David Jackson is the founder of Semafone, a patented solution which takes contact centres out of scope of PCI DSS regulations (standards for payment card data security) for telephone payments. The company is privately funded and has received a total of £3.4m in investment, from Octopus Ventures in 2010 and existing investors in 2012.
Hi David, Thanks for doing this. How are you doing today?
I’m very well thanks!
Can you give us some background information about yourself? Tell me how you initially got into business?
I gained a degree in Management Sciences from Manchester University, and was subsequently accepted onto a graduate traineeship scheme with Cadbury Schweppes. After that I worked in a number of other roles in the food sector.
In 1989, I founded a fresh food manufacturing and distribution business and subsequently co-founded contact centre services provider, Careline Services with Charles Cooper-Driver after spotting an opportunity to create a quality call centre business.
How did the idea for Semafone come about?
While working with Careline, we identified the need for enhanced security in the processing of sensitive data in the contact centre environment. This led to the formation of Semafone.
Tell me about the early days, what was the hardest part of starting the business?
For me it was assessing whether the risk was justified. We all have other responsibilities that demand our time and effort. In my case I had a young family and a mortgage. The decision to start a business under these circumstances is not easy given the high risk of failure and the massive demands on personal time.
What is Semafone? And what are you trying to solve with it?
Semafone is a patented solution which takes contact centres out of scope of PCI DSS regulations (standards for payment card data security) for telephone payments. It allows the call – and the call recording – to continue as normal while the customer enters their credit card information using the telephone keypad. Card data is sent directly to the bank, avoiding the need for contact centre agents to hear or see card details, making the transaction both compliant and secure.
How have you been able to fund it?
The company is privately funded and received a £1.9m investment from Octopus Ventures in 2010. Semafone also gained a further £1.5m, primarily from existing investors, in 2012.
What sorts of advice do you having for entrepreneurs looking to raise money for their startups?
Fund yourself up to a point where you have proven demand and have a reasonably clear idea of the commercial model. From there, you can create a business plan that investors will find credible. If the business requires substantial funding to realise its potential, then take money in tranches. I strongly recommend that the first round includes angel investors with relevant market experience. Thereafter VC funding for more substantial amounts at higher valuations will be more accessible.
About the first few months, how excited were you, tell us about how those months felt, what happened?
I have been associated with a number of ideas that have been commercialised successfully. The thrill is always the same. The realisation that you have a unique proposition in the marketplace is unbeatable. Enrolling others (colleagues, customers, suppliers and business partners) validates the proposition and provides a framework for subsequent fine tuning of the concept.
The sense of developing momentum is very exciting and then, of course, the big first milestone is finding a customer. By that stage you have a real sense of achievement.
How did you initially get traction?
When we started Semafone, we were in the fortunate position of running our own call centres as we already owned Careline Services, a leading contact centre service provider. We knew our marketplace and saw that Semafone was a great solution to a problem experienced by many companies.
Having built the prototype, after technical and commercial trials we realised that we had something. I talked to a number of ‘friendly’ call centre operations and confirmed that we had a product with real potential. The rest was then more process driven in the sense of funding and staffing the new business through to its launch.
What are the most crucial things that you have done to grow your business?
Simple: find good people to work with. Trust and respect them and crucially be prepared to step aside and let the team take ownership and flourish.
What would you say has been the highlight of your entrepreneurial journey so far?
For me it’s the creation of the idea. I have limited skill sets so my contribution to an emerging business is mostly front loaded. The first few months are always the most memorable and exciting.
What should we be expecting from yourself and the Semafone team for 2013?
Semafone has recently signed contracts with a number of high profile clients and is continuing to grow from strength to strength. We are still hiring and will continue to expand into America, New Zealand, Australia and South Africa and have some exciting partnerships in the pipeline.
Lastly, what three pieces of advice would you offer entrepreneurs starting out today?
1. Don’t give up – there will be lots of setbacks.
2. Listen to the advice of people you respect and be prepared to be flexible.
3. Delegate to those with more relevant experience in their field of expertise. You are unlikely to be the complete business person.