Like most entrepreneurs, David Milne has a strong independent streak. The 66-year-old co-founder of Edinburgh-based Wolfson Microelectronics puts this down to his father dying when he was just 12, adding that it's revealing how many other entrepreneurs have also lost a parent at a young age. "It certainly made me stand on my own two feet very early," he says. "I was a border at George Watson's and very independent at school." So it was hardly surprising that while nearly every other student was studying to be a doctor or lawyer, Milne ventured into academia, an "individually minded" profession if there ever was one.
After securing a PhD in physics at Bristol University under Cecil Powell, a Nobel-prize-winning physicist, he returned to Scotland in the 1970s to head up the Wolfson Institute, an offshoot of Edinburgh University. The unit designed silicon chips for the first mobile-phone companies, among others. But the money, at £200,000 for a typical contract, seemed unfairly divided. "The companies were making much more money than us. So I said, why can't we participate a little bit in this, do it for ourselves, and take a share of the business?"
So in 1984 Milne and several colleagues spun the institute out into an independent microchip design firm, with £375,000 raised from their own savings, an investment trust in Edinburgh and the Lothian region pension fund. From their Edinburgh University base they began designing chips for firms making mobile phones and high-tech medical tools. "But it's very difficult to make money and grow a business from doing consultancy on chips. It's OK for an individual engineer with no overheads. But as a company, you can't really make enough to reinvest in the business." It also hurt that Wolfson didn't own the intellectual property on its products. To do that, he'd have to switch the firm's business model from designing specific products for individual customers, to designing and manufacturing its own chips for selling on to a variety of clients, which he did in 1995.
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It worked. By 2000 Wolfson was turning over $2m a quarter, when it began tapping into the growing personal electronics market. Microsoft bought Wolfson's audio chips for its Xbox computer console, and soon Apple's iPod was also carrying the audio chips. "Things really took off" from there, he says, with the firm averaging 65% annual growth over the following six years.
Milne and 39 colleagues became paper millionaires when Wolfson floated in 2003, and by 2007 it was turning over more than $200m a year. That's when Milne decided to retire from his post as CEO and focus more of his time on the Edinburgh Science Festival, of which he is the chairman. He aims to get children interested in science and making money. "Kids get really excited by science. But they see an easier life or higher rewards from the professions. What I try to put across is that you can make a lot of money in science. Engineers are highly paid. By running your own firm you can make easy money and probably more than in the professions."
Jody studied at the University of Limerick and she has been a senior writer for MoneyWeek for more than 15 years. Jody is experienced in interviewing, for example in her time she has dug into the lives of an ex-M15 agent and quirky business owners who have made millions. Jody’s other areas of expertise include advice on funds, stocks and house prices.
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