Stuff Matters: Genius, Risk and the Secret of Capitalism. Harry Bingham

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СКАЧАТЬ specifically for the marine market, and that it could make a lot of money in the process. His boss didn’t see things the same way and before too long Paul and two of his colleagues had quit to set up in business on their own. They invested £6,000, which was pretty much all the spare cash that they had. They worked for six months on no pay. The company started out with no products, no sales agents, no brand, no finance, and no reputation. It did, however, have plenty of competition. The area that Paul was keen to enter was one dominated by large, established companies, well known to shipping firms around the world.

      The tiny start-up had to design and manufacture a range of entirely new products, for a market that had never previously existed, and beat a host of well-resourced competitors as it did so. A ridiculous challenge, of course, and yet one that Paul’s team met with style.

      Their first major product was something called Bulksafe, a system designed (literally) to ring alarm bells if water started entering the ship’s hold. Detecting water is not, in itself, a particularly tricky business but, like any vaguely technical product, this one had to meet a whole slew of further parameters. The system needed to be maintenance free. It had to be corrosion proof. It should be able to operate in dusty conditions (because the ship’s hold might, for example, be full of coal). It needed to be proof against chemical contamination. It should be able to withstand tough handling. It had to be something that you could install quickly, cheaply, and without starting to mess around with the ship’s hull. It had to be something that would meet all the new safety regulations and carry a lifetime warranty. When the new regulations were finally published, at the end of a long consultation process, Paul’s team was ready. Ages before its competitors were in position, Martek Marine launched Bulksafe. No other product could do what it did. Orders started to flood in.

      The same thing happened with a gadget called MariNOx, a system designed to monitor emissions from marine engines. Within just three weeks of the relevant regulations being published, Martek had MariNOx on the market and, again, its competitors were nowhere. People came to Martek because they had the first available product. They stayed because it also had the best one.

      By now, the company has won fistfuls of awards for its innovations and export prowess. Perhaps more to the point, the company has grown fast and profitably, without taking on a single penny of debt along the way. By 2012, the company is aiming to have sales of £20 million and an operating profit of £4 million, the largest single slice of which will be Paul’s. I spoke to the company when panic about the recession was at its highest, but Paul told me that both sales and profits were growing; the only downside was that some of its new product launches would need to be put back by a matter of months.

      If Reaction Engines was the perfect example of a highly inventive company, then Martek Marine is a textbook example of a highly innovative one. Its products have all been developed from scratch. It’s always been first to market. It’s always taken and held a position of market-leadership. Yet the most striking thing for me in talking to Paul was simply this: product development was the easy bit. The international bodies responsible for regulating safety at sea had issued consultation papers indicating the likely drift of regulation. Paul and his team looked at options for meeting those requirements. They created a concept and spent time talking to a dozen or more consulting engineers about implementation. They outsourced much of the prototype work and any machining tasks that they couldn’t sensibly take on themselves. And they developed a product.

      In one sense that product was entirely innovative because it solved a hitherto unsolved problem. In another sense, they simply took existing concepts and bits of expertise, and assembled them intelligently into one simple-to-use package. The way Paul spoke about it all, invention of this sort is a business process like any other; one that needs thoughtful and attentive management, but no more or less than anything else. Martek Marine doesn’t have a single engineer with Alan Bond’s genius. It never will because it doesn’t need to. What the company needs to succeed is a tenacious grip on what its customers want today or may need tomorrow. The rest of it is simply a matter of management. Indeed, if the company had wanted to outsource its product development – that is, outsource all the genuinely creative work involved in designing a new product – it could easily have done so. Consultancies exist which offer exactly that service. You can find websites where different bidders compete to solve a given product development challenge. Even innovation can be specified, outsourced and put out to tender. Just put ‘product development solutions’ into Google, if you don’t believe me.

      If that seems to take all the fun, all the sexiness out of entrepreneurial innovation – well, it shouldn’t. It doesn’t really matter whether an entrepreneur is engaged in a technically led business or not. All entrepreneurship is innovative always. It cannot not be. When Paul and his colleagues started Martek, they started with nothing: three blokes and an idea, sitting in a pub. They didn’t know how to start a company, plan a product, get it certificated, organize manufacturing, retain sales agents, arrange logistics, rent premises, budget cash flows, compile tax returns, or anything else. In the first months and years of a start-up’s life, no problem has ever been solved before. If something needs to be done, then someone has to figure out how to do it. Sometimes that’s a phone call to a known expert. Sometimes it’s something that can be worked around. Other times it’s something to do yourself. Whatever the solution, there is never an established precedent, no one whose job it is to take care of the issue except you.

      Indeed, speaking to Paul, I realized that for him creating a product had been straightforward; creating the company had been the challenge. Take, for example, the matter of marketing. Shipping is a global industry and Britain no longer has a significant merchant navy. If Martek wanted to sell its kit, it needed distributors in Singapore, Taipei, Oslo, Rotterdam, Mumbai, Hong Kong, Cape Town, Rio de Janeiro and a whole host of other places besides. That meant somebody – often Paul – climbing onto a plane and looking for local agents. How do you find the right kind of sales agent in Taipei? How do you know you can trust him? What kind of contract should you sign? What kind of income split makes sense? What kind of literature do you need to supply with the product? If you’re part of an established company, then all these questions have answers. There are existing agents, existing contracts, and a body of experience. When change happens, it tends to be incremental, building patiently on the lessons of the past.

      An entrepreneur has no such comfort – and no such shackle. Martek’s success demonstrates that more often than not it got the answers right. But not always. No sooner had it launched its products, than rival producers in India simply copied them. The products were securely protected by patent, but all a patent really means is that you have a right to sue. Indian courts can easily take ten years to come to a verdict and the ultimate recovery of funds is highly improbable. Paul didn’t know all that to begin with and spent a few thousand pounds finding out. A more established company would have known that; it would have had a procedure in place telling it what to do.

      I left my conversations with Alan and Paul reminded of a basic truth. Entrepreneurs are only rarely and accidentally inventors. Ford did not invent the car. Hoover did not invent the hoover. Rockefeller did not invent any oilfield or oil transport technology. Carnegie was no technologist, nor is Lakshmi Mittal, his modern-day counterpart. Paul Getty, it’s true, did invent the John Paul Getty Special, but that hardly qualifies him for induction into the inventors’ Hall of Fame. Knox D’Arcy, Gerry Lambert, Richard Branson, and Warren Buffett invented nothing. Mr IKEA, Ingvar Kamprad, invented nothing. Michael Dell and Michael Bloomberg invented nothing. Retail billionaires Walton, Sainsbury, and Albrecht (in the United States, the UK, and Germany respectively) invented nothing. They’re not unusual. Most entrepreneurs never do.

      Indeed, if we tend to think of invention and entrepreneurship as running hand in hand, that’s partly because there have been one or two major historical exceptions to the rule (notably Edison) and because the modern software industry has made a number of inventive types very rich indeed. If you put the software industry aside for a moment, then not one of the richest people in the world made their money primarily or even largely from invention. Even in software, few people would СКАЧАТЬ