Managing support for early-stage ventures

Aside

Managing support for early-stage ventures – a fast emerging role
In Silicon Valley support is everywhere, and it is increasingly immanent in London’s entrepreneurial world, with some high profile examples – promoted by a new breed of support managers. But there are other areas where it is still a distant prospect. Join us in exploring how best to manage support.
Next week: The Future of Innovation – nuggets from the Deloitte Annual Survey of organisations’ views – about how they will do it and what kinds of things they will do.

.
The most distinctive features of Accelerators (as short periods of intensive development for small groups of early-stage ventures) are the proactive nature and the amount of support that they provide for the businesses they nurture – especially in the form of mentoring (in many programmes mentors are in a ratio of at least half a dozen per team), yet many startups and SMEs even in Incubators and Science Parks are lucky if they have a single one.

Mentors tend often to be appointed simply because they provide a hand to hold, so is it failure to match mentors to individual needs that holds mentoring back? While the Business Growth Fund normally appoints a couple of Directors and then on their advice from time to time finds appropriate experts, advisers and mentors (http://wp.me/p3beJt-ak), the London Stock Exchange has launched its Elite programme of support with Imperial (http://www.lseg.com/elite), one or two VCs like Octopus Ventures (http://wp.me/p3beJt-ap) have evolved sophisticated regimes of support; and Accelerators like Startupbootcamp (http://wp.me/p3beJt-8N) and Bethnal Green Ventures (http://wp.me/p3beJt-2i) are highly proactive in the management of their mentors and of their programmes.

One of the most telling accounts that I have written recently has been about what startups in Accelerators said they valued most (they cited: supervisory facilitators, proximity to their fellow travellers, access to their various mentors, and the inspirational speakers they met (http://wp.me/p3beJt-a7)). I am running a project whose aim is to learn more from those on the receiving end about what it is that works best in terms of support for early-stage ventures – e-mail me if you are interested to participate.

Entrepreneurs may be passionate and determined people, but they do not necessarily know what they are missing. The managing of support is a new role: it entails keeping in very close contact with developing businesses, understanding what might help them at different moments, the ability to corral a host of potential supporters, and to bring supporters and entrepreneurs together successfully (see http://wp.me/p3beJt-9R).

Help us! We are looking at ways in which people who play this evolving role can contribute their experience to its development – on topics such as building a bank of supporters, identifying startups’ needs, finding specialised experts, matching mentors to startups, curating cultures of inclusivity, and programme management. If you are interested to participate in this, please e-mail me.

John Whatmore
March 2015-03-20
john.whatmore@btinternet.com
http://johnwhatmore.com

Advertisements

Are there any limits to the scope for Accelerators

Aside

Are their any limits to the scope for Accelerators?
Hallowed publication ‘Nature’ reports on a nine-week ‘Biotech Boot Camp’ in the US, funded by the National Institutes of Health, which aims to get entrepreneurial scientists to get out there and ask potential customers what they want. Its author used to think that his method was applicable in all industries except one – Bioscience! Should the Stevenage Bioscience Catalyst and even the Wellcome Foundation be funding their own Boot Camps?
Next week: I enumerate persuasive examples of intensive support for early-stage ventures; and suggest that a lot can be learned from one another on key aspects like the recruitment and the management of supporters.

Steve Blanks’s I-Corps (Innovation Corps) runs a Boot Camp – a nine-week course designed to teach business skills to entrepreneurial scientists in technology-based startups – that has now been rolled out for biomedical firms as part of an experiment by the US National Institutes of Health (NIH).

Its ruthless pitching tests have encouraged some of the participating companies to change course drastically and others to abandon promising science for something more market-savvy. “You can be a great researcher and you can think you have great ideas”, said one Congressman, “but until you’re forced to talk to a potential customer, you never really know.”

Nineteen teams formed last December’s first cohort. ‘Each morning was spent presenting, and then re-presenting the ten-minute team pitches. Each afternoon, the teams raced to interview experts in their fields, then reported back for more workshops. Nights were filled with class readings, homework and preparations for the next day’s presentations and interviews.’

The interviews are central to the process. Teams needed to talk to scientists, pharma company reps, regulators, doctors, billing specialists and more – essentially any person with expertise in what it takes for companies to get their products to patients and get paid. A time-consuming process, and Blank insists that the interviews be conducted face-to-face, to build rapport and allow interviewers to better gauge their subject’s emotions. If an expert cannot be met in person, the team must hold a video-conference. “For commercialisation, being able to explain it to your mother is what matters”, said Blank.

Steve Blank is a college drop-out who wandered into Silicon Valley in 1978 and has launched eight technology companies there – not all of them successful. From his introspections, he crafted a curriculum for tech entrepreneurs, to teach them to think beyond their own technology and to dive early and deep into the details of commercialisation: who the customers are, what they need and how much they are willing to pay. The technique is said to have swept through the tech industry, though it needs to be guided in order to obviate its tendency towards focusing on incremental rather than revolutionary improvements.

The US Small Business Research Programme had been concerned that top earners of grants were rarely focused on commercialisation, sometimes being used not to further a business, but to continue research. The National Science Foundation was the first to offer the programme to scientists on the threshold of launching a company, and since 2011 about 500 teams have taken the course. Then the NIH followed, first with the National Cancer Institute (NCI).

At first, Blank believed that his method was applicable to all industries except one – life sciences – where the gestation period was too long. But life science companies have cut back on in-house research in favour of early partnerships with smaller firms, effectively turning big pharma [and in the UK the Wellcome Foundation too] into early customers. So startups must deal with the difficulties created by heavier regulation, the importance of intellectual property, and the challenge of payment services.

In order to assess whether to get more companies involved, NIH is tracking the teams’ success over the next five years, monitoring how many partnerships with major pharmaceutical or medical-device firms the companies form, and whether they receive funds from other investors. The NCI is expected to decide within the next two months whether to continue its programme. In the meantime, 82% of participants said that they would recommend the programme to others.

The US Department of Energy has announced a similar project and the Department of Defence is also considering one. Several university technology-transfer offices in the US are interested in Blanks’s methods for aiding academic entrepreneurs; and Imperial College has adopted a similar programme – for startups based on synthetic biology. The Cabinet Office’s second round of funding of Accelerator programmes has been for startups in Healthcare; and its participants recently made their final presentations at an event in London.

There is no shortage of opportunities for these kinds of programmes, but there is a risk that they will not be appropriately adapted to their sector and their purpose, and that there are too few people with the necessary expertise and experience the ensure their success. They have a long way to go.

Biotech Boot Camp’ Nature, 26 March 2015

See also: ‘i-Teams: the teams and funds making innovation happen in government’ tells the stories of 20 such teams in various countries.
Nesta, June 2014. http://www.nesta.org.uk/project/i-teams

John Whatmore
April 2015
http://johnwhatmore.com

Innovation Officers with a range of tools to help managers at the coal-face in delivering innovations

Aside

Corporate have tended to look for their innovations more to acquisitions of early-stage businesses than to internal developments, perhaps because of the difficulty of the latter; but Innovation Officers are evidently developing their tool boxes and shifting their targets to achieve greater success.
Evidence has for some time been indicating that Innovation is the top objective for organisations and their CEOs, but what they are doing about it is less evident. Appointing an Innovation Officer is one such response, so it was interesting for me to be a fly on the wall at a recent conference of Chief Innovation Officers (run, rather surprisingly, in a deeply old-fashioned style!)
Such people often faced the impossible option of either attempting to change the entire culture of the organisation – a vital but entirely impossible job without the total commitment of the CEO, or of diverting funds towards developing new products, a task likely to be killed by the existing divisional Barons. So it was a dead-end job.
Many of the conference presentations demonstrated a range of other roles – including the support of those Barons in terms of their own objectives – helping them to achieve outcomes that would deliver their bonuses. One of them: delivering a process that would elicit new ideas; another the use of an online facility to aggregate questions and knowledge on current issues; another the bringing together of groups of people (from both inside and outside the organisation) to identify and wrestle with issues and deliver solutions; and another to help the Barons to enhance their existing services, especially with new perceptions, new ideas, new skills and new kinds of support.
Yet another was that of Tesco Lab’s dozen or so members, with their 6-week projects. It has a number of strings to its bow, including new products, product design and development, open innovation, hackathons and supplier workshops, and even culture change. It relies on delivering new products that would clearly benefit the entire business, like a mobile app that enabled all staff to interrogate stock levels, locations, delivery expectations etc; and another (fascinating) gadget – a pair of google specs with which the wearer could read the barcodes of items running short, and re-order them for subsequent delivery.
One outstanding address was that of Lee Burton, Director of Innovation at Stanford’s School of Engineering, who presented a comparison of the culture of Silicon Valley with that of European businesses, highlighting the latter’s key ‘missing catalysts’. While Europe’s economies are supported on science-based cultures, Silicon Valley’s is an innovation-based culture – and in its economy ‘culture eats strategy for breakfast!’ Comments from the floor countered that Europe has to develop its own particular approach to innovation culture. Speakers suggested that innovation units were busily growing, and Lee Burton reflected on the time it takes (maybe three years) for units like Tesco Lab to move from ‘push to pull’ – from pushing their ideas into the organisation to the organisation seeking to pull out ideas from the unit.
A small number of corporates have tasted the concept of the Accelerator (short, intensive programmes designed to help a small number of teams with fulsome support to develop their ideas for a new business into marketable propositions), but only Telefonica has done so wholeheartedly, establishing its own Accelerators in around a dozen countries – apparently with success in terms of new products for itself.
However, there has been a feeling that such Accelerators (as those of Johnson & Johnson, Banco Sabadell, Barclays, John Lewis et al) will be less attractive to startups because if their venture does not receive further funding from the corporate, the sponsor’s subsequent support will be indifferent, whereas the likes of Techstars Europe and Startupbootcamp rely on their reputations for launching as many new businesses as possible from each cohort of startups.
Accelerators supported by clusters such as Fintech Lab London for the banking industry have been more attractive – to SMEs from all over the world, but while the Fintech world is beset with rapid change (not least from Apple), in this field before they are adopted new products require a great deal of testing – not least for reliability and security, and across the entire organisation.

John Whatmore
October 2014

MedCity: another string to London’s bow as an Innovation hub

Aside

MedCity: yet another string to London’s bow as an Innovation hub
MedCity aims to join the ranks of TechCity, EduCity and FinTech in aspiring to make London an innovation Super Centre, where all sorts of different experts in each field work intimately together to foster new businesses – like Silicon Valley.
The Mayor of London has just added a new 20-year vision for London. And contributed £4.1mn to it. MedCity will position London and the greater south east of England as a world leading, interconnected region for life science, research, development – manufacturing and commercialisation. It will provide a “go to” point for businesses and investors, whether global or local, to understand, access, invest in and collaborate with life sciences activity across the region.
The aim is to build a more entrepreneurial culture – championing new areas of collaboration, and fostering a commercial mind-set in the research and clinical community; and creating and promoting a joined up and globally distinctive life sciences offer, meeting the needs of customers and ultimately benefitting patients.
It will achieve this through understanding, communicating and promoting the internal capabilities within London and the greater south-east, enabling customers to readily access the science and industrial excellence available

.
It will aim to be a portal to access the Life Sciences communities within London and the greater south-east.


 It will encourage and facilitate entrepreneurial activity through collaboration, networking, events and seeding activities – bringing investigators, industry and the finance community together. While the focus will be on life sciences, other opportunities will be actively sought out in order to bring together new groups of people, building on parallel initiatives such as TechCity

. It will be an advocate and an ambassador for the life sciences.
There is as yet no indication of how these aspirations will be met and how the cash will be used, but co-working and co-mingling are surely of the essence to collaboration.

John Whatmore June 2014
,

YCombinator a unique experiment

Aside

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?

Twice a year YC selects a new cohort of entrepreneurs who have agreed to move to silicon Valley for three months, for which they get $20k from YC in return for 6-7% equity and $80k seed funding from other outside investors. So while most serial Accelerators produce perhaps two dozen new businesses a year, it is fair to ask if YC is indeed the world’s most successful attempt to mass produce technology companies.

Its boss. Paul Graham, is said to be looking for someone who takes their work a little too seriously; someone who goes beyond professionalism and crosses over into the obsessive; and is into hacking or breaking rules, who combines gall with intellectual flair and an ability to get s*** done. He is said to value ‘determination’ and ‘earnestness’. None of the British founders he has known have been ‘pure unworldly nerds’ – of the kind he favours.

He comments that “the biggest mistake people make is working on made-up ideas. The most successful start-ups were all made by people solving their own problems, as opposed to making up some plausible sounding bull***. An unsolved problem is the world’s rarest commodity”.

“But once you have one, then launch fast – within weeks, even days, before you run out of funding and in order to get critical feed-back from the wider world.” Reid Hoffman, the LinkedIn co-founder is quoted as saying ‘If you’re not embarrassed of the first version of the product you’ve launched, you’ve launched too late.’

YC’s regime is focused round the weekly dinners, where you would not want to have too little progress to report to your peers. ‘But old-fashioned networking also plays a part. YC’s founders can rub shoulders with the world’s most powerful investors and innovators. They’ll also inherit a formidable old-boy network.’

Other Accelerators have insisted, unlike YC, on their participants also working together and in close proximity. And unlike the UK’s current Accelerators, where Demo Day is more like an end-of-term presentation, at YC it is a genuine market place, with generations of nerds investing in nerds!