A Startup to put Deepmind in the shade

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A Startup to put Deepmind in the shade – a Christmas dream!

 Two professors at the University’s School for Magic Solutions sought to develop a product that would be superior to all other startups.

Experts in artificial intelligence, they decided that the time had come to tackle the ultimate task: they aimed to document and analyse all great discoveries of the world, like the wheel, steam, electricity, flight, penicillin, the atom and the internet. If it was possible to write a program, they reasoned, that could romp home against Champions at Chess or Go, then it must be possible to write one that would produce an innovative solution to any problem whatsoever.

Early versions tended to produce solutions that already existed; some looked promising but were beaten to it by existing entrepreneurs; and some required too much manual input. Less predictably, some looked to be socially or politically unviable.

Some of their output sold to writers as valuable plots; some to science fiction boffins; and Private Eye bought some to fill its Funny Old World column.

Seed money came from Elon Musk, Tim Cook and the Prince of Wales private office. Even Nesta, the UK’s innovation engine, bought some shares. The ‘A’ round proved more elusive. The VC pundits felt that it was not really up their street, and that selling on might be difficult. The Angel community could not find a lead investor with relevant experience. However popular interest suggested that Crowdfunding might be its best route, and so it transpired.

At that moment, an expert in Blockchain technology offered a modest price for 20% of the business, interested to capture their marketing expertise, and this renewed popular interest. Subscribers became so keen to use it that it eventually crashed. ‘Golden balls too popular’ read the Sun. The moment came when the Magic Circle decided that it was damaging their image for illusion, and sued on trademark grounds.

Then there was a barrage of complaints when a series of customers found that their applications for patents were refused on grounds of prior submissions. Gradually people lost faith in the value of the program; and its proponents failed to update it in the light of a plethora of recent inventions.

It continues to be used in technical colleges; it is a valued case study in MBA programmes; but its authors have moved on to other speculative fields; one is working on space travel and the other on animal intelligence.

With best wishes for Christmas and the New Year, John Whatmore

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Four incubator initiatives

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Four Incubator initiatives Incubators have taken to developing specific aspects of support (Edinburgh University); to buying in wholesale support (from the likes of Accelerator Academy), to adapting a well–recognised accelerator format (the Crick Centre) and even selling their support programmes to others (Ryerson University). One has decided that it is a permanent Accelerator (coming soon).

Edinburgh University’s Executive Director Designate Programme provides an experienced entrepreneur/mentor/advisor who can help pull together a plan for the business, and thus provide better balance to the academic team that improves the chances of raising funding for these spin-out companies. It also allows universities to pay consultancy fees of experts from outside the University, or buy out time of tenured academics to allow them to focus on a spin-out. The University also has a scheme called Pitching for Mentors – similar to Dragons Den in format but at a much earlier stage – looking at how help can support the commercial opportunity around these projects.

Several incubators including South Bank University’s have made use of Accelerator Academy’s mini-Accelerator (conceived in 2014, supported by White Horse Capital). It is based on one day a week of intensive, structured development support for 6-12 weeks – around team, market and investor readiness. It comprises 150 hours of training, mentoring and support, with weekly classroom sessions, workshops, and mentoring, and fortnightly clinics (and ongoing support, events and investor introductions.)

The Crick Centre in London is running an I-Corps type programme for around a dozen teams to help commercialise their work. ‘The course includes’, says the description, ‘pre-accelerator, accelerator and post-accelerator activities designed to take founder teams from idea to Series A and beyond commercial launch’ – a spectrum unheard of in any other such programme. ‘Teams will have access to a network of global experts in all aspects of entrepreneurship, health sector knowledge, data science and investment strategies.  This network will provide workshops and mentoring to support the cohort – helping them to maximise opportunities and address challenges.’

 The Digital Marketing Zone at Ryerson University, has developed all sorts of accelerator programmes. Known for supporting Canadian tech startups and recently ranked the top university-managed tech incubator in the world, (tying with Bristol’s SetSquared), among Ryerson’s programmes is a sales accelerator programme; and it has forged partnerships with banks and companies like Facebook to develop accelerator programmes in digital news, financial technology and early market validation for women-led founders.

Coming shortly: an Incubator that experimented with an Accelerator programme, but decided instead to turn itself into a permanent Accelerator.

John Whatmore, December 2018

Accelerator Policy: the future after Brexit

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Accelerator Policy: the future after Brexit The UK will need to establish its own policies and its own grant regime to replace the grants currently available from the EU, and crucially and urgently needs a locus to carry this out. EU support for Accelerators and Incubators has been more extensive than elsewhere and more comprehensive and more collaborative than that of the UK, suggests recent research. (My 5-point plan is below.)

 With Y Combinator and Techstars as leading lights in the world of Accelerators, the US’s Small Business Administration has run several support programmes:

* 2014, on Accelerator and Incubator models:$2.5 mn;

* 2015, to involve all regions of the US: $4.0 mn;

* 2016, in support of jobs growth, manufacturing, and areas with weak access to VC: $3.4 mn. (1)

By contrast, EU funding (of which of course the UK has been a beneficiary), designed to tackle the ‘EU’s gravest economic crisis in 50 years’ by revolutionising its business culture, has focused on networking – among providers, on the development of specific fields of interest; and has been of various intensities and with different breadths of application.

Policies have been targeted at:

  • Cross-border services
  • Impact that is industry-led and pan-European
  • Startups, especially in ICT
  • Eco-system building, and
  • Internet public-private programmes

And more specifically on projects about:

* Commercial space applications

  • Transport
  • Low carbon energy systems
  • Internet content and media
  • The Internet of Things
  • Healthcare
  • ‘Smart city’
  • Social, and
  • Learning

The EU’s recent Horizon 2020 project commits nearly €9 bn for grants – in phase 1, for innovation feasibility studies, in phase 2, for advice and support services for investment mature concepts, and in phase 3, no doubt for aspects of implementation.

The UK’s interest in Accelerators was founded on a research mission to the US by a public innovation R&D organisation (Nesta) in 2011. Its report, ‘The Startup Factories’, (together with lead Accelerator, Seedcamp) launched interest in Accelerators, and was followed up with funding by Nesta for several very early stage examples. Shortly afterwards, the Cabinet Office offered £11mn in development grants to ten organisations that were focused on stimulating social enterprise. Since then however, policy has relied on the market – mainly through tax incentives to investors (the EIS and SEIS schemes). And grants, mostly for proof of concept, have been available from Innovate UK.

The UK’s approach is strongly marked by the mutual independence of those who deliver Accelerator (and Incubator) programmes; whereas the EU’s approach appears to have been more comprehensive and certainly more collaborative. Meanwhile, London (with its ready access to trade and financial services) has become the leading place in Europe for startups.

It has to be said that evidence of outcomes is no more than the siren calls of the deep: we know little about startup rates or success rates, or about failure rates – either nationally or regionally. And what there is tells us little about ways forward.

However, for Brexit the UK will need to take urgent action to establish policies for the future, together with a grant regime, that will maintain the UK at the forefront of this field. Here is my 5-point plan:

*   establish a trade body for this now substantial and important sector, whose                 primary objective should be collaboration, and include in particular:

*   establishing a major UK provider of programmes to rival Techstars and Startupbootcamp; and adapting them for universities, and business and science parks;

*    increasing the number and enhancing the practice of mentoring; and of staff of Accelerator and Incubator organisations;

*     developing the sector’s venture capital industry;

*     and focusing grants on sectors of major interest to the UK; on pe-accelarators; on scaleups; and on local eco-system.

 

(1) This and the following two paragraphs are based on material in ‘Accelerators’ by Wright and Drori, 2018, most of whose research quoted is dated 2016.

John Whatmore, November 2018

Incubators getting more pushy

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Incubators are getting more pushy Once simply providers of cheap accommodation for a number of young companies, Incubators are slowly taking the bull by the horns and adopting active ways of helping their tenants to develop their businesses.

Proactive staff: Incubator staff increasingly act as monitors (eg at ‘office hours’ with regular reviews of progress, problems and plans) (Bethnal Green Ventures, South Bank University, Cockpit Arts).

Workshops and events: meetings with specialised advisers are now common.

Mentoring: cohorts of mentors are increasingly common, though rarely systematically managed.

Grow or go: Incubators are adopting policies to encourage churn: they expect incubatees to move on after a given period (Cockpit Arts).

Early-stage development programmes: Incubators are running pre-accelerator programmes (Imperial, South Bank University with Accelerator Academy)

Startups moving on: Incubatees are moving on – from incubators to Accelerators (eg to Wayra et al.)

Incubators as fully-fledged business developers: running their own Accelerator programmes (Imperial, Crick Centre, BioHub).

Incubators forming alliances: Corporates and VCs are increasingly involved in Incubators – as funders, partners, and investors (Barclays, John Lewis; Cisco and D.C.Thompson with IdeaLondon; ‘SOSV’ (a US VC) running its own Accelerator – ‘RebelBio’).

 

Will Incubators go even further, and develop Online programmes (like Y Combinator and Dreamstake), and Scaleup programmes (like ‘Growth Builder’)

Are Science Parks next in line to turn from letting agents into developers of businesses?

 

John Whatmore, November 2018

Confronting the challenges of the day

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Innovation Labs that confront major changes in the economy Initiatives in a number of sectors have created nurseries for innovations created by shifts in the economy – from presentation/discussion forums, to hackathons, to match-ups, to accelerators, to scaleup support programmes.

Airports are creating innovation hubs to protect their retail revenues (40-60% of total revenues). Their shops face online retailing; Uber and improved public transport attack car parking revenues; and the lower cost appeal of flying diminishes passengers’ spend.

Munich, Singapore’s Changi, and Aeroports de Paris are testing solutions including turning retail spaces more into showrooms, changing car parks into destination centres; and making the passenger experience more satisfying – to attract a higher spend.

The aim of their innovation hubs is to come up with a more entrepreneurial culture in which businesses will address not just revenue generation but also airport operations and passenger processes.

*

Generic change programmes have become increasingly common. Among the first were FinTech programmes like Startupbootcamp, which remain a hot field to-day.

Level39 in Canary Wharf was started soon afterwards, which was essentially about retail, but a host to Fintech programmes.

The Tramperies established a number of specialist nurseries each one focused on a different field, and all either alongside or in collaboration with expertise in that field.

Social enterprise (Bethnal Green Ventures its pioneer) was a recipient of an early government grant for that field).

Science’s incentives make it a reluctant host to business, but BioCity in Nottingham and BioHub at Alderley Edge have been leaders.

Less common but of great interest for their inherent focus on innovation have been nurseries in the arts: in theatre The National Theatre’s Studio , in music A venture capital company that knows its onions , in crafts An Incubator with a strong development focus and at the Royal College of Art DesignLondon, .

CivTech and GovTech nurseries have attracted interest more recently.

Accelerators in Healthcare are just now of increasing interest – a difficult field for business because of its fractious structure.

Opportunities for innovation labs that focus on particular fields are numerous; they include the railways, adjacent local authorities, area transport services, water, gas and electricity, retail and entertainment centres.

John Whatmore, November 2018

Mentoring: a timely Academic review

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Mentoring: a timely Academic review of its role in Accelerators Among the articles in the recently published book entitled ‘Accelerators’, the section on Mentors (much of it drawn from the extensive network of Accelerators in Israel) explores mentorship as ‘one of the building blocks of accelerators’ education programmes’. But coaching and mentoring remain underexplored and undervalued in the business world.

Perhaps its most helpful contribution is about typical problems with which mentors can help:

  • over-optimism and naivety about market barriers and the business model;
  • commercialisation of the product, and the targeting of its market;
  • marketing and dealing with global markets;
  • lack of managerial experience; and
  • difficulties in scaling up.

It is lack of experience more than lack of knowledge that is at the heart of many of these problems; and failures are an important part of experience – that mentors need to support and turn to good effect. (Very recent research by MIT suggests that successful entrepreneurs tend to be in the forties.)

Four regular topics identified were:

Setting up strategy and establishing priorities What is the market/the market fit for this kind of product/the best market to go for.

Revealing marketing opportunities Identifying unique benefits; how they would be used; and where they can be marketed to best effect, and against the competition.

Structuring organisational processes Advising on team membership and team building, including inter-cultural conflicts.

Expanding ventures’ social capital Occasionally connecting to other relevant startups/networks.

(Surprisingly there is no mention of product design or development, nor of manufacture.)

Mentoring is addressed in this book mostly through anecdotes, and largely in terms of mentors’ invariably extensive background experience, their perceived objectives, and their motivations. However it draws on too small a range of accelerators to include some facets of mentoring (like establishing a fit and developing relationships, and some important developments, like the way in which the need for specific kinds of help changes as businesses evolve).

Mentoring is described as ‘altruistic, educational, updating, stimulating and possibly offering investment opportunities’ and as sometimes a bridge to other contributors in the eco-system.

‘They [mentors] ask questions that force entrepreneurs to think strategically and more objectively, to intensify processes and shake entrepreneurs out of their comfort zone.’

‘The challenge is to match mentors to mentees according to the stage of development, their needs and personal fit.’ There is, however, nothing here about the various approaches to establishing good fits – many of them based on variants of speed-dating. (Startupbootcamp has used a talented mentor manager, both for finding specialist mentors and for changing mentors according to teams’ changing needs.)

Mentors, a contributor suggests, meet weekly or bi-weekly, but they develop their understanding and relationship progressively and in parallel with the development of the business.

One contributor asserts that having more than one mentor leads to confusion; but Steve Blank of I-Corps, the accelerator widely adopted in the world of science in the US, identifies five different aspects of development where mentors with specific backgrounds and experience are needed, often in succession to one another, namely: conceptualisation, strategy, product development, marketing and funding.

There is an unspoken presumption that mentors somehow know best how to play their role, though Startupbootcamp has from time to time brought mentors together and provided an opportunity for them to learn from one another’s experience in the role.

‘Accelerators’, edited by Mike Wright and Israel Dori, Edward Elgar Publishing, 2018.

John Whatmore, November, 2018

Whither Accelerators

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Whither Accelerators? The COO of Startupbootcamp IoT, one of their three London-based Accelerator programmes contemplates the future 

Programmes are now commonly run with several different corporate backers, often providing substantial inputs to the programme

Programmes have become longer: once 12 weeks, now often 16 weeks

There is an increasing pre-occupation with after-care

Programmes are increasingly focused on specific fields eg Fintech, Insuretech, IoT etc

‘Office hours’ as weekly meetings with each participant – about their progress, their problems and their plans – remain at the heart of Accelerator programmes

Mentoring (by experts, unpaid and voluntary) remains a major element in Startupbootcamp programmes [as it does in Seedcamp and Techstars programmes; but is often vague or minimal on some programmes]

Programmes are tending to take less equity in their deal with participants.

Programmes are increasingly focusing on later stage businesses

Leaving space for pre-accelerator programmes, such as I-Corps, The Oxford Foundry, The Accelerator Network, (and online programmes) as contributors to early-stage startups, sometimes now offered in Incubators.

Development Labs are appearing – that facilitate the development of technology (Startupbootcamp and Imperial among recent examples)

Programmes are increasingly available in many parts of the UK

Startupbootcamp [and Techstars] run programmes all over the world – SBC now runs 22 programmes in 14 countries

The field remains a collection of independent programmes, with little interaction between them.

John Whatmore, October 2018