Edinburgh-raised Ramsay, who invented the trailblazing TV hard
disk recorder the TiVo, told weekly technology podcast OUT-LAW Radio that a lack of investment forces
inventors to trim their own sails before they have the chance to
test out ideas.
"There's no question in my mind that the talent is here, the
entrepreneurs are here, and they're every bit as passionate and
smart and savvy as any of them in Silicon Valley," said Ramsay.
"The issue is money. Sources of funding for young entrepreneurs are
not nearly as fluid as they are back there."
"As a result I think companies that could be high potential are
not able to raise the funds that they want, and they reset their
expectations to something that fits with the funds that they can
get, and if those expectations are below critical mass the company
won't break out, and that's a shame," Ramsay said.
Ramsay said that UK business is awash with private equity
funding, but that very little of it is available for start-up tech
firms. "I think the money is there, it's just not applied to that
type of activity. There's private equity out there but only a small
portion of that goes to venture capital. I think it's much more
fluid in the US," he said.
Ramsay worked at Hewlett-Packard after leaving Edinburgh
University and moved with the company to Silicon Valley, where he
eventually joined animation computer specialists Silicon
Graphics.
He and Jim Barton left Silicon Graphics to form a company in the
late 1990s and managed to raise $3 million in venture capital
funding before even having a fixed business plan. The pair came up
with the idea for the TiVo and faced extreme legal pressure from
the television networks which believed their business was
threatened by the machines' ability to fast-forward past
advertising.
"There were all sorts of arguments about, 'your right to watch
television in the United States is a right that is only granted if
you watch the commercials,'" he said. "At the end of the day it was
the Sony/Betamax ruling, that was a Supreme Court ruling, that came
out of a lawsuit Sony was involved in when they first came out with
the video recorder. The result of that ruling gave people freedom
to record for personal use."
TiVo won its arguments and television networks eventually even
invested in the company. "Over time they realised this was not a
TiVo thing, we had created a DVR [digital video recorder] and it
had a life of its own and it was going to exist independently of
us. Over time the climate changed, but initially it was
interesting."
