Martin Velasco believes that Scotland has a lead in tackling global disease. He’s not a doctor nor a professor of chemistry, but a European business figure and an angel investor. He has an impressive CV. He is an engineer with an MBA from INSEAD who is chairman of AC Immune, a Swiss drug development company and one of the leaders in innovative therapies fighting to combat Alzheimer’s Disease; the founder and chairman of the Infantia Foundation, an organisation aiding children in the developing world; he’s also involved with In Vivo Fertilisation to help couples have safer babies.
If that was not enough, he is also the chairman of two of Scotland’s most scalable companies in the sphere of Big Data analytics, now a hot topic for business. These companies are Sumerian and Aridhia, based in Edinburgh. Martin Velasco feels strongly that it is imperative that Scotland, which is already a hub for outstanding life sciences, flexes its muscle on the global stage.
“Where is Scotland going to build its competitive advantage? Where should we [referring to Scotland] develop leadership in the market? If you analyse this, there are not many areas where countries have a natural advantage over others. For example, Switzerland has finance and insurance, with UBS and Zurich, pharmaceuticals, machine tools, but if the country wanted to enter, for example, nano-technology, this is very specific, and it costs a lot of money and investment.” “When you think about what Aridhia is doing, which is bio-informatics, I believe there are the inherent skills, expertise and capacity in Scotland in terms of healthcare and clinical work. There is the medical side and the IT side, so combining the two is a natural path for Scotland to develop this new and important industry. When we want to do something with a purpose, it is not just about making money but bringing something to society in terms of building strength and becoming world leaders. This is something that we want to apply to both Sumerian and Aridhia,” he says.
Asked about the importance of building companies of scale in Scotland, Martin Velasco is clear that Europe is different from the United States. “You invest so much energy and emotion when you’re building a company for a purpose, and you want the company to continue to grow and develop. Trade sales are natural in Europe because it is difficult to grow. Speed is the essence when you are growing. Yet, if you want to develop something rapidly internationally, you need a lot of funding. Whether it is Switzerland or the UK, it is not easy to raise £250m to do a massive deployment. In the United States, it is much easier. Instead, in Europe, we develop good companies with good technology and sometime down the road there is a trade sale. Now we don’t want to do that with our Scottish businesses this time: we want to build Aridhia as a company that can become one of the world leaders. David Sibbald [Aridhia’s co-founder] and I are very much aligned about that. We want to give something to society and provide value. There are not many opportunities to make something different, that is lasting and competitive. Here we have an opportunity.”
“We think Aridhia is going to be a major Scottish company, reaching the very top, but progressively. It is very difficult to grow a standalone with organic growth. It is important to have the right partner. There is more co-operation and collaboration going on now. Nobody has the whole thing alone. We need partners and this will help speed up the process. But it is important to identify your core skills.”
His first involvement in Scotland was with David Sibbald and Atlantech Technologies in 1997. He became an early investor in Atlantech and David asked him to join the board because of his experience in telecommunications.
Originally from Bilbao, Martin Velasco went to study in Ecole Politique in Lausanne in 1972. He has lived there ever since. He completed an engineering degree and took a job in industry for four years. He then went to INSEAD to undertake an MBA before joining McKinsey, the consultancy.
“I’m from the Basque country, which is why I feel comfortable in Scotland. In the Basque country people put a great deal of store in family, friends and community,” he says. He felt comfortable in Switzerland, making his home on the shores of Lake Leman, with its snowy Alpine peaks in the distance. The two-hour EasyJet flight from Geneva to Edinburgh is a perfect route for spanning his business interests. At McKinsey, he worked on a variety of strategic projects from banking and telecoms through to cement manufacture. He quit McKinsey and decided to run his own consultancy where focused on telecommunications and the emerging internet.
“I became very interested in innovation and helping start-ups as a business angel. I’d made some small investments before I came to Scotland in 1997 and had a meeting with David. It was supposed to last 30 minutes, and we spent almost four hours discussing Atlantech and the strategy. A few weeks later I made an investment in the company and joined the board. Since then David and I have become very close friends. When you are in start-ups together, there’s a moving and often emotional element. You go through good and less good times and this builds a great bond.” When Atlantech Technologies was sold to Cisco in March 2000 for £120m, it was one of Martin’s most successful exits, and the timing was perfect. Armed with several million, the pair began looking for something to do next, and they realised in 2002 that the massive hype over the Y2K issues, where a mass collapse of computer systems was predicted as the time and date changed from 99 to 00 created an opportunity. The much-vaunted collapse never came but companies had purchased new systems and were not clear what to do with them.
With David Sibbald, as chairman and chief executive officer, and Martin as co-founder playing an active role supporting the company and meeting potential customers, they saw an opportunity.
“The corporations and industries invested a tremendous amount of money in terms of security and capacity and telecommunications. We said that IT was not managed like a normal factory production. So there might be something we can bring to IT. Then David had the idea of looking at data analytics. The company was set up in April 2002. Very rapidly Sumerian specialised in the arena of Big Data analytics. David stepped aside for Calum Smeaton to take over as CEO, while remaining executive chairman, and today the company is run by Bryan Clark, a former KPMG partner and its chief information officer, who spent eight years previously at EDS.
Today Big Data is the smart play. It’s the term on everyone’s lips and there are plenty of theories about how it should be used. However, a decade ago, it was in its infancy and Sumerian was able to develop its own systems.
“We increased levels of transparency, linking each transaction with IT consumption, performance and latency. It’s about technology being better aligned to work with the business. It was about capacity planning to provide data for management to make far more informed decisions. We were not even calling it Big Data at the time. This is a term that is at the forefront of all kinds of businesses today as they strive to become more efficient and use the data that they have more productively. We called what we did IT analytics and step-by-step industry leaders started to refer to it as Big Data analytics. We’ve been doing this since the beginning.” Martin Velasco is clear that both companies have a strong ethical ethos - and that it does good things.
“Of course, we want the company to be successful, but we have a purpose with what we are doing at Sumerian to provide the capacity to reduce costs and manage risk for businesses. When companies need to manage a very complex IT environment, and IT is more and more important for the business, then we are able to step in and take the temperature and make recommendations.”
Specifically, he talks about Aridhia’s prospect and its ability to provide far-reaching patient care improvement for the health sector, something close to Martin Velasco’s heart.
“Aridhia brings something that is unique to health care management. I’m active in the field of life science in Switzerland so I can see the wider horizon. There are a lot of major life science and medical device companies there and the environment is very vibrant. A firm that can slice and dice all the complex data and deliver business efficiencies is going to have a good future.”
His involvement with Anecova, an in-viro fertilisation company which is able to place fertilised human eggs back into the womb for a more natural human development, and work in the treatment of Alzheimer’s with Ac Immune, provides a unique insight into similar markets in Scotland for the likes of cancer research and diabetes.
David began discussions with Professor Andrew Morris, who is dean of medicine at the University of Dundee, and they knew that the challenge with chronic diseases, and in predicting how care and medical resources might be better deployed, could be met more easily using shared technology across industry and medicine.
“Then we were all talking about managing healthcare information more efficiently because we knew there was the possibility of developing new applications. However, there was a problem that it might become a ‘usine gaz’ [gas factory or talking shop], when you are trying to grasp something very difficult. So our idea was ‘why don’t we extract existing data’ and use this more coherently.” Aridhia takes existing data and puts it onto a platform. From this, it becomes possible to see the clinical path of the patient, from one end to the other. This, in turn, allows medical professionals, often specialist in their own fields but unable to see the wider picture, manage health in a much more efficient, overarching way.
“We are specialising in the chronic diseases such as diabetes, cancer, cardio-vascular and acute respiratory problems. And also neurological diseases. The reality is that these diseases are concentrated in elderly people, often they have multiple problems, yet there has been no real transparency or integration of this information and so the care might not be optimal.
“This is 65-70% of the costs of the NHS. So there are many elements that make this combination useful because it allows clinicians to become more efficient and effective. It is better for the patient and for the cost of the service. If we can provide early warnings by identifying the best treatment because today we have ‘average for average patients’ yet there is no such thing as average. Everyone has their own genes and one profile and it might be better to have treatment A rather than treatment B. So this is something that can be done.”
Aridhia has recently agreed a partnership agreement with Pibotal, a company which was part of EMC and in the area of Cloud computing. “This is good common sense for us. When Aridhia implements a platform somewhere the data streams in from all the patients and this requires huge amounts of server capacity and infrastructure storage.” Turning to Sumerian, which has been established for longer than Aridhia and has a larger profile, he explains and the launch of a new software-as-a-service application for firms to unlock their own ‘Big Data’. Sumerian Workbench is a Cloud-based app which is a fresh departure for the Scottish firm. It is in beta program with some interesting developments still to come.
“We are very excited about Sumerian Workbench. We’ve a mountain of experience on this score and a world-class team working on this software.
“We are very excited about Sumerian Workbench. We’ve a mountain of experience on this score and a world-class team working on this software. One of the key elements of Sumerian is that we are able to extract data from very different sources within an organisation, whether it is a monitoring tool or applications log file or other types of data. Our clients now need to integrate this data onto a platform where it can be modelled and then analysed. We build that for clients, using their own specific data, and make the model work and this allows us to have very reliable data for forecasting. We’ve now taken another step forward. Now, a client can access our Sumerian Workbench in the Cloud, upload their own data and start doing some of the analytics themselves – we can then add the value down the line if necessary.” While Scotland has done much to promote its global Scots, who live and work beyond often dreich and windy nation, Martin Velasco represents another group of pro-Scottish business leader who are born elsewhere but are well disposed to Scotland, its way of business and the success of nation. We should salute this group too.