The Government, says Nick Clegg, is fighting the entrepreneurial corner. Speaking at the launch of the entrepreneur festival MADE on Friday, he told a roomful of business royalty that the Coalition Government is committed to being on the side of the entrepreneur.
“The number of new business start-ups last year was one of the highest in our history,” he said, “and we want to encourage that trend”.
His words came at the end of a week in which his Liberal comrade Vince Cable took a step out of the firing line to cut the ribbon on a £200m “Growth Accelerator” programme. The aim is to give 26,000 growth-hungry firms the support they need to kick-start their expansion plans.
Like Clegg, Cable too talked of spurring the economy and supporting innovation. And so, Whitehall’s constant rhetoric about the unwavering need to create new businesses continued.
While in favour of such supportive measures, Confused.com founder Sara Murray does challenge the notion that new businesses are what we need, without question.
“The Government is encouraging everybody to go and start a business,” she tells BQ. “I don’t believe that’s right personally.”
“The UK is already ahead of most of the world in terms of the number of start ups [400,000 per year at the last count] and the majority of those fail. Telling everybody to start a business is not the right thing to do.”
What Murray – whose days are now dominated by her £4m-a-yeartechnology business Buddi – does believe in is backing winners. Clearly this is what Cable is trying to do – albeit with a wider area of focus than what Murray advocates.
“We should focus on the high growth business – the top 10,000 of them who under EU rules comply with their 30% growth per year.
“Those are the businesses that account for the new jobs everyone’s talking about. A lot of those other businesses just get people off benefits. They are being urged to start a business so they can’t be counted as unemployed.”
Certainly the UK economy would benefit from more people in business like Murray, who has proven to be adept at securing funding throughout her entrepreneurial career.
“Confused came out of an internet bubble and it was an extraordinary market in that, as a start-up in the UK, you normally can’t get any funding from anywhere.
“I had the idea and wrote the business plan overnight and the next day went to 3i and asked for £6m and they said yes, which just doesn’t happen ever.”
But happen again it has. Earlier this month Odey Asset Management, Crispin Odey’s US$7bn hedge fund, took a 20% stake in Buddi.
It reportedly values the company in the “tens of millions” bracket and is understood to be crucial to Murray’s aim to land a key contract with the ministry of Justice.
Murray’s idea for Buddi was conceived when one of her children went briefly AWOL in a supermarket. It is now used by local authorities to monitor dementia sufferers, mental health patients and also has applications in the security sector – including the monitoring of young offenders here and overseas.
According to the Telegraph Buddi is one of four companies being consider for a Ministry of Justice deal to supply the technology on a system which tracks ex-offenders.
With an Odey representative joining Buddi’s board, Murray will have another figure to challenge, persuade and reassure alongside the likes of Sir Nigel Rudd, the chairman of Invensys.
She says: “Investors often have very little commercial experience but may have learnt some general business principals, one of which is focus.
“So as soon as I say we should do this and this they start to worry and panic [but] I continually have discussions to explain that we are focused.”
Such discussions may be triggered by shifts into new territories or towards new applications for the Buddi system. The global potential of the firm looks to be huge, though, with Murray eyeing growth in a number of markets. “The US market is like the UK health market, in that it’s particularly underserved.” Of particular interest to Murray – alongside Buddi’s security applications – is demand in the US for the ability to monitor vulnerable senior members of society.
“Over age of 60, 30% of people have a fall every year and if you ask anyone in that age group, are you concerned about falls and the answer is no - it’s not until they are in hospital that they start thinking about it.”
In the US they are presented with technology [that does this] by Philips but we’ve done a partnership with a company that outsells Philips two to one in America.
“We are looking at whole of western Europe, Canada and Asia at some point not the next 12 months.”
Murray does take the advice of her advisory board seriously, however, and is a keen champion of the chairman’s role – even for companies with a handful of staff.
“I always have a chairman even when I’ve only got two or three people. There’s just something about having someone that looks at the business in a completely different way. It’s also hugely valuable to have an advisory board – a group of people that you don’t have to give very much to who just enjoy being part of being involved.
“In return you get really different advice that you can’t get all from one person.
“Sometime you are making decisions where you are thinking this is either going to be Harvard Business case or this is going to destroy the company and I don’t know which it is before I’ve done it and embarked on a decision. Ask lots of people and hopefully you’ll minimise your chances of it going wrong.”
Turning back to the national business agenda, Murray calls for more encouragement for women in the engineering sector.
“I left school without having ever heard the word engineer. I never understood what an engine looked like. I fly a helicopter now but I don’t even know how to open the bonnet of my car which is ridiculous,” she says.
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