Timing and luck certainly came into play. He was destined for a lifelong career in engineering at the South Queensferry plant of Agilent, originally part of Hewlett-Packard, until the redundancy notices came round in 2005.
“I was looking for a job and came across a guy, Campbell Murray, in the high growth team at Scottish Enterprise and said if he knew of anybody starting company perhaps he could mention my name. He asked if I’d thought about starting a company, which I hadn’t.”
It turned out to be a life-changing meeting. “He suggested I pitch to Scottish Enterprise,” says Cook, “So I went home and made a set of slides about what was happening in the telecoms space and why there was a need for a new type of test equipment.
“I knew it was credible but I hadn’t a clue about starting a company. I’d been in a multinational all my life and I didn’t know where to start. Campbell said he’d show me how to do it. My CV was working for one big company, but I thought if I could keep a startup going for six months it would look better on my CV for that next job.”
He needn’t have woried about that next job. He raised about half a million pounds in equity from the Discovery Investments syndicate in Dundee, and with co-investment from Scottish Enterprise, Calnex Solutions was in business.
The testing equipment is designed in a suite of offices and labs probably half the size of a football pitch (the standard unit of measurement) at the Oracle Campus in Linlithgow, once the home of Sun Microsystems which Oracle acquired in 2009.
Manufacturing is undertaken by Kelvinside Electonics in Kilsyth, keeping the whole process within Scotland. It has a broader range of products and a bigger suite of emulation tests than its competitors.
Cook had been at Agilent/HP for 23 years. “I could have been retired by now,” he says. Instead, at 65 he’s marking the 20th anniversary of Calnex which employs 110 staff, floated on the Alternative Investment Market in 2020 and has received three Queen’s Awards. He is now one of the longest serving CEOs in the country.
“I was in my mid-forties when i started Calnex. I could not have started it in my twenties, and probably not in my thirties. It was sector knowledge that I used. and my contacts and ability to wander into the engineering teams at Cisco and Nokia and just talk to them about their testing challenges.
“Coming out of university, young people are full of energy and ideas, but if you don’t have the sector knowledge you don’t have the credibility to get through the front door, and I really used that.”
Clients include the big players in the sector spending millions on developing new products that need to perform as intended and conform to required standards. Components may fail, and Calnex will tell them if they can be fixed or need to be re-designed.
Tommy Cook: I used my sector knowledge (pic: DB Media Services)
“When a system is more complex, more things can go wrong, and you need to test it more,” he says. “If everything was simple and straightforward it wouldn’t be good for us.”
The business has two streams of operation, timing protocols and network emulators which introduce “real world failure events”, a sort of crash-test for telecoms. “We deliberately break things to see what happens,” he says.
“We have always had our own engineering team. The IP of the company is in people’s heads. They know how to develop this technology.” Does he still get involved in the engineering work? “No, they try and keep me away from that,” he jokes. “In the timing side I stick my nose in more than I’m welcome.”
Reflecting on his 20-year journey, and that decision to “to give it a go”, he says: “I remember somebody said the biggest graveyard for companies is the first year and then the next biggest is when they grow from 20 to 30 employees.
“Things work really well and then they just stop working as effectively and it is usually down to the communication. When you get slightly more people you have to change the way you communicate.”
As with any business, trading has been far from smooth. “When Covid hit, the tech sector boomed as clients moved to the cloud and people worked from home. We grew over the two years 2021 to 2022 by about 30%.
“Telecoms is cyclical. When the macroeconomic environvment slows down projects close down and we are the tail of the dog as they don’t have equipment to test.
“The low point was in the banking crisis when orders froze for three months. We had only been going 18 months. Everybody stopped spending money. For three months we got one order.
“Staff took a salary cut and we got some additional money, but we had to start getting more orders and when they realised the world had not ended they started spending money again.”
By 2017./2018 the company realised it had a strategy but not a financial structure aligned to it. “We were going to grow organically but we wanted to do acquisitions and we became way beyond the pockets of Discovery. That meant either bringing in an outside investor or go for an IPO.”
The broker Cenkos, now Cavendish, recommended flotation. In October 2020 it became the first Scottish company for two years to join the Alternative Investment Market in an IPO that raised £22.5m and valued the company at £42m.
Given the bad experience of some other Scottish firms which floated around that time, how has he found life as a public company?
He admits that if the share price falls he feels a responsibilty for those, including employees, who have invested. “If the share price goes down it is annoying but all I can do is make the company more profitable. I don’t spend my time watching the price.
“I don’t regret it. There is a slight reporting and cost burden but there would have been burdens in any other route we could have gone down. VCs would have been taking money out of the business and putting controls on things.
“The IPO has raised our profile in the industry so when we speak to small companies about an acquisition they know we can raise the money.
“We feel we still control the company. There is a lot of effort involved but it did work for us. We bought some small companies and now have operations in Belfast and Stevenage.”
Cook is the biggest single shareholder, owning about 18% of the company. Scottish Enterprise sold some of its shares in the IPO but remains the second biggest shareholder.
“Calnex would not exist without Scottish Enterprise,” he says. “I would never have done this if I had not had that meeting with Campbell.”
PERSONAL CHECKLIST
Occupation: Chief executive, Calnex Solutions
Birthplace; Port Logan, near Stranraer
Education: Paisley Technical College (electrical and electonic engineering)
Career highlights: Joined HP in 1982, formed Calnex in 2006.
What was your ambition when you were young?
I wanted to be a pilot, then electronics became the new thing in the 1970s and looked exciting. I was better at science and maths than languages.
Family background
Father was a dairy man and my mother a post-mistress. They installed a work ethic in me.
Hobbies?
Cycling
What annoys you?
I think people should be rewarded properly for what they achieve. The taxation system doesn’t do it here.