Innovation knows no borders

Nearly half of Oxford’s spinouts since 2011 have a founder from another country. Meet the international innovators creating a big impact around Oxford.

Written by Gregg Bayes-Brown

One question that often asked of universities at the heart of established innovation ecosystems — be it Cambridge, MIT, Stanford, or Oxford — is “what’s the secret sauce?”

In truth, there is no secret sauce. Even if there were, each ecosystem would have their own special blend; there is no one-sauce-fits-all model.

There are, however, common ingredients, and one of the most important of these is diversity.

Encouraging diversity comes in many different flavours: gender and sexual equality, supporting people from minority and lower economic backgrounds to get ahead, ensuring a level playing field for the disabled, welcoming people from all walks of life and backgrounds, and more. This also means constructive immigration policies. For ecosystems to succeed, they must have robust access to international talent through immigration.

Why this is pivotal for innovation is that diversity, in turn, encourages an array for skillsets, opinions, and approaches sourced from a plethora of backgrounds that innovators can draw upon. It supplies ideas and people from around the world. It gives them a critical mass of smart, capable people in the local area, who in turn attract more talented people and organisations. It gives them divergent thinking — the ability to think creatively outside of the box and find new solutions to problems — built into their projects, companies, and ecosystems.

There’s the oft-mentioned mantra regarding innovation that it’s a numbers game, which is interpreted by some to mean that if you have enough ideas, some of them are going to be winners. But if the success of Silicon Valley is to be considered, it’s not the number of ideas that has made it the international capital of innovation — it is the high number of incredibly talented, forward-thinking innovators capable of taking those ideas forward that has made the difference.

Research by the National Foundation for American Policy in 2016[i] into the relationship between immigrants and unicorn startups (ie. startup companies worth over $1bn), found that immigrants started over half (44 out of 87) including household names like Uber and StartX, and are key members of management or product development teams in over 70%.

EBay and Yahoo were created by foreign founders, and Instagram and WhatsApp both had immigrants as co-founders. One of the most recognisable university spinouts in history, Google, was co-founded by Sergey Brin, born in Russia.

In Oxford, the story isn’t much different. 45% of our spinout companies — ie. companies with University intellectual property at their core — have foreign founders or co-founders.

Torsten Reil — NaturalMotion

One of Oxford University’s greatest spinout success stories is NaturalMotion. While the company itself may not be a household name, many of the products using its technology are.

The company is the brainchild of Torsten Reil. Torsten was first attracted to Oxford while serving in the German army after reading The Selfish Gene by Richard Dawkins. During his undergraduate studies in biology, Torsten became fascinated with evolutionary and adaptive systems — the bridge between biological and computational sciences. He completed his Masters on the subject at Sussex University before returning to Oxford for his DPhil.

Torsten found that, when he hooked up a neural network-driven artificial genome programme into the simulation of creatures, it created fully interactive animations of those creatures which would respond to stimuli in a unique way.

It was this research that would form the basis of NaturalMotion. Spun out of the University’s Zoology Department in 2001, Torsten originally planned to use the technology in games.

“We thought that the unique behaviour generated by our engine would be ideal for games, but it was ahead of its time,” said Torsten. “This was still in the era of PlayStation 2 and the original Xbox, and even high end PCs couldn’t keep up. The tech simply wasn’t fast enough. So, instead, we targeted special effects first.”

As a result, NaturalMotion embarked on a rather unorthodox route to becoming a games developer: by making movies. Notably, Troy (the 2004 adaptation of the Iliad), and the Lord of the Rings series.

As the hardware behind gaming caught up, NaturalMotion shifted its focus back to games. It developed Euphoria, an animation engine based on its Oxford University intellectual property. Rockstar, the developer of Grand Theft Auto (GTA), became its first and main customer. The two built a healthy, collaborative relationship, which went on to underpin some of the biggest gaming releases of the past ten years, including the widely acclaimed Red Dead Redemption, GTA IV, and the fastest selling entertainment product of all time, GTA V.

In 2010, NaturalMotion developed Morpheme — a gaming engine for mobile that taps into the animation power of Euphoria. This development allowed NaturalMotion to make the move from engine developer to a fully-fledged gaming company. The final piece of the puzzle was the ever-increasing processing power of the iPhone, which opened the door to NaturalMotion making the pivot into games.

NaturalMotion’s first game was Backbreaker Football, an American Football game initially released in 2009 on iOS to strong reviews. Subsequent reviews for releases in 2010 on PS3, Xbox 360, and Android devices all praised the Euphoria animation engine behind the game, with one critic, PlayStation LifeStyle’s Joseph Peterson, saying, “Running with the ball feels lifelike and better than any other football game on the market… The fact that the game really tries to make you feel what the player is feeling is probably the game’s crowning achievement… literally every tackle is completely different.”

In 2011, the company moved into the Free-to-Play (F2P) market with the highly rated My Horse, a stable simulator, which went on to be more successful than all its paid games combined. The real breakthrough moment, however, came with CSR Racing.

“We used lessons learned from My Horse, and spent a lot of time making it [CSR Racing] look amazing,” said Torsten. “As a result, the game became one of those wildest dream moments for the company, making over $12m in a single month after launch.”

The success of CSR Racing paved the way for Clumsy Ninja, featuring a fully interactive ninja for mobile devices. Announced at the iPhone 5 keynote, the game had a wildly successful launch with 10 million downloads in the first week.

In 2013, Torsten was introduced to Mark Pincus, the CEO of Zynga, widely regarded as the pioneer of social gaming, and developer of games such as Farmville, which became the most popular (or, depending on how many notifications Farmville users bombarded you with, widely despised) game on Facebook for two years following its launch in 2009.

“We wanted to marry our technology with Zynga’s systematic approach,” said Torsten. The ensuing collaboration between the two companies would underpin development of CSR Racing 2: “performance [of CSR Racing 2] remained strong, and I attribute that to Zynga’s expertise.”

It was the strength of this collaboration that led to Zynga acquiring NaturalMotion in 2014 for $527m; a deal which returned $50m (£30m at the time) to the University.

Torsten attributes the success of the company to the association with Oxford, as well as the support he received from Oxford University Innovation (OUI) — then Isis Innovation — in setting the company up, which he praised for assisting with patents, lawyers and introductions to investors.

Because of this bond with Oxford, despite having other offices in London and San Francisco, NaturalMotion’s office in the city remains its headquarters, as well as the central location for its technology development and home to many of the company’s games development teams.

However, were Torsten looking to found NaturalMotion all over again today, the results may be different.

“I wouldn’t have the studio in the UK without the EU,” Torsten explained. “The damage from Brexit at the moment is subtle, and most of the impact from it is yet to pan out. But already, the culture of the UK has begun to shift. Britain as I remember it being when I first arrived was outward and friendly. Now, I genuinely don’t feel as welcome.”

“Oxford isn’t representative of the rest of the UK,” he added. “People should come here, be a part of the University, and start their companies in the city. It’s my hope that whatever happens in the wider UK, Oxford remains an island of sanity.”

Alina Rakhimova and Robert Simion — Enzbond

While certain American-Russia collaborations may be under some intense scrutiny in other parts of the globe, in Oxford, they can be the spark that fires up new companies and innovations.

This was certainly the case for the first spinout developed by students since NaturalMotion, Enzbond, co-founded by Alina Rakhimova and Robert Simion.

Although the pair are at the start of their entrepreneurial journey, it’s one that would not have happened without Oxford’s international appeal.

Alina came to Oxford with a full scholarship, but realised that she didn’t want to stay in academia and wanted more impact with her work. Over the course of her studies, she met Rob, and the ideas the pair came up with led to the creation of Enzbond.

Launched in December last year, Enzbond is developing in-silico technology for utilising enzymes in drug manufacturing. The tech is capable of delivering efficient trials with a faster development time. It also has cross sector potential, such as using enzymes to break down rubbish into something useful, such as a biofuel.

The company is still in the early stages. With support from OUI’s Andrew Bowen and serial academic entrepreneur Steve Davies, Alina and Robert are currently developing an overarching strategy to grow the company while pursuing a couple of projects and expanding their collaborator network.

“We do get some small jokes over the Russian and American thing,” said Alina. “But Oxford is a place where people can unite, despite their background.”

Agne Milukaite and Peter Ebsen — Cycle.land

Agne: Left. Peter: Centre.

In the world of Oxford startups, international innovators are having an even greater impact than their spinout peers. Of all the companies to pass through the Oxford University Incubator, 78% have a foreign founder or co-founder.

Over the past year, one of the rising stars in the incubator has been Cycle.land, which is developing an app that’s essentially the AirBnB of bike sharing.

Agne Milukaite, the founder of Cycle.land, has long held an affinity for bikes. In her home city of Siauliai in Lithuania, Baltik Vairas, a bike manufacturer, is a big employer. Consequently, the community tended to unify behind the company, and cycling is a major part of city life.

Agne’s inspiration for Cycle.land came about shortly after coming to Oxford to study Migration Studies. She initially had a tough time finding a bike, but ended up borrowing one from a DPhil student. Identifying that this was a common problem for both international students and tourists in Oxford, Agne came up with the idea of an online platform that could facilitate bike sharing.

Agne later met Roy Azoulay, who manages the incubator, at an entrepreneurship class, and ended up joining the incubator. There, she participated in the incubator’s accelerator programme, which prepared her for business. She also brought in Peter Ebsen, who has a background in Law and running cleantech companies, as a co-founder to help develop the company.

In the year since its launch, the company has expanded to a headcount of six. It has operations in Cambridge and Edinburgh with plans to set up in Bristol, Brighton and London in the near future. It was also the first incubator company to pull off a joint venture/crowdfunding round, raising £375,000 through the Seedrs crowdfunding platform with support from Parkwalk Advisors.

Agne had the entrepreneur bug before joining the University, and notes that the emerging innovation ecosystem around the city was one of the deciding factors in coming to Oxford:

“I’d read about Oxford’s attempts to create a startup scene to rival clusters in the US, and thought that’s something I wanted to be a part of,” said Agne. “In addition, it can be tough getting started in the US if you don’t already have the network, whereas Oxford provides the network for you.”

Agne’s team are looking to target all manner of cyclists, from regular cyclists looking to trial different models of bikes to tapping into tourists who come to Oxford, which represent up to seven million potential customers.

“A cycling-based startup is an idea more tailored to Oxford than it would be in the car-centric US,” notes Agne. “Oxford also gives us the perfect trial ground for Cycle.land — if we crack can Oxford, we can crack any city.”

However, for Agne, Oxford represents much more than just a perfect test bed for Cycle.land:

“Oxford is an international city with people from all around the world. You can learn incredible things at the University, but the real eye-opening experience is the people. You can learn so much from each other here: food, global politics, getting an in-depth understanding other cultures,” said Agne, likening the international diversity to Silicon Valley.

Tapping into that international pool of talent — as with most spinouts and startups — is essential for the growth of Cycle.land. Beyond finding people who have the necessary skills to make a success of the business, Cycle.land’s international ambitions are underpinned by its staff’s diverse backgrounds.

“At Cycle.land, no two people are from the same country. People from different countries gives us a range of perspectives, but crucially, they can help us understand how to get into other countries. We need to be able to access international talent for growth,” explains Agne. “Things like difficulties surrounding visas and restrictions around immigration makes startup life tougher than it already is. Simply put, the more barriers you put in the way of innovation, the less you’ll have.”

Cycle.land are facing an increasing challenge in attracting the talent they need as people begin flooding out of the country because of Brexit, while other countries are making the best of the situation and making strong pitches to attract those leaving the UK.

“Despite that, Oxford still remains amazing,” said Agne. “The place is on a wave at the moment. New incubators and accelerators are popping up, increasing co-working, and investors are beginning to take notice. However, not many people are aware of what is going on here. The innovation scene taking off here remains a well-kept secret.”

Samuel Conway and Roger Noble — Zegami

One Oxford company, Zegami, can trace its roots back to the other side of the world.

Samuel Conway, CEO of Zegami, and Roger Noble, the company’s Chief Technology Officer, both came from Australia to set up Zegami along with Oxford’s Stephen Taylor, Head of Computational Biology, who also acts as the company’s Chief Scientific Officer.

Samuel’s route to Zegami began after the 2008 financial crisis robbed him of his dream job. He rebounded with a business, set up with Roger, in 2011, which used technology with Microsoft origins.

The technology, framework for Bing’s image search function, would catch the attention of Stephen who was brought in to redevelop the front end of the platform.

After a meeting with Stephen and OUI’s Fred Kemp, the University offered to spin the company out under the Oxford banner, and Zegami was born.

The platform offers a user the ability to control and manipulate their image collection how they see fit. For example, someone with a collection of bug pictures could circle a part of a map to see where each image was taken, a World War One image set could be set to a particular time in the war, or a museum curator could select all images of a certain colour. Then Zegami can pull all the images within that selection together.

“Microsoft had the original concept, but Zegami was an idea ahead of its time,” explained Samuel. “Several years later, and we think Zegami has the potential to be the default visual search for people’s data. We’re making it much easier to search images and use the data. We’re taking Zegami to the cloud. This is the next stage in the evolution of visual search.”

The company has been operating for little over a year, but has already built up a solid client base, including a long list of universities, museums and galleries around the world, and is finding new uses for the platform in human resources, asset management, and sports analytics. It has also recently raised £2.3m in venture capital backing, which it is planning to use to develop the platform for a wider user base. Zegami is also expanding its headcount from six to 20 over the next few months, and have already brought on NaturalMotion’s Adam Whittaker as the company’s Chief Financial Officer.

Both Roger and Samuel uprooted to move to the UK to launch Zegami. While Samuel admits it took a while to find his feet, he thinks it was well worth it.

“Oxford opens doors, its opinions carry weight,” said Samuel. “As a result, people take Zegami more seriously. You also have OUI here in Oxford, which we relied upon heavily to get advice on how things work. That level of support simply doesn’t exist in Australia.”

With regards to Brexit, Samuel remains somewhat more upbeat than other international innovators.

“Brexit won’t impact our visas, and Zegami’s unique appeal will help insulate the business,” said Samuel. “Yet currency swings are an issue, and affects us pricing sales wise. However, business still continues.”

Daniel Kroening — DiffBlue

While nearly half of Oxford’s recent spinout offering have a foreign founder at its core, Daniel Kroening, CEO of DiffBlue, thinks the percentage of foreign founders should be even higher.

“If you took a look at the make-up of the academic body, the amount of people coming to Oxford from outside of the UK is far higher than 45%. This story should not be about how great it is that 45% of the University’s spinouts are founded by internationals, but why that figure isn’t much greater.”

Maximising the potential of international innovators at Oxford like German-born Daniel is critical to the longevity of the Oxford tech cluster, especially if it leads to more spinouts that mirror the early success of DiffBlue.

The core of technology underpinning DiffBlue is an artificial intelligence (AI) that can write code for people. The team are developing three products based on this AI focused on rewriting badly expressed or out of date code, finding security holes, and generating human-readable tests for code — all of which are automated by the AI.

The manpower and quality of talent required to bring these products to market has led to DiffBlue becoming one of the fastest growing companies in the Oxford ecosystem. Launched in April 2016, DiffBlue has exploded to a headcount of 50 within a single year.

The company plans to sustain this growth, and recently secured £17m in venture funding from Oxford Sciences Innovation and Goldman Sachs for £17m to do precisely that. However, for DiffBlue to keep its competitive edge, it must search globally for its employees.

“This growth is heavily dependent on our access to international talent,” said Kroening. “Around two thirds of our workforce have relocated to Oxford from outside of the UK. Of the remaining third that were already in the UK to begin with, only three are British citizens.”

Consequently, Kroening remains concerned about the current political trajectory of the United Kingdom. As mentioned, one of the core strengths of Silicon Valley is the region’s ability to attract high calibre individuals in vast numbers, giving a deep pool of quality ideas and concepts backed up by a wealth of talent. As a result, Silicon Valley’s momentum is sustained by immigration.

Meanwhile in the UK, if plans outlined in the Conservative Party manifesto before the General Election in June are implemented, companies would be subject to a tax that would increase to £2,000 per head for every employee not from the UK. For DiffBlue, this would amount to a £94,000 tax per year on a young, growing company levied simply for attracting the talent it needs for that growth.

For Oxford and other tech clusters like Cambridge and London to keep their edge against peer ecosystems, rapidly-expanding young companies like DiffBlue need to be encouraged, not penalised.

Without Oxford’s international innovators, Oxford University would — on paper — still be one of the top contenders in the UK for turning its ideas into technologies and companies which have a positive impact on the wider world. But that doesn’t count for all the researchers from other countries who help develop those ideas, the employees in startups and spinouts which have come to Oxford and are integral to their success, and the serendipitous innovation that stems from an internationally diverse group of people who have come together to make Oxford a top global hotspot for university innovation.

While Brexit and Britain’s future are issues with many factors and facets to consider, the message from the ground of Oxford’s tech cluster is clear. If Britain is to keep a competitive, innovative edge, and embrace science and technology as a major part of its economy, then the UK must not allow itself to slip into isolationism, and maintain an open, welcoming and global outlook in the future.

Gregg Bayes-Brown is the Marketing and Communications Manager for Oxford University Innovation. You can follow him on Twitter at @GreggBayesBrown, and you can follow OUI for more blog posts and innovation news at @OxUInnovation.

[i] http://nfap.com/wp-content/uploads/2016/03/Immigrants-and-Billion-Dollar-Startups.NFAP-Policy-Brief.March-2016.pdf