The British Are Coming panel at CES

-Hi, I'm Jason Jenkins, the editor of CNET UK and welcome to The British Are Coming, a quick look at what our little island has to offer for the world of tech at CES. Now, I've got three fascinating guests in the British tech companies coming up. But before we meet them, I made a little film that explains it all. Let's take a look. -Here I am in Las Vegas a few days before the show starts outside a typical British home. Now, I've been coming here for over a decade to report on the latest trends at CES. But one country I never see very much reported on is the UK. But why is that? I thought I'd go out on the street and ask a few people around on what comes to mind when they think of the UK. -Dank skies and dismal days. -Drinking. -Wake up very early in the morning and have a spot of tea. -I'd have to say, rich? -Okay, yeah. -Yeah, you have nice cars. -Sid Vicious, Johnny Rotten, Paul Cook, all those guys. -They're very, very nice and my son just got back from London and he said it was the best curry he's ever had in his life. -Is Britain a high tech country? -Britain seems pretty low tech country to me. -I'm-- I'm assuming it would be. You have a video camera. That's pretty high tech. -I think that pretty neatly answers the question about why we don't read too much about British tech at CES. But it's a shame because historically Britain's been involved in lots and lots of inventions. -It's a hard question though, British invention. Beer. -I'll say ale. -Have you heard of any British technologies? -No. -Have you heard of any British inventions? -No to that either. -British technologies? No. -The fingerprint? -Let me think here, Big Ben? -How about the Louvre? -So are all of Britain's tech triumphs in the distant past? Have we lost our tech magic? I've gathered together people from Britain's gadget makers, entrepreneurs, and inventors to hear what their take is on what our little island has to offer the world today. Let's head inside and see what they have to say, shall we? -Well, those are the views of some random people I found in Vegas. So let's see what the people here have to say. Let's start by introducing someone representing Britain's gadget makers. I've got Colin Crawford, sorry, from Pure. And now Pure makes wireless music and internet radio systems, supplies digital radios Europe and Australia. And you're launching a Wi-Fi speaker to rival [unk]. Do you want to tell us a little bit about it? -Yeah, it's a-- it's a very affordable multiroom audio system, Jason, call the Jongo Family. -This is it here, right? -This is the sort of baby speaker in the range, if you like. So it's battery powered, main's on battery powered, surround sound, Bluetooth and Wi-Fi across the range as well. Well, the key thing really is the multiroom side of things, so it's being able to control and stream your music from your smartphone or your tablet which, you know, so many people want to do these days. So it's getting the convenience of that and then delivering it really beautifully, so lovely audio from your speakers, perfectly synchronized in one room or in multiple rooms around your house. -So I guess as a British company, how hard is it to build a globally-recognized brand that, you know, people that we saw on the video might recognize? -Yes, British inventions, something like a telephone or a, you know, or a TV, certainly hadn't mentioned any of that, but that would've been nice, but we did invent those, not me, but someone over there did. It's pretty hard. But, you know, it's hard for anyone to build a global brand that's-- Britain tends to be really good at technology. We are actually real technology buffs and we've got lots of very, very clever people there developing clever stuff. But what we haven't been very good at, certainly over the last little while is actually coming up with consumer brands which make it globally. I mean, I was trying to think before we came on of a global British brand. The one that came to mind was Dyson, actually, and with our case- -Okay, yeah. -you know, what else is there out there? Some brands some people might think are British, something like Philips, that's a Dutch brand. There aren't enough global British brands, and it comes down to-- yeah, I think there's something in us that really likes to get down to the nitty gritty, likes to invent stuff, but then we give it away. Then we give it away to other people or we license it to other people. There's plenty of British technology in things which don't have British brands on them, and you know, we'll talk to Ian in a moment. And, you know, and ourselves, our parent company actually licenses technology which is in lots and lots of devices out there. But, yeah, unfortunately, the vast majority of the brands that those are in, they aren't British brands. -And your parent company is Imagination Technologies which has revenues of about $200 million a year, and then you previously can see around with that, so why that, and why kind of diversify if you're doing okay by inventing things? -Well, Imagination wants Pure effectively to keep them honest, we say. You know, to-- what they really want is a link, a real solid link to the consumer, and you can get a little bit isolated as a technology, as an intellectual property company being a bit too far away for the consumer. And certainly, our CEO very, very much wants to have that hard link to a company who has to struggle through the difficulties of making, you know, cake that has to be sold through retail and dealing with all of that. It helps us understand that whole-- that whole chain, if you like, yeah, and keeps us-- keeps us very much in tune with what's happening with consumers. -Okay, I think it is from we should bring in someone representing Britain's ideas industry, and that's Ian Drew, you're the EVP of marketing and business development at ARM. Now, ARM is probably Britain's biggest tech success story. Your technology is in everything from phones to washing machines, found that earlier. -Yeah. -But you don't actually make anything. So why is that and how do you actually go about making money? -So ARM started 22 years ago when the PC industry, everybody was making their own CPU chips. So we designed the BBC Microcomputer which most of the people of a certain age in the UK will remember being their first programmable machine. At that stage- -You see beyond screen, now, yeah, yeah? -Yeah. -At that stage, you'll see lots of CPU companies doing reasonably well but nobody making any money. The Apple Newton came along. And Newton's Apple said we'd like to license your design for the CPU and have it made somewhere. So we started a CPU IP company and we named it ARM, Acorn RISC Machines-- -Oh, right. -twenty-two years ago and Apple being our first partners, when all of a sudden, this IP industry took off. People wanted low power and the phone industry went digital, went from analogue to digital and Nokia said we'd like a very low-powered device, and Nokia phone started growing, and ARM was very, very important in that. Companies like TI and Qualcomm started in that era. And so for us, we started in the phone industry and then branched out. So 95 percent of all phones now have chips in there designed by ARM, same for tablets. DTVs, and setup boxes, we're in 70-plus percent of them. So ARM partnership, billions and billions of units a year. We're very much into designing the IP. We make no hardware. We sell that IP and we get a royalty back. And I think where Britain really comes in to this is taking that engineering knowledge and creating new business models. We're not very good at the branding side and I think the British culture in technology being fairly low key, also doesn't help us there as well. But I think this whole technology industry is very vibrant in the UK, although a bit more of an undercurrent rather than at the leading edge. -Do you-- do you want to expand a bit on the kind of Cambridge side because you're-- that's where your headquarters is and it's the center of excellence for technology in the UK. Can you describe what the culture is like, what the business is like out there? What's going on that maybe we should know about what we don't, what's exciting? -Cambridge, your Silicone Fen as we liked to call it, just north of London, is really the high tech center of the UK. There's hundreds of companies there that do IP, companies that you might have heard of like Autonomy, who's just being bought by HP is very large-- -Yeah, as well, right? -very large there. For us, that whole culture of angel investment really comes into Cambridge ethos. There's lots of technology angels there and lots of people starting small content companies or IP companies, spinoffs from universities, spinoffs from other companies in Cambridge that really haven't expanded outside of the-- outside of Cambridge very much. But there is a culture there of small companies that grow into slightly larger companies and then being bought by American companies or bought by European companies as we grow. So there's very much a culture of inward investment via angel funding. -Can you think of-- I mean, are there any companies you can think of in the past that maybe should've been bigger than they were if they-- if the story has been different, maybe them bought out just as on the kind of cusp of becoming great on their own right or something? -There's two-- CSR, a great company that did very well in the Bluetooth radio space, companies along those axes that could've gone a lot more into the radio area and grown there. We see other companies bought out for $20 million that you think if they were in America, they would have more and more investment and would become really big silicon companies of their own. So for us, I think we're very good at that small startup that tends to get bought up by a big multinational rather than developing our own multibillion dollar consumer electronics company. The real company that grew huge was Autonomy that's just being bought for $7.5 billion by HP. But that's really a unique situation, most get to at $10 to $20 million and then get sold to big American companies. -Okay. Let's bring in my last guest. You're representing the young startup kind of culture in Britain, Rish Mitra, you're the founder and CEO of Blippar, and Blippar provides augmented reality to advertisers. So if you install the app and point your little-- point your phone at like a bottle of ketchup or something, it does something really cool on the screen. Now, you've got around 2 million users worldwide, you've worked with big companies like Nike, Domino's, Sony and more, but it all started to get big for you at last year's CES when you won a free place at the show from the UK government. Can you-- can you tell us what that meant for your company? -Of course, I mean, the body called UK Trade Investment in Britain and they try and encourage businesses inside Britain to go global. So we entered a best startup competition in Britain last year and we won the first prize, and the prize was an exposure, an international exposure to an event like CES where you get to see a whole large global audience of businesses and consumers and it's a-- it's a brilliant stage to showcase your technology. And the prize was the team coming to U.S., everything paid for, which is brilliant for a startup because it's-- it's pretty unaffordable for a young company like ours at least a year back. And since then, we got tremendous traction in the U.S. I would say CES was the single reason behind us opening our offices in the U.S. this summer and we've already worked with brands like L'Oreal and Budweiser and more on a pretty-- on an annual scale-- on a national scale in U.S., which is very cool. So I would say that there are policies and there are opportunities in Britain which is encouraging towards young startups like us to, at least, showcase our technology and at least have a global dream about our business. -And you actually went to the U.S. originally to get funding before settling on the UK for your headquarters. -Yeah. -Can you tell us a bit about the differences you noticed in the business culture and kind of your thoughts on that, and maybe if you speak up a little bit- -that might help I think. -Yeah. -There are significant differences, in fact, from a funding point of view and from a startup culture point of view. Most important in the VC community, the U.S. based VCs are less risk averse and they're willing to actually gamble on the next big thing. They try on an idea pretty much in its infancy and understand it. How much can this business really scale globally? Is this really a global opportunity to create the next big thing? And we saw that mindset really reflected from a U.S. investment culture which wasn't present in UK. And most of the UK VCs we met, year one revenues are always the first question where you're trying to set up a business and you're trying to build a traction of large consumer base, revenues are something which is not immediate priority for us or a business like ours. So that's one big difference we saw. Another difference is generally able to support, I mean, there's a better culture of mentorship. So what we noticed in US that actually the VCs or other current CEOs of large businesses or small businesses, they really help younger businesses to build something stable and give a lot of live feedback. And there are a lot of forums to actually help each other out. And that culture lacks in UK definitely where actually existing entrepreneurs do not support young companies as much or there isn't enough forums where people go and informally talk to each other and help each other out to understand problems because there's a lot of knowledge to be shared. I mean, today, in a year and a half, you've learned enough through running a business in the US and UK where I could help out a lot of entrepreneurs in the UK and explain to them the challenges and opportunities to set up a global business. -So, I mean, that's something that we've-- that all of us have touched on as we-in a prep to the-- when we were speaking backstage that Britain kind of lacks that-- is it-- is it an entrepreneurial spirit or something? What's the answer? Do you want to say something, Colin? -I don't think we lack an entrepreneurial spirit, actually. I think there are-- there are plenty of-- yeah, plenty of great ideas in Britain. But it's-- it's the-- it's the vision to really take that and make it global. And I do think we are-- we are lacking in that in Britain. It's certainly not-- I don't think it's something that's particularly encouraged in Britain. It's not something which is part of our culture. I don't think it's necessarily something that they-- maybe, you know, the government, the whole sort of environment encourages in Britain. But, you know, it's-- to build a brand, to build a big global business, it involves more than technologies. It's not just clever guys in a room, you know. You've-- you've really got to have-- you've got to have money, you've got to have marketing knowledge, you've got to have a lot more business knowledge. And maybe that side of that entrepreneurial stuff, yeah, we just don't have enough-- we aren't encouraging enough people in that area. -I agree with you, but I also think the government could do an awful lot more to create a culture that really allows big technology brands to grow. I think we do very well on the engineering investment and R&D side, but I think that-- how do you go promote worldwide brands in the UK? The government tried to do certain things but I think you either have to go big and help companies go and create brands worldwide or create a culture where it's okay to try and do this. And I think we need to correct entrepreneurial spirit that really starts growing this culture of brands in the UK, not just the engineering talent as well. We're brilliant at engineering. Our universities push out some brilliant engineers in this, and that's why all three companies have done very well. I think this brand side needs to be worked on, on how you create that culture of a big- -But how do you actually achieve that, that's the question, is it? You know, you want it, but how do you actually go about doing it? Like- -Well, I think it's investment; I think it's support. I think when people stand up and go, this is what technology's all about. We need to be able to go and showcase everything that we've done. Very interesting that video of people going, I didn't remember the TV was invented in the UK, didn't remember the phone was invented. But you look at all of that technology, people sitting at this table designed a lot of that technology. We can go and create those companies that really enable big consumer brands to happen; why can't we do it ourselves? I think a lot of it has to do with us pushing those cultural differences forward. -Yeah, I mean, we do have-- well, we're creating all the engineers as Ian says. We've got a huge university system in Britain, pumps out fantastic engineers. One part of our issue is that we regret exporting them so, you know, you'll find lots of British engineers in this hole; they're working for US companies; they're working for Japanese companies; they're working for non-British companies because there isn't enough-- there just aren't enough of those big British companies actually there to take the engineers. Whereas and certainly in our case, we can't get enough engineers, you know, in terms of Imagination Technologies, our IP side of the business; we just can't get enough guys into the business. It's-- it's-- it's-- there's a-- there's a- [unk] of them, I'm sure it's the same at ARM. -We're importing British engineers back into the UK that have been to UK companies, been to UK universities, exported around the world, we're bringing them back because that's how good they are. This whole CES is driven a lot by UK talent. We need to make sure that we grow the brands around that as well. -And it brings it down to the whole issue of funding again. The reason we've lost so many engineers abroad is due to funding of opportunities. I mean, many people have started businesses in Britain and really scaled in America because an investor in US believed in the wider vision of the business. And there is something which is slowly changing. I mean, we're already seeing some big names, Silicon Valley investors opening their shops in Britain and driving the change in investment culture. And today, I mean, there are 5,000-plus startups in London alone. And there is a significant change in terms of entrepreneurs wanting to do more and wanting to drive investment and scale, but challenges are twofold. One is the mindset of investors, another, government policies to some extent because sometimes the government vision about the whole tech entrepreneurship can be quite narrow. And trying to define a geography is pretty much a tick box, so there are-- there is something called Silicon Roundabout in London, which is considered Britain's answer to Silicon Valley but it's-- it's merely- -[unk] guys like Google and, you know, it has all the American companies out there, right, -Exactly. -which has had the effect of pushing rents up for people like you- -Absolutely. -And so-- so it kind of hasn't worked, right? Is that what you think? -It was-- it was meant to attract startups like us and make it easy and have more easy and lower office rental and good IT infrastructure in place, but it's actually become an attractive point for high-value startups and really big global conglomerates like Google and Facebook to -open their offices there, which is of course, driving the rents up. So there are policies in place but they're not being-- they're not being exercised in the right way. But I would say, few things like the basic paperwork stuff but things like entrepreneur's relief and R&D tax relief, there are a few things there which is quite encouraging for a startup where you end up paying less in terms of taxes. But that will not fundamentally change the vision or the whole future of Britain. And I also think we need heroes. Britain lacks heroes in tech space. The culture about exits as well, you know, people tend to exit very quickly, hence we lack brands. We've got a lot of companies which are amazing components but we don't own the whole brand. -Okay, that's great. I've-- I've really enjoyed this talk but I'm afraid we're the-- that's our time over so I hope that's given people who are watching there a bit of an idea of what Brits tech-- British tech's like. Thank very much for you all the people in my panel. Bridget Carey's out next with our TV experts so stay tuned.