Barn and bred in a Yorkshire village

Barn and bred in a Yorkshire village

A few years ago inventor Michael Gould locked himself in the outhouse at his village home to build some software. What emerged from the barn has since been taken up by the biggest firms on the planet, secured US$150m in investment and become a Silicon Valley darling. But despite rapid global growth, his firm will never leave its Yorkshire homeland, he tells Andrew Mernin.

The Yorkshire barn which gave birth to software firm Anaplan is a world away from the sun-kissed Californian HQ it lives in today.

But while the palm tree-lined grid of Silicon Valley may be its official base, its motherland remains crucial to its ongoing growth.

For despite holding office in the world’s technology epicentre, in the shadows of Google, Facebook and friends, the company deems Yorkshire a more fertile ground for skilled staff.

Buoyed by the US$100m in new investment it secured in May, the firm plans to double the size of its York R&D team to 90 within a year.

The expansion plans come amid a move into a larger site at the old Bonding Warehouse, which until recently had lain derelict for most 15 years.

Since Anaplan’s launch in 2010, its Yorkshire team has provided the innovative software development, while their San Francisco colleagues have been largely tasked with selling it to the world. And they’ve done that in spades, with HP, Nokia, Diageo and McAfee now standing among its clients.

The fact that inventor and company founder Michael Gould is a long-time resident of the North Yorkshire village of Yearsley is perhaps one reason why the company maintains a footprint in Yorkshire.

But much more significant, says Gould, are the readily available skills in the county, compared to Silicon Valley where the best talent gravitates towards the tech world’s biggest firms.

He says: “It’s a real challenge for start-up companies to fill skills gaps in Silicon Valley. Once a company is growing fast and beginning to be known then it becomes a bit more feasible to find people – and actually we’re making progress there now.

“But a lot of the software giants have their offices there, you’ve got firms like Google and Facebook as well as a huge number of start-ups. So it’s a very competitive market and difficult to be distinguished.

“Contrast that with UK where there are not so many companies around, particularly in the North of England, but there is a great pool of talent and some really strong university computer science departments. One of our early developers was a PhD student who came from York University, for example, and she’s been a fantastic member of the team. So there is some really good talent here without quite so much of the hot competition from the larger companies.”

Anaplan’s CEO Fred Laluyaux, who is permanently based in Silicon Valley, agrees, telling the press recently: “We’ve long believed the North of England offers a substantial and untapped source of great [software] engineering talent. The region has a strong heritage in financial software: the core products of SAP and IBM were both built around applications developed here.”

Michael Gould02Anaplan’s software helps businesses build plans and assess execution against them. Since its commercial launch in 2010, it has built up a base of over 20,000 users, a network of 11 offices in seven countries and has raised around US$150m in investment.

Alongside private backers, funding has come from some of the technology market’s biggest players, including salesforce.com, the cloud computing giant currently ranked by Forbes magazine as the most innovative firm in America.

Revenues have grown from US$10m in 2012 to around US $40m last year – with the firm generating around US$10m per month in 2014 so far.

And all of this from a business created in the stone outbuilding at Michael Gould’s rural home less than a decade ago.

“It was a risky decision,” says Gould of quitting his job at the now IBM-owned software empire Cognos to develop his own software in 2006.

“I recognised it was going to be a long journey to the point where I had a commercial product. Building a system like this takes a significant amount of time, so I worked essentially by myself on the core calculation engines of the product.”

After two years of working in isolation, surrounded by old stone walls of farmers past, a breakthrough came in the form of investment from Guy Haddleton, his Anaplan co-founder.

Haddleton was formerly CEO of performance management software firm Adaytum, which he co-founded and was later sold to Cognos for a reported US$160m.

As Gould’s endeavours evolved into a viable business, the company put together a small team of developers in York.

Anaplan’s software is a cloud-based business modelling and planning platform for sales, operations and finance. Its creation was a response to what Gould calls “legacy systems”, built by tech giants IBM, Oracle, Microsoft and SAP, which he believes are often used inappropriately by businesses or are unsuited to certain requirements.

“There were a number of products that had essentially been doing the rounds for 20 years or so. There was a need for a new platform and new technology to solve the problems that these rather older products were not really addressing very well.

“Getting our first few customers was a real challenge because our competitors of the large established companies who’d been operating for many years. So getting to the point where early customers would take a risk with an unknown newcomer in the space, was a big milestone to get past."

AnaplanIT security empire McAfee was the first major player to put faith in Anaplan, then others, like HP, Procter & Gamble and American consumer giant Kimberly-Clark, followed.

The company’s aim from day one was to be global, rather than starting slowly by building up a home market.

Gould, who visits San Francisco at least every six weeks, says: “When we first got investment, we discussed where we should be based. We intended it to be a global business, and since we were selling to global companies, Silicon Valley was the natural choice. So that’s where we chose to put our head office, sales and marketing, but we continued to keep our R&D facility in York since we were having huge success in bringing on really talented individuals here.”

Today Anaplan is in the midst of international expansion, with the company using small offices with a handful of staff to target strategic territories.

“We are expanding a lot in the Far East, and set up an office in Singapore last year. Since then we’ve opened in Malaysia and Sydney and we are also seeing a lot of uptake in Russia. Obviously there’s a tense situation there at the moment but from even a couple of years ago in the early stages of our sales, about 10% of our customers were in Russia so we’ve got some good opportunities there.

“We are currently looking at Latin America which, although we don’t have a presence there at the moment, is probably next on our list.”

Its exponential growth in recent years has, in part, been driven by global economic turbulence.

“When things are going well in business, the numbers essentially look after themselves. Companies focus on building whatever it is they are building or selling products and running with it. When things are tough and companies have to look very closely at their finances and keep a very close eye on cash flow, that’s when the kind of detailed planning that Anaplan provides is ideal.

“So we’re seeing great success within the construction sector, for example, with a number of UK house-builders using our software. I’m sure they always did focus on their numbers, but they now have a more urgent need to look more closely at their costs and particularly the timing of projects.  From when they start committing to costs to when they expect to get sales coming through, that detailed level of tracking allows them to keep control of their costs and stay profitable. In many ways the recession was an opportunity for us to help companies improve their processes.”

Given that Anaplan had less than 30 employees two years ago, and now has over 200, has the firm experienced any growing pains lately?

“We’ve learnt over the last two years of really fast growth that everybody’s job changes. There is a continual reassessment of what everybody’s job is. My job has changed dramatically over the years, from purely writing code, to managing a small team and then becoming much more strategic in terms of being engaged with our key customers and directing the overall company strategy.”

As further growth ensues, and Gould’s current role of CTO no doubt changes yet again, will a permanent move to California eventually become inevitable?

“Silicon Valley is a lovely place but I’m happy to stay put in Yorkshire,” he says from his new home on the bank of the River Ouse.