Start-ups that grow to a value exceeding $1 billion are so scarce that they’ve been given a pointedly mythical epithet. But the UK is home to a handful of unicorns – and Director has tracked down the founders of three such rare beasts for a series of exclusive interviews. In this Q&A Gordon Sanghera – co-founder and CEO of Oxford Nanopore Technologies, discusses turning innovation into profit
About Oxford Nanopore Technologies
A specialist in DNA analysis, the firm is developing portable DNA sequencers to enable the “analysis of any living thing by any person in any environment”. Founded when Gordon Sanghera, Spike Willcocks and Hagan Bayley spun it out of the University of Oxford in 2005, the company now has 390 staff, a valuation of $1.5 billion and has raised £451 million to date – including a round of £100 million in March. In 2016 astronauts used one of the company’s DNA sequencers in their experiments aboard the International Space Station.
You were a director at another business before you established Oxford Nanopore Technologies. What did you learn there?
I saw some risky approaches pay off and others go wrong. I spent 14 years at a spin-out from the University of Oxford – MediSense – which was sold to US giant Abbott Laboratories for $876 million in 1996. I then spent seven years at Abbott, where I saw the terrible impact of a lack of investment in intellectual property. Our IP-insularity meant that, instead of dominating a $6 billion diabetes care market, we achieved only a minority share. MediSense was very successful, but our growth could have been controlled better and we didn’t always match manufacturing with demand.
How did you set up your new company to be different?
I had three clear objectives: our technology would be disruptive; we would make a global play for IP; and we would seek out long-term investors who wanted to build a global technology company in the UK. Growing a high-tech company is a juggle: you are constantly balancing factors of investment and bold approaches against the need for caution and frugality. You need to have a clear vision and hire people who share that vision.
What has been its biggest success so far?
Making nanopore DNA sequencing work – and work well. This incredibly complex combination of chemistry, electronics and informatics was conceived in 1996. We started our work on it in 2005, delivering the first technology to early-access users in 2014. That took a huge amount of determination, time and investment. For years people said that what we were doing was impossible, which made us more determined to make it work. People don’t always understand the British mentality.
You’ve raised £451 million so far. What’s your advice for others seeking investment?
Be honest about your long-term goal. Is it huge market disruption, for instance, or is it delivering a medium-term product and then exiting? And then be clear about what it will take for you to achieve this. You need the right shareholders, not just shareholders.
Many promising British firms sell out way before reaching unicorn scale. What’s your view on this?
It’s about the management and shareholders having the same view of what the company wants to do. An exit may be what some people want, but we want to build a British technology story into international markets. We shared this vision with our shareholders at the outset and we have worked incredibly hard since then to find others that share our aim of building a global technology player in the UK.
How would you describe your leadership ethos?
From the beginning I wanted to create a company structure that’s fluid. As a football fan, I have an underlying approach that derives from total football, the brilliant concept made famous by Dutch teams in the 1970s. Its basic idea is that the outfield players can all interchange positions. Taking this into a business context, we have soft boundaries between traditional group structures. For example, research concepts can be transferred through to the manufacturing floor and the researcher will stay with the project through to high-scale manufacture. This required us to hire a team that was not already trained to operate within traditional boundaries. Many members of the team have grown with the company, so they have a deep understanding of the ethos we have created.
What’s the secret to assembling the right board?
We think about our board of directors in a simple way: can they help? Can they bring expertise to the table but listen to the management team, who are “living” the business every day? The VC model, whereby a venture capitalist drives the interest of a single shareholder, works in other businesses. But it doesn’t work for us – all our shares are ordinary, which is unusual for a business of our type.
How do you develop yourself as a leader?
I see myself as a constant work in progress. I have a very talented business mentor and we use a rigorous framework to keep working on improving my skills. I’ve continually been learning how to develop my leadership style as the business has expanded from 35 people to more than 350.
Is it true that you’re encouraging internal ‘start-ups’ to create new revenue streams?
Even firms of our relatively small size can struggle to innovate. So yes, we have established teams that work in different locations to push forward new generations of our technology. We have long-term innovation groups working on next-generation platforms. Sustainable innovation is key – how will we be disrupted and how do we disrupt ourselves?
What’s your advice for anyone with ambitions to develop their own unicorn?
Be bold, ambitious and decisive. I know that I’ve made many incorrect decisions, but it is always possible to readjust your direction of travel if it’s wrong. I’ve seen too many vague decisions being made with the aim of appeasing the broader group. That’s a killer when you have limited time and resources to succeed.
Bonus points: Gordon Sanghera on…
Setting up in the US…
Make sure you understand your reasons for going to the US – it’s an obvious choice as the language means that the barrier is lower. But there are other markets with different types of barrier – trade, legal, regulatory, cultural, and different competitive scenarios. For us, there is a very strong link between scientific communities in the US and UK, and the US has an incredible amount of innovation and early adoption in genomics, so we are enjoying doing business there. DIT is always very helpful in helping companies overcome logistics challenges.
The biggest challenge so far…
We’ve been commercial for nearly three years, but we’re only in the foothills of that really, so when we look back at the obstacles they sometimes feel small in comparison to what we are trying to do. One thing that any company will face is competitors, who of course try harder to stop you the better you are doing. We have been very open with our shareholders and our employees about those kinds of obstacles, and they are very supportive of our technical and commercial strategies.
The impact of Brexit…
As long as we are able to hire and retain talent freely, which we have received many assurances on, we will be fine as we are a global and nimble business. Our growth is happening in Asia and the US, not just mainland Europe – and being in this growth phase means we can easily respond to global or geopolitical changes, in many ways it’s an advantage.