How did you start Ossila?

David Lidzey, chair: About 10 years ago, I was working on a project with colleagues in the chemistry department at the University of Sheffield. I needed a postdoc to do this work, and out of the blue, James Kingsley phoned me up and said, “Have you got any postdoc positions?” Later, we got funding to develop self-assembly techniques for making polymeric solar cells, and our academic collaborators really liked what James was doing in terms of re-engineering things to make devices more efficiently. That’s when they started asking for spares.

James Kingsley, managing director: We spent a lot of time designing speciality components that we needed for our research, but when we’d approach a manufacturer and ask, “Could you make this for us?” they would usually reply, “Yes, that’s fine; how many thousands would you like?” A large part of the cost of producing these components was getting the first one made – after that, incremental ones could be made much more cheaply. So even though we only needed one or two ourselves, we would often get a few extra made and hand them out to our collaborators. After a while, it got to the point where I was posting five different sets of things to people around the UK, and we decided that since they weren’t the only people in the world doing this sort of research, maybe there was a small business in it.

What was it like to start the company?

JK: It was hard work, but the great thing was that I could do it part-time. At the start, I was working for the company one day a week (as well as in evenings, weekends, hobby time and holiday time). That fraction gradually increased as the business grew, but it was several years before I stopped working for David’s research group entirely. Being on campus and in the university ecosystem was helpful in the early days. For many jobs – everything from packing boxes to more complicated things like designing some of the new components – we often took on undergraduates or postgraduates on a part-time basis. By doing that, we were able to access a pool of very talented people and add fractions of them to our workforce as needed.

The fact that Ossila is a know-how-based company rather than an intellectual-property-based company makes us much less reliant on outside investment, but of course it also limits the rate of growth. This is often seen as a less attractive way of doing business. More often, people want to get rich quick or die trying, because there’s a sort of glamour in that. But of course, the reality is that a lot of start-ups will fail.

Can you elaborate on what it means to be know-how-based rather than IP-based?

JK: To be eligible for a patent, you need to have done something that is “non-obvious to somebody skilled in the art” – it needs to be a breakthrough, a non-trivial step forward. A product, in contrast, is anything that solves a pain point for a customer. When we started Ossila, a lot of people were trying to make research-sized solar cells, and it was very difficult and time-consuming – either they couldn’t find the right components or they couldn’t get the components to work together easily. So we’ve engineered a package of components, a platform, where everything works together nicely, and by providing an off-the-shelf packaging component that works out of the box (or at least with a minimum of further equipment), researchers can focus on their material and whatever interesting twist they’re working on, rather than spending lots of time designing every component from the ground up. That’s not really a patentable innovation, but it solves a problem for our customers. I’m not saying that operating on a know-how basis is easy, but if you’ve developed something in your lab that other people need, then there’s a potential product in it even if it can’t be patented. I think that’s often overlooked.

What have been your biggest challenges, either technical or otherwise?

JK: We’re very much a company of makers: we productize the things we like to make and that we needed for our own research. We’ve got a fantastic, highly trained staff, but finding those people has been a challenge. The other thing is that when you’ve only got two product lines, manufacturing is relatively easy, but when you start having multiple product lines with different supply chains and long lead times on speciality components with rigorous quality parameters, all those things need to be controlled tightly. Now that our manufacturing is scaling up, we’re starting to read books from all the way back to the 1980s about Toyota’s production system to learn how they did it.

DL: Another ongoing challenge is to identify the right product for the right market. It’s easy to have an idea for a product, spend lots of time developing it, and then launch it only to find that it doesn’t sell anywhere near as much as you thought, while other products seem to fly off the shelves. Understanding what makes a good product, what the market wants, and what price the market is prepared to pay for it is a real challenge. But I think we’re getting better at it.

What are the next steps for Ossila?

DL: Lots of our customers are developing new types of technologies (such as solar cells, light-emitting diodes or field-effect transistors) and are doing basic spectroscopy research. We started out in the photovoltaics and thin-film electronics sector as we knew this area well, but we’re now diversifying into materials science in general. We still sell lots of materials for solar-cell research and semiconducting polymer research, but we’re also selling things that you could use to make different types of films or coatings, or to look at the properties of coatings on surfaces, or to measure conductivities of films. That has meant diversifying the materials we work on, from conductive polymers right the way through to two-dimensional semiconductors, graphene, carbon nanotubes and so on.

Another notable recent development is that for eight of our first nine years, we were based in an innovation centre at the University of Sheffield, with everyone squashed into half a dozen relatively small labs and offices. But earlier in 2018 we moved out to a purpose-built site, and that’s been good for us. On a practical level, we have more space, but making a more formal break from the university environment has also made us grow up as a company.

What do you know now that you wish you’d known when you started back in 2009?

JK: The number one thing I wish I’d done is to read more. The number of books that I needed to read to fully understand our business model was really quite large. As scientists, we read technical articles all the time, but I can think of several business books that fundamentally changed the way we think. Some of them are relatively famous, like The Lean Start-Up, while others are more esoteric or unusual. Within any book, there’s always some useful nugget of information that changes the way you think about your business.

DL: I never really appreciated the importance of effective operational structures within a company. Companies only work well when the people within the company are working well together, and we’re paying attention to this right now in terms of deciding how to structure the company as it grows.

Any advice for others seeking to start a business in this field?

DL: When we were trying to start Ossila, we struggled to convince people that a company without IP could be valuable or interesting. But in our field we’ve found that model works well, so my first piece of advice is that you don’t have to have some hugely valuable patent to start commercializing what you’ve done.

The other thing I’d like to mention is that we have a third co-founder, our technical director Alastair Buckley. Alastair came to the Department of Physics and Astronomy at Sheffield from a company that was developing technologies based on polymer light-emitting diodes, but unfortunately went bust after running out of capital. That was an important lesson, because it showed us how vulnerable tech companies can be if they’re based on large amounts of venture-capital funding. For that reason, we’ve always liked the organic growth model inasmuch as you only spend what you’re making. That makes the company much safer and more sustainable.