David Richards: entrepreneurs did to make a 'total commitment'
Some of the best business ideas can come from a chance meeting. After running a successful IT consultancy in the mid-1990s, David Richards (now 41) moved to America, founding software firms Insevo and then Librados. He sold the latter for $10m in 2004 and was looking for a project that could become his next business venture when, in "a classic Silicon Valley story", he bumped intoDr Yeturu Aahlad at a drinks party.
Aahlad was researching distributed computing, a field that involves getting multiple computers to work together on a single task, and his speciality was replication. This enables computers to duplicate part of the task being carried out, enabling one to take over seamlessly if there is a problem in another part of the system.
At the time, many in the industry believed true replicated computing was impossible. But Aahlad, who had given up a job at Sun Microsystems to pursue his research, had cracked the problem. He showed Richards a complicated proof that involved "20 pages of maths".
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Seeing the business potential of the idea, Richards decided to take a gamble. Figuring that his combination of technology experience and business acumen gave him an advantage, Richards persuaded Aahlad to go into business with himself and Jim Campigli, who had worked with Richards at Librados.
They set up WANdisco in 2005. However, Richards's experience with Insevo had left him wary of Silicon Valley short-termism and he wanted to build up the business for the long term, rather than simply for a "quick exit". In an industry where venture capital backing is almost obligatory, he took the radical step of spurning outside help, instead relying on revenue from product sales to fund expansion.
It wasn't risk-free. Richards admits that one of the big problems was "getting the pace of growth right". WANdisco needed a constant stream of clients to keep money flowing in, but it was equally important not to risk its long-term future by taking on too many projects. Because of the "feast or famine" nature of the tech industry, it wasn't until WANdisco secured a $3.5m dollar deal with Hewlett-Packard that Richards felt more secure.
By 2012 Richards decided it was finally time to seek equity funding but even then he decided to be a little different. WANdisco floated on the London Stock Exchange's Aim small-cap board, rather than on Nasdaq. Friends and advisers tried to discourage him, but Richards believed that a lack of other technology companies would help WANdisco stand out from the crowd.
His gamble paid off and the firm raised £34m from two offerings in 2012 and 2013. WANdisco now has a market cap of £71.5m, with sales of $11.2m, and has rolled out new products, including WANdisco Fusion, which helps share large datasets.
This is part of a strategy to enable the firm to take advantage of the rise of "big data" the use of high-level data analysis to help make business and operational decisions.Having now founded several start-ups, Richards knows that "setting up a business is tough". He is sceptical about those who try to "run a business on the side, while still carrying out their day job". Entrepreneurs have to make a "total commitment", he says.
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Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.
He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.
As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.
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