The Social Entrepreneur

It's not hard to imagine Charles Armstrong as an amateur researcher, living for a year on the island of St Agnes in the Scillies to study how its 80 inhabitants communicate. Yet he fits just as comfortably into his current role as the CEO and founder of Trampoline Systems, a developer of social networking software. Trampoline's success, in fact, is testament to how he's managed to make the transition from ethnographer to entrepreneur and evangelist, taking the lessons he learned as an academic into the corporate environment.

Since setting up Trampoline (http://www.trampolinesystems.com) three years ago, Armstrong has gathered around him a team of developers to tap into the social networking vibes created by the likes of MySpace and YouTube. Using the latest programming methodologies, the company has set out to take the best of the consumer networking environment into the business world, focusing on helping individuals find and manage information.

'The value that's hardest to pin down is peer learning - being part of a group of entrepreneurs all going through the same process. We are in touch with many of them regularly.'

It's not been a straightforward journey. Participation in the London Development Agency-backed g2i programme, beginning in autumn 2005, prompted Armstrong to rethink his strategy and switch direction, and he's already seeing results. As well as benefiting from the quality of resources accessed via the programme, he has become part of the community of London based technology entrepreneurs being supported by g2i.

Human behaviour

Trampoline Systems was founded in September 2003 on the back of some fairly revealing observations. In his ethnography work on St Agnes, Armstrong had noted how humans have evolved sophisticated behaviours to get information to relevant people and places. Without the internet or a formal information dissemination system, an item of news arriving on the island via one person would be very quickly dispersed to everyone who needed to know it - and usually bypassed those who didn't.

Contrast that with a large enterprise, where formal information management systems are supposed to put information into the hands of all the appropriate people. But without reference to the social networks - formal and informal - that exist within a company, along with the work interests and expertise of individuals, information often remains locked up in e-mail systems and documents.

Various attempts have been made to solve this problem, from search engines to collaboration suites, but Armstrong believes systems need to mimic human interaction. He notes how human networks have built-in authorisation, for example. In a social gathering, information that is shared will be passed on freely from one group to another, but a close secret between friends won't. In Trampoline's software, this translates to setting levels of data authorisation so a private message isn't inadvertently broadcast.

Solving information overload

Trampoline was originally conceived as a pure collaboration software operation. Set up in September 2003 with £200,000 seed funding from a mixture of friends, family and two small funds, its first product, Collaboration Engine, was released after just three months. An R&D Grant (then called the Smart award) was awarded by the DTI the following March.

Armstrong had a good pedigree for getting a cash-strapped start-up off the ground. Eight years before setting up Trampoline, he had worked in the social entrepreneurship world, using his entrepreneurial flair to spot opportunities in the public sector. 'Apart from anything else,' he says, 'that made me accustomed to setting up projects with scarce resources. We're in a similar situation here, and from the beginning we have looked at ways to achieve a lot with minimal resources.' That included making heavy use of open source software (Armstrong estimates that there are upwards of 70 open source libraries in the product). The company also uses 'agile' development methods, working in very short development cycles, putting products into users' hands for testing, and then feeding that back into the next short cycle.

While the company made progress in the first couple of years, however, Armstrong started to question its core strategy. '[The direction we'd chosen] wasn't a good way to use our limited resources to do something compelling,' he says. 'It was taking us head on with Oracle and Microsoft. We were much better off finding a focus that was unique and that could hook into things others we were developing.'

Armstrong was introduced to the gateway2investment programme in September 2005 and attended a programme of g2i workshops running through November the same year. Working with the g2i team helped him to decide that the business needed to shift tack. 'It's hard to say exactly what form changes in outlook take, but there was definitely a change in focus for us as a business,' he recalls. 'The g2i programme helped us look at Trampoline from an investor's perspective and question some deep-seated assumptions. The results speak for themselves with the investor interest we're seeing now.'

Trampoline completed a first round of follow-on funding in May 2006, which helped it make the shift from providing a broad-based collaboration platform to solving information-related problems, such as e-mail overload and time wasted searching for data. Analyst groups estimate that employees spend 49 minutes each day reading and managing e-mails, while knowledge workers spend 30% of their time looking for material on the company intranet. So taking elements of what it had already built, Trampoline refocused 90% of its development effort on analysis. The result was a new product, Sonar, which plugs into corporate networks to help employees find information.

The change had its first proof point a few months later at the O'Reilly Emerging Technology Conference in San Diego. 'The way we presented was completely different - it was all about convergence and our new focus,' says Armstrong.

Looking across the pond

A £3m Series A round of investment, secured recently, is a mark of how far Trampoline has come. 'It became clear in the second half of 2006 that there was a lot of interest in what we were doing specifically and in the next wave of innovation in enterprise software generally,' says Armstrong. 'We started getting enquiries from investors in the UK, elsewhere in Europe and the US.'

Armstrong says the company had to choose between a specialist boutique investor and a broad-based but larger partner. There are pros and cons to each approach, but the company chose Tudor Group, a larger partner that it felt would work with it in a way that best suited its needs. That has included the appointment of Steve Allott as a non-exec. As president and CFO of Micromuse, Allott took the British software company across the Atlantic, built it from a £1m to £140m company and from 80 to 500 staff. It has also recently joined Oracle's Emerging Business Partner Programme, giving it access to technical expertise and senior-level executives. Trampoline has won two partner awards from Oracle, including the UK Partner Award for Innovation, and a string of other awards and recognition have followed in the Enterprise 2.0 space and beyond.

Trampoline plans to remain based in London, but the tie-up with US-based Tudor is recognition of its international ambition. Trampoline is looking across the pond to establish operations in the US. With the likes of Channel 4 and the Foreign Office already signed up as customers, around half of its pipeline is now coming from the US and defence contractor Raytheon is piloting Sonar. Armstrong says: "Getting your first two or three reference customers is important. We have to pick customers very carefully because it would be so damaging to work on an ill-conceived project where our expectations aren't well matched and the customer doesn't support the rollout properly." The next stage of growth is going to be critical and as a sign of its intent, Trampoline recently hired Oracle veteran Adrian Jones as VP of sales and Peter Biddle, a well-respected Microsoft visionary, as VP of development.

With the benefit of hindsight, Armstrong now concedes that in the early days the company was overly optimistic with its projections. 'It's fascinating looking back to our first business plan and seeing what we expected to do in the first six months,' he says. 'SONAR now delivers what we planned originally, but if we had realised back then how long it was going to take, we probably never would have started out!. In some areas we've done much more than we expected because we've learnt lots of important lessons from our customers. Customer feedback has also taught us that we'll never do some of what we planned because its not what users are looking for.'

He remains typically philosophical about the challenges ahead. 'We're still tiny and we have enormous challenges ahead of us. But we've shifted from being an angel-backed venture to a VC-backed venture - it's a smaller table and you get better visibility. From a customer point of view, people feel more comfortable working with us.'

Charles Armstrong was talking to David Longworth of Webster Buchanan Research

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