SMEs need someone to act as ‘chair’

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SMEs need someone to play the chairman role even more than do bigger businesses Lead mentors have the ability to ask the right questions and to turn up with someone who has just the expertise you are about to need.

Wayra Lab, Startupbootcamp and Techstars all attach mentors to their young businesses so as to provide feed-back and advice at the moment it is needed – on a proactive basis, not just when it is sought. This is in sharp contrast to Incubators such as those at Sussex Innovation Centre, Imperial College and UCL’s IdeaLondon and others, where advice or help is provided when it is sought – on a reactive basis.

There are topics that early-stage businesses know little about (eg development grants, intellectual property); there are things they don’t know how to do (eg 3D printing, ‘chatbot’ publicity); there are tasks of which they have little experience (eg strategy and management), where someone who has ‘done it before’ is invaluable. And in a world of disruptive advantage, time is not their ally.

Jim Milby who mentors several small businesses, recently retired as a Director of Barclays Bank, where he has ‘seen a few businesses’ and ‘knows a lot of people’. It is his extensive experience, his connections and importantly his independent voice that make him highly valued by the SMEs he works with. He has always insisted on having a regular review of progress – once a week ‘because you don’t want to go pitching for funding before you’ve got some customers.’ 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, the strategy for getting there, or even the team itself.

John Whatmore, April 2016

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UK Innovation needs leaders

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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/

*                                   *                                 *

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

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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.

‘Village Capital’s’ different perspective on social enterprise

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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.

Village Capital (‘VC’) is a US based non-profit organisation whose business is social enterprise. Founded in 2009, it has raised $1mn, now almost all invested* – in 350 ventures through 22 programmes in 7 different countries, in what is probably best described as mission-oriented projects, as opposed to product- or business-focused projects (eg enhancing private educational facilities in Indian schools).

Concerned that the relationship between investors and entrepreneurs was too strong a determinant of the kinds of things that new enterprises could achieve, VC has sought to put the achievement of objectives as the over-riding determinant of the processes of innovation in which it invests.

Entrepreneurs cannot exist without funding – from angels or venture capital organisations, so entrepreneurs’ projects have tended to focus on the particular areas that are of interest to those funders and on the returns which they require. In practice most of these have been IT based and ‘quick wins’. VC seeks to combat this destructive relationship by sourcing its own funding, and so having funds readily available – on an unconditional basis – for the projects it chooses (though still subject to due diligence).

Projects tend to start with a vision – a vision of how things might be, and then move on to issues about how realistic and how realisable such a vision might be.

VC describes itself as peer-driven and transparent. Investments are decided upon by investment committees made up of peers – committees whose composition reflects the project in question

(if it is about women in India, it needs to have some among its investment committee); and its members tend to look for real evidence of customer acceptability and demand. VC claims that the selection of projects by peers tends to make them less ready to invest, but to make for more successful investments.

Projects tend to be niche rather than general, and to be framed in terms of the problem in question rather than the obstacles or the specific approaches to the problem eg enabling home workers in India and the US to earn a living wage. And this means that broader approaches to the problem, like forming a consortium or bidding for contracts or grants are not excluded; and the duration of projects may be significantly longer that to-day’s accelerators.

VC spends an unusual amount of time in searching for its entrepreneurs. It looks for entrepreneurial talent in people who are already working in the field in question who are likely to be acquainted already with the problems and the people concerned; and it seeks to form the leanest possible core teams – that will not be disrupted or diverted.

Candidates are evaluated primarily on their ability to deliver solutions, and the criteria for deliverability will be different for different kinds of projects. But liquidity is of the essence – reputation and progress are vital for VC, so the mitigation of risk is also a very important consideration.

Each programme is 12 weeks long, and cohorts in each programme tend to be of 10-15 teams, and made up of teams with different but relateable issues – building the necessary community is important.

VC’s investments may take various forms including grants, loans and equity, and on returns that are appropriate to the project, which may take the form of royalties, revenue sharing, dividends or sale of equity.

What is traditionally termed mentoring often takes the form of enlisting deep expertise in the issue in question – as it is needed and as it is relevant. (The project mentioned above – in India – opened with a workshop on pedagogy led by people from Pearson – educational book publishers.)

In all aspects of its operation, Village Capital’s focus (see http://www.vilcap.com/) is on making a difference – on issues that can transform lives (like Kickboard – which aims to catalyse education reform with its web-based software that enables teachers to collect and analyze classroom data in realtime) rather than on creating businesses that will return profits to investors.

* VC is currently raising a further $15mn.

John Whatmore The Centre for Leadership in Creativity London, November 2013

http://johnwhatmore.com

Dreamstake, the free website for aspiring entrepreneurs

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

Dreamstake is a free interactive startup platform for entre-preneurs which has a rating feature that acts as a marker of their progress. Membership is growing fast and has increased from 6,000 in April 2012 to 10,000 now. It is has added regular educational events at Google Campus in Tech City; and enables its members (and others) to see how well they are making progress by comparison with other members. And some recent statistical analysis reveals aspects of their businesses.

 

Dreamstake acts a bit like an online Accelerator by taking startup founders through a process to get them ready for investment and then introducing them to potential investors.

An algorithm enables each member to keep track of the progress of his or her startup, by measuring team size and mix, progress with the product, fund-raising, number of pivots and other key measures of success. The speed with which this measure progresses also acts as an indicator of the dedication of its entrepreneurs. All of this is available for potential investors to see.

Dreamstake has introduced regular educational workshops for startups – at Google Campus, where it is now the largest provider of events. They take place every Monday evening and there are funding-related events on a monthly basis; and all of these are provided free. For those that sign up for a full Accelerator programme – weekly academy, monthly bootcamps, performance review and mentoring – Dreamstake charges a success fee upon successful introduction to investment.

The data which has been input by the entrepreneurs has revealed some interesting analysis. Social media is a dominant theme and that for some 70% of its members their vision is their primary motivation – followed by the concept of a product – for 25%, and money for a mere 5%.  Forty percent work from home, 25% from an office and a third say that they are in co-working spaces. (Over half had English as not their first language, the vast majority of them European.) Among their technical skills, HTML comes top, followed by web development, PHP and CSS. Of the kind of businesses they are developing less than 20% are described in terms that are other than IT related; over 60% are clearly internet or mobile related.

Progress is hard to interpret in a fast-growing community like this, but the statistics show that nearly a quarter have had one pivot, and about a third of the total have had two or three pivots (a quarter have as yet had no pivot at all). Eight percent are at the idea stage, 58% are at the prototype or beta stage, 17% have a full product, 13% are in revenue, and 4% are profitable.

Dreamstake offers universities and their ilk an attractive  and low-cost way of supporting their aspiring entrepreneurs.

Universities being dragged into more commercialisation of their research

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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.

Conceived and run with his usual flair by James Mawson, 16 October saw an outstanding small conference on Global University Venturing, a new publication launched earlier this year, which brought together top people in this field from all over the world to offer in a tightly packed agenda their perspective and to talk about their successes in various fields of venturing.

James sees the commercialisation of university research as a likely source of rescue for the financial squeeze faced by universities. And while delegates saw some signs of changing attitudes in university departments, they also mentioned many of the obstacles still to be tackled if universities are to make real progress in the commercialisation of their research.

The emphasis was certainly on the selection of investments, and the making of deals, and on funding gaps – more than it was on the supporting of investments. Evidence suggests that venture capital organisations are being increasingly attracted to the university sector and a number of strategic partnerships are being formed (among them for example, a leading edge partnership – mentioned in the publication – between the Mayo Clinic and Arizona Furnace, an Accelerator programme, of which Arizona State University was a founding member).

The plethora of small group sessions at the conference provided frequent opportunities for delegates to meet leaders in other sectors and cadge from their experience.

Global University Venturing has chosen a long road to hoe, but if it moves the field forward as fast as Global Corporate Venturing did with corporate ventures, it will have provided a remarkable service.

Small, elite university incubator launches into new space

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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.

On 21 August, Cass University’s Business School Incubator launched its new space in Tech City. ‘The Hangout’ is a start-up space for City students and alumni, providing an interactive environment where ‘talent meets tech’ ie where students and alumni from City University have the opportunity to be matched up with Tech City entrepreneurs. Sharing space with The Bakery, a small, private 8-week brand and marketing Accelerator, each has about 20 places, with a mixture of desk spaces, conversation area, small meeting rooms, a table tennis table and a kitchen area.

The founder of Cass’s Incubator, Leo Castellanos, then working for one of the big four ‘accounting’ firms, happened four years ago to be interested in some of the work of the Technology Transfer offices, and was induced to run a pilot. It had an enviable early success rate, and now the resulting Incubator has no difficulty in recruiting some twenty interns in a new programme every six months.

The Incubator has three strands: it seeks to work with a small number of technologies from its related University Technology Transfer Offices that appear to be ripe for commercialisation and so accelerate the launch of innovative products and services; it seeks to provide internships in entrepreneurship for a small number of students and alumni who have the necessary technical and commercial skills and the potential to become the managers and directors of the future; and its third strand is the provision of consultancy to high growth companies – for whom it also offers meeting space.

Every six months, the programme starts with a six-day business learning programme; and the interns are put to work on the task of commercialising specific technologies drawn from the parent universities – in the fields of journalism, informatics, design, and finance. Run by Leo, whose passion is the development of new businesses, with the help of four or five other people, and the occasional introduction of a mentor, its interns move on at the end of their time, with some 70% going into existing SMEs, and the others into their own startups.