It's been nearly a year since Peter Arnold quit his post as the figurehead of Newcastle Science City. Since then, the man once charged with turning Newcastle into a hub for science has been working on his own ventures. John Hill finds out more about how he’s applied his experience to start-up life.
I HAVE a special shorthand symbol I reserve for conversations with Peter Arnold. It’s made up of a vertical dash, a mound, a small step and a horizontal line. It’s a squiggle I use for the phrase “unmet need”, which pops up every few minutes like a plastic whac-a-mole.
Arnold argues that some businesses make the mistake of taking a cool technology and seeing what they can do with it rather than digging up an “unmet need” that no one has thought of before and finding something that can deal with it effectively.
It was the principle on which the Innovation Machine was built ... a project which took promising entrepreneurs and encouraged them to identify such needs. The thinking was that – if you discovered that need and had the necessary dedication – you were well on the way to putting together a business that could reach for the stars.
“When you look at the 100 or 200 companies that have gone from zero to £10m in revenue in five years, those with a technology solution only account for about 1% of them,” said Arnold, in an interview back in 2010. “But they all identify an unmet need. We tell our managers that you have to start there.”
This was something he preached at Newcastle Science City, when he ran an operation that aimed to turn the city into an international centre of excellence for science. Of course, a big clue as to whether something is as good as advertised is whether the chef’s willing to swallow it himself.
In April last year, Peter Arnold left Science City to “explore some really interesting new ideas” in the science sector. According to Newcastle Science City chair Paul Walker, Arnold had put together a range of options as to how the organisation could develop after One North East funding dried up.
One of those was a stripped-down organisation and it didn’t include him.
In a conversation with nebusiness last month, he admitted it was time to move on as the “focus was changing away from creating new businesses with public funding”.
The former group director of technology at Smith and Nephew had run Science City since 2008, developing and supporting new businesses and striving for the creation of the ambitious and expensive Science Central building. So what went through his head when all of that drifted into the rear view mirror?
“I knew I needed a portfolio of ventures,” he says. “If I’d backed one project, it was highly likely that it might not have been successful.
“I needed to take a number of things on and evaluate how they were going to work. Even if one or two failed, I’d be improving the odds of bringing in something that would be successful.”
Arnold is keen to stress that his ventures are all at a relatively early stage. However, he’s already set up a company called Vaxinia in Hexham, through which he’s developing his idea for a new method of creating vaccines.
He’s lodged a patent for the process and is largely self-funding studies into how well it might work against diseases such as malaria.
“I’ve been working with groups around the world and we’ve been working to create new anti-malaria vaccines”, he says. “I’ve invented a new method and I’ve patented it.
“I’ve had some research done and the first set of results that came out at the end of last year look very positive. So we’re looking to raise finance to get it to the next stage.
“If it does work, the method could possibly be applied to creating vaccines for things such as flu or HIV. As I say, it’s a long way away, but it looks very promising.”
While he has a certain amount of angel investment for Vaxinia, he is largely putting in the money for the studies himself. The next batch of studies will cost around £500,000. Development will cost many millions, but he is confident that once he’s proven the product’s effectiveness, a pharmaceutical backer will step in.
“One of the benefits of meeting a lot of these people in Newcastle Science City is that you get a feel for the challenges. It’s always a challenge to find enough capital if you’re going to do something quite technical.
“Angel investors and funds and supporters who really understand the technology will invest at a very early stage, and at a late stage when you’re are showing the success, but in the middle it’s quite difficult. I’m still at the stage where I can raise finance for the idea.
“At the right time, the big companies will be very interested. When I get through the next stage of testing, a number of vaccine manufacturers will be very interested in this approach. I’m not looking for public sector funding for most of these ideas. Most of the portfolio can be funded fairly economically.”
He’s also working on a company called Mozaicom that’s developing tracking technology using the UK’s personal router network. On top of that, he’s offering informal advice to people looking to start businesses through his Elmgrove Incubator, running a med-tech consultancy organisation called Compliant Sales and developing a number of social networking ideas including an “eBay for gardeners”.
“I’m very interested in all the very different ideas I’m working on. They do require some expertise, so on every project I’m partnering with someone who has experience and passion to deliver in that line of work.
“It takes up a lot of time and I do a lot of consultancy work as well. But I’m brutal in cutting things off quickly if they don’t appear to be working. Last year I created 10 online business and I’m now down to two. But I did it very cheaply to see what the reaction would be to those business models. If I’d been doing it in a more institutional set-up it would have been more expensive.”