Interview: David Warren

Tuesday, 01 August 2017

Christopher Niesche photo
Christopher Niesche

    The software entrepreneur talks astronomy, floating altium, and the benefit of endowed chairs at Australian Universities, writes Christopher Niesche.

    Dr David Warren FAICD recently gave $2.6 million to the University of Tasmania to endow a chair in astrophysics. The donation poses the question: of all the sciences, why astronomy?

    “I think a science education is an enormous advantage. There are a couple of things about astronomy that help in the modern age,” says Warren, a co-founder of ASX200 software company Altium.

    “In astronomy, you’re required to deal with large data sets and you’re required to understand statistics in a very detailed way. Modern application of statistics is a completely marvellous thing and that deep knowledge of how to do deep data with deep statistics gives people an enormous leg up.”

    The donation will be for Tasmania’s first endowed chair in its 126 year history and Warren says he was trying to set an example for others to endow chairs, as happens so frequently in the UK and the US. But he also has a more personal reason for donating to the University of Tasmania.

    “If you have a look at what happened with me, then you’d have to conclude that the ride through university and science worked out fabulously. My route into this was the technology that I learnt in astronomy, which set me up to start electronic engineering businesses,” Warren says of his path to becoming a software entrepreneur.

    Born in 1955, Warren grew up in Kings Meadows, what was then a new working class suburb in Launceston. It was a suburb with many disadvantages but Warren had one big advantage – both of his parents placed a high value on education.

    His mother was a high school maths teacher who had been to university in Hobart and had a clear understanding that there was another world out there.

    His father was a road worker who had been pulled out of school to work in the family guesthouse and never finished year 10. “He deeply resented that. He was a pretty bright guy and it was a long source of frustration throughout his life that circumstance meant he didn’t get to exercise the extent of his talent,” Warren says.

    “What with him having that attitude and marrying mum, who had this other background, it was clear to him there was a better future to be had and they went to inordinate lengths to educate my brothers and me. It was a financial struggle.”

    Warren won a Commonwealth scholarship to study physics and computing at the University of Tasmania, but even then, paying for his accommodation in Hobart was a financial struggle for his parents.

    He was advised to take his time and study broadly, so also took classes in geography and philosophy, specifically in epistemology, metaphysics and logic.

    As a result, it took him five years to get through the three-year degree. But he knew that no matter how patchy his undergraduate degree was, if he did well in an honours year all would be forgiven. So he enrolled in x-ray astronomy and was hooked.

    Warren is still fascinated by astronomy, and how over the centuries it has changed our perception of ourselves.

    “When I’m thinking about issues, and that includes business problems, I like to get it all in perspective,” he says.

    “If you start with the 13.79 billion years we know the universe has been around, working from the trillion galaxies to the 200 billion stars in our galaxy, to the fact all the stars have planets and we know why that is now and what the statistics are. Then you realise there’s upwards of a hundred billion earth-sized planets in the trillions of planets in our galaxy.

    “You think, ‘If we were somehow thinking this is all about us, gee, better think again.’ It puts all of our problems in context.”

    But astronomy also gave him skills he would use to build up businesses.

    In 1980 when Warren did his honours year it wasn’t possible to buy an x-ray telescope. So he and his colleagues had to build one. His supervisor told him to go away and solve an engineering problem with the telescope using a microprocessor.

    “The microprocessor was only invented in 1972 and yet here I was in a place that knew all about them and they told me to go and do a new project using the new microprocessor,” he says.

    “That was the University of Tasmania. I would say it was one of the first places where you could really be exposed to microprocessor applications in the country very, very early on.”

    Connecting microprocessors to real world applications gave Warren a lot of transportable skills.

    “I’m the example that, if you start off in a blue-collar suburb, and somehow your parents make you go to university and work your way through there and you follow what you’re interested in and get exposed to high-tech stuff – and the universities are very, very good at that – then the rest is up to you and the world’s your oyster and it will work out, it can work out. It has worked out,” he says.

    Warren worked briefly in medical research before joining up with colleagues Nick Martin and others to form a company to produce computerised design tools, or computer-aided design (CAD), after they found existing tools were inadequate.

    “The precept was to make electronic design tools that were cost-effective and that everyone could have access to, because the price point would be somewhere where anyone could have it and we stuck with that,” Warren says. As the company grew, they added new tools to their initial offering to make it available to a wide range of users.

    That company was Protel Technology, which became Altium when it floated on the ASX in 1999 in the midst of the dot-com boom. “I was very much in favour of going public. I felt we needed the discipline that comes with going public,” he says.

    In the wake of the dot-com crash in 2004, Warren stepped back from the daily running of the company to become a non-executive director. “I felt the best thing I could do was to remove myself from my daily job and take a fresh look at it all,” he says.

    Management needed some help with making some of the tough decisions, particularly those concerning staffing, which affected people who had been with the company for many years.

    “The first thing I found was that I wasn’t completely snowed under the whole time,” he says of taking on a non-executive director role. “As an executive in a busy company, you do have trouble seeing the wood from the trees. It’s very, very busy – enormously busy – because competition is hot.”

    It gave him a chance to work on the business strategy and try to make it durable enough to survive the business cycle.

    The company had grown from having a handful to many hundreds of staff and Warren thought it was also time to hire expert staff. In sales, for example, Warren had personally filled the head of sales role for the company several times, despite having no formal sales training.

    “It seemed to me that we should be able to attract people that knew more about that than I did. This way, having grown up through the whole thing, it was really clear to me that there should be more talent out there for the specialist parts and the things we were trying to do,” he says.

    He also decided board renewal was needed, for the same reason.

    “Too many of us had grown up with the organisation. We were sort of home grown,” he says.

    “Everything is different when you go from the $20 million revenue company we were when we went public to a more than $100 million revenue company. We had long since exited the zone in which we needed the skill set our group of entrepreneurs had back in the 90s.”

    Sam Weiss FAICD has chaired the company for the past decade. He holds several other board roles and was previously Asia Pacific vice president of Gateway Computers and chief operating officer for Nike Europe.

    Warren is chair of the human resources committee. “I’m in the business of trying to rebuild the board so I can see it’s time for me to go – that will be success for me now.”

    Including chief executive Aram Mirkazemi, the board currently comprises only five members, although Warren says there’s certainly room for more talent.

    Raelene Murphy GAICD joined in 2016, following management roles in national accounting firms and as CEO of the Delta Group contracting company.

    The most recent addition is Lynn Mickleburgh, who joined in March this year. She is currently head of business optimisation at Australian software developer Altassian and has several years of experience transforming and scaling software companies.

    Warren says bringing on the new directors has brought enormous benefits. He says having directors with experience looking after aspects of the company such as staff remuneration packages delivers a positive outcome for the business.

    Raising significant amounts money for a big project and dealing with financial institutions is another area where new board members can help. “I want one of my board members to say, ‘Well the last two times I did it, we did it this way’,” Warren says.

    The appointment of two women brings the board a diversity it previously lacked. “We suffered from old white man syndrome – certainly old male syndrome,” he says.

    Altium supports the Australian Institute of Company Directors’ target of 30 per cent female board representation on ASX200 companies by the end of 2018.

    “We found all the talent that we needed. The people that have been appointed have enormous track records. These are people who have done really big executive things all over the world and work for big companies all over the planet in the way that I haven’t,” Warren says.

    Warren agrees compliance obligations place a burden on boards, but says it’s necessary because history has shown people don’t behave well in an environment where there are no regulations.

    “It is burdensome but we do need regulation. We need fewer regulations but I cannot tell you how to do that. I guess in the end regulation is a burden I’m happy to accept as a director,” he says.

    As he built up Altium, Warren has variously lived in Sydney and California to get the business going.

    Tasmania, and Australia for that matter, are too small to offer a market for the sort of specialised design tools Altium makes. “Even with my first electronic engineering business back in 1984, it was clear right from day one we were never going to get enough revenue, enough work from Tasmania,” he says.

    “Any serious business undertaking must be outward looking. Look to do business from Tasmania rather than just in Tasmania. It’s all ‘overseas’ from Tasmania.”

    He moved back to Tasmania with his wife and two sons in 1996, where he and his family remain. His oldest son has an electrical engineering business based in Hobart and his younger son is a cook and musician. While Tasmania is often overlooked by the mainland, its lifestyle is attracting large numbers of people looking for a better life, including retirees.

    “We have Australian rule of law, Australian services, access to benefits of cities like the orchestras, museums, libraries, hospitals with all the latest gear. Want to live in a place where houses are very cost-effective, the traffic is not too bad, and you’re not crushed by throngs and throngs of disinterested people? The answer is Tasmania.”

    Warren says it is an Australian trait, shared by the universities, to look to government for financial assistance. In making the donation to the University of Tasmania, he hopes others will follow his lead. Australia has a poor record of endowing chairs. Cambridge has 124 permanently endowed chairs, Stanford has 340 and Berkley has 77 in engineering alone.

    Australian universities by contrast, have only a handful, and Warren says they need to make a better case for endowments.

    One of the great advantages of a permanently endowed chair is that the discipline isn’t hostage to the annual university budget allocations and academic fashion.

    “It doesn’t have to be flavour of the month anymore and there are degrees that have come and gone because they were flavour of the month. Pure mathematics, for example, might be seen as a bit arcane until you’re Albert Einstein and you need it then it suddenly has relevance,” he says.

    Outside of his directorship duties at Altium, Warren maintains his interest in electronics and flight – he has been flying since he was 17 – and was responsible for the first electric powered flight in this part of the world.

    “In 2008, my old flying buddy Alan Coates and I redid one of his flying machines – changed the motor to electric and I did all the electric work and built the fancy battery – and we flew the first electric aircraft of any sort to fly a person in the southern hemisphere in 2008. Now, what’s happened is there’s been a huge explosion in that area and you can actually buy very good electric aircraft now.”

    He also owns an old British military jet trainer, a Jet Provost Mk.5A, which he flies at air shows.

    Even as he helped to build up Altium, Warren was part of a group of scientists who proved a theory developed by sixteenth century Italian friar and cosmological theorist Giordano Bruno that stars were really other suns and were surrounded by planets. While Bruno was tried for heresy his doctrine has been widely accepted for a couple of centuries. Yet it had not been proven.

    The University of Tasmania is part of the PLANET consortium, an international group searching for extra-solar planets with a technique known as gravitational microlensing. In 2005, the group published a paper outlining its discovery of the first cool rocky planet found outside our solar system.

    “We’ve finally found the planets that Bruno was talking about in 1584. When I say we, I mean astronomers worldwide,” Warren says.

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