Sales for Startups Founder and CEO, James Ker-Reid, talks to Graeme Cox, a serial entrepreneur and advisor whose latest venture is one of the most exciting we’ve had the pleasure of learning about.
We chat through his recent experiences of shifting priorities and identifying the pockets of opportunity that keeps his ambitious business pushing forward.
- Before we get going, can you please tell us more about yourself and the company?
Absolutely. I graduated in Artificial Intelligence from Edinburgh University back in the 90s and have been working in AI and big data my entire career, both for global consultancies and with running my own businesses. My current business, Emteq, is the 4th company that I’ve founded and led, as well as acting as an advisor and non-exec to a number of other businesses. I have one previous major exit; a leading UK cybersecurity provider that I founded, grew for 10 years and ultimately sold and integrated to Dell’s global cybersecurity business, Secureworks.
So, Emteq – I met a fascinating person called Charles Nduka who’s a leading facial surgeon based in Brighton (where I now live). At the time he was looking for ways to build technology to help treat his facial paralysis patients, which is a passion and focus of his. I got involved with him in looking at how we could measure the movement of the face using sensors and machine learning techniques to understand that data.
That quickly grew on to realising that what we were dealing with was a way of reading the most visible and deterministic methods of expressing emotion that human beings have, which is through our faces and bodies. Being able to read all these emotions and expressions allow us, as humans, to subconsciously interpret the emotional state of the people we are conversing with. These are the traits that AI has to learn to understand emotional display if it wants to have the ability to understand the human condition more deeply, which is the mission that we set ourselves out on.
So I founded Emteq in 2015 with Charles and we set out on a mission to decode human emotional display for medical purposes; to treat our moods, and signs of the change of our mood, as medical biomarkers of genuinely how we feel. To also be able to understand and diagnose, and therefore treat, mental illnesses (i.e. signs of anxiety, signs of fear, signs of stress) – and use those in ways to help provide interventions or understanding of stress in certain situations to then help human beings provide interventions to aid people.
Even in this pandemic world we live in, this is the world’s greatest epidemic – whilst Covid-19 is top of everyone’s minds, we are in a world where 1 in 4 of us will experience mental illness of some kind. It is the world’s greatest disease at the moment and there’s currently no deterministic ways of understanding the severity, state and onset of mental illness. It’s all through subjective analysis with doctors. So we are in the process of building systems to read the digital biomarkers of mood and mental state for medical intervention. We have just started going to market, only starting to sell the product this year.
- Fascinating story there! You mention facial recognition and biometrics – do you amplify that with testing as well to build a more rounded report of the person?
So we are focussed on building systems that are wearable technologies. Our two systems are a virtual reality headset that can read these biomarker moods directly from contact and a pair of glasses that can do broadly the same thing – but more in the real world in our everyday lives. We are not using invasive markers, such as taking blood. We are not inside the body, we are on the surface and focused primarily on reading real-time data – understanding in the moment what someone’s response is.
- What are the changes you’ve made in the last few months with the ongoing pandemic?
We originally had a launch date of 1st May 2020 for the first healthcare use case of our product. This required us to do a completed set of trials with hospitals in South East England over February to April which got curtailed rather dramatically. All access to hospitals, clinical trials and non-essential activities obviously got completely stopped. So it hasn’t been possible to complete that cycle.
Because of this, the swift change that I made back at the start of March was to refocus our sales activities on a secondary use case which we had identified but wasn’t our primary route to market at the time. There has been a significant interest in the virtual reality system with biosensors in it from people researching emotions, such as clinical psychologists, academics studying human emotion and people interested in developing tools for stress management. We have pivoted rapidly in order to put the medical use case on the backburner until roughly October, and we have started sales of the research system instead which have gone really well.
- So going forward, do you see the research market as a long term strategy, or could it fade out and the medical side take over?
They are just very different markets. The research market, as I’m sure you can guess, is not a massive global opportunity – perhaps only five to ten thousand researchers worldwide that could use one of these systems. What it does mean in selling to research use cases, where data quality is very important, is that the unit price we can put on the system is relatively high but the number of units we can sell is relatively low. Compare that to the clinical and consumer use case of the system where, if we are successful, we could be putting out the systems in the hundreds of thousands (or even millions) potentially in the future where unit price is lower but market potential is higher.
So research is not a replacement for our primary market drive, but a very useful and extremely interesting market to get into now. It’ll also help us develop our brand credibility around our system – having leading academic researchers using our systems and validating the data coming out of it is actually very beneficial long term in improving people’s understanding of what we are capable of. I’m very positive about the change we’ve made and it’s going very well so far.
- Besides the research market, what are things are you focussing on right now and where do you see the opportunities going forward for you over the next, perhaps, 3 months?
That’s quite a short window for us – we’ve had over 4 years of being an R&D company where we’ve literally been burning cash and not turning over very much at all, funded by research grants and equity investments. We’re now pivoting into a properly commercially focused business. So the next 3 months are really all about the practical and process changes associated with moving away from an R&D business – but also the cultural changes in order to build a sales-focused arm of the company, which is a significant change all by itself. That means I think the next three months are continuing the development cycle behind the scenes as planned, but also a significant increase in effort and spend in sales and marketing, focused on the research opportunities. And if we come out of the next 3, or even 6, months with success in those areas then I will be absolutely delighted.
- Is there any advice you’d give other tech founders, perhaps in VR or AI, that are looking to make that shift from purely an R&D business, similar to yourselves?
I’m not sure if I’ve got advice that plays specifically to those technology platforms, but the general advice still works extremely well which is that you have to find your initial market, the launch market that genuinely makes sense. If you throw yourself into a very broad, unfocused and dispersed market that ends up competing against HTC and Facebook (Oculus), for example, then you’re never going to get anywhere.
You need to define that tight niche where you can show clear blue water between yourselves and competition to start with. It may not look like a big market in itself, but if you can establish a bridgehead, demonstrate the viability of the software and build an audience, then you have a starting point to land and expand from. So boiling down, ‘focus’ is the word, beginning with the question ‘who is the customer?’.
- What advice would you give founders in order to improve their success?
Thinking about this one about immediate advice for right now, a big focus for me is keeping on top of employee morale and productivity.
Unless you’ve started a remote working startup deliberately, your audience is working in a very different environment to what they were expecting for most of 2020. The pattern of work and communication is starting to be embedded and changed. What I saw at Emteq in the early days was a real boost in productivity in development, idea spreading, etc. when everyone was excited about working from home.
That said, we are definitely over that initial novelty now. Therefore it’s making sure we’re keeping up the rhythm and excitement, and focus on delivery as well. In the company of 20, I’ve introduced more team activities into the work to bring people remotely together – more social activities during the week, introduced an afternoon chat every afternoon at a set time where you’re not allowed to talk about work for anyone who wants to join. I’ve also upped my 1-to-1s with my team. The general feeling of contact and feeling of purpose of belonging is important. That’s what I’d encourage any founder right now, to ensure their team is OK and being very aware of team morale and productivity.
The second thing is around outreach to your customer and potential customer base which is potentially difficult at this point, particularly if sales have fallen off a cliff recently. And sending out ongoing mail saying the company is doing well is something you can only really do once. Finding ways and reasons to reach out to your audiences, engage and understand their needs is really important. Whether you can actively sell to them or not at the moment doesn’t matter – outward communication is important.
The third one has to come back again to cash flow and cash planning – I would say to anyone who is getting excited since lockdown lifted is that the impact of this will last a very long time, so if there is any way to curb spending and control cash flow without significantly damaging your business, then you should do it. When it comes down to it at pretty much any startup, the bottom line is the cash position, and that drives everything.
Make sure you look for those other opportunities of money that you might not have immediately thought of. A revelation to me through Emteq is that we’ve found our ability to raise money from UK grant structures has been fantastic – for example Innovate UK. We’ve won 8 different awards over the years, not just from InnovateUK but also the NIHR (the NHS’s research arm), European Funding from Horizon2020 and also via the Wellcome Trust, totalling over £4M. There are a lot more grants available right now to try and keep loss-making, high growth startups in business. The government announced there is a scheme which will match-fund equity investment into the company – if you’ve got angels and lead investors into the company that are potentially interested, get them aware of this as they might invest more.
- Fantastic – thanks for today Graeme! For those out there who want to connect, where can they find you?
Thanks Graeme, great to chat!
We want to thank Graeme for this interview, a really good conversation with a serial entrepreneur who’s laser-focused on identifying success.
That is all from us at Sales for Startups today, be sure to tune in soon for more interviews with CEOs and Founders of some great companies that are shedding some light on the current issues we are facing. If you’d like to be interviewed please comment below or feel free to connect with me on LinkedIn or submit a request on our website.