Profile - Jez San

Looking for the next big thing…

by Nitin Kumar

Jez San, chief executive and founder of Argonaut Software, is a well-known figure in the media and games industry. He's also an entrepreneur who started young, and, at 36 years old, is already an OBE and regarded as an industry 'veteran'. The Chilli talked to him to find out how he made his first break, the issues and challenges of building and growing his company, and what he aims to do next.

Jez San

The success story of Jez San and Argonaut Software is no accident, as he points out the skills he taught himself to make his first break. He bought his first computer, a TRS-80, at 12, and by the time he was 13 he'd learnt assembly language. "I knew practically every assembler for processors like the Z80, 6502, ARM, Transputer and 68000. I had a skill which very few people had then or even now - global optimisation." This skill enabled him to optimise the microprocessor register information in his head, so that he would know what was in every register. He also developed another skill: "I could literally write assembler at touch-typing speeds, of around 110 words per minute."

The point? This enabled him to write efficient programs, and paved the way for his success as a programmer and subsequently a games developer. The company he founded in 1982, Argonaut Software, was initially just a smokescreen to get consulting jobs with the big companies. His first two paid projects as a programmer were with BT and Acorn. These projects required him to help design better security systems. He also started developing his first game, Starglider, in 1984, and co-wrote his first book 'Quantum Theory' at the same time.

"Our big break was the royalties from Starglider, which at £2 per copy and with hundreds of thousands of copies sold, provided the seed money for further development and enabled the hiring of our first people in 1986." Following this success, Argonaut went on to other successes with Starfox for Super Nintendo, which sold some four million copies, and the SuperFX graphics accelerator developed for Nintendo through its subsidiary chip operation at the time (now known as ARC International).

Valuable lessons for entrepreneurs

San speaks of the defining event for Argonaut. "The deal signed with Nintendo in the late eighties allowed us lots more expansion. The team made games, which made money." But he says, "We learned one valuable lesson: if you try and do things through cash flow alone, then it's difficult to take on new business and expand." For the first 14 years, Argonaut was financed from internally generated funds. After 1996, it received around £6m of external investment and raised an additional £18m when it floated on the London Stock Exchange in April 2000.

"When we let in VCs (venture capitalists), things were able to move a lot faster. I let in the so-called 'enemy' in return for less control, but the problems everyone talked about didn't happen. The biggest mistake I ever made was to not introduce investors earlier." San believes there is nothing wrong with losing some control. "I was worried before I let them in, but it wasn't as bad as I thought. The best piece of advice they [Apax Partners] gave was to separate the Argonaut and ARC businesses, which we did in October 1998."

Not all advice is for the good of the business, comments San. "Before Argonaut became public, every adviser said that we shouldn't do it. But we went through with it, and did it. It was the right thing to do - we raised a lot of cash, just two days before the stock market crashed."

He also offers this advice to other entrepreneurs who want to grow their business. "The other big thing is to learn to delegate. Hire good management, and delegate. What I enjoy most about my job is that I have hired a great management team, and I have empowered the team to make the big decisions." He sees himself as constantly changing his role in the business. "My role has changed over the years. First I was a programmer, then a manager, then a business manager, and then a CEO. I do think there's greater responsibility now."

And what about the fame, of being profiled in rich lists and of the OBE? After all, he is considered to be one of the most experienced experts on the interactive games and technology markets. He comments, "In the 1990s, I enjoyed the limelight, because it allowed me to do things and get things done for the company. But now I just want to sink into obscurity, I am quite happy with what I am doing. I don't need the ego boost."

What next?

Having started a business, grown it successfully, launched several successful games and taken the company public, what's next for San? Well, he sees himself as contributing to the good of the industry at a wider level. He serves on the committee of BAFTA Interactive and is an advisory board member of the Game Developers Conference. San says, "It's good to do, and it's something that I should do."

In terms of what's next in business opportunities, he says he is looking for the 'next big thing'. "I have some ideas, but I am also a minority investor in several new companies. One of these is Anthropics." This company aims to become a standard in interpersonal multimedia messaging and enable video content delivery across web and mobile networks. Say San, "They have an amazing technology, and I'm doing whatever I can to help the company get traction. I think it's one of several companies that are interesting right now." He also sees business opportunities in security. "Media security and games security are areas that I love and areas which I don't think have been exploited. Someone, somewhere will get in to it eventually."

In terms of what he misses most now, Jez San responds, "What I do now does challenge me, but in a different way to the challenge at the beginning. I started out as a programmer, and that is the one thing I miss most. One day when I retire, I would start programming again."

© Chilli Publishing Ltd 2003

30SEPT2002