Falanx Group’s John Blamire talks listing a shell company, intelligent fridges and going from army officer to entrepeneur

 
Harriet Green
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Organisations want more than just a black box – they want a service, says Blamire (Source: Getty)

I think I’d just been given one too many orders,” laughs John Blamire, founder of Falanx Group. The entrepreneur spent the first chunk of his career as an officer in the British Army, serving in Northern Ireland, Iraq and the Falklands. In 2001, he was responsible for creating a strategic-level intelligence unit in a high-risk area of Iraq. But by 2006, he’d left the army and co-founded Praetorian Protection, a specialist security service for clients working in Africa. “I’d got to the point in my career where I realised that, if you disagree with the person above you, there’s extremely little you can do about it. I didn’t want to become the person in 20 years’ time that I couldn’t currently influence, so I got out.”

Own kind of music

Nearly four years ago, Blamire jumped ship again – but onto another company of his own. Falanx is a security and intelligence provider with a growing specialisation in the cyber space. “Back in late 2012, we [Praetorian] were providing a lot of consultancy work, and it was obvious that clients were becoming more and more aware of the vulnerability of their digital systems, so we began providing more assistance to help them.” Blamire says he realised quickly that the cyber security space was growing, and that there was plenty of opportunity in the market. “There were a few niche businesses then, and government was starting to talk about it, but cyber security wasn’t in the mainstream consciousness. And that’s why we decided to act and start building a business centred on it. It certainly raised a few eyebrows with shareholders, though! Tech and software can lose you money very quickly if you don’t get it spot on.”

It’s worth pausing on the word “shareholders”. When Blamire set Falanx up, he did something radical, listing it as a shell company on Aim. “People said I was mad – and it was madness. But I knew how I wanted to capitalise this business and how I wanted to fund it. I spoke to private equity and talked to VCs and I didn’t like any of that kind of investment. I wanted to control the business myself and have the ability to make acquisitions freely. I didn’t want people imposing what they thought was the right thing to do.” The idea was to create an umbrella company and put specialist firms underneath it – then see which one fared best and beef up focus. While Falanx is growing its cyber defence work, it also spans political risk, facility security and crisis management.

Enticing shareholders wasn’t an issue for Blamire – “there was interest in our focus on defence because there was no opportunity to get some big upside from the huge incumbents like G4S”. But the listing process was a nightmare: “it really was the blind leading the blind. I’d never been part of a listed company and you can’t go into Waterstones and get a book on how to IPO. I don’t regret it, but if I did it again, I’d do a few things differently.”

The public eye

Now, Blamire says he wouldn’t want to run anything but a listed company. “It gives you a way of incentivising staff directly, and it means you pay more attention to the PR around your business.” Aim does have its pitfalls – the cost for SMEs, the regulatory framework and admin – and shareholders take up a lot of time and energy, “but I always make an effort to tell them as much as possible. Besides, hearing from them is far better than some fund manager,” says Blamire.

And Falanx is making good progress. Its employees advise governments and large corporates – all alongside software delivery. In late 2014, it won a two-year contract to provide cyber defence services to Cert-UK, the UK’s computer emergency response team.

“Organisations want more than just a black box – they want a service. The likes of Capgemini, Capita and Dell have used an army of consultants to earn money over the past two decades. But in this next decade, we’re going to see a massive shift in how data and computing are managed and solved. Things will be far more integrated, with clients expecting a 24/7 service.”

Blamire may work with large firms, but he’s got a clear vision of the future for individuals, too. “You’ll go online, go to a portal and say ‘I’ve got this number of items in my home, and I need cyber security around those devices or that network and I’m prepared to pay X amount for it.’ The best deals will come up, you’ll put your card in through Paypal and it just gets delivered to you over the internet.” This sort of service will either be available via firms like his, he says, or through internet providers or telecom companies themselves. “Everyone is desperate to understand how to meet the challenge of The Internet of Things. I’m not a fan of the expression, but if you’ve got a situation where your fridge is making an automatic online shopping order because you’ve run out of milk, there are huge security implications.”

Ready to pivot

But despite the need for developed and nimble businesses in the industry, Blamire is not convinced that enough have grabbed the bull by the horns. “Companies or funds that are now thinking of taking a position in what is a very fast-moving market are pretty close to missing the boat altogether. It’s not just the fact that barriers to entry are so high, but it’s hard to get the right people – because there aren’t many in the UK that have the capability – and work out how to take a specialist combination of product and service to market. Too many of our competitors are sticking to the traditional model of selling the black box with some consultancy on the side.”

But Blamire is confident that his method of creating a suite of focuses and pivoting when needs be is the right way forward. “Whichever had come to the fore, I would’ve gone with.” If you’re setting up a business these days, he adds, you “really need to start with a broad portfolio – or the ability to move quickly... I would challenge anyone to tell me what the market of opportunity will be in four or five years’ time. Take a broad view and go with the market. If you do that, you’ve got every chance of being successful.”

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