How we built a business out of recession - the first prototype - chapter 3
The story of CitNOW*
This is the third chapter about CitNOW, the company we started from a kitchen table in Winnersh, Berkshire. If you’d like to read from the beginning, here are chapters 1 and chapter 2. Each one is roughly a 5-minute read. These are all early drafts for a book.
CitNOW was founded by Andrew Howells and Donna Barradale in 2005, although the company was only registered in 2008. In February 2018, we sold the company to Tenzing, a UK private equity company. It has been sold again since.
My starting point with Honda was to see whether anything already existed. I’d read about a medical service Telewest had been trialling with some of their customers in the Midlands. They were the local cable operator, a Sky competitor, with their version of multichannel TV, broadband internet and another possible glimpse of the future.
The trial gave local GP surgeries access to some of their more housebound patients who were equipped with cameras so a two-way visual conversation could occur via their televisions. It must have felt like an early version of a videoconferencing call, with the patient and nurse able to see each other while holding a normal telephone conversation.
It lasted over a year, the addition of video, inconclusive in the end. But by then, Telewest had significant financial problems to resolve, owing to its mounting debt from building a cable network, acquiring other smaller providers, and not having signed up enough monthly subscriptions.
My first step was to visit the company who’d won the pitch and delivered the GP’s service. It turned out to be a division of a well established medical supplies company whose board had been convinced three years earlier that this was an ideal opportunity for investment and growth.
My meeting took place in a laboratory that reminded me of school chemistry lessons, with traditional stools and benches. The only thing missing was a Bunsen burner, with a lazy flame flicking the air, waiting for another experiment, usually a finger or two, daring to stay in there the longest.
I met a solitary, somewhat despondent figure who didn’t hold out much hope for my car application, even after an enthusiastic explanation. Their trial had apparently been a success for those able to access the service. But the numbers hadn’t been what they wanted, and now, with Telewest’s precarious financial situation, the board had decided that there would be no further time spent or money invested.
They’d worked with various cable platforms for several years, developing their video service on the promise that there might eventually be millions of customers. The GP surgery app was an early example of how video might enrich and improve everyday lives.
They were right. There would be many video-rich applications in the future, but none constrained by an individual cable or satellite provider. Televisions would only be one of several ways to participate. The most popular device would turn out to be a mobile phone.
Despite the end-of-the-road feel in that laboratory, I was given a product demo and access to their software. What I did with it, he didn’t much care.
I needed help because I wasn’t a software engineer and had no money to develop what had just been donated. Alistair, an old friend from Newcastle University, was interested in what I was doing. He was also an engineer, just the wrong sort, but his practical thinking and ability to marshal thoughts in the right direction was helpful when we started doing our own demos.
The original application combined a phone call and video from a camera attached to the top of the cable customer’s TV. A standard TV signal has 25 frames of information every second, this app produced two or three. That might work well enough with static objects, like a patient sitting in front of their TV, but it’s really unusable if the camera is moving, which is what we were after.
John was a really smart ex-BBC engineer who I met when I worked with his old boss, Scott. Scott and I had started a consultancy when my interactive TV business failed and John had helped occasionally on work or pitches being made. He was the perfect fit for the moment, an optimist who positively excelled with the technical hurdles that had to be overcome.
But it was also a commercial relationship. While he enjoyed the challenges, he also needed to earn a living, and I couldn’t afford to pay him for more than a day a week at best. He kept himself busy continuing to work at the BBC on other projects. They had a culture of hiring consultants, the same ones who’d once been full-time employees. All in all, John had a rich, eclectic life, which even included teaching piano lessons several evenings a week; his reach was that broad. On more than one occasion, I’d call him on the day set aside for my work, only to find out the next day, when he didn’t answer, that he’d left early to ski in the Cairngorms because fresh snow had fallen overnight.
I tried to persuade him to sign-up to what we were hoping to build. His mix of skills and knowledge perfect for a start-up situation. It would have allowed us to move much faster without the same cash constraints, but he didn’t want equity in the business and frankly, who could blame him?
John helped get the prototype to base camp. We’d started with a small handheld Panasonic video camera and, after much searching, found an Indian company, started through a university project, who sold something called a FastVDO capture card. It took our analogue video from the camera, converting it into video that played on a computer. The first sample had turned up after a four-week wait and much to our surprise, it had worked.
It was now time to try it out in a dealership.
Loving this story x