What makes a potent entrepreneur? Kate Craig-Wood, one of the few female technology entrepreneurs in the UK, and recently ranked the 20th most influential person in British IT in Computer Weekly’s UKtech50 list, has a theory. Ten years ago, with just £3,000 in a room above her mum’s garage, she and her brother set up Memset, which has grown to become one of the UK’s leading managed hosting and cloud computing companies. As she tells Eleanor Harris, her success in business is in part thanks to a unique experience.
Kate Craig-Wood is co-founder and managing director of Memset, based in Guildford. She was born in Surrey in 1977 and has a Masters degree in biomedical science. After graduating, she worked as a web programmer at MBA Systems, then as a management consultant at Arthur Andersen, and then rose from e-commerce developer to head of business development at Easyspace, before founding Memset in 2002. Today, Memset employs 24 staff and achieved revenue of £2.88 million in 2011, and clients include Debenhams and Hilton Hotels. Memset was named the UK’s best web host by PCPro Magazine for the sixth consecutive year in 2011, and Craig-Wood won the IoD Young Director of the Year South East award in 2008. Craig-Wood sits on the main board of Intellect UK, which represents the UK technology industry, and chairs its climate change group. She is in the final year of a collaborative PhD in energy-efficient cloud computing at Surrey University, and her hobbies include motorcycling, surfing and science.
Why did you set up Memset? What was the inspiration?
I was brought up in quite an entrepreneurial household – my dad was a technology entrepreneur, and the dinner table conversation revolved around business and information technology, so I had it in my blood to an extent. I’ve always loved technology and I started programming computers when I was nine – back then there weren’t many games so you wrote your own. And I always knew I wanted to run my own company, so when I’d had a bit of real-world experience and the right opportunity came up, I jumped at it. I’d got bored of having a boss, and I’d spotted a gap in the market: there was either traditional shared web hosting or dedicated servers, and nothing in between, but virtualisation technology was just starting to emerge and I decided to start my own virtual dedicated server company. I had a very supportive partner so I was able to go for about two years without paying myself. I hear a lot about barriers to entrepreneurship and I perhaps take a bit of a hard line, but I started a business with £3,000, bought a laptop and some Google AdWords and bootstrapped business that way, got customers to pay in advance, and it snowballed from there.
Can you tell me about the growth and success of the company?
In the first few years we grew very aggressively. Since then our growth rate has slowed, but we’re still doing 30% compound annual growth, so this year we’re on target to do about £3.8 million, with the best part of £500,000 profit, which is a nice place to be. One of the recent milestones we passed is getting just over £1m in the bank. It is quite a capital-hungry business so we do tend to hoard it a bit, partly because we’ve got some quite big investment plans in the future, but it’s been a real success and we’ve done that without selling any equity – my brother and I are still 45% shareholders each. Getting involved in technology at a young age really gave me an advantage and I became quite scientific too, and I brought that systematic and scientific approach to business, which stood me in really good stead. A real advantage to me is that I’ve never had any business training, just anecdotal stuff from my dad, a scientific approach and a good understanding of the product. Certainly, early on, we did a lot of things that a lot of people would think were not particularly sensible, but it’s worked out really well. We recently won a framework agreement to deliver cloud services to government, and I did a lot of work on the technical side of the GCloud programme, which aims to open the field a bit more for SMEs, and for us that’s been really successful. Through that we’ve just won a contract with Estyn, the Welsh equivalent of Ofsted, for its cloud infrastructure, and we’ve got a lot of opportunities in the pipeline, and these too have the potential to be quite transformative.
You promote the UK’s high-tech sector – why are you passionate about this?
I’m a patriot – I love Britain, and I think we’ve lost our way. We’re a nation of great innovators but there’s a poor culture in the UK where you have a great new little business and almost always the IT ends up going over the Atlantic. We’re really good at science and technology, particularly IT and advanced communications, and as long as we’ve got little companies like us and we’re going up against behemoths like Amazon and we’re out-innovating them in some areas and undercutting them in most areas, it shows you don’t need to be massive to do it. In these difficult times where we’re seeing a seismic shift in the way the economy functions, we need a new engine of growth for Britain and I passionately believe that information and communications technology has the potential to be that. We account already for 10% of GDP, as a sector we’re still in double-digit growth, and the beauty of IT is that it’s so exportable – you create a software product here and can sell it to the entire world. Our nation could be the next Silicon Valley; there’s a real opportunity here, but in order to grasp it we need to attract more kids into IT. And instead of this culture of well, we can invent it here but we have to sell it to the Americans to monetise it, we need a cultural shift to well, why can’t we have the next Facebook or Google right here in the UK?
You are also a passionate advocate for green technology and getting girls into technology – is promoting these issues as important to you as your business?
My first love is my business, although it’s not actually about the money, it’s about having a bigger train set to play with and giving life to ideas, but my two great passions are technology and the environment. Humanity is a bit of a blight on the planet and anything we can do to reverse that and minimise our impact is worthy, and technology holds the answer I think to most of it. Getting girls into IT comes back to having a healthy IT industry. Research shows that gender-balanced teams are more effective, so on a purely practical level, to feed that engine of growth, we need more women in technology. Also, on a more personal level, it can get a bit lonely at the top. When I’m at Intellect UK board meetings and there are 20 guys and four women, which is not unrepresentative of the industry, it’s a little demoralising. Also, I see a number of really good girls who do come into the industry and are put off by how many guys there are and end up leaving, and we really need them.
As a woman in this male-dominated industry, has your gender been a barrier or an advantage?
It was a lot worse when I was very blonde. I’m very aware it’s harder on some of my younger female colleagues, they haven’t got the thick skin I’ve developed. Some of the guys are just plain sexist, it is quite appalling. I would hazard, however, that in my case, overall, because there are so few women in senior IT positions, it has been an advantage. It has helped me gain visibility for myself and for the company. I would say there is definite positive selection for the few women that are in the IT industry, the up and coming companies recognise that the few female technologists are a precious commodity.
You have said that when you were young you wanted two things when you grew up: to be a business woman. You have achieved significant success in business and you underwent a transsexual transition six years ago – how does it feel to have achieved that two-pronged dream, and would you consider that your greatest achievement?
I’m the sort of person that’s never really satisfied, there’s always a higher goal. Sometimes I wake up in the morning and think wow, I’ve got here, but at the same time, when you’re running a business your frame of reference gradually shifts. So although I’m doing very well, I now compare myself to people I meet through my networking, being quite senior in the IT industry now, and I feel like I’ve got a lot further to go. But yes, I do feel very lucky to be living my childhood dream.
Do you think your success in business is in part because you are able to see things from both sides of the gender divide?
Yes, I think it is, but it’s something specific. I’ve always had a female brain, but I was brought up and socialised as a boy, and that I think has given me an advantage in business, because I’m something that you don’t tend to see much of. I’ve got the usual somewhat more feminine skills but I was brought up to be confident and analytical and, whereas my sister was encouraged towards art and literature, I was encouraged towards business and science. Although most parents aren’t trying to, they’re still bringing up their kids in gender stereotyped roles, but what would happen if we actually raised more girls like we raised boys? I think I should be viewed as an interesting social experiment in what can happen if you take the female mind but then socialise it as a male, and give it a traditional male upbringing, and I would hazard that you come out with quite a potent entrepreneur.
As an entrepreneur, do you have more new business ideas in you?
Absolutely. I’m constantly having ideas and being able to breathe life into an idea gives me a huge feeling of satisfaction. That’s one of the biggest drivers behind it. I hope to become a portfolio entrepreneur, using Memset as a base to bootstrap other synergistic services. We’re already starting to do that. We have a personal cloud backup service called SquirelSave, and we’ve got a number of other irons in the fire, so we’re spreading out. But the thing I don’t want to do is sell one business and go and start another. I want to spin off new businesses with the infrastructure and manpower we’ve got and have multiple business units, and then have a portfolio of enterprises. That’s where I see the long-term future for me, and I’m certainly not looking to retire any time soon.
Details: Memset website
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