From little Acorn grew an angel investor with an eye for the next big thing

After playing a pivotal role in the development of personal computing, Hermann Hauser now heads up one of Europe’s major venture firms

Venture capital is widely viewed as a cut-throat industry, but talk to people who know one of its best-known European figures, Vienna-born Hermann Hauser, and a single word recurs: “gentleman”.

The tall, elegant Hauser, a serial entrepreneur involved with numerous Cambridge University-based start-ups, whose companies Acorn and ARM have had a pivotal role in the development of personal and mobile computing (see panel), now heads up one of Europe’s major venture firms, Amadeus.

That has brought him to Ireland regularly, as the company made a significant, early investment in InTune Networks, the start-up behind the State’s exemplar broadband network and last year’s winner of The Irish Times InterTradeIreland Innovation awards.

He says Amadeus is now casting a more general eye around Ireland’s start-up scene. “I love coming here, and, I hope, will make many more investments here.”

His personal role in the development of modern computing, starting with Acorn – which rose to fame after it won the contract to make the highly popular BBC Micro home computer in the 1980s – gives him a unique perspective in delivering a talk on technology industry innovation recently for University College Dublin’s Nova Innovation Centre.

After all, how many people speaking on the subject could punctuate an overview of the development of the home computing market with the sentence: “I remember Bill Gates coming in, wanting to sell DOS to me . . . ”

During the talk, he offers many interesting aside, such as his take on the future of computing.

“I think mobile phone architecture will start to dominate computing. It has a much wider use case than the PC. The big question is, will Intel and Microsoft play any role?

“We’re right in the middle of a murder plot where mobile phone architecture will kill PC architecture and the Intel processor,” he notes.

“No one understood that apps would become the new way in which people would interact with their computers. One thing that wasn’t part of the script, and where Microsoft was asleep, is compatibility. Apps don’t only run on Windows, and so Microsoft has lost the biggest asset it always had.”

He can’t resist a small pat on his own back about the success of ARM, the chip company he spun out of Acorn, which developed the highly efficient RISC chips, now ubiquitous in computing devices and mobiles.

Eight billion ARM chips will be shipped this year, he says – “more chips than Intel has shipped in its entire history”.

Such success has given him the personal wealth to become an angel investor and to set up Amadeus. After his lecture, he launches into an interview on the state of the venture market. Yes, it’s been a tricky few years since the recession.

“Our industry is very cyclical, and the world is risk-averse. In the UK, we’re back to the level of investment of 1997. But I am just getting the feeling that it’s bottoming out.”

There is turmoil in the venture industry, with rumours of the potential collapse of many well-known Silicon Valley firms, and he says there’s definitely a “shakedown going on”. But it’s definitely not a “doomsday” situation, he adds, pointing to many promising areas of technology that are generating much investor excitement, such as chip development, internet-based companies, and bio- and medical technology.

Medical technology is a personal enthusiasm – he is fascinated by the potential of genetic research and has had his genome sequenced. It’s going to be “potentially the largest new investment sector over the next three to five years. I don’t think people have recognised that, and it will open lots and lots of new opportunities”.

Amadeus remains primarily focused on the European market, a region that has been criticised for a lower level of entrepreneurialism than the US or Israel, and sometimes dismissed for lacking the billion-dollar plus companies that are common in the US and especially, Silicon Valley.

On the contrary, he says: “We have 11 $1 billion companies coming out of Cambridge, and two $10 billion companies – Autonomy [recently sold to HP] and ARM.”

Cast an eye back to the start of the venture industry in Silicon Valley in the 1960s, he says. “The returns were not very impressive for the first 20 years, and then, they took off. Europe has just had about 20 years [of similar investment]. There is an undersupply of venture capital, and there’s now the expertise.”

One of the problems of the last decade, he says, is there was an oversupply of VC firms and venture capital, and thus, investments were not well targeted and many European companies were overvalued.

“When you have lots of money, everyone throws it at you. Companies now are very reasonably priced. And we have people who’ve now had the benefit of running companies. The really savvy investors realise now is the time.”

The US venture community is “overlooking” European companies, but he agrees there is much greater interest now than in the past. However, they tend to be more cautious if the companies don’t have a cultural alignment. “They’re quite happy to invest in Europe, but they like to invest with companies that have a similar style. And it has to be a US-style investment.”

For the most part, he feels that governments need to stay at arm’s length from getting involved in venture investments, except for very large-scale investments in areas that may need a decade or so of development – “but I’m very impressed with enterprise Ireland”, he adds. He thinks the support system it offers to young companies, and the level of investment, is about right.

And what sectors does he think hold the most promise right now? He lists medical technology, new networking and software companies, social media (“something no one predicted”), big data, machine learning and sensors.

Amadeus has money in many of these areas, which he can talk about with encyclopedic knowledge. Amadeus, he says, tends to invest in companies that are in sectors he has a passion for.

“I’m a very old-fashioned guy, and I try to understand what I’m investing in.”

Serial entrepreneur: the life and times of Hermann Hauser

Born in Vienna, Hermann Hauser took an MA in physics from Vienna University and arrived in Cambridge to do a PhD in physics. He has remained there to become one of the best -known figures on the European technology scene in the decades since.

A serial entrepreneur with a close knowledge of practical research, and now a venture capitalist, he set up Acorn Computer in 1978 with Chris Curry, a company that became enormously successful when it was chosen to produce the popular BBC Micro (a story featured as part of the BBC’s drama Micro Men).

Acorn sold to Olivetti in 1985, where he became vice president of research and eventually co-founded Olivetti Research Laboratory back at Cambridge.

He left to form the Active Book

Company which he sold to ATT in 1991. Meanwhile, he helped spin out chip developer Advanced RISC Machines (ARM) from Acorn in 1990.

In 1997, he co-founded Amadeus Capital Partners, one of Europe’s major venture firms.

Timeline: some other career highlights

1993: co-founded Advanced Telecommunication Modules Ltd, sold to Conexant Systems in 2004

1996: founded NetChannel, sold to AOL the same year

1998: co-founded Cambridge Network Ltd

Founder-director of IQ (Bio), IXI Limited, Vocalis, SynGenix, Advanced Displays Limited, Electronic Share Information Limited and E*Trade UK non-executive director at CSR, Entropic Research, Solexa, Plastic Logic, Icera, and XMOS

He recently produced a report for the UK government on technology and innovation, iti.ms/U74CxR