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This is going to become a multi-part thread that will debate why there is a need for new mechanisms to invest equity capital at the grass roots of society.
Part one: Opening the debate.
Today I believe that we live in a feudal mercantile, not a classic capitalist society and that the label “Capitalism” has instead been high jacked by the FIRE economy to cloak the feudal mercantile economy with a false identity. But rather than continue to pick over the bones of a failed economic strategy, we must start to look ahead, and to that end I open with a quote from the Times last week:
“According to insolvency practitioners grappling with the growing queues outside intensive care, more drastic treatment will be required for many small firms.
That will often mean raising fresh equity to pay down debt. But from where?”
One would be forgiven for thinking that with our Anglo-Saxon capital based society having been in place for more than a century, that would be a silly question to ask and even sillier to suggest that there is no answer. But in fact, the answer is nowhere!
They continued: “ Entrepreneurs are in no mood to remortgage their homes and the venture capital industry deserted small businesses long ago. Lord Mandelson's £50 million for a new enterprise investment fund is trifling.”
http://business.timesonline.co.uk/to...cle5519591.ece
The long term aiming point for this thread will be to define an answer to that question, where to find fresh equity for small firms? And, if £50 million is trifling; how much do we need?
For those of you new to iTulip, I am a British inventor. I will be 65 this year, and have been in business, investment and inventing since the 1960’s, so I feel I bring into the debate a very broad experience of the events and business environment of nearly half a century. Most of my experience has been as a classic “ideas man” with thinking beyond the imagination of the day and I want to bring you into focus with where the economy of the Western world should be going from now onwards from my grass roots viewpoint.
If my point of view is to have any value, then it is vital that you can see where I come from, so I am starting with a brief potted history of the seminal events, good and bad, that have shaped my personal view, that venture capital and Private equity do not fulfil the needs of a fully free enterprise society. That the question posed by the Times in London last week opens the door to a much wider viewpoint that must be urgently debated.
Do not, for one moment, think I am some sort of closet socialist. My grandfather had been a Jobber on the London Stock Exchange and by the late 1960’s I was financially successful, working as a highly skilled artisan in industry and already investing in shares of local companies via a local stockbroker, and from that association came the idea to set up my first business, repairing freight containers and trailers moving through Southampton Docks here in the UK. Thus early 1970, I stepped out into as competitive a business environment as anyone could imagine. Every single job had to be competitively quoted on the dockside taking handwritten notes while standing literally face to face with all your competitors with no quarter given, nor taken. I thrived in that competitive environment. We expanded rapidly and successfully.
But the whole experience ended after three years just as rapidly, not because of any decision we had made, but because of a combination of international dock strikes and our inability, over a single day, to be able to show our bankers that we had complete control over our market. And that taught me my first lesson. We came to a complete halt because we were grossly under capitalised and what finance we had, especially as our latest funding had come from Hambros Bank, a major City of London Merchant Bank, was structured in such a way that we were unable to withstand what was a short term “shock” to our otherwise very successful business. That it is very dangerous to expand a business with credit rather than equity capital.
We heard, not long afterwards, that our customers deeply regretted that they had treated us in the way they had, causing our demise, but by then it is always too late.
So my first years were a firestorm of experience. But there were a whole pile of inter-related aspects that also started to point to where I am now. One of the products we had developed during those early years was what I called Portable Housing Units. Using the freight container dimensions and corner blocks, we were already selling, internationally, portable offices that could be transported within the freight container system. I suspect that I was the originator of what is today, a substantial international business. But there was no obvious structure to finance such a separate new business from a small, grass roots production facility where the underlying business was already in difficulties.
In the UK at that time, and still to this day, if you go bankrupt in business, you are a charlatan, a form of antisocial petty criminal with all that that description implies. But I did clear all my personally secured debts to the principal private investor via a property development. (The house was briefly featured as a part of a BBC TV program recently).
I gained a very good position in South Africa to set up container repairs throughout the Transvaal, based in Johannesburg, ordered to create a new subsidiary of Anglo-American Safmarine and treat it as my own business. However, the South African government would not grant me a permanent residence permit, (I discovered afterwards the most likely reason being that I had written on a single page form that I am a Christian/agnostic). I believe in religion but not god.
Turning back to experience gained with repairing freight containers, I then designed and filed for patents, a completely new form of blast cleaning device. In essence, I took the many times more efficient concept of wheel blasting, where grit is slid down a rotating blade, instead of blown down a compressed air tube, to create a hand held wheel blast unit that brought all the advantages of wheel blasting into the hands of the old fashioned user with an air compressor. Built a prototype, and successfully demonstrated it. Once again, there was nowhere to find that initial capital injection. So this time I got myself in front of what had been the major metal finishing business in the UK, (indeed, the world), and made a new mistake, I had been advised by a “City” friend to hold out for retaining the patent rights and renting them for a peppercorn rent…….. and came out with nothing. Ouch! Another lesson learned.
But what was of greater interest was that, unless I was prepared to sell the rights immediately to the largest business in that marketplace, there was no other source of funding. Not on any terms. You either sold the idea or nothing.
Not long afterwards, the metal finishing business, now led by a new high flyer that had arrived just before me, re-structured the business, threw out the old core, long successful metal finishing side, and let the management buy it. But they too collapsed due to being unable to ride out the short term change in direction of the underlying business, I must assume from being under capitalised too. So perhaps the experience was better to have burnt my own fingers in the way I did, for the experience, rather than become a part and then see it all disappear. Either way the result was, in the end the same. I was eventually granted the UK patent, but was, again, completely unfunded and had to, again, move on.
Next I carried out a full exercise to create a Treated Straw Plant. If you mix ~ 3% Caustic Soda with the waste cereal straw from wheat farming, and run that through a pellet mill you can use the resulting product both as an animal feedstock and also as a feedstock for Kraft paper production. I had suppliers, customers, plant, premises in a perfect location with ample raw materials on the doorstep, local authority permissions, everything I needed but finance. Try as hard as I could; I could not find the funding I needed on any terms. The main players had already put their money into a major multi-national located nearby who had also spotted the opportunity and no one was going to let me compete. I had no option but to walk away. There was no structure, no where I could raise capital to compete as they were the source of capital.
So by now you are getting the idea of where I come from today.
In 1977 I turned to contacts I had already made in the local university, Southampton, where, with the wonderful help of Ron Foyle, a Senior lecturer in Mechanical Engineering, we had already formed what we described as a Project Development Group. So here was I, schooled where no one thought to encourage you to go to a university and thus trained as a skilled artisan, sitting around a table with six academics, all of us with exactly the same experiences; ideas for products and no funding. The high point for me was being given a Common Room Pass so I could sit down and drink tea with every Don in the university.
I learned very many things, particularly, that I was experiencing the same problems as everyone else; primarily, no funding. There were fine scientists around me with a constant flow of new thinking that they wished to test on the marketplace. No one had any access to capital. Our High Street banks knew what we wanted to do, but they could only offer the classic mercantile economy solution, a bank loan set against a capital asset, mainly your home, backed up by your home income. Moreover, the banks had no direct connection with capital.
During 1978 Harold Wilson, ex Prime Minister of the UK set up a committee to review the functioning of the financial institutions and I gave them the benefit of my opinion. That in turn got me a full Business Page feature in the May 1978 issue of Investors Chronicle.
I then founded Ideas Exchange Limited to act as a National information exchange between inventors and industry. To give you an idea of the climate I found myself in, I was interviewed by senior managers of my bank, whom I had approached for support. The interview was in a storage cupboard, a very visible and calculated insult. However, not to be discouraged, I set off for London and by walking through doors and asking, I got myself invited by E.F.L. Brech, (The world renowned author of The History of Management), and at that time Chairman of Intex Executives, to direct the creation of Ideas and Resource Exchange Limited, (IREX) which combined my ideas with that of a Resource Exchange, (created and widely featured by Michael Dixon with five half page write ups in the Financial Times).
Between us, Edward and I raised some capital from one of the leading firms of City accountants, founded an impressive board of directors, opened a London office and set into motion the creation of our new entity. While doing so, the IREX computer software system, which I designed and successfully implemented, was credited by the UK Department of Industry as being the most innovative information distribution system they had seen up to that time. Kenneth Baker, Minister of State for Information Technology opened the offices and we were blessed with substantial publicity in computer industry publications such as being Front Page Story for Informatics, as well as BBC Radio and national newspapers. During 1981-82 I then followed that up by organising and presenting a full IREX national industrial exhibition program during which I made useful contact with every major group in the UK involved with job creation. However, IREX was classically under capitalised and to add to the problems, the Board decision had been made to PR launch the business using the last of our funds available and we picked the day Prince Charles announced his engagement to Diana. The next day the newspapers were running five or ten pages on Charles and Diana and we got nothing for the investment. In the end, while we had made good progress in spite of all that, we could not find enough paying customers for the service. Another business lesson; you cannot foresee every circumstance and, while it was a great idea, the fact is, you must have paying customers to survive or adequate funding. Back to square one again.
In passing, Edward, at that time in his early seventies, went on to become the oldest recipient of a PHD at the grand age of 92 and lived to 94 years. He introduced me to a world I had never imagined such as dinner in the Reform Club in Pall Mall, Lunch at the Athenaeum Club surrounded by Bishops and tea with the Director General of the British Institute of Management, (liveried flunkies and all) with Edward kicking me under the table to curb my enthusiasm. Working with Edward Brech resulted in some of the most interesting conversations imaginable, and in the most remarkable locations; a wonderful and amazing experience.
As I was already involved, as a judge of school science competitions via the Southern Science and Technology Forum, (SSTF), based on Southampton university campus, and taking into account conversations with close associates, I had come to the conclusion that, while I was trying to set up new businesses, I could see that the greatest disadvantage was that many people simply do not understand business. That from childhood there was no way of getting a better understanding of just how business worked via the education system. So I set into motion the creation of a debate surrounding my ideas for bringing business education into ordinary schools and called the whole idea “Venture Enterprise”.
My! Have you ever put your head into a hornets nest? Now I learned just how much the whole idea of “business” was depreciated by the senior UK Civil Service education establishment. I think some might have willingly burnt me at the stake, given the slightest chance.
That exercise ended with myself and the Director of the SSTF attending a meeting with senior civil servants in the head office of the Manpower Services Commission in the North of England where the door to the room was propped open with a fire extinguisher, (because the fire alarms were not working???). Told we would have only a couple of minutes as they were “busy”, we kept them talking for some two hours only for the meeting to break up very quickly when my colleague got very angry and I pulled him out. Behind that door were three secretaries who had taken down every word spoken. They looked exhausted, poor things. Someone should look up the record of that meeting sometime; it will make for quite a story today.
This takes me on into the early 1980’s. As I had a good working relationship with by then quite a few academics in the university, I concentrated upon taking that forward into two separate areas of interest; research & development and my sport, gliding, flying sailplanes. So in 1984, I founded UK Research & Development Limited which was set up to create a working interface between the ordinary academic and the need for outside companies to have research done. Ron Foyle became my Chairman and we took an office on the university campus. Almost immediately I discovered brass filings on my desk top and on the advice of the local police, fitted my own lock to the door prompting the university to terminate our lease and forcing me to relocate to my home, a house under renovation; not very auspicious, having your office on a building site. (In my spare time I was in the process of completely rebuilding a terraced house).
Not withstanding, over the next few years I very successfully designed, manufactured and commissioned unusual laboratory equipment, particularly for the biotechnology industry and successfully managed external research and development projects for a number of leading international companies including Philips Car Stereo International, the UK Public Health Laboratory Service, Porton Products International plc, Johnson Matthey PLC, Hythe Chemicals (a division of B.P. British petroleum), EXXON Chemicals and Brookes and Gatehouse PLC.
During this period I also became a founding member of another discussion group which we called the Catalyst Group.
Returning to my university contacts, between 1985 and 1986 I created a new group of students to copy the successful German university concept of an Akaflieg, where the students set out to actually design and build a real aircraft as a part of their studies. Over the next two years, they produced a new design for a new British glider. But I could not find anyone who would finance any part of the exercise.
Somewhere in my archives I have a letter from my then bank manager making fun of me and my “ideas”.
Early 1986 I laid down proposals titled: Producing Bubble Structures in Space. This in turn provided the springboard to, with the help of Dr. Alan Jefferson, at that time a senior lecturer in the Astronautics and Aeronautics department of the University of Southampton, produce an entry for the Eiffel Tower in Space Competition. We were awarded “Mention” Tour Eiffel de L’espace competition. Prize presented by M. Jacques Valade, Minister for Research and Development, Paris France, who publicly credited us both with having the same technological foresight as Gustav Eiffel a Century before. Our entry – “The Space Chronometer” was published in Leonardo Vol. 22 No 2 1989. http://www.jstor.org/pss/1575232
But I digress; as this period covers 1984 -1988 and my main “in house” proposal where I founded and led the creation of proposals to sell technology and know-how in the use, forming and manufacture of new advanced materials. The proposed Advanced Engineering Materials Centre attracted a formidable team including Dr. Alan Jefferson, now Assistant Dean of Engineering (Academic), University of Southampton, Peter D.R. Rice, retired Director of the U.K. Polymer Engineering Directorate, Michael Gill, Gill Electronics Research & Development, Professor G.M. Lilley, Professor Emeritus (Aeronautics and Astronautics), University of Southampton and Jasper Warner Rothuizen, Rothuizen Consulting, Switzerland. But, again, we could not find anyone to fund the establishment of the business.
We even had the input of the Deputy Lord Lieutenant of Hampshire who brought in a very senior retired Navy Captain who in turn took the proposals to a friend of his in the “City” – which friend retorted as he immediately handed back the proposals unopened. “Research and Development old boy, bottomless pit, never touch it with a barge pole”.
Returning to the conventional track of seeking funding from a major company, I tried to get support from GEC, in the process getting a guided tour of their facilities from their Technical Director. Some time after that, GEC announced the establishment of, yes; you have guessed it – GEC Advanced Engineering Materials Centre Limited.
I opened a similar conversation with Johnson Matthey through my membership of the Catalyst Group. That produced one of those never to be forgotten “cringe” moments as the meeting was going very well indeed until I stupidly put up a slide to show just how little money I had spent. (I am always proud that I am never a spendthrift), and had spent very little to get the entire project to that point. Their looks of embarrassment will live with me till the plank gets nailed down over my head. They never returned to the conversation.
Ironically, in 1990 I was granted the core patent that was the principle technology embedded in my ideas for an advanced engineering materials centre; a completely new type of hybrid fibre combining the properties of Carbon Fibre and Kevlar, 31 January 1990 GB 2 183 540. But again with no possibility of any funding to take it any further, I simply had no option but to walk away.
But I digress, as by the end of 1988, having expended all my spare funds on advanced materials I had to regroup and, as I had carried all the costs throughout, I re-mortgaged our home, paid off the creditors, and immediately after Christmas, January 1989 I filed five new ideas as patent applications and moved into the next phase, GPS navigation.
I took two of those applications and decided to run with one as the lead, a proposal for a combined printed map in a sealed consumable plastic cassette and a GPS navigation system, GPNS, Global Portable Navigation System. The second patent application was placed on the back burner as no one I approached wanted to deal with a proposal for what is now, some 20 years later, the camera phone with GPS, but what I then described as the Photographic Security System. Video-911 as it is today.
I have to cut a very long story short. I tried everything I could, between 1989 and spring 1992 to raise $30 million to develop both those ideas. In the process I presented papers to the 24th ISATA, Florence, Italy, (May 1991) and the following September, to the Fifteenth Biennial Guidance Test Symposium, Holloman AFB, New Mexico. My first marriage collapsed and Easter 1992 I was right back to square one. The best offer I received was from a VC in San Francisco who offered to buy the patents for $200,000 while telling me that was the best offer I would ever receive.
My main efforts were aimed at getting support from a major manufacturer and I did receive a lot of support from Philips Car Stereo International, a division of the largest European electronics company. But Philips also had another division developing, within a European collaboration, a new in-car navigation system and they in turn refused to permit another form of in-car navigation system to compete with theirs. The lesson here being that at the large company level, competition is suppressed, not favoured.
Later, I tried to get support from a UK government inspired organisation who offered me a choice. They would take the IP, yes, I was invited to give it to them or, they might consider a joint collaboration if I could demonstrate a large company interest in a joint development. So I then succeeded in getting the GPNS concept all the way to a main board meeting with Sumitimo Electric Industries, but by then, the Japanese economy had suddenly collapsed and they could not commit the funding.
What was really interesting, the UK government inspired organisation, regardless that I had achieved so much, took no further interest in either myself or the GPNS system. In effect, if they could not take complete control, they were not interested.
It is important to realise that such attitudes continue to this day.
Being again, early 1992, back to square one with no funds, and with my High Street bank closing the company overdraft facility, (in just the same manner as we hear is occurring today with other small businesses), I sat down and wrote a 170 page report to the European Patent Office as “Evidence of Due Diligence in attempting to raise capital to pay the filing fees to the EPO”. Needless to say I was forced to abandon the European patent application as I needed something like the price of a small house to pay all the fees and associated costs for an international patent application. And is why I only have three US and one Japanese patent. But that still makes me the originating inventor of a full system, (hand held device, transmission and base station), incorporating any portable transmission device that combines a electronic camera and a navigation system that transmits an image with navigation notation to a base station for display of both the image and the location on a map. My report led to a letter published in the Times London, 2nd June 1992, asking the question - Who leads the savings institutions towards longer term investment in the nation?
Invention is just as important to the long term success of a nation as any sport, so saying I was years too early is like saying that you are better off not passing the baton in an Olympic relay race.
You must also understand that by then the major impact of the first property crash was in full pelt and the local UK economy had all but come to a halt. U.K. Research & Development Ltd had no work, or any sign of such on the horizon. So, nearly destitute, I turned to working on a possible property development, a new deli restaurant under a railway archway in the city of Salisbury. Over the next three years I won several planning permissions, gained the support of the Railtrack national railway engineers, in the process winning a public enquiry, forced the Salisbury City Council to abandon their Commuted Car Parking Scheme, and won planning for offices and a restaurant and night club over the restaurant car park. However, I could not get the council to settle a boundary dispute with Railtrack and the restaurant had to be left on the back burner and instead I set out to build the car park, (what Americans call a parking lot), with my bare hands.
Soon after that I was also instrumental in forcing the City Council to abandon flood protection measures for the Waitrose Food Superstore development by bringing in a World class hydrologist to confirm my own findings about their viability. I won against Sir William Halcro & partners, one of the largest consulting firms in the UK as well as the National Rivers Authority.
During 1994 I presented to the UK government, HM Treasury and The Bank of England, comprehensive evidence of the difficulties of raising capital for new start-up high technology firms. This in turn also led, at their request, to further detailed submissions to the Department of Inland Revenue on the subject of Venture Capital Trusts, direct correspondence with the then Governor of the Bank of England, Eddie George and, initiated by the Bank of England, face to face conversations with senior figures from the City of London banking community.
The latter were particularly interesting; they told me job creation was the government’s responsibility. And, yes, one of them had been once involved with raising capital for a business, it had taken some years. And no, they were not interested in helping me with anything I was involved with. They saw it as - their business function was not down at my level at all and matched other similar conversations where I would often be told that City banks are in the business of intergovernmental purchases of securities and the like.
And just to top off this period between 1994 and 1995, as chairman of The Coles Consortium, (the name was not my idea but an associates, a retired Jewish solicitor and one of my greatest friends, but sadly the now late; Ronald B. Margolin). I led a group of local businessmen, (the local Member of Parliament, Robert Key, sat in as an observer), towards implementing my proposals for the development of 19 acres of surplus railway land in Salisbury City Centre. I had proposed that the existing main line railway and railway station, (currently running over a largely derelict 15 foot high embankment and a series of old Victorian brick arch and wrought iron bridges), are lowered into a new “Cut & Cover” tunnel which would be constructed right across the city. The £100 million development titled “A Riverside Restoration” was a contender for one of the £50 million grants from the Millennium Commission, a National Lottery fund distributor. There was great support from the Civil Engineering Department of Railtrack. However, the City of Salisbury District Council would not talk to us at all and the Millennium Commission ruled that the proposals were judged not sufficiently distinctive. Subsequently the Department of Transport made Salisbury the subject of a detailed study to view the possibility of combining all forms of transport in the City. In addition Robert Key, as the then Minister responsible, went on to propose a “Cut & Cover” tunnel for the A303 road tunnel beside Stonehenge, the World Heritage site just North of Salisbury. That story continues to this day.
But again, unfunded and near bankruptcy, I turned to working permanent nights in a local factory and between Christmas 1995 and 2001 I worked at least one 24 hour day each week and in my spare time, (I was working a 60 hr week minimum at night), quite apart from the planning success and building the car park, including the dual carriageway access, I also won a six year debate with the United States Patent Office for the telecommunication patents I now own. I also continued to maintain close contact with my long term mentor in GPS navigation, Leonard R. Sugerman, a Past president of the Institute of Navigation, who in turn in late 1997 got me face to face with the Assistant Secretary for Research Development and Acquisition for the US Army in the Pentagon. This was another seminal conversation. He told me to my face that, yes, they were infringing my soon to be granted patents but that they would ignore me.
It is important to relate that my US patent agent when told this exclaimed “they cannot do that”, but did not lift a finger to do anything about it. I have to assume because he knew that I had no funds available to pay him.
Remarried and back on my feet financially, in 2001 I gave up the night job and travelled to the United States and established GPNS Corporation with the aiming point of exploiting the US patent rights to create a Video-911 service that would provide increased levels of personal security for every US wireless phone user.
We ran into several problems. First of all the Federal Communications Commission, (FCC), having also met me in 1997, appeared not to want to talk to us again. We believe that we were, are, seen as a competitor to their E911 system where the wireless phone provides only location information. In addition, with my patent rights including the right to transmit and the FCC having sold the right to transmit for the 3G licenses for some $16.9 billion, and more recent licenses being sold for some $20 billion, the position was very well summarised by one of the FCC staff…”get yourself an expensive attorney.” So we could not even try and raise funding for our own national system that would inevitably compete with an already part established FCC sponsored system. Without the FCC, we were dead in the water.
Our second problem was that we launched GPNS on September 11th, 2001. What with the fallout from that event, the collapse of financial markets, Enron, etc. we could only debate the issues. Successfully I believe history will show, as I then set out to attend many telecom conferences all over the US as well as Europe and I am sure that I left my mark upon the ongoing debate about the future of telecoms in the US. But with no major telecoms carrier or existing wireless phone manufacturer prepared to come back to continue talking after a first meeting, I had no option but to again change direction.
Before I leave this period, I must also relate a conversation I had with a European Commissioner at a wireless conference in Lisbon, Portugal. He had made the keynote speech and afterwards, being me; I got on stage and got him into conversation. He was very clear about the situation of the individual inventor in Europe and confirmed that there are no funds available for the individual from the European Community. Part of the problem is well known; that the farming fund had been subject to a lot of fraud and the consequences were that, by then, 2002, the EC were not inclined to even take applications from the individual. The ECC is very corporate minded today.
During the latter period I also applied for US citizenship but was declined.
While attending a wireless conference in San Francisco, I had been challenged, by a NIST scientist delegate to write about some ideas I had on the subject of, of all things, gravity. No one would publish, so I set up my own publishing company and e-commerce web site and had published my book by early 2003. However, the first edition proved so controversial that no one would publicise it and with no sales and no income, another divorce and my car park/parking lot handed over as amicable settlement, I was once again back to square one financially and so, summer 2003, I again returned to the UK.
Another viewpoint about the difficulties for the individual inventor was obtained as I had quoted William Kingston’s book INNOVATION, The Creative Impulse in Human Progress, in the first paragraph of my new book and then asked Bill if he would like me to re-publish his book. That in turn led to my publishing a new, improved edition that I typeset. So I have had a lot of interesting conversations with William Kingston who in turn is on various committees who look at the issue of the individual inventor. I quote from the dust jacket we produced for his new edition:
“His work on the financing of new businesses, published by the British Government Cabinet Office ‘think-tank’, led directly to the introduction within the UK of tax relief for equity investment – the Business Start-up and Business Expansion Schemes.
Kingston’s conviction that intellectual property no longer serves the purposes for which it was originally set up is reflected in many publications arguing for its reform. His research revealed the extent to which owners of patents or copyrights are intimidated by firms which have large funds for litigation. It led him to propose that compulsory technical arbitration should be a pre-condition for any reference to the Courts…..
…..Inevitably, Kingston’s concern with intellectual property spread to interest in property rights in general, and especially in those rights which lead to business becoming global in scope. An aspect of this is the growth of bureaucracies, both national and international, on which he has also written. In his view, this development reflects policies that are inimical to innovation.”
In addition, my original proposals submitted to the UK government on the need to fund new business that had opened the door to the conversations with the Bank of England were put up on the internet as proposals for a Capital Spillway Trust. I will return to that in a later post on this thread. http://www.chriscoles.com/page3.html
By 2005 I had both academic support for my new thinking about gravity in the form of a Professor of Physics as Principle Investigator and some industrial sponsorship. But by then my old fallback working nights in a factory came to an end and I had to make a decision. You have to understand that an unemployed inventor here in the UK, particularly one past middle age, has no employability standing whatever. Regardless of what I had achieved, as a private individual inventor, (while looking for work and at one and the same time trying to get back into business, moreover, in a world where the potential employer, quite rightly, demands that you are going to stay working, and not suddenly leave for some new project), my long years of adventure had made me unemployable. Yes, I could find some menial work, working very long hours for a pittance but have no time for anything else. I took the decision to remain unemployed and instead to concentrate upon continuing to write about gravity.
As I was by then over 60 years old and the UK government in turn had created what they call Pension Credit, where unemployed men over 60 are passed into a system of early retirement. (In passing hiding many hundreds of thousands of us from the unemployment register), I signed on while taking care to tell everyone, Pension Service, Hampshire County Council, etc what I was going to do and I settled for poor man’s tenure and got on with addressing the challenge to create proposals to prove my new thinking. So I sat down and over the next three years wrote some 27 individual papers and then, after some time reading in a university library, as well as setting up, but not having time to complete, the first experiment, I sat down early 2007 and brought everything together into what is now a completely new book but based on the 2003 original.
Also, while all this was proceeding, I also continued to file a new patent for a new form of electric motor, an idea that has been on my “back burner” since the early 1990’s. But that exercise also brought me right back to where I was, financially, in 1992. Yes, you may file for a patent. But if you are unfunded, the costs very quickly become completely beyond the limit of anyone without access to the capital to pay. Even without a patent agent you will be faced with a call for international filing fees of tens of thousands of pounds. It is quite impossible to take new thinking forward without access to the funds to pay the fees and if you are unfunded, you get summarily abandoned. An attempt to get WIPO, World Intellectual Property Organisation, to treat me as a criminal in a criminal court where the court would pay my fees produced an answer that they would not communicate with me again under any circumstances. A very impolite – go sod off mate!
However, my entreaties to the UK patent office have created a situation where the International application is formally filed with WIPO and will be published, in so doing, creating a legal precedent for the future.
Be that as it may, I have a solid reputation of never giving up. We press on. Between 2003 and today, I have managed, against all odds, to hold all the pieces of these ongoing proposals for Video-911 together, remain unencumbered in the US and also continued to write.
As of today, I am about to launch a new edition of my book about the subject of gravity that we now believe will create considerable controversy and debate. My PI has written a Foreword and discussion continues about private funding from local sources. We are also going to establish a completely independent research institute dedicated to long term research into gravity and new forms of alternative energy that we believe can be funded by public donation and also, later still, a Visual Gravity Observatory which I hope will eventually become a public theme park. Yes, at my age, I am about to set off on another adventure. It does help that my family line is listed in Salt Lake City as a blood line that lives to a great age.
I do not apologise for taking so long about this description of my experience of the difficulties I have encountered when trying to start-up businesses from my grass roots perspective, particularly with a new high technology business. Yes, my primary experience has been here in the UK and yes, I am still, today, unfunded. No, I do not see myself as a failure. Rather, that by staying at this interface, I have learned a lot of very valuable lessons that can now be put to good use. Particularly as I also believe that there are many many thousands like me out there, at this same grass roots level, trying constantly to find ways to fund their ideas.
There is no mechanism to capitalise us if we lie below the normal investment horizons of the existing structures such as venture capital. As you can see, when I used the word “nowhere”, I support that contention with sound evidence. It is also pertinent to remember the Times also asks the same question.
Yes, I wholeheartedly agree, I am no more compatible with today’s venture capitalist or Private Equity group than they are with me. And it is that fact that lies at the heart of what I am going to say as I move forward.
I sincerely believe that the existing mechanisms that purport to be able to fund the ongoing success for a capitalist society are at best, completely inadequate and at worst, are the underlying reason for the present collapse. We all have to face the fact that there is a desperate need to try another way forward. So, for what it is worth, I am going to set out what I feel should be changed, and how those changes must be implemented.
I will leave this first post up for a few days and then I will add further posts to this same thread to set out my thinking of where we are today and what needs to be done, as I see it, to bring the economy back around and headed towards a long term success.
Please, feel free to make as many comments as you wish. All I ask is that you look out for my own ongoing input and also respond to those as well.
This is going to be my own personal viewpoint and all I ask is that you give me the chance to set out my thinking and that you respond in kind.
Finally, and most importantly, I am definitely not in this to try and find funding for my own projects here on iTulip. If that were to happen, it would discredit the debate. My aiming point is to define a solution that everyone can use for the ongoing benefit of our entire Western culture. The present system is not working. I have set out to show you how I have been affected and thus what changes need to be made for everyone to succeed. In that respect, my immediate needs are immaterial.
Chris Coles.
Part one: Opening the debate.
Today I believe that we live in a feudal mercantile, not a classic capitalist society and that the label “Capitalism” has instead been high jacked by the FIRE economy to cloak the feudal mercantile economy with a false identity. But rather than continue to pick over the bones of a failed economic strategy, we must start to look ahead, and to that end I open with a quote from the Times last week:
“According to insolvency practitioners grappling with the growing queues outside intensive care, more drastic treatment will be required for many small firms.
That will often mean raising fresh equity to pay down debt. But from where?”
One would be forgiven for thinking that with our Anglo-Saxon capital based society having been in place for more than a century, that would be a silly question to ask and even sillier to suggest that there is no answer. But in fact, the answer is nowhere!
They continued: “ Entrepreneurs are in no mood to remortgage their homes and the venture capital industry deserted small businesses long ago. Lord Mandelson's £50 million for a new enterprise investment fund is trifling.”
http://business.timesonline.co.uk/to...cle5519591.ece
The long term aiming point for this thread will be to define an answer to that question, where to find fresh equity for small firms? And, if £50 million is trifling; how much do we need?
For those of you new to iTulip, I am a British inventor. I will be 65 this year, and have been in business, investment and inventing since the 1960’s, so I feel I bring into the debate a very broad experience of the events and business environment of nearly half a century. Most of my experience has been as a classic “ideas man” with thinking beyond the imagination of the day and I want to bring you into focus with where the economy of the Western world should be going from now onwards from my grass roots viewpoint.
If my point of view is to have any value, then it is vital that you can see where I come from, so I am starting with a brief potted history of the seminal events, good and bad, that have shaped my personal view, that venture capital and Private equity do not fulfil the needs of a fully free enterprise society. That the question posed by the Times in London last week opens the door to a much wider viewpoint that must be urgently debated.
Do not, for one moment, think I am some sort of closet socialist. My grandfather had been a Jobber on the London Stock Exchange and by the late 1960’s I was financially successful, working as a highly skilled artisan in industry and already investing in shares of local companies via a local stockbroker, and from that association came the idea to set up my first business, repairing freight containers and trailers moving through Southampton Docks here in the UK. Thus early 1970, I stepped out into as competitive a business environment as anyone could imagine. Every single job had to be competitively quoted on the dockside taking handwritten notes while standing literally face to face with all your competitors with no quarter given, nor taken. I thrived in that competitive environment. We expanded rapidly and successfully.
But the whole experience ended after three years just as rapidly, not because of any decision we had made, but because of a combination of international dock strikes and our inability, over a single day, to be able to show our bankers that we had complete control over our market. And that taught me my first lesson. We came to a complete halt because we were grossly under capitalised and what finance we had, especially as our latest funding had come from Hambros Bank, a major City of London Merchant Bank, was structured in such a way that we were unable to withstand what was a short term “shock” to our otherwise very successful business. That it is very dangerous to expand a business with credit rather than equity capital.
We heard, not long afterwards, that our customers deeply regretted that they had treated us in the way they had, causing our demise, but by then it is always too late.
So my first years were a firestorm of experience. But there were a whole pile of inter-related aspects that also started to point to where I am now. One of the products we had developed during those early years was what I called Portable Housing Units. Using the freight container dimensions and corner blocks, we were already selling, internationally, portable offices that could be transported within the freight container system. I suspect that I was the originator of what is today, a substantial international business. But there was no obvious structure to finance such a separate new business from a small, grass roots production facility where the underlying business was already in difficulties.
In the UK at that time, and still to this day, if you go bankrupt in business, you are a charlatan, a form of antisocial petty criminal with all that that description implies. But I did clear all my personally secured debts to the principal private investor via a property development. (The house was briefly featured as a part of a BBC TV program recently).
I gained a very good position in South Africa to set up container repairs throughout the Transvaal, based in Johannesburg, ordered to create a new subsidiary of Anglo-American Safmarine and treat it as my own business. However, the South African government would not grant me a permanent residence permit, (I discovered afterwards the most likely reason being that I had written on a single page form that I am a Christian/agnostic). I believe in religion but not god.
Turning back to experience gained with repairing freight containers, I then designed and filed for patents, a completely new form of blast cleaning device. In essence, I took the many times more efficient concept of wheel blasting, where grit is slid down a rotating blade, instead of blown down a compressed air tube, to create a hand held wheel blast unit that brought all the advantages of wheel blasting into the hands of the old fashioned user with an air compressor. Built a prototype, and successfully demonstrated it. Once again, there was nowhere to find that initial capital injection. So this time I got myself in front of what had been the major metal finishing business in the UK, (indeed, the world), and made a new mistake, I had been advised by a “City” friend to hold out for retaining the patent rights and renting them for a peppercorn rent…….. and came out with nothing. Ouch! Another lesson learned.
But what was of greater interest was that, unless I was prepared to sell the rights immediately to the largest business in that marketplace, there was no other source of funding. Not on any terms. You either sold the idea or nothing.
Not long afterwards, the metal finishing business, now led by a new high flyer that had arrived just before me, re-structured the business, threw out the old core, long successful metal finishing side, and let the management buy it. But they too collapsed due to being unable to ride out the short term change in direction of the underlying business, I must assume from being under capitalised too. So perhaps the experience was better to have burnt my own fingers in the way I did, for the experience, rather than become a part and then see it all disappear. Either way the result was, in the end the same. I was eventually granted the UK patent, but was, again, completely unfunded and had to, again, move on.
Next I carried out a full exercise to create a Treated Straw Plant. If you mix ~ 3% Caustic Soda with the waste cereal straw from wheat farming, and run that through a pellet mill you can use the resulting product both as an animal feedstock and also as a feedstock for Kraft paper production. I had suppliers, customers, plant, premises in a perfect location with ample raw materials on the doorstep, local authority permissions, everything I needed but finance. Try as hard as I could; I could not find the funding I needed on any terms. The main players had already put their money into a major multi-national located nearby who had also spotted the opportunity and no one was going to let me compete. I had no option but to walk away. There was no structure, no where I could raise capital to compete as they were the source of capital.
So by now you are getting the idea of where I come from today.
In 1977 I turned to contacts I had already made in the local university, Southampton, where, with the wonderful help of Ron Foyle, a Senior lecturer in Mechanical Engineering, we had already formed what we described as a Project Development Group. So here was I, schooled where no one thought to encourage you to go to a university and thus trained as a skilled artisan, sitting around a table with six academics, all of us with exactly the same experiences; ideas for products and no funding. The high point for me was being given a Common Room Pass so I could sit down and drink tea with every Don in the university.
I learned very many things, particularly, that I was experiencing the same problems as everyone else; primarily, no funding. There were fine scientists around me with a constant flow of new thinking that they wished to test on the marketplace. No one had any access to capital. Our High Street banks knew what we wanted to do, but they could only offer the classic mercantile economy solution, a bank loan set against a capital asset, mainly your home, backed up by your home income. Moreover, the banks had no direct connection with capital.
During 1978 Harold Wilson, ex Prime Minister of the UK set up a committee to review the functioning of the financial institutions and I gave them the benefit of my opinion. That in turn got me a full Business Page feature in the May 1978 issue of Investors Chronicle.
I then founded Ideas Exchange Limited to act as a National information exchange between inventors and industry. To give you an idea of the climate I found myself in, I was interviewed by senior managers of my bank, whom I had approached for support. The interview was in a storage cupboard, a very visible and calculated insult. However, not to be discouraged, I set off for London and by walking through doors and asking, I got myself invited by E.F.L. Brech, (The world renowned author of The History of Management), and at that time Chairman of Intex Executives, to direct the creation of Ideas and Resource Exchange Limited, (IREX) which combined my ideas with that of a Resource Exchange, (created and widely featured by Michael Dixon with five half page write ups in the Financial Times).
Between us, Edward and I raised some capital from one of the leading firms of City accountants, founded an impressive board of directors, opened a London office and set into motion the creation of our new entity. While doing so, the IREX computer software system, which I designed and successfully implemented, was credited by the UK Department of Industry as being the most innovative information distribution system they had seen up to that time. Kenneth Baker, Minister of State for Information Technology opened the offices and we were blessed with substantial publicity in computer industry publications such as being Front Page Story for Informatics, as well as BBC Radio and national newspapers. During 1981-82 I then followed that up by organising and presenting a full IREX national industrial exhibition program during which I made useful contact with every major group in the UK involved with job creation. However, IREX was classically under capitalised and to add to the problems, the Board decision had been made to PR launch the business using the last of our funds available and we picked the day Prince Charles announced his engagement to Diana. The next day the newspapers were running five or ten pages on Charles and Diana and we got nothing for the investment. In the end, while we had made good progress in spite of all that, we could not find enough paying customers for the service. Another business lesson; you cannot foresee every circumstance and, while it was a great idea, the fact is, you must have paying customers to survive or adequate funding. Back to square one again.
In passing, Edward, at that time in his early seventies, went on to become the oldest recipient of a PHD at the grand age of 92 and lived to 94 years. He introduced me to a world I had never imagined such as dinner in the Reform Club in Pall Mall, Lunch at the Athenaeum Club surrounded by Bishops and tea with the Director General of the British Institute of Management, (liveried flunkies and all) with Edward kicking me under the table to curb my enthusiasm. Working with Edward Brech resulted in some of the most interesting conversations imaginable, and in the most remarkable locations; a wonderful and amazing experience.
As I was already involved, as a judge of school science competitions via the Southern Science and Technology Forum, (SSTF), based on Southampton university campus, and taking into account conversations with close associates, I had come to the conclusion that, while I was trying to set up new businesses, I could see that the greatest disadvantage was that many people simply do not understand business. That from childhood there was no way of getting a better understanding of just how business worked via the education system. So I set into motion the creation of a debate surrounding my ideas for bringing business education into ordinary schools and called the whole idea “Venture Enterprise”.
My! Have you ever put your head into a hornets nest? Now I learned just how much the whole idea of “business” was depreciated by the senior UK Civil Service education establishment. I think some might have willingly burnt me at the stake, given the slightest chance.
That exercise ended with myself and the Director of the SSTF attending a meeting with senior civil servants in the head office of the Manpower Services Commission in the North of England where the door to the room was propped open with a fire extinguisher, (because the fire alarms were not working???). Told we would have only a couple of minutes as they were “busy”, we kept them talking for some two hours only for the meeting to break up very quickly when my colleague got very angry and I pulled him out. Behind that door were three secretaries who had taken down every word spoken. They looked exhausted, poor things. Someone should look up the record of that meeting sometime; it will make for quite a story today.
This takes me on into the early 1980’s. As I had a good working relationship with by then quite a few academics in the university, I concentrated upon taking that forward into two separate areas of interest; research & development and my sport, gliding, flying sailplanes. So in 1984, I founded UK Research & Development Limited which was set up to create a working interface between the ordinary academic and the need for outside companies to have research done. Ron Foyle became my Chairman and we took an office on the university campus. Almost immediately I discovered brass filings on my desk top and on the advice of the local police, fitted my own lock to the door prompting the university to terminate our lease and forcing me to relocate to my home, a house under renovation; not very auspicious, having your office on a building site. (In my spare time I was in the process of completely rebuilding a terraced house).
Not withstanding, over the next few years I very successfully designed, manufactured and commissioned unusual laboratory equipment, particularly for the biotechnology industry and successfully managed external research and development projects for a number of leading international companies including Philips Car Stereo International, the UK Public Health Laboratory Service, Porton Products International plc, Johnson Matthey PLC, Hythe Chemicals (a division of B.P. British petroleum), EXXON Chemicals and Brookes and Gatehouse PLC.
During this period I also became a founding member of another discussion group which we called the Catalyst Group.
Returning to my university contacts, between 1985 and 1986 I created a new group of students to copy the successful German university concept of an Akaflieg, where the students set out to actually design and build a real aircraft as a part of their studies. Over the next two years, they produced a new design for a new British glider. But I could not find anyone who would finance any part of the exercise.
Somewhere in my archives I have a letter from my then bank manager making fun of me and my “ideas”.
Early 1986 I laid down proposals titled: Producing Bubble Structures in Space. This in turn provided the springboard to, with the help of Dr. Alan Jefferson, at that time a senior lecturer in the Astronautics and Aeronautics department of the University of Southampton, produce an entry for the Eiffel Tower in Space Competition. We were awarded “Mention” Tour Eiffel de L’espace competition. Prize presented by M. Jacques Valade, Minister for Research and Development, Paris France, who publicly credited us both with having the same technological foresight as Gustav Eiffel a Century before. Our entry – “The Space Chronometer” was published in Leonardo Vol. 22 No 2 1989. http://www.jstor.org/pss/1575232
But I digress; as this period covers 1984 -1988 and my main “in house” proposal where I founded and led the creation of proposals to sell technology and know-how in the use, forming and manufacture of new advanced materials. The proposed Advanced Engineering Materials Centre attracted a formidable team including Dr. Alan Jefferson, now Assistant Dean of Engineering (Academic), University of Southampton, Peter D.R. Rice, retired Director of the U.K. Polymer Engineering Directorate, Michael Gill, Gill Electronics Research & Development, Professor G.M. Lilley, Professor Emeritus (Aeronautics and Astronautics), University of Southampton and Jasper Warner Rothuizen, Rothuizen Consulting, Switzerland. But, again, we could not find anyone to fund the establishment of the business.
We even had the input of the Deputy Lord Lieutenant of Hampshire who brought in a very senior retired Navy Captain who in turn took the proposals to a friend of his in the “City” – which friend retorted as he immediately handed back the proposals unopened. “Research and Development old boy, bottomless pit, never touch it with a barge pole”.
Returning to the conventional track of seeking funding from a major company, I tried to get support from GEC, in the process getting a guided tour of their facilities from their Technical Director. Some time after that, GEC announced the establishment of, yes; you have guessed it – GEC Advanced Engineering Materials Centre Limited.
I opened a similar conversation with Johnson Matthey through my membership of the Catalyst Group. That produced one of those never to be forgotten “cringe” moments as the meeting was going very well indeed until I stupidly put up a slide to show just how little money I had spent. (I am always proud that I am never a spendthrift), and had spent very little to get the entire project to that point. Their looks of embarrassment will live with me till the plank gets nailed down over my head. They never returned to the conversation.
Ironically, in 1990 I was granted the core patent that was the principle technology embedded in my ideas for an advanced engineering materials centre; a completely new type of hybrid fibre combining the properties of Carbon Fibre and Kevlar, 31 January 1990 GB 2 183 540. But again with no possibility of any funding to take it any further, I simply had no option but to walk away.
But I digress, as by the end of 1988, having expended all my spare funds on advanced materials I had to regroup and, as I had carried all the costs throughout, I re-mortgaged our home, paid off the creditors, and immediately after Christmas, January 1989 I filed five new ideas as patent applications and moved into the next phase, GPS navigation.
I took two of those applications and decided to run with one as the lead, a proposal for a combined printed map in a sealed consumable plastic cassette and a GPS navigation system, GPNS, Global Portable Navigation System. The second patent application was placed on the back burner as no one I approached wanted to deal with a proposal for what is now, some 20 years later, the camera phone with GPS, but what I then described as the Photographic Security System. Video-911 as it is today.
I have to cut a very long story short. I tried everything I could, between 1989 and spring 1992 to raise $30 million to develop both those ideas. In the process I presented papers to the 24th ISATA, Florence, Italy, (May 1991) and the following September, to the Fifteenth Biennial Guidance Test Symposium, Holloman AFB, New Mexico. My first marriage collapsed and Easter 1992 I was right back to square one. The best offer I received was from a VC in San Francisco who offered to buy the patents for $200,000 while telling me that was the best offer I would ever receive.
My main efforts were aimed at getting support from a major manufacturer and I did receive a lot of support from Philips Car Stereo International, a division of the largest European electronics company. But Philips also had another division developing, within a European collaboration, a new in-car navigation system and they in turn refused to permit another form of in-car navigation system to compete with theirs. The lesson here being that at the large company level, competition is suppressed, not favoured.
Later, I tried to get support from a UK government inspired organisation who offered me a choice. They would take the IP, yes, I was invited to give it to them or, they might consider a joint collaboration if I could demonstrate a large company interest in a joint development. So I then succeeded in getting the GPNS concept all the way to a main board meeting with Sumitimo Electric Industries, but by then, the Japanese economy had suddenly collapsed and they could not commit the funding.
What was really interesting, the UK government inspired organisation, regardless that I had achieved so much, took no further interest in either myself or the GPNS system. In effect, if they could not take complete control, they were not interested.
It is important to realise that such attitudes continue to this day.
Being again, early 1992, back to square one with no funds, and with my High Street bank closing the company overdraft facility, (in just the same manner as we hear is occurring today with other small businesses), I sat down and wrote a 170 page report to the European Patent Office as “Evidence of Due Diligence in attempting to raise capital to pay the filing fees to the EPO”. Needless to say I was forced to abandon the European patent application as I needed something like the price of a small house to pay all the fees and associated costs for an international patent application. And is why I only have three US and one Japanese patent. But that still makes me the originating inventor of a full system, (hand held device, transmission and base station), incorporating any portable transmission device that combines a electronic camera and a navigation system that transmits an image with navigation notation to a base station for display of both the image and the location on a map. My report led to a letter published in the Times London, 2nd June 1992, asking the question - Who leads the savings institutions towards longer term investment in the nation?
Invention is just as important to the long term success of a nation as any sport, so saying I was years too early is like saying that you are better off not passing the baton in an Olympic relay race.
You must also understand that by then the major impact of the first property crash was in full pelt and the local UK economy had all but come to a halt. U.K. Research & Development Ltd had no work, or any sign of such on the horizon. So, nearly destitute, I turned to working on a possible property development, a new deli restaurant under a railway archway in the city of Salisbury. Over the next three years I won several planning permissions, gained the support of the Railtrack national railway engineers, in the process winning a public enquiry, forced the Salisbury City Council to abandon their Commuted Car Parking Scheme, and won planning for offices and a restaurant and night club over the restaurant car park. However, I could not get the council to settle a boundary dispute with Railtrack and the restaurant had to be left on the back burner and instead I set out to build the car park, (what Americans call a parking lot), with my bare hands.
Soon after that I was also instrumental in forcing the City Council to abandon flood protection measures for the Waitrose Food Superstore development by bringing in a World class hydrologist to confirm my own findings about their viability. I won against Sir William Halcro & partners, one of the largest consulting firms in the UK as well as the National Rivers Authority.
During 1994 I presented to the UK government, HM Treasury and The Bank of England, comprehensive evidence of the difficulties of raising capital for new start-up high technology firms. This in turn also led, at their request, to further detailed submissions to the Department of Inland Revenue on the subject of Venture Capital Trusts, direct correspondence with the then Governor of the Bank of England, Eddie George and, initiated by the Bank of England, face to face conversations with senior figures from the City of London banking community.
The latter were particularly interesting; they told me job creation was the government’s responsibility. And, yes, one of them had been once involved with raising capital for a business, it had taken some years. And no, they were not interested in helping me with anything I was involved with. They saw it as - their business function was not down at my level at all and matched other similar conversations where I would often be told that City banks are in the business of intergovernmental purchases of securities and the like.
And just to top off this period between 1994 and 1995, as chairman of The Coles Consortium, (the name was not my idea but an associates, a retired Jewish solicitor and one of my greatest friends, but sadly the now late; Ronald B. Margolin). I led a group of local businessmen, (the local Member of Parliament, Robert Key, sat in as an observer), towards implementing my proposals for the development of 19 acres of surplus railway land in Salisbury City Centre. I had proposed that the existing main line railway and railway station, (currently running over a largely derelict 15 foot high embankment and a series of old Victorian brick arch and wrought iron bridges), are lowered into a new “Cut & Cover” tunnel which would be constructed right across the city. The £100 million development titled “A Riverside Restoration” was a contender for one of the £50 million grants from the Millennium Commission, a National Lottery fund distributor. There was great support from the Civil Engineering Department of Railtrack. However, the City of Salisbury District Council would not talk to us at all and the Millennium Commission ruled that the proposals were judged not sufficiently distinctive. Subsequently the Department of Transport made Salisbury the subject of a detailed study to view the possibility of combining all forms of transport in the City. In addition Robert Key, as the then Minister responsible, went on to propose a “Cut & Cover” tunnel for the A303 road tunnel beside Stonehenge, the World Heritage site just North of Salisbury. That story continues to this day.
But again, unfunded and near bankruptcy, I turned to working permanent nights in a local factory and between Christmas 1995 and 2001 I worked at least one 24 hour day each week and in my spare time, (I was working a 60 hr week minimum at night), quite apart from the planning success and building the car park, including the dual carriageway access, I also won a six year debate with the United States Patent Office for the telecommunication patents I now own. I also continued to maintain close contact with my long term mentor in GPS navigation, Leonard R. Sugerman, a Past president of the Institute of Navigation, who in turn in late 1997 got me face to face with the Assistant Secretary for Research Development and Acquisition for the US Army in the Pentagon. This was another seminal conversation. He told me to my face that, yes, they were infringing my soon to be granted patents but that they would ignore me.
It is important to relate that my US patent agent when told this exclaimed “they cannot do that”, but did not lift a finger to do anything about it. I have to assume because he knew that I had no funds available to pay him.
Remarried and back on my feet financially, in 2001 I gave up the night job and travelled to the United States and established GPNS Corporation with the aiming point of exploiting the US patent rights to create a Video-911 service that would provide increased levels of personal security for every US wireless phone user.
We ran into several problems. First of all the Federal Communications Commission, (FCC), having also met me in 1997, appeared not to want to talk to us again. We believe that we were, are, seen as a competitor to their E911 system where the wireless phone provides only location information. In addition, with my patent rights including the right to transmit and the FCC having sold the right to transmit for the 3G licenses for some $16.9 billion, and more recent licenses being sold for some $20 billion, the position was very well summarised by one of the FCC staff…”get yourself an expensive attorney.” So we could not even try and raise funding for our own national system that would inevitably compete with an already part established FCC sponsored system. Without the FCC, we were dead in the water.
Our second problem was that we launched GPNS on September 11th, 2001. What with the fallout from that event, the collapse of financial markets, Enron, etc. we could only debate the issues. Successfully I believe history will show, as I then set out to attend many telecom conferences all over the US as well as Europe and I am sure that I left my mark upon the ongoing debate about the future of telecoms in the US. But with no major telecoms carrier or existing wireless phone manufacturer prepared to come back to continue talking after a first meeting, I had no option but to again change direction.
Before I leave this period, I must also relate a conversation I had with a European Commissioner at a wireless conference in Lisbon, Portugal. He had made the keynote speech and afterwards, being me; I got on stage and got him into conversation. He was very clear about the situation of the individual inventor in Europe and confirmed that there are no funds available for the individual from the European Community. Part of the problem is well known; that the farming fund had been subject to a lot of fraud and the consequences were that, by then, 2002, the EC were not inclined to even take applications from the individual. The ECC is very corporate minded today.
During the latter period I also applied for US citizenship but was declined.
While attending a wireless conference in San Francisco, I had been challenged, by a NIST scientist delegate to write about some ideas I had on the subject of, of all things, gravity. No one would publish, so I set up my own publishing company and e-commerce web site and had published my book by early 2003. However, the first edition proved so controversial that no one would publicise it and with no sales and no income, another divorce and my car park/parking lot handed over as amicable settlement, I was once again back to square one financially and so, summer 2003, I again returned to the UK.
Another viewpoint about the difficulties for the individual inventor was obtained as I had quoted William Kingston’s book INNOVATION, The Creative Impulse in Human Progress, in the first paragraph of my new book and then asked Bill if he would like me to re-publish his book. That in turn led to my publishing a new, improved edition that I typeset. So I have had a lot of interesting conversations with William Kingston who in turn is on various committees who look at the issue of the individual inventor. I quote from the dust jacket we produced for his new edition:
“His work on the financing of new businesses, published by the British Government Cabinet Office ‘think-tank’, led directly to the introduction within the UK of tax relief for equity investment – the Business Start-up and Business Expansion Schemes.
Kingston’s conviction that intellectual property no longer serves the purposes for which it was originally set up is reflected in many publications arguing for its reform. His research revealed the extent to which owners of patents or copyrights are intimidated by firms which have large funds for litigation. It led him to propose that compulsory technical arbitration should be a pre-condition for any reference to the Courts…..
…..Inevitably, Kingston’s concern with intellectual property spread to interest in property rights in general, and especially in those rights which lead to business becoming global in scope. An aspect of this is the growth of bureaucracies, both national and international, on which he has also written. In his view, this development reflects policies that are inimical to innovation.”
In addition, my original proposals submitted to the UK government on the need to fund new business that had opened the door to the conversations with the Bank of England were put up on the internet as proposals for a Capital Spillway Trust. I will return to that in a later post on this thread. http://www.chriscoles.com/page3.html
By 2005 I had both academic support for my new thinking about gravity in the form of a Professor of Physics as Principle Investigator and some industrial sponsorship. But by then my old fallback working nights in a factory came to an end and I had to make a decision. You have to understand that an unemployed inventor here in the UK, particularly one past middle age, has no employability standing whatever. Regardless of what I had achieved, as a private individual inventor, (while looking for work and at one and the same time trying to get back into business, moreover, in a world where the potential employer, quite rightly, demands that you are going to stay working, and not suddenly leave for some new project), my long years of adventure had made me unemployable. Yes, I could find some menial work, working very long hours for a pittance but have no time for anything else. I took the decision to remain unemployed and instead to concentrate upon continuing to write about gravity.
As I was by then over 60 years old and the UK government in turn had created what they call Pension Credit, where unemployed men over 60 are passed into a system of early retirement. (In passing hiding many hundreds of thousands of us from the unemployment register), I signed on while taking care to tell everyone, Pension Service, Hampshire County Council, etc what I was going to do and I settled for poor man’s tenure and got on with addressing the challenge to create proposals to prove my new thinking. So I sat down and over the next three years wrote some 27 individual papers and then, after some time reading in a university library, as well as setting up, but not having time to complete, the first experiment, I sat down early 2007 and brought everything together into what is now a completely new book but based on the 2003 original.
Also, while all this was proceeding, I also continued to file a new patent for a new form of electric motor, an idea that has been on my “back burner” since the early 1990’s. But that exercise also brought me right back to where I was, financially, in 1992. Yes, you may file for a patent. But if you are unfunded, the costs very quickly become completely beyond the limit of anyone without access to the capital to pay. Even without a patent agent you will be faced with a call for international filing fees of tens of thousands of pounds. It is quite impossible to take new thinking forward without access to the funds to pay the fees and if you are unfunded, you get summarily abandoned. An attempt to get WIPO, World Intellectual Property Organisation, to treat me as a criminal in a criminal court where the court would pay my fees produced an answer that they would not communicate with me again under any circumstances. A very impolite – go sod off mate!
However, my entreaties to the UK patent office have created a situation where the International application is formally filed with WIPO and will be published, in so doing, creating a legal precedent for the future.
Be that as it may, I have a solid reputation of never giving up. We press on. Between 2003 and today, I have managed, against all odds, to hold all the pieces of these ongoing proposals for Video-911 together, remain unencumbered in the US and also continued to write.
As of today, I am about to launch a new edition of my book about the subject of gravity that we now believe will create considerable controversy and debate. My PI has written a Foreword and discussion continues about private funding from local sources. We are also going to establish a completely independent research institute dedicated to long term research into gravity and new forms of alternative energy that we believe can be funded by public donation and also, later still, a Visual Gravity Observatory which I hope will eventually become a public theme park. Yes, at my age, I am about to set off on another adventure. It does help that my family line is listed in Salt Lake City as a blood line that lives to a great age.
I do not apologise for taking so long about this description of my experience of the difficulties I have encountered when trying to start-up businesses from my grass roots perspective, particularly with a new high technology business. Yes, my primary experience has been here in the UK and yes, I am still, today, unfunded. No, I do not see myself as a failure. Rather, that by staying at this interface, I have learned a lot of very valuable lessons that can now be put to good use. Particularly as I also believe that there are many many thousands like me out there, at this same grass roots level, trying constantly to find ways to fund their ideas.
There is no mechanism to capitalise us if we lie below the normal investment horizons of the existing structures such as venture capital. As you can see, when I used the word “nowhere”, I support that contention with sound evidence. It is also pertinent to remember the Times also asks the same question.
Yes, I wholeheartedly agree, I am no more compatible with today’s venture capitalist or Private Equity group than they are with me. And it is that fact that lies at the heart of what I am going to say as I move forward.
I sincerely believe that the existing mechanisms that purport to be able to fund the ongoing success for a capitalist society are at best, completely inadequate and at worst, are the underlying reason for the present collapse. We all have to face the fact that there is a desperate need to try another way forward. So, for what it is worth, I am going to set out what I feel should be changed, and how those changes must be implemented.
I will leave this first post up for a few days and then I will add further posts to this same thread to set out my thinking of where we are today and what needs to be done, as I see it, to bring the economy back around and headed towards a long term success.
Please, feel free to make as many comments as you wish. All I ask is that you look out for my own ongoing input and also respond to those as well.
This is going to be my own personal viewpoint and all I ask is that you give me the chance to set out my thinking and that you respond in kind.
Finally, and most importantly, I am definitely not in this to try and find funding for my own projects here on iTulip. If that were to happen, it would discredit the debate. My aiming point is to define a solution that everyone can use for the ongoing benefit of our entire Western culture. The present system is not working. I have set out to show you how I have been affected and thus what changes need to be made for everyone to succeed. In that respect, my immediate needs are immaterial.
Chris Coles.
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