EFFORTS to harness the commercial potential of the knowledge developed in Scotland's universities are fraught with challenges but in this week's SME Focus we hear about two men with PhDs in opto-electronics who have developed a brace of successful businesses in the sector.

Name: Dr Graeme Malcolm

Age: 44

What is your business called?

M Squared Lasers

Where is it based?

We're headquartered in Glasgow, but we also have an office in San Jose to keep us close to clients in Silicon Valley.

What service does it offer?

We develop and manufacture advanced laser technology along with other photonic instruments. Essentially, this combines real-life applications in industry with ground-breaking academic science.

On the academic side, many of our customers use our lasers to slow down atoms in order to study fundamental physics.

These types of lasers are used by Nobel Prize-winning scientists in their research.

Out of the lab we make lasers that can be used to make video images of otherwise invisible gas clouds, for example a gas leak from an oil and gas installation.

Who does it sell to?

We provide products and services for frontier science, biomedical imaging, oil and gas, process control and manufacturing, plus defence and military industries.

What is its turnover?

Current turnover is about £5 million. Over the past five years this has grown by 1603%.

We were named the fastest growing technology company in Scotland, eighth in the UK, in Deloitte's Fast 50 Technology rankings.

How many employees?

We are still recruiting, but in the seven years since we first set up the business, the overall headcount has grown from just two to almost 40 people.

When was it formed?

Dr Gareth Maker and I established M Squared Lasers in May 2005.

Why did you take the plunge?

Gareth and I had previous experience of running a start-up after we founded opto-electronics company Microlase in 1992, which was a spin-out from Strathclyde University. We ended up selling it to Coherent Inc, which is quoted on the Nasdaq stock exchange.

We were excited by the opportunity to start afresh, both in terms of technology and approach to customer relationships.

We could be creative and develop new technology in this field without the legacy in technical approach that can exist for more established organisations.

Similarly, we could work on creating a different kind of relationship with our customers, many of whom are academics working on frontier science. We try to engender a high level of collaboration to solve their challenges.

Prior to Microlase, we were part of a laser research group at Strathclyde University.

It was a particularly fertile period of research into laser development and it became clear that many of the novel laser systems we were working on had the potential to be commercialised.

The equivalent lasers that existed at the time were large and complex, in contrast to the small and simple-to-use systems we could build, so we could see the potential.

What were you doing before you took the plunge?

After we sold Microlase to Coherent, I spent five years working with the company between 2000 and 2005.

What was your biggest break?

Early in M Squared's development we won a contract in conjunction with St Andrews University to provide new detection technology for the Ministry of Defence. It really set the ball rolling for us.

On top of that, we also secured £3.85 million funding from the Business Growth Fund last year. This meant we had the ability to expand the business, in particular the sales, marketing and product development teams.

It meant we could pursue more of the opportunities that we knew were out there.

What was your worst moment?

We have to travel a great deal because 95% of our business is overseas. There was a particular instance when we first founded the company and we were on our way to Frankfurt for a meeting that was pivotal to our programme in Europe. We were supposed to connect flights in Amsterdam but our flight from Scotland was delayed, resulting in us missing the connection. We were stranded in Schipol with little help. It was really touch and go for a while but thankfully we got to Frankfurt in the end.

What do you most enjoy about running the business?

Two things really stick out for me. What I do allows me to apply my passion for science to real-world problems. I've been working with lasers and opto-electronics for years now and it's still something which really fascinates me.

There aren't many companies that can say they have Nobel Prize-winning scientists as well as big-name corporations among their clients, and that combination makes my job quite exciting.

At the same time – and it may come across as slightly clichéd to say this – we have a great team at M Squared.

The people we have share the ambition and drive of the company and that's what helps us continually innovate.

When you have a good team around you and really exciting things happening all the time, you don't often experience that Sunday night dread!

What do you least enjoy?

There's nothing in particular that I do not enjoy. Setting up a technology business gives you the opportunity to explore new areas and I seldom find myself complaining about anything in particular.

That said, I don't like seeing time wasted on bureaucracy, particularly when we all know what needs to be done. It can really slow things down.

What is your biggest bugbear?

I find it baffling that there is not more of a critical mass of technology companies in Scotland; particularly with our strengths in science and technology.

We need a more dynamic infrastructure for start-ups in this country along with more of an appetite for taking risk and an increased confidence in would-be entrepreneurs.

What are your ambitions for the firm?

We have grown exponentially since the company's inception and we're looking to keep that momentum going.

The ultimate aim is, of course, to grow the company into a substantial global technology business. We are looking for the company to reach the £100 million turnover mark in the next five years.

What are your top priorities?

We want to continue developing new and innovative products while working hard for and with our customers.

We are also looking to grow what is already an extremely talented team of individuals.

What could the Westminster Government and/or Scottish Government do that would most help?

Both governments could do more to provide a more supportive framework and better infrastructure for research and development.

I would also like to see more home sourcing of technology. Our US competitors, for example, run off the back of the US defence programme, which gives them a big advantage.

What was the most valuable lesson you learned?

You need to work really hard to ensure you have got the right people in your company. Do not compromise when looking at the people you want to bring into an organisation.

It is important that people share the drive and ambition of the company and do not treat it as if it were just somewhere they go to work from nine until five.

How do you relax?

I live in rural Perthshire with my family, which is great for getting outdoors. The countryside around the area really is spectacular.

I also enjoy a game of golf when I have the time.