Brian Smillie is solving a huge problem. Like all the best disruptive entrepreneurs, he identified a massive market failure and provided a solution that makes life easier, simpler, cheaper and better.

In doing so he has created a company that Peter Jones, of Dragons’ Den fame, has not only invested in but believes will become a unicorn, one of that rare breed of start-ups that achieve a valuation of $1 billion.

There’s an app for everything these days. And that is the precisely the problem that Brian identified. The app market is exploding on a thermo-nuclear level. Businesses today are developing their own apps eight times faster than they were building websites at the height of the dot.com boom.

The statistics are staggering. An average of 5,600 apps are launched every day. But according to Apple, eight out of 10 apps never make it out of the app store.

Meanwhile Google Play reports that 60% of the apps on their platform have never even been downloaded. The market is structurally failing.

HeraldScotland:

A wise person once observed that the best way to make money in a gold rush is to sell the shovels. Another wise person, US president Thomas Jefferson, noted that if you build a better mousetrap the world will beat a path to your door.

With his company, Beezer, Brian effectively combined those two insights. He is poised to become the leading developer of apps and he has also launched a better version – the progressive web app is poised to replace the native app (the type you currently download onto your phone from an app store) just as surely as the laptop replaced the typewriter and Homo Sapiens replaced the Neanderthals.

Scotsman Brian’s eureka moment came from his experiences while running a digital marketing agency in Australia, the Sydneybased Creative Shop, which he eventually sold to a major South Korean agency.

“When we built apps for our customer, nine times out of 10 they’d come back and say, ‘The app is fantastic but nobody is downloading it’. I could feel their pain but the problem was that the app distribution model was broken.

“Typically, customers spend so much money building their app they’ve got nothing left to market it. And they really underestimate how much it takes to stand out in an overcrowded market. So, I asked myself this question: can we bypass app stores? It sounded like an interesting project. It was disruptive and nobody else was doing it so I thought ‘let’s get stuck into this one’.”

That combination of high app development costs, long development lead times, the challenge of multiple operating platforms – from Apple and Android to Blackberry – and the complicated and costly distribution mechanism through the app store was clearly unsustainable and crying out to be fixed.

According to Brian, Beezer’s SaaS (software as a service) platform revolutionises app creation, providing several huge advantages to the SME or individual who wants an app.

Not only can the customer now create, distribute and manage their app without any technical or developer skills but they can launch it immediately, completely bypassing the app store. Beezer also calculates that its solution slashes the lifetime cost of providing an app by as much as 90% with a similar saving in development time.

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This article was published in the December edition of Business HQ - Click here to view

Beezer-built apps work on all mobile operating systems and customers can distribute them using SMS, email and social media to their own personal networks, customer databases or fans. App users can also share the app throughout their personal networks, increasing the viral growth of the app.

Brian bootstrapped the business in the traditional way. He put £150,000 of his own money into the business, selling his two houses and most of his art collection – of works by graffiti artist Banksy – to raise capital. Version one of the platform was called ShareOurApp: the Beezer name, from the Scottish word for “brilliant” and familiar from the popular DC Thomson comic of that name, came later. Now firmly established in premises in Edinburgh, the company had a breakthrough moment when Brian first demonstrated the prototype to RBS:

“It had limited functionality and was essentially a glorified website. We presented it as a litmus test to the CTO (chief technical officer) of RBS and some of the senior management team. After the demonstration Nick Lennox, the CTO, turned round to me and said, ‘Brian can we steal your code?’. “For me that immediately meant we had validation and that we had a great idea.”

GLOBAL REACH

RBS has now formalised its relationship with Beezer, becoming one of the company’s channel partners: “Our channel partners are large organisations with existing databases and customers. They want to provide those customers with a value-add, or something new that aligns with their existing products.

“Building a subscription base will be the most valuable business in the longer term but that will take a lot of time, effort and money as we need hundreds of thousands of customers to make this a viable business. The channel partner strategy complements that.” Beezer is currently working with two of the largest website builders in the world – Wix.com and Weebly.com.

Both have plugged Beezer into their marketplaces enabling their huge customer bases to turn their existing websites into Beezer progressive web apps with just a few clicks. Beezer retains 70% of the margin on each purchase with 30% going back to the channel partner.

Given that Wix has over two million paying customers, the opportunity to scale quickly is considerable. Brian is looking at projections of up to 30,000 paying customers in year one from Wix alone.

Having achieved the breakthrough with RBS, Brian then faced one of those watershed moments that test an entrepreneur’s resolve and nerves.

The first version had been developed by an outsourced Slovenian company called Zabec.net but Brian was keen to retain more control of the intellectual property and creative development.

He talked to a developer called Grant Finlay who said he was interested in joining Beezer but who wanted to rebuild the entire platform using progressive web app technology. This was the platform being championed by Google and was considered the next big thing in online tools.

Brian took a deep breath and decided to sanction the rebuild as he realised it would combine the best aspects of a responsive website with the best of a native app.

“We went back to the drawing board,” he explains. “And spent the next two years building version two. It gave us the shareability of a website – and ability to bypass app stores – and most of the features and functionality of a mobile handset. It seemed like absolutely the right way to go.”

That brave decision was already paying dividends in August this year when Brian and his director of product innovation, Euan McCreath, were invited to appear on the BBC’s popular Dragons’ Den television programme. The show, in which entrepreneurs pitch their ideas to a panel of celebrity venture capitalists, is known for its tension and drama but Brian and Euan ratcheted it to a whole new level and broke some records for the series including longest episode, most viewed episode and most money raised.

Star investor Peter Jones – whom Brian targeted for his smart money combination of experience and networks – told them they were one of the toughest negotiations he had ever had before offering them £125,000 for a 15% stake.

“Immediately after Dragons’ Den we had over 140,000 hits on the website and we added in excess of 10,000 subscribers. So that put the business ahead by a couple of years.

“We went on Dragons’ Den for four things really. Money was one of them but it wasn’t the main motivator. Instead we wanted the exposure, the validation and access to networks, including those of the television viewers.”

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In fact, those tough negotiations are still ongoing: “We have a burn rate of £40,000 per month so taking £125,000 is just three months’ salaries.

“We’ve left the door open with Peter Jones. We haven’t taken his investment into the business yet. We’re doing a dance.

At the end of the day we believe in our numbers and we think the business is being undervalued. We’d like an opportunity to go away and prove those numbers and come back with a more realistic valuation.”

In fact, Brian is currently focused on Beezer’s next funding round from institutions, a journey that has so far taken him from London to Tel Aviv to the offices of Google: “We’re looking to raise £1 million for 20% of the business. That will allow us to internationalise and build the marketing function.”

The key markets for expansion are the UK, the US and India: “We want to be the Wix of progressive apps.”

All good entrepreneurs know from the very start how they will exit the business and Brian is no exception: “Our exit strategy is very clear. We’ll do it for two to three years and then exit with a sale to one of our big channel partners. I believe we have future-proofed the business for the next 10 years.

“Whoever buys it has a really solid technology platform to work with.” Becoming a unicorn?

There is, indeed, an app for that.

For further information on Beezer please visit www.beezer.com