Q5 interview - Hal Philipp, founder of Quantum Research

Electronics Weekly puts its questions to an industry figure: Hal Philipp and his wife Kathy founded Quantum Research Group in Hamble, Hampshire in 1996 in a spare bedroom. He originally developed and patented his capacitive touch technology for use in automatic water taps.

Today, refined versions of this technology can be found in over 60 models of mobile phone, plus countless MP3 players, automobiles, PCs and other consumer appliances. Hal sold his company to Atmel earlier this year in a $130m deal, having never borrowed from banks or raised venture capital (VC) funding, or even having an overdraft facility. The total capital he injected in the 1990's amounted to $50,000. Electronics Weekly asks Hal Philipp about the secrets of success.

What were the most challenging aspects of expanding a UK-based semiconductor business globally?

Finding the right kind of talent, primarily in engineering and product marketing. So-called talent coming out of UK universities is often sad. Most CV's are deceptive. We interviewed people with amazing CVs who could not do basic maths, and recruitment agencies are mostly useless to small companies. We succeeded by looking outside of the UK and by sifting though CV's from paid recruitment websites. We have a team from around the world, including Malaysians, Germans, Greeks, Americans, Irish, Turks, French, Bulgarians, and even Brits! More parochial managers are missing out on great people. Fortunately, the UK makes it relatively easy to bring in people.

We also were plagued with over regulation. We powered through it; many otherwise deserving companies don't.

Why did you decide to steer clear of VC funding and bank loans when these options may have given you the opportunity to grow much faster?

I looked at VC or angel money in 2000 and 2001 but we weren't an Internet, telecoms, or biotech company. One angel investor told me were doing everything wrong and 'needed to be fixed'. He was deeply invested in telecom and Internet.

We were cash positive, and the limit on growth was recruitment. Not having a credit line was healthy; it instilled the drive and ethic that comes from working without a net. It made our collections process more brutal when necessary and we rarely paid late, making our suppliers keen to do business with us.

You have design wins with global leaders in mobile phones and other high volume products. How did you persuade them to deal with Quantum when it was such a relatively small company?

Firstly, our service attitude - constant communications, fast delivery of samples and prototypes, and becoming a virtual extension of our customers' design teams. We did design work free-of-charge, so engineers didn't have to get management approval and we stayed off the radar screens. We lost money in the short term but got some great design wins because we had the right technology with a customer-focused business attitude.

Secondly, we didn't go in at the top of organisations - we would have gotten nowhere. We worked with bench engineers who understood the technical issues and what was needed to address them - that was their prime concern. To this day, real people answer our phones, not machines.

We created internal champions at our prospective customers. Projects got along so far that companies were committed to us. It didn't always work but it created its own momentum.

Our methods were grounded in quaint ideas like 'the customer pays the bills'. It's amazing how many companies treat customers with disrespect or fail to engage them with intelligence.

We took calculated risks and ran Quantum close to the edge. But we were not stuck on a particular methodology. Our strategies evolved and the best changes we made were in response to customer requests. These ultimately paid big dividends.

How have people's day-to-day roles changed at Quantum since the company was bought by Atmel?

Jobs haven't changed much, although I now focus on developing technology as CTO. We are the centre of excellence for touch technology within Atmel and have much greater technical and commercial resources. However, within Quantum there is still a small-company attitude and culture.

What will the company's acquisition by Atmel mean for your customers?

More applications, marketing and sales support, throughout the world. We are adding to our engineering resources to accelerate the rate of innovation and create new ways for consumers to interact with electronic and electrical products. There is a feeling among customers that we're now a large, solid company. This is a big door-opener.

See also: Q5 - Interviews with electronics industry leaders
Read all the Electronics Weekly Q5 interviews. From ARM's chairman, Sir Robin Saxby, to touchscreen technology firm Zytronic's MD, Mark Cambridge, the business leaders share their particular insights on the UK electronics industry.