Julian Ranger talks about the motivation behind iBundle, an innovation hub and investment vehicle for technology companies which he hopes ultimately will become a business incubator.
The management consultant and angel investor, who previously founded the defence company STASYS in 1986, also gives his opinion on what constitutes a worthwhile investment opportunity, why businesses fail and why entrepreneurs should find their ‘pain point’.
Krystena Petrakas: Tell me about your first business venture…
Julian Ranger: I set up a business with a partner, doing communications, consultancy and networks for military systems. You could think of it as the internet in the sky before we even knew there was an internet!
I built the company up for 19 years with 220 staff and various offices in the UK, Germany, Australia and the US. We then sold the company in 2005 to Lockheed Martin, the largest defence company in the world, and I was vice president of Lockheed Martin for a couple of years until I retired in 2007.
I went around the world for 18 months, fulfilling my lifelong dream, during which time I decided to set up iBundle partly because of the experiences I’d seen with other businesses
KP: What then inspired you to start an internet consultancy business?
JR: I didn’t know what I wanted to do for a while. Like anyone who retires after a long career I was at a crossroads in my professional life.
I never had any plans to start a business. I had a couple of ideas I had patents for, so I invested in a few business.
I went around the world for 18 months, fulfilling my lifelong dream, during which time I decided to set up iBundle partly because of the experiences I’d seen with other businesses.
KP: And what were these experiences?
JR: Well it all started with a company I knew which were doing well but lacked the skills necessary to progress. I bought them in and formed iBundle to act as an innovation hub and online consultancy for entrepreneurs.
There are many business start-ups out there with different proposals, and whilst they may have a great idea they lack the rounded business skills, including finance, marketing, delivery, etc, and this is where we come in and help if possible.
I see businesses coming in to provide more than a quarter of a million pounds and there are many angel investors or family and friends investing initial funds of up to £100k. However that money is generally provided without any management support to help people get to the next stage.
I think there’s that gap in the market, where entrepreneurs need a small amount of money to move an idea forward, but also need management infrastructure support from people with experience. That’s where we’re hoping to target iBundle in the future.
KP: What do you enjoy about running your own business?
JR: Trying to change opinions. Many people, even entrepreneurs, are wary of new ideas and question whether people will buy the product.
You can never be absolutely sure and you need a certain amount of belief and gut feel to launch something new, but there is work you can do to maximise your chance of success. I enjoy consulting on these projects.
KP: What type of investment opportunities appeal to you?
JR: Primarily, it’s got to interest me. Also, investors shouldn’t put all their money into one asset, so for example they don’t put all their money into property investment, shares or insurance bonds.
I separate business portfolios into high risk and standard-risk categories. Any risk for angel investing is relatively high compared to other investing.
When I’m looking at the very high-risk businesses there must be a level of interest that drives me to want to invest, for example a business in technology and science would interest me, as they are two sectors I have knowledge in.
It is also crucial to invest in a viable business project.
KP: Tell me about the main difficulties entrepreneurs encounter...
JR: The two main difficulties I’ve seen business start-ups struggle with are calculating the revenue model and marketing. Most entrepreneurs have a good handle on business needs, but they may not understand how many people will actually be interested in their business idea.
KP: Why do business start-ups fail?
JR: I believe the main reason is a lack of focus on the core business aspect. Anyone can open a shop, but it’s how well you understand your market that will make customers actually go in and buy; entrepreneurs spend insufficient time on understanding the heart of the business.
In regards to software and web space I’m concerned too many people are throwing their solutions together. There’s a big drive to get their business idea out the door quickly so they can get customers straight away.
A business needs a certain level of quality in its product. It's this quality that makes investors want to grow a business.
If you build your business on a shaky foundation it won’t grow. So although a level of speed is required, there is such a problem as being too quick.
KP: What advice would you give to entrepreneurs starting a business?
JR: Go out, talk to people and find out their ‘pain point’ - a difficulty that motivates someone to seek a solution or alternative.
Identify solutions to problem people have, pitch your product to the pain point.