Alfred Yarrow served his apprenticeship with Mssrs Ravenhall, Marine Engineers, at Ratcliffe, in Stepney. At the age of twenty three he managed to raise £1000 and with a man called Hedley, who had contacts in the riverboat repair business, set up a partnership in 1865. Calling themselves as  Yarrow and Hedley, engineers, they rented a yard at Folly Wall on the Isle of Dogs. The yard laid behind a dyke called Folly Wall, hence the yard’s name Folly Shipyard. The half an acre site had two cottages and a small riverfront. It was crossed by two rights of way that led to the Folly Public House, which become, naturally, the favourite drinking place for Yarrow workers.

The first two years of the Poplar yard’s existence were very difficult as orders were extremely hard to come by. However, a welcomel breakthrough towards viability came with the building of small riversteam launches. Between 1868 and 1875, the yard built 150 of these launches, providing the company with a strong financial foundation. The partnership with Hadley was dissolved in 1875. In the same year Yarrow had the opportunity to expand the yard by buying first the freehold and then the Folly Public House, which he later turned into the yard’s drawing office.

In 1897 there was a change of name for the company. It was to be called Yarrow Company Limited. At the turn of the century, Yarrow decided to move the shipyard from the Isle of Dogs to Scotstoun on the Clyde. Yarrow gave his reasons as the cost of materials and labour but wide spread labour unrest on the Thames also contributed to his decision. He signed the contract to move to Scotstoun in 1906 and the Isle of Dogs yard was gradually run down as machines and materials were moved north. Finally in 1908 the Folly Shipyard closed.