Re-shaping support for SMEs

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Making the most out of young businesses Lessons are arriving from all sides about early-stage businesses (Village Capital, Nesta, Scaleup Institute, Growth Builder, IDEO). What do they tell us? Shouldn’t Innovate UK be taking a bigger role in the support of innovation practice?

 Most striking is the extent to which Accelerators – a fast growing phenomenon – have become the province of corporates. They force new businesses to focus not just on good ideas but on important (commercial) issues; they know their own field – its problems and opportunities; they provide invaluable support; and they are willing and capable investors (Wayra Lab, Cisco, John Lewis, and many others.)

However, this does leave great swathes of the population and of the economy untouched by support for innovation eg the public sector, several industries, large parts of the country and the everyday lives of most people. The Nesta report identifies some; and Geoff Mulgan, its Chief Executive, has focused on others, not least in the public sector.

The main sources of funding for Accelerators are now Corporates, the Public sector and Philanthropics. Venture Capital is a source for only 8% of Accelerators (and 2% of Incubators). The Nesta Report reveals that in the UK both Incubators and Accelerators rely heavily on public funds – from a variety of sources (in many areas and sectors for a substantial proportion of funding and in some, completely.)

It is now well recognised that the greatest opportunity for the development of entrepreneurial eco-systems is in ‘sectors that have a deep and local focus’; and the Scaleup Institute is busily working with LEPs to help them to do so.

However, innovation strategy and practice are evolving; and there is still little experienced management of proactive support.

Recent research by IDEO revealed something surprising: neither a more traditional approach to product development – coming up with three good options, analyzing them, and choosing one to move forward with, nor the lean startup approach – taking a best guess, piloting it, and then pivoting based on what works – is the most effective way to launch a new product. Instead, when teams iterate on five or more different solutions, they are 50% more likely to launch a product successfully.

‘Entrepreneurial support organisations are critical infrastructure for cities, communities and for corporates; and they too need clearly articulated support’ says Village Capital, a major US philanthropic business. The most common form of support is mentoring, but the promotion and management of mentoring (and of support in general) is a role that is extremely rare, but much needed, and rarer in Incubators than in Accelerators. Moreover a different format of support programme is also emerging – in the form of regular monthly meetings – especially of hi-growth businesses – based round collaborative learning.

There is at present no body that adequately encompasses Incubators and Accelerators – to help steer policy, identify best practice, and foster training and development in innovationeering. Innovate UK should take urgent steps to create an appropriate KTN.

John Whatmore, May 2017

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National Virtual Incubator has untapped potential

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The National Virtual Incubator has vast untapped potential
It can provide intimate learning opportunities with specialist experts – without the need for travel: bringing together startups and experts that have interests in common with the flick of switch (and a bit of organising).

Cisco’s National Virtual Incubator is effectively a number of inter-connected local mini-studios, each strategically located in innovation centres such as science parks, incubators, innovation spaces and universities (currently 13 nodes). Their focus is on startups and early-stage ventures; and their aim is to provide opportunities to showcase and make use of each host’s activities and expertise. (Many solutions are inspired by similar problems from other domains.)

It was described as a bit like engaging with a TV – or as Skype-like conversations writ large, able to project several individual participants at the same time, or groups of participants, and to organise and moderate discussions among the participating nodes: participants can be as little two in each location and as many as a hundred or more. It has the potential to provide intimate learning opportunities with specialist experts – without having to travel more than a few yards!

Currently each month one node runs an event; recent ones include:
• Angels and VCs joining in an Investor Panel to discuss what they were looking for and what is on offer for investors in early-stage ventures – such as the EIS and SEIS schemes; to talk about pitfalls in raising funds and to offer their help.
• The Digital Catapult Centre has run in information session on MassChallenge with the University of Strathclyde and The Landing hub in Salford.
• The Swansea node ran an event on Big Data.
• Ten startups across a number of nodes came together to discuss the creation of mobile apps.
• The Sunderland node joined with InnovateUK to talk about the latter’s activities and offers, and about the launch of the local Digital Catapult Centre.
• And on two occasions, IdeaLondon has run events where customers were brought in and SMEs pitched their problems to them – looking for solutions.

It is ideal for bringing together those in the same field who are in different places (1); and for bringing together experts in some field with potential beneficiaries who are in another part of the country or even in another country (2) – a sort of magic conference.

Started less than two years ago, it is on a steep leaning curve. The hardware is provided by Cisco and the dedicated space and the management are provided by the local host. There is an NVI website, which is evolving and becoming better known; and each node has ‘lead’ participants who meet twice a year to co-ordinate the activities of the network and identify good examples to showcase [where leaders of Accelerator programmes, VCs, InnovateUK and the Digital Catapult could also have a useful contribution.]

(1) BT Labs use electronic conferencing facilities
BT Labs has equipped many of its development teams with large plasma screens, interactive white boards and video conference facilities (round one half of a circular conference table with the project team round the other half), enabling their members to conference or ‘hothouse’ (a sort of BT Hackathon) alone or with fellow teams eg in Ireland or Bangalore.

(2) ‘Mentor Managers’ can work miracles for startups
Above all else, early-stage ventures need their hands holding in their new adventures, but they have no idea about whose hands to hold. Mentor Managers find experienced and expert mentors by searching on the internet and linking up with them by Skype. http://wp.me/p3beJt-9R Jan 2015

John Whatmore
March 2015
Website: http://johnwhatmore.com

A new incubator with a difference in Tech City

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IDEALondon, a new incubator space in London’s Tech City, opens this month  (Dec 2012), an unlikely alliance between Cisco, DC Thomson and University College London, which furthers UCL’s far-sighted objectives and strengths – – in entrepreneurship. (For comparisons, see final para.)

IDEALondon enables twenty early-stage businesses to be co-located for up to nine months – primarily for launch and trials, as pre-cursor to seeking investment etc. (early-stage businesses are nowadays more often looking less to build something – the means of creating a website or an app are relatively easy to come by – than for customer validation and trials, which IDEALondon can help facilitate).  Candidates must be championed by any of the three partners; and their progress must be justified to a quarterly board meeting.

Completed almost a year to the day after it was announced by the Prime Minister in 2012, it is a significant outcome of UCL’s 2005 decision to establish the department UCL Enterprise with the aim of suffusing enterprise throughout the whole university as well as extending its knowledge and expertise to all its collaborations.

Occupants of IDEALondon have a less tightly determined regime in terms of time and objectives than in classic Accelerators, and are less fulsomely supported with mentors, though with almost every imaginable form of support available somewhere in UCL. Mentoring support is provided on a one-to-one basis with three or four meetings per month, and there is a small amount of ‘education’, for example in marketing, though not in entrepreneurship as such. And there are a small number of specialists-in-residence including designers, developers and entrepreneurs.

More specialised support is also available in the form of commercial testing and concept validation. Cisco provides mentors for CTOs in SMEs in the incubator; and it has its own forms of bespoke support. It also has a leadership programme. UCL intends to offer several other specialist courses such as in machine learning and mobile technologies.

The alliance has also opened a facility in Scotland to support Abertay and Dundee University in their collaboration with DC Thomson. (http://www/idea.scotland.co.uk)

For UCL, candidates would be businesses in areas such as Future Media (one project is with Atos and the BBC), Healthcare or Mobile, that also need specialist support from elsewhere in the university (such as clinical trials or ethical approvals), and that might need several commercial contracts to put a demonstrator into place or more than nine months in the incubator. For UCL’s partners, candidates will be relevant to their businesses, and in Cisco’s case companies include BIG Award Winners. Eight places out of the twenty are already filled.

UCL also operates jointly with Mobile Monday London the ‘Mobile Academy’, a pre-accelerator network in the form of 12-week programmes of twice weekly evening classes, 40 per cohort– for SMEs, start-ups, would-be entrepreneurs and enthusiasts – for the many potential students who are not necessarily at university (http://themobileacademy.co.uk). UCL also operates several other programmes relating to entrepreneurship. For example on behalf of Goldman Sachs, it runs their 10,000 Small Businesses programme (http://www.10ksb.co.uk) ; it runs internship programmes, and knowledge transfer programmes, eg in support of post-docs providing specialist knowledge for relevant companies. (UCL works with up to 500 companies annually.) IDEALondon also provides space pro bono for community events.

With its 20 places and 9-month+ duration, UCL’s new Tech City facility is more of an incubator than a classic ‘accelerator’ (like Springboard http://wp.me/p3beJt-z or Bethnal Green Ventures http://wp.me/p3beJt-V), and has a less formal supervisory regime and provides less specific support. And it is unique in being an alliance with its industry partners. It is more oriented to UCL itself than Cass University’s (http://wp.me/p3beJt-6o) – which is oriented to local Tech City businesses, or than the Royal College of Art’s (http://wp.me/p3beJt-k) – which is both longer (at 2-years), and tackles different kinds of problems (engineering and design, and the building of its teams).