Harold Goddijn, the Dutch creator of TomTom satnavs, looks down at the tape recorder placed on the table for his interview. "That's one of the technologies that has managed to survive, despite everything," he marvels.
Goddijn is something of an expert on survival. He had two failed attempts to launch a car navigation business before succeeding with TomTom, but since 2004 he has sold 60m satnavs – a technology which has spelled the end of in-car arguments about the passenger's ability to read a map. "It was one of the fastest-adopted technologies in the history of mankind, faster than mobile phones or fax machines," he says.
The success made paper billionaires of Goddijn and his French wife Corinne Goddijn-Vigreux, who started the company and still runs its consumer products division. But the market is now saturated: most people who want a satnav already own one and see little reason to upgrade – particularly when there are now cheaper and even free alternatives available on smartphones from the likes of Google and Nokia.
TomTom's sales went into reverse in 2008. Takeovers resulted in a heavy debt burden during the credit crunch, and a loan renegotiation was followed by a rights issue. The problems are not yet over: there was a profit warning in June, and TomTom's shares have lost 67% of their value this year.
Restless
Well manicured and trim, Goddijn is a typically restless entrepreneur. Even in 2007, when TomTom was valued at £5bn and he owned a quarter of the shares, he says there was no champagne moment. "If you are the entrepreneur and owner and chief executive all at the same time, even when to the outside world it looks like a fantastic success, there is never time to celebrate anything, to sit back and be happy about yourself."
Goddijn has no training in science or technology. He studied economics at Amsterdam University before going to work for a venture capital firm; through that came into contact with Britain's once mighty Psion Group, maker of pocket computers and originator of the Symbian operating system, which was the standard for mobile phones before Google's Android tookover.
He founded Psion Netherlands as a joint venture in 1989, becoming one of its largest European distributors. In 1991 his wife left her job as Psion's sales director and helped to found Palmtop Software, to write applications for pocket computers. Her husband took a stake – and that is where they, and their co-founders Peter-Frans Pauwels and Pieter Geelen, still work today, 20 years and a significant rebranding later.
They are a close-knit team, and Goddijn shows no impatience when I ask a question that must come up often. Don't he and Corinne see a bit too much of each other? "There is a lot of trust and complicity. You can both enjoy the ups and downs, we didn't have to live it by ourselves." The couple often cycle to work together, but don't share an office and Corinne is not on the board.
Their skills are, he argues, complementary. "We are completely different characters. What she has is energy, drive in sales. She's a great motivator, good at building teams. I'm a little more the strategic and on the product side."
In 1998, Goddijn took a job in the UK, becoming managing director of Psion's computer group. But the company's glory days were over. He left a year later, soon followed by another frustrated employee, engineer David Tupman, who went on to head Apple's iPod division, having failed to get an MP3 player to market at Psion. Goddijn went full-time at his own company in 2001, in the role of chief executive.
New brand
The company launched a mobile phone mapping product in 1999, in a joint venture with Ericsson, which is when its unusual name was invented.
Goddijn and his team had given themselves a 48-hour deadline to come up with a brand. "We tried to create a character, a friend, a local that will help you find your way. We were in a cafe and at the end of two days we had nothing to show," he says, slamming the table for emphasis. There was a shortlist of 10 names. At the top of the list was Tom. It was unregisterable as a trademark, unfindable as an internet search term. Five minutes before leaving the cafe, someone suggested TomTom.
Their contact at Ericsson, he recalls, went berserk: "What do you think we're doing, selling teddy bears?" But they spent hundreds of millions promoting the cuddly brand name – and it worked: "A lot of our success is attributable to that name." Goddijn believes consumers prefer it to the "geeky" brands of rivals such as Navteq.
With the end of the first dotcom boom the plug was pulled on their Ericsson venture in 2001. By then, Bill Clinton had freed the US military's Global Positioning System (GPS) for civilian use and TomTom hooked its boxes up to the inexpensive satellite technology. The first navigators appeared in 2002, but were a complicated mess of CD-Roms, wires and cradles and had to be hooked up to pocket computers. In 2004 he issued a new design brief for the units: "Buy, take out of box, drive home."
Along with rivals Garmin in Kansas and Magellan in California, TomTom has sold the majority of the world's satnavs, with a 45% share of sales in Europe and 21% in the US. Its revenues went from €39m in 2003 to €192m the following year. In 2010 it turned over €1.5bn.
That cash cow is now in decline, and Goddijn is now betting the company on two complicated, ambitious new projects. The first is creating a massive global database of real-time traffic data. For those willing to buy a new box, pay £47.50 a year and listen to the voice of Jeremy Clarkson (in the Top Gear themed model, that is) TomTom will guide them away from traffic jams.
To predict what roads are likely to be congested at what times, the company collects traffic data from a multitude of sources – traffic reports, taxi and lorry companies, mobile phone networks that collate traffic data as phones move between masts, and, most importantly, its own customers. The latest satnavs use mobile phone networks to send and receive information. Those who opt in – and 80% do – allow TomTom to anonymously collect their travel data.
"We fuse that all together in a big database – don't ask me how it works," says Goddijn. "The route calculation is then done, avoiding villages and schools as much as possible."
There have been privacy concerns. Earlier this year, TomTom was forced to apologise to customers for selling their data, which had been used by the Dutch police to set speed traps.
Some 1.3m of the new generation devices have been sold direct to consumers since 2007, but their widest adoption is likely to be through partnerships with carmakers. Renault, Toyota, Fiat and Mazda build them into cars, and every month 80,000 vehicles come to market with one on board. Half of the Renaults sold in the UK have them.
Goddijn's second initiative relates to the fact that a number of motor groups are tendering with mobile networks to have Sim cards put in cars, which will transmit data back about faults and driving patterns. These Sims could be used in tandem with in-car computers for audio and video entertainment, usage-based insurance, even car-sharing clubs. "What we want to do is enable the technology that will help that," says Goddijn.
It will be a slow burn. Like his rather nervous investors, the chief executive is by no means certain he can strike gold twice. "It doesn't happen very often that you find a technology that takes off as fast as [satnavs]. That is a low probability event and for it to happen twice is an even lower probability."
But Goddijn has an interesting vision and a good brand. With luck, the tape cassette will disappear long before TomTom does.
