The latest support programmes for SMEs

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Support programmes for young ventures in incubators

New support programmes for scaleups are of a design that could easily be replicated in incubators and their ilk, and could help generate big steps in growth.

Incubators have been essentially providers of low cost accommodation for small businesses, but they are coming under pressure to be more active in the support of their growth and development.

The concept of the Accelerator has illustrated what can be achieved by orchestrated forms of support – at least for startups. And the recent Barclays report has suggested that some of those approaches might also be usefully applied to Scaleups, with the aim of nurturing some great businesses of the future.

New programmes for Scaleups (such as the Judge Institute’s Growth Builder programme (http://wp.me/p3beJt-fn) and the RBS/UCL Business Growth programme (http://wp.me/p3beJt-dK) have taken the form of periodic meetings for CEOs, usually monthly meetings over twelve months, and consisting of mutual discussions of their problems and opportunities, and learnings about the latest developments in the most relevant topics, such as the latest uses of social media and the latest sources of finance. The Belgian Plato programme (http://wp.me/p3beJt-dH) (widely franchised in other countries) and the Vistage programme from the US (http://wp.me/p3beJt-cb) now popular in the UK – both for cohorts of senior executives, both use a very similar format.

What is common to these programmes is:

*         the exchanging of experience

*         their regular but occasional meetings

*         their intimacy and confidentiality

*         their ability to bring together individuals with common issues or experience.

And surprisingly, their addictiveness.

Their participants are usually carefully matched – for sector, technology, markets, size or maturity.

Young businesses with high growth potential will often be found in incubators, co-working spaces and innovation centres, where it would not be difficult to set in motion programmes of this kind, which could give a major boost to their participants.

John Whatmore, October, 2016

New support for startups and scaleups in East London

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New support for startups and scaleups in East London
ENTIQ’s new innovation centre in the old Olympic Park will be a great new signpost but the peloton needs more than that: a new network is needed to spur incubators and co-working spaces to develop support services like this one –  for the growing number of young businesses.

ENTIQ is the innovation consultancy behind a new Innovation Centre on the new campus in the Queen Elizabeth Olympic Park in East London. Jointly owned with an investment fund, it will provide support services for business development for: new product development – with prototyping facilities and a technology lab, entrepreneurship and business education, business-accelerator and -growth programmes, and back office and professional support.

                                                          Focus on local threads 

The Innovation Centre’s aim is to establish a cluster of up to 500 members and organisations as at Tech City in Shoreditch; and the Centre will work with companies big and small that are pioneering new technology in their fields, with an initial focus on Sport, Health, Fashion, Smart Cities and the Internet of Things (IoT).

Typical targets include improving engagement in sport; tools for preventative healthcare; designing intelligent and functional fabrics; applications that improve connectivity; and sustainability and mobility in urban environments.

                                                 This will be a gee-whizz park

It is expected to be a place for experimentation, design and performance – for entrepreneurs and big businesses alike – a launchpad for British-based scale-ups and a ‘soft landing pad’ for companies coming to the UK for the first time.

With its base in London, it could make a much needed contribution to the development and commercialisation of UK technology. It will be a centre that is carefully tailored to early-stage businesses and in particular to those that are pioneering new technologies, and one that also has on hand high quality support, provided proactively.

                                      Scaleups badly need this kind of leadership

While the number of incubators and particularly co-working spaces in the UK has been growing substantially (there are probably now several thousand), few offer services to their occupants to this extent, yet they are possibly housing the unicorns of the future.

Many of these are run by individuals who have little hands-on experience of business or of business support agencies; and their links with the business community are often tenuous. ENTIQ however, was co-founded by two people who co-created Level39 – the innovation centre in Canary Wharf; and ran the Cognicity Programme for Canary Wharf Group, a 3D Fintech Lab for Dassault Systemes, and a Blockchain Lab project among other specialist innovation programmes. Claire Cockerton is a serial entrepreneur, and Eric van der Kleij had been the founding CEO of TechCity.

                                                        A very tough task

Making a success for early-stage businesses in all sorts of developing technologies in a Centre like this could well be as difficult a task as if all the students in a university were reading completely different subjects. It will require a remarkably sophisticated feat of collaborative support – to help all of the different businesses to develop and commercialise their products or services. Or else it may have a high failure rate.

With the rise in entrepreneurialism, support for startups and scaleups has got more sophisticated as Accelerators have proliferated and diversified; and Growth Builder programmes have come on the scene. With new developments in support evolving continually, there is an urgent need to help incubators and co-working spaces UK-wide to be able to offer them to their occupants.

UKBI (UK Business Incubator – the sector’s trade association) was founded some twenty years, but collapsed several years ago. The time is surely right for a new network of hothouses (incubators, co-working spaces and their ilk), that will help its members learn from one another and from outside experts about the latest practices and approaches for providing support to young businesses.

*                               *                             *

Some comparable initiatives
This will be a larger project than the Daresbury Innovation Centre (http://wp.me/p3beJt-Y), launched several years ago in the vacuum left when the bid for the new Synchrotron facility went to Harwell; Daresbury has a wider range of businesses on its campus, but without as much support; similar too to Harwell (http://wp.me/p3beJt-r), which has a large number of businesses on its site – many related to the technology of its Synchrotron, where good technical support is at least on hand; but there is scant business support; and not unlike Rocket, a Berlin funder and supporter of early stage businesses (http://wp.me/p3beJt-8U), or the newly opened Edney Innovation Centre in Chattanooga, seen by its civic leaders as ‘the gateway to the city’s command-ing new business enterprise’ (New York Times.)

See also: Design your own Accelerators: an analytical review for innovationeers – johnwhatmore.com 8 Dec 2014 http://wp.me/p3beJt-K

John Whatmore
September 2016

Wharton on ‘Whither Accelerators’

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Accelerators: Wharton on emerging avenues

While the established Accelerators evolve, the field grows and segments: some are now corporate based, some property based, some employment based, some area based, some sector based, some market based; all of them chipping away at Silicon Valley’s market share.

 “Accelerators are a very expensive source of capital,” “If you’ve never launched your own startup before it’s great validation, and maybe you need that leg up. If you need a stronger network and you definitely need advisers – those are the key things accelerators provide you that is worth that 7%.” However, “If you’re a vetted entrepreneur or you’ve been at Google as an engineer and you’ve been at a fast-moving pace, an accelerator might even be a negative signal for a venture capitalist knowing that you’ve already committed 7%,”

What is it that is of value and to whom? Is it the interview process, the validation created by being selected, the mentoring, your fellow startups, the pitching process, the investment – or what?

Incubators Grow Up

Incubators provide space and resources for collections of young businesses, together with occasional mentorship. Accelerators are intensive development programmes for cohorts of around a dozen young ventures, working in close company, for around 12 weeks, with intimate help from mentors and advisers, in return for 6-10% of equity – with the objective of enabling them to raise seed capital from investors.

About half raise capital – good odds considering about one in 100 startups overall get funded, according to George Deeb, managing partner of Red Rocket of Chicago.

“The best programs have a substantial impact,” says Dave McClure, the founder of Silicon Valley accelerator 500 Startups. “The worst programs can probably cause damage.”

Techstars – an evolving archetype

Over nine years, Techstars has become one of the world’s leading accelerators, with programs in Berlin, London, New York, Cape Town in South Africa, and Tel Aviv, among other locations.

Those who enter the program give up 6% of common stock for the loan. They also receive lifetime access to Techstars’ resources, hands-on mentorship in a three-month program with office space, $20,000 in living expenses and connections to more than 5,000 experts.

Techstars reportedly now automatically offers a $100,000 convertible note to all startups upon acceptance. The note converts at a pre-money valuation [the valuation before outside funds or the latest rounds of funding are accounted for] of $3 million to $5 million, the company says.

In 2015, Techstars initiated an equity back guarantee program to address the shifting paradigm. With the preponderance of competing accelerators and other avenues to reach investors, Techstars officials now offer their startups a chance to lower or eliminate how much equity they give up. Startups have three business days after the program ends to reject the standard plan if they aren’t satisfied with what Techstars offers.

Deeb, a founding Techstars mentor, is a staunch proponent of the model that vets startups before investors hear about them. Techstars Chicago picks 10 companies out of 1,000 applicants, says Deeb. This way investors hear pitches from only the most promising startups as determined by the accelerator.

Corporates too are into startups

Another tentacle in the ecosystem can be found in Techstars’ collaboration with major corporations. Since 2015, Techstars had partnered with such heavyweights as Barclays, Disney and Sprint to create accelerator programs for each company.

Disney did not renew its contract with Techstars in early 2016 but continues to operate a startup accelerator. Kevin Mayer, Disney’s executive vice president of corporate development, has said the company isn’t investing in startups in order to make a quick profit like a typical venture capitalist…it is more interested in creating cutting-edge products it can use, as well as revitalizing its leadership by staying at the forefront of innovation.

Corporate leaders figure they can train and support aspiring entrepreneurs to be part of innovative projects in-house instead of having to pay millions later on to acquire them. “Opening an accelerator is a strategic decision that allows big corporates to stay relevant and competitive in a rapidly changing economy,” Microsoft’s general manager of accelerators Zack Weisfeld wrote this year in an opinion piece for Forbes.

 Incentives and objectives are of various kinds

Charles Bonello, a New York entrepreneur, investor and startup tinkerer, is co-founder and managing director of Grand Central Tech, a New York City startup hub that offers companies a year long program without charging rent or taking equity. The catch is that companies that complete the program agree to rent office space for four years in the accelerator’s extensive 1.1-million square foot building overlooking Grand Central Station, a building owned by the accelerator’s billionaire backers.

Many of the startups entering Grand Central Tech aren’t looking for seed money. They are attracted to the program’s impressive list of corporate partners that include Google, IBM, L’Oreal USA, Microsoft, Pepsico North America and JPMorgan Chase.

 Bonello and partner Matt Harrigan have a long-term goal of finding emerging companies trying to solve problems. “Our goal is to create a single point of density of the best technology companies in New York.” One of their first startups was Nagare Membranes, a developer of water filtration technology. By keeping like-minded entrepreneurs in the same office the men hope for cross-pollination in problem solving.

Employment as another objective of accelerators

“Looking at emerging markets, many see entrepreneurship as solving unemployment issues,” says one Wharton expert; but many don’t. “And many jobs are outsourced to other countries like India for IT.” Community and political leaders have many motivations for accelerating business in their region, but “it’s not clear it is working”, even though the Obama Administration’s Startup America Initiative has used many of the fundamental accelerator ideas to promote small businesses nationally.

In 2011, the Chilean government decided the best way to promote homegrown entrepreneurship was to create its own accelerator. The country’s economic development agency hatched the idea with Stanford University experts to create Start-Up Chile. Government officials offered entrepreneurs from around the world $40,000 of equity-free capital, infrastructure and work visas for one year to develop their companies over six months. The program also gave selected startups access to Chile’s financial network. The idea was that the recruited entrepreneurs would serve as role models for Chile’s budding startup culture, but it is uncertain how many stayed in Chile.

Muhammed Mekki, a founding partner of AstroLabs, has extended a corporate connection to Dubai in the United Arab Emirates. It has strong government backing for its partnership with Google to build a startup hub and training academy to promote online and mobile business throughout the Arab world.

“It becomes part of the culture, and when it becomes part of the culture, it becomes part of the government – to integrate this idea of startup mentality,” says Bambi Francisco, whose company Vator is one of the largest social network platforms dedicated to entrepreneurs.

Specialisation

The first accelerators recruited all types of companies instead of focusing on specific industries. But as these programmes proliferated they became more nuanced in targeting companies to accelerate.

Blue Builder is an accelerator in southwest France that caters to ocean and other outdoor sports in the picturesque fishing village of Saint-Jean-de-Luz, located in the heart of the surf alley in the Basque country. It also lies beneath the Pyrenees Mountains, providing a testing ground for all kinds of adventure sports products.

It offers a campus with prototype studios, workshops and a safe environment to experiment with materials such as polymers and resins used for building surfboards and snowboards, where those involved can maintain their lifestyle, and which is close to its market rather than close to coders or to sources of finance.

It works with entrepreneurs on specific projects to get them launched when they are ready to be presented to investors. It surrounds these creative trailblazers with brand designers, user experience designers, business developers and finance and legal experts to increase the likelihood of success during a year long assignment to build a product, such as one involving a sensor that measures surfboard movements in real time.

Moreover, it determines how much equity it gets based on the valuation of each company instead of taking a uniform percentage at the entry point.

Instead of looking for companies, Entrepreneur First in the UK recruits graduates, and then partners with the talent to build a company from scratch. This is one way to attract a variety of experts to work on a specific issue.

 Hybrid Approaches

The University of Pennsylvania is pioneering a new approach to entrepreneurship by combining academic applications with practical experience. Some argue that college is the best time to launch a business because of the proximity to so many people to test the product and gather feedback.

Penn’s Graduate School of Education (GSE) has created the country’s first executive master’s degree programme in education entrepreneurship. The school also helped create an Education Design Studio, a hybrid incubator and seed fund for education startups. Entrepreneurs who chose the incubator route have access to GSE’s professors to get the latest research on what is working in their areas of interest. But they do not earn degrees.

The model of offering two routes to launching businesses with academic support — in school while pursuing a master’s degree part-time or through an incubator program — is not limited to education startups.

A short form process

Started in 2007, Vator holds entrepreneur conferences in Los Angeles, London and Oakland, California, that can lead to investment deals. It has promoted about 175 companies through its startup competitions in the past five years. The winners get to pitch to investors at the end of their Splash events just like they would at an accelerator “demo-day.” Its startups have raised $700 million in capital without releasing any equity to the facilitator.

The future of the Valley

“People say nobody’s going to duplicate Silicon Valley. In many ways, it is part of the natural evolution that turned the San Francisco Bay Area into a global economic powerhouse with Apple, Facebook, Google and Twitter among the current stars.” “It has gotten easier in other places, but there is no doubt by every stat that it is the hub of entrepreneurial activity, especially in the web software services space. The big brands keep the Bay Area at the heart of American innovation. But the environment has changed.”

The mean distance between a venture capitalist and a company they invest in, says one old hand, is only 80 miles. “So, if you’re not in San Francisco or New York or a few other places, you’re unlikely to get access to funding.” He is sceptical of some accelerators that advertise a new approach with more access. Yet “There are reasons to have accelerators in cities Europe-wide because these people are cut off from the funding system and support system that exists for the lucky few in the U.S. But you can’t just copy Y Combinator and expect it to work.”

With investors more dispersed these days, entrepreneurs can create companies closer to their homes, which, in turn, can lead to organically grown startup communities that include accelerator programmess and localised funding – the type of industry plays a big role in where a community develops. McClure says it requires the “minimum critical mass” of startups and investment in entrepreneurs to develop a thriving hub. As many as 100 metropolitan areas worldwide have the potential to reach that threshold.

See: http://knowledge.wharton.upenn.edu/article/why-startup-accelerators-are-feeling-pressure-to-evolve/ July 2016

John Whatmore, September 2016

 

A new Accelerator Lab by Accenture

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A revolutionised Accelerator Lab Helping corporates to work with innovative young companies to introduce innovations in the fast-changing retail field.

Nesta’s work with P&G in 2010, where Nesta acted as the confidential intermediary for half-a-dozen startups, was a door-opener into the field of Open Innovation.

The latest such opening is a dramatic evolution of Accenture’s Fintech Lab Accelerator, where a dozen banks each provided a chaperone whose role was to help the half-a-dozen young ventures that had been brought together at Level39, to introduce their products to the relevant managers in these banks.

Where the banks faced major threats arising from new ways in which financial transactions could be made, the retail trade and brands are fighting a rearguard action to counter Amazon’s lead in online retailing; and they are doing this by majoring on

  • individualisation,
  • sophistication and
  • personalisation

In Accenture’s latest version of the Accelerator Lab, launched with a razzmattaz of a major conference on the future of retailing, complete with a store of the future, innovative businesses had been invited to enter a competition, whose winners and runners-up were then offered eight weeks together at The Trampery co-working space in Shoreditch; and the dozen major retailers (Argos, Sainsbury’s, Kingfisher, Specsavers, Dixons/Carphone – among others) who participated in the programme were invited to presentations and discussions with them over the period of their residency.

Millenial 2020 (millenial20-20.com)is a process created by Accenture for corporates in retail. It kicked off with a two-day conference – a grand gathering of over 3,000 startups, brands, retailers, and corporates encompassing four industry sectors, at which Accenture set up a store of the future, entitled The World of ME: Millenial Expectations: an inspiration playground for the consumer experience and store playground of the near future’, ‘an immersive experience that brings together a curated selection of start-ups and brands to explore millennial-driven products and services expected to influence the retail and consumer landscape of the near future.

 Will the store no longer be solely a place to purchase things, but a port of call for expertise, unique brand stories, immersive experiences and even a place to learn, create products and connect with like-minded individuals?

Accenture had invited companies to pitch their ideas for innovation to judges from the twelve participating organisations for the Accenture Consumer Innovation Awards. 170 applied and sixteen were invited to pitch – in four categories:

  • Get me into the store and spending more
  • Get me what I want and when and where I want it
  • Make ME digital on the inside, and
  • Give ME omni-personalisation

 “Ignite your senses Using all five senses, play with products and innovations curated to illuminate future scenarios we see emerging. For example…

– Experience what on-demand personalisation could mean for jewellery by trying on and designing 3D printed pieces from WonderLuk.

– For the Conscious ME millennial, brand values that align with beliefs and identity will become a given. Touch and feel a textile made from citrus peel, brought to you by Orange Fiber, one of 5 winners of the H&M Conscious Foundation’s Global Change Award.

– Experiences will start to become the product. Swipe left or right to determine your preferences and find the right food pairing to match the craft beer you select, all powered by Accenture Customer Genome and Intel.

For Accenture this was an experiment in creating processes that would support major changes in sectors – disruptions or major challenges; and so both enhance and demonstrate to potential customers their armoury of processes in the consultancy business. It is being repeated later in the year in New York and in Singapore.

Corporates, including Barclays, John Lewis, Tesco, and most notably Telefonica, have gone down the path of running their own Accelerators despite disadvantages to the startups involved. In participating in group Accelerators, including in the insurance industry, the food industry, the healthcare industry and the New Cities initiative, startups have accepted the risks that openness involved.

More an opportunity for corporates and early-stage businesses to get thoroughly acquainted than to get engaged, Accenture’s innovative new ‘immersive’ process has played on their willingness to be open and transparent. Only time will tell whether it has facilitated the development of innovations into new products or services.

John Whatmore, July 2016

A new programme from Stanford

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A programme from Stanford to support entrepreneurial venturing in organisations Designed to help technical leaders to enhance their entrepreneurship, this part-time programme in London includes a lot of work on their specific ventures

The Stanford Ignite London programme, about to start, is designed to deliver the same kind of immersive, innovative, and hands-on instruction that working professionals and graduate students at Stanford experience.

It provides exposure to both the fundamentals of management and the practical aspects of identifying, evaluating, and moving business ideas forward. It is aimed at participants with strong scientific, medical, or technical backgrounds who do not have an advanced degree in business.

Participants are taught by Stanford business faculty in London as well as those beamed in from Silicon Valley through high-definition video technology. Infosys which also hosted the Bangalore programme will host this programme at its Canary Wharf teleconference facility, using its high-definition distance video technology to deliver seamless teaching sessions from California to London.

During the programme, which runs from September to December, participants will engage with faculty and each other in interactive sessions and group projects. “This is a programme for those who are planning to start a new venture, as well as for intrapreneurs – individuals who wish to bring innovation and entrepreneurial thinking to their current role within a company,” said Stanford Ignite faculty director Yossi Feinberg, Professor of Economics at Stanford Graduate School of Business. “It provides graduate students, innovators, scientists, and engineers from leading companies the essential toolset for creating impactful ventures.”

Stanford Ignite participants have started more than 100 successful companies since the programme was introduced at Stanford in 2006. The London programme is one of seven Stanford Ignite programmes available in innovation hubs around the globe to enable audiences outside of Silicon Valley to tap into Stanford’s distinctive approach to teaching entrepreneurship and management. It is now offered in Bangalore, Beijing, Paris, New York, London, and Santiago as well as at Stanford.

The non-degree programme in London – for 50 participants – costs US$10,000 and will be held every other week on Friday evenings, Saturday and Sunday over a twelve week period. It will include training, but also a third of the time on participants’ own venture projects, which they will develop by working closely with experienced mentors and panels of industry experts from both Silicon Valley and the New York area – who will provide real-world feedback.

The programme draws on the same world-class business faculty who teach in Stanford’s MBA Programme, which is infused with the culture and practice of innovation that pervades Stanford University and Silicon Valley.

John Whatmore, June 2016

ISSUES AS THE CARROT FOR INNOVATION

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Five approaches in which identifying big issues is the carrot that leads the innovation process

Focusing on major issues rather than relying on people with good ideas is likely to be a good source for the 6% of businesses with hi-growth potential (- and Unicorns)

 Most of the commercial supporters of hi-growth businesses depend on who turns up with a good idea: just a few focus on issues of strategic, technical or sociological importance – like basic needs, lifestyles or communities.

Several industry sectors have identified aspects of the development of their businesses and then invited interest from relevant parties, including the food and drinks industry through a meeting at the Institute for Manufacturing in Cambridge, and the aerospace industry’s more extensive National Aerospace Technology Exploitation Programme, which aims to support the development of some 30 innovative technologies in the short to medium-term.

In 2014 Nesta launched the Inclusive Technology Prize to inspire people to improve or develop assistive living aids, adaptations, products and systems that will make a real difference to the lives of disabled people. The challenge prize received over 200 applications, which have now been whittled down to 10 finalists, ranging from affordable 3D printed bionic hands to an open source communication aid.

The Mayor of London’s Smart London plan has identified five priority areas: Environment, Buildings and Homes, Transport, Health, Resilience and infrastructure; and has invited applications from interested parties to pitch. Short listed companies will be selected and given the opportunity to present their innovations to leading technology investors, key decision makers and thought leaders within the public and private sector. However they must already have a demonstrable product/service, which is past proof of concept stage, and a clear business case for investment of between £100,000 to £5m.

 Vinnova Sweden’s innovation agency is moving towards a challenge-driven strategy, addressing essential or critical needs in society and industry, promoting new cross-sector collaborations and fostering systemic approaches – which address different social subsystems, framework conditions, political, commercial, technological subsystems, etc.

Nesta has been a protagonist for challenge-led innovations for some time, and has set out the best ways in which Prize competitions are being made effective, including a develop-ment period, which allows for:

*          Hack days,

*         wider public or peer commentary,

*         opportunities for peer collaboration and support, and

*         for users/purchasers to have an input into development. Moreover Nesta’s earlier work – with P&G – underlined the importance of having a buffer (100%Open an exemplar) between the ideamongers and their potential exploiters. Nesta’s work needs to be more widely exploited.

John Whatmore

March 2016

Accelerators attacking bigger issues?

If Accelerators can support hi-growth SMEs as well as startups, can they also be adapted to focus on tough problems and emerging opportunities in all sorts of fields? Oct 2014 

(http://wp.me/p3beJt-9e)

Reversing a topsy-turvy approach to a better world

Focusing on major issues rather than relying on people with good ideas is likely to be a good source for the 6% of businesses with hi-growth potential (- and Unicorns) Oct 201 

(http://wp.me/p3beJt-bx)

 

 

 

 

 

What mentees get from mentors

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What mentees get (and can only get) from mentors

Presentation to UCL Symposium, 24 February, 2016

 I have for some time been collecting stories from my encounters with mentors and mentees. So I have picked some to tell to-day. UCL would probably call me an ethnographer!

I have developed and sold a small company; I have been Chairman of a group of venture capital companies and a Nesta Associate; and I have always been fascinated with how you ‘manage’ innovation. My simple aim is to pass on to the innovation community advances that I come across.

Aggressive mentoring characterises to-day’s Accelerators. Seedcamp claims to have a thousand or more; Telefonica’s Wayra Lab 150; and Jon Bradford over a hundred. But in Incubators, they are much rarer – some of Oxford Innovations centres for example have none at all.

The rationale is simple enough: if you are creating a completely new business, it is great to have by your side someone who has done it before.

I have been asking mentors and their mentees in both startups and SMEs what mentors contributed, and what their mentees got out of them. Their answers depend on where they have got to with their new business.

 

The Conceptor

helps in identifying something new and useful The Strategist and Manager

helping to find ways of delivering it

The Technician

helping to make it function, and produce a prototype

The Marketer

helping to adapt it to users, buyers and customers

The Investment adviser

helping to find ways of funding its scaling up

And not forgetting the Mentor Manager

 

Feed-back comes top – about their new product or service – for their mentors’ ability to introduce startups and their ilk to users, buyers or customers. They can never get enough of it.

Two participants I met at the recent MassChallenge Demo Day each said that they had made use of five mentors.

David Parker, a mentor at Startupbootcamp, helped his startup to identify possible routes to market; and then introduced the team to 10 people who were possible customers – who would chat with them only because David had introduced them.

One mentee told me: ‘Our mentors gave us advice, contacts and evaluation. One told us how to approach a potential user, who to talk to, what to say and how to say it.’ (Intriguingly Wayra Lab teaches the one minute pitch, the three minute and the five minute pitch!)

Andrew Grant who mentors at IdeaLondon used to be a senior manager at BT, and for that reason was able to effect an invaluable introduction for the company he came to chair; and BT became their first customer.

Nobel Prize Winner, Physicist Richard Feynman used also to be a painter of Life models – and when he wanted to sell some of his nudes, he asked the waitresses in the local topless restaurant which of the bosses of the local massage parlours would be most likely to buy them!

 

The voice of experience comes next in importance. Jim Milby retired recently as a Director of Barclays Bank – in his locanic mid-Atlantic brogue – says he has known a few companies. He now mentors several SMEs – one of them with Startupbootcamp’s Fintech Lab. It is his extensive experience and importantly his independent voice make him highly valued – in relation to strategy AND to management.

While the team, he says, are preoccupied with driving towards their current objectives, he might be asking questions about whether it is time to change something – in the product, or the target market segment, the key customer benefits, or the strategy for getting there.

He has always insisted on having a regular review of progress – once a week ‘because it is no good getting to Demo Day to pitch to investors if you still don’t have any customers’.

Wayra Lab, one of Telefonica’s startup schools, attaches three mentors to each of its young companies, and they meet once a month along with programme staff – to assess progress in Board Meeting style.

Paul Miller at Bethnal Green Ventures does it once a week – asking about what you achieved last week, what are your pain points and what you expect to achieve next week.

YCombinator does it over dinner every week; and Watershed Bristol does it over lunch on Fridays. As one mentee there observed: ‘there is always someone around who has done just what you are trying to do.’

Advice about the team comes with the same depth of experience.

When Jim Milby began to have doubts about the length of one of his team’s runway, he insisted that they change their finance guy.

Jacoby Thwaites CEO of Sparkl here at IdeaLondon was asked by his mentor, Alastair Moore, two questions: how long is your pipeline of prospective customers; and who generates it. To Jacoby’s answer, Alistair simply said: Hire him – an exchange Jacoby has never forgotten.

And when Bill Clee here at IdeaLondon, had won two big projects, his mentor Andy Mulholland, an ex-CTO at Cap Gemini, helped him to sort out his back office and appoint an Operations Director and a Sales Director in quick time.

 

Making it work. Joe Rabin is Technologist-in-residence at Wayra Lab – highly appreciated for his help to participants in building their products and services.

Trained as an engineer, he is something of a technical polymath. Many of the participants, he says, need help with their IT.

On one occasion, he spent the entire week-end with a team whose developers had just jumped ship, helping them to reshape their strategy and get back on track.

Azita Esmaili helps young businesses to adapt their structure and their organization to their IT strategy – both at IdeaLondon and at MassChallenge.

 

Advice about investment is harder to come by. Many finance mentors are with the banks, but the banks are no longer lenders of this kind. And new sources of finance abound, but comprehensive advice about them is hard to find.

For example, Crowdfunding can be a nightmare. My father was a city expert in Prospectuses and would be turning in his grave; and my son rejected this route for his SME because of what is needed to service 40 or 50 shareholders.

A guy who once participated in one of my Learning Groups had designed and prototyped a 3D copier. He used Kickstarter to get almost two hundred pre-orders for his 3D copier; and their payments funded manufacture.

Sussex Innovation Centre has on its staff a guy (actually an ex-bank manager) who runs a local Angel network.

What is certain is that funders inevitably take time to get to know your company, and they take time to complete any deal.

Perhaps the best single mentor to have is a potential investor with experience in the field in which you are operating.

 

Lastly, I come to the role of Conceptor. It is this guy in whose hands it is to raise the entire status of the entrepreneurial revolution. IT-based new businesses are quick and cheap relatively speaking. But Healthcare, public services and education for example have hardly been touched yet.

Here are three inspiring leaders who work at the very front end of innovation.

Jackie Ying started at MIT. She has always encouraged her students to tackle projects that have commercial prospects as much as academic benefits.

In one such project, in order to create a platform for delivering insulin to treat diabetes they used the same technology her MIT lab had used to make a nano-emulsion to coat the turbines in jet engines. They sold it for an undisclosed sum to Merck.

Later she founded her own Bioengineering and Nano-technology laboratory in Singapore, and over the last 12 years she has generated more than 300 patents, 80 licences and 8 startups. A Conceptor par excellence.

Ian Downey is another Conceptor. At the European Space Agency, he puts consortia together for innovative projects enabled by Satellite technology.

To combat the recent sharp rise in Lyme’s Disease he had brought together researchers into malaria in Africa and in the UK, GPs and hospitals in Scotland, and pharmaceutical companies – in a project funded by the ESA at Harwell.

Steve Blank in the States runs nine-week Boot Camps designed to teach business skills to entrepreneurial scientists in technology-based startups – a bit like Accelerators. Since 2011, some 500 teams have taken the course.

His ‘Innovation Corps’ programme has been adopted by the National Institutes of Health and has now been backed by the National Sciences Foundation.

It has inspired new approaches in a variety of other similar bodies in the US and has recently been adopted in Imperial for startups based on synthetic biology.

And Wayra Lab has been asked by Oxford’s Isis whether they would set up a similar programme in Oxford.

 

Not forgetting the role of mentor manager.

Thibaut Rouqette, the Mentor Manager at Startupbootcamp’s Fintech programme made himself continually aware of the mentoring needs of each and every team all the time; and equally aware of the expertise of all the hundred or so mentors; so that he might take a good stab at who to introduce to whom and when.

He could even find you an expert on payments in sub-Saharan Africa! But there are very few who play this role.

 

Mentors remain undervalued and undersupplied. Under appreciated largely because it is only after the event that their value becomes so evident. And undervalued because they are only just beginning to be recompensed.

In the early days, the mantra used to be: never adopt a mentor who wants to do it for money (does that necessarily taint everyone?); but these days, as I discovered recently while I was recruiting a mentor for an e-commerce business, the norm seems to be around 1% of equity – no doubt over a period, or in options.

And choice of mentor is often the outcome of a momentary interaction – startups won’t give time for anything longer. While programmes used to depend on someone’s large address book – Reshma Sohani, Jon Bradford or Nektarios Liolios, to-day organisations like Startupbootcamp run more extensive processes. The recruitment and development of a mentor bank is up to the mentor manager. I am just offering my services to a charity – the Rainmaking Foundation, and I shall be very interested to see how they do it.

Above all else it is their different perspectives that makes mentors so valuable, and so essential especially in incubators and research organisations like Harwell; and in Universities.

 

John Whatmore

February 2016

 

 

 

 

 

A lab head and product developer

Aside

A lab head and product developer

She encouraged her students to tackle issues that could have commercial appeal as much as scientific value, and helped them to realise their commercial capabilities as well as produce great science. (Science 12 June 2015)

Jackie Ying was eager to push her already productive lab at MIT into the life sciences. Todd Zion was first attracted to her lab because of her fanatical work ethic, and her business-minded approach appealed to his nascent interest in becoming an entrepreneur – she says that every graduate student should tackle a project not only of tremendous scientific interest, but also of great commercial potential.

He was asked by Ying to see if the same technology her lab had used to make a nano-emulsion to coat the turbines in jet engines could create a platform for delivering insulin to treat diabetes. He spent two years trying to find a material that prevented the insulin from leaking out before he realised that the secret lay in chemically modifying the insulin itself. The discovery led to SmartCells, a company he and Ying co-founded in 2003, which was later sold to Merck for an undisclosed sum.

His business savvy drew the attention of Lita Nelsen, the longtime director of MIT’s technology licensing office because of the way he had run the company as a tight operation, and he was soon back starting another company with his former colleagues.

Ying says that roughly a quarter of her MIT students have founded companies or gone to work for a startup, but she has chosen not to take that path. ‘What interests me’, she says ‘is bringing the technology to a certain level where you can spin it off and then playing an advisory role to make sure that things are running smoothly.’

Andrey Zarur, one of Ying’s first graduate students who developed the technology that Zion later modified to create SmartCells says Ying ‘would take me with her on visits to companies to get funding for the lab. And I would make the presentation. People thought she was taking advantage of me because she made me do three PhD projects, but this was preparing me for the life I want’.

Ying went on to become the founding director of the Institute for Bioengineering and Nanotechnology in Singapore (‘IBN’) – to spread the twin gospels of top-flight research and entrepreneurship that she had learned at MIT. Her record over the past 12 years suggests that she has done exactly that. IBN has generated more than 300 patents, 80 licences, and eight startup companies.

Sometimes, she suggests, faculty members need help in finding a project with commercial promise, and sometimes she needs to find partners in industry to help with a project. Overall she hopes to find a way for IBN to help nurture new companies without losing all the scientists who did the technology’s foundational work. ‘We will continue to help the firms with research’, Ying says, ‘and maybe they will give us not just royalties but some shares to the people involved.’

John Whatmore, February 2016

Related news:

* It is rumoured that Telefonica’s Wayra Lab is in discussions with Isis, Oxford University’s technology transfer organisation, to set up a unit in Oxford like that of the former’s Accelerator in London.

* Imperial College now has at least four accelerators, each in a different field, each designed to encourage an entrepreneurial environment alongside high quality academic research and teaching. (A full description of these will appear shortly in my blog series.)

Ten trends in the doing of innovation

Aside

Ten trends in the doing of innovation

In the world of innovation, I see increasing maturity, and shifts – in targets, (item 1), in leading players (item 2), and in supporters (items 3 and 4); but a continuing belief in Unicorns.

*         Attacking bigger issues: various approaches to challenge-led innovations

*         Accelerators migrate to new sponsors – charitable foundations, corporates and                                        even universities

*         Mentoring becoming more commercial you pay; but how do you find?

*         A programme of support for v hi-growth companies A new support          programme for 50 hi-growth companies; while the Government folds the Business Growth Service

*

Attacking bigger issues

Challenge-led innovation is a difficult topic because the range of possible challenges is so wide. In several sectors there have been Open innovation events where leading companies have pitched their challenges to potential innovators. Nesta has focused on Prize-led challenges. Vinnova, the Swedish Innovation Agency, has focused on critical needs in society and industry, promoting new cross-sector collaborations and fostering systemic approaches. Innovate UK has focused on challenges and grants for strategic product development; and Silicon Valley’s Singularity University focuses simply on what might work for you.

Accelerators migrate to new sponsors

Accelerators have continued to flourish despite the entry of several charitable foundations that have reduced the cost to participants (in equity sought, and by paying more expenses). Corporates have adopted them with a vengeance despite the moderate chances of returns, and the smaller attraction to participants – in terms of finding ongoing funding (see Nesta’s report: nesta.org.uk/winning-together.) And interest is stirring in universities (notably in Imperial and Oxford).

Mentoring becoming more commercial

The mentoring weather has changed. It used to be: ‘No mentor who expects to be paid is worth his salt’, but nowadays there is virtually no such person to be found (except in Accelerators (in Incubators and their ilk they remain – for some reason – rare.)) The standard fee appears to be around 1% of equity, but finding the right mentors is still an issue. I resorted recently to encouraging two CEOs with complementary needs and skills to mentor each other! (The 24 Feb meeting of UCL’s INTER-CEP Symposium Series in London is on Mentoring – it still has places.)

A programme of support for v hi-growth companies

Growth Builder is a new, independent 12-month programme of support for 50 hi-growth companies – that provides tutor groups, workshops with hi-growth founders, networking events, introductions and other events to inspire and inform. The Government’s abandonment of the Business Growth Service (which provided access to mentors for businesses with hi-growth potential) seems more than perverse just at the moment when Innovate UK had begun to roll it out to its grant winners.

John Whatmore, February 2016

See http://johnwhatmore.com for recent commentaries on:

  • innovation centres – in Sussex and Oxford
  • mutual support groups for senior executives in SMEs
  • The latest and largest co-working space in Europe is in London
  • Five different kinds of mentors – all of whom you may need

 

A UNIQUE FORM OF SUPPORT FOR EXECUTIVES IN SMEs

Aside

A UNIQUE FORM OF SUPPORT FOR EXECUTIVES IN SMEs

These mutual problem-solving and support groups for senior executives in well-established SMEs would be beneficial in every incubator, science park, innovation centre and tech hub. All they need is a good facilitator.

Next up: Oxford Innovations – a major source of incubator space in the South East, but one that provides meagre support for occupants.

‘Vistage’ forms groups of senior executives from SMEs, each group of about a dozen people, who meet regularly to help each other to:articulate their issues (‘what is your biggest pain point?’)

  • clarify their thinking (‘what is its root cause?’)
  • identify possible solutions (re-motivate/hire/fire?)
  • and to hold them accountable (‘What are you doing about it?’)

(- comparable to the Belgian Plato programme (see below.)

It now has some 1000 members in 70+ such groups in the UK. Big in the US where it started several years ago, it now operates in 16 countries with over 20,000 members.

Each group is of about a dozen senior executives, all with similar levels of responsibility. (Groups in the Plato programme are matched both for function (eg marketing/finance etc) and by industry.) Vistage runs some for large SMEs (£4mn+ turnover); some – on a smaller scale – for smaller SMEs; and some for ‘key directors’.

They meet on each other’s premises, normally monthly, for a full day, in which they draw from each other’s experience. The centrepiece of the day is for two (or sometimes three) members of the group to bring a key issue to the table, by:

  • stating succinctly what it is
  • saying why it is important
  • and indicating their ideal outcome.

Other members of the group then ask questions to get to the heart of the problem (diverse thinking being encouraged) until in a final round, each person proposes their solution. Only then does the problem-owner comment, and say what he or she will now do.

Most meetings will start with a presentation by a well-recognised speaker – on a relevant topic; and may finish with a general discussion on a common or topical issue. These groups have a life of their own, including an annual retreat; and this life is itself managed by the group.

Between meetings of the group, each of its members has a coaching session with the Chair of the group, focusing on their current major challenge; and helping them to make decisions about what they will now do. Those who were in the spotlight at the previous meeting will be asked what have they done since; and they will be asked again at the next meeting of the full group.

The nature of these groups consists in:

  • willingness to accept vulnerability
  • the sharing of issues, experience and ideas
  • and the acceptance of challenge.

Openness to these qualities is the overriding requirement for joining any group. Group Chairs have a crucial responsibility for putting groups together, for which they depend on their interviews, though some candidates may attend the Speaker workshop part of the meeting as a guest, and sometimes they join for a trial period.

Candidates come from several sources and have to be invited by the Chair – to ensure that they’re right for this kind of meeting and for the specific group. (To ensure openness and confidentiality, no group can include competitors, suppliers or customers). The fact that most group members sustain membership for long periods of time makes it clear that these groups have a role that is different to any other relationship in almost any organisation – whether with directors, colleagues or subordinates – essentially because of their intimacy (they could be said to be addictive and comforting – a bit like the confessional!)

The group Chair is of course responsible for sustaining the life of the group, for organising and facilitating the meetings of the group, and for the one-to-one coaching sessions between each of its meetings. Vistage carefully selects Chairs, and runs training and development courses and events for them. The expert speakers are equally carefully selected and only retain their Vistage accreditation if the members score them highly.

In addition to the group meetings and 1-to-1 coaching, Vistage also runs a series of exclusive keynote speaker events throughout the UK – to further support the development of group the members, but also to help them develop their teams.

It is evident that Vistage supports growth in the businesses concerned (apparently three times that of the average SME), just as it also helps to allay the stresses in those involved.

The main advantages of this well-established model (which is not unlike that of Action Learning) is that it:

  • focuses on major issues
  • brings to bear on them a wide range of thinking and experience
  • encourages decisions and action
  • enables close relationships with a number of fellow travellers
  • and provides comfort and re-assurance.

However, it does not necessarily provide advice related to the specific context of those issues (eg the sector), nor from people with closely related businesses.

January, 2016

A comparable programme:

AN OPEN INNOVATION LEARNING NETWORK – FOR SMEs AND OTHERS

I have just returned from a two-day workshop in Belgium about mentoring small groups of senior managers in SMEs, who meet together regularly to draw on each other’s experience, and with the support of mentors – a striking example of collaborative enterprise. Set up by a passionate individual in East Flanders Chamber of Commerce, it has been running for twenty years and has now been seeded in at least fifteen different countries. April, 2012. http://wp.me/p3beJt-H