Raspberry Pi CEO on building a tech start-up

Raspberry Pi operated for seven years before it even thought about setting up a sales department to market the microcomputers it makes.

Its small, low-cost devices — about the size of a credit card — were launched through a UK educational charity to promote computing among young people. It was only after the products attracted interest from the first corporate clients, often through parents who had bought one to teach their children about coding and then seen the potential for a commercial use, that the business started hiring people to sell them to new customers.

The company, spun out of the Raspberry Pi Foundation, had been focused on creating the best product for the price rather than “being greedy”, says its co-founder and chief executive, Eben Upton. “Up until 2019 we didn’t have a single person you would recognise as a sales person. We then started to see there were limits with that stance.”

Raspberry Pi now employs 134 people, including about 25 in sales, and is selling about 200,000 microcomputers and accessories a week. In June it listed on the London Stock Exchange with a £542mn valuation. Within three months it was elevated to the FTSE 250 index of blue-chip UK-listed companies.

Its pocket-sized boards, essentially mini operating platforms that plug into monitors and keyboards and cost about £50 for the basic model, are now used widely. They provide the computing power inside Heathrow airport’s departures and arrivals boards and electronics group NEC’s digital signage. They power electric vehicle chargers and pinball machines, control the Kenya Wildlife Service’s observation cameras and the production line of folding bike maker Brompton. Corporate clients account for 70 per cent of sales.

“We have been unusually visible because of the reach of our product,” says Upton. “There was also a lot of latent demand for what we do, building a very low cost PC that is small enough to fit inside display boards with the processing power to do things like run production lines.”

There was also a lot of latent demand for what we do, building a very low cost PC that is small enough to fit inside display boards with the processing power to do things like run production lines

Growth in operations has not always been straightforward. Initially Raspberry Pi was unable to raise the capital to make enough devices to meet the first wave of demand. Upton had to adopt a royalties model, licensing the company’s designs to the manufacturer — an idea that had already proved successful for its much bigger Cambridge tech peer, the chipmaker Arm.

Then, as Covid disrupted the sales team’s first year, Raspberry Pi was hit by supply chain constraints. The new department spent more time managing down demand, says Upton. “It was almost about using anti-sales skills”.

More recently, the company has had to work to block distribution of its devices that were finding their way into Russia. Upton says he was shocked by data produced by the Kyiv School of Economics identifying the sanctions-breaking activity, including “limited evidence of their use in military applications”. He says Raspberry Pi is working with licensee and approved reseller partners to shut this trade down. “We plan to add enhanced traceability to some of our products to allow us to work backwards from recovered hardware to the reseller to whom it was first sold,” Upton adds.

The computer maker has overcome many of its early teething problems. Its first results announcement as a quoted business showed a 47 per cent increase in half-year profit for the start of 2024, at a higher than expected $34.2mn; and a 61 per cent rise in revenue over the same period to $144mn.

Accelerating that growth in a sustainable way is what now concerns the chief executive. He admits one of his biggest worries about further expansion is managing the growth in headcount and his fear that the now listed business will lose its entrepreneurial dynamic.

“We are not a process driven organisation. We are not a big meetings organisation. We are not a big PowerPoint deck organisation,” he says.

Britishness remains a core facet of the Raspberry Pi brand. Upton has close ties to Cambridge, where the company was founded and is still based. He completed his undergraduate physics and engineering degree there, plus a diploma and PhD in computer science. He then set up two mobile phone games businesses, before leading Raspberry Pi.

Almost all the company’s single-board devices are assembled at Sony’s factory in south Wales, just a four-hour drive away from its headquarters. That means if there is a need to check on production, the business can move fast. Upton describes how he pulled back from an initial foray into using factories in Shenzhen, China, because of problems keeping control of manufacturing.

“We could do this in Silicon Valley . . . we could probably do it in Shenzhen, but when you start doing it in one place you have to keep doing it there because of the communication intensity of innovation.”

Having everything together is also important because Raspberry Pi develops both hardware and the software to run on it, Upton says.

“We still have all of our engineering on one floor. You put the software and hardware engineers together and they talk to one another. So there is unlikely to be a Silicon Valley satellite engineering office for Raspberry Pi.”

However, faced with the recent decision on where to list the business, Upton almost opted for the US. The London market had been struggling to attract high growth tech ventures, while other UK companies, including Arm had moved their listings to New York.

We could do this in Silicon Valley . . . we could probably do it in Shenzhen, but when you start doing it in one place you have to keep doing it there because of the communication intensity of innovation

“Given the paucity of listed deep tech companies in the UK, particularly in the aftermath of Arm’s departure . . . there was a concern that perhaps there would be a lack of necessary domain knowledge in the UK analyst community,” he says. “Happily this hasn’t turned out to be the case, and we’ve been very lucky with the quality of the coverage.”

Upton and his chief financial officer, Richard Boult, decided to list in London rather than New York after investors they met during a US roadshow trip told them there was “no meaningful multiple gap” in how UK and US fund managers would rate the company. They had also been concerned that their business might fall below the radar of analysts and investors.

As Upton and Boult parted ways at Boston’s Logan airport “we agreed the plan had changed to London”, the chief executive says, noting it was purely a business decision, not one driven by patriotism or emotional attachment to the city where he studied. “Britain remains an amazing place to do this.”

Upton describes the company’s culture as one of “transparency”, with employees “extremely empowered up” to do what they think is necessary.

He recites case studies from his days as an executive MBA student at Cambridge Judge Business School about companies that failed to grow because they did not give enough responsibility to staff.

He credits non-executive director, Sherry Coutu, the founder of the ScaleUp Institute, who has been with Raspberry Pi since it broke out of the foundation in 2012, with encouraging him to expand the business faster, by arguing this would bring exponentially bigger benefits.

“I know growth has non-linear returns. We could get to 250 people and in my mind that would lead to four times the amount of business we currently do. But if you talk to Sherry, it will be 10 times.”

Upton has also used partnerships with other technology companies, such as Spanish software consultancy Igalia, to grow operations without expanding his payroll. But making these work depends on securing the right people. “The risk . . . is that the supplier in the first meeting puts forward some good guys that you never see again, so we have focused on signing deals where we keep those guys as the people working for us.”

Upton says he has no plans to relinquish his own role in the company, although as the business has grown he has handed more decisions to his chief operating officer. He believes this is a sign he has grown as a leader. “I am not looking at the door, but I would be if I was not changing,” Upton says.