And what do you Yuuguu? - Crain's Manchester Business

Rss |

Homepage |

E-mail this article |

Anish Kapoor.

1:00 am, February 11, 2008
And what do you Yuuguu?

Telecity founder seeks £2m to go global with screen-share software

You need to show someone what's on your screen. But that someone is on a train near Milton Keynes. This is such a familiar problem that Anish Kapoor (pictured) has made a business out of solving it.

Yuuguu, which he founded with Philip Hemsted, gives away free software which enables people to share their desktops and send messages.

It makes money from sharing revenue on conference calling, which is provided by Powwownow. National rate 0870 numbers and PIN codes appear on users' screens.

Yuuguu, whose name comes from the Japanese word for fusion, was founded in 2005 and has raised £800,000 from the RisingStars Growth Fund and the Liverpool Seed Fund.

Staying connected

Kapoor, Yuuguu's chief executive, and Hemsted both live in Manchester but one of the conditions of the latter investment was that Yuuguu have an office in Liverpool. However, as all seven employees are connected using the software, it hardly matters where they are based.

They are now looking for a further £2m to grow the business more quickly. Kapoor would not reveal revenue for this article because of confidentiality agreements with existing investors, who own more than 50 per cent of the company. He said Yuuguu had tens of thousands of users and the total was “doubling every month”, with a target to get into the millions worldwide as soon as possible.

Kapoor has been involved in tech startups before. Back in 1997, he founded datacentre operator TeleCity with Mike Kelly in Manchester. They took the company into the FTSE 250, employing 500 and with operations in 12 countries.

Then, in 2001, a £20m funding shortfall wiped 90 per cent off the value of TeleCity's shares, and the company was forced into a merger. Kapoor is determined not to make the same mistakes again. “One of the lessons we learned from TeleCity was that we spent a lot of time worrying about shareholdings and percentages and not enough time moving as fast as possible. We're not concerned about having the biggest chunk of the pie. It's about making the pie bigger.”

Business priorities

Yuuguu's founders met while working as technology advisors to venture capital investors. Kapoor said: “We asked companies what were their three business priorities. Distributed team working was always first or second. They said: "We're never in the same place at the same time and we're struggling to find tools that help us work effectively'.”

Up to eight people can share desktops using Yuuguu's software at present, but they hope improvements in the technology will soon allow up to 50 people to share. A user can take control of another user's desktop and make changes. Other revenue-raising enhanced services are being worked on, said Kapoor.

There are still serious doubts about whether the company will ever be profitable. Kapoor admits that there is nothing to stop anyone downloading Yuuguu's software but then using Skype to make conference calls free via the internet. But he believes that with more and more services like HDTV going down broadband lines, the quality of VoIP calls will suffer.

'A tough area'

Nor are there any patents or intellectual property protection behind Yuuguu. “We have certain things that we feel we can patent but it would take time, and the reality is that it's all about getting a large user base very quickly,” said Kapoor.

Paul Robinson, of Manchester-based ideas-sharing website Vagueware.com, said Yuuguu was attracting users thanks to the way it had used established technology to meet a need. “They're in a tough area and they're competing on multiple fronts, but I think they're in a strong position,” said Robinson. “The IM (instant messaging) sector is not engaging with the audience that Yuuguu is, and uses technology that would scare most IT admins away.

“The web conferencing sector still don't get the modern web, and the companies selling shared desktop solutions have just had Yuuguu chop their business model out from under them — but many have yet to realise it. The real threat might come from better SIP (session initiation protocol) services threatening their revenue model and customers communicating on voice outside of the Yuuguu system.”