The spotlight on R&D and innovation, which has historically been synonymous with multi-nationals, has shifted more recently towards small and medium-sized businesses, according to The State of Engineering 2015 report. Dr Graeme Malcolm shares his experiences of bringing the SolsTiS to market through building his own business M-Squared Lasers.
M-Squared Lasers sold the first model of SolsTiS – a fully automated laser toolkit – back in 2006; the same year my business partner Dr Gareth Maker and I founded M-Squared Lasers.
Business has been booming since then and research institutions around the world are using SolsTiS for applications including atom cooling; optical tweezing; holography, high-density optical data storage, and metrology.
The SolsTiS is an ultra-pure light laser. Its invention represented a step-change in laser technology. Previously, light hadn’t been pure enough to provide the ultra-narrow line-width, low-noise output required to probe complex quantum systems.
It was considered a breakthrough in the field of laser technology – and it continues to win awards; something we’re really proud of.
But the hard part about innovation isn’t coming up with good ideas, it’s bringing them to market – particularly if you’re an SME. There’s actually more innovation involved in that process than in the original idea.
Developing the SolsTiS was ground-breaking but considerably more effort has gone into rigorous engineering, developing a marketing strategy and educating a new customer base.
That’s the bit that’s underestimated. For a scientist come entrepreneur, the light bulb moments can be obvious in comparison.
Our aim as a business is to satisfy academic and market demand, something we’ve achieved by taking a collaborative approach with supply chain partners and universities.
Commercialising in the field of academia, as a fast growing SME, with a multiple partners and competing against much larger, multi-nationals isn’t without challenges. But they aren’t insurmountable.
I believe that the success of M-Squared Lasers has been the result of our focus on three strategic areas:
First, to make sure innovative ideas quickly result in physical products, unlike many larger peers, we use local manufacturing via an advanced production facility in Glasgow.
The proximity between engineering and manufacturing is crucial when you’re doing it quickly. It’s an intimate process – and allows you to keep the skills you need to complete the whole cycle from analysing a market to delivering a product. It’s difficult if you don’t have those close connections.
I think that trend is something the UK is pulling through strongly on. It makes the cycle of iteration much more rapid – so innovation can happen more quickly. Many of the great innovations in recent years have had a number of iterations – the tighter the loop the better.
Second, we focus on finding the right research partners. Working with a multitude of partners is not a soft option. You have to think harder about intellectual property. We make detailed agreements so partners know where they stand on ownership if something commercially valuable is created.
We try to work with the most like-minded groups in universities – usually the departments that are already working with industry. The rest, the more research-based academic parts, can be worked with for longer term projects. We license a lot of technology from universities and that makes the relationship last longer because they’ll come back to you.
Third, we found the right investor for the business. There is a lot of capital out there; grants, private equity and even newer, alternative forms of funding such as peer-to-peer lending and crowdfunding.
We receive our financial backing from BGF (Business Growth Fund), which initially invested £3.8m in 2012, followed by a further two rounds of funding bringing the total to more than £5m.
BGF’s funding model worked for us; it’s a commercial partner, but unlike traditional private equity, BGF take a minority, non-controlling stake and it can invest for the long-term, which means that they don’t dictate a time-frame for when they expect the business to exit.
This allows us to focus entirely on managing the business and scaling-up our operations.