Ideas man Karl Watkin is back – with an enthusiasm undimmed by a three-year bear market.

Ideas man Karl Watkin is back – with an enthusiasm undimmed by a three-year bear market.

Karl Watkin is a peripatetic entrepreneur. So we’re sitting in the kitchen of his London home, one of five that he has, and which he’s in the process of selling. A Geordie by birth, Watkin seems to collect homes around the world. A new project pops up, he’s spending a lot of time in the same place, so he buys a property; the project ends, and so the property is surplus to requirements. It’s that sort of lifestyle – and it’s global.

For business innocents, the latest hot spot in the universe is China. The whisper is that it’s growing, it’s developing and soon it will overtake the rest of the world. It’s where the latter day equivalents of the miners in the California Gold Rush are heading. Well, Watkin was in China 20 years ago, living there for two years in the early 80s.

Chinese whispers

But he has a salutary warning to pass on. Two years ago, he was giving a speech at a conference in Shanghai to an audience of 500 business people. He asked: ‘Can you tell me what the rate of capital gains tax is in China?’ No one knew. Watkin’s response: ‘That’s because no-one has ever made a capital gain!’ His view is that no one is making any money out of China – and that the enthusiasts have been saying ‘it will happen tomorrow’ for the last 25 years. ‘Be dead careful, very, very careful – you can lose a lot of money.’

Despite his own warning, he remains involved in the Chinese business world. One of his current ventures is as chairman and 49 per cent shareholder in the European joint venture with ZTE, a telecoms company employing 16,000 people worldwide.

Successes…

Watkin has had the usual mix-and-match of great business successes and some failures. His early career showed huge tenacity in an unpopular area – manufacturing. At 23, he joined Crabtree Group, manufacturer of capital equipment for the canmaking industry, as an export salesman. In 1993, 14 years later, he floated it on the stock exchange, staying as chairman until 1995. When he took over at Crabtree, Watkin says it was making losses of £8,000 a day. He turned this around to deliver a profit of £4.5 million a year.

Achieving this transformation required huge energy, networking and enthusiasm. Watkin worked hard to get the canmaking industry to work together, no mean feat with 140 competitors from 30 different countries. He formed a manufacturers’ association and founded a machinery exhibition.

Initiatives like these can be time-consuming and not always rewarding. But he had a passion for manufacturing per se and devised other initiatives to raise the awareness of the sector and to try and raise it higher on the political agenda. He’s also stayed true to his Northern background by formulating The Manufacturing Challenge in 1992, a campaign to double the manufacturing base and treble the exports of the Great North in a ten-year period.

And failures

But Watkin has also been the target of hate pieces by certain sections of the Fourth Estate, emanating from his involvement with Just2Clicks, yet one more of the crazy internet ventures foisted on an investing public by many seriously sane people in a moment of madness. As one newspaper viciously said: ‘Karl Watkin, then chief executive of the British B2B company Just2Clicks, told an audience of analysts and rivals at a conference in London that the supply industry was experiencing an ‘e-orgasm.’ Unfortunately, he was premature.’

The impetus for such vituperation stems from the £3.5 million which Watkin personally recovered from the detritus of the business when it delisted from Aim and paid out the cash balances that were left. Well, there’s quite a long list of CEOs of internet vehicles that frittered away all the cash and others too that, like Watkin, came to their senses and retrieved what they possibly could for the shareholders before the bank account was bare (Watkins saved and distributed £34 million to shareholders). Watkin ruefully says, ‘Eight weeks after we floated I said it wouldn’t work and I wanted to give the £41 million back. I had to fight to get it closed down. I had a group of shareholders – I called them the Aerial Heads – that wanted to spend the money on what we’d said. I didn’t take a penny salary from the day we decided to close it down for the next 18 months.‘

The next big idea

At present Watkin is working on his latest good idea, well four ideas.

Globalpoint Technologies is marketing what it claims to be the smallest, lightest, most powerful and lowest power satellite tracking device worldwide. The company was started with technology developed in the Ukraine (it acquired the IPR in 2002). Apparently, telematics unit sales within the UK and elsewhere are climbing steeply and so mobile positioning and telematics systems are thought to be poised for growth in both the business-to-business and business-to-consumer environments.

OmPrompt offers a hosted platform that automates the ability to receive, translate and transmit messages in disparate formats between disparate devices and systems in any mode. As Watkin puts it: ‘Anything in, anything out.’ The hope is that this will improve the efficiency of supply chains as previous efforts have petered out on the rocks of data incompatibility and unclean messages which information systems are unable to process.

The plan is to put these two businesses together and to float them on AIM next summer. The combined business will look to raise £5 million cash to roll out the products.

Idea three is Skin Salveation. This is a pharmaceutical research business that has developed a range of treatments for eczema and psoriasis.

Finally, there’s D1Oils, which Watkin describes as his main business. Its website entices visitors to ‘Take a walk in our bio-diesel forest growing 2 billion litres of sustainable environmentally friendly fuel per year.’ D1’s mission statement says that its intention is to establish D1 as the benchmark global brand for biodiesel, controlling the supply of 50 per cent of the capital equipment and 100 million tones of feedstock to the biodiesel market annually. To achieve all this, the company has several projects on the go across the world, including in South Africa and Egypt. In Egypt, for example, it is looking at developing oil-bearing feedstocks on 700 acres of reclaimed desert.

Making a difference

At the bottom of Watkin’s CV, he puts one of his interests as ‘making a difference’. A definition of how that’s achieved is that he’s the man that can get an idea through from first twinkling to a tangible format. Ideas get dimmed by the risk-avoiders that surround entrepreneurs but Watkin has the energy, enthusiasm and commitment to keep going despite the doubters. ‘I find the opportunity and put together a team. Now I just keep the name of a good person in the back of my head. I look for the opportunities to fit people in. I make sure the ideas survive – I ensure the light bulb stays on. It’s very draining to keep an idea afloat and stay buoyant.’