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Accelerators or Incubators – or combinations?

Flexible and adaptive development, challenge and support are what is required for hi-growth young businesses.

 IT is revolutionizing or disrupting many sectors of the economy and providing opportunities for endless innovations. And as it does so, first-mover advantage has been an important asset, and speed of development has become an increasingly vital element. While Incubators provide valuable spaces and an umbrella for SMEs, Accelerators (12-week managed programmes of intensive development for a small number of early-stage businesses, all working beside one another, and with fulsome support) aim to provide injections of development.

 Incubators provide flexible accommodation and basic services for SMEs, while Accelerators aim to provide 18 months of development for dynamic young businesses in the 3 months or so of their programmes; and they differ in two main respects: pressure and support.

While Incubators have no time limits on their occupants, Accelerators calibrate their progress and provide at the end of the period an opportunity to present their case to investors – for further funding. And while Incubators are reactive – they may have access to a range of advisers, available on request, Accelerators are proactive – they work with their young businesses to help them identify the advice or support they need, and then find it for them.

The reality is that different things are important at different moments and for different stages of growth. Most valuable is to have access (and not just the one-shot injection that the Business Growth Service provides to its adherents) to people with a depth of experience in the long-term growth of young businesses – a changing quorum of experts in a non-executive role. The big new co-working spaces like the 3,000-seater new WeWork building in Moorgate London (or for that matter the new Crick Institute at Kings Cross, and even the Harwell Campus), would benefit from having a number of such experts on tap, and ready to take up that role.

They can also mediate access to specialist mentors and advisers, and they are also in a position to bring together from time to time those businesses with similar growth issues and in similar sectors – to learn from each other’s progress and experience (like the Belgian Plato programme, http://wp.me/p3beJt-H) and like Wayra Lab – the Telefonica Accelerator http://wp.me/p3beJt-s). And they can run sessions of intensive assessment (like those run by the Sussex Innovation Centre) and short periods of intensive development (like Hackathons http://wp.me/p3beJt-aU).

The other crucial difference between Accelerators and Incubators is that you pay for the former in equity, and for the latter in rent.

For an analysis of the several roles that supporters play, see “Managing Creative Groups – how leaders develop creative potential in their teams”, Chapter 9, How leaders provide support. John Whatmore, Kogan Page, 1999.

 John Whatmore

December 2015

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An Accelerator’s Mentor Day

I am a fly on the wall at an Accelerator’s Mentor Day
Experiments like these – in mentoring – might be as productive as any in the support of innovators in action.
Lucky as I was to be welcomed to Fintech’s Meet-the-mentors day last week, I listened to the ten teams pitching to some of their potential mentors and I could also be a fly on the wall at their subsequent small group and one-to-one meetings.
Startupbootcamp had previously held a Mentor Day (mentors numbers were in a ratio of slightly under ten to a team), to invite them to consider their availability and depth of involvement, and with the help of startup mentor-matching app eRipple, to write alongside their photos about their experience, motivations and expertise (hopefuly searchable by key workds), with the aim of developing capability in matching. (The research project hopes later to include aspects of personality.)
All of these teams were established SMEs with existing products that could be relevant to London’s banking industry, for which the 12-week Fintech Accelerator programme was grooming them. Several of them are dealing with customers whose risk profile or with markets which are currently outside the banks’ normal range of business. They were looking to adapt their products to the needs of this market.
Many of these teams came from overseas and hence were seeking introductions to elements of the UK market. In their pitches, some of the teams made no mention of their mentoring needs, some mentioned them in outline; and one or two – in extensive detail.
One team found the small group meeting too diverse to enable them to focus in enough depth on aspects of their mentoring needs. Another found itself with repeated small group meetings in which it could elaborate on its business. At each group meeting, potential mentors and teams could make appointments to meet later on a one-to-one basis.
The received wisdom is that the best among mentors are those who have ‘done it before’, either launched a new business or mentored one (or more) – or both; and everyone recognises the importance of ‘getting on well together’.
I eventually divided the mentors I met into five types.
Specific contributors. Among these were specialist experts, technical ‘challengers’, sector merketers, and ‘introducers’ ie to individuals in intermediaries or among potential customers or users.
Coaches. Providers of help in identifying and focusing on the best objectives and lines of attack from one moment to the next as the venture moves forward.
Advice givers. Providers of their opinion about what they heard. Most effective when well-grounded and undogmatic, but difficult if in conflict with the opinions of others (eg grounded on different experiences, contexts or values.)
Supervisors/facilitators. In close and frequent contact, asking regularly about progress and plans, obstacles and learnings; often with fat adddress books from their extensive experience, and willing to make instant introductions.
General contributors, including people who were groping their way to how they might be able to help, among them people who were running or had run other Accelerators.
I saw one participant being offered advice (I think to the effect that he should do more extensive tests of customer reactions) by a didactic and rather imposing mentor. As he left him, he passed me muttering ‘f…… c…’! The mentor later button-holed me to tell me, in triumph, that this guy had returned to make another appointment with him. I hope to discover who then said what to whom!
Serendity at its most evanescent!

John Whatmore
Sept 2014

UK Innovation needs leaders

Aside

Initiatives in Innovation in the UK need to be more actively analysed and followed on

Yes, we have an organisation whose role it is to chart the way forward for UK Technologies (the Technology Strategy Board), but none for doing so for UK Innovation (Nesta’s focus is research more than development). An analogy from horse racing (first item below) prompts ideas about where Innovation would be most profitable. In the meantime, innovation is led by whatever initiatives happen – see below: initiatives corporate, academic, in social enterprise, via new enterprises, and less surely, by initiatives in public funding.

Applied Creativity Briefings from John Whatmore at

The Centre for Leadership in Creativity November 2013

john.whatmore@btinternet.com

 Join the discussions at https://johnwhatmore.com/

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Profiting in times of extreme uncertainty: an analogy from the turf  We asked some expert punters how they would make money in horse-racing if:

  • race courses and races were changing from day to day (ie the business environment changing rapidly);
  • there were many more horses in training (ie more competition);
  • horses were strikingly more ‘trainable’ (ie innovations becoming more common and more radical);
  • owners and trainers were preoccupied with trying out new ways of getting the best out of their horses? (industry increasingly preoccupied with innovation).

Their answers included:

  • bet on more horses (ie increasing one’s chances by spreading one’s risk);
  • bet your money on trainers (ie backing skill/expertise);
  • invest in a horse transport business (ie services to participants);
  • buy a bookmaker! (ie services to backers).

(Originally published in Applied Creativity, May 2010, and still more relevant!)

 To Accelerate or not to Accelerate: that is the question

While it will be impossible for some time yet to prove that Accelerators are effective, the likes of Google and Microsoft are busily betting on their future. (http://wp.me/p3beJt-6O)

Small, elite university incubator launches into new space

Focusing on a small number of technologies that are ripe for commercialisation, and a small number of students or alumni with an interest in entrepreneurialism whose careers it seeks to advance, the Incubator of Cass University Business School has a new home which is unique in having alongside it a co-working space where students and alumni have the opportunity to be matched up with Tech City entrepreneurs. (http://wp.me/p3beJt-6o)

US non-profit ‘Village Capital’ has a different perspective on social enterprise: objectives first, resources next

Village Capital sees capital as a resource in the service of its mission rather than as a determinant of new businesses; and puts projects and teams together on the basis of what will best achieve the social objectives it espouses. (http://wp.me/p3beJt-6K)

Dreamstake, the free website for aspiring entrepreneurs which measures their progress, is growing, and expanding its offering; and it has done some diagnostics

Dreamstake, a fast-growing free interactive startup platform for entrepreneurs which has a rating feature that acts as a marker of their progress has added regular educational events at Google Campus in Tech City. And some recent statistical analysis reveals aspects of their businesses. (http://wp.me/p3beJt-6H)

Universities are being dragged into more commercialisation of their research

A small but elite conference brought together by new publication Global University Venturing indicated areas of progress as well as areas of obduracy, but added urgency to the task. (http://wp.me/p3beJt-6E)

Professionalising the playgrounds; and thickening up the pot of post-Accelerator funding – EU funds for London Accelerators

For participants in sixteen London Accelerators, funding has been promised – to pay for mentors and others supporters; and for co-investing in new businesses exiting these Accelerators. But this omits other possibilities. (http://wp.me/p3beJt-6R)

 

The Centre for Leadership in Creativity (a ‘virus for creativity’) carries out research and provides consultancy and peer-to-peer learning for organisations looking to enhance their creativity and innovation.

Copyright John Whatmore 2013

The Centre for Leadership in Creativity                            138 Iffley Road,London W6 OPE                 

Tel: 020 8748 2553                                                 E-mail:  john.whatmore@btinternet.com

Extra funds for London Accelerators

Aside

Professionalising the playgrounds; and thickening up the pot of post-Accelerator funding

For participants in sixteen London Accelerators, funding has been promised to pay for mentors and others supporters; and for co-investing in new businesses exiting these Accelerators. But this omits other possibilities.

Accelerators use ‘mentors’ for a variety of roles – from acting as supervisors, as contributors of their specialist knowledge or expertise, as advisers – about strategy, business model, proposals and plans, and as door-openers – especially to potential partners, customers and funders. And the art, and it is very much an art, lies in enabling them to make their contribution at the right moment – when the participants recognise the need and/or when the ‘mentor’ does so. There are also those who lecture, teach or coach, or just tell their own War Stories. Seedcamp boasts a thousand mentors; Springboard a hundred and fifty; and Bethnal Green Ventures some sixty.

So far, those who manage Accelerators have called on their friends and contacts, on those who support the world of entrepreneurship, and increasingly on their alumni to act as their ‘mentors’; and the latter have all responded to these calls. In Silicon Valley the network of such people is enormous and very responsive: everyone seems to know everyone and word is passed round quickly and effectively; but here in London, they are fewer and in less close contact with one another. EU funds have now been promised (via the GLA, Enterprise Capital and London Business Angels) to sixteen London Accelerators to pay for these people.

By comparison the folk of Silicon Valley are pleased and happy to pass the word around simply because they are interested in innovative businesses – a community for whom the fascination of working with and talking to and about start-ups is sufficient.

These funds will no doubt generate a host of ‘consultants’ big and small, who will offer their services because there is money to be made out of this burgeoning scene. But they will not be the first choice of aspiring entrepreneurs because the best supporters will be those who are not in it for the money; and the entrepreneurs will recognise this. Second rate Accelerators will attract second rate ‘mentors’; and it must be doubtful if this will promote the start-up scene to its best advantage.

Less controversially, the EU is also the source of funds promised for co-investing under arrangements with those who are putting money into new businesses that are exiting Accelerators (many of them angels and quite small funds – the most successful of which will have worked with the Accelerator over a period in getting to know their targets). This is designed to increase the size of such funding packages, which will lengthen the runway for these businesses and give them a better chance to establish themselves. Yet at this point, many are left without the support that they have enjoyed and with which they would very much like to be able to continue.

It is disappointing that funds have not found there way to spreading the Accelerator concept into new fields such as for high growth SMEs, for commercialising Intellectual Property, and for supporting innovation in local industries and in public services.

To Accelerate or not to Accelerate: that is the question

Aside

While it will be impossible for some time yet to prove that Accelerators are effective, the likes of Google and Microsoft are busily betting on their future.

Nothing better illustrates the dilemma that innovators face than the fact that it will be impossible for several years yet to prove the value of Accelerators – short periods of intensive development for selected cohorts of teams, working closely together, along with a host of supporters – yet it is a model being rolled out by leading companies.

Engagement, enthusiasm, funding, alumni and followers all give a rosy feeling to the Accelerator concept; and in spite of their rapid proliferation in the UK and Nesta’s admirable financial support of early adopters, Nesta’s experts are deeply cautious about its future.

Yet September saw Google announcing that it is building a network of tech entrepreneurs in seven North American Cities. A spokesperson commented that they have been incredibly impressed with the catalyzing impact that tech hubs have had – helping startups to grow, and creating jobs in local communities in the process. The aim is to ‘create a strong network, providing each hub with financial support alongside access to Google technology, platforms and mentors, and ensuring that entrepreneurs at these hubs have access to an even larger network of startups.’

September also saw Microsoft offering technology startups in the B2B, consumer and gaming sectors the chance to apply for its Accelerator programme in London. The chosen entrepreneurs will take part in a 12-week programme to help grow their businesses through mentorship, access to resources and technical assistance. The Accelerator is looking for 10-15 startups developing technologies in financial services, electronic retail and commerce, gaming, big data or enterprise software. Microsoft will not be taking any equity in the companies, but will maintain relationships with startups through an alumni programme after they “graduate” the Accelerator. During its pilot the Accelerator will be based at Central Working in Shoreditch.

Microsoft also feels that startups are suffering due to a severe skills shortage. The companies are struggling to find talented developers to work with in the UK, which is preventing business growth. This developer shortage can be blamed on the increase in B2C companies that have ventured into the software business taking the talent with them. Microsoft actively tries to solve these problems by running roundtables and workshops to introduce developers to new Microsoft technologies.

Despite the skills shortage there does not seem to be a shortage of energy in the developer ecosystem. “There’s still plenty of buzz and excitement around it.” And that is the dilemma.

‘Supporters’ becoming more integral to Accelerators

Aside

Advisors, Speakers, Mentors and other specialists are getting more and more involved in Accelerators; but generalists, polymaths or iconoclasts should not be excluded

Discussions at the Accelerator Exchange Forum that we held recently in London showed how ‘supporters’ were becoming increasingly involved in Accelerators (see http://wp.me/p3beJt-5W), so it was no great surprise to read in a recent e-mail how Wayra Lab was defining these different roles.

“The role of the Board Advisor is to act as in an advisory capacity for a specific team or project. We ask Board Advisors to be active participants in the acceleration of the specific team; being available on an ad-hoc basis, attending Board Meetings and facilitating network opportunities.

The role of the Masterclass Speaker is to provide inspiration, expert knowledge and opinion on a specific subject matter.

The role of the Mentor is to be available to act as a sounding board for the start-ups, pitches and new ideas.

The role of the Surgery Mentor will be to run at least one half-day open surgery per year on a specific theme/topic to which the project teams can book face-to-face consultations.”

Among the most popular speakers are those who tell the story of their adventure in their own early-stage business – whether it was a miserable disaster or a grand success.

The analysis above omits one role that is capable of lifting the whole process, of breaking the mould, of creating genuinely disruptive innovations: that of presenting ways of looking at similar problems in different contexts, epitomised in EPSRC’s Sandpits – by sessions with poets, ethicists, IT experts et al, but also for example by people who simply work in different fields such as theatre, sport or art (‘Ideas via Intermediaries’ is a collection of nineteen brief stories about breakthroughs of this kind – available on request).

Moreover, some would say that there are several different roles for mentors: one is to provide regular ‘supervisions’; another is to act as confidante; a third is to be available for his/her particular knowledge and skills; and the fourth is to be able to provide contacts and introductions. And different roles have different places in the course of Accelerator programmes as the business concept reaches different stages of evolution.

Another correspondent tells me that he became concerned that as a mentor he was simply being used by a certain Accelerator. There clearly has to be some give-and-take, and the ‘take’ must consist of opportunities to invest (or for paid work/ advice).

So it also comes as no surprise that providing just the right support from moment to moment to entrepreneurs with their ever-changing needs is a sophisticated management role: detecting their needs and organising to meet them is like tending the growth of a very fragile plant.

Jw/October 2013

Applied Creativity Sept 2013

Aside

The task of bringing innovations into widespread use needs to have as much emphasis as the development of new technologies or their new products

Processes of innovation do not attract the interest that new products and services do, so we should celebrate the new Level39 at Canary Wharf, a fast-expanding hub of creativity focusing here on financial services and retail, but a model that could find a place in other ‘clusters’; and Angel investing continues to thrive and expand, as do start-ups and Accelerators.

The UK rates highly as a centre of innovationism, with well-identified technological foci and a strongly developing entrepreneurial culture. But while we are plagued by new offers, new deals, new apps, we remain desperately slow to bring major innovations into being, such as HS2, new sources of energy, new airports, new systems (eg in the NHS and in government). Leaders say that innovation is their top priority, but they don’t seem to deliver.

 

 

 

 

 Applied Creativity September 2013

Briefings from John Whatmore at The Centre for Leadership in Creativity

 

 

 

 

john.whatmore@btinternet.com

Join the discussions at https://johnwhatmore.com/

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Level39, Canary Wharf – a throbbing new Innovation Centre

This unique tailor-made innovation eco-system has been carefully designed to meet the varied needs of those who are looking for innovations and those who are seeking to develop them in this part of London; and to bring them together in successful collaborations. What it does and how it does it might have some useful lessons for all those involved in innovationism.

(http://wp.me/p3beJt-65)

Angel investing taking yet more steps forward

Now far from its origins as a side-line for rich single investors, angel investing is becoming a collaboration between different contributors and the UK Business Angels Association – a major supporter of fast-growing young businesses.

(http://wp.me/p3beJt-5S)

 YCombinator a unique experiment

A recent article in the Times (27.7.2013) about YCombinator – as an archetypal Accelerator, emphasises some of its seemingly nuttier aspects; so what do they tell us? (http://wp.me/p3beJt-6d)

Managing to-day’s Accelerators

At a recent Workshop I ran with people involved in Accelerators, it was clear that Accelerators are becoming more institutionalised. They are no longer one-offs, they are part of continuing programmes; they are working with more established entrepreneur ‘teams’; Accelerators are no longer being managed by just one or two individuals but by teams; and they are involving a wider cohort of followers. Moreover they are developing fast. (http://wp.me/p3beJt-5W)

‘Supporters’ becoming more integral to Accelerators

Advisors, Speakers, Mentors and other specialists are getting more and more involved in Accelerators; but generalists, polymaths or iconoclasts should not be excluded. (http://wp.me/p3beJt-6f)

Managing Bubbles

The government would like to discourage ‘bubbles’ caused by overheating, but to encourage others where they are the green shoots of the future. How can they do so? (http://wp.me/p3beJt-61)

Calibrating my Raspberry Pi – my own ‘Outrage Meter’

I don’t need the Press any more: I have found a computer which I can programme to deliver just the items I want that will give me my regular dose of outrage instead of reading the media! (http://wp.me/p3beJt-6h)

 

The Centre for Leadership in Creativity (a ‘virus for creativity’) carries out research and provides consultancy and peer-to-peer learning for organisations looking to enhance their creativity and innovation.

Copyright John Whatmore 2013

The Centre for Leadership in Creativity                         138 Iffley Road,London W6 OPE           

Tel: 020 8748 2553                                             E-mail:  john.whatmore@btinternet.com