Investment for business growth: Building out new products

The Business Growth Fund has now been around for two years. To find out how it is helping companies grow, we've been given exclusive access to four portfolio companies.

As part of our exclusive look at the Business Growth Fund’s (BGF) portfolio, GrowthBusiness sits down with Cennox, Springfield Healthcare Group, GCI Com and to find out how the subject of product development is being tackled post-investment.

Richard Bishop, head of investments at the Business Growth Fund:

‘Investing in new products is one-way to stay ahead of the competition, how does that factor into your business strategy?’

Clive Nation, founder and chief executive of Cennox:

‘When we bought the business we acquired, with it, a piece of technology to do with copying cards and ATMs. However, whilst the technology was fundamentally sound, it required a lot of investment from an R&D perspective – one which played second fiddle to everything else.

‘Once the investment was in place we were able to look at the product and redevelop it and incorporate new technology that now enables us to prevent many different forms of crime taking place at ATMs such as card entrapment, which is running at about £2 billion a year.

‘We’ve developed our product and it is now being adopted by at least one of the UK’s major banks, and that is a big step for us as we need a good reference customer. We expect to have in the region of 500 of these devices in the UK, mainly in London. Already that is attracting great interest, not just from other UK banks, but from others around the world who all suffer from this issue of card skimming.’

RB: ‘New product development in your business Michael is an on-going requirement isn’t it?’

Michael Phillips, managing director at

‘Most of our product development costs are sunk with employees, but what we’ve found post the investment is that we’ve taken on a number of new heads in our development team in London. The one thing we’ve noticed is that finding good technologists is expensive. So for us it is all about making sure we constantly measure the value of work into our products. 

‘If we do a piece of work and deploy it, we are making sure we are testing it, assessing the decisions made and seeing if that produces an increase in yield from customers on the website. 

‘In some senses that can be good as you can optimise your weight, but you also have to make a bigger leap, as bigger discoveries require a bigger appetite for risk so you’ve got to do something radically different and you’re not guaranteed a result.

‘Where the BGF investment has helped is we are now looking at the architecting some of the back end: so for example, we dropped tariffs and are now able to consider third party companies to do that work.

‘We also have a new CTO and FD, so there is more testing of that work financially. We also look to close the loop by accessing whether work was done to price and has it delivered. Even in short space of time since the investment there is greater rigour and scrutiny on development decisions, which means we get greater value for money.’

More from our exclusive Business Growth Fund roundtable:

RB: Wayne, GCI Com is operating one of the fastest moving sectors, how do you make your product development decisions?

Wayne Martin, CEO of GCI Com:

‘One of my favourite sayings is never be afraid to reinvent yourselves, and I’ve seen a sector which has, on a yearly basis, reinvented the technology that all businesses use. 

‘It is a fine demarcation now between product and service. So, a common theme running through our clients is allowing them to focus on what they do best, which is their core business, and to take away their pain and problems.

‘Cloud in our sector is the big buzzword at this point in time. However, when you break the cloud down, what it’s about is integrating the organisation, automating it, and enabling it to operate smoothly without the hiccups of downtime.

‘We’re focused on delivering products on a pay-as-you-go basis to our clients where they are not having to make significant capital investments in infrastructure to run their operations. They can leave that to us, and can up-scale and down-scale quickly, and be assured they have that as service form us. 

‘In the retail sector, if there is down time with regards to technologies they can calculate lost revenue. We take those product services as one simple solution to allow the client to focus on business.’

Company profiles from our exclusive roundtable:

RB: ‘In service sector environment where the product is the care provided, how do you go about innovation in that type of environment?’

Graeme Lee, group CEO of Springfield Healthcare Group:

‘Our care village model is quite unique in that it is fundamentally a smaller version of what people might assume a care village to be. It’s only 100 units, but the key to it is being in the heart of the community it will serve. A lot of people live in a street scene and they want to continue to do that as their care needs change.

‘To be able to create a care village, where people can come in for a short space of time, is important to older people. As we offer day care and independent apartments for old people, rather than them thinking “don’t put me into a care home”, you can show them a much more attractive and appropriate building where their independence is not taken away. That is very innovative and the funding has allowed us to deliver that kind of product.’

This feature is part of a larger package looking at the Business Growth Fund’s active portfolio. See links above for more content.

Hunter Ruthven

Bernard Williamson

Hunter was the Editor for from 2012 to 2014, before moving on to Caspian Media Ltd to be Editor of Real Business.