Dressed in a blue polka-dot oxford and striped Reebok sneakers, James Dyson abruptly veers off a paved path that cuts through his company’s 15-acre compound. The beanpole-thin 69-year-old billionaire pushes his way into some shrubbery and presses his nose right up to the reflective glass that encases his new, top-secret laboratory, a sleek two-storey cube that looks like it was beamed directly from Santa Clara to the Cotswolds. To his delight, he can’t make out what his engineers are doing inside. “I hope they are working,” he says, chuckling.
In reality, it’s move-in day at this brand-new $200-million-plus research facility, and on the other side of the glass, dozens of young engineers are unpacking their gear and settling into their quarters. Their job at D9, as the building is cryptically known, is to experiment fearlessly, fail constantly and document those failures in company-issued black-and-yellow notebooks, which form the basis for still more experiments, still more failures—and also a corporate sideline in patent litigation. Very rarely this unending cycle of failure results in a revolutionary new product: The bagless vacuum cleaner (5 years, 5,127 prototypes), the 360 Eye robot (17 years, 1,000-plus prototypes) and the Supersonic hair dryer (4 years, 600 prototypes). But those successes add up: Dyson’s 58 products generated $2.4 billion in sales last year and an estimated $340 million in net profits, even after Dyson reinvested 46 percent of the company’s Ebitda in R&D, more than rivals such as Electrolux and Techtronic. Dyson owns 100 percent of the company, which is worth some $4.8 billion.
D9 is the gleaming cornerstone of Dyson’s ongoing efforts to lure engineers straight out of college to work for him at the company’s headquarters near Malmesbury, an ancient market town of 5,400 two hours west of London. The average age of his engineers is 26 (he has 3,000 worldwide and wants to hire another 3,000 by 2020), and their youth is no accident. “The enthusiasm and lack of fear is important,” Dyson says. “Not taking notice of experts and ploughing on because you believe in something is important. It’s much easier to do when you’re young.”
Dyson’s own fearlessness enables him to constantly test new products, although his perfectionism often gets in the way of releasing them. He is best known for creating the first bagless vacuum cleaner three decades ago, and his company still gets 70 percent of its sales from vacuum cleaners, many of which are now lightweight, handheld and battery-operated. But Dyson has also had hits with the Airblade hand dryer; the Dyson humidifier; and the Pure Cool Link, a fan that doubles as an air purifier. The latest wonder from his workshop is the Supersonic blow-dryer. Dyson spent $71 million (and went through 1,000 miles of human hair) developing the $400 device, which is supposed to eliminate heat damage and cut down on uncontrollable flyaways. It launched in Japan in April and comes to the US any day now.
Dyson is hoping that all those new engineers he is hiring will accelerate the company’s pace of innovation: Dyson is planning to invest hundreds of millions of dollars to develop at least 100 new products by 2020, nearly double of what it now has on the market and equivalent to the number of products introduced since its founding. “We are reinventing ourselves all the time,” Dyson says. “We’re battling against the status quo. We still feel small, agile, pioneering.”
While Dyson is mum on specifics, he reveals that many of the new products will be related to personal care or lighting. The lighting systems are the brainchild of his eldest son and heir apparent, Jake, 46, who spent two years at Dyson before leaving in 2002 to start his own business selling self-cooling LED light fixtures. “I wanted to go out and do my own thing and prove to myself I could do this,” says Jake, who returned in April, bringing his LED technology and ideas with him.
But Dyson’s biggest bet is on batteries. In his view, the current rechargeable lithium-ion (li-ion) batteries that power most of the world’s gadgets (including his own) don’t hold a charge long enough and need to be safer (they occasionally catch fire). True to his nature, rather than incrementally improve existing li-ion technology, Dyson is forging a new path: Experimenting with solid-state li-ion batteries that use ceramics. To this end, Dyson made the first acquisition in the company’s history in October 2015, spending $90 million for Sakti3, a battery startup in Ann Arbor, Michigan. And that’s just the beginning. Dyson vows to spend $1.4 billion building a battery factory and investing in R&D over the next five years, a huge gamble for a company its size. But Dyson is undeterred, claiming that soon it will be making the world’s longest-lasting, most reliable batteries, taking dead aim at the global li-ion battery market, which research firm Lux estimates at $40 billion. “Batteries are quite exciting and sexy things,” Dyson says.
The seeds of Dyson’s determination and resilience were planted on the shores of Norfolk in northeast England, where he grew up the youngest of three siblings. His father taught classics at Gresham’s, an elite boarding school founded in 1555; his mother, who dropped out of school at the age of 17 to join Bomber Command during World War II, raised the kids. His father died of cancer when Dyson was 9. After the loss, Dyson began pushing himself. He took up the bassoon despite hearing it was the most difficult instrument in the orchestra to learn. At 14, he started running competitively, often waking up at 6 am to train, sprinting up sand dunes (better for resistance training, he learnt). In the evening, he would typically run for another two hours until after midnight. It was the one thing that came easily to him in those days. “Suddenly I had something in which I could kick people’s asses occasionally,” writes Dyson in his 1997 autobiography.
A self-described poor student, he went to the Byam Shaw School of Art in London, where he met his wife, Deirdre. He later gained entrance to a graduate programme at the Royal College of Art even though he never completed his undergraduate degree. While in school, Dyson developed an offbeat design for an aluminum roof. That led to a meeting with Jeremy Fry, a well-regarded inventor who had installed a similar roof. The two hit it off, and Fry eventually offered Dyson his first full-time job at his manufacturing company, Rotork. Dyson helped design the company’s first sea trucks, essentially high-speed cargo boats, and peddled them to armies around the world, including Egypt’s, which used them to fight Israel during the 1973 Yom Kippur War.
He and his mentor, Jeremy Fry, each put up $53,000 initially. And for the next five years, while he spent thousands of hours (and dollars) making those famous 5,127 prototypes, his artist wife kept the family afloat by selling illustrations to British Vogue and teaching still-life classes.
When it was finally done, in 1983, Dyson’s bagless vacuum was so powerful that its inner-cyclone mechanism separated air and dust at a speed of 924 mph and could pull cigarette smoke from the air. To pay off the debts, he decided to licence the technology. It took another two years to sign his first big customer. Apex, a Japanese company, agreed to pay him $78,000 upfront and a 10 percent royalty for the development of its $1,800 G-Force vacuum. Things didn’t go so well in the US, where initial licencing agreements unravelled and led to a tangle of lawsuits.
And lest anyone dismiss Dyson as a dreamy-eyed tinkerer, it’s clear he knows how to play politics. The man who owns approximately 7,500 global patents was instrumental in getting the UK to revise its tax laws to favour patent holders. Dyson, whose holding company had been registered in Malta, a tax haven, penned a 2010 report, titled ‘Ingenious Britain’, at the behest of soon-to-be prime minister David Cameron on how to make the country a leading tech exporter. In it he supported the so-called ‘patent box’, which would reduce income taxes on patented products to 10 percent, and incentives for research and development. The patent box became effective in April 2013. One month earlier, Dyson had incorporated his holding company in the UK to take full advantage of the new laws. Since then the company’s taxes as a percentage of revenue have dropped by a fourth. “As a result we can reinvest more, so it’s helping us,” Dyson says.
Batteries have become something of an obsession for Dyson, who envisions a “huge number of product opportunities” that come from marrying better batteries with his products. To make his point, Dyson jumps up from his desk in Malmesbury, grabs a red-and-purple cordless vacuum cleaner from atop a couch and runs it along the floor to show how much easier it is than a standard plug-in. Battery-powered vacuums now make up two-thirds of the 9 million his firm sells annually. “It’s really taken over, and I think it will continue,” Dyson says. “But we need to have better battery technology.” Dyson’s wireless vacuums can run for only about 40 minutes before needing a recharge, which can take up to three-and-a-half hours.
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(This story appears in the 30 September, 2016 issue of Forbes India. To visit our Archives, click here.)