Venture capitalists. Who needs them?

Richard Sharpe meets three UK start-ups developing products to help others manage their applications, all without the aid of venture capital.

Written by Richard Sharpe

The UK software industry is hardly renowned for its management packages. The single example of Autonomy sticks out like a sore thumb.

Now three of Computing's Acorns, specialising in UK software product development, are aiming squarely at delivering software to help others to manage.

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Solcara is aiming its applications, built on core software, into vertical markets which need assured knowledge management packages, such as the legal profession and the police force.

Police investigating a string of murders are going to be inundated with media calls; they need to keep the media informed with consistent and legally correct information. Solcara's Press Bureau allowed the force which investigated the Harold Shipman murders to do just that.

Change is constant; the lack of integrated software tools to support strategic change is also constant. Until now.

Tapster Rock has a window of no more than 18 months before the big boys of software applications bring out their versions of strategic change management (SCM) products to compete against Tapster's Oriel.

Physician, heal thyself, is the age-old saying thrown at those who suggest cures for others. IT has been proposing that management be supported with integrated software. So why is the IT function not fully supported by integrated software?

That's the question John Gibert posed and answered when he launched Be-st, which is in talks to get the first round of customers for its integrated IT management package.

These three Acorns are aiming to support the management of parts of business with integrated packages. They have another common feature: they have no venture capital (VC) funding.

They are being funded by the efforts of the founders because, they claim, VCs may bend the young company out of shape to satisfy their own needs, rather than those of the customers.

It is by winning customers and satisfying their needs at a profit that they will survive and grow.

CASE STUDY: TAPSTER ROCK

Learning what not to do is just as important as learning what to do. Don't go to VCs, otherwise you end up doing things to please them. Go to the customers first. They are far more important.

Don't do direct mail or cold calling for an innovative software package which is hard to explain bacause you won't get a good response. Instead, run events so that people can talk about their problems.

Don't make your product portable across a lot of databases, as there is no point in doing it at the early stages.

All this may sound highly negative but, in fact, it is the positive basis for Tapster Rock, the software start-up trying to persuade the world that a package to support SCM is the next big thing.

Tapster Rock's package is called Oriel, like the window sticking out of a wall which gives a good view, according to co-founder Jane Deeley-Graham.

Two customers have already signed up, said co-founder and technical director Jon Iles. They are Marlborough Sterling, a software and IT services company for financial services clients, and a retail financial services company.

Iles, Deeley-Graham and her husband Kevin co-own Tapster Rock. All in their early 30s, they are using their own money to fund development of the business, and employ three others: a software developer to work with Iles, and two to support sales, marketing and implementation.

The name comes from the Tapster Valley, near the village of Beoley, near Redditch close to where the M42 links to the M40. They like the lifestyle of the countryside. The Rock part of the name comes from the company's logo.

Tapster Rock toyed with the idea of VC funding. "We did presentations about a year ago but they were a waste of time," explained Iles.

"You end up having to do things to please the VC. It's far more important to go straight to your customers and please them."

Iles has a doctorate in speech research from Birmingham, and has worked in small software companies in development. Jane worked in the same small company as Iles. Kevin has worked for Deloittes Consulting, and is ex-ICL.

Kevin found that he was having to pull together strategic change projects with a range of tools from spreadsheets, to PowerPoint and manual processes.

Why not put all that into a single package? Hence Oriel, now in version 2.4 and sold via the application service provider (ASP) model.

Sales have generated a profit on a turnover of about £180,000 in Tapster Rock's financial year, which has just ended. It is burning about £10,000 a month on salaries to continue developing the company.

The business side is spending cash to run events where executives discuss their problems in strategic management and project control. This has allowed Tapster to penetrate organisations which would never reply to direct mail or cold calling.

Tapster then has a chance to explain its approach, which Iles maintained is rather like trying to explain what a spreadsheet can do for somebody who has never seen one.

Competition will come when established vendors of project management software and enterprise resource planning packages enter the market, probably in the next 12 to 18 months. By then Iles hopes to have a mature product and "stand a good chance of making a big impact before they can get established".

The next step for 2003 will be to talk to partners and try to interest them in selling Oriel. Iles said that Tapster does not want the consultancy work; it wants to sell shrink-wrapped software or the equivalent as an ASP service.

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