Failed accountant worth pounds 22m

Profile; Peter Dawe

The head of the first Internet-related company to float should cash in soon when it is taken over. But he has unusual plans for his wealth, as David Bowen discovered

PETER DAWE was scrabbling around for a fiver to pay the taxi after our meeting last week. He had already confessed he had no money to pay for his beer, and was generally looking a bit skint.

It was an illusion. Dawe's paper worth is pounds 22m, and because his shareholding in the Internet company Unipalm is likely to be bought out soon, his actual wealth is likely to be pounds 22m, too. When he has the money in his hands, he intends to use it to start a new political party. "I know, you're going to say I'm a British Ross Perot," he says.

Possibly, but no-one could mistake 41-year-old Dawe for Mr Perot. He looks like a failed local authority accountant. That may sound unkind but it is not - for that is exactly what he is.

He is also the highly successful founder of Unipalm, the first Internet- related company to float anywhere. It arrived on the stock market at pounds 1 a share in March 1994. A year later, it was trading at 120p. Then in May, the market decided that any company that made its money from the Internet was a gold mine. The shares had rocketed above pounds 3 by August, when Unipalm announced it had received a bid approach. Last Thursday, the shares shot up by 58p on speculation that the bid value was pounds 9.50; on Friday, they tumbled from 551p to 428p after the company announced that the real figure would be more like pounds 4.50. But Dawe will still get his pounds 22m.

He is selling out because he has decided Unipalm is not growing fast enough. The workforce is up from 97 at the float to 220 now, but that is not enough. "You have to be the biggest, or you lose," he says. Unipalm does not have the mass it needs, he says, especially since BT moved in to compete.

Which brings us back to politics. Dawe's views do not fit with those of any British party. He is passionately anti-Brussels (but not anti-Europe), and declares the minimum wage and the social chapter disasters. But he says he is left of centre, and is appalled by the poverty trap and by the overweaning influence of the multinationals. This last comes from his own experience of battling the telecom Goliath.

Dawe sees strong parallels between his fight with BT and Richard Branson's with British Airways. "We have a complaint in with Oftel over BT's abuse of its dominant position," he says. BT has set up a division to compete with Unipalm's main activity - providing Internet software and connections to companies, and it is pricing low. "It says this is the early stage of the market so losing pounds 10m is legitimate." He does not agree, and he hopes Oftel will not either.

Peter Dawe was born in Bedfordshire, where his father was a newsagent. He went to technology school, then on to Queen Mary's College, part of London University, where he studied computer science as part of his degree course. "But that was when computers were really boring. I wasn't interested in them."

Dawe decided a less boring occupation would be local government accountancy. He got a job with Cambridge City Council, but after three years decided this was at least as dull. He ended up having a row with his boss because he insisted on talking directly to councillors.

He switched to the council's computing section, joining the plethora of self-taught programmers that abounded in the 1970s. One of the council's suppliers was Cambridge Microcomputing, which offered him a job as a systems analyst. He accepted and ended up as chief engineer, designing computers.

He became excited by networking software, to which the company had the European rights. It allowed computers of different types to talk to each other - this was where he believed the future lay. "I went to my wife and said do you mind if I start a business." She had just given up work, they had a small child, but he scraped together pounds 6,000, bought the rights for the software. He injected the business into Unipalm, the name of his father's old newsagent company: there was no point in buying a new name.

This was 1986, and for "18 lonely months" he peddled his system around large companies. They were not fruitless, though it was only when Bob Williams, a former Cambridge Micro salesman, joined him that sales started to climb sharply. They brought three new partners in, and by 1990, Unipalm was turning over pounds 3m.

"Then we hit a managerial wall," he says. Dawe's idealism had led him to take on new partners without spelling out who was the boss. "It worked brilliantly for a while, then it fell apart." Arguments raged about strategy. He and Williams, who owned 51 per cent of the company, left and then called an emergency meeting, at which they voted their former colleagues out. "It was silly," Dawe says. "None of us acquitted ourselves with honour." The staff, now numbering about 30, had carried on as normal while the directors knifed each other, so Unipalm's growth was hardly affected.

In the few weeks he thought he really had left, Dawe drew up plans for a new company, to be called Pipex. He reckoned the little-known Internet was going to be big business, and he decided Pipex should offer companies Internet connections. Back at Unipalm he revived his plans, and Pipex became part of the business.

So Unipalm became the first British Internet provider in 1992. Dawe believed growth would be rapid, but the arrival of the World Wide Web, which turned the Internet from a network for academics into a source of mass enter- tainment, made all his forecasts wild under-estimates. "We expected business to double every year, and not to attract competition until 1996." Instead, growth has been exponential, and Pipex had to run frantically to keep up. BT moved in on the corporate side, while Dawe's move into personal Internet provision was chaotic. It had to withdraw its first product after being overwhelmed by the demand, and is now battling in an already crowded market.

Unipalm was floated in March 1994. The share price trundled along until this spring, when Internet fever broke out. Dawe says that if Unipalm was being quoted at the premium of equivalent US stocks, its share price would be six to eight times higher. He considered floating on the US Nasdaq exchange, "but for one thing I had no idea US stocks would attract that sort of multiple, and for another I wasn't prepared to spend my life in a 747."

There were days this summer when he came home and said to his wife, "We're pounds 2m richer than last night." "Can I go out and spend it?" she asked. "Not yet," he replied. When the money is in the bank they will be able to start - but it seems unlikely they will. He has just splashed out on an 18-year- old Triumph Bonneville, though he has no intention of trading up from his second-hand Renault or buying a yacht or a jet. His wife, a family planning nurse, and his 10-year-old son are unlikely to find themselves transported to a life of sybaritic splendour.

But he does believe he can use the combination of his wealth and knowledge of the Internet to influence opinion. The Internet will, he believes, become a powerful lobbying tool for any new electronic party - it will be able to bombard people with electronic mail, and have its own "site" that anyone with a computer can visit. His party will, he says, fill a gap in the political market: he will sell it like a product.

In that sense, he is like Ross Perot - but his aims could hardly be more different. They are not modest: he wants to restructure the benefit and social security system, he wants to cut the power of Brussels and big corporations. He is keen on Tom Paine, the 18th-century radical who he describes as "pretty cool". And he says if he wanted he could "make monetary union happen by 1999 without any involvement by governments". He explains: "I would just issue electronic cash in the new currency, and it would close everything else out."

All this may sound off the wall. But it would be unwise to underestimate the failed local authority accountant's understanding of the power of technology - he has made pounds 22m by seeing the future before others did. There is no reason to believe he has lost his powers of prophecy.