17thJun 2011

How a Bath-based trio set about solving one of the global broadcast industry's biggest technical challenges - and how support from a local business incubator made all the difference

The Mirifice Team with Julian Dennard of YFMPaul Tinkler and Alex Dick had good jobs working for a large IT consultancy in Bath. Their work included projects for companies in defense, telecommunications, finance and other sectors. It occurred to the pair that the broadcast industry is going through massive change, particularly in the way in which television content, and other services, are being delivered. As he thought about the challenges faced by broadcast network operators, Alex came up with a product concept. He and Paul then joined forces with Niall Buckingham - Alex and Niall had been at the University of Bath together as students - and the trio took a leap into the unknown to set up their own business - Mirifice. That was in 2004. Since then, with help from SETsquared's business incubation unit at the University of Bath, they have grown a successful, global business.

The product concept

All television broadcast networks have finite capacity. However, demand for capacity goes through peaks and troughs, both nationally and in individual regions. The challenge for cable, satellite and IPTV companies is to ensure that the viewer gets the best possible picture and service quality at all times. Operators want to deliver more pay services over these networks to increase their income. They also want to avoid losing customers through quality problems. In the past, operators monitored their networks at various points then tried to interpret the data they received in an attempt to understand how the experience of viewers was affected by changes in network dynamics.

Like all great ideas, the Mirifice product concept was based on a simple proposition: the only way you can really understand what the customer is experiencing is by monitoring the service at the point of delivery. In other words, you need to evaluate network performance, and its affect on services, at the set-top-box in the home. The idea was to create a test routine in software that could be sent along the connection to the STB and which would then continuously feedback data about the quality of connection at the box. With the number of network subscribers now in the tens of millions in the UK alone, generating and managing the data from this process is very complicated. The many different types of STB just compound the problem. That's where the skills of Paul, Alex and Niall came to the fore. However, for all of them, this was going to be their first attempt at running a business and they recognised at the outset that they may not have all the skills needed to do everything. This was particularly true because the team was aiming high - they wanted to reach out to the global market and not be limited to local demand.

Finding the right help

Mirifice discovered the SETsquared Partnership's business incubator in Bath through a course on entrepreneurship at the University of Bath, which Alex Dick attended. SETsquared operates business incubators at Bath, Bristol, Southampton and Surrey universities. The incubators provide an environment for encouraging technology businesses and giving them the early-stage support they need to get off the ground. SETsquared arranges introductions to business mentors and to other professional advisors, all of whom provide their services free of charge in the first instance. They make introductions to potential investors and run a number of events each year that encourage business networking. They also facilitate access to academic resources in the universities, where it's needed. In addition, the incubators provide low-cost office space with support services.

The Mirifice team established itself in the University of Bath incubator in February 2005. Centre director, Simon Bond and David Richard, formerly of Sun Microsystems, acted as business mentors in the early days. They helped the team define a launch strategy for MiriMON, the company's network monitoring product, and facilitated an introduction to the local HSBC bank, through which a small business loan was arranged.

Heading west to the US

Recognising that the US could be a key market, the Mirifice team sought validation of a strategy to enter US markets. SETsquared was again able to offer support through its UK-US Science Bridge Programme. In May 2006, funded by the programme, Paul travelled to San Diego, California, to present to an expert panel of potential mentors, investors, customers, partners and service providers provided by CONNECT's Springboard programme. He had 10 m

inutes to give his pitch with 30 minutes allocated for questions and 30 minutes of feedback. Paul generated immediate leads for both potential investment and customer contracts. The panel included individuals from Motorola Ventures, Nokia Ventures, Qualcomm Ventures, Intel Capital, the three biggest cable companies in the US, and a number of established entrepreneurs with deep experience in Mirifice's pot

ential markets. It was clear from the expert panel's comments that there were longer term opportunities for Mirifice products in the US market and the event very quickly resulted in US consultancy contracts totally around $1 million, which included deals with Scientific Atlanta, a Cisco company, and OpenTV, a TV systems firm in San Francisco.

After the event, Paul Tinkler said, "To have set up all of these contacts ourselves and to gain the invaluable market knowledge would have probably taken 2 years and cost us £2 million. The Bridge Programme was absolutely invaluable."

Other products emerge

Mirifice generated income from consultancy services during the development of MiriMON. The company also identified another opportunity in the broadcast sector to adapt the same basic technology to create a product for automatically testing STBs. MiriATE removes the reliance on expensive and unreliable manual testing.

Following the San Diego event, Mirifice was introduced to Solekai Systems, a software engineering services company in San Diego. Solekai is now the Mirifice test systems integrator for the US market and provides product customisation, installation, commissioning and training for US customers.

Now Mirifice has a complete family of products to help network operators generate more revenue from their customers and ensure a higher quality of service. The products help to reduce "customer churn" where dissatisfied customers dispense with network operators' services.

Finding funds to grow

One of the biggest challenges Mirifice faced in the early days was securing funding. The team was new to the process of trying to raise money and, supported by SETsquared, had to learn what investors were looking for before they would part with their cash. They also found that the process of raising money threatened to be very time consuming, so introductions to potential investors via SETsquared and their events were very valuable. The team presented at SETsquared's Annual Investment Showcase in London in October 2006. A few months later, in June 2007, the company secured £250,000 of funding from the South West Ventures Fund, which is managed by YFM Group. The fund invested a further £330,000 in January 2008 to help accelerate expansion.

Global success from small beginnings

Today, Mirifice has a truly global market. It sells products and services in North America, Australia, Russia and throughout Western Europe. The company, which is still based in Bath, employs 45 people and, despite the economic gloom, is expecting to achieve significant growth in 2009 and beyond.