Interview with Dr Paul Atherton

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Serial entrepreneur – January 2015

Could you give us an overview of what you’ve been up to since leaving university?

In 1974, I decided to do a PhD in Physics and joined the Astronomy Group at Imperial College. I worked on a project developing optical interferometers for use on large telescopes.  After a great deal of persistence, we succeeded in stabilising the interferometer system using capacitance micrometers and piezo actuators. The group was constantly asked for copies and as a result, we set up a small company, Queensgate Instruments, to supply our academic colleagues, who were using them to study the influence of Dark Matter on the rotation of spiral galaxies. For seven years I combined my academic career designing and building instrumentation for Astrophysics with working for the company in a part time role. I was then offered a Professorship in the US which I accepted. But, at the same time, Queensgate Instruments won a large contract with NASA to put one of our systems on the Space Shuttle.
I managed to defer my academic post for a year but in the end I stayed with Queensgate full time and never did take it up.

I then did an MBA at the London Business School and managed the company for the next 15 years, transitioning it first into nanotechnology instrumentation and then into fibre optic devices. In 1998 we won a 50 million dollar contract to supply these devices to the telecoms industry and in 1999 we were acquired by SDL, later JDSU for a substantial, if not ridiculous, amount.  A year later I left to become an Angel Investor and have built and sold several businesses since then.  I joined the Board of Imperial Innovations in 2004 and helped professionalise and systematise the business before floating it on the AIM and raising several hundred million pounds to invest in UK technology start-ups.  I am now focusing on Nexeon (silicon anode materials for lithium ion batteries), Phase Focus (lens-less imaging of live cells from Sheffield University) and Infinitesima (a nano-scale imaging company), as well as some pro bono and mentoring activities around technology entrepreneurship.

Do you think you were always destined to become an entrepreneur, or did it just happen?

If I look back now at my career I am truly astonished where it has led me. I believe that I always had some kind of aptitude to be an entrepreneur, but it was never a conscious goal. You need to have passion, focus and the ability to get people to work for you. I have always tried to do interesting things, rather than trying explicitly to make money.

Who or what would you say have had the greatest influence on you and your career?

Probably Margaret Thatcher!  She tamed the power of the unions and modernised the British economy.  In the mid-1980’s Britain was fairly broken. This helped me to make the decision to stay in Britain rather than move to the US.
And Professor Jim Ring, who was Head of the Astronomy Group at Imperial College and saw further and more clearly than others about the advantages of interferometric techniques.


What advice would you give to anyone thinking of starting a technology company today?

Be brave and be patient. Don’t expect to get rich quickly, and try to grow organically so you can avoid getting diluted. You should not believe all you read in the press about it happening quickly. Do not imagine that you will follow in another’s path. Analysts are mostly wrong and entrepreneurs are often very lucky. Most start-up companies fail due to poor management.

What is the secret to generating value from technology innovations?

I think the most value comes from the transfer of trained and experienced people going into industry. Large industrial companies have the ability to leverage their skills and knowledge, and they also have access to finance and the market.
In a start-up, a good management team is more important than a good technology.  They understand the market and are often able to find a better more suitable technology to solve their customers’ problems.

There is increasing interest in collaboration between academia, corporates and early-stage businesses. What advice would you have for start-ups in these circumstances?

Start-up companies need to be very careful about their relationships to retain value for their owners. Large companies are experienced and so they are aware of the traps and pitfalls relating to IP – which could easily be compromised.  Start-ups should focus on gaining customers rather than on strategic partnerships or investments, in order to preserve their independence and ensure that their exit value is not limited.  It is very easy and very common for start-ups to be trapped by their naivety.

Which technologies do you think are most likely to make a major impact on our society in the next few years?

The future is extremely difficult to predict!  However, we are all living longer and getting richer, and as a consequence, healthcare technologies become more important. In particular I think that Personalised Medicine is a very interesting area – there are many new tools becoming available which give us the ability to treat individuals with tailored drugs.

I would love to find a good Photovoltaic technology – one that was cheap enough and efficient enough; but sadly we are a long way from where we need to be here to solve our clean energy issues.

The UK is often cited as being excellent at technology innovation; what is holding the sector back from being more competitive globally?

I believe that UK is good at technology innovation and is just behind the US and Israel. But commercialisation is more difficult due to the lack of large industrial companies in the UK. The US has significant advantages with large markets and large companies. The US financial markets value companies more highly than the UK which in turn provides good returns for US VC companies – which in turn increases the amount of funding for commercialisation. The US has invested heavily in military and space and this develops many highly trained people and highly specialised technology companies.

It can take many years to create a supply chain. In the UK we have allowed large companies which had strong supply chains to go bankrupt rather than transitioning them into modern companies. Now, as we focus on High Value Manufacturing, people are realising how long it takes and how hard it is to build a strong industrial base in the UK.

Do Governments provide sufficient support for innovation?

There is a great deal of support but, although it is well meaning, it can be misguided. The UK programmes are developed by civil servants who have not had a technical background or scientific training, and this limits their understanding. In Europe, Japan and the USA programmes are run by individuals with deep scientific training, technical knowledge and skills. What we need is a technocratic administration with a long term view.

Are there any big challenges left that you would like to achieve personally?

I would like to see Nexeon and Phase Focus become global forces in their industries. And I believe that I still have a couple more start-ups left in me. I might also do something philanthropic. But whatever it is it has to be interesting. I am still trying to decide what I will do when I grow up!!