Annoying A Dragon In His Den, Starring Piers Linney

I certainly had no wish to antagonise Piers Linney, the latest addition to the BBC’s entrepreneur show, Dragon’s Den. But somehow in my interview with the Outsourcery CEO, I found myself facing a mildly angry dragon in his own cave (or office, as most people would call it – a very quiet, sedate one at that).

It doesn’t start too well. I ask a question that’s meant to lead into a discussion about the entrepreneurial mindset and its willingness to accept failure in the dogged pursuit of success. But in the process, I mention certain tabloid reports on the new Dragon’s Den star. These focus on Companies House data, claiming 32 of the companies Linney has been involved in have folded. Two of them, Itchy Media and Interactive Media Developments, were said to have closed with six-figure debts. It turns out they were part of the same group, so Linney, in a blog post in March, said the reporters were guilty of “double counting”.

‘Journalists didn’t know what they were talking about’

He is still far from happy about the reporting. “It’s complete bollocks,” he says. “Certain journalists take information from Companies House and use certain words… I won’t explain it because I can’t be arsed with it.”

He explains anyway. The 32 “companies” were meant to close, he says. They included  paper bodies, from special purpose vehicles – legal entities designed to perform a single function before being dissolved – to intermediate holding bodies. “They’re not folded – the word they used. As we explained, they’d been dissolved.

“The only company that has folded and people have been owed money that I’ve been involved in, as a direct investor… was one where it went tits up, I lost my money and that’s what investment is about.

“I’ve never set up a company myself and dissolved it owing anyone a bean.”

As for the article, Linney concludes: “That’s just clever use of words by entertainment journalists trying to write about business that don’t understand what they’re talking about.”

We finally get back to the point: does business failure have a positive side? “Failure to me is not a bad thing. You learn, but it’s who you take down with you,” he adds.

There is a period of calm before the next storm (in a teacup, admittedly) ensues. Linney reveals Outsourcery, his cloud services firm, which provides unified communications, struggled to get investors when the business launched following the management buyout of Genesis Communications from DSG International in 2007.

Linney has an interesting take on the lack of funding that is currently hurting technology start-ups throughout the UK. He believes pension funds couldn’t justify putting money into the venture mid-market, as the returns simply weren’t good enough. Since the dotcom boom in the late 90s and early 2000s, that venture capital segment has remained dry as no one has been brave enough to fill it.

“All you’ve really got to replace it is angel investors. Angel investors, a bit like in Dragon’s Den, might put in £30,000 or £50,000,” he adds. “But, as they’re finding in Tech City, angel investors can only go so far… most angels aren’t going to drop a million. But the mid-market is a vacuum.”

Many of the venture capital firms operating in the UK and Europe are heavily focused on finding the next big app, the next Skype or Twitter, and aren’t paying much attention to the B2B market, he suggests. If Outsourcery had set up in the US, Linney thinks investors would have been tripping over themselves to get involved.

Another sticky patch

This is steadier ground, especially as finance and investment is really Linney’s speciality. But we then hit another sticky patch, when I suggest that, given his role as one of the panel of investors on Dragon’s Den, and his involvement in a technology company, he must be interested in investing in innovation. I wanted to know if he considered Outsourcery as an innovator, given it is largely a service provider for cloud-based Microsoft productivity and communications tools, whilst offering hosting infrastructure with managed cloud servers, based on HP hardware and Microsoft software (Hyper-V and System Center).

Perhaps foolishly, I assumed he was on the hunt for innovative new businesses.

But he says he isn’t looking to invest. “I’m not looking for investment. I’m doing Dragon’s Den, I’m doing my own personal stuff, my own personal wealth management and that’s it. I’m not actively looking to invest in a tech company.”

Innovation is left to Outsourcery’s technology partners, he says. Oddly, he later explains to me the company has an Innovation Team, based in Manchester, who do the coding to tie all the different pieces of its services together.

I was also keen to find out if Outsourcery would ever move away from focusing so heavily on Microsoft, perhaps offering full service and support for other major cloud providers, Salesforce for instance, who run the world’s most popular CRM product. But he doesn’t like that either.

“I don’t want to move outside of Microsoft, why would you? That’s a huge market,” he adds. “You can’t build a business that will support every silo of technology.”

I suggest it wouldn’t have to be every silo, you could focus on the most popular Software-as-a-Service products, giving more choice to customers. “Why would you? If you’ve got a £6 billion market to go after, that you’re already an expert in, leading the market, creating a billion pound company, why am I going to faff around with something that is completely different?”

Don’t mention the hypervisors

But it is over something far geekier that Linney becommes even more irritable.

He starts to proselytise on the superiority of the Hyper-V hypervisor. I cut in, suggesting the Microsoft hypervisor was lagging behind competitors. It has a smaller customer base than VMware’s ESX, which is generally considered to have more advanced features also.

Linney responds: “I really don’t think you know what you’re talking about.” He then admits VMware is the dominant player, but “only because of history” – the same, I note, could be said of Microsoft’s dominance in certain areas.

He claims that in one upgrade to Hyper-V, the company was able to increase its capacity fourfold. “Our data centres effectively got four times as big in one upgrade.”

“If you look at the list of capabilities of Hyper-V and VMware, actually the gaps, if there are any now, are very slim… in most cases Hyper-V is ahead of the game,” Linney adds.

“Microsoft is not going to lose the hypervisor war, for three reasons. One is that it can’t. Two, it has $9 billion to invest. And three is – and this is what others don’t have – it has a feedback loop because they use this at massive scale on a daily basis. And that all goes back into R&D.

“You’re on a very sticky wicket sitting there saying that Hyper-V is a long way behind VMware because that is not true.”

He claims he doesn’t even see XenServer, which is surprising given it is probably Hyper-V’s closest competitor in the bare-metal hypervisor market – and is led by Microsoft partner Citrix.

We don’t even touch on KVM, the open source hypervisor heavily used by Red Hat. The credentials of the hypervisor have never really been Outsourcery’s main selling point.

And then the interview peters out. Niceties are exchanged, along with some chatter about his latest TV venture and his last one on Secret Millionaire (in which he gave money to a genuinely awesome organisation helping prisoners with their literacy), and the tension dissipates. I shake his hand and leave, a little singed from a meeting with a surprisingly fiery dragon.

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