‘I learned how to run businesses during the difficult times’

Paul Atherton MBA26(1989) tells founders that their lessons from this crisis will be the most valuable for their future lives

I learned how to run businesses during the difficult times-1140x346

Starting a new business is challenging and filled with complexity at the best of times. Right now, for many people this is the worst of times. The global pandemic has brought whole countries to a grinding halt and the scale of this disruption is truly vast.

With so few answers available over the timeframe of government-mandated lockdowns, and uncertainty over the global operating and economic outlook, what is an entrepreneur to do?

Paul Atherton, a serial investor in university spinoffs, engineering entrepreneur and chair and non-executive director of a number of hi-tech companies, is one founder who knows something about running a business when disaster strikes.

Watch Paul Atherton’s top tips for founders and inspiration for dark times:

In the first of a series of videos produced by London Business School’s Institute of Innovation and Entrepreneurship (IIE) profiling entrepreneurs who have overcome significant challenge, Atherton recalls how the first crisis he faced taught him “everything” about running a business.

“It was new, it was difficult, it was brutal,” reflects the world-recognised engineering nanotechnologist and chairman and investor at Sussex Place Ventures, London Business School’s venture fund, which funds early stage software and digital ventures in the UK.   

Atherton’s entrepreneurial career began “by accident” when he was studying a PhD in Astrophysics at Imperial College London. He founded a company to exploit his research, selling equipment to academics.

“The business really took off in 1985 when NASA offered us a contract to build a system to go on a space shuttle, at which point I took a sabbatical from my academic career,” he says. “We grew fast until about 1991 when things got very tricky.

Read: The entrepreneurship equation 

“We had been doubling in turnover every year and then suddenly several of our projects went wrong at the same time. This followed a massive cashflow crisis. I had hired lots of people, many from university, and set them off on their careers. Suddenly I had to cut back.“

“Suddenly several projects went wrong at the same time. This followed a massive cashflow crisis”

“The flipside for the business was that I learned to manage on low costs. That’s when we really learned how to run a business – not through fast growth, with lots of cash, but through the unprofitable and difficult times. Keeping costs tight, not seeing success as being anything other than temporary.

“The most important lessons I’ve learned have been through mistakes and difficulties. I don’t think there are many positives that come from success. A lot of hubris comes from success.”



Paul Atherton, who graduated from the MBA programme in 1989, is a serial technology entrepreneur. The views in this video are his own and are not representative of the IIE or London Business School. 


Institute of Entrepreneurship and Private Capital

This article was provided by the Institute of Entrepreneurship and Private Capital whose aim is to inspire entrepreneurs and investors to pursue impactful innovation by equipping them with the tools, expertise and insights to drive growth.