design, a Scottish Government project being led by VisitScotland. Richard Walker from the University of Edinburgh won last year’s Converge Challenge with Photon Force, a company that aims to design sensors for detecting photons, which are individual particles of light. “Converge Challenge has provided an immense opportunity for Photon Force, from the application process – which made us understand what was involved in operating a business in our field – through to developing a business plan that would

achieve results,” says Walker. “On top of this, we have also had access to an extensive suite of training and mentoring. Converge Challenge has helped put us on the path to entrepreneurial success.” Caroline Barelle from the University of Aberdeen took second place with drug developer Elasmogen. “During this journey, I have met some incredible people and thanks to the continual support, expert advice and training that has equipped me with confidence, the know-how and a ‘Can Do’ attitude to make things happen,” she says. “I am now the proud chief executive of a biotech company that aims to develop new, effective sight-saving therapeutics and I can thank the Converge Challenge for being an integral part of this achievement.” Personal Guardian, an attack and lone worker personal alarm from Pick Protection, won third prize for Rebecca Pick from the University of Strathclyde. “Being part of Converge 2015 was a fantastic experience,” says Pick. “So much is on offer from meeting fantastic people, developing your business skills and ultimately gaining a package of financial and non-financial support to help grow your business. I cannot thank Converge enough for what it has done for my business, Pick Protection.” Judges for this year’s main Converge Challenge include: Mary Jane Brouwers, a director of the Linc Scotland business angel network; Gillian MacAulay, founder of the Gabriel Investments business angel syndicate; and David Milne, founder of Wolfson Microelectronics. Judges for the ‘KickStart’ competition include Eleanore Irvine, business development manager at life sciences firm Biogelx, and Paul Devlin, investment manager Scotland at Mercia Technologies, while the Social Enterprise judging panel includes Lorna Baird, social enterprise advisor at Business Gateway Edinburgh, and Laura Goodfellow, head of business engagement at Interface, the public body that acts as matchmaker for entrepreneurs seeking academic experts. Entrants have until 18 April to submit their twopage application forms, before the contestants are whittled down during the summer through a series of training events, pitches and business plan competitions. The winners will be named on 22 September at a gala dinner and awards ceremony at the Assembly Rooms in Edinburgh. n

Find out more and enter the Converge Challenge at www.convergechallenge.com

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LIVE DEBATE

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THE VOICE FOR BUSINESS DEBATE

The issue: Are directors fully aware of the personal implications of corporate litigation and what steps should be taken by them when corporate governance goes wrong? Many directors still believe setting up a limited company – as opposed to remaining as a sole trader or partnership – will constrain their liabilities if their corporate governance fails and leads to a catastrophic event, such as an accident at work or the collapse of their business. Yet recent pieces of legislation have allowed regulators and prosecutors to pursue directors they suspect of wrongdoing, lifting the protection of the corporate veil and opening up individuals to personal liability. The impact of such changes was at the heart of the discussion during the latest BQ Live Debate, which was held at the Blythswood Hotel in Glasgow. Laura Gordon, Glasgow chair of leadership training organisation Vistage and a regular chair of BQ’s debates, opened the evening’s proceedings by highlighting the relevance of corporate governance following the collapse of part of Didcot A power station in Oxfordshire, which had occurred just days earlier. “It shows just how serious these issues can be,” she said.

One of the key themes participants returned to again and again during the debate was the concern that few directors understand their personal liabilities. “Over recent years, a lot of our micro-businesses – that historically would have been sole traders or partnerships – have converted themselves into limited liability companies,” noted Newell McGuiness. “I worry that these businesses think that their liability is completely limited; they simply don’t understand that it’s not quite like that. So the challenge for me and my sector is to educate these companies about what their potential liabilities are and what they can do to cover themselves.” “As a consultant, I’ve seen bad governance and I’ve seen good governance,” said Ian Gracie. “Are directors equipped for directorships? In a lot of cases, particularly with SMEs, they’re not.” David Watt explained how the Institute of Directors (IoD) in Scotland educates directors about their responsibilities and liabilities. “We’re committed to getting the message out

there,” he said. “So many people just fall into being a director without understanding their responsibilities – we shouldn’t be allowing people to do that.” The lawyers taking part in the debate are all too aware of the consequences when things go wrong. “I see first-hand how directors in small businesses can let corporate governance slip and directors’ duties become blurred with their own personal interests, which often results in closer scrutiny and claims arising after a formal insolvency,” said Leon Breakey. “As a litigator, I get to see how directors handle these situations, day-in, day-out,” agreed Jennifer McKay. Lesley Carruthers said corporate governance issues are particularly acute in the charity sector because the selection of directors was often arbitrary. “The directors are often unpaid volunteers,” she said. “Charities are facing financial struggles but, at the same time, the people the charities employ have a drive to do the very best they can for their customers. If this isn’t very carefully managed then it can get out-

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TAKING PART

“The people the charities employ have a drive to do the very best they can for their customers. If this isn’t very carefully managed then it can get out-of-hand, like we saw with Kids Company”

of-hand, like we saw with Kids Company. John Morrison explained how he worked with many companies in “crisis” situations, during which they need to manage reputational issues. He highlighted the need for clients to also consult their lawyers during such crises. Corporate governance is one of the risks Clydesdale Bank’s Emerging Technology Unit considers when it receives an application for funding, explained Tom Brock, who also chairs the risk committee for Parkhead Housing Association. Nicola Taylor highlighted the vast range of legislation with which businesses in the hospitality sector have to deal, from health and safety through to food handling and hygiene. She pointed out a recent change in the law concerning the sale of alcohol; previously only directors were prosecuted if alcohol was sold

inappropriately, but now frontline members of staff face the consequences. “You’ll have noticed that more people are now being refused alcohol,” she said. “I think if you move the responsibility down the chain then you get the result you’re after.” Chardon Trading currently runs six hotels in Scotland under the Holiday Inn and Holiday Inn Express brands. Up until two years ago, the business also ran around 60 hotels throughout the UK on behalf of other owners. During that period, the health and fitness club manager at a hotel in the Peak District brought a chemical onto the premises that was not listed for use in the hotel and stored it in a cleaning cupboard, from which a cleaner took it and burned her hands when cleaning a bathroom without any gloves. “I found myself pleading guilty in court to something that I had absolutely no way of

Leon Breakey, commercial partner, MacRoberts Tom Brock, head of the Emerging Technology Unit, Clydesdale Bank Lesley Carruthers, board member, Epilepsy Scotland Ian Gracie, consultant and chair, Chartered Institute of Building (CIOB) in Scotland Michael Kelly, corporate partner, MacRoberts Jennifer McKay, construction partner, MacRoberts John McGovern, head of corporate defence, MacRoberts Newell McGuiness, managing director, Specialist Electrical & Engineering Contractors (Select) John Morrison, director, Morrison Media Strategies Nicola Taylor, managing director, Chardon Trading David Watt, executive director, Institute of Directors (IoD) Scotland Michael Willis, head of board development, IoD Scotland Also taking part: Dave Townsley, group account director, BQ In the chair: Laura Gordon, Glasgow chair, Vistage Taking notes: Peter Ranscombe, editor, BQ Scotland Venue: Blythswood Hotel, 11 Blythswood Square, Glasgow, G2 4AD

BQ is highly regarded as a leading independent commentator on business issues, many of which have a bearing on the current and future success of the region’s business economy. BQ Live is a series of informative debates designed to further contribute to the success and prosperity of our regional economy through the debate, discussion and feedback of a range of key business topics and issues.

#bqlivedebate Join in the debate online and have your say on the issues raised. If you would like us to organise a BQ round table dinner debate call 0191 389 8468 or email info@bqlive.co.uk

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controlling,” Taylor said. “We had ticked all the boxes for training, but it still happened. Clearly I felt dreadful that someone had been disfigured, but this wasn’t even my business – I was running it on behalf of a client.” “What strikes me about corporate governance is that people often see it as a defensive tool but, as a corporate lawyer as opposed to a litigator, I like to think of corporate governance as a more positive and constructive tool,” said Michael Kelly. “I use corporate governance as a tool for helping people to build a better and moreefficient business.” Michael Willis, who delivers directors’ training for the IoD in Scotland, agreed corporate governance could be a useful tool, especially for small or medium-sized enterprises (SMEs) or family businesses that needed to professionalise to fulfil their duties of care as directors. John McGovern established the corporate defence group at MacRoberts in April 2015 and his team has already swelled from three solicitors to ten, reflecting how active regulators have become. “We protect directors from regulatory investigations from the likes of the Health & Safety Executive (HSE), the Scottish Environmental Protection Agency (Sepa) and the Food Standards Agency (FSA),” he explained. “When we can’t stop a prosecution emerging then we go into court to defend the directors. The corporate veil has been lifted and regulators are looking at what individual directors are doing and are accountable for, rather than the corporate body. It’s difficult and worrying, but there are ways and means of dealing with it.” Gordon emphasised how damaging unfounded allegations could be. Morrison agreed: “That’s why you need legal advice around these issues too. Your instinct is that if you’re being chased by journalists then you could always have a comment ready. But clearly there is a change of mood in the country and so sometimes it’s better not to respond.” “People are baying for blood and want someone to take responsibility,” nodded Gordon. “I think that’s become more prevalent since the financial crisis.” “I don’t think the public is looking for someone to take responsibility – I think they’re looking for someone to blame when things go wrong,” suggested Carruthers. “They think that someone must be at fault.” Carruthers added: “I also have a particular

personal interest in this question about the steps you can take when corporate governance goes wrong. A business colleague is living through a nightmare as we speak. He identified an issue of corporate mismanagement and highlighted it to his chief executive and was told not to worry about it. He flagged it up again to the same person and was told ‘This is how it’s going to be, just get on with it’. “He left the company six months later, but 12 months after that, they came after him. He’s now being sued because, although he flagged it up, it was in the financial services industry and he didn’t ‘whistle-blow’. But he knew that if he whistle-blew then he wouldn’t get another job within the sector. He felt he had done what he needed to do to keep himself right, but in fact he’s going to be poleaxed for it. It’s quite worrying.” “Hindsight is a wonderful thing,” said Breakey. “Lesley’s colleague may have thought he was doing the right thing, but in financial services there are specific rules and regulations about whistleblowing.” “It’s about a cultural shift as well,” interjected McKay. “At the moment, whistleblowing is not looked upon kindly at all. We’re still in a culture where you’ll do what you can to protect your own back; what the regulators actually want is a situation in which you blow the whistle as soon as possible and then there are leniency provisions for the company or the individual to protect them to a certain extent. It’s really important that we have that cultural shift and that the knowledge is put out there that there are ways to protect yourself if you stand up.” “There’s the carrot and then there’s the stick that’s used in competition law,” said Breakey. “The punishment for major competition law breaches can be 10% of turnover and there’s a huge reduction – I think it’s 100% – for whistleblowers. So there’s an incentive for companies to bail out.” McKay agreed: “That’s how a lot of the cartels in the construction sector were brought to an end. That’s what it took to get that cultural shift. There have been shifts in some sectors, but it’s not enough.” “One of the challenges we face is raising awareness among SMEs about the landscape they’re in,” pointed out McGuiness. “In my industry, electrical installation is a tough game. These people have to fight to get paid. It’s

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“There’s this paradigm that suggests capitalist companies are trying to abuse the regulations and get away with it, and the regulator is the good guy.” a certain type of person that goes into that industry. It breeds a person who’s strong-willed. They’ll take guidance on technical issues, but if we try to tell them how to run their businesses then they don’t like it.” As the debate moved on, diners discussed the regulators’ role. “Some of the regulators are very aggressive,” said Willis. “There’s this paradigm that suggests capitalist companies are trying to abuse the regulations and get away with it, and the regulator is the good guy. But so often, especially with new regulators that are trying to prove themselves and get prosecutions, it’s best to fight the regulator and get that balance. They’re not always right – I think they’re often overly vicious.” Gordon pointed out the need to question how regulators were incentivised to carry out prosecutions. “Is it in the best interest of the public all of the time?” she asked. “When I ran a company, the first item on our board meeting’s agenda was health and safety,” said Gracie. “We had very good relations with the Health & Safety Executive because we worked with them. But again not every company takes that approach.” “Regulators are becoming more robust,” McGovern agreed. “For example, if the HSE finds a breach on your premises then the whole cost of its investigation falls on your company.

What I can’t quite get my head round in corporate defence over the past few years is why directors don’t push back much more? I know there’s a financial aspect to it, but most people will have some form of insurance cover for defence costs. Often the quality of the investigation isn’t what it should be.” “Does that come back to reputation issues?” asked McKay. “Do they think they can’t face the prosecution and the time in court?” “It could be, or it could be the fact that they’ve been fingered by the regulator and they think ‘There’s no smoke without fire’ even though the evidence could be very flimsy,” mused Morrison. Brock said: “Banks have built up huge systems of checking, offering a first line of defence and then a second line of defence and so on. At some banks, there are processes where 14 people will have carried out checks and they will still get it wrong, because there’s this human capacity that says ‘If someone is checking it then it’ll be ok’. The accountability has shifted with the number of people carrying out checks along the line. “You can get lost in the world of control. Sometimes the more controls you put in place then the less effective they are. “I think the banks are now at the stage where they’re going to have to use technology to handle all of this in a smarter way. They’re dealing with huge volumes of data and no one

individual can make sense of it all. “Proving your competence is also difficult. You may be qualified and you may have years of experience, but you still might not be very good at what you do.” Building on Brock’s point, Gordon asked: “Governance is about putting the right processes and systems in place – but can we overdo it?” “Absolutely,” replied Kelly. “It’s about balance and what’s appropriate for a business. Excessive controls or governance can constrain a business. “In the SME world, the reason why directors are held responsible for the actions of the business is because to a very large extent they do shape the culture of the company. There will clearly be times when the regulator’s approach is excessive, but a lot of the time it isn’t actually unreasonable. Business owners and directors are responsible for the business and you can’t be cavalier about that.” Taylor pointed again to the example of selling alcohol. “It would be impossible for a company director on holiday in Mauritius to see what’s going on in a pub in Glasgow,” she said. “In changing where that responsibility lies – in that it’s now down to the people on the shop floor who are in control of it – has completely changed the industry. The further down the chain you make the responsibility lie then the safer it is for people.” Gordon asked Watt and Willis if the need to filter information down through the company was an issue that was included in training for directors. Willis said it was: “It’s part of how directors deal with risk. Directors should have a handle on risk. They can’t possibly hope to understand each regulation that’s going to hit them, so they need specialist advice from professional service companies or trade associations. But they need to understand the individual risk for directors and have a risk strategy, getting this balance between building a company and making sure it’s under control.” Dave Townsley pointed to the number of emerging entrepreneurs that read BQ Scotland, who will have grown successfully from being sole traders to limited companies at great speed. He highlighted the risks associated with a fastgrowing company and asked how corporate governance could be put in place. “When it comes to your own personal liability, I’m guessing that ignorance isn’t an excuse?” he said.

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“It would help corporate governance enormously if we could get across the message that you can’t hind behind the cloak of corporate entity – you have a responsibility as an individual” Watt said the benefit of training was that it helped people to go from running a business to directing a business. “It’s not the same thing,” he said. “There’s a very significant difference.” “You have to go from working ‘in’ the business to working ‘on’ the business,” Gracie agreed. “You need to bring in advisors and non-executive directors, who have experience and who you can bounce ideas off.” “In an owner-managed business that’s grown very quickly the mentality has remained the same and they haven’t developed their corporate governance,” said Breakey. “When they fall into insolvency then you see the directors have used the company’s money as their own slush fund, they don’t have any accounts, and it’s just a product of operating a single ownership business.” McGuiness argued: “I don’t think entrepreneurs set out to break the law – they just don’t know what they don’t know.” “I don’t think it’s a conscious decision,” agreed Breakey, “but often they don’t keep up with the growth of the business and when it all unwinds you find they don’t have a clue that they’ve got a group of companies each of which should be a separate corporate entity with separate bank

accounts and financial accounts. I guess it comes back to education.” “There’s a question about where the buck stops,” said Townsley. “If a manager is supposed to have trained their staff to handle chemicals and they’ve not done it properly then can you argue it’s not your fault but the fault of your manager? “We talk about setting up a limited company to limit liability – so if something catastrophic happens and a big claim is going to sink the business then you can strip the assets, wind down the business and open again in a few weeks’ time to begin trading as something else. There’s confusion about where the line of personal liability sits with directors of that company.” Taylor pointed out that insurance companies often made pay-outs that would make the policyholder liable for an incident. “They do it because it’s cheaper for them than actually fighting it – that’s something I have a major issue with, and so I don’t allow any pay-outs unless I’ve authorised it,” she said. “That’s a good point,” said McGovern, “because when it comes to paying out claims, insurers make the decision.”

Gracie suggested that if banks are lending money to a business then they should insist there is an experienced non-executive director on the board with experience of corporate governance. Kelly pointed out that there is a cost associated with a credible non-executive director coming into the business. Brock said banks looked at the professionalism of a team before lending money. “The challenge has always been that when banks put a nonexecutive director on a board then they’re crossing the line in becoming a ‘shadow director’ because they have too much influence. Banks have always been nervous about that.” Morrison asked if directors were still responsible for their actions after a company had been liquidated? McGovern replied that regulators and prosecutors could lodge caveats at Companies House so they could continue their investigations even if a director was trying to wind-up a company. “It would help corporate governance enormously if we could get across the message that you can’t hind behind the cloak of corporate entity – you have a responsibility as an individual,” said Carruthers. “I don’t think that message is out

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there among the general public.” “Part of the problem is that we’re pushing this idea of the entrepreneurial economy all the time and we don’t talk about failures,” explained Willis. “We don’t talk about the pain of insolvency. If you don’t understand the accounts then you have a duty of care as a director to educate yourself so that you do understand the accounts.” “You need very good reporting procedures and processes to give directors the right information,” Gracie pointed out. “Directors need good reporting in order to make decisions. A lot of companies don’t have that – they don’t produce monthly management accounts. Cash management is paramount.” Townsley asked whether trustees should be held accountable for the actions of a charity if they are volunteers. Carruthers replied: “It’s a valid question – but yes, they should be held accountable. It doesn’t matter if they’re not being paid or if they’re doing it out of the goodness of their heart. If you’re the director of a board then the buck stops with you, but I don’t think that message is universally acknowledged.” Watt asked McGovern how many directors

were prosecuted each year. McGovern said an increasing number were being prosecuted by regulators, pointing to directors being jailed following Sepa investigations. McGovern also highlighted the increasing scrutiny on who is donating money to charities. “Are charities doing due diligence on donors?” he said. “That’s the way regulators are going.” Breakey and Gracie questioned what amounted to due diligence on donations, while Morrison said probing too far would cast aspersions on the character of the donor and McKay asked whether in-depth checks were a good use of a charity’s limited resources. Townsley highlighted the long chain of command between directors and the operational staff. “Ultimately, corporate governance is about ensuring that what you think is going on is actually going on,” said Watt. “How do you do that? For example, I sit on the board of a sport and leisure trust and our members go out and visit sports centres to make sure health and safety policies are being implemented.” Gordon asked if such visits crossed a line between being an executive and non-executive director. “Being a non-executive director is about

keeping your nose in and your fingers out,” she said. Willis argued such visits flew the flag for health and safety and raised standards, rather than interfering. “It’s about finding the balance between asking questions but not undermining the senior staff,” added Watt. “You’re allowed to carry out stress tests to find out what’s going on.” Kelly highlighted the need to take “reasonable steps” in corporate governance, while McGovern pointed out that what staff judged to be reasonable steps in the workplace could be different to what a judge decides is reasonable when they come to analyse the case several years later. “The biggest cause of these situations that lead to litigation is a lack of communication,” added McGovern. “It’s about trusting the people you put in charge of areas such as health and safety and communicating with them about what they’re doing.” Brock said: “A lot of the business plans that come across my desk contain strength, weakness, opportunity and threat (SWOT) analysis that have been copied out of a textbook. So we ask applicants ‘What risks keep you awake at

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night?’ and often that’s the first time they’ve really drilled down into the real risks. “If people use the word ‘risk’ then it changes how they view things; ‘corporate governance’ comes across as just being controls, but when you start talking about personal risk and liability then you shift how people view it.” Gordon asked Brock about the checks and balance the bank would want in place before it agreed to lend. Brock said he would ask questions about non-executive directors and what professional advice had been taken. McGovern highlighted the need for directors to have policies in place about tackling cybercrime. Townsley said the threat was so significant that it would be the topic for a future BQ Live Debate. Gordon asked about the liabilities of nonexecutive directors. McGovern highlighted that regulators tended to target the “controlling mind”. Willis said all directors should check their insurance policies and that policies should be tailored to suit each director’s circumstances on each particular board on which they serve, especially whether they have tail-off cover for once they leave a board. Townsley questioned the responsibilities of non-executive directors compared with executive directors, with McGovern and Kelly pointing out that regulators would look at an individual’s

“The same individual serving as chairman and chief executive has never been accepted by the stock market – it’s seen as bad practice when it comes to corporate governance” knowledge and conduct, rather than their executive or non-executive status. Gordon questioned whether the same individual could still serve as both chief executive and chairman. “It depends on the size of the company,” replied Gracie. “For large companies, you need a chairman who is divorced from the day-to-day management of the organisation. But for small

Timing is everything The duties and responsibilities faced by directors of companies in Scotland are facing increasing scrutiny from regulators. Directors must be aware that they can be held personally liable in a criminal court for failings that occur during the course of their business. When corporate governance fails, it is imperative that directors seek to protect both the company and themselves from prosecution. The corporate defence team at MacRoberts, one of Scotland’s leading law firms, advises on, prepares and presents the defence of prosecutions brought against clients following investigations by Police Scotland’s Economic Crime Unit, Financial Conduct Authority, Health & Safety Executive, Scottish Environmental Protection Agency, Food Standards Agency, Forestry Commission Scotland, HM Revenue & Customs and Driver & Vehicle Standards Agency, among other regulatory bodies. John McGovern, partner and head of corporate defence, said: “Our team has significant experience defending clients in criminal prosecutions and my background as a criminal lawyer makes our expertise unique in the Scottish market. We understand and appreciate the legal process, how to deal with charges brought by regulators and, importantly, are able to manage the situation from the initial investigation right through to appearing in court. Timing is everything – as soon as a director is subject to an investigation they should contact my team immediately.”

companies, the same individual could be the owner, chairman and chief executive.” Watt said: “The same individual serving as chairman and chief executive has never been accepted by the stock market – it’s seen as bad practice when it comes to corporate governance.” Brock said: “You have a similar situation in the social housing sector, with the regulator asking if someone should still be a non-executive director after they’ve served for seven years. That’s a problem if you’ve had tenants sitting on a board for 15 or 20 years.” “The IoD recommends two terms of four years each would be the maximum length for a nonexecutive director to serve on a board,” Watt added. As the debate came to its conclusion, Townsley asked McGovern what directors should do if they’re faced with an investigation by a regulator. McGovern explained that an insurer would insist on an internal investigation following an incident and he advised that the company’s lawyer should conduct that investigation. “The beauty of that is that we as lawyers can then exert legal professional privilege,” he said. “What we uncover in these investigations tends to be culpability. The HSE would uncover that too. But invariably, if the internal report is not protected by privilege then it will highlight the evidence for the HSE. It’s about protecting the business.” n

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Converging on the target Olga Kozlova, founder of the Converge Challenge, battled through wind and rain to tell journalist Karen Peattie about her contest for budding entrepreneurs within Scotland’s higher education establishments

Even as Storm Gertrude does her best to disrupt the lives of thousands of Scots, Olga Kozlova braves the elements to reach the safe and civilised sanctuary of the Waldorf Astoria Edinburgh – The Caledonian. She’s here to talk about her passion: Converge Challenge, a competition and mentoring programme for students, staff and recent graduates of Scottish universities and research institutes aimed at

creating a new generation of entrepreneurs in Scotland. Joking about her “windswept and interesting” look courtesy of gusty Gertrude, Kozlova is soon taking her seat for lunch in The Pompadour by Galvin, the hotel’s discreet finedining restaurant that has started serving lunch on Fridays. Perusing today’s menu, she opts for the Terrine de Champagne, walnut bread, caper and resin purée followed by an aesthetically

pleasing and “exceptionally tasty” Ditherier of Scottish game, says Anne of root vegetables, apple and cranberries. The stunning views of Edinburgh Castle from the table – and, of course, the amazing food – fail to distract the creator and founder of Converge Challenge from the task in hand and she talks animatedly about the Heriot-Watt University-based programme that seeks to nurture our future entrepreneurs. With a prize fund this year of more than £150,000 across three categories – Converge Challenge, KickStart and Social Enterprise – the programme clearly offers huge incentives for ambitious people with innovative ideas. But, as Kozlova explains, it’s not all about the money. “It’s very much about instilling confidence in people and working with them to develop their ideas and nurture those ideas,” she points out.

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“You can have a great idea for a product or a business concept but where do you go to for help and advice? How do you access funding? Do you have a business plan? You have this great idea but how do you find the customers who will buy your product? You need to take it to market but where do you start? Have you thought about intellectual property (IP)? What about social media? This is where we come in. “By bringing together the most ambitious and creative thinkers from academia, research and business, our long-term goal is to provide the practical commercial skills to enable these entrepreneurs to bring to market novel products and services,” she continues. “This then creates the sustainable, profitable companies that Scotland needs. “It’s about providing the right support at the right time to ensure that an idea can come to fruition and result in a profitable business that will contribute to the Scottish economy.” A joint initiative between the eight researchintensive Scottish universities and the Scottish Funding Council, Converge Challenge covers all sectors, product and service-based businesses, and commercial and social enterprises. Alumni of the programme range from companies working on medical devices and drug discovery through to businesses looking to bring art closer to the general public and even one that’s developing next-generation golf performance tracking technology. Last year’s winner was Richard Walker of Photon Force, working out of the University of Edinburgh. His company is developing the design, build and supply of scientific sensors that can very precisely detect and measure single photons, the tiny building blocks of light – technology that is in high demand for many applications, such as biomedical imaging. Indeed, from the 120 entrepreneurs who have gone through the programme over the past four years, 51 have formed companies that have secured in excess of £15m in funding and employ some 140 staff. “No idea is off limits,” says Kozlova. “We support a very wide range of projects and I think that’s one of the most exciting things about Converge Challenge. You never know what’s going to land on your desk when the applications start coming in – we never cease to be amazed by the ingenuity of these young entrepreneurs, their ambition and the belief they

“By bringing together the most ambitious and creative thinkers from academia, research and business, our long-term goal is to provide the practical commercial skills to enable these entrepreneurs to bring to market novel products and services” have in their idea.” So what qualifies this softly-spoken Russian to offer advice to young entrepreneurs developing ideas in Scotland? Quite a lot, actually. Kozlova moved to Scotland in 1999 to study for her doctorate at the University of Edinburgh and then started her career as a Royal Society of Edinburgh enterprise fellow. She then founded her own biotechnology start-up and has also worked in business development and knowledge exchange in the life sciences sector. “I didn’t want to spend the rest of my life in a lab,” she laughs. “As my own career developed, I could see that there was so much potential out there to help others and that’s ultimately

what led me to Heriot-Watt, which had secured £3.5m of cash from the European Regional Development Fund for working with industry in the broadest possible way – and one of the ways was to create a business competition. “But I didn’t want Converge to be a duplication of something that’s already out there,” she explains. “I wanted it to be collaborative, so all the universities and stakeholders supporting us get actively involved – they’re not just sitting on the sidelines. It was a challenge to come up with a concept that was original and appealing to participants and stakeholders but, when our pilot at Heriot-Watt in 2010 proved so successful, we knew we had the right formula.

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“Being an entrepreneur can be quite a lonely experience and also quite a daunting one when you suddenly find yourself faced with the prospect of looking for support,” says Kozlova. “For that reason, I felt it was important to create a pathway that not only develops ‘intrapreneurial’ and entrepreneurial skills but one that gets people talking to others about how they set up their businesses – what are their successes but also what are their mistakes and what can I learn from that?” That’s where the mentoring aspect of Converge kicks in. “People often don’t know where to go for advice but sometimes they can be swamped with advice when what is really important at the beginning is consistency of advice,” Kozlova points out. “We invite a lot of different people to be mentors – from people who have worked with small companies to Saltire Fellows and many others. “We encourage our participants to meet regularly with their mentors but there’s more to it than just sitting down for a chat once a month – you need to find the right chemistry with your mentor and the role of a mentor is also to challenge you and make you think as well as offer advice.

“Mentoring isn’t about telling you how to do it – that’s up to you – but a good mentor will challenge and stimulate you. Many of our participants benefit from a mentor who isn’t necessarily someone who has been running a successful business for 20 years or more but someone who is two or three years ahead of them – someone who has gone through exactly the experiences as you more recently. That can be really valuable for a young start-up.”

With applications for Converge Challenge 2016 now open, Kozlova is expecting record entries. In 2015, there were 186 applicants – growth of 68% on the previous year – and the competition engaged with 17 universities and research institutes. “We were absolutely delighted with the level of interest last year,” she says. “Of course, it’s not just about numbers – it’s the quality of the applicants and their ideas that count – but to see Converge growing is hugely gratifying. “We’re also encouraged that the male to female ratio of applications remains strong with over 30% of female participants at all stages of the competition.” This year, the winner of Converge Challenge will receive £43,000 in cash to start their business but also included is a further £28,000 of in-kind business support. “It’s a great opportunity because this kind of finance at this most vital stage in a young company’s growth and development can be hard to secure,” says Kozlova. “However, the in-kind support is equally important because it’s all the issues I mentioned earlier – how do I do this, who can help me with marketing, who do I talk to about IP – that can slow you down and act as a barrier to meeting deadlines and targets.” Meanwhile, the KickStart award is aimed at an early-stage idea for a new product or service, with the winner receiving £3,000 in cash to help create a prototype or secure IP rights. The runner-up will receive a £2,000 cash injection. In addition, the top 30 projects receive two days’ business support training and are encouraged to apply for the main Converge Challenge the

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following year – the winner is automatically eligible to be fast-tracked to the following year’s Converge Challenge Top 30. Finally, the Social Enterprise award offers a £5,000 cash prize to the winner and £3,000 to the runner-up. Previous winners are Zoe Michell and Anne Rushing of Pop Up Scotland, which emerged out of the University of Edinburgh and brings art to unexpected places such as shopping centres in an attempt to bridge the gap between the everyday world and the world of fine art. “We do have a lot of applicants from the life sciences and technology sectors as you would imagine as these are some of the key industries driving Scotland’s economy,” says Kozlova. “But I stress again that we are open to all sectors and we look forward to seeing what the 2016 competition brings.” A company that wins an award in Converge Challenge will become more attractive to investors, suggests Kozlova. “Investors want

From there, the competition moves on to the companies’ full business plans, which are assessed by an internal panel with just ten shortlisted then sent to an external judging panel. The final pitch, to the external judging panel, takes place on the day of the awards presentation dinner. “It’s an intense process throughout, from the moment they send in their initial application,” says Kozlova. “People say it’s not for the fainthearted and it’s a great reflection on someone’s strength of character when they take the plunge

and apply. Even for those who don’t win, Converge Challenge is a tremendous training ground because it exposes you to what’s really involved in creating and setting up a successful business.” n The deadline for entries to Converge Challenge is 18 April – for details and to enter visit www.convergechallenge.com. BQ Scotland has become a media partner for the challenge – find out more about the competition on pages 38 & 39.

“It always comes back to people, doesn’t it? You can have the most brilliant idea but if you can’t present yourself well you may fall at the first hurdle” to see great ideas but they also want to invest in people so we also train our finalists on the best ways to pitch to them. If investors can see that an individual can build a relationship with a customer or potential customer, then that is more likely to help that company clinch the funding support over another company and its idea. “It always comes back to people, doesn’t it? You can have the most brilliant idea but if you can’t present yourself well you may fall at the first hurdle.” The shortlisted applicants in this year’s Converge Challenge will have the opportunity to shine at the final in September. Before that, however, they will attend a three-day training programme in Edinburgh where they must do an elevator pitch-style presentation judged by a panel of experts. At this stage they are also required to prepare and speak at an exhibition of their work as a prelude to the pitch.

The Pompadour by Galvin Discreet and very, very elegant, The Pompadour by Galvin at the Waldorf Astoria Edinburgh – The Caledonian certainly lives up to its reputation as having the best tables in Edinburgh. After all, how many restaurants in the capital boast views over Edinburgh Castle? You’ll soon find it’s very easy to sit and gaze out of those panoramic arched windows. The Pompadour by Galvin, the sixth instalment of brothers Chris and Jeff’s expanding empire and their first Scottish venture, takes its name from the famed Madame de Pompadour, the favourite mistress of King Louis XV of France, who installed her in the Palace at Versailles. There’s no doubt about it – it’s very grand indeed, its listed interior décor reflecting the sumptuousness of the royal court of the day. So if you’ve been before, why not book the very reasonably-priced lunch that is now available on Fridays? At just £29 for three courses, it represents excellent value for money given the focus on top-quality Scottish ingredients, all in season. With executive chef Fraser Allan’s flair for combining freshnes and flavour with a French twist, it’s no surprise that this beautiful restaurant is fast becoming a destination not just for the business market but for foodies who want to experience outstanding cooking in an exceptional setting. It’s also no surprise that it holds 3AA Rosettes. The Pompadour by Galvin at the Waldorf Astoria Edinburgh – The Caledonian is open for lunch on Fridays, from noon to 2.30pm. View sample menus and book at www. thepompadourbygalvin.com or email pompadour.reservations@waldorfastoria.com

ENTREPRENEUR bqlive.co.uk

The complete package Producing packaging thatâ&#x20AC;&#x2122;s made from plants sounds like an idea straight from the pages of a science fiction novel, but Joe and Lucy Frankel and their team have turned the concept into a thriving business, writes Peter Ranscombe Inspiration can come from the strangest of places. For some entrepreneurs, inspiration strikes when theyâ&#x20AC;&#x2122;re driving along the road, while for others it comes when they reach the top of a Munro or when they come out of church on a Sunday morning. For Joe Frankel, inspiration came in the form of a spoon. As the founder and managing director of Edinburgh-based Vegware, Joe has created what he describes as the only global completely compostable packaging company. From offices next to the Union Canal on a nondescript street in the Polwarth area of the city, Vegware has amassed full distribution throughout Europe and North America, with a mixture of its own subsidiaries and partnership deals giving it reach across Australia,

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New Zealand, South Africa, Hong Kong and the United Arab Emirates. From coffee cups, cutlery and takeaway food containers all the way through to bin liners, J-cloths and napkins, Vegware uses materials derived from plants to create packaging that can be recycled and composted along with any normal food waste. Joe is assisted in his endeavours by Lucy Frankel, his sister, who joined the business in 2011 and is now its communications director, which she says covers all of the “outward-facing bits of the business”, including writing articles, making films and even

“singing silly songs about packaging”. “We always got along well as children, but there was never any expectation that we’d end up working together,” laughs Lucy. “We were working in such different areas that it’s quite funny how things have turned out.” Lucy studied languages and then translation at the University of Leeds and spent four years in Budapest. Although she mastered the accent, the word order for the language can be a challenge and so Lucy jokes that she ended up sounding like the “Hungarian version of Yoda”. Joe, meanwhile, was working at the Centre

for Speech Technology Research (CSTR) at the University of Edinburgh, where he contributed to academic papers with mind-boggling titles like “An automatic speech recognition system using neural networks and linear dynamic models to recover and model articulatory traces”, “Speech production knowledge in automatic speech recognition” and the classic “Term-dependent confidence normalisation for out-of-vocabulary spoken term detection”. Both careers seem a long way from running a recyclable packaging company, especially now that Vegware employs 50 staff and turns over £12m a year in the UK, with its global sales rising to around US$25m (£17m). Yet the step-by-step story of how the team has grown the business will be familiar to a whole host of fellow entrepreneurs. But first, back to that inspirational spoon. Joe spent a year working at the University of California, Berkeley, and one day his wife came home from a farmers’ market in San Francisco with a spoon that had been made out of corn starch. “It felt so tactile,” Joe remembers. “It reminded me of a bone spoon that my grandmother used to have. Shoppers at the farmers’ market had been using the spoons to taste samples of yoghurts.” Some of Joe’s friends and colleagues had already been involved in start-up and spin-out companies and so he knew a good idea when he saw one. Working in California – surrounded by entrepreneurial Americans – had given him an appetite for starting his own business. He began exploring ways to license the design to bring the spoons to the UK market, but in the end it proved easier to go to the source – in this case the maker of the raw material – and start his own range from scratch, with Vegware being born in 2006. “I started the company while I was still in America, so I was putting samples of knives, forks and spoons together into bags and heatsealing them before sending them over to our dad, who would go down the road to the post office to send them out for me,” smiles Joe. “When the first big shipment came in, it was all going to be stored in my sister-in-law’s attic until I found out that there was such a thing as a fulfilment centre.” Joe clearly has fond memories of the early days of Vegware, as he balanced working at the university with getting the company off the

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“For me, it’s all about problem solving. We identify a problem – like the high cost of disposing of unrecyclable packaging – and then we come up with a solution, like making compostable packaging that can be recycled alongside your food waste.”

ground. “In those days, search engines used links to reputable sources to rank results and so my connections with the University of Edinburgh and the International Computer Science Institute at Berkeley meant that Vegware very quickly became the top search result for compostable packaging,” he explains. “Tony Stone from Stoats porridge was one of our first customers. At that point he was running a physical porridge ‘bar’ serving breakfast to customers. Now his business has grown into producing porridge ‘bars’ that you can buy in the shops, along with microwaveable porridge oats.” Once back in the UK, Joe ran the business from home, working at a desk in his garage next to his piano. Dominic Marjoram, now his business development director, worked out of his own flat in Glasgow, helping to build the business one customer at a time. Joe approached the growth of Vegware in the same way as he did his scientific research. He would break each process down into steps and, through trial-and-error, he would learn lessons as he went along.

“Science isn’t about ‘Eureka’ moments – you can probably count the number of those throughout history on just one hand,” he explains. “Instead, science is all about step-bystep processes. You try one iteration and if that doesn’t work then you learn from your mistakes and move onto the next iteration. “For me, it’s all about problem solving. We identify a problem – like the high cost of disposing of unrecyclable packaging – and then we come up with a solution, like making compostable packaging that can be recycled alongside your food waste.” Lucy began by helping out with the writing of text for the website and brochures, as well as running the Vegware stall at tradeshows, before joining the company full-time. “The stands have gone from a table with a cloth over the top – which may or may not have stayed in place – to what we have today, which can be lovely with fake grass, reclaimed pallets and fairy lights.” As the business grew, Joe knew that he would need external finance in order to expand and keep up with demand from customers, as well as further extending the business’s overseas

reach. He teamed up with Bradenham Partners, a Buckinghamshire-based private equity firm with very strong Scottish roots. Keith Wilson, one of the founding members of Bradenham, studied business at Glasgow Caledonian University before rising through the ranks at the hospitality arm of Granada, the motorway service station legend that’s now part of Compass, eventually becoming group finance director. He’s arguably better-known for teaming up with business partner Alastair Storey to create Westbury Street Holdings, the parent company behind catering brands including BaxterStorey, Caterlink and Searcys. Bradenham took a 20% stake in Vegware in 2009 for a six-figure sum. Wilson’s fellow founding members are: Ian Morrison, a University of Strathclyde graduate who was a corporate finance director in Glasgow with accountancy firm KPMG before setting up Morrison Watson, a specialist corporate finance firm, in 2005; and David Robb, who studied accountancy at the University of Glasgow before serving with Spicer & Oppenheim, Pannell Kerr Forster, KPMG and Morrison Watson.

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“If we’d been funded by the banks then we probably wouldn’t be here today,” Joe admits. “We chose Bradenham because of Keith’s unparalleled experience in the catering and hospitality sectors. “We can have very honest and open and robust conversations with our investors. I would count Keith as a friend now.” While the Vegware brand has become firmly established and the company lists major catering suppliers among its big-name clients, one part of the business that’s perhaps less well-known is its ability to add designs onto disposable cups, sandwich boxes and other packaging for its clients.

“You can’t recycle food with plastic in it and you can’t recycle plastic with food on it. Using compostable packaging means that you don’t have to worry about whether it’s clean or not.” “We’ve just hired our third in-house designer,” explains Lucy. “Having their own design on their coffee cups can help small businesses that are competing with high street chains, like Pret.” One of the most popular off-the-shelf designs for cups has been the Christmas jumper, featuring white reindeer against a dark background. “We began selling them three years ago and sold about 50 cases during that first year,” Joe says. “Last Christmas, we sold about one million of those cups.” In total, the company sells around 200 million coffee cups each year, both directly and through its global partners. Roughly half of its packaging is produced in the UK and Ireland, with the other half made in Taiwan, allowing it to cut down on its shipping costs to customers in Asia and Australasia. The company was given a boost in 2014 when the Scottish Government introduced waste regulations that meant businesses and public sector organisations in non-rural areas producing food waste – from cafes, hotels and restaurants through to care homes, hospitals

and school canteens – had to separate out their scraps instead of chucking them in the bucket with other rubbish. At the turn of the year, the threshold was lowered from 50kg of food waste to just 5kg, meaning that more and more small businesses like cafes and takeaways have been caught up in the regulations. When a business owner sees how much food they’re throwing away at the end of the day – and paying to be collected – then they can soon crackdown on their costs, saving money and the environment at the same time. “It comes back to one of those problems to which we wanted to offer a solution – you can’t recycle food with plastic in it and you can’t recycle plastic with food on it,” Joe points out. “Using compostable packaging means that you don’t have to worry about whether it’s clean or not.” Wales and Northern Ireland are also introducing tighter waste regulations that should benefit companies like Vegware, with England lagging behind. Internationally, markets such as Hong Kong and certain parts of the United States are

also getting in on the act. “The scale in America is mind-blowing,” says Lucy. “Even individual sites can have an impact. If Atlanta airport says that it’s going to cut down on its waste then they really mean business.” Lucy’s creative side is even on show in the Vegware office. As we sit on purple and pink sofas with bright green artificial grass crunching under our feet, we’re surrounded by posters on the wall. One features a map of the British Isles, with the landmasses constructed out of fresh produce, from fruit and veg through to fried eggs and pork pies. “That was a lot of fun to make,” laughs Lucy, describing how she and her photographer friend laid down compost onto plastic sheeting and then began over laying spaghetti as the outline for the islands, followed by all of the fresh food. The map is typical of the creativity within the company, which is reflected in its marketing materials. Next to the poster hang rows of certificates, marking the dozens of prizes that the business has won over the past decade. On the opposite wall, a display case holds some of the 50 or more trophies that Vegware has amassed, both for its commercial and environmental credentials. Awards on the shelves include accolades from Deloitte, which has consistently included the company in its “Technology Fast 500” rankings, alongside a listing in the “Sunday Times Virgin Fast Track 100” that will see Joe and Lucy having dinner at Sir Richard Branson’s home in Oxfordshire in June. There’s even the “Innovative Exporter of the Year” trophy from the 2014 BQ Scottish Export Awards, which are run in partnership with Scottish Enterprise, along with the “Small or Medium-sized Enterprise of the Year 2015” prize from Business in the Community Scotland. But in amongst all the many accolades and commendations, are there any awards that stand out for the pair? “We found out that we were receiving both the Queen’s Award for Enterprise in Sustainable Development and the Federation of Small Businesses’ (FSB’s) UK Business of the Year Award within a couple of days of each other,” explains Lucy. “The FSB award was really special because we were selected by our peers from among thousands of businesses.” “It was also nice to be invited to the palace and meet the Queen – but what does she know about enterprise?” Joe jokes. n

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National Emerging Entrepreneur Dinner 2016

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FIND OUT MORE For more images of the event visit bq nal live.co.uk

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Natio ging Emer preneur Mike Hughes @mikehughes l a n o Entre rtells Nati gi@WEBMART 2016 boss Simon Biltcliffe ng r inne @BQLive e D r u Em pand e ren#BQEntrepreneur contestants how he did it. Entre r 2016 e Dinn Dr Junior @dr_dranonymous So proud of Becky @OneDayCreative engaging the audience with the vision of their amazing company #BQEntrepreneur

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bqlive.co.uk

T O P T nWal E E T S

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Feeling very inspired by all the talented entrepreneurs this evening. #BQEntrepreneur

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nal Katrina Cliffe @KatrinaCliffe Natio g Great to see fabulous female #entrepreneurs mergin E eur leading the #Yorkshire repren016 nal shortlist at the t o n i t E a N awards! r2 #BQEntrepreneur erging Dinne Em preneur Entre@andyhanselman r 2016 Andy Hanselman Dinne

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EQUIPMENT bqlive.co.uk

Supermac’s everyday car

Its practicality may be a matter for debate but there’s no question that the McLaren 570S is fun to drive, as Josh Simms reports

McLaren Automotive wants you to know that its latest sports car, the 570S, the first of its new Sports series, comes with a vanity mirror. There’s a glove box too a first for the company that launched just six years ago, later wowing car nuts with its £875,000 P1. There are two cup holders, 150 litres of luggage space enough for a couple of holdalls and even the swingup doors, a McLaren signature, have been redesigned to make the car easier to get into and, more problematically after a certain age, get out of. In other words, McLaren is pitching the 570S the first of which should be on the road by the end of the year as its first ‘practical’, ‘everyday’ and, at around £140,000, ‘affordable’ car. This is, note, the same car that, with its Formula

1-inspired carbon fibre mono-cell frame and aluminium panels, will propel you from 0 to 60mph in 3.2 seconds helpful for when the weekly shop really must be done and the supermarket is about to close. “Well, for McLaren it’s an everyday car, just providing you don’t need to get two people in the back,” jokes Robert Melville, the company’s 38-year-old head of design, ex of Land Rover and General Motors’ prestigious Advances Design Studio. “We know there’s a growth market for this kind of car. Porsche of course does it so well but this is a new proposition, because the 570S comes with that Formula 1 technology its a sports car with super-car design. People have lives and need to be able to get in and out easily, throw some bags in the back. But

they still want the drama and excitement of the kind of cars we have normally made. Above all this is a fun car to drive.” Certainly McLaren is serious about the proposition and with good reason: the 570S’s practicality may be debatable (the company insists it will never launch an SUV) but it still marks a step change for the British supercar company. It is ploughing some £120m in research and development a staggering 30% of current turnover with the ambition to be making a steady 4,000 cars a year from 2017. By the end of this year it will have launched four new cars as many as it has in its history to date with the second quarter of next year seeing the 540C, an even more affordable version of the 570C. That idea of affordability

EQUIPMENT bqlive.co.uk

But Melville also concedes that it is, perhaps, an odd time to be pitching the idea of an everyday super-car when the future of very high performance cars on the road is, according to some, in serious doubt their status value diminished after a global economic crisis, their environmental credentials highly questionable and, yes, as premium SUV sales indicate, their utility in a world finding increasing appeal in getting about as easily as possible rather than as fast as possible looking to make them look like four-wheeled dinosaurs. Yet he still sees a place for them. “These are complex issues a lot of tech that makes mainstream cars more efficient filters down from the super-car world, and there will in time be a fully electric super-car no doubt,” may be relative, but the shift in gears certainly means that McLaren is set to become a more high-profile name on the roads rather than just the race track. The company, which in 2015 saw its second year of profitability, says some 1,000 orders for the 570S have been placed to date, mostly to customers new to the marque. “Part of the intention with the 570S is to make McLaren much more visible and in doing so lay a foundation for the future of what is still a young company,” explains Melville. “McLaren already has wide appeal as a name. This guy serving in a shop in New York told me the other day that he loved driving the P1, which left me confused for a moment. But he meant in a video game. It was his favourite car. So the brand is already reaching different people in different ways.”

getting greener, more practical, and will show that their impact can be positive.” Certainly the 570S makes its impact felt in the driving, right down thanks to a re-engineered exhaust manifold to the cleaner, more Formula 1 engine note. If, despite the car’s light weight just 1,313kg dry it feels solid and assured in its normal driving mode (good for that supermarket run then) it is an altogether different animal in its ‘active’ mode: nimble, responsive, nippy but rooted too never so super that the everyday driver feels out of control in this supposedly everyday car. That is in large part too due its aerodynamics, with the 570S’s front diffuser chanelling air both above, below and to the side of the car, where the door shape allows for a smaller side air intake and thus better

“Part of the intention with the 570S is to make McLaren much more visible and in doing so lay a foundation for the future” argues Melville. “Sustainability aside there is this other key issue of the connected and autonomous car too which we’re looking at too. But part of me thinks a move away from sports and super-cars would be sad too many people love cars because they’re fun, because they feel they can engage with them, because they make you feel something. They’re not just boxes you get in to get you somewhere. That fun element does have a future. I think the era of the American muscle car with your V10, 8 litre engine is over. But cars like ours will keep

aerodynamics still. All this just happens to look good too. But that, Melville might have you believe, is just a happy accident. “For me the design aesthetic is about beautiful products that show their design. But it’s the problems we face in design, and their solutions, that create the car’s aesthetic,” he says. “Of course, there are ways of interpreting that, and some features are about balance, or catching the light in a certain way, but really the way it looks is the way it has to look. And that’s pretty good.” n

MOTORING bqlive.co.uk

5-3-7-1-5 is not some strange and bizarre mathematical sequence – it’s the series of BMWs that I’ve owned. After a brief flirt with some Swedes, other Germans and even an English model, I’ve always returned to BMW as my first love. When I picked up the car from Craig at Douglas Park, my introduction to the vehicle was unusual because it was via the key. The key itself looks like one of the latest smartphones and remotely controls functions such as locking, lights, security, miles-to-empty and – most usefully – allows you to switch the heating controls on and off. This was very welcome on a bitterly cold February morning in Glasgow where prior to breakfast I was able to crank up the heating to defrost the car, so that when I drove off the car was nice and toasty and the windows demisted. The car was stunning in alpine white with contrasting 20-inch anthracite alloy wheels. It has the typical BMW sporting style and, in M Sport guise, gave the impression that you were looking at an M7. The new 7 Series has some cracking standard equipment. In previous models, comfort seats were an additional option – for the thick end of

A German Self-confessed petrol-head Donald Boyd, a partner and specialist in the automotive sector at accountancy firm Campbell Dallas, shares his views on some of the well thought-out comforts and technology that come with the latest BMW 7 Series

MOTORING bqlive.co.uk

love affair “The car was stunning in alpine white with contrasting 20-inch anthracite alloy wheels. It has the typical BMW sporting style”

MOTORING bqlive.co.uk

cost £3,000 – but these now come as standard. This allows the driver to set the seating position with engineering precision. I am already familiar with the three-litre, sixcylinder diesel engine with 261 break horse power; again it felt like home and was more than ample to cope with the weight of a luxury car. A few winters ago, there was a lot of negative press about rear wheel drive cars and BMW in particular, however, this has been largely overcome by the X drive four-wheel-drive system now being rolled out across the range. Behind the wheel it felt luxurious with an instrument layout familiar to any BMW driver. The instrument panel is wholly-digital. As we live in the digital era, BMW has always kept up with the times with its flagship model having a dazzling array of new technology. The ‘I drive’ system, which is now standard in most BMWs, has been upgraded to include a touchscreen, which is particularly useful with the satnav model. There is an embarrassment of choice in entertainment from DAB radio to ‘screen casting’ from another Bluetooth device, enabling the screen to act like a smart TV. The ‘I drive’ also includes several standard apps and I was particularly taken by the weather app, which intuitively displays the weather for your location over the coming hours and days. The drive in comfort mode is smooth, although not as smooth as some of its rivals, but there in belies the sporting heritage of BMW, as there has to be a slight compromise between handling

and ride comfort. Changing the engine into sport and sport individual modes turns all the instruments crimson red. You are also able to display the power dials and torque curve on the screen, which is particularly fun when you put your foot down. Like many cars these days, it has a sophisticated economy mode and will easily return north of 40 miles per gallon on a straight run. Around town, I was achieving 30 miles per gallon, which is impressive given the size and weight of the car. It is in the back seat where you really experience the BMW 7 Series. You couldn’t want for any more in terms of space and BMW replicates the air of quality that you would find in a Bentley or Rolls Royce. Passengers are able to adjust their own climate control and seat heating, as well as having a touch screen to control phone and media functions, while also displaying satellite navigation. As a cost option in the 7 Series, you can even use the smart key to prompt the car to park itself. It uses an array of cameras and sensors to steer around obstacles and stop short of walls and kerbs. Perhaps viewed as a gimmick in the same way as voice control on your phone when it first came onto the market? However in truth it works. The biggest test for me is the luggage and boot space, as being a golfer with a family that also golfs, I regularly have to carry three sets of clubs, as well as two sets of skis, and the 7’s boot was able to cope satisfactorily. At £64,500 for the entry level 7 Series, it is more than a match for its rivals, although many buyers

will look at it in terms of monthly payments, as my experience with motor trade clients highlights that more than 80% of cars are now bought through a monthly payment purchase, rather than worrying about the back pages of Autocar magazine. Being an accountant, company cars are always a topic of conversation with my clients and the 7 Series comes in at a respectable 137g CO2/km, although I don’t think I’d be advising many of my clients to purchase this as a company car given the large benefit-in-kind hit of around 24 per cent, which equates to £15,000 or, in hard cash, an extra cost of around £500 per month for a higher rate tax payer. Definitely a car to buy personally. This is common to many prestige cars as it is not the CO2 emissions that count, but rather the list price. On returning the car to Craig at Douglas Park, a brochure caught my eye for the 330e plug-in hybrid, which is delivering 5% benefit-in-kind, which would be in the region of £50 per month for a higher rate taxpayer. It was a sad day to return the 7 Series as it now feels significantly different from the 5 Series I have owned, so I may be tempted if the lease deals are right… n Donald Boyd is a partner and a specialist in the automotive sector at accountancy firm Campbell Dallas. The car Donald drove was a BMW 7 Series, starting from £70,920, with optional extras at £3,565. Supplied by Douglas Park, Kyle Street, Glasgow, G4 0HP, 0141 333 0088.

“It is in the back seat where you really experience the BMW 7 Series. You couldn’t want for any more in terms of space and BMW replicates the air of quality that you would find in a Bentley or Rolls Royce”

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Official fuel economy figures for the new BMW 7 Series SE Saloon range: Urban 24.8-51.4mpg (11.4-5.5l/100km). Extra Urban 45.6-67.3mpg (6.2-4.2l/100km). Combined 34.9-60.1mpg (8.1-4.7l/100km). CO2 emissions 189-12 4g/km. Figures may vary depending on driving style and conditions. Douglas Park is a credit broker. *Business users only. Plus £5,394 initial rental. Price shown excludes VAT at 20% and is for a 36 month Business Contract Hire agreement for a BMW 730d SE Saloon, with a contract mileage of 24,000 miles and excess mileage charge of 27.02p per mile. Applies to new vehicles ordered between 01/01/16 and 31/03/16 and registered by 30/06/16 (subject to availability). At the end of your agreement you must return the vehicle. Excess mileage, vehicle condition and other charges may be payable. Available subject to status to UK residents aged 18 or over. Guarantees and indemnities may be required. The amount of VAT you can reclaim depends on your business VAT status. Terms and conditions apply. Offer may be varied, withdrawn or extended at any time. Hire provided by BMW Financial Services (GB) Limited, Summit ONE, Summit Avenue, Farnborough, Hampshire GU14 0FB. Douglas Park Limited is an Appointed Representative of Park’s of Hamilton (Holdings) Limited FRN 308476, of 14 Bothwell Road, Hamilton, ML3 0AY, which is authorised and regulated by the Financial Conduct Authority, as a Credit Broker. We can introduce you to a limited number of lenders including BMW Financial Services to assist with your purchase, who may remunerate us for introducing you to them. Retail customers only.

M AY O N W I N E bqlive.co.uk

Getting to know your neighbours Derek May, chief executive at recruitment agency Brightwork, fills a couple of vacancies in his wine rack

Sometimes what you’re looking for is right under your nose. Or, when it comes to wine, it’s right under your office. Brightwork’s Glasgow base is on Bath Street and every day on the way to work I pass by the door to Inverarity One to One, the wine shop in the cellar of our building. I’ve always been meaning to pop my head round the door and have a nose, so the invitation to review two bottles of wine for BQ Scotland was the perfect excuse. The shop is fantastic and is a bit like Aladdin’s cave. As well as wines, I noticed that they sell whiskies, gins, rums, and cigars too. They even have their own darts board – I’ve not played darts in years, but I thought that was a nice touch. It makes it feel like a fun place to hang out. I always associate wines with holidays. My wife is a French teacher and so during the school summer holidays we always head for France. It’s a big country, so we’ve slowly been working our way round it, and going on the

M AY O N W I N E bqlive.co.uk

“France might be my first love, but I do enjoy wines from other parts of the world too”

wine trail to try different wines from different regions has been great fun. My favourite wines are the famous pinot noirs from Burgundy – or the “Bourgogne” if we’re going to get all French. I love their fresh red fruit flavours – like strawberries, raspberries and red cherries – and I like the really light red wines you get further south in Beaujolais, which are made from a grape called gamay. I prefer those types of lighter-bodied red wine to the heavier stuff that you get from Bordeaux or the Rhone. Having said that, I do also enjoy Fitou, a red wine from the very south-west of France in Languedoc-Roussillon. France might be my first love, but I do enjoy wines from other parts of the world too. I like a good Rioja from Spain and I also enjoy New World wines too, including bottles from South Africa, merlot from Chile, and tempranillo when it’s grown in Argentina. Spain is tempranillo’s homeland and it’s used to make Rioja, but it’s

really interesting to try the grape when it’s grown in other countries too. I guess my love of pinot noir and Beaujolais has helped me to get into rosé wines in recent years. But I’ve never been into white wine. I don’t know what it is; they’ve just never done it for me. But it’s good to try new things and so it was interesting to taste the Domaine Haut-Gleon Blanc. It came in a really-attractive, highshouldered bottle and we tried it with cheese, which was recommended in the tasting notes. Despite me not being a big white wine fan, I thought it was crisp and refreshing. Saturday night is pizza night in our house and so that’s what we served with the Chateau Des Labourons made by Henry Fessy. This was much more my kind of wine. It’s from Fleurie in Beaujolais and it was packed full of the delicious raspberry red fruit flavours that I enjoy. It was juicy and easy to drink and the acidity in the wine cut right through the rich cheese and

tomato sauce on the pizza. Of the two, the red is the one that I’d go back to buy. And now that I know what’s behind the door, I’ll be visiting Inverarity One to One again soon too. n Derek May is chief executive of recruitment agency Brightwork. Find out more at wwwbrightwork.co.uk. Thanks to Inverarity One to One, 184a Bath Street, Glasgow, for supplying the Domaine Haut-Gleon Blanc (£12.49) and the Chateau Labourons Fessy (£13.99). More details at www.inverarity121.com

INTERVIEW bqlive.co.uk

Setting the stage

INTERVIEW bqlive.co.uk

Networking organisations are ten-a-penny in Scotland, but Alexander Lamley is doing something completely different with Connections, as Peter Ranscombe finds out It’s a situation that will be all-too familiar to entrepreneurs. You’re sitting across the desk from your accountant, lawyer or other advisor and you’ve just told them all about your latest big idea. But instead of them demonstrating the same entrepreneurial spirit to match your own, they just give you a conservative shrug of their shoulders, wring their hands a bit, and then ask if there’s a less-risky way of doing business. Alexander Lamley is out to change all that. As chief executive of the Connections networking group, he’s hoping that a wee bit of that magic entrepreneurial dust rubs off on the professional advisors who he brings together to meet business owners. “I want to take some of the enthusiasm and passion that you see within the entrepreneurial community and inject it into the professions,” he explains. Connections began life as an organisation set up by the Association of Chartered Certified Accountants (ACCA), the Royal Bank of Scotland (RBS) and the Society of Writers to Her Majesty’s Signet (WS Society), which ran events just for accountants, bankers and lawyers. “I was a member of Connections while I was working as a junior assistant to the senior

partner at a high street law firm in Perth and I used to come down to Edinburgh after work for events because that’s where I wanted to do my traineeship,” remembers, Lamley, now 30. “I thought it was a good set of events, but it was all very soft. I started to think ‘What would I do with this?’ but, by the time I moved down to Edinburgh full-time, Connections had disappeared because the leadership had left. “I went to the old committee and told them that I had an idea for what I could do with Connections, but the WS Society decided that it didn’t want to continue supporting the organisation and it couldn’t give me the membership lists for data protection reasons. So I had to start again from scratch.” RBS no longer wanted to be involved, but the ACCA continued to support Lamley’s idea. “I went to the Law Society of Scotland and asked if it would become a ‘parent’ of Connections,” Lamley laughs. “I thought ‘parent’ sounded better than ‘sponsor’ and because I told the

society ‘I’m not going to ask for money just now, but further down the line I might knock on the door one night and ask for £40.” With support from the ACCA and the Law Society, Lamley was able to get Connections back off the ground in January 2012. While the name may have been the same, the remit for the organisation had completely changed, encompassing professional advisors from myriad disciplines and bringing them together with entrepreneurs and business owners. His first event attracted 140 participants in Edinburgh and introduced the concept of ‘Misconceptions’, which has gone onto become the network’s signature format and is repeated each year. The gathering involves a panel of five speakers – for example, an accountant, a banker, an entrepreneur, a lawyer, and a public relations consultant – who each get five minutes to talk about their misconceptions about what one of the others does for a living. “I got to indulge in some stage management,”

“I want to take some of the enthusiasm and passion that you see within the entrepreneurial community and inject it into the professions”

INTERVIEW bqlive.co.uk

â&#x20AC;&#x153;Professional development is done in silos and the professionals tend to be inward facing. Connections is an attempt to get them more outward facing and mixingâ&#x20AC;?

INTERVIEW bqlive.co.uk

smiles Lamley, who trod the boards as a student actor at venues including the National Theatre in London, the Lyceum in Edinburgh and the Lemon Tree in Aberdeen amid training to become a lawyer. “I had each of the guests come up on stage and do their five minutes in turn. Then I got each of them to rebuff and defend their discipline – they couldn’t pitch either themselves as an individual or their firm – it had to be about the discipline.” Events such as ‘Misconceptions’ are designed to break down the barriers between disciplines. “I’d like to see the professional advisors learning from one other more than they currently do,” Lamley explains. “Professional development is done in silos and the professionals tend to be inward facing. Connections is an attempt to get them more outward facing and mixing. “It’s not just about sharing knowledge; it should also increase referral business between the professions and on a much more efficient basis as well. If you actually know what the different types of accountant are then you know who to

LOUNGE 17.5x12cm ING.indd 1

talk to when your client needs that particular skill.” Other formats used by Connections include dinners, guest lectures and cocktail parties, with each event being followed by facilitated networking, with Lamley acting as a matchmaking service for entrepreneurs or business owners who want to be introduced to bankers, lawyers or other potential advisors. During Connections’ first two years, all of the events ran for free, with the network having now switched to a pay-as-you-go model, so guests part with cash to come along to the events that interest them. Connections expanded into Glasgow in January 2013 and is now preparing to move into London, with its ‘Misconceptions’ launch event scheduled to take place at the Vintners’ Hall on 21 March. During its first three years, the network held 23 events, with its mailing list now standing at around 1,200 members. This year the network aims to put on around six events each in Glasgow and Edinburgh and a further four in London.

“Unlike some of the other groups out there at the moment, we’re not an age-limited organisation; we’re not a young drinking clique by any means,” Lamley points out. “We have members aged from 18 all the way through to people in their 60s who are retired and are looking for non-executive director positions. So we have youthful exuberance meeting wisdom and experience.” Having disbanded the committee from the previous incarnation of Connections and taken to running the events on his own, by the time the network had a presence in Edinburgh and Glasgow, Lamley decided he needed to bring a more professional air to the new-look organisation. He brought on board Russell Dalgleish – advisor, entrepreneur, investor and founder of Exolta Capital Partners – as a nonexecutive director and consultant Kendra Byers as event operations manager. They have since been joined by volunteer Sara Brouwer as events coordinator to help with this year’s push into London. n

09/03/16 15:58

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A spark of genius Alastair Martin, founder of energy technology firm Flexitricity, combines the cool, calm head of an engineer with the passionate heart of an environmentalist, helping his clients to use and generate electricity at the right time and in the right way Simply flicking a switch to turn on the kettle or the television or the computer is something that most of us will take for granted. We expect the power to just be there when we need it to make a cup of tea or watch the match or send that all-important email. But as commuters began driving home on the evening of 4 November, 2015, newsreaders on the radio were in a panic. National Grid, the appropriately-named company that runs Great Britain’s national electricity network, had issued a ‘notice of insufficient system margin’ or ‘Nism’, asking power providers to generate extra electricity and calling on big customers to cut back on their usage as it prepared for a peak in demand. The situation sounded very dramatic, with opposition politicians and other talking heads warning of the risk of blackouts over the winter amid fears that Britain’s dwindling number of power stations wouldn’t be able to cope with demand. With coal-fired plants being decommissioned and no gas-fired or nuclear sites being built to replace them, doommongers were warning that the situation was becoming dire. “It was meant to be the winter of the Nisms,” laughs Alastair Martin, founder and chief strategy officer at Flexitricity, an Edinburghbased energy technology company that sits on

the frontline of the battle to keep the lights on. “But it wasn’t a Nism-fest; even with a couple of cold snaps, the system coped and we got through without any problems.” Martin launched his business in 2004 after he spotted a gap in the market and began operating commercially in 2008. In a nutshell, Flexitricity helps the grid to cope with unexpected peaks or dips in demand for or production of electricity. Using clever technology developed by Martin, the company can ask its clients to reduce their energy consumption at peak times or turn on extra generating capacity to feed electricity into the grid, both of which provide extra ‘headroom’ when traditional generating capacity – like big power stations – would find it hard to cope alone or would be uneconomical. Asking users with generators to produce electricity or getting them to reduce their demand is cheaper than firing up idle power stations and releases less carbon dioxide into the atmosphere. “National Grid issued its Nism in November because seven coal-fired power stations had difficulties and weren’t available for use,” explains Martin. “A lot of power stations shut down over the summer for maintenance and normally come back online during October and November. “The last time National Grid issued a Nism

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“I’ve never worked with a nicer group of people. There are lots of different characters and we work across lots of different disciplines, but everyone respects everyone else’s contributions to the business”

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was in 2012, when seven gas-fired power stations failed to come on as they were expected to on one really cold Saturday morning – we nicknamed that their ‘duvet day’ in our office. That was because gas prices at the time meant power stations weren’t running at night, which isn’t what they were built to do. “Our first year in business, 2008-9, really was the winter of the Nisms – there were loads of them. A Nism is just one of the standard tools used by the grid when you’re balancing a real system. A Nism isn’t that close to the edge. But it’s close enough to take action.” During the recent Nism, Flexitricity supplied a ‘demand-side balancing reserve’ (DSBR), in which big energy users cut back on the amount of electricity they drew from the grid. It’s a relatively small service compared with the ‘shortterm operating reserve’ (STOR) that the firm also operates for the grid. “The security standard that the UK Government has set is for three hours of energy deficit per year,” Martin says. “That means that if the system is balanced in the way it should be then for three hours each year somebody is getting a power cut or a voltage reduction, which is called a ‘brown-out’. “That standard was introduced by the Coalition Government. The previous security standard was less-formally stated, but National Grid liked to work to a one-in-365 standard, which essentially meant one power cut per year. In fact, National

Grid was running at just one every three years. “So roughly speaking, we’re already three times better than the standard that’s three times better than the one we’re supposed to be working to. So according to the statistics, the Government should be expecting more power cuts, but in fact we’ve been having fairly few. Politicians obviously can’t promise that the lights will never go out – but we need to have pragmatism.” Taking that pragmatic view is at the heart of Martin’s training. Born in East Kilbride, he studied electrical and mechanical engineering for his undergraduate degree, before completing his doctorate in offshore engineering, both at the University of Edinburgh. He carried on his research at Edinburgh and its neighbour, Heriot-Watt University, looking at process intensification at big sites like ExxonMobil’s Mossmorran chemicals plant in Fife. Industry then came calling, and Martin became a project engineer with Mitsui Babcock Energy, now Doosan Babcock, where he worked on assignments for nuclear power stations and on improving the efficiency of coal-fired power stations from an average of 36% to more than 50%; quite an achievement when considering a modern gas-fired power station only manages 60%. After working with power generators, he then switched to Scottish Water, one of the country’s largest electricity users, where he worked on energy efficiency and renewable

energy. His pragmatic view of the energy industry is also influenced by his interest in the environment. For a couple of summers during his time at the University of Edinburgh, he worked with Professor Stephen Salter, whose research group pioneered the development of wave power technology. “That wee research group was really the engine room of Scottish renewable energy generation,” Martin remembers. “It was very influential and had a profound effect during the 1970s and 1980s. I think the modern version of that group at the University of Edinburgh could become just as influential in the future. “Even though I only worked with him during the summer holidays for a couple of years, Professor Salter was probably the biggest influence on my take on engineering during my time at university. He is the archetypal genius. He has an incredible mind and will apply it to pretty much any problem. “I think a lot of energy engineers share my enthusiasm for protecting the environment. The way the energy industry is shaped is often due to the policies put in place by governments rather than the actions of engineers on the ground. Sometimes those policymakers are too detached from the reality and experience of those who are working at the coalface and could actually help solve these problems.” While he was working in industry, Martin spotted the opportunity to vary the demand

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“According to the statistics, the Government should be expecting more power cuts, but in fact we’ve been having fairly few” from energy users in an intelligent way – socalled ‘demand-side response’ – rather than just simply building more and more power stations. He saw that if a power station was to be made more efficient then it would lose some of its flexibility, whereas on the demand side power users could be more flexible without compromising efficiency. He came up with the idea for the technology used by Flexitricity, which receives data signals from the grid when it needs big customers to cut their power usage or fire-up their generators to send electricity back into the system. Flexitricity is now also offering ‘foot-room’ to the grid, meaning it can ask customers to increase their electricity usage if a lot of power is being generating by wind turbines, solar panels or other renewable energy sources. For example, instead of letting the free fuel from nature go to waste, manufacturers can adjust their production processes to use more electricity when there’s a peak in renewable output on windy, summer’s afternoons. But Martin is quick to point out that giving extra “foot-room” is not about using electricity for the sake of it; instead, it’s about shifting use that would be happening anyway to peak times, or getting sites with their own generators to use renewable electricity from the grid instead of lighting their gas-fired boilers. On the ‘headroom’ side of the coin, customers like the Royal United Hospital Bath and Rotherham Metropolitan Borough Council can supply standby generating capacity when needed, while other clients can turn down their power requirements when requested, like the Excel exhibition centre in London, cold storage and logistics company Norish, the Thameswey combined heat-and-power plant in Milton Keynes, and Dutch company Rainbow Growers in Kent, which operates a greenhouse complex with enough glass to cover 80 football pitches. “One of the biggest challenges in setting up the company was finding the initial finance we needed,” Martin remembers. “Scottish Enterprise gave us a relatively-small grant to begin with, but it was very important because it

involved very heavy due diligence work. “Once other investors saw the due diligence that had satisfied Scottish Enterprise, it made it much easier for us. HSBC was very supportive from the start and we still bank with them now. “Archangel, the business angel group, then invested in us and they were very patient investors. The landscape around us changed quite a lot and they were very understanding and listened as we explained what was going on and how we needed to change. “Having started out with just us in the space, other companies then began to spring up. But that actually helped us to increase our own customer base because there were more people out there talking about demand-side response.” The company now has 30 staff and turns over £2.4 million a year, while it has around 50 customers. Together, they can vary the amount of power they take from or pump into the grid by 300MW. Harnessing the intellectual power locked away inside Scotland’s universities has also been an important part of Flexitricity’s story. Interface – the public body that runs a match-making service for entrepreneurs looking for academic partners – put the company in touch with Dimitri Mignard and Professor Gareth Harrison at the University of Edinburgh to collaborate on research. Early on, Martin and his investors realised that Flexitricity would need a large industrial partner if it was going to be able to scale its business. In April 2014, the company was sold to Swiss utility firm Alpiq, which is involved in energy trading and sales as well as power generation. So why did Martin choose to stay on at Flexitricity after the sale instead of sitting back and enjoying the cash from the sale of his shares? “The team,” he replies without hesitation. “I’ve never worked with a nicer group of people. There are lots of different characters and we work across lots of different disciplines, but everyone respects everyone else’s contributions to the business. “We knew Alpiq was the right partner because

they saw that utility companies needed to come ‘beyond the meter’. In the modern energy market, it’s not enough for utilities to just sit there generating power and counting their money. Those days are over. “Our approach is to go to a customer and speak to everyone who’s involved in energy, from the financial director who pays the bills to the person wearing the blue collar whose problem it is if a piece of machinery stops working. We didn’t need to explain that to Alpiq – they instinctively understood that demand-side response was about more than just having a spreadsheet with a list of names of customers who could turn down their power usage.” Much of Martin’s job now involves energy policy. He works with the Association for Decentralised Energy (ADE) – the trade body formerly known as the Combined Heat-and-Power Association (CHPA) – to help influence government policy. “The Department of Energy & Climate Change (DECC) often has many competing priorities,” Martin explains. “Energy policy doesn’t fit nicely into one election cycle. Politicians are never going to win an election anyway based on their energy policy, so they need to take the politics out of energy policy and concentrate on long-term solutions. “No government has ever taken energy efficiency seriously. That’s a really important step, both for saving money and reducing carbon dioxide emissions. “It’s hard to believe that we’re thinking of spending so much money on the Hinkley Point C nuclear power station when we’re not asking new gas-fired power stations to start recovering the heat that they will generate. That could be used for district heating systems or for industrial uses. “But there’s been a gap in energy policy for many years that’s only now beginning to be filled. So we are where we are. It comes back to pragmatism again.” As the interview ends, Martin is preparing for a trip to Inverness for some hillwalking in the Highlands, heading out to enjoy the environment that Flexitricity is helping to protect. “I’ve spent too much time in business and not enough time in the hills,” he laughs. “I haven’t found my favourite range of hills for walking yet and that’s something I want to do.” n

BIT OF A CHAT

Jock Yuler examining the news behind the headlines Road rage Looks like those financial services wideboys through in Embra are still doing alright for themselves. According to the latest numbers from Glass’s – which insists on calling itself the ‘motor industry Bible’ despite protestations from the moderator o’ the Kirk – the BMW 3-Series is still the fastest-selling used car in the capital. Goes to show all those spivs and speculators are alive and well. And the fastest-seller in Glasgae, I hear you ask? The Vauxhall Antara. Aye, I had to go and look it up too. Turns out it’s one of those off-road jobbies – a Bearsden tractor. I ken the roads are poor in Glasgae, but do we really need so many of these faux-by-fours clogging up the Queen’s highway?

Hop to it Prime numpty David Cameron may be getting his knickers in a twist about Europe, but let’s forget about the referendum for a moment and focus on the really important stuff – the beer. Society of Independent Brewers Scotland chairman Gerald Michaluk and his chums headed to the continent recently to tell MEPs about how wonderful our beer is and how many people work for our breweries. Michaluk – who was joined on the trip by Campaign for Real Ale chairman Colin Valentine, PubAid’s Yaser Martini, and MEP Richard Ashworth – said the politicians were “taken by surprise” by the range and diversity of styles of Scottish beer. One of the politicos even suggested beer should be the “official emblem” of the EU because it’s brewed in every country. Now that’s one way tae show there’s more that unites us than divides us.

Love-fest at Espark opening The official shindig for Entrepreneurial Spark’s ‘hatchery’ at Royal Bank of Scotland’s Death Star-like global headquarters at Gogarburn felt like it went on longer than the opening ceremony for Glasgae’s Commonwealth Games. Some of the ‘chiclets’ had grown wings and turned into fully-fledged hens by the end of it. From what I could gather from way up on the second-floor balcony – have you never heard of giving an old guy a chair? – it sounded like it turned into a bit of a mutual appreciation society too. The game seemed to go something like this: the Royal thanked the First Minister; the First Minister thanked the Royal; Sir Tom Hunter thanked Ewan Hunter (no relation); everyone thanked “chief executive optimist” Jim Duffy; and then everyone took a shot. Or something like that. Anyway, Nicola Sturgeon made sure that Duffy’s head didn’t swell too much with all the thanks. “I know you’ve got your daughters with you today, Jim, so I’m sure they’ll bring you back down to Earth,” joked the FM. Duffy replied: “I thanked my girls for coming along today, but they told me they only came to see Nicola Sturgeon.” One man who wasn’t on the long list of people being thanked was former Royal boss Fred Goodwin. “Let’s be frank – or rather, let’s be Fred,” quipped Hunter. “Turning the executive suite into a hatchery wouldn’t have happened while Fred was here.”

It’s snow joke Not content with being BQ’s cover boy over the winter, it looks like Chris Tiso has developed a taste for photo-shoots. The owner of the eponymous outdoors business was spotted pulling a sledge down George Street in Auld Reekie, which attracted some quizzical glances from onlookers, including Grant Stott from off the wireless. Turns out Tiso was helping his pal Victor Contini to celebrate after the restaurateur raised £31,000 for Embra cancer charity ‘It’s Good 2 Give’ by hiking 62 miles through the frozen wastes of Finland. Contini met up with 12 year old Kira Noble, one of the patients who benefited from his fundraising. Tiso supplied the equipment for the trek and offered Contini some friendly words of advice, presumably based on his own time leading expeditions rather than how to get your woggle in the right spot on your neckerchief, which is what he’s been learning as honorary president of Scouts Scotland. ‘It’s Good 2 Give’ has raised £1.2 million to build a respite care centre in the Trossachs called ‘The Ripple Retreat’. Good on yer lads.

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EVENTS

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BQ’s business diary helps you forward plan

APRIL 11-16

We Are The Future Silicon Valley Accelerator Programme to take entrepreneurs to the United States. www.sanfranciscosummit.com

Deadline for entries to the Converge Challenge for students, recent graduates and staff at Scotland’s universities and research institutions. www.convergechallenge.com

Third annual UK Sustainable Investment & Finance Association, Royal Society of Edinburgh. uksif.org/events/edinburgh-conference-2016-2/

20 20

Place Matters – an Enterprise Mash-Up, Can Do Places, Drygate Brewery, Glasgow, 10am to 4pm. www.scottishchambers.org.uk/events Connections networking group’s ‘Misconceptions’ event, University of Glasgow, 6pm. www.connectionsnetworkinggroup.com

Entrepreneurial Scotland Annual Conference, Gleneagles Hotel. www.entrepreneurial-exchange.co.uk/events/

Brigadier David Allfrey, chief executive of the Royal Edinburgh Military Tattoo, delivers the spring keynote address at West Lothian Chamber of Commerce, Marriott Dalmahoy Hotel, Kirknewton, 6.30pm. www.scottishchambers.org.uk/events

CBI Scotland Dundee Dinner, Apex Hotel, Dundee, 7pm. news.cbi.org.uk/events/event-listings/cbi-scotlanddundee-dinner-2016/

M AY 03 03-06

Connections networking group’s ‘Misconceptions’ event, University of Edinburgh, 6pm. www.connectionsnetworkinggroup.com Engage with Strathclyde, a week of events designed to help businesses engage with the University of Strathclyde. www.strath.ac.uk/engage/

Scottish Parliament elections.

Engage Invest Exploit Scotland, Informatics Ventures, Assembly Rooms, Edinburgh, 8am to 7pm. www.eie-invest.com

24-25

Sixteenth annual BioDundee International Conference, West Park Conference Centre, Dundee. www.biodundee.co.uk

CBI Scotland Inverness Dinner, Kingsmills Hotel, Inverness, 7pm. news.cbi.org.uk/events/event-listings/ cbi-scotland-inverness-dinner-2016/

Scottish Renewables Young Professionals Green Energy Awards, Glasgow Science Centre. www.scottishrenewables.com/events/

BQ’s business events diary gives you lots of time to forward plan. If you wish to add your event to the list send it to editor@bq-magazine.co.uk and please put ‘BQ events page’ in the subject heading Please check with contacts beforehand that arrangements have not changed. Events organisers are also asked to notify us at the above email address of any changes or cancellations as soon as they are known.

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