The Sunday Times
February 8, 2009
February 8, 2009
A green firm ridiculed on TV is having the last laugh - turning over £1.5m a year
The Dragons were scathing about Very-PC... but now it's a success
WHAT could be better than appearing on Dragons’ Den, being lauded by the judges and showered with cash? Well, how about appearing on the BBC show, being pilloried and humiliated, then seeing your business succeed anyway – thus thumbing your nose at the television’s experts?
That was the experience of Very-PC, a start-up that specialises in energy-efficient computers. It was formed five years ago by three idealistic graduates and today employs 20 people in a smart new factory. Last year the company made a profit of £321,000 on a turnover of £763,000 (profits were boosted by some outstanding consultancy payments).
For 2008-9, predicted turnover is £1.5m. The future may look bright for Peter Hopton, the managing director, but he said the sweetest part of his success was proving the Dragons wrong. “They really went for the jugular,” he said. “It’s very hard to be on the receiving end of that. I think I survived due to the resolve of the company’s founders and support from friends and family. After the programme was broadcast we got 100 letters and e-mails of support from customers and the public.”
Few would-be entrepreneurs appearing on the show experienced quite such a mauling as Hopton did last August. His valuation of the company at £5m and request for £250,000 investment drew scorn and anger from several of the entrepreneurs and he was sent packing without a penny.
Peter Jones, the Dragon who started out running a computer company and now owns Phones International Group, called Very-PC “an averagely crap business”, and when told that Hopton had been in talks with other investors asked: “Are they in this country, or do they live on another planet? Are they human?” James Caan, the fifth dragon (not pictured), was also scornful and said: “I’ll tell you the offer I’m going to make you – I’m out.”
Like all good business ideas, Very-PC is based on a relatively simple premise: saving some of the vast amount of energy wasted by computer systems from the big manufacturers.
“What we do is not that revolutionary, it’s just really good engineering,” said Hopton. Most of the wastage stems from power-supply equipment that generates excess heat and the big, inefficient fans needed to cool this equipment.
“The large IT companies are concerned with economies of scale and with fitting standard components into standard boxes – energy efficiency is a secondary consideration,” said Hopton. “What we do is to cherry-pick processors, fans and power-supply equipment from around the world. We buy in components from Germany, Ireland, Thailand and other countries, assemble them ourselves in tailor-made boxes and run them with our unique software that optimises power supply.”
The firm’s products tend to cost 10% to 15% more than the equivalent from the global manufacturers, but Very-PC says this is easily outweighed by reduced electricity bills. Saving power in a computer that is turned off may seem a tiny element in the battle against increasing CO2 emissions, but Hopton points out that most computers spend 90% of the time doing nothing, either in sleep mode, turned off or just waiting for the user to hit the next key.
“By tweaking the voltage of components and using our own modification of Windows drivers and power-management software, we can reduce the 100 watts used by a computer that is turned on and doing nothing to less than 30 watts.”
Hopton set up the company with his brother Andrew, who is sales director, and a friend, Simon Bown, in charge of technical support, after all three graduated in electrical engineering from Sheffield University. Very-PC’s new plant, built on an old landfill site in the city’s Parkwood Springs district, was opened last year by Hilary Benn, the environment secretary. Sheffield University and other educational institutions are now among the company’s largest customers.
The importance of energy efficiency in the IT sector is underlined by Tim Danton, editor of PC PRO, which gave Very-PC its award as Environmental Innovator of the Year in 2007 and a Highly Commended last year. “A lot of effort is now being made on energy efficiency by big vendors like Dell and HP. What Very-PC is doing is taking that concern and putting it into every area [of manufacture],” he said.
“You can call us eco-geeks if you like. When we set out we wanted to make something that would really make a difference to carbon emissions,” said Hopton. “Worldwide the amount of C02 pumped out by the IT industry is equivalent to that produced by aviation – it’s about 3% of total emissions.” So perhaps that brutal encounter with the Dragons was not such a bad thing after all. It has allowed Hopton and his team to maintain their idealism whereas taking an investment from the Den might have led to a takeover.
Show me the money: How to finance your eco start-up
Part 1: GETTING ADVICESo you have an eco-idea that can save the world from climate change and make a fortune at the same time? But how do you turn a fledgling “cleantech” business into a multi-million-pound global giant?
The first step, before even thinking about attracting investors, is to start networking, get the right advice and ready your business for the market.
Naturally, many of the steps you need to take are the same as for other small firms, green or otherwise.
The good news, though, is that there is a wealth of sources of advice as well as seed-funding that are specifically intended to help green businesses take root.
There are environment-focused “incubator” services where green entrepreneurs can hook up, swap experiences and share resources, either online or not.
Peterborough is rapidly becoming the UK centre for environmental industries and EnviroCluster (www. envirocluster.net)has low-cost office space at its Eco Innovation Centre( www. ecoinnovationcentre.co.uk). There are similar programmes in other regions, such as Envirolink Northwest www.envirolink northwest.co.uk). Your local Business Link (www.businesslink.gov.uk) will help to point you in the right direction.
“The first thing early-stage businesses need to do before they seek investment is develop their business plans, protect their intellectual property and generally assure potential investors that the concept has legs,” says Michael Sippitt of Environmental Investment Network (www. environmentalinvest.com), a joint venture between the Environmental Industries Commission and Clarkslegal, a specialist legal firm in the environmental sector. The Technology Strategy Board (www.innovateuk.org) has also set up several Knowledge Transfer Networks for various business sectors. The environmental one is at www.tinyurl.com/c3q9mc.
Patenting an invention is a tricky business. Although it can cost only a few thousand pounds initially, that can escalate to tens of thousands. Advice on best strategy is essential before diving into the market. The Carbon Trust (www.carbontrust. co.uk) Incubator Scheme offers up to £70,000 of advice to qualifying schemes and free access to legal and business services at Grant Thornton and Mills & Reeve. The advantage of getting advice from eco-sector specialists is that they have access to networks of like-minded businesses and investors and can give your concept credibility – a crucial factor for success.
That’s the easy bit: now you need to start raising the money.
- by Matthew Wall
Follow our three-week series Getting advice Part 1 this week on where to find help for your fledgling eco-business. Bag The Money Next week: part 2 tells you how to secure investment. Grant Aid Part 3 covers sources of public-sector funding.
That was the experience of Very-PC, a start-up that specialises in energy-efficient computers. It was formed five years ago by three idealistic graduates and today employs 20 people in a smart new factory. Last year the company made a profit of £321,000 on a turnover of £763,000 (profits were boosted by some outstanding consultancy payments).
For 2008-9, predicted turnover is £1.5m. The future may look bright for Peter Hopton, the managing director, but he said the sweetest part of his success was proving the Dragons wrong. “They really went for the jugular,” he said. “It’s very hard to be on the receiving end of that. I think I survived due to the resolve of the company’s founders and support from friends and family. After the programme was broadcast we got 100 letters and e-mails of support from customers and the public.”
Few would-be entrepreneurs appearing on the show experienced quite such a mauling as Hopton did last August. His valuation of the company at £5m and request for £250,000 investment drew scorn and anger from several of the entrepreneurs and he was sent packing without a penny.
Peter Jones, the Dragon who started out running a computer company and now owns Phones International Group, called Very-PC “an averagely crap business”, and when told that Hopton had been in talks with other investors asked: “Are they in this country, or do they live on another planet? Are they human?” James Caan, the fifth dragon (not pictured), was also scornful and said: “I’ll tell you the offer I’m going to make you – I’m out.”
Like all good business ideas, Very-PC is based on a relatively simple premise: saving some of the vast amount of energy wasted by computer systems from the big manufacturers.
“What we do is not that revolutionary, it’s just really good engineering,” said Hopton. Most of the wastage stems from power-supply equipment that generates excess heat and the big, inefficient fans needed to cool this equipment.
“The large IT companies are concerned with economies of scale and with fitting standard components into standard boxes – energy efficiency is a secondary consideration,” said Hopton. “What we do is to cherry-pick processors, fans and power-supply equipment from around the world. We buy in components from Germany, Ireland, Thailand and other countries, assemble them ourselves in tailor-made boxes and run them with our unique software that optimises power supply.”
The firm’s products tend to cost 10% to 15% more than the equivalent from the global manufacturers, but Very-PC says this is easily outweighed by reduced electricity bills. Saving power in a computer that is turned off may seem a tiny element in the battle against increasing CO2 emissions, but Hopton points out that most computers spend 90% of the time doing nothing, either in sleep mode, turned off or just waiting for the user to hit the next key.
“By tweaking the voltage of components and using our own modification of Windows drivers and power-management software, we can reduce the 100 watts used by a computer that is turned on and doing nothing to less than 30 watts.”
Hopton set up the company with his brother Andrew, who is sales director, and a friend, Simon Bown, in charge of technical support, after all three graduated in electrical engineering from Sheffield University. Very-PC’s new plant, built on an old landfill site in the city’s Parkwood Springs district, was opened last year by Hilary Benn, the environment secretary. Sheffield University and other educational institutions are now among the company’s largest customers.
The importance of energy efficiency in the IT sector is underlined by Tim Danton, editor of PC PRO, which gave Very-PC its award as Environmental Innovator of the Year in 2007 and a Highly Commended last year. “A lot of effort is now being made on energy efficiency by big vendors like Dell and HP. What Very-PC is doing is taking that concern and putting it into every area [of manufacture],” he said.
“You can call us eco-geeks if you like. When we set out we wanted to make something that would really make a difference to carbon emissions,” said Hopton. “Worldwide the amount of C02 pumped out by the IT industry is equivalent to that produced by aviation – it’s about 3% of total emissions.” So perhaps that brutal encounter with the Dragons was not such a bad thing after all. It has allowed Hopton and his team to maintain their idealism whereas taking an investment from the Den might have led to a takeover.
Show me the money: How to finance your eco start-up
Part 1: GETTING ADVICESo you have an eco-idea that can save the world from climate change and make a fortune at the same time? But how do you turn a fledgling “cleantech” business into a multi-million-pound global giant?
The first step, before even thinking about attracting investors, is to start networking, get the right advice and ready your business for the market.
Naturally, many of the steps you need to take are the same as for other small firms, green or otherwise.
The good news, though, is that there is a wealth of sources of advice as well as seed-funding that are specifically intended to help green businesses take root.
There are environment-focused “incubator” services where green entrepreneurs can hook up, swap experiences and share resources, either online or not.
Peterborough is rapidly becoming the UK centre for environmental industries and EnviroCluster (www. envirocluster.net)has low-cost office space at its Eco Innovation Centre( www. ecoinnovationcentre.co.uk). There are similar programmes in other regions, such as Envirolink Northwest www.envirolink northwest.co.uk). Your local Business Link (www.businesslink.gov.uk) will help to point you in the right direction.
“The first thing early-stage businesses need to do before they seek investment is develop their business plans, protect their intellectual property and generally assure potential investors that the concept has legs,” says Michael Sippitt of Environmental Investment Network (www. environmentalinvest.com), a joint venture between the Environmental Industries Commission and Clarkslegal, a specialist legal firm in the environmental sector. The Technology Strategy Board (www.innovateuk.org) has also set up several Knowledge Transfer Networks for various business sectors. The environmental one is at www.tinyurl.com/c3q9mc.
Patenting an invention is a tricky business. Although it can cost only a few thousand pounds initially, that can escalate to tens of thousands. Advice on best strategy is essential before diving into the market. The Carbon Trust (www.carbontrust. co.uk) Incubator Scheme offers up to £70,000 of advice to qualifying schemes and free access to legal and business services at Grant Thornton and Mills & Reeve. The advantage of getting advice from eco-sector specialists is that they have access to networks of like-minded businesses and investors and can give your concept credibility – a crucial factor for success.
That’s the easy bit: now you need to start raising the money.
- by Matthew Wall
Follow our three-week series Getting advice Part 1 this week on where to find help for your fledgling eco-business. Bag The Money Next week: part 2 tells you how to secure investment. Grant Aid Part 3 covers sources of public-sector funding.
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