Interview with David Potter CBE

David Potter was born on 4 July 1943 in South Africa. His grandfathers had been born in England but emigrated to South Africa. One was an accountant, and the other a professor of engineering at the University of Cape Town – the father of engineering in South Africa. His father died when he was very young and whilst he grew up believing he did not need one, he reflects that not having a father was a formative part of the person he came to be. His grandmother was one of the first university woman graduates, having read Classics in the 1900s. It was an academic family. She played the role of a mother in his early life, as his own mother went to work. He was very close to his sister and together they developed the myth that other people’s parents came to watch their children in school events, such as swimming galas, because they were hopeless and needed the support. Their parents were not able to come. By the time Potter was 10 his mother had remarried and they moved to what is now Zimbabwe.

His senior school followed the English system, and enabled him to take his A ’Levels.  It was an old fashioned school with the “positive and negative attributes” associated with an English education – highly disciplined and very demanding.  He spent two terms at the University of Cape Town before coming to Cambridge.

David arrived at Cambridge University, aged 19 with a Beit scholarship to study Natural Sciences later on assessed to be the most demanding undergraduate study.  Subsequently he did  a PhD at Imperial College, London, and for a number of years was an academic in applied physics.  He explored chaos theory and nonlinear phenomenon covering the atmosphere, the future of climate change, the oceans of the earth, galaxies and the structure of galaxies and plasma physics.  In the course of these studies he used computer simulation, writing an academic text, and publishing papers on the subject – the million-dollar mainframe computers of the 1960s.  Colossal in size, but with capability far smaller than the smartphones in our pockets today.

Potter taught at Imperial College and at UCLA in Los Angeles in 1974/75.  Through the physics department at UCLA, he saw the beginnings of the chip.  He could see that this would change the world.  The discoveries of silicon, fibres and LCD displays which were made during the first half of the twentieth century, then applied during the second half have really altered our existence.

There was a giant stock market crash as the FT30 fell from 520 to 146 – the worst fall in our generation.  David saw this as an opportunity – “when there’s a sale on, it’s a good idea to buy things”.  He invested his £3,000 savings into six companies.  When he returned to Britain his investments had more than doubled and there was the beginning of a recovery in 1975.

After his first child was born in 1975, he went skiing in Austria and discovered the duvet.  He observed that all his fellow Brits who had been on skiing holidays would have been sleeping under duvets, rather than the sheets and blankets they were used to at home.  He believed they would want to “throw away their blankets and buy duvets”.  He researched duvet suppliers in Britain, found a company in Boston, Lincolnshire that was making them, and put half his capital in that company.  He had done his research thoroughly, the company did well and began to create the capital he would later use to form Psion.

In 1980 David Potter founded Psion – Potter Scientific Instruments with his own capital.  He was encouraged by his wife who believed whatever he turned to he would achieve.  His academic colleagues thought it was a great risk – why leave a secure job.  Potter thought this was a “giant frontier” and he wanted to be in it.  There was a severe recession in Britain and America – Potter believes the best time to start a business as capital is available and interest rates fall.

David had to find out how to start a company.  He registered a company by paying £100 – to give it 100 shares and a further £50 for services.  It had to be given a name that was not already in use, so the company was called Red Cheer.  He had a little office at the back of an estate agent’s and then began to explore what was going on in Britain in technology.

There were people who worked for British Airways mainframe computer services during the day, and at night they would build their own microcomputers and write software – “a little undergrowth developing beneath the forest of big companies”.  At the same time, in America, Apple had started and in 1977 the AIM microprocessor and computer in Albuquerque, New Mexico – where Bill Gates began, in 1975, to write the first software for it – BASIC.  In these germs and seeds, all over the place, there was great opportunity – people who saw what could be done and wanted to get involved.

David discovered Sinclair Research’s “funny machine” the ZX80.  It was a tiny computer that worked through your television.  What Potter could see was the opportunity of software.  There were newsletters where software was being marketed, so he began to research them and found some interesting bits of software. He entered into distribution deals with the software writers, as he believed they could be packaged and sold with the computers.

After a year of marketing software, he invited Charles Davies to join him.  Davies had done a doctorate under him and was knowledgeable about computer software as he had written a major simulation program for his Ph.D.  He left his post at Imperial College to become the first person to join Psion after Potter.  Davies would write the software, and Potter would plan and market it.  One of their early projects was a flight simulator for the ZX81.  It had a runway, plane controls and it was exciting.  The simulator sold well.  By 1982/83 they were the largest microcomputer software creator in Britain.  Beginning with databases and utility products and then computer games.  They put their own brand on it and sold with Sinclair and Acorn.  By the end of the first year he felt confident in what they were doing and in the second year they turned over £1.6 million with a profit of £600, 000 and had expanded to around fifteen people.  In the third year Psion turned over £3.2 million with a profit of £1.6 million. There was no borrowing on the company during the first three years.

At the end of the second year Charles Davies wanted to invest in a VAX minicomputer – an odd thing for a company writing software for microcomputers – because it allowed up to 24 people to work together and had simulators for all the microprocessors and compilers for all the major programming languages.  It gave them capacity that others did not have.

In 1984, the Psion Organiser was launched.  David thought they would need more capital to finance stock and was being approached by venture capital companies.  When he produced an early prototype of the Organiser, they looked at him with horror as they were only interested in the software.  It was a high risk venture.  They did it because by the early 1983 they had a strong team who were highly academic and intellectual and they wanted to be part of more than computer games.  The second reason was that the companies they were associated with and depended on – Sinclair and Acorn, did not have a strong financial base and were vulnerable to an economic downturn.  They saw the need for diversification.  At this stage, the PC was finding its feet, but was expensive and not mobile.  There would be one per office, where 10 people would use the same PC.  The idea of portable computing was alien in the early eighties.  They planned to build a device for ordinary people – potentially a very wide market.  To engineer the hardware, they hired Andy Clegg to solve the problems of size and weight, battery life, and it keeping its memory when it was switched off – there was no room for a disk drive.  Clegg came up with the solution of EPROMs – electronically programmable read-only memory.  Martin Riddiford of Frazer Design Ltd designed the appearance.

The Organiser was funded out of profits from the software business and one million pounds raised from two friends who competed with a venture capital offer.  The company was valued at around £7/8 million and they got around 13% of the shares.

David says it was an interesting problem to launch a product which nobody knew the purpose of – marketing was tricky.  A personal mobile computer was a radical idea as people didn’t recognise that they had personal information – in spite of having diaries, notebooks and address books.  They had recognised that in fact people carry around a great deal of information.  The early marketing explained the need for it and described what it did.  They built 10,000 units and were sold to many different kinds of people.  Marks and Spencer approached them to make them a point of sale device and became a valuable client over subsequent years.  The personal sales were slow early on but demand for commercial applications was excellent.

Over the next 18 months 20,000 devices were sold to the consumer market.  At the end of 1985, early 1986, the Organiser II was launched.  It was an evolution of the I but had a more substantial software system inside it.  The marketing became more sophisticated – what does this really do for you in the emotional sense?  Ronnie Gottlieb, developed the advertising messages.  The image in the newspapers was a shirt pocket with the little computer sitting in it, with headlines including, “The Daily Help, “Move Over Rover”, and “Man’s Best Friend’.  They were 8-bit, based on 8-bit microprocessors and used static memory.  They were the first machines that could hold permanent information.

Organisers I and II lasted until 1991/1992.  The next generation was SIBO – 16-bit organiser.  The memory and the screens were bigger and the technology was developing rapidly.  It was designed to create a whole range of products including the first notebook computers.  They began in 1986.  Psion launched its first notebook computer in 1989 after going public in 1988.

In the 1980s the life expectancy of a small company in the IT world was short.  David considered whether the company would do better owned by him and a few of the executives, or with a wider capital base independent of the founders. They were ambitious and wanted to go a long way with the company.  They couldn’t do it just by themselves.  The capitalisation of the company was £17 million with profits of about £1.1 million for 1987. They planned to publicly quote the company in October 1987. As it turned out, they couldn’t have chosen a worse month.  On the day they were going to present their pathfinder prospectus to institutional investors, there was a hurricane over the South East of England, so nobody could get to the meeting.  The following Monday the stock market crashed in America, losing around 27% in one day. Potter told his colleagues they would hold on the floatation.  By spring 1988 the market had reasserted itself, so Psion was floated in March 1988.  At the time of the floatation, Psion was a one-product company. The organiser was going from strength to strength and the profit outlook was very positive.  Most of the R&D was around the software.

In 1992, the third generation of devices was launched – the Series 3.  Potter was invited down to Nokia in London to talk about the future of hand-held devices and computers.  It was at the same time that GSM was launched which Nokia came to dominate.  It was a rapidly evolving market where the cell phone was going to become very big.  The hand-held computers and cell phones had the same challenges – size, weight and battery life.  By 1996/1997 it was clear that these two devices would merge. Psion talked to Nokia, Ericsson and Motorola – the big giants of the cell phone industry at the time.  All knew that data was going to play a bigger and bigger part in the nature of the cell phone.

Competitors to the Organiser began to appear – Japanese calculator manufacturers, Sharp and Casio produced ranges of computers. Palm, in America, began to develop an alternative which had no keyboard and a stylus to enter data.  Apple launched the Newton which did not succeed, but all of these created a wider market and wider interests.  Potter says that Microsoft didn’t work out the right kind of software for these devices – they did not need a pocket version of Windows, they needed something different.

In 1998, they launched the Symbian Venture, creating a new company consisting of Psion’s major software, operating system software and applications, working in conjunction with the hardware and some software contributions from Nokia, Ericsson and Motorola – the big cell phone companies. They were now on a path of long term research and development with these companies.  Later, Samsung, Sony and Matsushita joined so they were working with most of the industry. Psion retained about 40% of the company and Potter was chairman.  He describes this as one of the most interesting things he has done in his life.  He was chairing a key element of a big industry and seeing how the different companies related to each other – they had to work cooperatively, but they were all enemies. Ultimately. the company didn’t succeed but its legacy continues in Android.  They sold hundreds of millions of computers, smartphones and cell phones using the operating system but it did not come to dominate. David Potter resigned as Chief Executive in 1999, remaining as Chairman until his retirement in 2009.  The company was subsequently sold to Motorola.

David describes Keith Roberts, who worked at the Culham laboratories in Oxfordshire as a great mentor. Roberts completed his doctorate in 1939 and was one of a great set of physicists who developed radar during the Second World War. David believes he may also have worked on the thermonuclear bomb and speculates that Roberts’ relatively early death may have been due to his exposure to radiation in the 1940s, as they were not aware of how dangerous it was.

The Sinclair group and Hermann Hauser from Acorn were also strong influences.  He observed the way they set up their businesses and operated.  He believes he had a stronger commercial and marketing instinct than they had as Psion never had bankruptcies or defaults

David believes there would have been greater success for Psion if they had behaved more like the Americans.  They have a culture and infrastructure which is focuses on taking enormous risks.  Symbian was an enormous risk and he believes he should have funded it on a larger scale as it ultimately did not deliver what they had hoped.  If he had been in America he would have not worried about profit at all – in London there was always concern about shorter-term profit, so risk had to be mitigated.  He wonders if the 1,200 people they employed were not enough – would it have worked better with 4,000?

David found it exciting to create a thriving business for many years, pioneering new products and technologies.  He believes a healthy society needs people to be adventurous – creating businesses and entrepreneurship is of great value. Exploring through business and making new opportunities generates employment, taxes and returns and rewards for society as a whole.

The frontiers relate to data on a giant scale – libraries of information and understanding the relationships between what the data tells us of different factors, is hugely valuable.  Potter is concerned that we are beginning to emerge into an Orwellian world, where governments know huge amounts about us – providing issues with privacy and freedom.  We can learn about our society by looking at the relationships between things in the data we capture.

David suggests finding an area which has got a long way to travel and join that.  Do your own thing within it, working with other groups of people.

He maintains his links with South Africa, as he has an educational foundation there.  He believes education is the most important thing – it gives you the skills that allow you to have a job

David Potter was awarded the Mountbatten Medal in 1984/85 and the CBE for manufacturing industry.  He has been granted a number of honorary degrees because of his example as an entrepreneur from the world of science, and partly because of his work with the Dearing Committee.

Interviewed by: Alan Cane on the 20th April 2016 at the WCIT Hall

Video by: Boardie

Transcribed by: Susan Hutton

Abstracted by: Annabel Davies