BQ SCOTLAND Issue 1

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www.bq-scotland.co.uk

ISSUE ONE: AUTUMN 2010

renaissance men The American family taking golf to another level barcode bob An inventive mind is one man’s Great Escape the bigger pitch A former Dens Park stopper advises on fair play and customer loyalty

superjammy It’s jam today and jam tomorrow for granny’s recipe

dough rising ISSUE ONE: AUTUMN 2010: SCOTLAND EDITION

Necessity is the mother of invention. The mother is also the breadwinner and a bit of a Genius

BUSINESS NEWS: COMMERCE: FASHION: INTERVIEWS: MOTORS: EVENTS

SCOTLAND EDITION

Business Quarter Magazine

£2.95



WELCOME

BUSINESS QUARTER: AUTUMN 10: issue ONE WELCOME. I’ve been asked why we have published a Business Quarter in Scotland. Firstly, we all need a bit of cheering up and a classy-looking glossy magazine that’s finely written, well informed and filled with award-winning photography should be a winner. Scotland is a brilliant country. Yes, we have our deep-rooted social and health issues, our tribal differences, our lacklustre national football team, but we have an abundance of imagination, wit and expertise. While we still have a weird contradictory view about those who make a pile of money, we also have the free will to do things and achieve things in life that would be impossible in many other cultures. There is real opportunity in Scotland for those prepared to take it on. Our job at BQ Scotland is to celebrate the best kind of entrepreneurial flair right across the business community in Scotland, from deep-sea widgets technology in the North Sea to the bio-tech drug inventors, the mobile phone apps makers and those working in our food, drink and hospitality industry. We intend to get around as much of Scotland as we can. Now is the time to look again at what wealth creators do for our nation. Scotland faces a bumpy transition from an economy heavily dependent on the public sector to something that will be leaner and more streamlined. That debate about the whys and wherefore of this painful change is really for other forums. BQ Scotland is about our entrepreneurs and our innovators and how they will fit in and flourish to this new landscape. BQ Scotland will feature those who can turn an idea into a business success story. Or for those who have failed and not given up until they eventually succeeded. One thing for certain about entrepreneurs: they all have individual stories to tell. There are our established business figures such as Sir Tom Farmer, Sir Bill Gammell, Sir Tom Hunter, Sir Ian Wood, Brian Souter and Ann

Gloag. They represent a massive amount of experience and knowledge. And in BQ Scotland we hope over the coming editions to return to them speaking to them afresh about their achievements. But we’re keen to shed light too on the emerging class of younger entrepreneurs and their support channels. We’ll be asking if the banks, the business angels, and the venture capitalists are truly doing enough of the right things to foster a culture of wealth creation in Scotland. We still need as much enterprise as possible in Scotland – arguably more than ever before. So we intend to write about the business people and those advisers, funders and bankers who genuinely care about Scotland thriving in the future. Starting a new magazine in the era of instant access internet is a bold step. We believe there is room for it. We understand that most business people lead busy lives and don’t spend enough time reflecting on their business life. So we want BQ Scotland to be stimulating and enjoyable. We also need your support and feedback. Please let us know what you think. This is our first step. So I declare BQ Scotland open for business. And open for ideas that can be turned into commercial success stories. Kenny Kemp Editor, BQ Scotland

CONTACTS room501 ltd Christopher March Managing Director e: chris@room501.co.uk George Cheung Director e: george@room501.co.uk Euan Underwood Director e: euan@room501.co.uk Bryan Hoare Director e: bryan@room501.co.uk EditorIAL Kenny Kemp Editor e: editor@bq-scotland.co.uk Alastair Gilmour Sub-editor Jane Bradley Editorial Design & production room501 e: studio@room501.co.uk Photography KG Photography e: info@kgphotography.co.uk advertising For advertising call Alistair Fleming on 07818 411195 / 0191 537 5731 or email sales@bq-magazine.co.uk

room501 Contract Publishing Ltd, 16 Pickersgill Court, Quay West Business Park, Sunderland SR5 2AQ www.room501.co.uk room501 was formed from a partnership of directors who, combined, have many years of experience in contract publishing, print, marketing, sales and advertising and distribution. We are a passionate, dedicated company that strives to help you to meet your overall business needs and requirements. All contents copyright © 2010 room501 Ltd. All rights reserved. While every effort is made to ensure accuracy, no responsibility can be accepted for inaccuracies, howsoever caused. No liability can be accepted for illustrations, photographs, artwork or advertising materials while in transmission or with the publisher or their agents. All information is correct at time of going to print, September 2010.

THE LIFE AND SOUL OF BUSINESS SCOTTISH EDITION

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BQ Magazine is published quarterly by room501 Ltd.

BUSINESS QUARTER |AUTUMN 10


CONTE BUSINESS QUARTER: AUTUMN 10 ALL THUMB’s

Features

58 renaissance men How an American family developed a world-class, East Lothian golf course

14 entrepreneur It’s jam today and jam tomorrow for Fraser Doherty and his granny’s recipe

26 bread winner The rise and rise of Lucinda BruceGardyne’s gluten-free bakery business

32 all thumb’s The ideas from a mobile apps developer that just get bigger – only smaller

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64 barcode bob

32 SPHERE AND THERE

Inventor and entrepreneur Bob Watson keeps production flow simple

70 bigger pitch Former Dens Park footballer Jim Rae on the value of customer loyalty

76 sphere and there Kenny Kemp attends to the growing pains of the PufferSphere

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TENTS SCOTLAND EDITION

BUSINESS LUNCH

22 COMMERCIAL PROPERTY

The landmark developments influencing our built environment

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38 BUSINESS LUNCH

Regulars

A flight-search entrepreneur comes down to earth over crab risotto

44 WINE South Africa and Edinburgh, hands-on

46 fashion Golf and style in unison? Of course

6 ON THE RECORD Doing the positives in business

9 NEWS Who’s up to what, where, when and why, here in Scotland

20 AS I SEE IT Tom Sime on surviving the recession

FASHION

50 equipment Time you had a piece of Spitfire

54 motors Peter Grant gets manual with the black beauty that is the BMW 520d

81 bit of a chat Gripping gossip from our backroom boy

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ON THE RECORD

AUTUMN 10

Scotland’s most famous industry – and its most lucrative export – still has the capacity for flexibility in the marketplace. Whisky is an international driver, but so too, it seems, is bribery. Never mix the two

>> Here comes the bribe Give me a job and I’ll pay you a back-hander. That’s the kind of conversation that will be under scrutiny in the coming months and years. And rightly so. With a surfeit of business-related legislation to keep an eye on, BQ Scotland will be taking a regular look at what might be impacting an entrepreneurial business.

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One of the last acts of the previous Government at Westminster was the Royal Assent of the Bribery Act, which is also expected to be ratified in Scotland. It represents the biggest changes to UK laws in this area of business and commerce for many generations. Richard Neave, director,

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PricewaterhouseCoopers in Scotland, said: “UK companies have a new set of risks to navigate with the introduction of this legislation. The Act introduces a new crime of ‘failure to prevent’ bribery, which means that companies unable to demonstrate that they have implemented ‘adequate procedures’ to prevent corrupt practices within their ranks or


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by third parties on their behalf could be exposed to unlimited fines as well as other collateral consequences, such as debarment from government business. “So, companies operating in the UK need to be aware that there are no specific exceptions under the Bribery Act for ‘facilitating payments’ for ‘routine governmental action’ which are permitted under the US Foreign Corrupt Practices Act.” “Many businesses will need to review how they behave to avoid being caught by the Act. The real challenges for management are implementing and maintaining the right processes, controls, governance and culture and encouraging the right values and behaviours. “Unless an organisation already has good anti-bribery policies and procedures in place and in action – which many don’t – it will be looking at a considerable period to implement change that will be sufficient to be considered ‘adequate’ under the new rules. The stakes are potentially high and the time to act is now.” The business community now awaits guidance on “adequate procedures” from government which is expected soon. Meanwhile, businesses need to root-out those who need their palms greased – not always easy when international companies are working in very different operating cultures.

UK companies have a new set of risks to navigate with the introduction of the Bribery Act. The stakes are potentially high

ON THE RECORD

>> What is the Bribery Act? Robin Corbett, partner with leading law firm Biggart Baillie, explains The main provision of the act is not yet in force, and is now not expected to come into force until April 2011. When it does, it will have significant implications, in particular for businesses in Scotland and the rest of the UK. Everyone affected by the act faces the challenge of reviewing and adapting their business practices and structures to safeguard themselves and certain officers from substantial penalties. The Bribery Act 2010 creates: Two new general offences, relating to bribing or being bribed A specific offence of bribing a foreign public official, and; An offence for commercial organisations which fail to prevent bribing by a person associated with them. Everyone faces the challenge of reviewing and adapting their business practices and structures to safeguard themselves (and certain officers) from substantial penalties. An offence is committed if a person promises or gives financial or other advantage to another person and intends, by doing so, to induce or reward that other person for improper performance of an activity. The offence covers “financial or other advantage”, a term which is used consistently throughout the act, so this can also mean lavish corporate entertaining. This is about many more than cash. he test is the intention of the bribe, not the outcome. Being bribed A person is also guilty of an offence when that person requests, agrees to receive, or accepts a financial or other advantage as a reward for improper performance, or where a person makes improper performance anticipating financial or other advantage. Effect of Bribery The offences of bribing or being bribed can be committed in relation to many activities: functions of a public nature; any activity connected with a business; any activity performed in the course of a

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person’s employment; and any activity performed by or on behalf of a body of persons (corporate or not). For an offence to be committed, though, the person performing the function or activity must: Be one who is expected to perform the function or activity in good faith and/or be one who is expected to perform the function or activity impartially; or be in a position of trust. What about just “oiling the wheels” abroad; cultivating the influential? In addition to the general offences described above, the act makes it an offence to bribe a foreign public official with the intention of influencing that official, in his or her capacity as a public official and with the intention of obtaining or retaining business, or an advantage in the conduct of business. The act does not refer to “improper” performance. Instead, the focus is simply on intention to influence, linked to intention to obtain or retain business or an advantage in its conduct. Perhaps there are always going to be rogue employees or consultants, people who go further than their employers would consider right. Whatever the position in the past, their activities will be a clear threat once the act comes into force. What about corporate hospitality? The indications are that the government recognises that corporate hospitality is an accepted part of modern business practice. Corporate hospitality, however, is not excluded from the bribery offences. Reasonable corporate hospitality, within the normal range of relevant industry activity, is unlikely to cause difficulty. In addition to a gifts and hospitality policy, if an organisation’s procedures include a specific corporate hospitality budget, with procedures for control and approval of expenditure, that can only be helpful. Lavish corporate hospitality, however, may raise issues. Just what that might be is a judgement call – perhaps, like defining an elephant, you know it when you see it.

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ON THE RECORD

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>> Looks good, tastes good, does good In Scotland, there are thousands of occasions each year to raise a glass to Elspeth, Agnes and Ethel. The three sisters set up in the Robertson Trust nearly 50 years ago and it is still going strong today. Established in 1961, the Robertson sisters donated the shares in a business, founded and developed by their grandfather and father, to the trust for charitable purposes. Today, the trust controls the Edrington Group, one of Scotland’s largest private companies in the Scotch whisky industry which owns iconic Scottish brands: the Famous Grouse, The Macallan, Highland Park and Cutty Sark (acquired in April 2010). In 2008 it acquired a controlling interest in Brugal, a leading brand of rum produced in the Dominican Republic. Over the past two-and-a-half years the Edrington Group has increased the international nature of its business; transformational changes of which the sisters would certainly have approved – more money into more good causes in Scotland. Ian Curle, Edrington’s chief executive, said at the recent results: “I am pleased to report that the company grew shareholders’ earnings, reduced borrowings and further improved its strategic position during the year. “We have continued to invest and develop our portfolio of premium international spirits brands. This strategy is bearing fruit as we continue to outperform the

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category in our key markets.” The business origins – based in Glasgow – stretch back to the 1850s when William Robertson began selling whisky. The sisters were all given shares and brought them together under the Edrington Group (named after the farm near their Borders home) and established the trust. This connection between business and social good remains a template for philanthropy in Scotland. In the year to March 2010 the trust committed £9.7m to more than 500 different charities. The majority of these awards will be paid out over the next three years, subject to the agreed conditions being met by the recipient charity. Donations totalling £9.2m were paid out to 785 charities. The trust received a total of 720 eligible applications in the year to 31 March 2010 and 72% received a donation. When Elspeth, Agnes and Ethel established the trust, their purpose was to ensure that the family businesses remained active and independent, and to continue and extend the past support they had given to charities. They ensured that the trust operated along the principles their father had employed in the business; honesty, integrity and willingness to help people in trouble or need. The Edrington Group´s results for the 12 months ended 31st March, showed turnover was up 11.5% at £468.3m – from £419.9m

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– profit before tax up 25.1% to £118.6m (2009: £94.8m) and shareholders´ earnings up 30.7% to £54.1m with dividend up 25% to 23.25p (2009: 18.6p). However, Ian Curle remains cautious, pointing out the short-term growth of premium brands was being impacted by the global recession. “We remain confident about the long term growth prospects for premium authentic spirits brands,” he says. “However, the board remains cautious in its view of trading prospects in the short to medium-term, due to challenging market. “Our new route-top-market alliance with Beam Global, which covers 24 of our key markets, completed a successful first year. The alliance has helped our brands to compete more efficiently and outperform the markets.” Following a period of employee consultation, Edrington has restructured its distillation capacity with the mothballing of Tamdhu and the concentration of production at three core distilleries; The Macallan, The Glenrothes and Highland. Next year the trust will have a half century to celebrate and a time to remember Elspeth, Agnes and Ethel. Global expansion remains firmly on the mind of Scotland’s whisky firms. William Grant & Sons, another of Scotland’s independent family distillery concerns, now owns a portfolio of Irish spirits and liqueur brands, including Tullamore Dew Irish Whiskey, Carolans, Frangelico and Irish Mist, following its acquisition of C&C’s spirits and liqueurs business for £247m. The business now operates as William Grant & Sons Irish Brands Ltd and employs 63 people, plus other support from C&C will join the new company including 42 employees from Clonmel and 15 from Dublin. Tullamore Dew, which at 600,000 cases is the world’s second-largest Irish whiskey brand, will become William Grant & Sons’ sixth core brand in a portfolio which also includes Glenfiddich and the Balvenie Single Malt Scotch Whiskies, Grant’s Scotch Whisky, Hendrick’s Gin and Sailor Jerry spiced rum.


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NEWS

Scotland’s economy is being urged to respond to calls for more innovation, to invest in talent and to embrace technology – why a business organisation from across the Border sees room for expansion >> Andrew, meet Kenny Aberdeen-based Wood Group has signed a two-year contract with BP to provide engineering and management services for BP’s Andrew Area Development in the North Sea. The contract, worth in the region of £75m, covers the engineering, procurement and construction on the Andrew platform and involves the installation of a new 800-tonne module. The project includes the tie-back of the Kinnoull reservoir to Andrew, which requires a 28km subsea pipeline. Wood Group’s subsea specialist division Kenny is also involved.

>> Apprentice scheme is success A £2,000 incentive for employers to “adopt” an apprentice made redundant has kept 600 young people in work. Skills Minister Keith Brown said the Adopt an Apprentice scheme, delivered by Skills Development Scotland, enabled Scots to continue working toward Modern Apprenticeship qualifications.

Ireland, said: “We are delighted to be welcoming such a team player to Barclays Wealth. Douglas is one of the industry’s brightest talents and brings with him a considerable amount of experience in portfolio management.”

>> CEO group increases offering Vistage, the leading global organisation for chief executives, is expanding in Scotland. Group chairman Paul Pinson, based in Edinburgh, said the group started in Wisconsin in 1950s by Bob Nourse, is now increasing its visibility in Scotland. Pinson said: “Vistage is agenda-free and unbiased. It’s lonely at the top of companies so sharing problems with other people who feel the same is beneficial. From this beginning, Vistage members realised the effectiveness of what they were doing and how much it impacted on their businesses.” Business author Charles Llewellyn, who wrote The Seven Deadly Sins Of The CEO, will be speaking at a Vistage breakfast seminar on October 12. Vistage is now in 16 countries with 15,000 members. www.vistage.co.uk

>> Lockhart plays a straight bat with Barclays Wealth

>> Business gurus offer a spot of advice

Douglas Lockhart, wicket-keeper, and one of Scotland’s most capped cricketers, has joined Barclays Wealth in his home city of Glasgow. Reporting to Alastair Mackenzie, regional investment director, Lockhart is a key addition to Barclays Wealth’s Investment/Portfolio Management team. Lockhart arrives at Barclay’s Wealth with ten years’ experience in international banking. Mark Little, managing director of Barclays Wealth Scotland and Northern

An online media channel designed to support small businesses through the recession has been created by a band of Scottish entrepreneurs. The free, not-for-profit service, called Guruspot offers small and new-start business owners video advice from talents such as Chris van der Kuyl from brightsolid and Hamish Robertson from Robertson Technologies. Guruspot is co-ordinated by Angela Paterson, the recruitment entrepreneur who sold her firm Kite, created HiJobs, and

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spent four years on the board of the Entrepreneurial Exchange. “We have seen a number of companies simply move along in ‘survival mode’,” said Paterson. “The time has come for people to dust off their bigger business dreams, their growth or exit plans and move forward.” www.guruspot.co.uk

Alastair MacColl

>> NE’s enterprise body plans Border raids The leader of the North East of England’s enterprise and economic development company is aiming to go back to his roots as the organisation begins expansion plans across the Border. Alastair MacColl, who is originally from Scotland, has been chief executive of Business & Enterprise (NE) since launching the company in 2007. The business already has a strong reputation for delivering business support, enterprise and economic development in the North of England and as part of a national expansion plan, is now looking at how it can support the Scottish market. >>

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NEWS

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He said: “We are a very ambitious company and have a proven track record for successfully delivering contracts – including Business Link, UK Trade & Investment and a pioneering Investment Centre – on behalf of a range of organisations. “We feel it’s a natural progression to move into the Scottish marketplace and our experience, skills and 21st century approach to business support will ensure we are able to help businesses start, succeed and grow. “We are already in discussions with a number of partners looking at how we can support businesses across Scotland. Business & Enterprise (NE) has a wealth of experience and a strong track-record in transforming business support – and delivering contracts efficiently – so we are in a strong position to continue improving business support and enterprise services in Scotland, whatever form those services may take in the future.” Business & Enterprise (NE) has worked with thousands of businesses. It has helped approximately 12,000 businesses to start, creating an initial 14,000 jobs as a result, while also assisting around 70,000 established businesses to improve performance and grow. MacColl said: “I know Scotland continues to be a great place to start and grow a business. Scotland is full of talent and entrepreneurial spirit and is home to many outstanding companies that have made a significant contribution to the economic prosperity of the nation – and through our expansion plans we believe we are in a great position to support these businesses.”

>> Funding boost for ATEEDA Edinburgh based ATEEDA, which provides software testing tools, has secured £500,000 funding from the Archangel Informal Investment syndicate and Scottish Enterprise’s Scottish Co-Investment Fund, supporting the roll-out of its technology across the global chip design and manufacturing industry. ATEEDA’s automation design tool, LinBIST, replaces analogue tests with simple digital ones, speeding up testing by a factor of

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ten or more. The company expects to expand significantly in staff in the coming months to account for a growing customer base. Chief executive David Hamilton said: “We keep hearing from major manufacturers that analog test is becoming a critical bottleneck. This investment enables us to expand to meet demand for our new LinBIST product.”

Alex Salmond

>> Innovation and ideas remains crucial to Scotland’s global business success Scotland’s economy committee convenor Iain Smith has told BQ Scotland that Parliament must do much more to address business failure and that innovation and turning ideas into commercial success remains the key to Scotland’s future success. “Over the centuries Scotland has established a reputation as being a centre of innovation and entrepreneurship,” said the MSP. “There is a long list of inventive minds who have made their mark on society and the economy. “Although Scotland still spawns a number of success stories in diverse fields, ranging from biotechnology to oil, too many business start-ups fall by the wayside. The reasons range from a lack of funding to increasing competition from developing economies.” The Scottish Parliament’s Economy, Energy and Tourism Committee is carrying out a number of inquiries aimed at addressing the issues which may be holding back entrepreneurship and identify where improvements can be made.

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“We have recently embarked on a review of the purpose of an enterprise agency,” said Smith. “We have gathered written evidence on the merits of the country’s enterprise network which consists of Scottish Enterprise, Highlands and Islands Enterprise and Scottish Development International. “We are hearing from a number of witnesses who will inform our report on how well the existing enterprise network serves Scotland’s business, including entrepreneurs. Fundamentally, the inquiry will question whether there is actually a need for the network or if the Scottish Government’s economic growth aims would be better achieved by other means.” He added that there needs to be an examination whether the public sector, through such organisations as Scottish Development International, is doing enough to support companies of all sizes, including entrepreneurs, to trade in overseas markets. The committee will also continue to scrutinise the tourism industry, from the reform of the National Trust for Scotland to an economic evaluation of Homecoming 2009 and The Gathering. And on Friday 12 November, the committee, along with the Scottish Government, will hold its sixth annual Business in the Parliament Conference which is designed to encourage the private and public sector to consider how we can grow Scotland’s economy. Keynote speakers include: Alex Fergusson MSP Presiding Officer; Iain Smith MSP; First Minister Alex Salmond; John Swinney MSP, Cabinet Secretary for Finance and Sustainable Growth; Sir Winfried Bischoff, chairman of Lloyds Banking Group; Aggreko chief executive Rupert Soames and Dr Janet Lowe, board member of Skills Development Scotland.

>> Tidal tiddler gains new backing Scottish tidal energy developer Nautricity has secured its first multi-million pound investment. The figure is undisclosed. First Tech, the investment company based in Aberdeen which invests in offshore engineering, has made a


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NEWS

significant equity. Nautricity, headed by Cameron Johnston, has secured a global licence for the CoRMaT technology from the University of Strathclyde, who are a shareholder. CoRMaT is tidal turbine system invented by a team at the University of Strathclyde’s Energy Systems Research Unit.

>> Hello Glastonbury, let’s clock Aggreko, Scotland’s Plc of the Year, helped make the summer rock by supplying more than 27 megawatts of power for the Glastonbury Festival. The cult event, which attracts more than 177,000 visitors is made possible by a small army of highly experienced and skilled people. Aggreko, winners of the Scottish Business Insider and PricewaterhouseCoopers plc awards in April for the second year, placed four project managers at the festival, who between them have experience of some of the world’s largest and most prestigious events, including the Ryder Cup, the Open Golf Championship and the Olympic Games. To cope with the massive temporary power demands of Glastonbury, Aggreko supplied more than 230 generators for the 750 traders who were on-site for the duration of the event. The Aggreko team began setting up the power supply infrastructure more than a month before the opening of the festival on June 24. Seventy Aggreko technicians were involved in the run-up to the event, creating their own “village” within the site, with the team growing to more than 90 at its peak. To meet the festival’s request for the use of renewable energy, Aggreko provided bio-diesel

>> Vital renewables role for North Sea The North Sea will play a key role in powering Scotland, Europe and North Africa with renewable electricity by 2050 – but sustained partnerships are essential if this is to succeed. A study by international energy and climate experts from the Potsdam Institute for Climate Impact Research (PIK), the International Institute for Applied Systems Analysis (IIASA), the European Climate Forum (ECF) and accountants PWC reveals the first policy, market, investment and infrastructure roadmap towards a 2050 goal of achieving a 100% renewable power sector. Kevin Reynard, partner, PricewaterhouseCoopers LLP in Aberdeen, believes the report clears up some of the conventional criticisms of renewables. He says: “Opportunities to use clean, affordable natural sources of energy have been talked about for over 150 years – and now is the time for positive action. “We will need to see a big increase in renewables as well as the deployment of carbon capture and storage on a commercial scale if we are to reduce reliance on carbon within the power sector to meet our challenging longer term climate change goals.” A European SuperSmartGrid is needed to use natural resources and established weather patterns to incorporate: onshore and offshore wind farms in the Baltic and North Sea; ocean tidal and wave power in locations including the North Sea; solar potential of southern Europe and North Africa, and hydro and biomass generation.

generators, which required more than 60,000 litres of waste vegetable oil (WVO) fuel, to run throughout the event. This year Aggreko also laid 24km of festoon lighting with time clocks to reduce the power requirement during the day. Areas powered by Aggreko included the broadcast compound for

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the BBC, the market areas, the medical centre, the police compound, the security compound and the corporate hospitality centres. With the experience of previous years, the Aggreko team was well prepared for any weather conditions and 4x4 tankers were on standby to ensure a secure fuel supply.

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NEWS

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>> Barclays to create 600 jobs in Glasgow One of the biggest news stories of the summer is Barclays’ plan to create up to 600 jobs in Glasgow. The jobs are part of the bank’s expansion in the city which has been supported by a £6.6m Regional Selective Assistance grant from Scottish Enterprise. This is conditional on Barclays meeting milestones in job creation, potentially taking its total number of employees in Scotland to more than 2,000. At Barclays Aurora premises in Glasgow, First Minister Alex Salmond welcomed the bank’s plans. Barclays is establishing a global Shared Services hub in Glasgow to support the activity of its investment banking and wealth management divisions. Alex Salmond said: “Barclays is already one of the top employers in Scotland and its plans to increase its presence here reinforces the country’s status as a global leader in finance.” Ian Axe, head of operations, Barclays Capital and Barclays Wealth, said: “This example of collaboration between the investment banking and wealth management divisions at Barclays is an exciting development for clients, staff and potential employees in Glasgow and across Scotland.” Des Byrne, head of Barclays Stockbrokers, said: “We are absolutely delighted to have agreed the terms of a grant with Scottish Enterprise. Since opening the Aurora building in Glasgow in 2007, Barclays has been committed to creating a powerful legacy of customer service, job creation and community involvement in Scotland and today’s announcement is the latest step on that journey.” Anne McColl, interim chief executive at Scottish Development International, said: “SDI, working in partnership with Scottish Enterprise, has put together a strong package of support to attract and secure Barclays’ additional investment in Glasgow.”

>> MIT Venture for Scottish entrepreneurs Informatics Ventures, an Edinburgh University programme set up to encourage Scotland’s globally ambitious

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software companies in Scotland, is giving 10 high-tech companies the chance to attend Massachusetts Institute of Technology’s (MIT) Entrepreneurship Development Program. The programme, from January 23-28 2011, gives companies the opportunity to learn about developing new technology ventures. www.informatics-ventures.com

Keith Cochrane

>> Weir Group joins the FTSE 100 Glasgow-based engineering solutions company, Weir Group, has joined the FTSE 100 – a tremendous boost for Scotland’s engineering community and its global standing. The Glasgow firm recently announced pre-tax profits rise of 58% from £91.4m to £144m in the past six months. Weir has strengthened its presence in the Indian market by securing the purchase of Karnataka-based BDK Engineering Industries, which specialises in manufacturing valves for oil and gas pumps. “Against the background of an uncertain global economic recovery, the Weir Group has again delivered an excellent set of results with all divisions recording profit and margin progression,” said chief executive Keith Cochrane.

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>> CBI chair says radical approach required Scotland needs to look more radically at how services are delivered to the public, says Linda Urquhart, chairman of CBI Scotland. “Yes, businesses have been closing, shedding staff, restraining wages, conserving cash, cutting hours and offering unpaid leave,” she told the 30th CBI Scotland Annual Dinner held in Glasgow’s Hilton Hotel. “Conversely, many businesses have become slimmer, more efficient more competitive and therefore stronger and more sustainable. “In a world where every penny, every pound has been made to count, this is being achieved by accepting the reality of the new world; thinking differently – and radically – and looking at the world from new perspectives. “Importantly, these businesses see opportunity in and through the change that is taking place.” She believes many Scottish companies are doing well in home and international markets, including energy and food and drink. “What those working in local and national Government also need is bold leadership, courage, support and long-term vision from their political masters,” she said. “The CBI president called for a halt to ‘them and us’ attitudes where the private sector denigrates the public sector and vice-versa. “This is a time of opportunity for the public and private sectors to show and earn mutual respect, admit to each other’s strengths and to work together in real and lasting partnerships. Then put them to work for the good of Scotland nationally and for local communities.” She said CBI Scotland is strongly in favour of public sector reform. “We need a root and branch review of public bodies – with much greater clarity of purpose and operational focus. “I have said before that I would like to see


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NEWS

public authorities shift from viewing themselves as deliverers of public services to commissioners of public services.”

>> Scottish lawyers sign up to Lexcel Commercial law firm McClure Naismith LLP has become the first in its sector in Scotland to obtain UK wide accreditation by Lexcel, a quality accreditation system for the legal profession. Lexcel is becoming the benchmark for best practice management of legal firms and is increasingly recognised as a key indicator of high quality client service. There is no comparable standard in Scotland. Des Hudson, chief executive of the Law Society, said: “Lexcel accreditation is now widely recognised and supported by the legal profession in England and Wales. We are pleased that the first firm in Scotland has now been accredited and would encourage others to follow suit.”

>> Connects makes a good investment The Connect Scotland Investment is set to bring together the key investors in Scotland’s technology community at its conference on November 17 at the George Hotel in Edinburgh. www.connectscotland.co.uk/csic.html

>> Afinion is success for Axis-Shield Axis-Shield, the Dundee-based diagnostics specialist, has recorded a 2.8% increase in revenue in the past six months from £49.5m to £50.9m, while product sales have increased by 6.7%. The company increased turnover 2.8% to £51m in the six months to June, although selling, marketing and distribution costs rose 5.5% to £11.5m, with administration costs up 22% to £6.5m and research and development spending 10% ahead at £5.4m. The company’s Afinion multi-illness tester, which allow many diseases to be diagnosed from a doctor’s surgery rather than a general hospital, has had a positive response, with more than 7,700 systems in place. Ian Gilham, chief executive, said: “Axis-Shield continues to advance with sustainability and profitability despite operating in challenging market conditions. During the period we have been pleased to expand the commercial penetration of our core products into established and emerging markets and we continue to make progress with the development of new tests in areas of high market need.”

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ENTREPRENEUR

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SuperJam

Five years ago, Fraser Doherty and Iain Clark were in the same year at school in Edinburgh. Iain trained as a journalist while Fraser is the brains behind SuperJam and a leading UK young entrepreneur. Here the old school mates catch up Fraser Doherty is back where it all began. In his family home in west Edinburgh, Doherty sits in the living room next to the kitchen where, as an ambitious 14-year-old, he honed his jam-making skills from his grandmother’s secret recipe. I can see he has changed a great deal in those intervening years. We talk about the whirlwind past seven years which have taken him from selling his homemade preserve in the neighbourhood to supplying the biggest supermarket in the world. “It’s been an amazing adventure,” says Doherty, whose company, SuperJam, currently provides jam to more than 1,000 supermarkets and independent retailers across the UK. Sweetened using only grape juice, his 100% fruit jam has gone from his “tiny kitchen” into the National Museum of Scotland as “an iconic Scottish brand” alongside Baxters soups, Irn-Bru and the Tunnock’s Tea Cake. Doherty’s brain for business was clear from a

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young age. I know because I was there to witness his early entrepreneurial flourishes. We were both pupils at the Royal High School in Edinburgh and I recall Fraser buying chocolate bars in the local Davidson’s Mains supermarket, re-wrap them with his own quirky printed packaging and them sell them to classmates during the lunch break. Even then I had a sneaking admiration for his acumen. However, as soon as he gained his Highers, Fraser seized the opportunity to get out of school and attempt to turn his jam-making hobby into a career. We both went our separate ways, and I didn’t see him again for a few years. So why did he pursue an interest in jam-making? “Sales of jam have been in decline for the past couple of decades, mostly because it’s really unhealthy,” he says. “It’s usually about 70% or 80% sugar so I figured if I could try and come

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up with a healthier way of making jam we could maybe reverse that decline.” Although the 21-year-old has now sold more than two million jars of jam throughout the country, the process of winning his first major customer was a challenge. He entered the business world armed with nothing but a naïve confidence and the determination to succeed. “My age sometimes made it difficult for people to take me seriously,” he says. “Not just because I was so young but because I didn’t have any money or experience and it was probably hard for them to see how I was going to be able to turn this idea of making 100% fruit jam into a product that they could actually sell.” After scouring the country for factories to mass-produce his jam, while working with a small design company who created a quirky comic-strip packaging for his jars, Doherty attended a Meet The Buyer day at >>

Fruitful: Fraser Doherty expects to clean up



ENTREPRENEUR Waitrose, which he describes as “the X-Factor for selling groceries to supermarkets.” His first pitch to Waitrose was immediately rejected as being “ridiculous”. “That was the point where a lot of people said that we’d give up and it wasn’t going to work,” he says. However, he returned to the bubbling cooking pan in the kitchen and started again from scratch, eventually coming up with a product Waitrose was willing to sell. Although he has been a lone operator through most of his seven years in the business world, Doherty has benefited from various types of support as a young entrepreneur. “I’ve been amazed by the amount of support there is for young people who want to start up their own businesses in Scotland,” he says. A £5,000 loan from the Princes Trust gave him a starting point at the beginning of his business career, of which the young Scot is hugely grateful. “Without a charity like that, young people can’t really go and borrow money from a bank or anything so having that loan was great,” he says. “I think young people maybe watch the Dragon’s Den or something and imagine that business is really ruthless and everybody is out for themselves. There would definitely be people like that out there but I’ve found in Scotland that there’s a real business community and there are people who are willing to spend time giving advice to young people.” An Edinburgh businessman who heard about Doherty through an article in a local newspaper, contacted the young entrepreneur and offered his support and advice while SuperJam was starting up as a business. “He had set up companies supplying supermarkets and he just taught me all about how supermarkets work,” he says. “I‘ve learned a lot from him.” Doherty admits he admires businesses such as Anita Roddick’s The Body Shop, or Innocent Drinks, “businesses which, as well has having a good product and doing good business, do good”. “I wouldn’t like to get up every day and setting up a business which wasn’t trying to make a positive change in the world.”

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Jam tomorrow: Fraser Doherty is looking forward to SuperJam’s expansion His admiration for “do-good” businesses has seeped into Doherty’s own company. Last year he set up the SuperJam Tea Parties, a charity which aims to give back to his grandmother’s generation. After research in the UK, Doherty decided to set up social events for elderly people across the country, during which they could enjoy his jam, scones and live music and dancing. He says: “We started having tea parties in community centres and schools and offices, completely free to come along to with live

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music and dancing. In the past year we’ve held about 100 tea parties with the biggest ones having about 600 people at them, so we’ve had thousands of people along having a great time. It feels really good to do and I’m quite ambitious to see it grow.” Apart from the £5,000 loan, Doherty’s business has been completely self-funded. During the early stages of his business career, the young Scot did a deal with the factory he was working with which meant that they put up all of the working capital for the jars, fruit


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and the credit terms for the supermarket. “It was probably about £100,000 that I didn’t have to borrow from the bank,” says Doherty. Alongside developing SuperJam, he has spent the past 12 months writing The SuperJam Cookbook which hit the shelves in August of this year, filled with numerous SuperJam recipes for jam as well as puddings. He has also, in collaboration with an application developer, created an iPhone application which contains various recipes from the book. “We’re probably the first jam company in the world to have an iPhone app,” he laughs. At the moment, jam is the main focus of his business. “I don’t think there’s much else that I could be doing that could be more fun for me,” he says. He hopes to expand into marmalades and other healthy fruit spreads but Doherty believes there is “a lot of potential” in jam. “We currently sell about 1% of the jam made in the UK,” he says. “I think we could maybe get to up to about 4% or 5% in the next few years; I think there’s a long way to go just focusing on jam.” When reflecting on his rise in the business world, Doherty seems genuinely surprised at where his determination to succeed has taken him. He says: “I look back at that last seven years and I’m amazed that it’s happened – and I can’t really imagine what might happen in the next seven years.” The business has taken him from the family kitchen and into supermarkets across the country but he is not planning to stop here. Currently in talks with supermarkets across the Atlantic, he says: “Seeing the products in the United States would be amazing.” That won’t be easy; even Gordon Baxter, the famous jam and soup entrepreneur from Fochabers, found it virtually impossible to break into a US market which already had shelves heaving with every conceivable product. So, selling Scottish jam to the Americans will be Doherty’s biggest challenge. And he’ll need to be determined. Meeting Fraser again was a pleasure, and I wondered if perhaps it was me who could have chosen the wrong trade, although it does take all sorts in this world, and jam-making is not for me. n

ENTREPRENEUR

I look back at the last seven years and I’m amazed that it’s happened – and I can’t really imagine what might happen in the next seven years

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COMPANY PROFILE

AUTUMN 10

A recession undoubtedly creates a number of hurdles for businesses to overcome. However, with the proper planning and support, there can be just as many opportunities for expansion as during an economic boom. How can your business take advantage?

ACHIEVING GROWTH THROUGHOUT THE ECONOMIC CYCLE

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here can be no denying that recent economic conditions have been tough. The recession has presented a number of challenges to the operations of companies throughout Scotland, leaving precious few industries and sectors untouched. But now, amidst current signs of economic recovery, Scottish businesses have the ideal chance to take advantage of new opportunities and emerge from the recession in a stronger position than ever before. Chances for growth may present themselves by exploring opportunities to diversify, either into new services, new industries or new international markets. Power1 Electrical Contractors, based in Paisley and founded in 2004, has seen a boost in turnover and employee numbers after diversifying six months ago. The company works with The Co-operative Group, fitting out its stores across Scotland, and also sets up telecommunications equipment for Vodafone at events such as Wimbledon and Glastonbury. However, with those industries facing the challenges of recession, Mark Ward, who founded the company, spotted the opportunity for growth by diversifying and exploring a new sector. Mark says: “Trading conditions were challenging, but we still had ambitions to grow the company. However, we knew that we would have to put a solid plan in place if we wanted to achieve this growth while mitigating the risks. We were careful to maintain our core markets, but began to look at other areas in which we could operate.” The new area identified by the company was offshore oil and gas, and the last six months has seen Power1 expand into new, international markets in the industry.

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Lloyds TSB Relationship Manager James Gilchrist (left) with Power1 Electrical Contractors founder Mark Ward (right)

“trading conditions were challenging, but we still had ambitions to grow the company.” mark ward, power1 electrical contractors Mark continues: “We have just completed an oil rig project in Norway, and we are about to start a new contract off the coast of Venezuela. This has led us to take on 10 additional full time employees and we are targeting £3 million turnover for 2010, a 200 per cent increase on last year. “The decision to diversify was not without its risks, but we approached our bank, Lloyds TSB, and their financial backing and guidance enabled us to fully exploit the opportunity and move the company into a new sector and new overseas markets. “This has opened a new, exciting chapter in the company’s history and has provided an excellent platform for the company to expand and go from strength to strength.”

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That sentiment is echoed by James Gilchrist, Relationship Manager at Lloyds TSB, who works closely with Power1. James says: “Power1 is a great example of how to navigate an economic downturn by having a solid business plan, looking for new growth, and utilising all the support networks available.” Diversification and expansion may also come with the acquisition of another company, as demonstrated by Customworks, a Bo’ness-based manufacturer of bespoke products like fridge magnets and jigsaws for the museum and heritage market, with 50 per cent of its products being exported to foreign markets. Looking to strengthen its product range in


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COMPANY PROFILE

year to viable businesses with a turnover For more information of up to £25 million. ABOUT how Bank of Scotland Jackie continues: “The EFG loan was can work with you and your perfect for us, and enabled us to realise business, please contact Ian our ambition of purchasing Castle Collins in the first instance: Melamine, which in turn has increased our market penetration. We now look Ian forward to investing in new machinery Collins at the Castle Melamine factory to speed up production and improve the quality of East of Scotland products even further. Area Director, Commercial “We are continuing to work with the 07764 287926 team at the bank on an ongoing basis Ian.Collins@lloydstsb.co.uk and are excited about what we can achieve as a business.” Craig Customworks Director Jackie Scott (left) at the company’s The company will be supported every McNaughton premises with Bank of Scotland Relationship Manager Jayne step of the way by its Bank of Scotland Stirling (right) Relationship Manager, Jayne Stirling. West of Scotland Jayne says: “The addition of Castle Area Director, Commercial Melamine further strengthens an we are continuing to work with 07970 586261 already successful product offering for Craig_McNaughton@bankofscotland.co.uk the team at the bank on an ongoing Customworks. The team has ambitious basis and are excited about what we plans and we look forward to seeing the Graham business realise these.” can achieve as a business Blair Whatever the industry, Bank of Scotland jackie scott customworks and Lloyds TSB offer support for viable North of Scotland businesses across the whole of Scotland, Area Director, Commercial response to the recession, the firm purchased from Shetland to Gretna, Stornoway to Peterhead. 07887 821138 Stirling manufacturer Castle Melamine, enabling Ian Collins, Area Director for Bank of Scotland in grahamblair@bankofscotland.co.uk it to enter the gift shop market with products such East Scotland, says: “Strong support for Scottish as coasters, mouse mats and mugs. businesses is available from Bank of Scotland Customworks taking such a proactive approach to Jackie Scott, Customworks Director, says: and Lloyds TSB, which both form part of Lloyds achieving their ambitious growth plans and we are “We knew that with the industry being hit Banking Group. The banks’ local networks of pleased to be supporting them at every turn. by the recession we had to put measures in Relationship Managers can help companies access “It goes to show that with the right drive and place to ensure that the company could not only sources of guidance, no matter where they are determination, as well as proper planning and keep trading well, but continue to grow as much in their development cycle or which sector they support networks, growth can be achieved at any as possible.” operate in. stage of the economic cycle.” However, Jackie and the team knew that the “It’s great to see companies such as Power1 and decision to purchase another company was not one to be taken lightly, and that they would need appropriate support to carry out the acquisition. She adds: “Acquiring another company presented a risk with the economic climate as it was, but we put in place a solid business plan and thoroughly researched the opportunity to ensure it would be beneficial and achievable, and that we could get the appropriate funding in place.” For this, the company approached Bank of Please remember we cannot guarantee the security of messages sent by email. Bank of Scotland plc. Registered in Scotland number SC327000. Registered office: The Mound, Edinburgh EH1 1YZ. Authorised and regulated by the Financial Scotland, which provided a six-figure loan backed Services Authority under number 169628. Lloyds TSB Bank plc Registered office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales no. 2065. Telephone: 020 7626 1500. Lloyds TSB by the Enterprise Finance Guarantee (EFG) to Scotland plc Registered office: Henry Duncan House, 120 George Street, Edinburgh EH2 4LH. Registered in Scotland no. 95237. Telephone: 0131 225 4555. All lending is subject to status. fund the purchase. Under the EFG scheme, the Part of the Lloyds Banking Group. The Lloyds Banking Group includes Bank of Scotland plc and a number of other companies using brands including Lloyds TSB, Halifax and Bank of Scotland, and their associated companies. Government will guarantee £700m of lending this

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.”

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BUSINESS QUARTER | AUTUMN 10


AS I SEE IT

AUTUMN 10

Surviving the recession Still dazed from one global crisis, all we need is the dreaded DD – double dip – that many forecasters are predicting. Tom Sime calls for Government influence to be exerted on the banking system The last few years have been the most challenging and painful Scottish businesses have had to endure in a generation, but we’re a resilient lot and I believe most will emerge from this current economic quagmire stronger and healthier than before. We’re not out of the woods yet and the spectre of a double-dip recession still looms ominously over our heads. Surviving a recession requires a determined

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and dogged approach. I operate in the telecoms industry and when I first launched Exchange Communications in 1990 the UK was in the middle of one of the worst recessions in modern history. I truly feared for the future of my fledgling business but, like many others, I lived to tell the tale and I managed to do so by implementing stringent policies on procurement and credit control. We would never order any telephony

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equipment until we’d completed a sale, which meant we didn’t have to order stock in bulk. Surviving and operating in a recession is all about business flow and structuring, and having a tight fiscal policy played a major role in helping my company get to where it is today. Setting up your own business brings a great sense of euphoria but that enthusiasm and desire to succeed will only get you so far.


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Companies have to adapt quickly in order to survive and in today’s climate, if they fail to implement effective credit control procedures then they risk grinding to a halt. Clearly there are external forces which play a major role in determining the future success of a business, and if we are to avoid a repeat of recent years there is another course of action which I believe would help accelerate economic recovery, the responsibility for which lies at the feet of Government. I’ve been speaking to other businesses and potential clients, and it is clear there is a willingness and desire to invest in infrastructure, such as telecommunications systems, but people simply don’t have the capital to do so. The economy relies heavily on the success of SMEs, but a huge number of business start-ups and existing firms face severe cash restraints when it comes to investing in their company. I feel the Government must exert its influence and encourage the state controlled banks to start lending again. If they were to do so then I believe

companies like ours and many others would see a sharp increase in inquiries and sales. It would also help companies to equip themselves better and ensure they are in the best possible condition to tackle what lies ahead. Modern business communications systems can deliver a business advantage that start-ups and mature businesses need in this very competitive marketplace. Don’t get me wrong, businesses can and should be doing more to help themselves but we all require support and it would appear that not enough is being done to support growing businesses and perhaps more worryingly, start-ups. It has been well documented that recessions can be good times for innovative businesses but a recent study found the recession hit Scotland's low rate of business start-ups harder than the UK overall. The Global Entrepreneurship Monitor 2009 placed Scotland among the

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AS I SEE IT

lowest ranking developed countries from a list of 20, ahead only of Belgium and Japan. The University of Strathclyde report also suggested the effect of the global recession on Scotland is worse than for the UK as a whole, and other comparable small nations. I think this is a trend that can be reversed and if the banks start lending again, then I believe it will happen quickly. Providing access to funding is vital for business creation and for inspiring confidence in people wishing to go it alone. n Tom Sime is the managing director of Exchange Communications.

Scotland’s low rate of business start-ups places us among the lowest ranking developed countries from a list of 20, ahead only of Belgium and Japan

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COMMERCIAL PROPERTY

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The sector remains a difficult one but there are signs that recovery is on the way with developments in the Borders and Dunbartonshire and encouraging activity in Edinburgh. Jack Sharp reports >> ‘Cautious optimism’ for increase in Edinburgh office rentals next year – DTZ

>> Construction starts on major Lomondgate facility for Aggreko Morgan Sindall has been appointed to build a £20m international manufacturing and office facility for Aggreko, part of the mixed-use, Lomondgate development site just off the A82 in Dunbartonshire. Work will start this month with completion scheduled for 2012. The new flagship plant will be used to design, develop and manufacture power generators and temperature control equipment to be deployed around the world. Comprising a 160,000 sq ft manufacturing facility and 25,000 sq ft of office and ancillary accommodation. The £100m Lomondgate development is being developed by the Walker Group in partnership with Strathleven Regeneration Company. Bruce Walker, of the Walker Group, said: “This is a major step forward for the development. It is tremendous news that a world-class company like Aggreko is pushing ahead with developing its Scottish manufacturing base at a time when there is so much doom and gloom surrounding the UK economy. Lomondgate’s other anchor tenant is BBC Scotland, which produces River City from the site. Whitbread’s £4.1m, 60-bedroom Premier Inn hotel and family pub/restaurant is expected to open for business in time for Christmas. Construction on 300 homes is likely start in late autumn, subject to detailed planning permission being granted. Persimmon Homes hopes to build 120 properties on an 8.5-acre site, while Redrow will acquire 11 acres with plans to build 94 family homes. Walker Group has approval to build its own 109 new homes on an 11.5-acre site, with work likely to start later this year. A master plan for a 20-acre business park will be unveiled to the market in the near future. So far, more than £14m has been invested by Walker Group into the development, including a major new roundabout and other local road and other infrastructure improvements.

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The latest Drivers Jonas Deloitte Edinburgh Crane Survey reveals the sheer scale of the commercial property crash in the capital. In 2009, with a dizzying number of cranes swinging over the city, a record supply of 640,000 sq ft of new office space gushed from the development pipeline into an over-supplied market. Since then, development has almost entirely dried up. Only 24,000 sq ft has been completed this year – all of it at Bridgeside House, which completed in the spring. This drought of new space will continue into 2011, with the only development coming through the pipeline being the pre-let 55,000 sq ft Shawfair development for the SQA. Demand for available space evaporated last year. Of the 640,000 sq ft completed during 2009, some 482,000 sq ft still remains vacant – with no new building achieving 100% occupation. However, Ian Lochhead, agency director at Drivers Jonas Deloitte, argues that there are “cautious signs of optimism” for a moderate return to growth during 2011. He said: “There is little office development of any significant scale in the city centre, with only one development completing this year and one under construction. The current low levels of development supply should aid the market recovery as economic growth and stronger demand translates into shortages of prime stock.” Lochhead cited incentives worth as much as 36 months rent-free for an unbroken 10-year lease. “Rental levels have fallen from their 2008 peak and we consider headline prime rents to be about £26.00 per sq ft, a reduction of about 10%,” he said. “Incentives have continued to be in favour of the few tenants that have declared their position. With the possibility of few new starts


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in the coming months, even with the reduced take up we are experiencing, we anticipate that the reduction in supply should see a turn-round in prime city centre rents as we progress through 2011.”

>> Ryden lands air freight distribution deal Ryden has purchased the long leasehold interest in a prime air freight distribution unit at 2 Campsie Drive, Air Cargo Terminal, Glasgow International Airport, on behalf of a private investor client. The sale price was just over £1.1m, reflecting a net initial yield of 7.92%. The property is a 16,238 sq ft modern distribution unit, let to DHL Global Forwarding (UK) Ltd on FRI terms, expiring March 2015, with a tenant’s option to extend the lease for a period of five years from the expiry date. The net passing rent is £92,385 per annum. Jones Lang Lasalle and Acuitus sold the property on behalf of The Airport Industrial Property Unit Trust, a client of Scottish Widows Investment Partnership.

COMMERCIAL PROPERTY

building on North Bank Street, the former home to a bank branch and office suites. Beaghmor, funded for the first time by independent merchant bank Close Brothers, has already secured planning permission to convert the building into one- and twobedroom city flats, which are expected to fetch over £300,000 each. Stewart (35) runs a portfolio of six companies including Hometech Integration – the UK’s leading integrator of “smart home technology” and entertainment systems. He said: “North Bank Street will become unique and contemporary residences in a very historic and commanding site in the Old Town. It is in need of a major upgrade and something we can really make our mark on.”

>> Healthy demand for Glasgow office space

>> Stewart buys HBOS Mound site Scottish development company Beaghmor Property – owned by Scotland’s Property Newcomer of the Year – has purchased an historic tenement block on the Mound in Edinburgh for just over £1m. Beaghmor, part of the Chris Stewart Group, has secured an 8,000 sq ft Bank of Scotland

North Bank Street will become unique and contemporary residences in a very historic and commanding site

of company failures in Scotland represents a third of all UK construction companies that have gone bust.” He argues that this could be as a result of Scotland hitting the recession later than the rest of the UK, and that the market is now adjusting. He said: “Nonetheless, at a time when we need to build a recovery, the dramatic decline in the number of construction companies now operating north of the border over the past 12 months, is worrying. Construction is key to our recovery and at the very least these figures show that local building companies need support – quickly.”

Worrying market: Stuart Brodie

>> Scotland hit by a wave of construction liquidations Commenting on the latest provisional data on compulsory liquidations in the construction industry, Stuart Brodie of finance and business advisers Grant Thornton said: “In Scotland we are seeing the exact opposite to what is happening in England and Wales and that is very serious. “Over the last five quarters, England and Wales has seen a steady decline in the number of construction companies going into liquidation. Over the same period, the number of Scottish construction firms failing has risen. What’s more, the number

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Confirming the current healthy demand for good quality office space in Glasgow city centre, Gee & Co has let the fifth floor at 135 Buchanan Street to Thornton Hope Limited. The debt recovery and credit management specialists are relocating from offices in West George Street, following a search that identified 135 Buchanan Street as an ideal office for their business. Thornton Hope has agreed a five-year lease for the 1923 sq ft fifth floor at a rent of £25,000 per annum. Stephen McKenna of Gee & Co said: “As a result of this letting, 135 Buchanan Street is now fully let. Gee & Co completed this in just over six months of our appointment and we are delighted to have assisted the landlord, LNC Properties, with the agency of the building.”

>> Nike limbers up for Gretna Gateway Nike Factory Store is taking 8,000 sq ft of retail space at Gretna Gateway, the “outlet village” on the Scottish Border. Considerable internal works will be undertaken to create the new unit before it is ready to hand over to Nike. Peter Gardner, general manager at Gretna Gateway, said: “Nike Factory Store is >>

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COMMERCIAL PROPERTY

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one of the world’s most recognised brands and will attract additional shoppers to the outlet village, which will in turn benefit all of our other stores as well as the local and regional economies.” Current tenants at Gretna Gateway include GAP, Marks & Spencer, Austin Reed, Reebok, Game and Cadbury. Joint letting agents are Knight Frank and CHD Property.

Future: The tram’s coming

>> Tram stop will boost hotel fortune The Edinburgh tramline will help the fortunes of one of Edinburgh’s newest hotels – when it is eventually completed. Benson Elliot Capital Management and Algonquin have completed the joint acquisition of the Novotel Edinburgh Park, Edinburgh. The hotel was acquired from administrators KPMG. The acquisition, the second for Benson Elliot in the UK following the purchase of CBXII in Milton Keynes, was made on behalf of Benson Elliot Real Estate Partners. The fund now holds a broad portfolio of investments in the UK, France, Germany, Spain, Scandinavia, and Central Europe. The Novotel Edinburgh Park will become the 23rd hotel in Algonquin’s portfolio and is its first investment in the UK. Novotel Edinburgh Park opened in mid-2008, and comprises 170 rooms, a restaurant, meeting rooms and a leisure facility (including a swimming pool). It is the only hotel situated within Edinburgh Park and at a tramstop for the Edinburgh Trams, making it a 15-minute ride into the capital. Accor will continue to manage the hotel under the Novotel brand. The acquisition was financed by Barclays Corporate.

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>> Glasgow’s office landlords offering up to three years rent free Although take-up of Grade A office space in central Glasgow rose to an encouraging 153,000 sq ft in the second quarter of this year, total lettings for 2010 are predicted to be lower than 2009’s, according to DTZ’s latest Property Times report. The lower level of lettings is a result of the significant number of exceptionally large Grade A deals that went through in the third quarter of 2009, City centre availability fell back in Q2, particularly Grade A, following the increase in take-up. Demand was driven by the financial and legal sectors, with Maclay Murray & Spens and Ernst & Young taking 38,000 sq ft and 21,000 sq ft respectively in the newly completed G1 building in George Square. “Overall though, availability is expected to be flat in 2010,” said Ben Clarke, DTZ’s head of UK Markets. “The development pipeline is now effectively empty and future released space is expected to be offset by take-up. Headline rents are set to remain static in 2010, but as the proportion of Grade A availability falls, we anticipate that landlords will begin to take a harder line on incentive packages on larger deals ­– especially on those over 20,000 sq ft.” At £26 per sq ft, prime rents remained static in the three months from April to June 2010, with landlords offering incentives of 28 to 36 months rent-free on a 10-year lease. Ben Clarke said: “Following the G1 lettings, the choice is beginning to become restricted. It is still very much a tenants’ market, but the balance is shifting back towards landlords – though this depends on the individual circumstances of the landlord and the property in question.”

It is still very much a tenants’ market, but the balance is shifting back towards the landlords

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>> Miller Group gets back on track One of Scotland’s major construction and housing groups is fighting its way out of the recession by paying down bank debt. For the first six months of 2010, Miller Group’s net debt was reduced by £135m to £808m, down from £943m. The turnover for the Edinburgh-based group dropped to £338m from £404m in 2009, while the company returned to a profit £3.3m after losses of £7.4m. The Miller Group has made good progress against a backdrop of continuing economic uncertainty. The group generated a cash inflow before financing of £74.7m helping the group to reduce borrowings. Miller Developments, the commercial property arm, contributed profits of £5.5m. The company disposed of the 60,000 sq ft final phase of Edinburgh Quay offices for over £21.5m, at an initial yield of 6.1%. A 100 affordable housing units in Islington following a £22.5m deal with Family Mosaic have been started while the construction business generating an profit of £3.8m (2009: £2.9m). Miller has been selected for the NHS ProCure 21+ and Leeds’ Teaching Hospitals NHS Trust frameworks, but government cut-backs have resulted in the Gloucester Police PPP project being shelved. There are orders of around £569m for contracts with the Royal Mail, Development Securities, Carlsberg and Leicester City Council. Keith Miller, group chief executive, said: “We continue to make good progress in all businesses, each delivering an improved performance compared with 2009. Cash generation is strong as we recalibrate our debt to a more sustainable level.”

>> Builders told ‘on your marks’ for the Games Village Glasgow City Council has fired the starting gun in the race to get the Athletes’ Village up and running for the Glasgow Commonwealth Games 2014. The Council has approved the City Legacy Consortium’s planning application for the

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first phase of the Village, which is to be located beside the Clyde on a 32.5-hectare site in Dalmarnock. A meeting of the council passed plans to build 700 homes which will be used by 6,500 competitors and officials during the Games, before being turned into a new residential neighbourhood in the city’s east end. Construction will start later this year. Councillor Archie Graham, deputy leader of Glasgow City Council and executive member for the Commonwealth Games, said: “The Athletes’ Village is going to be a huge development that will help transform the east end of the city. It will show the world what Glasgow can do.” The City Legacy Consortium is made up of several companies that have a track record in residential development and job creation, including: contractors CCG, Mactaggart & Mickel, Cruden and W H Malcolm. Ed Monaghan, spokesperson for the City Legacy consortium said: “City Legacy is committed to working with Glasgow City Council to realise the vision for a memorable Glasgow 2014 Commonwealth Games and to deliver a lasting regeneration legacy for Dalmarnock. We are focused on transforming the area into a much sought-after riverside residential location and showcasing the Athletes’ Village as the best in contemporary and sustainable design.” After the Games, the Village will become a new residential community comprising 304 private homes, 400 homes for rent and a new 120-bed care home for the elderly. The removal of the temporary facilities after the Games will release additional land. The planned mix of sizes and types of properties will be important in creating a balanced community and will aid sales of the homes. The plan submitted by City Legacy will deliver a minimum 60% reduction in carbon emissions from the new homes to be constructed – a first in Scotland for a development of this scale. Celtic Park, the National Indoor Sports Arena, and the Sir Chris Hoy Velodrome

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are adjacent to the site. The East End Regeneration Route – scheduled for completion in 2011 – will run to within 350 metres of the Village.

>> End of the road for John O’Groats? Poor old John O’Groats – Scotland’s most northerly mainland settlement – has just been put into the same waste-basket as Cumbernauld. The popular starting point for long-distance walkers and cyclists has been named and shamed as “the worst town in Scotland” in the Carbuncle Awards 2010, beating off challenges from East Kilbride, Lochgelly, Inverness and Denny to “win” the notorious Plook-on-the-Plinth accolade. The annual celebration of Scotland’s worst architecture, planning decisions and design disasters is organised by architects’ journal Urban Realm. Carbuncles spokesman John Glenday said: “Last, most definitely last, in our cross country trek was John O’Groats. Despite having travelled so far north to be there, our enthusiasm swiftly headed south upon clocking the disparate assortment of steadings struggling to assume the stature of a hamlet. The overriding temptation upon reaching the famous northerly cliffs is to chuck oneself off them. John O’Groats may be geographically on top of the world, but its built environment is scraping the bottom.”

>> Iceland defrosts frozen demand for shops Iceland Foods has acquired the former Woolworths store on Dumfries High Street in a £750,000 deal. Total floor area of the unit is 18,118 sq ft, spread over the ground and first floor. Ewan Mackay of SGM Property, who sold the building on behalf of a private client, said: “To secure a top covenant like Iceland is a boost for Dumfries High Street. £750,000 is a good price in the current market, especially since the building needed a £500,000 refurb before being offered for sale.”

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ENTREPRENEUR

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ENTREPRENEUR

Lucinda: The incredible edible bread winner Cookery writer Lucinda Bruce-Gardyne wanted desperately to find something for her young son to eat. She invented a gluten-free bread that is taking the market by storm. Kenny Kemp caught up with her in Genius’ New Town office in Edinburgh A bacon butty in the morning, a sandwich for lunch and a slice of toast and Marmite for supper. We love our daily bread – but we take it for granted. Lucinda Bruce-Gardyne is a cookery writer who discovered that many people in Britain simply could not stomach bread and this omission consigned them to dietary purgatory. As a mother of three young children, she persevered for 18 months to find out how she could concoct a healthy loaf for those who are intolerant to wheat. But a chance conversation at the primary school gates in Edinburgh between Lucinda and Janice Gammell, the wife of Sir Bill Gammell, the head of oil giant Cairn Energy, helped turn her culinary search into a £10m-a-year business making gluten-free bread that is now changing lives. “Bread is a staple, that’s what people do, they

eat bread,” says Lucinda, the founder and innovator behind Genius foods. “Yet, if you had a gluten allergy you were stuffed. When you can’t eat bread it is a real handicap.” It was the needs of Lucinda’s first two youngsters that turned her professional interest into “Mmm … Genius”, an outstanding entrepreneurial success story for Scotland. Angus, her first child, had a dairy intolerance, but the realisation that second son, Robin, was allergic to wheat and flour led to a transformation. “For Angus it was OK because a dairy-free diet wasn’t too bad,” says Lucinda, sitting in the meeting room of her converted townhouse office tucked away in a New Town lane. “But for Robin it was a nightmare. We just could not buy gluten-free bread that was any good. “The stuff you could get was stuck together

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with gums, stabilisers and preservatives. I couldn’t believe these companies were calling their product bread.” Lucinda, now 39, is a foodie to her core, but to build a business she needed other qualities, which meant bringing in financial help to raise funding and retail expertise to ensure there was a market for her new bread. Janice Gammell recalls her conversation with Lucinda. “Robin was five and my Harry was four and we were trying to organise a play session for the boys,” she says. “Lucinda started to explain to me about Robin’s allergy and how he was coeliac [a condition of the intestines where sensitivity to gluten prevents the proper absorption of nutrients]. “I said, ‘he’s safe with me, I know all about it because my husband Bill is coeliac’.” Janice, who is now a non executive director >>

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Flour free: The challenge for Lucinda Bruce-Gardyne was to develop delicious food without the staple ingredients, wheat, butter, eggs and nuts of Genius, says: “Lucinda’s uniqueness is her inventiveness and her deep knowledge of food but she has allowed experienced business people to come in and help her build the business. “It can be very difficult for entrepreneurs to let go of their ideas, but Lucinda is really good at seeking help and advice from those around her. It’s an entrepreneurial trait she shares with Bill.” The Genius story is a heartening one. Lucinda grew up in Buckinghamshire as part of the Lyon’s family famed for its tea shops and Swiss rolls. Her dad worked as an executive in the business. Every Sunday was a roast lunch with granny, the stone-deaf matriarch, maiden aunts, rotund uncles and lots of children running around. “Food is a very big thing in my family,” she says. “They were Jewish and in true Jewish

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tradition we met with all the extended family for big meals. “It was very entrenched in our family history and, because of the way I was brought up, I always wanted to cook properly. I always wanted to eat with my family and give them really good food.” Lucinda was interested in science and studied physiology at Queen Mary and Westfield, part of the University of London. “I didn’t know what to do afterwards, so I thought I’d do a quick course at Leiths School of Food & Wine just to get the cooking bug out of my system, then I’d go and do something serious,” she says. From the moment she crossed the threshold at Wendell Road in 1993, she was besotted. “I loved it,” she says. “The best thing I’ve ever done. People talked about food all day, and then sit in the pub next door and talked about

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it all night until we were thrown out at closing time.” She knew she loved cooking and decided to get frontline experience in a reputable London restaurant. She landed a job in Terence Conran’s Bibendum as chef de partie under the legendary Simon Hopkinson. “I had a fascinating year there and learned so much. But I didn’t enjoy it all,” she admits. Lucinda was still in her mid 20s, petite and fit but the constant physical bending and the lifting of heavy, often scalding, pots 16 hours a day, seven days a week began to give her back problems. “It was really full-on and it wasn’t for me in the end,” she says. “Everything in my life had stopped other than work.” She left and set up a catering company called Thyme & Place with a friend from Leiths. It was successful, doing weddings, corporate events,


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parties and Lucinda met lots of interesting people. But her back pain persisted. She went back to Leiths as a cookery teacher, then director Caroline Waldegrave asked her if she would like to write the Leiths Techniques Bible, a book on methods of cooking. Lucinda, together with Sue Spaull, penned the best-selling tome. Using her scientific background, she was keen to understand why cooks use certain ingredients, and how they blended in cooking. It took four years to complete and it was voted by Waitrose as the sixth most useful cooking book ever, with Hopkinson’s Roast Chicken and Other Stories at number one. While researching her book, Lucinda’s husband Hew Bruce-Gardyne, originally from Scotland, landed a job back in Edinburgh and he brought a pregnant Lucinda with him. She says: “I was a bit nervous coming to Scotland because all of my family were London-based and I was six months pregnant with Robin, my second baby.” Then Angus turned out to be allergic to dairy products. He was being breast-fed but Lucinda was struggling late in the evening, so she decided to give him a milky bottle. Angus became deeply distressed and developed a red rash around his mouth. After a check-up, the health visitor noted that he was under weight and advised Lucinda to give him milky snacks. “I wasn’t convinced it was a good idea. I thought he might be allergic to dairy. But I wanted to give it a go with a baby yoghurt. I put one spoonful into his mouth and he went mad. Within minutes, there was a red rash and swelling all over his neck, face and arms,” she recalls with anguish. Angus was taken to the doctors where it was obvious he had a contact allergic reaction. Feeding a baby without dairy was hard because there were limited products on the market. “In the last five years there has been a great increase,” she says. “We had to discover soya milk, rice milk and dairy-free yoghurts. We tried all sorts of different products. “It can be a lot to get your head around because you simply can’t pick something up. You need to be organised. Because I was a chef and I’d written a book about cooking and ingredients, it gave me the background to deal

ENTREPRENEUR

He would play around with his food. I gave him a restricted diet which removed all gluten. Within two weeks, all the symptoms had stopped and his skin was much softer. He was three-anda-half. That confirmed it for me that he might be coeliac with this. I was aware I was lucky because I could experiment and work out ways of feeding my family. I had the confidence to try out different styles of cooking.” She also realised that unless people cooked from scratch, the diet would be extremely limited. This was the genesis of Lucinda’s second book in 2008, How To Cook For Food Allergies, which was a fresh look at favourite recipes. It was also dedicated to her mum Margie Monbiot, who passed away several years ago. Lucinda says: “Her health would have benefited hugely from the improved understanding and wealth of information on food allergies that we have today.” While Lucinda had been trained with easy-to-find and robust ingredients such as wheat, flour, butter, eggs and nuts, her challenge now was to cook delicious food without these staples. “The benchmark was that the recipes would only make the book if they were as good – or even better – than the mainstream alternative,” she explains. “It comes naturally to me to do my own thing.” Some recipes were easy, with a dash of other ingredients, but she found that bread – which was 50% flour – a tough one to crack. How do you do it without flour? For the book, the alternative ingredients had to be familiar and bought in a good supermarket or a decent health food shop. Bread became the Everest to climb; it took 18 months to get the bread ready for the book. Meantime, Robin had arrived. “By the time I got into the book, I discovered I had two sons who had food problems,” she says.

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When Robin was a baby he could eat anything. Then when he was two he looked grey around his eyes and developed dry skin. He wasn’t growing healthily and was tired and always cold. “He was a pretty miserable young chap nd had constant diarrhoea,” says Lucinda. “It was really awful to see and I didn’t know what it was. “He didn’t want a biscuit or a cake, which is unusual for a child. He didn’t want a sandwich and he would play around with his food.” Anything with gluten in it, such as toast and pasta, hurt his tummy and he would dash off to the loo. The doctors diagnosed a number of things but said they could only be certain about his coeliac condition with tests that would cause more upset to Robin but recommended that Lucinda remove gluten from his diet. “I gave him a restricted diet which removed all gluten. Within two weeks all the symptoms had stopped and his skin was much softer. He was three-and-a-half. That confirmed it for me that he might be coeliac.” Lucinda continued her quest to bake bread. She was spending four hours a day getting the gluten-free flours right. It involved blending potato flour and cornflour with a small quantity of tapioca flour, rice flour and ground almonds. Gluten traps air pockets allowing yeast to rise, so she needed an alternative ingredient to capture the bubbles and used a sparing amount of xanthum gum. Batches of two loaves at a time in her domestic oven took its toll and the door fell off. Her book was well received and the bread was now looking and tasting good. Lucinda >>

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Bake gently: Gluten-free bread isn’t as robust as normal bread went into Sainsbury’s at Blackhall in Edinburgh and spoke to the manageress. She agreed it had potential and suggested Lucinda approach a gluten-free bakery in Bathgate called United Central Bakeries (UCB). Lucinda went to see Paddy Cronin, commercial director at UCB, and over the next year they set about scaling up to find the equipment and inventing a process for making the bread in bulk. The bread had to be baked separately and to qualify as gluten-free it has to have fewer than 20 parts per million of wheat. “It had to be made very carefully in the bakery and proven very gently,” says Lucinda. “Gluten-free bread isn’t as robust as normal bread, although it does have a shelf-life in the store of eight days.” Her initial thoughts were simply to supply local shops in Edinburgh, but meeting Janice was a turning point. She dropped two loaves

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in for Janice to give to Bill who rang up saying: “Lucinda, you’ve got something really good here.” He wanted to help – and he did. Lucinda had been expecting to do it all on a shoestring but now a significant investment from Bill changed the game and he was able to suggest heavyweight expertise. Janice and Bill called in Charteredbrands, the brand experts founded by Gervase Cottam, and a business that had been able to revitalised failing brands such as the dishwasher Sqezy and toilet cleaner Frish. Gervase did some background work looking into the opportunities and, along with Dr Angela Pirrie, they found a major market was ripe for the picking. At a brainstorming session at Charteredbrands’ HQ, they arrived at Genius, with Gervase agreeing to join as a full-time chief executive after a period as a

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consultant. With Edward Murray, the corporate financier and non-executive director of Baxters Foods as chairman, the team was now in place. Lucinda’s husband, who was very supportive of the early project, stepped back, leaving Lucinda as the innovator and figurehead. There are now ten people working flat out to meet demand and work 24/7 for the bakery. Having Bill, Janice, Gervase, Angela and Edward on board chimes with a key piece of advice Lucinda received from her family before she started out the business. “When you choose your business partners, look at their motives, values and experience,” she says. “If you trust them and share the same vision, then grasp the opportunity with both hands. “It has surprised us how big the demand is for Genius bread. There are lots of people


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who had just given up on bread altogether. “When we got our first supermarket listing we were delighted. Tesco just jumped on us. We went from nothing to 700 stores nationwide overnight.” As soon as the six-month exclusivity deal with Tesco ended, Waitrose, Asda and Sainsbury’s weighed in wanting the bread. This year Morrison, several whole food chains and 350 Co-op stores are taking the bread. But a deal with Starbucks in February this year to supply bread for gluten-free sandwiches has taken the company onto another level on the High Street. To date, they have sold over four million loaves and retail sales turnover is approximately £10 million a year. “We’ve thought about baking down south, but we’re proud that we have a bakery in Scotland,” Lucinda says proudly. “We’ve managed to meet demand so far. Because it’s a breakthrough product there is no-one to ask, so the best way is to make it ourselves.” Genius sparks customer loyalty with 16,000 people signed up on the website, most thanking Lucinda for her creation. And she says there is a whole tray of products to come. Family life has been transformed too. Lucinda and Hew, with Angus, Robin and young Otto, are much healthier and love catching up in the evening. It’s special if grandmother Dorothy drops by, too. “We eat together every night as a family at 6:30pm,” says Lucinda. “I don’t want us all eating different stuff – I’m not running a café. It’s much better that we all sit down and have the same food. It means that the children don’t have an opportunity to be fussy and faddy. We all eat the same and nobody notices the difference.” Perhaps somewhere down the line, Genius gluten-free bread might become the target of a take-over – but Lucinda is unlikely to do anything that tarnishes the quality and reputation. In all, it’s an entrepreneurial recipe for continued success. n

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When we got our first supermarket listing we were delighted. Tesco just jumped on us. We went from nothing to 700 stores nationwide overnight

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Stroke of genius: Lucinda Bruce-Gardyne has been praised by thousands for her creation

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Thumb like it hot You can fit the staff of One Thumb Mobile into a Victorian office lift in Glasgow. But mobile aps creator Richard Hasinski is happy to be a tiny success story. Stewart McIntosh meets him >>

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INTERVIEW

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Sit in front of some entrepreneurs with notebook and pencil and you’ll usually be told about their ambitions. Big turnover, big profits, perhaps even big ego – oh, and the business plan always culminates in a big trade sale. But the diffident Richard Hasinski, owner of Glasgow-based apps and games designer One Thumb Mobile, doesn’t fit the “big is better” template – his ambition is to make things smaller. Then make them even smaller ... “I’m fascinated by the challenge of squeezing games and apps onto devices with very small memories, while giving the users a satisfying experience and helping my clients to extend their brands,” he says, surrounded by his highly focused techies – some sporting rather

looks exponential – research2guidance is predicting global app sales of £12bn by 2013. The surge in applications will be driven by a massive consumer move towards smartphones, dramatically swelling the ranks of last year’s 100 million users to almost one billion by 2013. Surprisingly, many companies have yet to grasp the potential of extending their brands via mobile applications. “Because the industry is growing at lightning speed, constantly aligning itself with trends, fashions and social media, mobile devices are no longer a luxury, they are a necessary part of life,” says Hasinski. “If your business has no mobile exposure, your brand message will not reach most of your customers.”

users can download apps) they decided to boldly go with One Thumb Media in launching an app that coincided with the opening of last year’s Star Trek movie. They also wanted to extend the reach of the app well beyond the iPhone. “Within less than three weeks we created three Star Trek apps, launching them on Java, Symbian and BREW in time for the movie release,” says Hasinski. “To give Nokia the reach they wanted, we had to work on three totally different technologies to ensure that the app was available across Europe and in the USA.” Other recent clients include Playerx, part of Zed’s global multimedia digital entertainment

One Thumb Mobile has already developed an impressive portfolio of clients including Visa, Honda, Nokia and Liverpool FC. Client requirements cover a wide range of strategies, products and services – as well as platforms on which their apps should be available. “Liverpool FC wanted an app on the iPhone, to extend its brand into mobiles and to generate a new revenue stream via downloads,” says Hasinski. “We created a ‘keepy-uppy’ app for them, using animated 3D models of team members Gerrard, Torres, Carragher and Kuyt.” When Nokia wanted to promote the launch of their new BREW mobile hand-sets in the USA, as well as their new Ovi store (where Nokia

group, who wanted an iPhone game to complement their ITV Bullseye game show. The game was an instant hit, becoming the UK app store’s second-top seller in May of this year. It was also in the store’s top five grossing apps. Working across multiple smartphone technologies, while having to design something creative and appealing against tight deadlines, holds no fears for One Thumb Mobile. “Apart from our design skills, our other advantage is that we’re very passionate,” says Hasinski. “This is a hard-burn industry that chews up people, then spits them out. But our enthusiasm for putting games onto >>

Because the industry is growing at lightning speed, constantly aligning itself with trends and social media, mobile devices are no longer a luxury

interesting hairstyles – in his cramped eyrie above the city’s famous St Enoch Square. But thinking small could reap tremendous profits for him, so long as his designs can stay ahead of the pack. The worldwide market for smartphone applications (apps) is growing daily. In the first six months of 2010, 3.8 billion apps were downloaded worldwide, more than double the 3.1 billion in the whole of 2009, according to industry analyst research2guidance. The average price of an app climbed to more than £2:50 last year. With sales of smartphones spiralling upwards, and with a growing number of mobile platforms now offering applications and games, the market over the next few years

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INTERVIEW

Digital: Richard Hasinski is driven by developing apps for devices with small memories

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INTERVIEW

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Liverpool FC wanted an app on the iPhone to generate a new revenue stream via downloads. We created a ‘keepy uppy’ one for them Fast, furious ... and small mobiles has kept us going. We’ve developed tremendous experience while many of our rivals moved sideways into easier games design for larger screens.” The good news for Scottish-based app and games designers is that it’s not easy to ‘offshore’ the design because, to succeed, apps and games have to be highly relevant to the culture and attitudes of the players. Hasinski says: “Frankly, we wouldn’t try to design something for Chinese or Japanese players. With a completely different background in games, it’s unlikely that they’d enjoy playing western European games – and vice versa. It makes sense to use designers who have a strong cultural understanding of the trends, lifestyle, social media and aspirations of the users.” So what makes a good app? Hasinski counts the key factors off on his fingers. He says: “A compelling reason for users to download and use it; a business element which chimes in with the relevant brand; a high standard of production that associates the brand with quality. Lastly, an app should be well positioned, new, or different from existing mobile apps.” When it comes to making games and apps smaller and smaller, One Thumb points the way ... n

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When Scottish Screen decided there was a need for an RPG (role playing game) that could play on smartphones and would get people interacting with Scotland’s stunning scenery and colourful history, they offered the job to an Englishman. Having designed his own games since early childhood, creating his own RPGs on pieces of paper, Richard Hasinski’s One Thumb Mobile has won a £25,000 grant from Scottish Screen’s “digital seed fund”, to put a piece of Scotland into the pockets of smartphone users all of the world. He said: “This a huge event for us. They’ve given us the money to design a prototype game, taking it to ‘proof of concept’ level. We’re very excited about this project, we’ve wanted to do this for all of our lives – the seed grant buys us the time we need to focus on designing something very new, while keeping the apps side of the business going.” Hasinski was an early entrant into the games industry. He says: “When the first computer games came along I started to figure out ways of putting my own paper-based games onto PCs. Then, in the 1980s, my school friend James McLaren and I started to design our own role-playing games (RPGs) for computers.” James, a mathematician, is his key associate in the One Thumb Mobile enterprise. After university the duo were employed by Dunfermline-based Digital Bridges, who were pioneering the games development sector at the turn of the new millennium. At that time well-known Scottish businessman Colin Grant was the company’s finance director. While there, Hasinski was lead developer on several million-selling and award winning games, including Fast and Furious:Tokyo, still the best-selling racing game ever on mobile. “At that time there were only a few companies in the world designing games for mobiles, so we were in at the dawn of a new industry,” says Hasinski. “By 2002 onwards we had designed various games for mobiles, at a time when most developers were still focused on designs for big PCs and games consoles. We soon developed a lot of experience in squeezing games onto devices with very small memories, so when mobile games started to really open up we had a distinct advantage over other developers ­– most of whom found it very hard to scale down to the technical restrictions of putting games onto mobiles.” With their aptitude for the differing requirements of apps and games, One Thumb Mobile is keeping two thumbs on the mobile pulse.

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COMPANY VIEWPOINT

Many business owners put in a lifetime of hard work building their business only to throw away some of the rewards by failing to properly plan how they will exit from the business. Jim Boyle, Partner in charge of Deloitte’s Entrepreneurial Business team, explains why it is vital to begin planning an exit at an early stage.

IT’S NEVER TOO EARLY TO PLAN FOR YOUR EXIT

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he latest Deloitte Entrepreneurship UK report highlighted that 60% of Scottish entrepreneurs were already planning how and when to ultimately exit their businesses. Exit planning should commence a few years ahead; not only after you have engaged in serious sale discussions. Exit planning is about optimising the business for sale and avoiding leaving value on the table. When considering a sale, there are both internal and external factors to take into account. These will affect the price and marketability of the business. Important internal factors affecting a sale include the track record of the business, the underlying quality of assets, current financial performance, expected future profitability, retention of key personnel and whether the purchaser can unlock synergies. External factors will include matters such as market conditions, competition and the dynamics in the particular sector. The current market conditions and the potential impact on underlying value should also be considered when contemplating a sale. Buyers remain more cautious and sceptical and lenders remain conservative whilst they are still clearly willing to back the right transaction.

raising any kind of finance, it is good practice to prepare answers to questions which providers are likely to ask. Any finance provider will focus on the balance sheet and expected future cash flows of the business.

Top 10 Tips to consider Jim Boyle, Audit Partner and Head of the Entrepreneurial Business Team at Deloitte

60% of scottish entrepreneurs are already planning how and when to ultimately exit their businesses been picked up at the planning stage. Once the decision to sell has been taken, creating a structured and tight timetable for the process is crucial in establishing and maintaining best value. This will also serve to minimise the risks associated with a sale process, including adverse reaction of customers or suppliers if they hear market rumours that the business is being sold.

The process Forward planning is essential. Ensuring that all legal affairs are up to date is part of preparing Sources of funding a business for sale. Any sale process will involve Various types of institutions might provide sources substantial legal diligence and paperwork. There of finance if vendors are contemplating a partial will also be commercial factors to consider such sale of equity or a sale to second tier management. as resolving or minimising potential issues which These include banks, private equity houses and could delay or frustrate a sale. This would mean public sector funding. Whilst there have been very looking at contentious areas such as outstanding few IPOs in Scotland in the last 2-3 years we are customer or staff disputes or pension scheme starting to hear of more companies announcing 2898A Many kw FS report stipinads_2898A_FSReport_StripAds_ PageBefore 3 funding. deal breakers truth could have planned IPOs15/03/2010 in the second 11:57 half of 2010.

Opportunity awaits

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1. Planning and timing your exit is vital to a successful sale. 2. Grooming the business ahead of time can shorten the sale process. 3. Minimise the risk of value erosion by tightening up your house-keeping. 4. Ensure your tax affairs are clean and up to date and avoid contentious tax schemes. 5. Get your selling message right and have it supported by a clear strategy, plans and forecasts. 6. Finding a buyer should be a targeted exercise. 7. Vendor due diligence and a well run process helps you stay in control. 8. Seek expert help – sometimes an outsider can identify opportunities that won’t be apparent to those close to the business. 9. Take tax planning advice and ensure you can maximise Entrepreneurs’ Relief. 10. Be prepared for bumps and bruises along the way and expect a fluid and drawn out process.

Deloitte has recently opened its annual survey of the UK’s entrepreneurs for its report: ‘Entrepreneurship UK: 2010/11’ and is inviting entrepreneurs from across the region to take part. To share your views, visit www.deloitte.co.uk/entrepreneurshipuk

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French toast to pie in the sky idea A web-based flight-search entrepreneur may also be interested in dining in the sky but his feet remain firmly placed on terra firma, as Jane Bradley discovers over crab risotto and chocolate brownies

For a man who spends his professional life finding travellers the cheapest way of flying to far-flung, exotic locations, Gareth Williams’ most recent mode of holiday transport is unexpected. When we meet, the chief executive of Edinburgh-based flight search website Skyscanner has just returned from his summer holiday – a camper van journey through the UK with his two young sons, Noah, five, and Arthur, three. “It was a lot of fun but very chaotic,” he says. “I mentioned in passing the idea of going somewhere in a camper van and they were so taken with the idea – they have a Playmobil

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version so they knew what it was – and it would have been cruelty not to go through with it.” But Williams’s passion for all things aviation has not been dented by his new-found love for road trips. The former computer programmer founded his company eight years ago after creating a software programme which would allow him to quickly identify the cheapest air route to visit his ski instructor brother who was living in the French Alps. He says: “Working as an IT contractor for financial institutions, I generally took two or three months off in the year and went to >>


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People there (Brazil) just heard about it and it has really taken off. The market is growing, but we’re not doing anything conscious to build it. We’re delighted, but at the moment we’re not putting marketing resources outside of Europe

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visit my brother. However, just as I was about to take my holiday, I got offered a great job. I told them that I would take it, but only if I could negotiate a two-weeks on, two-weeks off system so I could keep going out to France. I didn’t expect them to agree to it, but they did.” For the entire ski season, Williams commuted between his flat near London’s Liverpool Street and his brother’s French mountain home. When the contract finished, he began to think about his next career move – and realised that the tool he had created to allow himself to navigate the increasing number of budget airline routes around Europe could be turned into a lucrative business. “Lots of new budget airlines were emerging and there was no way of finding all of the flight prices in one place,” he explains, recalling a string of now defunct brands such as Buzz, Go! and Duo. After testing the product on friends, he


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devised a way to make money out of it – by charging carriers an average of 30p for every “click” through from his website – and Skyscanner was born. “I think our first month’s revenue in 2002 was £32,” he says. “In June this year, we broke through the £1m revenue barrier for the first time.” Skyscanner’s growth has been beyond anyone’s expectations – not least Williams’ own. When the firm moved into its current offices on Waterloo Place just 18 months ago, the 55 staff had room to spare. But not any more. “We’re running out of space,” admits Williams, who moved the business to Scotland at the behest of his wife in 2004, initially operating from a small base in Leith. “But it would be utter wastefulness to move office again so soon. I’m thinking of putting a semi-mezzanine level around the side of the walls, but I’m not sure how health and safety would feel about that. It’s a bit of a quandary.” Staff numbers have now reached 73, while the firm is likely to increase its headcount by another 10% in the coming six months. Revenues have tripled over that period, while the website is handling three million “clicks” a month. The company has begun to invest in serious marketing – most recently sponsoring the Festival in the Sky – where diners can eat at a table suspended 100ft above the city. The sponsorship, which saw Skyscanner’s branding emblazoned across Edinburgh during the busy Festival period, is a bold marketing move for a company which has so far generated a high proportion of its business from word of mouth. In Brazil, SkyScanner has more than 10,000 customers, but has not yet invested a single penny into advertising its services. “People there just heard about it and it has really taken off,” says Williams. “The market is growing, but we’re not doing anything conscious to build it. We’re delighted, but at the moment, we’re not putting marketing resources outside of Europe.” Although the firm has so far concentrated on a relatively small geographic area, customers across the world can still find flights in their region. By the end of this year, Williams says, all 200 budget airlines – and most major

BUSINESS LUNCH

Taking off: Gareth Williams’ Skyscanner website is handling three million “clicks” a month full-service carriers – across the world will be featured on Skyscanner. But not all (chiefly those in the areas the firm is yet to focus on), will be cash generating. Having broken the back of Europe – Russia grew from zero to half a million users in just the past six months – Asia and Australasia are next on Skyscanner’s hit list, starting with Singapore, Malaysia and Thailand. Around 80% of the company’s revenues come from “click fees”, while the remaining 20% is generated from traditional advertising. I ask him what would happen if one of the major airlines suddenly decided not to play ball and refused to pay for the “click-throughs” generated by Skyscanner. Williams pauses to choose his words carefully. “There is a toss-up between the degree to which you push the airlines commercially, versus the benefit that they’re bringing to us,” he says, diplomatically. “We’ve never had an airline turn around and say they don’t want to be involved. Sometimes it does take time to get new customers on board, but they are always keen.” Building the business up from scratch, however, was a time-consuming process. UK carrier BMI was the first on board as a paying customer, while other budget flights

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appeared without generating income. “We essentially showed them for free,” admits Williams. “Only after we properly set up the website as a commercial company did we think about how to make money.” He pauses. “I suppose it was slightly odd in some ways.” The business was not Williams’s first foray into entrepreneurship. As a university graduate, he took a grant from the then-government’s Enterprise Allowance Scheme to set up a picture library. But the venture, launched pre the days of easy internet-based picture distribution, flopped. “It simply didn’t work,” he says. “The pictures I had didn’t sell very well.” No-one could accuse his current business of going the same way. In the 12 months to the end of May, SkyScanner is set to report revenues of £8m, with £1.5m profit. Next year, Williams says, the company is on track to double profits to £3m and grow turnover to £15m. “It does get a bit harder to see such big growth as you get larger,” he says. “But I think we’ve the potential to double in size each year over the next couple of years at least.” He is constantly on the lookout for improvements he can make to his >>

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BUSINESS LUNCH website, which is updated every few weeks. The bane of his life is those nasty customers who use Skyscanner to find a flight, but click through directly to the airline’s own website when they come to book – depriving Williams of his 30p referral fee. I sheepishly admit that I have, myself, been guilty of such a crime. He chastises me, but his business brain immediately kicks into action. “Most people do it because they believe they will have a commission added to the price of the flights or that the airline won’t like a customer coming from a comparison site,” he explains. “Neither of those are true. We have been trying to combat that by putting up confidence messages, reassuring customers that this isn’t the case, that they won’t pay any more by using us.” I tell him that my motive is nothing other than sheer laziness – I might check a flight earlier in the day, decide to book it later once I have confirmed the dates I want to travel – then automatically go to the site of the airline which Skyscanner earlier told me would give me the best deal. He looks thoughtful, then grabs my pen and begins to scribble on a scrap of paper. “Perhaps we need to work out a way of saving a customer’s searches,” he suggests. “I’ll go away and talk to my web team.” It is this kind of attention to detail which has made Skyscanner the success it is. But Williams admits he has found it hard to delegate responsibility. “It’s part of my ongoing learning curve that you have to realise you can’t have one person doing everything,” he says. “I think the hardest thing I’ve found about running my own business is probably letting go of areas where I’ve managed to hire people who are better than me.” Meanwhile, his brother, who also runs a web-based business, is still living in France, having now moved to sunny Aix en Provence. “He works, he skis, sometimes he goes hiking and climbing – it’s not a bad life,” says Williams, gazing out across the rainy Edinburgh rooftops. “But I think it’s a bit too late for that for me now – relocation costs for Skyscanner would be quite high,” he muses. n

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AUTUMN 10

Ugly is bonny Tony Singh, owner of the restaurant where Gareth Williams and I meet for lunch, is one of the Scottish chefs involved with the Festival in the Sky project – sponsored by Skyscanner. For today, at least, however, Singh is firmly on the ground – cooking in the kitchen of his Oloroso eaterie, on Edinburgh’s Castle Street. Williams and I settle into a table by the window for an unrivalled panoramic view over the city. Sadly, the weather is typically Scottish and my visions of sipping cocktails from the elegant outdoor eating space are soon quashed. My starter of asparagus is perfectly cooked, with a light drizzle of a vinaigrette sauce – and delicious shavings of parmesan cheese. I accompany it with a few tasty bites of Singh’s signature “Ugly bread”, which, our waitress, helpfully tells us, is made in his “Ugly bakery”. Williams, not an effusive man, proclaims his terrine (complete with thin waves of “Ugly toast”) to be “good”, which is high praise indeed. He is equally complementary about his main of crab risotto, which sparks only the criticism that it could be “a little more crabby” but is otherwise extremely tasty. The only real complaint has to be about my fishcake – a slightly stodgy affair, accompanied by a tediously large pile of rocket salad. But, finishing off the meal with an out-of-this-world chocolate brownie, such trifles are quickly forgotten. It has been a while since I’ve been to Oloroso. But I have had a long-held theory about this restaurant. Once the place to be seen for the biz-erati of the capital, it suffered badly as companies – especially those in the financial industry – panicked at the onset of the credit crunch and cut back on boozy lunches. Even once the initial madness was over and bosses began to venture out for the occasional cheeky meal, Oloroso – which is undeniably fairly pricey, but no more so than many of its contemporaries – was shunned, having become a byword for boom-time opulence and scaring off firms desperate to cut all association with pre-recession decadence. Singh put his firm into a company voluntary arrangement (CVA), a brave move which undoubtedly saved him from closure. Now, nine months after the official end of the recession, business has picked up, the restaurant is once more packed with suits and buzzing with corporate gossip – and Oloroso is back on the map as one of Edinburgh’s business lunch hotspots. And I, for one, am glad to see it. Oloroso, 33 Castle Street, Edinburgh EH2 3DN 0131 226 7614, www.oloroso.co.uk

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For more information about Krug champagne, please visit www.krug.com Drink responsibly.


BALFOUR ON WINE

AUTUMN 10

Business angel and former leading UK fund manager Anja Balfour samples four inexpensive new South African wines created by an Edinburgh partnership

A Hand Maiden’s Tale What a delightful way to finish off a late summer Saturday spent at the seaside. Grilled mackerel, caught earlier in the day by the boys, Tim, Archie and Dougal; a freshly-made potato and spring onion salad, and four bottles of wine to sample. The labels said

BUSINESS QUARTER | AUTUMN 10

simply Handmade in flowing script with a hand print showing their South African origins. These were new wines to me, but having been a fund manager with an eye on value, I sensed this was a potential buying opportunity. I was intrigued when I heard that Handmade

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wine was an idea concocted by Richard Meadows who runs the Great Grog business in Edinburgh. Richard is well-known in corporate fine-tasting circles as a campaigner for Australian and New Zealand wines. But here we were tasting two reds and two whites


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from Stellenbosch. Had Richard deserted his calling? Handmade is a joint venture between Richard, Danie Steytler junior of the Kaapzicht estate in Stellenbosch, and two restaurateurs from Edinburgh’s well-loved Fishers Bistro and Fishers in the City. They came up with the concept – after a few beers – in Stellenbosch in 2008. That sounded ominous. The second batch has nearly all been consumed with just 50 cases of red left, so we were tasting the third recently-bottled batch. Since the restaurant owners are reputable fish experts, I sensed the mackerel was an ideal complement. I was joined by my friend Gail who normally enjoys a chilled glass of New Zealand or Chilean Sauvignon Blanc. We tried the whites first. This was the Handmade Chenin Blanc 2010. It was fruity and tangy but not unpleasant with an after-taste of apples and vanilla. The flavour wasn’t powerful, rather it was light and summery. I sensed this was a young wine, yet it didn’t taste sharp. In fact, Gail and I both found it rather pleasant.

Handmade Chenin 2010, 13% abv, White, Screwtop, £6.99. Handmade Red 2009

BALFOUR ON WINE

We then tried the Handmade Sauvignon Blanc 2010. This was more subtle and certainly did not have as much immediate impact as the Chenin Blanc. It reminded me of alfresco dining with green and crunchy salads and sea fish and it grew on us after two or three mouthfuls. A decent plonk but not yet a match for some of the better Kiwi Sauvignons, although we were mightily impressed by the value for money. We switched to the reds. The Handmade Red 2009 (Cinsault/Shiraz) was left to sit on the kitchen table for ten minutes. We then poured out our glasses. It was glorious deep purple with a fruity aroma that was pleasant. The first drop on the tongue conjured up burnt Demerara sugar, and there wasn’t any of that after-burn you often get with inexpensive reds. Indeed, it was very drinkable and slipped down very well. Good value for money. Finally, we turned our attention to the Handmade Reserved Cabernet 2009. This actually tasted of blackcurrants with a hint of caramel. It certainly had a much more complex taste. After our fish and the white wine, this was an excellent change of flavour. Gail and I felt we’d found four new friends. What struck me was that the wines were exceptionally good value for money. Well done to the Fisher folk and the Great Groggers. n

It was glorious deep purple with a fruity aroma. The first drop conjured up burnt Demerara sugar and there wasn’t any of that after-burn you often get with inexpensive reds

(Cinsault/Shiraz), 14% abv, Red, Screwtop, £6.99. Handmade Sauvignon Blanc 2010, 13% abv, Screwtop, £7.69. Handmade Reserved Cabernet 2009, 14.5% abv, Red, £9.59. The wines are available at Great Grog on 0131 555 0222: Great Grogs’ Annual Tasting of South Africa wines is at Merchants Hall, Edinburgh, on Monday 25 October, call 0208 947 7171 for tickets. They also have a Grog Fair in Edinburgh, Aberdeen, and Glasgow in November. www.greatgrog.co.uk

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BUSINESS QUARTER |AUTUMN 10


FASHION

AUTUMN 10

Being sponsored by a sportswear firm is one thing, but one of Britain’s most successful golfers is going one step further by developing his own line in clothing. Ian Poulter talks to Chris Porter This year, professional golfer Ian Poulter is ranked seventh in the world. It is lucky for some; 2010 has also seen him take a runner-up position in the Abu Dhabi Gold Championship and his first PGA Tour win, at the WGC Accenture World Match Play. It follows on from a successful 2009, which saw him finish second in The Players’ Championship and win the Barclays Singapore Open. But never mind all that, have you seen his trousers? >>

BUSINESS QUARTER | AUTUMN 10

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AUTUMN 10

FASHION

ideal gear for driving reign

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BUSINESS QUARTER |AUTUMN 10


FASHION

AUTUMN 10

“My dad always dressed nattily and one of my first jobs was selling menswear on a market stall,” says Poulter, who seems that much more at ease talking about clothes than clubs. “Sport was always my first love but I knew it was important to me to look good on the course and wear what I wanted. So I thought I’d best do it myself.” Certainly, if some might recall a golden age of golf style – Bing Crosby and Bob Hope in pastel checks, or Frank Sinatra, reputed to spend $30,000 a year on orange knitwear from the Canyon Club shop in Palm Spring, and the swinger credibility of Jack Nicklaus, Dan Sanders and Arnold Palmer – is to admit that today’s golfers, in chinos and baggy polo shirts, just don’t cut it. With the notable exception of Poulter. And he takes it sufficiently seriously that he has launched IJP Design, his own golfwear company. “Style in golf just became too easy – all those XXL T-shirts rather than a shirt that fits,

BUSINESS QUARTER | AUTUMN 10

multiple pleats rather than a flat-fronted trouser,” says Poulter. “Golf itself has become more fashionable, appealing more to younger men, evolving so more people can get out there and enjoy it. But its style has yet to catch up. It’s time it revived its old colour and edge.” He is not kidding. Staple to the 35-year-old’s collections are bold tartans, signed off by the Scottish Tartan Authority no less and a signature for the player, as are bootleg cut trousers “because plain trousers just look all the same”. Also included are lightweight sleeveless striped cardigans, brightly-hued knee-length tailored shorts, neat, fitted polo shirts and even Swarowski crystalstudded belts. These are smart garments in a broader sense as well, cut to allow necessary ease of movement, using technical fabrics to wick away moisture and maintain breathability. It is a brand doing as well in club shops as Poulter is on the course too. What began as

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an idea sketched on hotel letterhead paper in 2003 and launched tentatively three years ago has this year gone into overdrive. As of this summer it is sold in all 35 golfplaying nations, is moving into fashion retail and is set to expand in line with golf’s popularity (it is the world’s fastest growing leisure activity). A women’s golfwear line and even one for kids are preparing to tee off for 2011. “I’m the crash test dummy,” Poulter jokes, referring to his wear-trialling every design. “It needs to look right but also feel right in more practical terms. It has to be cool, the buttons have to be in the right position. It’s back to basics stuff but the kind of thing you don’t think off when you’re just buying a T-shirt. Just a button can get in the way of a swing. There needs to be a performance element. But I don’t understand why golfwear can’t look great too.” There is, however, more to IJP Design than Poulter’s love of flashy duds and his confession that he “tends to be a bit flamboyant off the course as well”. If other players turn to a new club or caddy to improve their game, Poulter finds it in his attire. “Clothing is psychologically important on the course,” he explains, “but I think it can be for everyone. If you go to a business meeting and your suit doesn’t fit well, you won’t feel right – you may not get the deal.” But, more than that, the clothing company is a longer term business prospect, a cashing in on his public profile and his sartorial reputation alike with post-golf life in mind. “I don’t want to get to 50 and wonder what to do next and I’ve always admired golfers who have looked beyond the sport alone to do something in the business of golf,” he says. “But there is also a recognition among professional sportspeople in general that their increased visibility, or the public’s access to them via social media, for example, makes them brands now. Sportspeople are businesses, in part because they have to leverage their names to have something in place for when they can’t play any more.” To develop it as Poulter has done is, however, harder than it looks. Poulter’s insistence on wearing his own clothing means, for instance, that lucrative sponsorship deals are not in the


AUTUMN 10

There is a recognition among professional sportspeople that their increased visibility, or the public’s access to them via social media, makes them brands now

offing. Rather, young up-and-coming British players, the likes of Steve Lewton, Giowan Suh and Gary Boyd are being sponsored by IJP. Nor is this to forget that launching a clothing line, let alone a specialist one, is a gamble in the current climate and that few other golfers, with the exception of Greg Norman, have successfully pulled off launching a clothing line. Poulter, however, may benefit from the increased style-consciousness among men now. “It’s just too easy to sign up with some fashion brand now,” he says. “This is a business decision and if it doesn’t work out at least I’ve given it a try, and at least I’ve got to wear what I like. It is a huge risk, though; it requires huge investment. But I think there will be a growing crossover of golf and fashion in coming years. More players want to look good on the course and keep looking good in the clubhouse. There’s room for what we’re doing.”

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FASHION

Indeed, while he certainly imposes his experience of play and his idea of taste on IJP Design products, the company is building a dedicated design team to keep the new collections coming. He needs it, since he still sees his job as playing championship golf, with a hectic schedule that leaves little time for pondering fabric swatches and samples. “My job is still to try to hole some putts and if I can give some design ideas on the side that’s great,” he says, though the fact that putts equals units sold is not lost on him. “There’s certainly a relationship there to work with – success on the course translates into sales. For the moment though, my working life has a very simple dynamic. It’s called performance-related pay. If I don’t play well, I don’t get paid. That keeps you on your toes.” n www.ianpoulterdesign.com

BUSINESS QUARTER |AUTUMN 10


EQUIPMENT

AUTUMN 10

Time FLIES

If you’re wearing a Bremont watch on your wrist, you’re flying high, asserts Chris Porter

Launching a new watch brand in a market that esteems heritage and history may be one thing. Launching one with the proud boast, not of its Swiss or German design, but of its Britishness, may seem foolhardy. And yet when brothers Giles and Nick English’s father Euan was killed in 1995 in an air crash that also badly injured Nick, that is what the pair set about doing, putting their careers in the City behind them in favour of doing something for the love of it, rather than the tidy bonus. It took a decade of planning, during which time they set up an aircraft restoration business, but in 2007 Bremont was launched. “We were brought up building grandfather clocks, so an interest in watches was always there,” explains Giles English. “But there is also a practical appeal in these watches. Flying has everything to do with time. “I’ll admit that I thought it would be easier to launch the company than it turned out to be. In terms of getting parts, for example, as a small company you’re right at the back of the queue. And how slow the watch industry can be is painful sometimes. “But luckily, we have never had investors breathing down our necks, so we have been free to grow at our own pace. We’ve been able to create the >>

BUSINESS QUARTER | AUTUMN 10

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EQUIPMENT

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EQUIPMENT

AUTUMN 09

watches we most would like to wear ourselves, which is quite a luxury.” Indeed, what is perhaps more remarkable is the swiftness with which Bremont has been established among serious watch buffs (some models already have a three-year waiting list) and those, like the brothers, with a penchant for vintage aircraft. The brand’s association with flying is fast becoming its signature. Bremont comes from the French farmer, and former pilot, into whose pea field in Champagne the brothers once had to make an emergency landing in their vintage bi-plane. Bremont’s EP120 model also contains parts of the Mark V Spitfire of the same name which, in one notorious day in 1942, made six German kills. It is all very Boys’ Own – and Bremont can count adventurer Bear Grylls, yachtsman Mike Golding and Everest climber Jake Meyer among its fans, enhancing the allure of a brand whose watches will be worn by men drawn to their spirit of adventure and the tough utility of their design. Even if the closest you come to sitting in a cockpit is turning left into First Class when you board for a business trip, the appeal is clear. “Bremont watches are about going out there and pushing yourself, in whatever way,” suggests Giles. “A watch says a lot about you. Any brand needs to have a theme.” The English brothers’ connections have put them on the inside track of the luxury goods industry too – John Ayton, founder of the Links of London jewellery chain, and Robert Bensoussan, former CEO of Jimmy Choo shoes, have both provided expert advice. The company was also smart in supplying the actors Ewan McGregor and Charley Boorman with watches for their televised motorcycle trek, A Long Way Down, and it also now sponsors the Goodwood Festival of Speed. The timing, far from being a disastrous time for growth, has been good for Bremont. In part, Giles English argues, because other companies with a reputation for pilots’ watches have “lost a bit of their soul”, by becoming part of luxury goods conglomerates and by chasing fashion. If English likes to describe Bremont’s rigorously tested, tool-like aesthetic as being one of high functionality (later this year it launches its first diving watch the SuperMarine 500, named after the Schneider Trophy seaplane) it certainly makes its watches stand apart from the glitzier styles some more established brands have produced, perhaps at a cost to their image. Bremont is also playing a part in a renaissance of British watchmaking. The world-class bespoke watchmaker Roger Smith, based on the Isle of Man, has in recent years been joined not only by Bremont, but by the likes of Graham and also Dent, pioneer of the marine chronometer and maker of the clock mechanism on the tower at the Palace of Westminster (also home to Big Ben). Watch collectors are beginning to appreciate that before massmanufactured watches squeezed out the artisan, and the Americans and

BUSINESS QUARTER | AUTUMN 10

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AUTUMN 09

EQUIPMENT

Britishness is part of what makes Bremont different ... there is a new credibility for English watches now; people are thinking about them again

Form and function: Bremont watches, known for their blend of great design and industrial-strength functionality, are favoured by sportspeople and explorers

then the Swiss came to dominate the industry, Britain once led the way. Hans Wilsdorf, after all, launched a company here in 1905, renaming it Rolex in 1908; its name, inspired by the sound of the winder, coming to him while sitting on a London bus. “Britishness is part of what makes Bremont different,” explains Giles. “It is probably too soon to speak of a renaissance, but certainly there is a new credibility for British watches now; people are thinking about them again. “After all, there is a huge history in British watchmaking that nobody seems to know about. But there is very much a British style of movement, right down to the thickness of the plates.” The slowdown affecting many giants of the watch industry means Bremont is no longer at the back of the queue, and the downturn has freed up time and components from the Swiss workshops that supply the parts inside Bremont’s distinctive, curved, British-made steel cases – manufactured by a Cambridge company that also, appropriately, finishes jet turbine blades. In fact, business is so good that the company can even afford to give its watches away, albeit once its recipient has undergone something of an ordeal. For when Bremont launched its entirely British-made MB1 watch at the end of last year, it awarded one to every pilot to survive a crash using an ejector seat made by the pioneering British company Martin-Baker. Thankfully, a more commercial version, the MB2, was made available for those who would rather not go through the trauma of being rocket-propelled out of an aircraft at 30,000ft, which is a relief. n

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BUSINESS QUARTER |AUTUMN 10


MOTORING

AUTUMN 10

Black Beauty

BUSINESS QUARTER | AUTUMN 10

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AUTUMN 10

MOTORING

The BMW 520D is sleek and energy efficient but it doesn’t shrink from being a powerhouse on the open road. Peter Grant, managing director of Grant Management, takes it for a spin

Perhaps the guys should have been wearing balaclavas and face paint. It was like a clandestine drop when a sleek dark BMW 520D was dropped off outside my Edinburgh home well after dark. Is this the way Mr Clarkson gets his test cars delivered? But the

BQ Scotland crew apologised for the late arrival, saying they had been held up with photo shoot assignments. An unlikely story, I had a sneaking suspicion that they were enjoying having this black Beemer too much and forgotten it was my job to drive it.

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Next morning my first real test for the car was in the school run. My eight-year-old liked the look and enjoyed the space and tidiness in the back, which was a good start. Many years ago when I left the Daily Record and before Colette and I set up Grant Management in >>

BUSINESS QUARTER |AUTUMN 10


MOTORING

AUTUMN 10

I like the idea of the engine cutting out when you stop in traffic. At first it was disconcerting, almost as if you’d stalled, but once you got used to it, it’s rather clever

Dark and mysterious: Peter Grant felt part of a covert operation on delivery of the BMW 520 1997 I was converted to automatics, so having to change gear was a bit of a novelty again. I don’t think the eight-year-old was too impressed with my movement from first into second, and up to third. But we soon got the hang of it. This BMW was certainly comfortable and easy to drive. What is surprising for a diesel is the lack of noise inside. I’d always been under the impression it would be like an Edinburgh taxi, but it was well insulated and we could hear Chris Evans’ dulcet tones booming out from the touch-screen sound system. My one thought was that the dashboard was a bit cluttered compared with my S-Club Mercedes, but then this might be a question of familiarisation. I like the idea of the engine cutting out when you stop in traffic. At first it was disconcerting, almost as if you’d stalled the car, but once you get used to it, it’s a rather clever EfficientDynamic technology and if it saves fuel and is much greener for the planet, then I can see this becoming something very significant. The car does 55.4mpg. In town, the car did the job, so how would it be on the open road? Out on bypass and then the M90 motorway, it purred perfectly well heading north over the Forth Bridge. It felt like a car that would be stable at 100mph on the

BUSINESS QUARTER | AUTUMN 10

Autobahn. I’m told the top speed is 144mph, but I wasn’t keen to test this out and incur any more points on my driving licence. I haven’t driven a BMW for ten years and I felt it was a classy drive. as an executive range BMW, this black beauty is Germanically stylish and beautifully engineered. n Douglas Park Glasgow BMW 0141 333 0088

Facts CAR: BMW 520d range PRICE: from £27,465-£36,065 INSURANCE GROUP: 15 CO2 EMISSIONS: 136-140g/km Power/torque: 245bhp @ 4,000rpm and 398lb ft @ 1,750rpm PERFORMANCE: [4dr] 0-60mph 8.3s / Max Speed 144mph FUEL CONSUMPTION: [4dr] (combined) 55.4mpg STANDARD SAFETY FEATURES: Twin front, side and window airbags / ABS / DSC

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Official fuel economy figures for the 5 Series Gran Turismo range: Extra Urban 34.0-50.4mpg (8.3-5.6l/100km). Urban 17.4-34.9mpg (16.2-8.1l/100km). Combined 25.2-43.5mpg (11.2-6.5l/100km). CO2 emissions 263-173g/km. *Offer available to business users only, figures exclude VAT. Hiring example is based on a 24 month BMW Contract Hire agreement for the model shown, a BMW 530d SE GT with optional metallic paint, with a deposit of £3,168.03 followed by 23 monthly rentals of £499.00 and a contract mileage of 16,000 miles. Mileage charge in excess of contract mileage 9.34 pence per mile. Vehicle condition charges may apply at the end of your agreement. Figures are correct at time of going to print and are subject to change without notice. All hiring is subject to status and available to over 18s in the UK only (excluding the Channel Islands). Guarantees and indemnities may be required. We can arrange finance and hiring facilities for you. *Subject to confirmation. BMW EfficientDynamics reduces BMW emissions without compromising performance developments and is standard across the model range. Test drives are subject to applicant status and availability.


ENTREPRENEUR

AUTUMN 10

A Renaissance Man: The making of a golfing fairytale Kenny Kemp finds out how a unique Scottish golf club, a drive and a chip away from the world famous Muirfield, started as a twinkle in the eye of one stubborn American entrepreneur Once upon a time there were six brothers who loved golf. They lived all over a large country and once a year got together to compete in their favourite pastime. One afternoon all the brothers were in the clubhouse when a fairy-godfather told them that in a far-off land there was a piece of nirvana for lease. One of the stubborn brothers called Jerry tried to persuade the other five that this was a chance of a lifetime. But they shook their

BUSINESS QUARTER | AUTUMN 10

heads and did not believe him. Undeterred, Jerry set off on an adventure to find out how to do a deal in Scotland. He came to tranquil East Lothian and was bewitched by its beauty and the bountiful fairways and greens. He returned home, extolling such virtues, saying that the fairy-godfather had indeed come up with a unique opportunity. His enthusiasm won over his brothers’ support, and they then set about

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creating one of the greatest golf courses in the world. Today the Renaissance Club – next to world famous Muirfield – is smack bang in the middle of golfers’ heaven. The club, on the Archerfield Estate, is 335 acres of windswept beauty situated along the coastline of the Firth of Forth. Hollywood couldn’t write a better film script: a feelgood movie about the rewards for the hard-working and entrepreneurial Sarvadi >>


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ENTREPRENEUR

Let’s do the show right here: Jerry, left, and Paul Sarvadi at the Renaissance Club overlooking the Firth of Forth

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ENTREPRENEUR brothers – Gerald or Jerry, Paul, Mike, Jim, Dave and John – who turned an at-the-bar dream into a reality. And it is a yarn that involves Arnold Palmer, the world’s greatest golfer, although the sprightly octogenarian hasn’t yet graced the wonderful fairways of this exclusive club. Scotland abounds with world-class golf courses and East Lothian has many of the finest with a chain stretching from Kilspindie, Gullane, Luffness, along to the hallowed Muirfield, home of the Honourable Company of Edinburgh Golfers and venue for The Open, 2013, and on to North Berwick’s open links. So why did Scotland need another one? And in the teeth of an economic downturn were there really rich Americans out there willing to shell out a £60,000, 30-year bond payment and £2,500 a year membership to share Jerry’s dream? It’s a question that he and Paul can answer easily. “We wanted to build the ultimate golf course for our dad, our brothers and our friends,” says Jerry, sitting upstairs in a hand-made Belgian carpeted lounge overlooking the Forth. “A friendly place where you would feel at home and nothing was spared to make the golf course a wonderful place to enjoy. “And, yes, there are people willing to pay for the absolute privilege of being a member of a club in this wonderful part of the world.” He adds that there are now 160 members from all over the globe with the aim to have 600. The Renaissance Club is building an unenviable reputation among the golfing fraternity. Golf course design-wizard Tom Doak has sensitively sculpted the topography; his minimal approach uses the natural wooded environment and contours with trees pruned to reveal tantalising vistas. Green superintendent Paul Seago, who sits on the R&A greenkeeping committee, has planted local grass seed that prospers in the loamy soil, while the drainage is natural, coping with the heaviest downpours. The result is a natural green carpet that some lowhandicappers sacrilegiously whisper surpasses its illustrious neighbour. The work isn’t finished though; only one of the five lodges has been completed so far, housing the Pro Shop, locker rooms and nine

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There are people willing to pay for the privilege of being a member of a club in this wonderful part of the world bedrooms for members and guests. Jerry and Paul are adding another three holes along the coast to make it a 21-hole golfing experience. It was Jerry and Paul’s dad, George – the son of Transylvanian immigrants to the US Mid-West – and husband to Trudy, who instilled a love of golf in his six sons and three daughters. He viewed it as a game that taught his children a lot about the ups and downs of life. Jerry, now 61, was still in high school when he became a caddy master at the Aurora Golf Club in Cleveland, Ohio. In 1966, when he was 17, the Cleveland Open was held at the club and won by Arnold Palmer who collected $30,000. One of Jerry’s young buddies was given $3,000 by Palmer as his share. This generosity inspired a life-long admiration for Arnold. But it was Paul, 53, who later got the chance to take Arnold on as an ambassador for his

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national US business. Its success allowed Paul to be a significant personal investor in Jerry’s plan. Paul set up Administaff in April 1986 with a mission to help small and medium-sized business succeed by offering a full service human resources department. “It had been tough in Texas in the early 1980s and I’d watched some small companies crash and burn and I wondered how could I make it easier for them to survive,” says Paul, who was inducted into the Texan Business Hall of Fame in 2007. “I came up with this package for small and medium-sized companies that could help them with all of their human resources issues – and it took off.” Administaff grew like wildfire and Paul, the chief executive officer and chairman, took the company on to the New York Stock Exchange in January 1997. He was an Ernst & Young’s Entrepreneur of the Year in 2001. Today Administaff has nearly 6,000 clients, more than 100,000 worksite employees and 1,800 corporate employees. While the Texas-based company hit it right with its products, it also scored a hole in one with its marketing. “There are around 600,000 firms in our target market in the US and two-thirds of them have golf as their number one non-work pastime,” says Paul. “I wanted to use golf to get to those 400,000.” He had been invited to many corporate golfing business events and one day he picked up a phone call in his office asking if he’d like to have Arnold Palmer join his company. He thought it was one of his practical joker buddies. Then, when he was assured it really was Arnold, he agreed a deal. Palmer turned golf into a global game in the 1950s and 1960s. It was his charm, style and talent that took it beyond America and brought it back to Britain – and Scotland – at a time when television was turning it into a truly global sport. Having Palmer in your business was a piece of gold dust. Silver-haired Palmer joined Administaff’s team and their first advert sent a shiver up Paul’s spine. He was standing in an airport lounge when Palmer’s distinctive tones beamed out. Everyone waiting for their plane looked up at the screen and the legend smiled, saying:


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ENTREPRENEUR

The hole shebang: Jerry Sarvadi’s enthusiasm for the Renaissance Club project rubbed off on his family, including his brother Paul, left “Small business is good for America. Administaff is good for small business.” Not quite Shakespeare, but it was simple and highly effective for Administaff. Overnight, it had national recognition, helping the company make the big time. The relationship has continued and now one of Paul’s ambitions is to have Arnold come and play the Renaissance. “We have around $1.7bn in revenues, and no debt,” he says of Administaff proudly. The Renaissance Club has an atmosphere unlike almost any other golf club. On this August morning, it has a distinctive family feel as the Sarvadi brothers and sisters gather in the large temporary clubhouse. They have all flown to Scotland from across the US to be together; there are children and grandchildren and lots of noise as families and friends greet each other.

Even in stuffy East Lothian – Scotland’s answer to The Hamptons – the locals have taken to Jerry and the Sarvadi clan. Jerry made more than 20 trips before he was able to secure the lease from the trustees of the Duke of Hamilton and he stayed in nearby Aberlady. Brother Mike, a genial host who made his money in the aviation technology business, is virtually a local resident now spending half the year in Scotland. So, how did Jerry come to invest in a Scottish golf course? The recent experiences of up-market Loch Lomond Golf Club, set up by Lyle Anderson but forced into administration and a sale, suggested that times are hard for many clubs. Even the planning travails of a property tycoon Donald Trump in Aberdeenshire might deter investors from coming to Scotland. Not so, this is East Lothian. The raised beaches

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make it ideal conditions for golf. The microclimate that gives the strip from Musselburgh to Dunbar more hours of sunlight than the rest of Scotland allows rugged green grass to thrive in sandy soils. And if a golf course designer of Doak’s genius takes that into consideration, then there is something special. That, and far fewer midges. The Sarvadi brothers use golf as a reason to get together and catch-up and they are encouraged to invite a friend. Two such friends were Don Lewis and Pandel Savic, a former American football quarter-back and business partner of Jack Nicklaus. Don knew about Archerfield and in the bar after 36 holes at the US Open course at Pinehurst in North Carolina, he was the fairy-godfather who raised the question. “Do you want to buy a golf course?” All the brothers laughed. >>

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ENTREPRENEUR “No way,” they replied, almost in unison. “It’s in Scotland.” Still they shook their heads. “Right next to Muirfield.” Jerry admits the boys had all been enjoying a glass or two of Californian red, and while they dreamed of what it might be like, they all dismissed it. All, but Jerry. Jerry’s introduction to Scotland was in April 2002. He was playing golf back home in Jacksonville, Florida, when he was introduced to Barry Hyde, then responsible for MasterCard International’s golf promotion. “He had then one of the best jobs in the whole world. He got to spend $30 million a year on golf,” laughs Jerry. “But he went over and worked for the US Golf Association, forging links with the PGA tour and the Royal & Ancient Golf Club in St Andrews.” MasterCard were one of the sponsors of the Open at Muirfield and Barry asked Jerry and his son-in-law Derek Siewert, if they would like to play on one of the corporate trips. Jerry, then running his own aviation oil business, was surprised to get the invitation but knew a lot of Americans had called off coming to Europe after the atrocities of September 11, 2001. “I think we were invited to make up the numbers – and of course I had to back the aviation industry,” he says. But Jerry thought the chance too good to miss. “We flew over and arrived at Edinburgh very early in the morning. It was wet and dismal day and I thought ‘this must be Scotland’. I rented a car and started driving around the bypass towards East Lothian and onto the A1. I’d just come off the dual-carriageway and the sun came out. It was an absolutely beautiful morning but I could see it was still raining over Edinburgh.” Derek and Jerry met up with Barry and the Muirfield party for the tee-off time just after 8am. He says: “We played two rounds. Then it was still glorious, so we went out again for another 18 holes. We finished at 9:15pm and it was still light. I played some of my best golf ever.” It was etched in his mind. So when Jerry heard from Don that attempts had been made to build a new course, next door to Muirfield on the Archerfield Estate, but had stalled,

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I could sense where the holes would be. The setting was spectacular. The prospect was beguiling he was eager to understand more. He went to see solicitors Biggart Baillie, who were working on behalf of the Duke of Hamilton and his family, in their Edinburgh office. The Renaissance Club’s property is controlled via a trust by Hamilton & Kinneil (1987), which represents the Duke of Hamilton’s family and H&K (Archerfield), both companies controlled by family trusts. The land for the golf course would be leased for 99 years from H&K (1987). The American visitor walked through the woods near Dirleton and could see how close it was to Muirfield. The southern boundary is Home Farm, the residence of the late duke and duchess. “I could sense where the holes would be,” he recalls. “The setting was spectacular. The prospect was beguiling.” He spent the next two-and-a-half years talking to and persuading his brothers. He retired from his aviation business and the course became his obsession although, at times, he thought of simply walking away.

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“There was a major cultural difference over in Scotland about getting things done,” he says. “There were a lot of planning issues to contend with and while I found East Lothian Council officials extremely helpful, we had to do it properly. “This is an area of extreme beauty, it has to remain unspoiled. The terminology was strange and I took a couple of years. But I just kept going, though.” The partnership deal and lease was eventually signed and Jerry is spending around £10m developing the course, giving Paul Seago the best possible equipment to keep it in immaculate condition. “We’re committed to ensuring the long-term viability of the club,” he says. “It’s all about the condition of the course. We’ve been very conservative. We raised the capital among our family and friends. We went out and approached them first and we’ve been supported by some golf fanatics who haven’t even been over to play here yet.” Jerry knows only too well that this is not a short-term affair; that to make this work required attention to detail and dedication to the project. He is sure that the course will buck the economic trend. “We haven’t used bank finance,” he says. “We’re still building membership but it won’t be crowded. We want to maintain that Sarvadi family atmosphere; that’s the reason we’re all here.” There’s also a benefit in having a large family. “The project has family investors that extend beyond just mother, my brothers and sisters but also to sons-in-law and even fathers-in-law.” The Renaissance Club is the fruit of entrepreneurial hard work and toil. It’s a tribute to a family vision. And there are lofty aspirations one day to create Scotland’s Augusta Masters here. That would be a fitting tribute to Arnold Palmer and his involvement with the Sarvadi clan. If you are a golfer and you get an invitation to “Come and play the Renaissance”, it would be rude to turn down the chance. n www.trcaa.com For membership enquiries please contact simon@trcaa.com


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ENTREPRENEUR

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The Tricks of the Track Inventor and entrepreneur Bob Watson could see the merits of keeping things simple. He became an expert in advance manufacturing and his touch-screen innovation has helped surgeons and anaesthetists work more easily in operating theatres. Now he’s turned his brain to creating a perfect electric-powered bicycle. Kenny Kemp meets the Scot who is king of the barcode

Bob Watson is a modest and understated Scotsman. He even apologises for a moment of unalloyed brashness when he allows his ruby red Audi R8 V10 Spyder to open up to 8,000 revs as it hurtles along an empty stretch of the M90 motorway towards Kinross. Jeremy

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Clarkson describes this beast as “bonkers fast” – and the massive acceleration pins a grinning, bespectacled Watson right back in his seat. “It’s never been about the money,” he shouts above the powerful engine roar. “It never even entered my head. It’s about the creation. What

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has driven me in business is creating something that no-one has done before, or doing it in a different way than anyone has thought of before. “Over the years we had done pretty well and we’ve enjoyed that. We’re a completely self-financing group of companies. I’m pretty pleased about that.” Bob is one of Scotland’s secret entrepreneurs; a rich man with a very low profile. Yet his Newgate Technology Group is a gem of a business. It has been a pioneer in the use of barcodes across the UK, and Bob invented a touch-screen system for use in operating theatres that makes a surgeon, anaesthetist and nurse’s job much less stressful. After perfecting this unique data processing system, he has taken a back-seat from Newgate, turning his attention to bringing electric bicycles to Britain, and when he couldn’t find a suitable steel shed to store them in, he set up a steel shed company which now erects warehouses all over the UK. >>


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Designed by Bob: Bob Watson and his latest development, AlienOcean, the electric bike that has become a cult brand “I don’t actually consider myself an entrepreneur, just somebody who does things.” says Watson, “but when I went to the United States and spoke to some business people I found that the fundamental difference between the guys who succeeded and those who didn’t was that the entrepreneurial types said when times are tough ‘I can still do this, but I’ve just got to figure out a way to get through the next week, month or year’. Whereas, the other guy says ‘stuff it’ and gives up.” Bob Watson has never, ever, given up. A child of the 1950s, he grew up on the vast Murthly Estate in Perthshire where he developed a fascination for the objects, stuffed animals and curios collected at the 15th century castle by several generations of Highland lairds. His dad was the clerk of works and the young Watson roamed the farms,

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fields and policies where exotic trees and shrubs had brass plaques with Latin names, and information on where and when they were planted and collected. Watson, now 57, was interested in this sense of order and a wonder at how things worked. This quest for keeping track on things would eventually define his career path. His grandmother and dey – or grandfather in Fife dialect – were a strong working-class influence. Dey was a self-educated coal miner in Methil who read philosophy and instilled in him a capacity for reading and inquiry. As a teenager, he devoured science fiction, listened to rock and roll music and tuned into Radio Moscow to staccato reports on the latest Soviet grain harvest. He was fascinated with the space race, admired President Kennedy and even his girlfriend – later his wife – was called Jackie. Jackie, who became a high

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school chemistry teacher, remains at his side in the businesses today. When his dad got a job with Perth Council, he moved to the academy there, and found his way to Wilkie’s Music House where a guy called Robbie taught him the guitar. He showed aptitude and was asked to help Robbie with his pupils. The family then moved to Dunfermline and spindly, long-haired 17-year-old set up his first business, the Watson Guitar School in a rented room in historic Abbot House. The queues of would-be axe heroes soon helped him to put enough down for a deposit on a motorbike – and this would become a life-long passion, leading to him buying Steve McQueen’s bike from the film The Great Escape. Instead of going to university in Glasgow to study engineering, which would disrupt his guitar school earnings, he went to college in


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Kirkcaldy to do an HND in business studies. Two years later, he landed a full-time job in Dalgety Bay in Fife working at the defence contractor Marconi, which had a manufacturing plant in Donibristle. “My first job was as a progress chaser on the production line,” he recalls, sipping tea and now sitting in his converted farmhouse in Cleish, with its stunning views towards the Ochil Hills. Watson was a kind of human just-in-time delivery man, dashing from one part of the factory to another to ensure that all the bits were put together. He worked on top-secret military projects, such as the Mark 24 torpedo, the Clansman radio system for the army, and the improved firing control system for the Chieftain tank. This was cutting-edge British innovation because Marconi’s laser-guided system allowed the tank to fire its rounds as it moved rather than stop to aim at its target. There were other military hardware projects such as the nose cone for the Blowpipe cruise missile and, more controversially for Watson, an antipersonnel land mine designed simply to maim. It was an interesting time but he left to work for a new inward investor from America who had arrived in Silicon Glen, the mighty Burroughs counting machines company which had been enticed to Livingston. “It was a leading electronic system firm supplying the banks with counting machines,” says Watson. “The American culture anticipated that you give them 100% of your life. I was very well paid – it doubled in three years – but I had one week off on holiday in that time.” Watson says Burroughs was never truly committed to Scotland and was simply here to make the most of cheap loans and government grants, but it expanded quickly from 120 people to more than 600. But he was one of the first to be sent to Chicago on technology and advanced manufacturing courses and he learned a huge amount as a production manager in charge of material management. Burroughs was at the forefront of optical and magnetic instrumentation which could read thousands of cheques an hour. It was the dawn of the barcoding revolution. “We were talking about automated materials

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ICL didn’t know what to do with me. They sent me on training courses, but their systems and software were five to ten years behind the Americans handling in 1982 when no-one in UK industry was even thinking about this,” he says. “We had the first barcode readers in the UK. The barcode for me was the way to go. You couldn’t do automated materials handling unless you found a way of saying where any component was.” Watson became expert in MRP2 – Materials Requirements Planning and Manufacturing Resources Planning – which boiled down to ‘Have I Got The Bits and I Have Got the Means to Manufacture the Bits to Put Them Together?’. In America, Olly Wight was the improvement guru of MRP2, which was radical change management in manufacturing – and Burroughs was at the forefront. Bob Watson could see how its application was now transforming material requirement planning, which became a cost-saving management initiative in advanced manufacturing. But three years of a relentless

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give-it-all-to-us corporate culture was enough for him and he left to join either IBM or the UK’S ICL. ICL in Edinburgh made a faster offer and he accepted – much to the chagrin of an IBM HR executive who questioned his sanity. After Burroughs, Watson discovered ICL was in the dark ages – no-one started work until after 9.15am, for instance, yet it was supplying a large chunk of UK business. “ICL didn’t know what to do with me,” he says. “They sent me on training courses, but their systems and software were five to ten years behind the Americans. I wanted to introduce barcoding to ICL’s customers and I wrote board papers but there was a lack of interest. Yet their systems did stupid things such as re-order minimum numbers between one and 100,000, when often you only needed a few widgets. “The Japanese had systems that sent a single item. I could see the efficiencies that could >>

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The barcode in itself was clever. But it was how you changed the way you used this data in advanced manufacturing that really interested me be made and I was deeply frustrated by this.” A barcode is a series of a numbers. It requires a scanner to insert the code and a link to a database to make it effective. Barcoding meant that data was much more readily accessible and could automatically update a computer system, and this could ensure a new component was made and sent out. Supermarkets were well ahead of the industrial sector in their use to resupply their stores. Watson says: “The barcode in itself was clever. But it was how you changed the way you recorded and used this data in advanced manufacturing that really interested me “ICL didn’t see it. I just couldn’t get them

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interested, so I said, ‘stuff this for a lark’ and I decided to leave. Of course when Fujitsu bought ICL the first thing they did was introduce a big barcoding system.” He was certain he could do a better job on his own. He was able to visualise a system in his head and knew he could make it a reality. In February 1988, Bob and Jackie set up Newgate Technology with two Amstrad pcs with 5.25in floppy disc drives that broke down a lot. The business plan stated simply: “We will create systems for manufacturing companies which will track the progress of materials on the shop floor, and track which person works on these materials to assemble them through to the finished product.”

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Bob Watson understood that if you have all this information you are able to work out what’s happening in your business on a real-time, micro level; you can say what the total time of production is likely to be, and work out how much things actually cost to produce. He employed a programmer and within the first few months they had £120,000 worth of orders. “Then, in 1989, the worst recession ever came along,” he says. “Within three months we were down to £20k. Every manufacturing company in the UK asked itself, ‘are we going to be here in a year’s time?’ – and there was no way they were going to spend money on our tracking systems. The 1989 recession was dreadful for us.” Watson’s recurring question was: “How the hell am I going to keep this going?” At one point he was £280,000 in the red, but he adopted a mind-set that said: “I know I can get through this, I just have to figure out how to do it”. “The recession in 1989-1990 was very hard for Scotland because we still had a lot of manufacturing in this country,” he says. “They’ve all disappeared now and today everything is predicated on service. “I vowed then that this was never going to happen to us again. I wanted to be recession-proof.” Watson looked at industries that will always require maintenance contracts for the systems that he was able to put in. Increasingly, there was a focus on local government and the health care sector. He managed to persuade the Bank of Scotland in Dunfermline to support him. “You have to fight,” he says. “If you can keep a positive attitude and talk to the bank manager saying ‘you can do this’, then this really can work for you. If you say to your bank manager, ‘if I prove I can do this one big thing, will you back me on the next bit?’ It’s step by step. And it took us four years to get on track again.” With a £20,000 bank loan, Newgate Technology’s business started to pick up in 1994, now with ten staff. A breakthrough was when cataract lens company, IoLab in Livingston, took its system to track the sterile manufacturing of the lens and a chance visit


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from an NHS central services manager led to an introduction. Watson says: “Although we’d been knocking at hospital doors, we weren’t getting anywhere because we weren’t a preferred supplier, which was ridiculous. But this NHS manager could see how good the system was and asked us, ‘can you apply barcodes to the manufacturing and reproduction of sterile services and the clean instruments for operating theatres?’” It wasn’t a problem for Newgate Technology. Precision stainless steel instruments are washed, brought in for repacking and then placed in an autoclave for sterilisation before being ready again in the theatre. Watson’s business made this easier using laser barcoding with Bridge of Earn Hospital, then Ninewells in Dundee adopting the systems. “We progressed in various areas,” he says. “It opened doors for us and we were asked to apply the technology to operating theatres. Barcoding in operation theatres had been going on but I couldn’t see how it might work effectively. A surgeon wearing rubber gloves wasn’t going to pick up a barcode reader.” Newgate was experimenting with touchscreen tablets applications in 1998, long before the iPad. He bought an early US system and asked one of his software boffins to adapt it. For example, welders wearing visors and big gloves found it hard to pick up a barcode reader, too, so Watson invented a simple yes-and-no touch-screen that recorded the date and time of a procedure. “That design of walking up to a screen and pressing a big green button and knowing instinctively that the machine knew what you wanted it to do was a breakthrough,” he says. “This emphasis on functionality defined the design of all our future systems from that point.” Since then the business has been working on refining and updating its systems, culminating in a continuing contract in 2005 to run the patient and hospital data for the whole of the Northern Ireland NHS area, linking all the hospitals. The system is worth £6m, and Bob Watson feels Newgate Technology could adopt a similar system in Scotland for a fraction of the £200m spent on the current system that has failed to achieve similar outputs.

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Today, Newgate Technology – based in Inverkeithing, Fife – is competing with the majors and has a turnover of several million a year. The value of all of Watson’s companies is several millions of pounds, although he’s reluctant to put a figure on this. Managing director Ross Mackenzie who has been a partner of Watson’s for many years, and Pauline Walker, the finance director, now run Newgate Technology, while Watson – who admits to having a typical entrepreneur’s attention span – has been working on other ideas. This restlessness has seen him moving into electric bicycles. “Six years ago I didn’t know what eBay was,” he says. “It was my son Adam who introduced me to it. I said, ‘show me how to do that’ and it was like a bolt of lightning. Here we have a huge 24/7 selling ability, anywhere. And it was like OK, what can I sell?” Watson wanted to sell something with mass appeal that fits in with various aspects of modern life. Health and fitness were obvious with people living longer but with their knees often giving out. He says: “Fitness was an issue and it occurred to me that I was overweight and wanted to do something like cycle. But I was getting left at the bottom of the hill when Jackie and Adam were away cycling up the brae. And I was pushing the bike. Then I thought, ‘I can do something about this’.” He invented an electric motor to drive a bike wheel and had it made in China. He ordered a container consignment of bikes from China, and modified the design. AlienOcean, named in homage to one of his science fiction favourites, became an internet bike brand, based in Lochgelly, with a shop opened in Kinross called the Scottish eBike Centre. He has now sold over 3,000 bikes and his “Designed by Bob” logo has a cult following. “It’s only really scratching the surface because we need to show more people the value of using an electric bike,” he says. “We need to educate people that this way of travelling exists and it’s not a cop-out for fitness, but it can help you get back into cycling.” For Bob Watson it is a fresh direction, challenging his thinking, and making him do what he enjoys most in life – solving problems to make life a little easier. n

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The Cooler King How Steve McQueen’s motorbike from The Great Escape came to be in the foyer of a Fife business says a lot about Bob Watson’s passion for bikes. In the film’s climax, McQueen attempts to jump over the border fences into neutral Switzerland. It’s an iconic film scene – and Bob’s favourite. He heard the famous bike was for sale. But wanted to know for sure if it was connected with the film. He phoned the number of a defunct Californian bike shop and amazingly spoke to a family member who passed on the number of McQueen’s legendary stunt double, Bud Ekins. Bob made the call and Bud answered. Bob explained the bike was advertised and he wanted to know its pedigree. Bud explained the original is in a US museum but that two TT650 Triumphs were used during the film, with Ekins doing the main stunts, although McQueen did most of his own riding. The two British bikes were adapted to look like German WWII BMWs, which were too rigid to do stunts. Elkins said that the second bike was on stand-by, and that while McQueen rode it, it was there mainly for parts and wasn’t used in the actual film. That was enough for Bob. He made an offer, which was accepted, and shipped it back to Scotland. And the reason for buying The Great Escape bike? “It’s there to say, whatever happens don’t give up,” says Bob. “McQueen didn’t give up.”

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INTERVIEW

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The Elevate pitch

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INTERVIEW

Jim Rae was a 100%-or-nothing footballer. He gave his all. Every game. Now he runs Elevate, a creative document solutions business, where the ethos is no compromises on service and stay close to your customers. Kenny Kemp tackles him at his Sighthill office Few people have Sir Alex Ferguson’s attributes. Yet there are gurus from every walk of life who wax lyrical on the theories of building winning teams. Then there are retired sporting legends who make lucrative earnings on the corporate dinners circuit recounting past triumphs. In all, there remains a massive appetite on hearing how it’s done. Jim Rae is a practical exemplar of actually getting things done in business on a daily basis. No waffle. A former professional footballer with Dundee FC who strives to be a winner, Rae has a hatred of losing and is a tenacious warrior behind his ready smile. He heads up Elevate, a creative document solution business in Edinburgh with global customers that is weathering the economic storm. Rae, now 41, is a tall, striking figure who keeps himself in trim and exudes the air of a team captain who can inspire and is prepared to lead from the front. He’s also the sort of guy you would not want to mess with on a dark night. He is a down-to-earth boss who is yet to reach his prime. While he is aware of his own strengths and weaknesses, he has a major work ethic and has developed a keen vision of where his industry and customers are >>

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INTERVIEW

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going. He’s also working on a major UK project that he’d rather keep under wraps for now, but this will hopefully be on beta-test sometime in October. “I’ve no idea what an entrepreneur really is,” he says. “If it’s about being good at networking, building relationships, spotting opportunities that others don’t spot, well, that’s probably one of my strengths.” Elevate, with a turnover of several million a year, employs 35 people at its base in Sighthill, a bustling industrial estate set up in 1950s with its close links to the city bypass and the M8 to Glasgow. Sitting in Elevate’s “Inspiration Room”, there’s no question that football remains a powerful metaphor for Jim Rae’s business life with signed Pele and Henrik Larsson football jerseys adorning the wall. “You’ve got to put your trust in people and believe that they are always doing the right things,” he says. “I’ve got a fantastic group of people and I’m proud of all of them. They put in a lot of effort. That starts at board level, including my colleagues, Grant Laing, the commercial director; Yvonne Hurry, finance director; Elaine Stroud, our IT manager; Paul Ranaldi, head of account management, and production manager Andy Colbridge. “They all work tirelessly for this business. Nothing is too much trouble and that attitude drives the company when the big contracts kick off.” Rae notes that the business leader and the entrepreneur tends to gets all the media attention, the plaudits and the interviews. “That is only one cog of a pretty well-oiled wheel,” he says. “The people who make it happen are not generally the business leaders. They are part of the process, but the really hard work is done by other people within the business. That’s not me; there are a lot of other fantastic individuals in here who make

sure things go according to plan. Without them, you don’t have any entrepreneurs. I’m not the only person in this business. I might be the front for the company, but the real hard work is done downstairs behind the scenes; they are the real stars at Elevate.” Every business leader pays lip service to their staff, but Rae actually knows that employees, such as Brian Blair who features in Elevate’s recent staff magazine, make the business tick. Brian is a print finisher who has been in the company for 17 years. What does he think is the best part of working, he is asked? “Working with such a great bunch of people and we always have a laugh.” “I’ve genuinely got the easy job,” says Jim Rae, pointing through the Inspiration Room window down onto a shop floor. “I’ve got so much respect for those who are working their socks off for the business and the clients.” After leaving Forrester High School in Edinburgh in 1984, Rae went off to become an apprentice footballer with Dundee on £27.50p a week, then in the Premier League. He played three seasons in the top flight under managers Archie Knox and Jocky Scott, two great sporting motivators. He turned out as a centre half or left back and was at Dundee at the same time as goalkeeper Bobby Geddes, playing at the same time as Tosh McKinlay and Colin Hendry, the former Blackburn Rovers, Manchester City and Rangers player and one of Scotland’s most revered defenders, who captained the country in the 1998 World Cup. “I learned pretty quickly that I wasn’t good enough to make the top level,” he says. “There were better, more skilful players than me and so I had to move down a grade to keep playing – but I had no regrets. Professional football taught me about

The people who make it happen are not generally the leaders. They are part of the process, but the really hard work is done by people within the business

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discipline – that’s something that’s held me in good stead – and working for the greater good of the team.” “It also gives you a real winning mentally, much to Laura, my wife’s, annoyance when we play family games. I have to win at all costs. I keep saying that to my kids; there’s no point playing unless you are trying to win. “If you’re going to do something, you have to do it the best you can, all the time. That’s not to say that you will always be the best or always win, but as long as you strive to do that, then no-one can complain if you’ve not achieved that.” Laura and his children Martin, 16, and Lucy, 13, are at the bedrock of Rae’s success. “Any activity by an entrepreneur or business leader, to do their job well, takes up a huge amount of time and energy,” he says. “If you don’t have support from your wife and family then I can only imagine that it would be extremely difficult. I’m lucky in that I have a fantastic amount of support which allows me to come in early then go out with clients in the evening, which can be fairly regularly.” With two spells as a part-timer with Arbroath, then Cowdenbeath and latterly ten years at Spartans where his 15 minutes of fame was to captain the now-legendary team that made it through to the Scottish Cup fourth round against Premier League Livingston. After leaving full-time football, Rae joined Xerox Business Service as a business development manager and then sales manager for Scotland and the North East of England. He undertook their management training programme, listened and learned about digital print and how to handle demanding customers who always wanted their work done in the shortest of timescales. He left to join The Stationery Office (TSO), responsible for £20m of government print contracts before joining Waddies, the veteran Edinburgh print company. Still in his early 30s, Rae was headhunted to join Docuserve in January 2002 which was set up and owned by entrepreneur Margaret Lang. Rae, as sales and marketing director, and Margaret developed the business, but it reached a crossroads with the board keen to concentrate on outsourcing office


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Team captain: Jim Rae is quick to recognise the contribution his staff make to the business

INTERVIEW

management and administration services. Rae took on Docuserve’s digital print division in a management buy-out in July 2005, while the other division was rebranded as Intelligent Office. In the intervening five years, he has steered the business through the toughest recession in living memory and when some of his major customers hit the buffers. Some predicted that Elevate would have bitten the dust too. But Rae is a grafter. “We never made anyone redundant during the recent economic downturn,” he says. “We kept all of our staff. I remember our chairman Bob Dryburgh, encouraging me and saying ‘we just need to hang in there’. He said that things would turn around again one day, and they have done. “Of course, I don’t think the tough times are over. There’s quite a bit of fall-out ahead for the next year-and-a-half. It’s going to be tough for most sectors, I don’t think anyone is going to escape that.” But Rae says this creates opportunities and his team are flexible enough – and hungry enough – to grab them. He says: “We’ve tried to diversify and to add that little bit extra to our service offerings. We’ve done pretty well with this so far. There’s a tendency when things are going badly to drop your prices, get as much work through the door as you can, but it’s maybe the wrong work. “We never did that; we stuck to our cost structure, offering solutions that we believed in. We stuck to our value proposition.” But he also kept close to the customer, even when they weren’t ready to pay for Elevate’s services. “We made a conscious effort to be a shoulder to cry on, to be a friend and give them advice and help,” he says. “It was a big investment of time for us, but it was the right thing to do. It has started to pay dividends because we’ve won a couple of very good contracts on the back of fantastic working relationships with our clients.” In its early years, Elevate carried out regular work for one of the largest banks in the world, with its global head office close by. This dropped away when the bank collapsed, although some has returned because of >>

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INTERVIEW

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Rae’s tenacity in holding onto the coat tails, but there are new players in this sector that have been able to fill a potentially disastrous void. “Most of the large financial services organisations are still very good – and long-standing – customers of Elevate,” he says. “They’ve been a big supporter of our business. What’s important is the way you manage the relationship with your clients. “I took the decision that there isn’t a lot of new business out there in the current climate and it’s very difficult to get brand-new wins, so while everyone else was off trying to do that, we kept closer to our clients. We wanted to make sure that we were there for them when things picked up.” Another major win is ICS – or International Correspondence Schools – the online learning company that trains about 45,000 people a year. ICS, which uses personalised learning plans, lecture notes and resources that target the requirements of each individual learner, signed a three-year deal with Elevate in March this year. “We’ve been able to help them adapt the learning process for ICS and how it is delivered to students,” says Rae. “We store all their textbooks, produce their CDs and manage their storage process. We send out in the region of 16 million prints per year. And we have helped them re-arrange all their ordering process.” They are now looking at creating a highlypersonalised prospectus rather than a 300-page document with every single course. Elevate is automating the process and with an end document only relevant to the individual who has ordered it, Rae believes the impact will be greater and the returns in terms of student numbers will be higher. He says: “It’s been a real revelation for them and for us. We’ve built such as strong relationship.” One of the largest bio and pharmaceutical research and commercial organisations in the world is also a long-standing major customer. “We were chosen to do their business stationery,” says Rae. “They have 23,000 staff in 60 countries and work needs to be translated into multiple languages. Our online ordering platform receives orders from

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Scotland is a very entrepreneurial place. It’s amazing how many smart people there are on our doorstep everywhere except the United States.” Elevate also produce all the housing sales particulars for ESPC, the Edinburgh property centre, and with his £500,000 leased Xerox digital press running 24 hours a day, seven days a week at the moment, he’s contemplating another machine sometime in the future. Jim Rae is also an ambassador for Winning Entrepreneurs, an organisation created two years ago by Belinda Roberts who set up specialist recruitment and training business Optimum Proactive Training which she sold four years later. She is now a keen supporter of wealth creators in Edinburgh through Winning Entrepreneurs. There are five ambassadors, including Edinburgh property and IT entrepreneur Shaf Rasul, well-known for his role on BBC’s Dragons’ Den online, and Paul Atkinson, the serial Scottish recruitment entrepreneur. “Belinda runs the company and we are there

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as a support,” says Rae. “We are always looking for the right kind of people who want to join. We’ve all got our own businesses and we’ll support the events. It’s very much a networking and support group which is great for smaller to mid-sized companies. They are very entrepreneurial and generally Scottish. “If you’re a business leader you have an inbred desire to succeed, to be better than anyone else. If you don’t have that, it is very difficult for your company to develop and grow. The guys I’ve met are absolute winners. “Scotland is a hugely entrepreneurial place, but very understated.” Jim Rae, who is also a member of the more established and much-admired Entrepreneurial Exchange, says that there are plenty of “phenomenal” companies in Scotland run by energetic people who have opportunities to develop and grow. “It’s amazing how many smart people there are sitting on our doorstep,” he says. Jim Rae still takes his football seriously, too. Now he is assistant manager to Mark Lamb at Coldstream, who play in the East of Scotland League First Division. He even put on his boots for the first two games of the season to help out his young team. “Mark’s got the technical aspect with all the coaching badges and I’ve got the former professional background,” he says. “We work really well together. “I’ve not really got the pace to play any more, so I’m very happy to coach and develop the young guys coming through. It’s a fabulous club to be involved in; the town and the committee really get behind the team. There is huge passion about their football team.” When Hearts played a pre-season friendly in the Borders town that overlooks England across the Tweed, there were more than 500 who turned up to watch Rae’s team. “They are some of the friendliest people I have come across and it’s a joy to be involved with a community like Coldstream,” he says. “The work behind the scenes at the club is fantastic and I tell the players they must never take any of that for granted.” That’s another of Jim Rae’s winning business mantras; never take anything for granted. Indeed, another practical business nugget worth sharing. n


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COMPANY PROFILE

While Scottish-based Bright Purple has been a player in the UK recruitment market since 1995, the firm has made huge strides forward over the last 18 months focusing on diversification and growth in both domestic and global markets. Through its latest merger with City-based specialist Taranata, the company’s managing director Nick Price is now looking to take Bright Purple to a higher level.

UK recruitment specialist Bright Purple steps up global ambitions

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ince it began trading in 1995, Bright Purple Resourcing has grown its reputation as one of the UK’s leading IT and Financial Services recruitment specialists. The company places quality permanent and contract staff amongst a range of public and private sector organisations, from SME to blue-chip level. Existing clients include Barclays Wealth, JP Morgan, Tesco Bank, Brewin Dolphin, NHS Scotland and investment management firm, Baillie Gifford. Despite the economic challenges facing the recruitment sector through the global downturn, Bright Purple has continued to push for growth. The company brought in new chairman Peter Flaherty, a recruitment industry veteran who led UK giant MSB International to a successful £210m floatation, whose experience has proved invaluable in the new strategy. In stepping up their focus on financial services recruitment, Bright Purple has secured a raft of new clients and an accompanying commercial success with revenue increasing from £12.6m to £18.7m in the last financial year, growth of 48 per cent. Currently operating from offices in Edinburgh and London, Bright Purple has now taken another major step forward with ambitious plans to develop its business overseas. The company began to roll out its global expansion strategy last year, taking on client assignments in Moscow and Dubai. It has also recently announced a merger with City of London-based niche investment banking search firm Taranata, a move which will significantly enhance its access to the international marketplace. Taranata’s London and India operations are now being rebranded as Bright Purple. Meanwhile the firm’s owner, Justin Willis, has taken on a new role as the head

Nick Price, founder of Bright Purple, believes there is great potential for the firm in global IT and financial services recruitment markets

“we have built the business on the back of a great team which is really committed to delivering a quality service for clients” of Bright Purple’s London operation to coincide with its move to Tower 42 in the heart of the city’s financial district. Bright Purple’s founder and Managing Director, Nick Price said: “I’m really proud of what we’ve achieved over the last 16 years, growing to become a leading specialist player within the UK recruitment sector. We have built the business on the back of a great team which is really committed to delivering a quality service for clients. “Last year’s strong focus on the financial services sector did come with a degree of risk but we felt the timing was right. We had many of our existing clients asking us to expand our delivery in this

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area while many of the other agencies were shedding staff.” Price says the Taranata merger now has the potential to turn Bright Purple into a fully fledged global player. “This is a huge step forward for us. Bringing someone with Justin’s experience on board will give us a significantly stronger presence in London and will also enable us to really develop our international strategy. Taranata has a strong presence in many of the global markets we want to reach, specifically New York and Singapore. We are confident and very excited that this move will enable us to leverage our expertise and sector knowledge in those areas.” After an exceptional year, the next 12 months could see a significant increase in air miles for Price and his colleagues as they roll out an ambitious strategy to further expand Bright Purple’s client base, within the UK and beyond.

Bright Purple Resourcing Ltd The Eagle Building, 19 Rose Street, Edinburgh, EH2 2PR Tower 42, 25 Old Broad Street, London, EC2N 1HN Tel: 0131 473 7030 (Edinburgh) Tel: 0207 877 0093 (London) Website: www.brightpurple.co.uk Twitter: twitter.com/BrightPurpleR LinkedIn: www.linkedin.com/in/perfectlyplaced

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Sight specific: Will Cavendish, who along with Ollie Collier, heads Pufferfish

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INTERVIEW

sphere there everywhere A grey balloon started life as an arts project, but it was soon coveted by rock stars and developed the potential to be a commercial phenomenon. Kenny Kemp talks to its Edinburgh creators

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It is like having a swirling piece of the Solar System in your garage. In a dimly-lit Edinburgh lock-up, next to a bike shop, we gazed in awe at a spinning, coloured orb; luminous and surreal. This is a wonderful invention called the PufferSphere. Scotland must claim its origins because, while the two creative minds behind this visual experience hail originally from London and Sydney, it was devised here with the help of Edinburgh University. Firstly, no artificial stimulants were taken in the writing or preparation of this article. But the PufferSphere is a beautiful object which is >>

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already becoming a fixture at live events where an “experiential” sense of mood and occasion are the order of the day. Rock band Coldplay love them, and Paul McCartney bought some for his world tour, while last year’s Eurovision Song Contest in Russia splashed out with them to brilliant effect. But this is only the beginning of the PufferSphere phenomenon – and it bodes well for Pufferfish, the Edinburgh-based business behind the spheres. For example, the Opening Ceremony of the London 2012 Olympic would be the ideal showcase for an array of PufferSpheres; one representing every nation and every sport. It could be Scotland’s graceful contribution to the Games. What is a PufferSphere and what is its purpose? Basically, it’s a 60cm - 4m diameter (grey polymer balloon or acrylic photoreactive) sphere with a powerful projector attached to the bottom. The ball is inflated with air, or carefully mounted, and the projector – which gives off 5,000 -22,000 lumens (that’s a measurement of brightness on a surface) beams specks of colour designed on any graphics enabled computer. Using complex polymetric algorithms, the two-dimensional design is projected onto all of the inner surfaces of the globe. The software bends the colours onto the surface to give a fantastic moving effect. If you think about how the RBS’s logo is painted onto the grass of a Six Nation’s Rugby pitch, which is parallax viewing, then you can visualise how this occurs in 360 degrees – and brilliantly lit by a projector. Edinburgh-based Pufferfish is the creator of the spheres, while Coldplay have had a hand in the development of a robust sphere able to withstand the trials of a touring rock band’s lighting rig. Chris Martin, who took several PufferSpheres on the Viva la Vida Tour in 2008 and 2009, described it as part of “a light show you’ve never seen before”. The two creatives behind Pufferfish are Ollie Collier and Will Cavendish, both now 30, and former Edinburgh undergraduates. Ollie, with curly hair and blond Biffy Clyro beard, is a reticent business figure who studied music technology at Edinburgh University. The final element of his course was a real-time design research and development project.

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“A part of this was looking at how to unite graphics and sound,” he says. “I wanted to make digital content more ‘experiential’. This started the project that ultimately led to the creation of Pufferfish.” In their final undergraduate years, Ollie and architecture student Will Cavendish, now with trimmed Thor Heyerdahl facial hair, began working on how to liberate digital content from a flat computer screen into the third dimension. The pair collaborated on an interactive art installation in spring 2003. “It was an art project, there were no commercial aims whatsoever,” says Ollie, “We wanted to explore the ‘experiential’ nature of digital media – or the lack of it.” The installation was taken to an arts festival in Sao Paulo in Brazil which sparked interest in what is now known as “generative-design”, an emerging digital art form that is attracting a generation of digitally-savvy designers. “It was really interesting for us,” says Ollie. “We went across and gave a talk. That process helped us distil the key messages. It was very well received and it was then we began to consider some aspects of this commercially. Up until then we hadn’t done this.” In Ollie’s view, music and motion graphisc on a computer screen are not well represented. He felt there was more that could be done. “A standard computer doesn’t do music and other digital content justice; there was so much more potential in the presentation of creative work,” he says. “Moving a mouse or tapping a keyboard seems hugely limiting. We wanted to create an installation that gave people a much broader or deeper experience.” He is a composer who plays concert piano, loves Bach and the complex music of Squarepusher, but loathes Stockhausen. He started a physics and music degree before concentrating on digital music technology. He played and composed in the experimental music festival call Dialogues with other people from the burgeoning experimental music scene. “I spent a lot of time playing and studying Bach’s work,” he says, sitting in the windowless Edinburgh meeting room. “I hate all the abstract theory – which I why I dislike Stockhausen. “What’s fundamental to me is the beauty of

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the music. I’m more interested in the end sound of the music.” Will is from a scientific family with a pedigree stretching back to William Cavendish, the brilliant physicist who gave his name to the Cavendish Laboratory in Cambridge, whose first director was Edinburgh-born James Clerk Maxwell, its professor of experimental physics. It wasn’t music but three-dimensional architectural design for structures that fascinated Pufferfish’s chief technology officer. Ollie remains excited by how people – especially children – interact and experience the installation, calling it a “digital campfire”, while Will and his technical team have been examining how the technology will evolve to become more complex. There are applications for new kinds of learning and therapy involving touch and sight. Edinburgh University plays a crucial role in turning these visions into something much more commercial. When the company began, the university agreed to give Ollie and Will an extra three months as pseudo staff, housed in the basement of Milson House, in the architecture department. The department had a studio free during the summer which allowed the pair to finish off their project for Brazil. Since then, Dr Mark Wright, an academic in the university’s Informatics department has been involved in strategic research incorporating Pufferfish’s technology working with the founders. “We started exploring the commercial side of the project,” says Ollie. “That was difficult at first because we had to concentrate on a single idea and put other ideas onto the back burner for a while.” The first creation was a full-size Formula One simulator in a sphere, used at trade shows and F1 events, which led directly to the formation of the limited company. It also highlighted a major issue for the fledgling company; the size and footprint of any commercial installation. Increasingly, the duo began to think about the business value. Ollie undertook a masters degrees in interactive and digital design at Ravensbourne College of Design and Communication in London while Will started on Edinburgh University’s pre-incubation scheme (EPIS), which has just closed. Pufferfish had a small loan from EPIS which was £7,500.


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“Unfortunately, the pre-incubation scheme closed this year, it’s a shame because it was a way to gain your commercial legs and have an academic and commercial mentor to help with developing the idea,” says Ollie. When Ollie and Will returned to their drawing board in late 2005, they applied for a Smart: Scotland award and an Ideasmart award, now replaced by Starter For Six. “These two awards addressed two components of the original project,” says Ollie. “The Smart: Scotland award was looking at the simulator style and the components, while the Ideas: Smart award was specifically for the kind of sculptural display element. It is that sculptural display element that we brought to the market first.” Ollie and Will still had a surfeit of avenues to explore but they focused on expanding one big idea commercially. They won the Ideasmart award which gave them £15,000, while Smart: Scotland would deliver them £50,000, with the provision that they could match this with funding from elsewhere. The Smart: Scotland awards, set up by Scottish Enterprise, have been a significant bonus for commerciallyviable Scottish firms spinning out from emerging technologies. Among those benefiting have been the likes of Scapa Technologies, Aquatic Diagnostics, Crusade Laboratories, Giltech and Renewable Devices Swift Turbines – good company for Pufferfish. “Winning the awards was very important to us,” says Will. “It was third-party validation of what we were doing commercially. If you don’t go through the process, you don’t know if you’re idea is just hype or whatever. You’ve no idea about the context until someone from outside looks at the real viability. “In terms of our intellectual property, we protected what we could. We knew early on there was potential and part of the Smart award was an IP review to protect any patents, etc.” Pufferfish was set up in 2004 but the company lay dormant until after the awards. Will says: “We had to see that there was serious scope to support ourselves financially in terms of salaries. The company was probably viable in late 2005, with our award officially confirmed in 2006.” Ollie moved back to Edinburgh and joined >>

INTERVIEW

We started exploring the commercial side of the project. That was difficult at first because we had to concentrate on a single idea for a while

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the EPIS scheme on a temporary basis and this allowed a commercial mentor. “He was invaluable in helping me set up the business side of the company,” Ollie recalls. But to unlock the £50,000 they required seasoned investors to share their vision. The company approached Andy Crofts who had experience of working in a number of technology companies. “We liked Andy’s approach: and he liked ours, so we started working together,” says Ollie. They then approached Professor Peter Denyer, the co-founder and chairman of MicroEmissive Displays which created the tiny digital phone camera. The brilliant Edinburgh professor and business figure became an investor and then chairman. Will recalls the first time they met. “Peter came in and spent a couple of hours with us and listened to what we were doing. He understood it from day one. He could see something of himself in what we were doing.” Denyer’s link with angel investors Braveheart Ventures helped match up the Smart award funds. Denyer’s premature death from cancer, aged 56, in April this year remains a massive shock to all at Pufferfish with Ollie and Will grateful for Denyer’s direction and technical understanding. Ollie also learned to enjoy sailing the waters of the west coast of Scotland, thanks to Denyer’s invitation to join him on his yacht Tigger Too, based at Ardfern. “One of the key things about Andy and Peter joining us was that from day one we were into selling products, and making sure that sales cycle was going on from the beginning,” says Ollie. With more than £100,000 of investment behind them, Pufferfish was able to build a commercially viable prototype with the first PufferSphere rented out in August 2006. “As soon as the company had the resources we moved pretty quickly to become a company operating in the real world,” says Ollie. “What’s the point of a company developing anything if no-one’s going to pay for it? Everything stemmed from that and all our development was led by the market.” There was a lot of unpaid demonstrations but the Big Chill music festival was the first paying PufferSphere customer. Since then the orders books have grown. In August 2007, the spheres returned to the Big Chill’s Sanctuary

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Peter came in and spent a couple of hours with us and listened to what we were doing. He understood it from day one

stage, looming over the audience and the crowd like a technicolour moon, as bands such as Coldcut, Future Loop Foundation, LJ Kruzer, Juana Molina and Roedelius took to the stage. In Stockholm, in early 2008, two spheres were used to stunning effect at the national rock music award ceremony and celebration called Rock Bjomen. In March 2008, a giant 3D oceanographic model was used at the National Oceanography Centre Open Day in Southampton, displaying data compiled by the centre’s Dr Andrew Coward, including changing sea temperatures, levels of salinity and the speed of ocean currents. In May 2008, Google's Zeitgeist Europe events showed off two PufferSpheres in orbit above the crowd with live video feeds of the performers being run through the sphere. An eye-catching sphere was used by fashion designers at Aquascutum during London Fashion week in 2009, then Pufferfish

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was called in for the stunning Eurovision stage at 2009’s contest. There were six, two-metre spheres inflated with air amid all the stunning pyrotechnics and lighting above the 16,000 audience at the Olympiyski Stadium in Moscow. Everywhere people are drawn to them in an almost spiritual way. Closer to home, Pufferfish is involved with InSpace, the public gallery within Edinburgh University’s School of Informatics. As part of a scheme run by Arts and Business Scotland, Pufferfish and the InSpace team, led by Prof Jon Oberlander, are working collaboratively on a number of research and public projects. Pufferfish sponsor the Inspace project bypart financing a PufferSphere and support, primarily in the form of specialist consultancy for the PufferSphere throughout its use during the Inspace 2009/10 arts programme. In return Pufferfish’s growing band of techies, such as Tim Prochak, are given access to School of Informatics research into the ways in which people interact with and behave around the sphere. Inspace’s other research partners include NASA, Google and the Royal Academy of Engineering, and there are connections with the Edinburgh International Science Festival and the Edinburgh International Film Festival. Since Peter Denyer’s death, Pufferfish has moved on with Iain Mackay, a former vice-president of Wolfson Microelectronics in Edinburgh stepping up from his non-executive director role to chairman, while Geoff Kell – an experienced company director and former CEO of Factonomy – has joined to manage the business. The company has a turnover in the region of £1.5m but this could jump substantially if a breakthrough is made in mass producing the spheres. Commercially, Pufferfish is working to increase sales and leasing of its large and medium spheres, with the digital signage market being a key growth area in the company’s sights, but it is also interested in developing smaller spheres that might be used in the domestic market – and could become the Christmas phenomenon in tens of thousands of homes in 2011, before the Olympics. A PufferSphere in every home would make Ollie and Will very happy. n


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with Jock Yuler >> Book? Don’t bank on it Remember Jim Wallace? He was Scotland’s Enterprise Minister back in 2003 when Lloyds TSB Scotland was in a much happier place. He opened the business lounge in Glasgow’s West George Street with some fanfare. It was a clever idea for the bank and mirrored a similar initiative in Henry Duncan House in Edinburgh’s George Street. Alas, no more. One entrepreneurial group finished a regular meeting in late August and asked to rebook. “Oops, sorry,” replied the young lady on the desk. “We’re not making it available to the public anymore. Didn’t your business manager tell you?” Not a dickey-bird, it seems. The suite of rooms is now being used for staff training. Perhaps our banks do require more training, but I’m sad that another great banking idea has simply disappeared.

>> Electric light orchestra When we were young, rock bands had proper names like The Beatles, The Troggs, Grateful Dead and Tonto’s Expanding Headband. Now they are plain silly with British Sea Power, LCD SoundSystem, The Gaslight Anthem and We Are Scientists. So perhaps guitarplaying Peter Hughes should think about setting up Scottish Engineering (the band and not the industry group he represents)

for next year’s T in the Park? Suggested debut CD title: Power to the People. Peter has been a consistent proponent for Scotland’s world-class engineering prowess. In a recent Daily Record article, he sang the praises of a list of great businesses, among them Weir Group, Wood Group, Babcock Marine, Thales, BAE Systems, Penman Engineering, Walker Precision Engineering, Allied Vehicles, Mactaggart Scott, Hyspec, Alexander Dennis and Clyde Blowers (all great names for album tracks). But, top of the pops, there is Aggreko, Scotland’s company of the year, which provides the temporary power supply for so many music festival events around the world. Rock on, Peter.

>> The curse of true love Angel investment adviser and decent cove Nelson Gray, formerly on the board of the Entrepreneurial Exchange, has identified a delicate business trait that’s often overlooked. Let’s call it Best Buddy Business Blockage. It’s when two college mates set up a business, live on beans, work their socks off, start to make some cash, then one meets a girl or partner, and falls in love. “You then get a different biological risk profile between the two founders,” he says. “That’s something that needs to be properly handled – and often it isn’t.” He believes VCs, investors and banks have to recognise this and be warned. Sounds like a thesis there, Nelson.

>> Drilling prospect Did Greenpeace need to expend so much carbon chasing Cairn Energy in Greenland’s icy seas? The chances of hitting a gusher by drilling only two exploratory wells is something like 50,000 to one. But knowing Sir Bill Gammell’s recent penchant for success, Ladbrokes would be likely to shorten these odds when the contrarian entrepreneur told the City: “I am encouraged that we have early indications of a working hydrocarbon system with our first well”. Environmentalist or not, it’s some story.

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BIT OF A CHAT

Clan plan: Nathan Pike

>> Accies all areas Who ever said second-row forwards where lacking in brain cells to be businessminded? Not me. Well, not to Nathan Pike, the 6ft 8in, 17st 12lb forward who played professionally for Edinburgh and Rotherham rugby clubs. Nathan’s had the bright idea of setting up Clan Fitness, an outdoor regime using drills and apparatus that kept the Highland clans ready for battle. Pikey’s entrepreneurial excursion, backed by Frank Docherty of Careers Associates, is at Raeburn Place in Edinburgh, home of the Accies. Bring your own woad.

>> Hacks know hacking It’s very hard to believe that a former editor of the News of the World didn’t know how his journalists were getting their stories. Surely the natural thing for any editor worth his salt is to ask at their internal news conferences how they got a story. Readers, rest assured, the BQ Scotland editor reliably informs me that no phone-tapping was used in this edition.

>> And a parting shot on … leadership The illustrious Scottish general Douglas Haig said in August 1916: “Our losses in July’s fighting totalled about 120,000 more than they would have been had we not attacked. They cannot be regarded as sufficient to justify any anxiety as to our ability to continue the offensive.”

BUSINESS QUARTER |AUTUMN 10


EVENTS

AUTUMN 10

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-scotland.co.uk

September

19th Scottish Retail Excellence Awards 2010. Crowne Plaza, Glasgow. Contact: Lisa Lynas, l.lynas@dailyrecord.co.uk

21st Scottish Council for Development and Industry Influencers’ Dinner, guest speaker David Wilson, Director of Energy, Scottish Government. Thistle Altens Hotel, Aberdeen (7.30pm). Contact: fiona.downie@scdi.org.uk

25th CBI Annual Conference, Grosvenor House on Park Lane, London. (9am). Contact: cbievents@cbi.org.uk

22nd Scottish Council for Development and Industry Influencers’ Dinner, guest speaker John Swinney MSP, Cabinet Secretary for Finance and Sustainable Growth. George Hotel, Edinburgh (7pm). Contact: claire.miller@scdi.org.uk 23rd Scottish Council for Development and Industry Energy Dinner, guest speaker Malcolm Webb, chief executive, Oil & Gas UK. Crerar Golf View Hotel & Spa, Nairn (7pm). Contact: lesley.rhind@scdi.org.uk 24th Scottish Chambers of Commerce ‘Economic Breakfast’, guest speaker Tom Vosa, head of market economics, Clydesdale Bank. Deer Park Golf and Country Club, Livingston (7.30am). Contact: West Lothian Chamber of Commerce 28th Scottish Council for Development and Industry Influencers’ Dinner, guest speaker Brian McBride, managing director, Amazon UK. Aberdeen Exhibition & Conference Centre, Aberdeen (7pm). Contact: fiona.downie@scdi.org.uk

25th CBI Annual Conference Dinner, Grosvenor House on Park Lane, London. (7pm) Contact: sue.thornton@cbi.org.uk 25th Scottish Chambers of Commerce ‘Master Class Lunch’ with Lady Susan Rice, managing director, Lloyds Banking Group Scotland. David Lloyd Centre, Monifieth, Dundee (12pm). Contact: www.dundeeandanguschamber.co.uk 28th Ayrshire Business Awards Gala Dinner 2010. Gailes Hotel, Irvine (7pm). Contact: Ayrshire Chamber of Commerce. 29th Institute of Directors in Scotland, Annual Conference and Dinner, guest speakers include Rt Hon Lord Smith of Kelvin, chairman of Glasgow 2014. Cameron House on Loch Lomond. Contact: Iod.scotland@iod.com

November

28th - 29th Scottish Low Carbon Investment Conference. Edinburgh International Conference Centre. Contact: lowcarbon@edinburghchamber.co.uk

17th Connect Scotland Investment Conference. George Hotel, Edinburgh. Contact: info@connectscotland.co.uk

29th Scottish Chambers of Commerce Annual Dinner 2010. Hilton Hotel, 1 William Street, Glasgow (7pm). Contact: events@scottishchambers.org.uk

19th SCDI Scottish International Awards 2010, guest speaker Mayor Rudy Giuliani, former mayor of New York City. Thistle Hotel, Glasgow. Contact: Nicola Seely, awards@scdi.org.uk

30th Angels Den SpeedFunding event Glasgow. Dallas McMillan, Regent Court, Glasgow (2pm). Contact: cameron@angelsden.co.uk 30th Scottish Green Awards 2010, guest speaker Tim Smit, founder of the Eden Project. Glasgow Science Centre. Contact: l.lynas@dailyrecord.co.uk 30th Winning Entrepreneurs Annual Dinner and Awards Ceremony, guest speaker Stuart Miller, chief executive of Young Enterprise Scotland. The Stables at Prestonfield House Hotel (6.30pm) Contact: enquiries@winentrepreneurs.com

October 5th Scottish Chambers of Commerce ‘Understand how BlackBerry can take your business forward...’ Inspire Conferences, Beach Boulevard, Aberdeen (12pm). Contact: Aberdeen & Grampian Chamber of Commerce 5th The Entrepreneurial Exchange: ‘Networking: Charismatic Connections’, guest speaker Russell Wardrop, Kissing With Confidence. Dakota Hotel, Motherwell (5:45 pm). Contact: info@entrepreneurial-exchange.co.uk

24th Institute of Directors Annual Dinner, guest speakers Alistair McGowan and Virgin Atlantic chief executive Steve Ridgway. Lancaster London Hotel, Hyde Park (7pm). Contact: events@iod.com 25th Insider & Scott-Moncrieff SME 300 Awards 2010. Glasgow Radisson Hotel (7pm). Contact: Contact: Jackie Malloy, jmalloy@insider.co.uk 26th The Entrepreneurial Exchange Annual Dinner: Celebrating Entrepreneurial Success in Scotland. Hilton Glasgow (7pm). Contact: info@entrepreneurial-exchange.co.uk 26th The Edinburgh CA Dinner. Sheraton Grand Hotel & Spa, Edinburgh. Information: www.cadinner.co.uk/Edinburgh.

December 2nd Edinburgh Chamber of Commerce ‘Speed Networking Marathon’. The Hub, Edinburgh (9.30am). Contact: Edinburgh Chamber of Commerce.

6th The Entrepreneurial Exchange: ‘Social Media Supper Club’, guest speaker John McLeish, Equator. Bonham Hotel, Edinburgh (6.45pm). Contact: info@ entrepreneurial-exchange.co.uk

6th Edinburgh Chamber of Commerce ‘Premier Series Dinner with Jon Moulton, chairman of ‘Better Capital’. George Hotel, Edinburgh (5.30pm). Contact: Edinburgh Chamber of Commerce.

6th Scottish Council for Development and Industry Influencers’ Dinner, guest speaker Stuart Cook, senior partner Transmission and Governance, Ofgem. Inverness (7pm). Contact: lesley.rhind@scdi.org.uk

9th Fife Chamber of Commerce ‘Self Assessment for the Self Employed’. Wemyssfield House, Kirkcaldy (9.30am). Contact: Fife Chamber of Commerce.

7th Scottish Chambers of Commerce ‘High Noon 5’ with Secretary of State for Scotland featuring Rt Hon. Michael Moore MP. Hilton Hotel, Earl Gray Place, Dundee (12pm). Contact: Dundee & Angus Chamber of Commerce 7th Scottish Leadership Awards 2010, guest speaker Paddy Ashdown. Grand Central Hotel, Glasgow (7pm). Contact: Jackie Malloy, jmalloy@insider.co.uk

BUSINESS QUARTER | AUTUMN 10

15th West Lothian Chamber of Commerce ‘Festive Networking Event’. Location TBC (5.30pm). Contact: aileen.ross@wlchamber.com Please check with the contacts beforehand that arrangements have not changed. Events organisers are also asked to notify us at the above e-mail address of any changes or cancellations as soon as they know of them.

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