In 2005, Abcam listed on the London Stock Exchange’s AIM market, with a placement of £15m and valuation of almost £60m. Not bad for a company just seven years old at the time, whose founder, Dr Jonathan Milner, had had to re-mortgage his house to set it up.
Also not bad for a company whose circumstances were so straitened seven years earlier that Milner had been forced to trudge round the laboratories of Cambridge selling his wares in an ice bucket to raise some cash. So where did it all go right? And what was Milner selling from his ice bucket?
In 1998 a group of researchers at the University of Cambridge were working on a protein connected with breast cancer. One of their frustrations was the difficulty of finding good-quality antibodies and reagents for their research.
Walk through walls and talk to people
Abcam’s story is illuminating for other businesses because it features both hard times and rapid growth.
When Milner talks about setting up the business, it’s clear just how gruelling the initial years were, as they struggled to generate finance and revenues. Like so many entrepreneurs, he talks of the stamina and perseverance required to grow a company: “You’ve got to walk through walls and be determined and not give up… It’s one of the most difficult things in the world to do, and it’s all about determination.”
Determination, plus a few other elements. The first, according to Milner, is to get plugged into a network, such as the group of Cambridge technology angels who supported Abcam.
“If you’ve got a business idea, then go to a local angels network or university network who can guide you, put you in touch with people who can assess the business plan, help you iterate it, and help you with access to start-up money. That would be my biggest piece of advice.”
Business angels and networks are a direct or indirect source of finance; they’re also a source of advice. Milner believes mentors are extremely important to anyone with an idea for a business. “A good mentor will have been through the experiences that any entrepreneur or founder will encounter, and can put them in context. To have someone that’s been there and done it and can advise on it, is really important. I was very lucky to have met David Cleevely who was my mentor.”
Setting up in the right location can help with access to mentors and networks. Abcam’s Cambridge base put it at the heart of a technology hub, and made it easier to access networks and angels who understood Milner’s business and sector. It also put him close to his first customers.
Finance was one problem that beset Abcam. Milner admits that another challenge was management. He explains that there are three different personality types in any business founder: entrepreneur, manager and scientist/technician. All founders blend these types in different proportions; in his case: “I have an enormous amount of entrepreneur, a reasonable amount of scientist, and very little manager. So that makes my management style quite hands-off, and quite strategic.
“I was really lucky to stumble upon a book called “The E-Myth Enterprise” by Michael Gerber and he talked about this, and I thought ‘Crikey, no wonder I’m struggling, I’m a typical entrepreneur scientist, and I need to bring in management expertise.’ And that’s exactly what I’ve done. I brought in a very good CFO/finance director – he’s retired now, but he was crucial, and that saved me. And now we’ve got an incredibly good chief operating officer, Jim Warwick, who is a detail manager, a traditional manager type.
“Anyone starting their own business should read that book because it will make you examine yourself, and therefore, what expertise you need to hire in.”
Even if you cannot afford to hire those people immediately, advises Milner, it’s useful to know where your weak points lie. First, you can try to address them; second, you can console yourself with the fact that you can hand those aspects over to someone else at a later stage. This consolation can help you through less happy times.
The “E-Myth Enterprise” is not the only book to have influenced Milner’s career. With no formal business education, Milner credits books with helping him run the business. “I’m an avid reader, I read and read and read. Other books that stand out and that I use an awful lot are Edward de Bono’s “Six Thinking Hats” – he’s a genius – and “Blue Ocean Strategy”, by W Chan Kim and Renée Mauborgne.“
With the benefit of hindsight, are there things that Milner would do differently? The first is to have moved things faster – capitalising the company better at an earlier stage. Though he acknowledges that the discipline imposed by bootstrapping is useful, he believes that running an undercapitalised business saps energy, and hampers a company’s growth and potential.
Second, “I wouldn’t have got so hung up about hiring decisions”. Or rather, firing decisions. “I realise now that it takes quite a while to get the right people on the bus, to get them in the right seat on the bus if you like, and it’s best not to agonise too much if you’ve got the wrong person – you’ve got to fire them or you’ve got to move to another position. I used to get quite hung up about having to fire people or give bad news to them, but now I’m much more realistic about that.”
Look hard at yourself and other people
Hiring the right people is a crucial part of achieving growth. This means weighing up potential recruits’ personalities and drive, as well as their experience or qualifications. Milner’s advice adds another perspective to this: the need to take a long, hard look at your own skillset and personality. That way you can complement them with the people you hire.
Milner’s experience also highlights the importance of getting the right people at the right time. Certain stages of a business’ growth, or even certain stages of the business cycle, need certain skills and specialisms. The role of the successful founder/CEO is to seat the best people in the best places. As Milner points out, this may sometimes require decisiveness on the part of the CEO.
Milner was one of those researchers, and he came up with the idea of selling high-quality antibodies online. That summer, Milner left the lab, and set up Abcam, with support from a local telecoms entrepreneur, Dr David Cleevely, and his former boss, Professor Tony Kouzarides. Unfortunately the various venture capitalists they approached were not impressed by their plans, and Milner and Cleevely had to bootstrap the company. It was only when a group of Cambridge business angels invested in the company that the scenario improved.
Thereafter, the mood of the story brightens. Abcam became profitable in 2002, and achieved growth in sales of 7,200% between 1999 and 2003. It now has 300-plus employees, in five offices, and it delivers antibodies to over 80 countries. In 2010, Milner was named Entrepreneur of the Year at the AIM annual awards, and CEO of the Year at the European Mediscience Awards.
This was an extract from Growth In A Difficult Decade, published by Regus. Order your copy of the book here.
Share this story