A serial entrepreneur's journey, from contactless to crowdfunding

Podcast transcription - 30th august 2018

Peter Cowley:                  So welcome again to another Invested Investor Podcast. This time we have Neil Garner who I've only actually met once before very, very briefly of the opening of the Bradfield Center in Cambridge. So this will be interesting because I will be learning a lot from this. So first of all, Neil, tell us a bit about your background?

Neil Garner:                      I've got a Ph.D. I did a masters in engineering at York University that was some which course. So I was sponsored by British Telecom. So I spent about a year of my activity working across different BT subsidiaries. Worked at Martlesham in Ipswich and I then also ended up drafting my masters, doing a Ph.D. sponsored again by BT. Which I guess I'd probably call artificial intelligence now. So I was working on neural networks and speech and language processing for detection of speech and heavy noise environments.

Peter Cowley:                  This was in the 90s was it?

Neil Garner:                      This was in the 90s, so mid-90s. I came away from that environment realizing that modeling human brains and audio to processing and neural networks was pretty different to do back then. But actually, I came away thinking that we'll never be able to do the kind of things that are now part of Siri and Alexa with Amazon.

Peter Cowley:                  We couldn't because there wasn't the processing.

Neil Garner:                      There wasn't the processing power, it was a very, very hard job to do 20 years ago.

Peter Cowley:                  Okay and then purely you used to work for BT for a while because they usually want people to stay on, don't they?

Neil Garner:                      It's a little bit ironic but although I did have offers to work with BT, I ended up working for a consulting organization and was called Detica, down in Guildford. They hired me because they wanted people who understood mobile given the background. So I got involved working with them on what was sort of like emergency services projects around the early days of sort of tech for radio. Using text messaging to do signaling and alerting and safety-critical things. Also, then got involved in sort of GPS positioning systems. I actually did some fishery protection work and so on of NGIS systems. It was kind of a good background in kind of working on public sector and large sector deployments in such particular environments.

Peter Cowley:                  Were you consulted as in writing reports or were you actually executing in writing code?

Neil Garner:                      A little bit of both. So I got the discipline of requirement specs, business specifications, working on European standardization projects. But actually where my heart was, was more in building stuff. So I ended up by writing software and specifying software and that kind of area.

Peter Cowley:                  Then you moved on to another consultancy after a few years, didn't you?

Neil Garner:                      That was an interesting move. So I can't remember the background of it but I thought I wanted to move away from Guildford, maybe back to London. But actually, I ended up getting a job with a company that's based in the same science park. Back down in Guildford, it's a bit ironic. But actually, it was a company called Consult Hyperion, which if you look at them, they're a niche - what I call boutique consultancy business. But what I didn't realize, it's only when I got into the work, is they were working with all the cards schemes, global network operators, banks, startups, anything to do with the next generation of transactions. Which when I ended up with a job there when I was leading the team that actually built stuff.

Peter Cowley:                  This was the early 2000s now?

Neil Garner:                      Early 2000s, yes.

Peter Cowley:                  Yes, okay. How big a company was that?

Neil Garner:                      It hovered between sort of a 30-50 people at different points in time with associates and so on. So it's actually a reasonable size consulting business but not one of the real big consulting players.

Peter Cowley:                  But really useful to see how a small-ish business works when you come on to when we talk about Proxama.

Neil Garner:                      So one of my goals, when I joined there, was I wanted to be on the board. I wanted to be a technical director. But I got into a great position, I did end up getting on the board and I did end up running probably almost half of the business. Anything that was designing and building, pioneering and pilot projects. All sorts of different sort of mobile payments, banking, sort of contact list, all those sorts of activities.

Peter Cowley:                  Who else were the customers not for Visa people like that?

Neil Garner:                      Yeah, I can talk about this but we did actually built the first contactless payment terminals for American Express and MasterCard. We actually wrote the software for the sim toolkit app used by Vodafone for MPesa. My team designed and built and specified a thing called Sky Card, which is a pioneering credit card deployed by Barclays and Sky and MasterCard. Which you actually put into the Sky Box to do banking and payments. There are some pretty interesting sort of projects that we worked on. But a thing for me was as we built stuff as any organization that builds software does, we built libraries and tools and capabilities. That in my head, I thought actually this is stuff we can productize.

Neil Garner:                      So we built more and more things that we thought we can do in a more scalable way. No disrespect to the rest of the board because they were totally amazing people that had those relationships and grew the business from where it kind of was. But I think ultimately, they left the consulting, great relationships, great positioning. But I was really in my heart, I wanted to start to build products.

Peter Cowley:                  This is very interesting actually. We'll take it a little bit further because we often see companies that are pitching, which are really a consultancy. They want to productize. It's very difficult for an angel to do that because they do not necessarily believe that the individual who has been used to selling consulting can actually sell a product.

Neil Garner:                      Absolutely.

Peter Cowley:                  How did that conversation go within the company?

Neil Garner:                      So I think for a while, I had the ability to kind of start to do that kind of thing. We productized a lot of the work that we were doing. So you could sell the consultancy but you could do it more cost-effectively. But I think as time went on and also because life plans had changed a little bit because I was based down in Guildford. I had got a flat in Guildford, my wife had a house in Norfolk.

Peter Cowley:                  Goodness.

Neil Garner:                      We sort of went through is actually if we're going to have a family, we'd like to have somewhere that was a little bit more rural. Made the decision that if we're going to set up home, that's going to be based up in Norfolk.

Peter Cowley:                  You would be mid-30s, early 30s now would you?

Neil Garner:                      Very early 30s so that was I think it was about 2004-2005.

Peter Cowley:                  Let's talk through that trigger. You are in a position which is obviously paying well, you're really enjoying yourself, you’re the director of a board. You then become a startup - an entrepreneur. That is a major change.

Neil Garner:                      Yes.

Peter Cowley:                  Talk me through your thought process and how you executed on that?

Neil Garner:                      So the way it ended up working was probably like many people. Four days a week were down with the company, down in Guildford or with customers or in London or whatever. Then Friday was always a home working day. I started to do a little bit of digging about the local community and the feasibility of if I was to do something myself, what would it be, how would it work, who would I work with? What sort of things would I kind of do? So I built a plan up over probably about a year of what I think it would look like and what the business would do.

Neil Garner:                      Then I guess took the plunge, we moved to a house where I got a really lovely office. So we got our daughter then and the whole thing was if I've got an office at home, I could work from there. That was the base.

Peter Cowley:                  You obviously jumped out of a fairly reasonable package and into what? Into nothing, just savings or?

Neil Garner:                      Yeah, the way it worked was I got made a director on the board of the company but actually what that ended meaning, I bought some shares. But because they were shares and I wasn't earning mega bucks, I ended up taking out a loan to buy the shares. I was a bit naïve at that point and I thought, well, that's great. I thought I had a bit of a dawning realization of I sort of been promoted, I'm now on the board and I'm now got less money than I had beforehand. But what ended up happening was basically when I left, the company bought the shares back. So I kept the loan, I had the money back from the shares and that was my seed capital.

Neil Garner:                      I had a friend of mine who actually had some work he wanted to do that was linked to, I think it was one of the original Innovate UK grants or something.

Peter Cowley:                  Or TSB in those days.

Neil Garner:                      TSB grants where I think we got a £10,000 grant for that project, which was then going to go to me to help him do that. Back then as well if you remember, the banks were a little bit more liberal with their funding. Again, people say to me, never ever, ever do it but I second mortgaged. Then that was the working capital to get the business going.

Peter Cowley:                  Right. So at this point, you're working from home. Is just you, is there or?

Neil Garner:                      Just me.

Peter Cowley:                  Yeah, fine. Doing what sort of thing?

Neil Garner:                      In the initial stage, it was a little bit of consultancy I suppose, just to kind of get a little bit of capital and relationship going. But the first project we did was for a bank customer I had beforehand that was actually linked to contactless. So we did, it was a consultancy study that was building things. It was literally proving how fast could contactless work for unattended machines. With the idea that actually it could depend on how you could deploy it. You can then work out what the spec was going to be for a bank to deploy terminals into unattended places. Depending on what 4G, 3G network authorization performance was to decide whether or not you did basically online authorization or offline authorization with a slightly more expensive device.

Peter Cowley:                  Yeah, so I was going to compare with the original Oyster cards in London but they're wired. So this is a wireless. So the mobile comes back in. So that will keep you blacklist or whatever it is in the local device. So you don't have to talk into the cloud or you don't.

Neil Garner:                      Yeah. The other project that we had, that's probably domain anyway say it was with Sky. We ended up doing up a sort of a fairly unique campaign with Sky for a movie launch. Which was basically a smart card that you were sent as a VIP Sky customer. You could put in your Sky Box, was branded for that movie brand and you unlock the preview to the movie. The idea that you would then download and watch the movie. Actually, that worked really well. So that was basically the first of the projects that we did for a major UK bank and for Sky. That was sort of really was our first-year revenue.

Peter Cowley:                  So for listeners, this company goes onto the stock market at some point. So this is moving from what effectively one man bound in a house to the stock market. Let's talk through that journey. How long was it between when you formed the company and you listed?

Neil Garner:                      So in the end, it was just under eight years, went through quite an interesting journey to get there. It had two phases. My first employee was hired about a month in because those two projects I talked about, I needed someone to be building stuff while I was going out and building the relationships and building the business. So, Tim, our first employee joined and I got an office space in the city in Norwich, which was local and there wasn't many offices back then. We built a relationship and again it's public domain, with MasterCard. So we ended up this little company in Norwich, building MasterCard's prototypes and technology for mobile wallets and payments and NFC activities.

Peter Cowley:                  Not within phones at this point, was it?

Neil Garner:                      It was within phones.

Peter Cowley:                  It was in phones?

Neil Garner:                      So we were working with them actually on the first Nokia prototype phones that had come out that had an NFC technology in them. That was actually you'd be able to do things like marketing, loyalty cards, loyalty transactions, and payments.

Peter Cowley:                  So which year was this then?

Neil Garner:                      This was starting in about 2006/7.

Peter Cowley:                  Okay, before the iPhone even.

Neil Garner:                      Well before the iPhone came out.

Peter Cowley:                  What was the name of the company? It was called Proxama when it's listed but it was something else at this point?

Neil Garner:                      At the initial phase and it is amazing a good name or not, I called it Glue Four Technologies. So it was a bit of play on words. So it was like gluing four technologies together, which were mobile, the web, interactive TV, and smart cards. So the premise was or the vision, all of those channels were all coming together. Actually, to make those channels come together, you need something that you have on you as a consumer, which then was a smart card. That you can take to use across those different channels. I think the ultimate vision then was that smart card would be in your mobile phone that you would be then able to take across the different channels that you're communicate with to be the embodiment of you across those different channels.

Peter Cowley:                  Right. So you're taking on staff every year, taking a few? How fast are you growing?

Neil Garner:                      We ended up getting to about 15 people relatively quickly through 2006, 2007, 2008. Then there was a little bit of a bifurcation that happened. They came across us in 2008 ... No, 2007 it was, a company called American Banknote, which is actually what you think it was. Is they had a heritage going back to Paul Revere who was actually the person that did create the first banknotes in America. They were the company that did print the original banknotes. They actually ended up being the business that issued smart cards, bank cards, stock and gilts and so on. Part of their strategy was looking at some of their bigger competitors that in some point in the future cash was going to decline, cards that were being issued were going to end up going into mobile phones.               We were this little company-

Peter Cowley:                  They could foresee this, could they?

Neil Garner:                      Yeah, they saw that. We had a few conversations and they decided to invest in the business. Again, myself being a little bit naïve back then I agreed to them taking a majority interest.

Peter Cowley:                  You didn't have a non-exec director or anybody who's advising you at that point?

Neil Garner:                      I had an advisor, a lovely chap called Nigel Cushion, who was an accountant in Norwich, who was working with entrepreneurs. That was my best friend and advisor that came with me on the trips to the States to meet with them. Helped me through the negotiations and discussions.

Peter Cowley:                  Yes.

Neil Garner:                      We ended up, we valued the business sort of I think it is almost £2 million. Had about £1 million invested into the business. That was a good decision.

Peter Cowley:                  What did you use the cash for?

Neil Garner:                      So hiring some additional people, expanding the business. We'd got sort of opportunities in the pipeline with some UK network operators, banks and a couple of retail organizations to do what we're doing. But if you think back in their economic environment back then, 2008, we had potential contracts with about three organizations that all of a sudden were privatized. Sorry, not-

Peter Cowley:                  Yes, nationalized.

Neil Garner:                      Nationalized.

Peter Cowley:And           many other organizations probably didn't have that much cash or they would be very cautious with their cash.

Neil Garner:                      Yeah. So a lot of our sort of big contracts we thought we had suddenly became the sort of things that actually if you're spending the money on those, those projects canned almost overnight. Which left us in a little bit of an awkward situation.

Peter Cowley:                  But cash in the bank at this point?

Neil Garner:                      A little cash in the bank.

Peter Cowley:                  So your figures probably not good ... You had spent most of the million already, had you?

Neil Garner:                      So I'm not going into too much detail but the money was being controlled by my CFO who was also the CFO of the American organization. So I had regular monthly calls, quite depressing in some ways. Could I pay the bills for the staff and the payroll?

Peter Cowley:                  In the States?

Neil Garner:                      Yeah, to get the money transferred across. For a period of time, it was literally touch and go on a pivoted basis. What's the sales pipeline, what's your opportunities, what are you kind of doing, where is it kind of going? Just to literally gauge are we going to get paid? Which was pretty tough.

Peter Cowley:                  You learnt a lot from that?

Neil Garner:                      Hell of a lot about cash management, managing shareholders, suppliers relationships. It was quite often we'd have regular three quarterly meetings, different places around the globe. Met lots of different players in different places. In Australia and other places who were running different part of this global business because I was part of their global management team.

Peter Cowley:                  But that phase must have finished because you went on to better things, didn't you?

Neil Garner:                      Yes. So in early 2010, we got to a point where the business was probably going to be folded into the European subsidiary.

Peter Cowley:                  Of American Banknote?

Neil Garner:                      Yeah, American Banknote is based in France. We had a bit of a crunch point where I was going to just go, okay, well, that's what it will be, I'll be an employee. The whole business is going to go all the other way. I had a bit of risky conversation and I had come across, I talked to a number of people actually in Cambridge who were sort of confidantes and friends and so on. Who'd been helping me along in the background or giving a bit of encouragement of what can I do and where this is kind of going. I just needed support. I came across a chap who was working for EEDA called Trevor Overall.

Peter Cowley:                  I know Trevor, yeah.

Neil Garner:                      He then introduced me to a chap that might be able to help me out called Chris Chapman. Me and Chris had a few conversations over a few drinks and a few lunches. About maybe if I did a deal with you, you could help me and we negotiated an exit. So literally I ended up taking the business on for a very small amount of money and taking all the liabilities. They would then exit and then I'd take the business over and then sort of drive it forward myself.

Peter Cowley:                  After that point, what sort of proportion of the business did you own?

Neil Garner:                      90%.

Peter Cowley:                  Okay, and the other 10% was Trevor and Chris and people like that?

Neil Garner:                      Yeah, so there was an agreement with those guys in terms of what their equity was going to be. Then I had an option also to purchase back the final 10% from the whole individual loaners for a fixed fee.

Peter Cowley:                  Okay, so now you're what, still 15-20 people are you?

Neil Garner:                      No. Unbeknown to my customers it was me during that year. Unfortunately, the casualties along the way is I ended up having to make a number of people redundant and they moved on and they've done different things and so as well. It was a cautionary tale this, it's not a pleasant journey sometimes.

Peter Cowley:                  You must've been so busy, you were supporting a customer base of I don't know how many, 5, 10, 15 customers.

Neil Garner:                      So the underlying thing that was happening during that journey, was I was negotiating a global deal with Nokia. Which we've announced to have our software on Nokia's first NFC mass-market phones to do marketing and loyalty.

Peter Cowley:                  Right, okay.

Neil Garner:                      Which we ended up closing in the next year in April.

Peter Cowley:                  Right, excellent but you got so many hats at the moment, haven't you? You're supporting customers, you're selling, you've got the finance sorted out. You're writing software, are you?

Neil Garner:                      I'd got a few people that are kind of freelance, helping me out a little bit and there's a couple subcontractors I was working with. But literally, there was no people in the company apart from me for about three months during the summer of that year.

Peter Cowley:                  This is '11, is it?

Neil Garner:                      This is 2010 and once a few bits of revenue and things kind of came in, I took a decision to rehire my ex CTO because he was keen to come back again. He was a bit unhappy during the whole horrible bit. I talked to the university about an internship scheme they had. Where they were able to fund, I think it's about 60% of the salary of some fantastic interns.

Peter Cowley:                  Yes.

Neil Garner:                      So I then hired three interns, one was an amazing designer. Another one was an amazing software developer and another lady was an amazing sort of general office admin, extra pair of hands. That was my team in September-October of that year.

Peter Cowley:                  Right. Having won the Nokia contract as well.

Neil Garner:                      That happened a little bit further down the line.

Peter Cowley:                  Okay, in 2011, yeah. Okay.

Neil Garner:                      But the thing that we were still working on is we had a project going on in collaboration with a few partners. That was actually the first prepaid mobile contactless wallet solution. That we were just finalizing and we ended up launching I think it was the end of that year or the next year. That was actually the world's first mobile contactless payment, where it was reloadable. That you can actually kind of use as a product and we're just finishing that off.

Peter Cowley:                  Then when did you float, which year?

Neil Garner:                      2013.

Peter Cowley:                  So we've got now another couple of years where you're growing the business back up again?

Neil Garner:                      Yes.

Peter Cowley:                  Okay.

Neil Garner:                      So fantastic, Chris came on board as the CFO, he was helping me through that journey. We were looking for angels and other people to come and invest. There is a chap called Gavin who I knew from the earlier days, many years ago. Who was involved in a business called Data Cash that was sold to MasterCard for about half a billion.

Peter Cowley:                  Okay.

Neil Garner:                      So he made a reasonable amount of money out of that and he'd been interested in what I was sort of doing. We had a bit of a chat, I showed him our mobile phone that I could actually pay for his drinks with in the restaurant in 2010. Where you'd probably get shot for trying to buy something with a mobile. Let alone you're the first person to ever use a contactless card at my terminal but you've now just turned it with a mobile phone and bought something in my outlet. He looked at that and said, "That's amazing, I like that." Then he invested.

Peter Cowley:                  Right.

Neil Garner:                      So he became our first proper angel investor.

Peter Cowley:                  What proportion of the company did he buy?

Neil Garner:                      About 10%.

Peter Cowley:                  Okay, yeah.

Neil Garner:                      I was still 90%-ish owner of the business and I've got a bit of money coming into the business as well, a bit of extra working capital. Then over the next three years, we went through a number of sort of angel rounds. He also introduced me to a fantastic chap called Miles Quitmann who was a global adventurer. Who'd been traveling around the Antarctic, broke a few world records and so on. He was a really good solid commercial chap, we got on really well when he came on board as a sort of a commercial director/MD. We then built the business sort of together. We built relationships and he's all public domain things, but people like Barclay Card. We were partnered with Barclay Card, deep relationships with MasterCard, the Network Operators and so on.

Neil Garner:                      Then before we listed, where we thought we're in a fantastic position, was we had deals with BlackBerry who were a big player back in sort of ... Still back, back then they were with the joint venture of US network operators to be providing software into their mobile wallet. We had the deal with the joint venture of the Uk Network Operators to provide their wallet's software, there's an entity called Weave.

Peter Cowley:                  Right, okay.

Neil Garner:                      So because we had this contract, particularly in the UK, with the joint venture of the UK Network Operators. Which we believed if you can take that relationship with it, the Vodafone, the O2, EE, and you can exploit that here in the UK. Then we can then take that same capability and deploy that-

Peter Cowley:                  There’s Bango, you know Bango here in Cambridge?

Neil Garner:Novae          , Bango sort of a-

Peter Cowley:                  Yeah, different, not competitive but similar sort of thing. Just growing out by building us some networks and going global.

Neil Garner:                      Definitely. So we had software that was being used by banks and network operators to kind of make the whole thing kind of work. So you can literally get a bank card into a mobile phone and then use it to do payments. We were also kind of building stuff around loyalty and redemption and all those sort things.

Peter Cowley:                  As I do with my Apple watch, but this is six years on.

Neil Garner:                      Absolutely.

Peter Cowley:                  Yeah.

Neil Garner:                      When we decided to list because we got that, we thought, we're in a really good position here. We talked to all those brokers and the nomads and we ended up reversing onto AIM through a cash shell called Long Ships.

Peter Cowley:                  Okay, which would just been dominant for while.

Neil Garner:                      Yeah, so that was our way to get onto AIM.

Peter Cowley:                  So what revenue, what size were you when you did this? You were obviously small by the look of the smile in your face?

Neil Garner:                      I think we were turning over less than a million pounds.

Peter Cowley:                  Okay. Each investing you got during the journey, was it an angel round, which is the conventional way or was it just meet somebody, they like the look of you and what you're doing, here's a check?

Neil Garner:                      We sort of did it as rounds but a lot of it was meeting people. So those people that between our shareholders we knew already. Yeah, you know how these things kind of work is if so and so is on board, then other people would come on board as well. But a lot of it was I think I met pretty much everybody that became an angel investor.

Peter Cowley:                  Yeah, but how did you price those rounds though?

Neil Garner:                      A little bit finger in the air, I think really. We were growing, we were building really good relationships. I think one of the things that Gavin always said to me, which sticks was, "When you're not making profit, your valuation can be whatever you want it to be."

Peter Cowley:                  Exactly.

Neil Garner:                      It's only when you're making profit that actually people would start to put a valuation on you.

Peter Cowley:                  It always comes down at that point.

Neil Garner:                      Yes, exactly. So we played on that really. Here's the big hockey stick future and we've got some really nice sort of models of if we had a small penetration of their handset market. This is how which we're going to be, it would be worth a lot of money.

Peter Cowley:                  So how much did you raise when you floated?

Neil Garner:                      We were listed I think it was about 4 million we got out of the cash shell and then very shortly afterwards we did a placement. Not that long afterwards with a few other big investors. I think that's about 8 million we raised then.

Peter Cowley:                  So what's your market capitalization do you think then?

Neil Garner:                      Shortly afterwards in February the next year, we put a few announcements out that coincided with a few things in the market. We hit about 50 million market cap.

Peter Cowley:                  What proportion of the company did you have at that point?

Neil Garner:                      About 20%.

Peter Cowley:                  Yeah, so you were certainly worth 10 million on paper.

Neil Garner:                      Yes.

Peter Cowley:                  We'll come to that in that moment.

Neil Garner:                      Yes, that was interesting.

Peter Cowley:                  I have a copy of the share price and you've had some interesting journeys. Now, you left a couple of years ago.

Neil Garner:                      Yes.

Peter Cowley:                  So can we talk through the relationship with the markets? This is the first time I've heard somebody talking about that. What went right and wrong before you decided to leave?

Neil Garner:                      Yeah, it was a complete learning curve. One lasting thing I remember is I went into hospital to have an ankle operation. I came around and I'm must've so irritated everybody in my ward but literally I was groggy on the morphine and everything else. But I was on the phone to all sorts. It's a funny little anecdotal story. We'd done a deployment of our technology into Guinness beer pumps, which is basically you put a little NFC chip behind the harp on all the beer pumps and they rolled it okay, across the UK and Ireland. So you could touch your phone onto to get content.

Neil Garner:                      Actually, the person who is doing the due diligence work had actually reported in. He'd gone and done his research and he'd found they weren't working. So you go into a bar and actually is a major panic. So people are phoning me up and what's kind of going on? This is really big alarm bells for everybody in all sorts. Actually, we dug into it and found out that actually the main wasn't working, it wouldn't pump out beer. So the beer bit wasn't working and they had taken out because the beer bit wasn't working. But our technology was sitting there and there were Harp logo. It was working perfectly, thank you very much. But they had gone in there and the barman behind it, "It's rubbish, it doesn't work." But those are the sort of things that can cause a lot of stress.

Peter Cowley:                  Yes, the share price drops no doubt as well.

Neil Garner:                      Yeah. But during that period, we were working hard with a number of people. We got really good relationships with ARM, we worked really close with the spinout of theirs, Trustonic, which was doing a lot of things around-

Peter Cowley:                  Had issues in Cambridge and Station Road.

Neil Garner:                      Trusted pin, access, and activity. I start to spend an awful a lot of my time in the States with network operators over there and the likes of Apple and Google and various others about what was kind of happening with the market. But the thing that happened was we were all betting that the technology we were relying upon, NFC technology when we listed and we're doing all the work with the network operators. We're in all the handsets but not in Apple phones. But we knew that Apple was going to have the technology in their phones, it's just a question of when. Therefore, being an innovative early-stage business, waiting for that to happen was usually a good thing.

Neil Garner:                      But what we didn't know was actually Apple had been working on it for quite a long time. Like Apple does, they'd probably been investing a few billion into this and the relationships they've kind of got. They came up with Apple Pay. The network operators and banks who we were working with looked at that and realized actually the value chain that we've built up for all the technology to be linked into our sim-card, which was where all our technologies was built around. So the banks and network operators could have a revenue model around the sim-card, we were part of that revenue model and we're facilitating that to happen. But all of a sudden, Apple comes out and says, "Well, we've done this deal with the card schemes, is now called tokenization and actually you bank just work with us and we'll set your cards up and way you go."

Neil Garner:                      So we listed in 2013. So 2014 is when Apple Pay and iPhone 6 came out and it wasn't too bad back then because it was a good new story that we're right. Every phone is going to be able to do payments and it was all kind of good and we got a good strategy to kind of combat that and work it all through. This is for me, I think in my heart to hearts, I sort of knew that our business model probably wasn't right. We needed to pivot and change.

Peter Cowley:                  How many staff were you here now?

Neil Garner:                      I think we were about 60-70 staff.

Peter Cowley:                  Fine and turning over very low millions?

Neil Garner:                      Turning over low millions, quite low millions actually. What we decided to do was we ended up towards the end of 2014, buying a company called Aconite. Which was a business that was actually doing a lot of the back office software for banks and processes. Things to do with chip and pin cards and processing and transaction processing.

Peter Cowley:                  Did you buy with shares or shares on cash?

Neil Garner:                      We mainly bought with shares.

Peter Cowley:                  Okay, they might be regretting that now.

Neil Garner:                      Yes. So we ended up doing another placement towards the end of that year to buy Aconite. So we bought that business and that then became a sort of expanded payment division. But actually, we got solutions between what we were already doing or they were doing that was a little bit more valuable in their marketplace. Unfortunately, because it was an acquisition of another business, we had to go through a bit of a cash consolidation sort of exercise. So it's a bit of a painful exercise early the next year. Then I think because it was going in the direction that I didn't really want to go in and I think the board perhaps wanted to go on a slightlu different direction to me, I decided to step down. It's a majorly hard decision if you're a CEO of your business and you've been driving it for 10 years.

Peter Cowley:                  Right.

Neil Garner:                      But it was definitely the right thing to do.

Peter Cowley:                  Maybe yes it was for the company or not but it was certainly was for you by the sound of it.

Neil Garner:                      Definitely. I like to be honest about these things. But if you think you've built a business and go through the journey that I'd been on and you had sort of pretty much not had many holidays. You've got young kids and family. You've been traveling around to the States all the time and you've got all that financial stress. Yeah, with hindsight looking back, I was just so totally burnt out. Therefore, you're not able to see the woods from the trees. That I think is a thing that I think I ... Not what I like what you're doing. It's absolutely, it's all about look after yourself. Look after, you think more positively about all the things to do with the business rather than just what you're doing for your shareholders and your board and staff members and everything.

Peter Cowley:                  You've started again, which is excellent. So you're now a serial entrepreneur. You've absolutely wonderful rich story here. So at what point between stepping down ... You gave yourself a rest hopefully and spent a bit of time with the kids.

Neil Garner:                      Yes.

Peter Cowley:                  Probably the next day you started, wasn’t it?

Neil Garner:                      Yeah, so I managed to get bit of garden leave in, which is what you do with these sort of things. I did a bit of home renovation, got back to normal. Just had a bit of a think about what to do. So there's a couple of things that I decided that I wanted to do. Is I doubled the little bit by creating a little tech hub up in Norwich. So one of the things finished off during that garden leave period was launching a not-for-profit tech hub in the city of Norwich, called White Space. Which we've now partnered with Barclays to be the first JV Eagle hub in the UK.

Peter Cowley:                  All right, okay, yeah.

Neil Garner:                      I had this idea for a brand new business called Things, which was really taking some of the relationships philosophy of what I knew. But turning it into a little bit more of I guess probably more of a commoditize play. So if you think of the technology that I was kind of doing beforehand accepting the fact that Apple and Google rule the roost and there's capabilities they're kind of doing. What can we do to apply the same kind of principles but in an environment where you can do what you need to do, without having to build complicated apps? That's essential what we're aiming to do.

Peter Cowley:                  Unfair to come call everything I guess, which Niall Murphy, I've known for years.

Neil Garner:                      Yeah, so I knew of Niall because of the ARM connection and I think there's quite a good synergy between them. So we're pretty much all about turning anything on the front office into something you can interact with through your smartphone. So it's more the consumer experience side of things. What technology do you put into the object? Whether it's a QR code, an image or an NFC chip or a Bluetooth beacon or whatever happens in the future, to enable that object to be interactive. Then we can link it through to experience on the phone. Because of the background, we've also tied it really tightly into payments.

Peter Cowley:                  Yes.

Neil Garner:                      So an ideal scenario is any object can now become a point to sale. So your mug, I could buy another mug off your mug, that sort of thing.

Peter Cowley:                  Yeah, by having gathered, RFID chip or a barcode on it.

Neil Garner:                      Yeah, that's right.

Peter Cowley:                  Yeah because it's crowded space this and I've seen many, many plans over the years. In fact, there was an investing company called Tap Two, which became Proxama. Which is similar to a guy called Andy Kind. But they weren't doing the payment connection. So I presume what you're offering here is interconnectivity and knowing how systems work together.

Neil Garner:                      That's right.

Peter Cowley:                  You said you don't want to be offering the hardware because that's going to be commoditised.

Neil Garner:                      Yeah.

Peter Cowley:                  Well, it might be during the short-term but not in the long-term.

Neil Garner:                      So, fortunately, I did come out with enough money to not pay myself for a little while and invest a little money to the business. So I actually I build the platform I knew that I needed. So I spent the time and energy building app platform, technology, supply chain relationship with those hardware suppliers to get kind of going in this. We've got what I call an end to end ecosystem plus the payment pieces. Through the relationships we've already got, we've been able relationships with the card schemes and so on, plus more importantly people like PayPal, Stripe, Worldpay. Also, a close relationship we've built with the guys doing the Apple Pay thing particularly for charity donations.

Peter Cowley:                  Right. How many staff, a few freelancers or have you got any full-time staff?

Neil Garner:                      My modus operandi of everything I've tended to do is I like a really strong tight team. I've found the right people, we've all got, it's about eight people but covering all the elements we need to do. So everything we built is all designed and built and owned in-house.

Peter Cowley:                  Yes, okay. Any funding before you went on to a crowdfunding site?

Neil Garner:                      So there's a lady who'd invested in Proxama before that managed to get out at the right time. She's lovely, she's come on board again for this. Then a number of sort of small SEIS investors who are people we know again as well. I've done a SEIS round, we've done that before going into the crowdfunding round.

Peter Cowley:                  Yeah, so as a point, getting out in time you mentioned. I noticed the share price is probably about a 100th for what it was of Proxama or nearly this.

Neil Garner:                      It's an awful thing to admit with a company that I was involved in. But all I can say is it wasn't like that when I stepped down as CEO. But I think a cautionary tale for me is any business can be completely disrupted if it's in a mobile space by the big players like Apple, Google, Amazon. You might think you're great but there again, they could be something they do on their operating system or something they buy that means you're just taken out of business overnight.

Peter Cowley:                  Or turning the other way around. There are some business I'm investing, are actually planning to be acquired rather than disrupted.

Neil Garner:                      Yeah, exactly. Much much better way to be.

Peter Cowley:                  So by the little bit of chance. Yeah, exactly. So just talk briefly about the crowdfunding you're doing because it's online. This podcast won't go out until it's closed so it doesn't matter quite what you say now, it won't affect people investing or not investing. So how's the process been for you?

Neil Garner:                      So the interesting thing about it, being honest, is I didn't want to do crowdfunding because I was running a PLC beforehand.

Peter Cowley:                  Before and had a load of shareholders.

Neil Garner:                      Yeah, for me there's a bigger version, particularly the journey we went on wasn't very pleasant, to say the least. So I always prefer to have the face to face relationship with investors. But I think because of the history, sometimes history is good and sometimes history is bad. Some of the shareholders I had before won't necessarily be shareholders again and also-

Peter Cowley:                  Of your business you mean.

Neil Garner:                      Of my new business.

Peter Cowley:                  Yeah, sure.

Neil Garner:                      Also, I think to be fair, you said the point, it's a bit of a crowded space. How do we differentiate? I know we're very, very differentiated and what we do is differentiated. But the only investors we've really picked up are people that kind of experts in the market, or understand all the nuances. Whereas if I call a lay investor who doesn't understand the market, know enough detail, will kind of go and look at and go, "You're using QR codes, I don't like them. I've heard of NFC is, that's never going to work."

Peter Cowley:                  That's the opposite for and invested investor actually, that's an investor who actually gets in the way. Doesn't invest the wrong type of time or effort or pressure on the founders.

Neil Garner:                      Yes. But we decided in the end that crowdfunding was the way to go because, given my background, I'm probably more used to dealing with people that could put in the million pounds plus or large chunks of money. But actually, the market seem to exist in the way that you can raise your SEIS money, there's a gap between your SEIS and your million pounds. Angels can fill that gap. All those different ways to do it. But I think looking at it now, I think the crowdfunding market is what's going to fill that long term because it seems to be that's your gig-app filler.

Peter Cowley:                  Now, you've chose Crowdcube, which is primarily a B to C market generally because people like to use the people investing as champions of brands. We're not a B, you're a B to B business, aren't you?

Neil Garner:                      We're a B to B business but I think there's quite a few B to B business on there. We did look at Seedrs and Syndicate Room and Crowdcube. But again, a lesson learnt naively is if you can do it right, you can raise your SEIS money and get that to count towards your next investment.

Peter Cowley:                  Okay.

Neil Garner:                      So you can go into your crowdfund with £150,000 you've already raised, it's on your ticket from day one.

Peter Cowley:                  Okay.

Neil Garner:                      But the lesson learnt is if you issue share certificates to those investments, that invalidates it. I think depending on the crowdfunding network, they've got different criteria about how much you need to have raised beforehand. I think the thing I found is actually although it's a crowdfunding platform, you really probably got to have raised half your money before you get a lot of-

Peter Cowley:                  Or more sometimes. In fact, on that basis, I think it's open for another couple of weeks from today or a bit less than that. It said 41% last night.

Neil Garner:                      Yes, it's going to change quite quickly. Again, another lesson is there's a plateau of despair in there as well. Which is you pretty get your initial investors, you then get your mad fools who just pile in because it looks great. Then you get the people who download lots of documents, information and sit there waiting. So I think most business you seem to get a plateau period where you think, my God this is like tumbleweed. But then that's when you actually getting investors who are interested but want to find out a little bit more, meet up and talk and share documentation.

Peter Cowley:                  Yeah, I noticed that the forum, it's got some quite sophisticated questions on this in fact, which you've answered.

Neil Garner:                      Yes. Fingers crossed, touch wood, we've now got a number of investors that are bigger ones that are putting money in. Then once you get over 50%-60%, that seems to be when it ticks up again and everybody else is happy to kind of jump in. All being well as it seems to go, is that then helps to get overfunded. So I think it's just getting your thresholds right.

Peter Cowley:                  So that will give you low numbers of hundreds of thousands. What are you going to do with that money?

Neil Garner:                      Fortunately, it's all for marketing and sales. So unlike quite a few businesses, we've actually built everything we need and our solutions deliberately sector agnostic, so we can apply to different sorts of sectors. So the work really is to kind of do the work, to analyze, which sub-sectors do we think we can own or the low hanging fruit to generate the revenue. Then we can push those out there. So it's really kind of sales, marketing, a bit of analysis on which markets to kind of move into and deepen the partnership relationships we've got.

Peter Cowley:                  So, Neil, this is really fascinating. This is two journeys. What tips have you got for entrepreneurs?

Neil Garner:                      First tip, again lesson learnt, is the first part of my journey. It was me and I think many entrepreneurs are probably quite self-sufficient, a Jack of all trades, masters of none. But the second part of my journey and the third part I guess with the new business, is actually build the team and the support network. It is the more open you are to working with others and build the best possible support network around you, that's definitely the most important tip.

Peter Cowley:                  Right, okay, thank you. Final question is I'm 15 years older than you. What are going to be doing when you get to my age?

Neil Garner:                      Interesting. First things first is if my journey had played out slightly different with my first company, I'd be an angel investor like you. That's part of my plan, so I want to work with young startups. Then the second part of it is as I live in Norwich, I'd love to try to join that ecosystem, better up with Cambridge and London. Get that to be a city where there's a great startup, design, creative scene for business.

Peter Cowley:                  That connection, that probably relies on a good public transport, doesn't it?

Neil Garner:                      Would do, yes.

Peter Cowley:                  So are you going to fund the railway?

Neil Garner:                      Maybe not funding a railway. I think if you look at Silicon Valley, the distance between Cambridge and Norwich or Cambridge and Ipswich and London is the extent to Silicon Valley.

Peter Cowley:                  I don't know how many times you've been but the traffic on that main road is appalling at the wrong time of day.

Neil Garner:                      Exactly. So you could quite easily be spending a ridiculous amount of time in the car or you could spending same amount of time on a train or in a car but the roads that are moving a little bit smoothly.

Peter Cowley:                  Autonomous vehicles roll on.

Neil Garner:                      Exactly.

Peter Cowley:                  Excellent, Neil. That's been really, really interesting. Who knows where this next journey is going or maybe there's a third journey coming up after this one.

Neil Garner:                      Who knows?

Peter Cowley:                  But you obviously enjoy yourself tremendously, thank you very much.

Neil Garner:                      Thank you very much.

Peter Cowley:                  Thanks for listening to another Invested Investor podcast. You can subscribe to all future podcast via our website investedinvestor.com or via a number of podcast platforms online. Signed pre-orders for our Invested Investor book and now available on our websites. Be sure to follow us on Twitter, LinkedIn, and on Facebook to get up to date interesting and insightful content from the Invested Investor.