Financial Times: A healthy new business is born
By Mark Nicholson
Jun 22, 2004
Two young Scots design engineers last week won this year's £10,000 Shell LiveWIRE entrepreneurs' award, two years after they walked into Glasgow's Yorkhill hospital and asked staff which of their equipment was "rubbish".
The clinicians pointed to intensive care equipment for new-borns. So Neil Tierney and Neil Farish, then undergraduates on a product design course run jointly by Glasgow University and Glasgow School of Art, came up with a better baby-care unit.
Last May the pair formed a company, Lightweight Medical, to develop the product. It has now won National Health Service approval, is close to patent protection and will soon be made under licence by a UK medical equipment supplier. The units should start appearing in hospitals by 2006.
By that time Messrs Tierney and Farish, respectively 25 and 26, aim to be solving other health service equipment problems. "We want to identify problems within the NHS by talking to staff and fix those problems," says Mr Farish. "That's how design works - find a problem then design something to solve it. But it's not how big companies tend to work."
The entrepreneurs, now based in Edinburgh, won the LiveWIRE award not just for their product, but also for their business model and ethos. Mr Farish says the two left university determined to design "meaningful" products, which in their terms means medical ones. "Cutting-edge design should apply to medical products first, you would think," he says. "But that tends not to be the case."
The name they chose for their company makes the point. "We knew we wanted to make medical products, and most medical products weigh too much," Mr Farish says simply.
The entrepreneurs' aim is to build a design company that earns royalties on products manufactured under licence - a business model Mr Farish says inevitably brought lean times at the outset. For the past 18 months, they have survived largely by doing other jobs, in Mr Farish's case coaching skiers on Edinburgh's dry slope.
Friends and family backed them, but the first formal funding was £10,000 from the Prince's Trust and Mid-lothian Council. A subsequent Scottish Enterprise grant took this to £16,500. Mr Farish says it took about six months for them to raise this first funding tranche.
Since then they have raised a further £84,000 through a Spur award, a government scheme to help start-ups exploit technological innovations, and are about to secure a £200,000 equity investment from local business angels. This should see the company through the next three years and allow it to take on one or two more staff, says Mr Farish.
Lessons learnt in bringing their first product towards market, he says, have included being careful to pick the right manufacturer. "If they're too big, they'll license it, but not produce it," he says. After conduct ing research, they settled on a Midlands-based company that they believed shared their own enthusiasm about the design.
Mr Farish makes clear that excitement is an important factor, particularly in making pitches. "It's showing your enthusiasm, passion and drive to see it through to completion," he says. But it works both ways, since he and his partner want to see it reciprocated by a potential manufacturer: "The excitement on the other side of the table has to be the same as the excitement on your side."
He acknowledges that their baby-care unit will find only a relatively small market. But among other products they are developing is one that, if successful, would prove considerably bigger: something to address MRSA, the antibiotic-resistant bacteria that account for thousands of hospital deaths every year.
"I'm not going to say how, but we're going to do something about it," he says. "It's very good, and it's going to work."
© Copyright The Financial Times Ltd