In my final year studying civil engineering at Newcastle University, I sat an optional module called Enterprise in Construction. It was either that or Spanish, but languages aren't my forte – my C in French GCSE is testament to that fact. In any case, the enterprise course seemed a refreshing change from calculating deflections in steel beams.

The class was asked to devise a business idea and write a business plan. After exploring various ideas, my friend Jack suggested self-service bike hire for students. We all approved. The business plan was submitted and scooped the top grade for the module.

Our lecturer subsequently persuaded a couple of us to enter a few business competitions. All we had to do was submit our plan and it started winning award after award. One evening after accepting our third silver envelope we decided to go for it – we could always return to civil engineering later.

To cut the story (and pain) short, in September 2010 we launched ScratchBikes, the first dedicated campus bike hire scheme at Newcastle University. It worked using standard bikes, locks, bike racks and a neat text message based rental system. Students and staff loved the service but we struggled to make any money from it.

However, within a few months it was spotted by Newcastle NE1, who represent the business community of Newcastle city centre. They loved the scheme and offered to sponsor a city-wide expansion. It relaunched in July 2011 with 150 bikes and 23 stations across Newcastle. Very quickly, we started receiving calls from universities and councils across the country asking how they could get their own ScratchBikes. They wanted to buy our system – it was an amazing feeling.

Although it was tempting to start reproducing the ScratchBikes system, we knew that it wasn't quite ready. We needed to refine our offering by developing a solution around what we were learning in Newcastle – a new improved generation of self-service bike hire . We launched GrandScheme as the vehicle to do this.

We raised investment to develop the system but had difficulty finding a company in the region that had all the skills required: electronics, mechanical engineering, software development, product design and manufacturing. That was until we heard out about some vouchers that Newcastle University were offering to incentivise companies to use their services.

Amazing that the solution was in the very place the idea was conceived in the first place – the same building in fact. It's worth mentioning that I never knew about this area of the university as a student. What more could universities be doing to connect undergraduate enterprise to academic expertise?

It took around two years of hard work to develop our new system and there was a huge amount of design, testing and refinement involved. Fortunately, working with a university team meant we had access to a large and varied pool of resources. They took us through the design process but always with manufacturing in mind. Okay, so they may have worked a little slower than a fully commercial consultancy would but they were better value and very patient.

In short, they took our idea and made it work. The systems you see in large schemes across the world like London and New York use heavy, expensive, on-street docking stations. We've taken the opposite route and put the intelligence on the bike rather than the street. Our stations consist of a normal bike rack and a signpost for instructions – stations can be moved easily, construction work is minimised, users are less restricted, and it's more affordable.

Most importantly, from an enterprise perspective, we're able to gather loads of data on how the scheme is being used – data that's available to users too. Each bike comes with a box on the handlebars. Each box holds the key for the lock. To access the key, users enter their access code into the keypad. A drawer pops out the side, and the key is revealed. Once on hire, all bikes are GPS tracked. Through the bespoke web platform and texts, users are told how far they are riding and where they are riding from and to. They can even tweet their ride or post on Facebook.

The first BYKER scheme (the name proudly announces its north-east origins) launched at the University of Sunderland at the end of May. By the end of the second week, ScratchBikes Sunderland had over 200 members and nearly 300 hires – impressive statistics for only 20 bikes.

Next we're launching a scheme in Oxford, followed by our third at the National University of Ireland in Galway – we're officially an international business. We have big expansion plans. I'm writing this piece on a flight to Vienna where I'm exhibiting at Velo City 2013. And Jack? Well, he isn't calculating beam deflections either. He's my co-founder.

Robert Grisdale is CEO and co-founder of Grand Scheme – follow it on Twitter @GSBikeshare

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