A man with plenty to Shout about

Dec 7 2009 By Andrew Mernin, The Journal

His inventions have revolutionised the contrasting worlds of heavy industry and the internet while his latest venture hopes to transform the mobile phone world. Andrew Mernin talks to serial entrepreneur Gary Hosmer.

AS the well-worn phrase goes, it takes money to make money. But for Gary Hosmer it also took a fair amount of elbow grease, opportunism and ingenuity to make the breakthrough that led him on the road to success.

His career has seen him create what was officially named one of the 100 best inventions of the 20th Century, develop an internet revolution long before broadband was commonplace and gain Royal recognition along the way.

His scientific legacy started life in his garage when, as a 25-year-old physics enthusiast, he built a machine that would eventually be used in 70 countries, by numerous industries, across the world.

The London lad, from a tough estate deep in Millwall-country, eventually found his way to Newcastle from where he launched his most successful, and most recent ventures.

But the initial catalyst for his success came as a young graduate when he helped to transform the way major oil and gas players, brewers and even the military operate.

"I was pretty ambitious back then and, whereas everyone else wanted to be dockers or labourers, I wanted to do something else."

After finishing a physics course – the first of many degrees – he found himself in his early 20s working in sales for an engineering company.

However, as he filled in for an unreliable boss, he found himself with a lot more responsibility than he expected.

He says: "The bloke I worked for was brilliant but he was only smart until midday. Because he liked a drink in the afternoon he was down the pub.

"In the afternoons he got to depend on me more and more. So from the age of 25, I was almost like his right-hand man.

"We used to do a lot of offshore work so I got a lot of experience on real pucka projects working to offshore specifications with huge industrial parts."

The company developed technology to extract oil from wells which were close to being depleted – which gave Hosmer the inspiration for his own invention.

"When I was on the sales side, I used to get people asking for a smaller version of the technology for use in the laboratory but the owner was getting such big business from the likes of Shell and BP that he wasn’t interested.

"So in my garage at home I built a miniature version of a nitrogen gas generator which I patented.

"I was 25 years old with a patented gas generator and did the first thing that came to mind ... tried to flog it. But no one was interested, so I had a crack myself."

After setting up his own workshop in a storage room at a refrigeration company to develop the technology, he began to target several markets. He says: "It was a fairly hard slog but we built up these nitrogen gas generators and eventually built small ones for the Ministry of Defence to use to detect gases on the frontline.

"We also came to the North East after we worked out a new method for beer dispensing, using nitrogen gas mixed with CO², which is still used today."

The hard slog paid off and, by the early 1990s, Hosmer’s Nitrox empire had exported to 70 countries, won the Queens Award for export twice, as well as the Queens Award for technology.

The technology was also named one of the best inventions of the 20th century and displayed at an exhibition at what was the Millennium Dome.

"I was really chuffed with that, although I didn’t make much money from it," says Hosmer modestly from the kitchen of his Gosforth family home.

It was then, as a number of heavyweight firms began circling the company, that he sold out to North East engineering giant Domnick Hunter, of Gateshead.

"It was a proper engineering business from sheet metal in one end to finished products out the other. We sold them all round the world and a lot to the States.

"We then got to a stage where a lot of the people we supplied were interested in buying us, one of which was Domnick Hunter.

"They tried to copy the technology for a year and a half but they couldn’t work it out and eventually bought my company. Part of the deal was that I came up to the North East for a transfer period."

Having finally relinquished his baby and cut his ties with Domnick Hunter after the two-year handover, Hosmer was left scratching his head over where next to turn.

With the dotcom bubble expanding rapidly, he opted for a brief dabble on the stock markets.

He reveals: "I put all my money in dotcom businesses. It was OK, but what’s the fascination with looking at a bloody screen all day?"

Bored with his status as a desktop investor, and driven by the advice of a friend, he then took an unlikely step into the Hungarian property market.

"Someone told me commercial property in Hungary was the new best thing so we started a building firm in Budapest which is still going today. But to be honest, it’s been a train crash.

"I think I’ve just about got my money out of it but I spent a lot of years going back and forwards to Hungary."

Around this time of his life, he also toyed with the idea of chasing a lucrative career in the law courts. However, the entrepreneur was quickly disillusioned by the monotony of memorising laws and procedures.

"I did my Open University law degree and thought about training as a barrister – but lawyers must only do it for the money as there’s no enjoyment in it.

"I kept thinking it was going to get interesting soon, but it never did."

A period of trial and error on his career path eventually led him to what was then the mysterious and largely uncharted territory of the information superhighway.

In fact, from humble beginnings at his home teaching himself computer programming, he went on to create one of the biggest internet phenomena of recent years.

He also developed an online service in the late nineties which – by the turn of the century – had the high street’s major financial players banging down his door to jump on the bandwagon he had started.

He says: "At the time people were trying to sell everything on the internet, but everything doesn’t sell. Anything personal that needed to be tried on didn’t sell.

"I’ve got no background in financial services but I saw an idea for mortgages at a time when you had to go down the high street and fill in a bloody great form which took an hour to get a quote – and nobody bothered comparing.

"Then I thought, if I put a form online and send it to all the mortgage providers, get all their quotes, get them competing for the business, it’s good all round. So I set that up easyquote.com

The meerkats and moneysupermarkets that followed Hosmer’s easyquote.com years later, show his concept was worthy and profitable, but it wasn’t an instant success story.

In the early days, the comparison site pioneer faced an uphill struggle to create an online legacy that would be replicated by many others the world over.

"I went out to all the mortgage people but they couldn’t be bothered with me and didn’t want to give me the time of day.

"In the end I got 12 of the small mutuals signed up but I gave them all the leads for free.

"I thought, get them hooked in and when they see how good this is, they will want to pay me money for this. After six months, I phoned them up and they didn’t have any record of it. They couldn’t see how the internet could be good for their business so I went away and developed it further into comparison of insurance, travel, hotels."

Hosmer also paid a visit to a little-known company called Google, whose European office in London was solely populated by a woman and, on occasion, her pet dog.

"I was the first client of Google in Europe and there was one lady in an office in Soho. I gave it a trial for three months and I couldn’t get enough of it. I got some great positions from them and it was dead cheap."

Then something changed in the market and suddenly the major mortgage and insurance brokers of the day were beating a path to his small operation in Gosforth.

"Come 2002 and 2003 and all those people that didn’t want to know me in 1999, such as Northern Rock and so on, were suddenly my best friend.

"They offered enormous amounts of money to give them leads, but I remained unbiased, so they would give me say, £8 for a lead on a £100,000 mortgage.

"I stayed unbiased but all the sites now are owned by insurance companies or banks so you can’t imagine them being completely unbiased." At its peak, easyquote.com, which had been built up by a small team of North East web developers, was turning over around £3.5m a year and was responsible for 2% of the UK mortgage market.

Currently the site remains relatively dormant compared with its heyday a few years ago, although Hosmer has top-secret plans which he believes will breathe new life into it.

He says: "I knew the site was finished when the credit crunch first hit. My feeling is that comparison sites have had their day because the market’s flooded, they are pushing the price of bidding too high and the mortgage market has fallen over.

"I’m going to relaunch easyquote as a completely new thing. There’s nothing like it on the market and it will put it back to number one."

Meanwhile, the millionaire’s day job is taken by his new firm which was born out of a partnership between himself, a North East property developer and the father of the chip and pin system.

Earlier this year, Hosmer teamed up with Ian Baggett, founder of Newcastle-based property development and investment giant Adderstone Group to set up digital agency Shout.

On the technological side, the driving force behind the Jesmond-based business is Gary Boon, a former director of North East technology firm Th_nk, who built the software behind the chip and pin payment system which is now used all over the globe.

The company is working on a number of applications for the iPhone alongside several major web projects and, according to Hosmer, will place itself at the forefront of the mobile internet revolution.

"I think the internet is very much in its infancy. The big change you are going to see is that you don’t have to go back to your desk to do it.

"Applications for mobile devices are going to be huge. When you say that to people they think only of games and say you can’t run a business on it, but believe me, Microsoft is gearing up for it and in a few years everything you do will be on something you carry in your pocket."

Few could argue with a man for whom everything he has touched – save perhaps for the Hungarian property market – has turned to gold.

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