Kell Systems: Sara Jones and Tim Walsh
We speak to the award winning Kell Systems, who have opened up a totally new market with their innovative ideas.
Sara Jones and Tim Walsh never expected to be awarded Manufacturing Business of the Year by the Startups Awards in 2005. However, the judges felt that their business, Kell Systems, had opened up a totally new market with their innovative ideas for the housing of computer servers and technical equipment.
UK manufacturing has had a rough ride for many years now, and the idea of investing in the sector would send many entrepreneurs running in the opposite direction.
To add to these concerns neither Jones nor Walsh had any experience in the sector. However, what they did have was a product that they felt was a sure-fire winner and they were prepared to take the risk.
Walsh had an idea for specially designed cabinets that could store computers servers and audio and technical equipment, both simultaneously keeping them cool and reducing their noise, so they no longer had to be housed in purpose built ‘computer rooms’ and could be just another part of the office.
“I had looked for a control suite, that was technically up to the job and that looked good,” says Jones. “But I knew from experience that there was nothing out there.”
His partner Jones was working in marketing for internet company Bulldog, but felt it was time for a change.
“I had been working for 10 years in communications for high-tech companies and it is fair to say that I was successful,” says Jones. “But I was looking for more something different and that gave me more autonomy.”
Walsh had the idea, whereas Jones had the skills necessary to promote and sell the new product. So, in June 2003, the pair founded Kell Systems.
“Tim had the concept but I realised that although the concept was good it needed marketing to get if off the ground,” says Jones.
“I didn’t have the marketing skills,” agrees Walsh. “So when Sara wanted to join I said ‘please, please, please’.”
“Our skills complemented each other,” adds Jones.
Each partner put in £50,000 of their own savings into the project, but much more was going to be needed before the business was going to get off the ground.
The idea had to be fully designed, manufactured, marketed and then finally sold. This would mean a long period of hard work and problem solving before they would even take an order.
“When we started we were all working for equity in the company as there was no money coming in,” says Walsh. “This was the case for about nine months to a year.”
Kell Systems was going to need plenty more funding before they would reach market. But fortunately they had a very thorough and well thought out business plan, which made this task easier. Also, Walsh had experience of running a business before and knew what to expect when seeking investment.
“It is much harder to start a company here then it is in the US,” says Walsh. “It is a battle here. Banks are banks and they don’t like to take risks.
“No-one with a start-up company should go the banks expecting them to be their friend,” says Walsh. ” I never expected them to for us, that is not their business.”
However, Kell Systems did do well through a government initiative called the Small Loans Guarantee, a scheme where banks will pass on details of a strong business plan to the Department of Trade and Industry who can then act as guarantor to a bank loan. Kell received £65,000 via the scheme and feel that it is something other startups should know about.
Further investment came through the Institute for Independent Business, a network of individual business people who both invest in projects and add their business expertise to help them work. They too could see the potential of Kell Systems’ products.
Now with the battle for funding won, there were also the issue of turning the prototype into a manufactured product. This too was a testing time for the nerves of the founders.
“There were a number of times when we thought a solution would work but then it didn’t and it was a case of ‘back to the drawing board’,” says Jones.
Eventually, they had their product and now they had the final task of taking an idea that no-one had ever heard of and selling it.
“Ours is a very different product we have to preach to people firstly that it works, and also that you don’t have to have all of your IT in the backroom,” says Jones.
They find that Google pay-per-click works, as there is no competition. They also take out space in IT magazines for their own in-house designed adverts, targeting the IT people who will often give the final go ahead to buying a Kell product.
Demonstrations are also key to sales and they show me how their server cabinet works in an office environment.
A stereo system plays background sound and I set it to the level of the Crimson Business office. Walsh turns on a stack of noisy servers and then closes the cooling cabinet around them. The result is that I can no longer hear the sound of servers above the office background sound them and our IT room at the bottom of the office now seems defunct.
The company has grown to 15 staff and they predict turnover will be about £1.5m in the next twelve months. Clients include companies such as Nasa, Hertz and Adobe.
Cracking the US market is next on the list, they estimate the market in California alone is 10-15 times the size of the UK. However this might entail a new manufacturing base across the Atlantic.
“We’ve been amazed at how many enquiries we have had from the US,” exclaims Jones. “Bearing in mind that that they have never seen the product and the costs of export and the fact we ask for payment upfront.
“We made Nasa pay with a credit card!” laughs Jones.
Their daring project greatly impressed the Startup Awards judges and both Jones and Walsh were delighted to win.
“It was completely unexpected,” says Jones. “And it has been a really good boost to all the guys on the shop floor. We were really pleased.”