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.

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Level39, Canary Wharf – a throbbing new Innovation Centre

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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.

With a simple remit – the development of the area (Canary Wharf) – Level39, 1 Canada Square, opened by Boris Johnson in March of 2013 and headed up by Eric van der Kliej – formerly CEO of Tech City, has quickly become a lightning conductor for those looking for innovations and those with innovations to offer in the kinds of businesses in this area.

Creating the connections and providing a ‘connectious’ space is what its Ideaspace is about – providing space where ideas can be found, developed and connected – without being overwhelmed by the legacy of any corporate culture.

Among its early work was the hosting of the Accenture-backed Fintech Innovation Lab London, a 13-week Accelerator in which a dozen of Canary Wharf’s big banks participated. Seven SMEs – drawn from all over the world – with innovative technologies of potential value to the banks, were housed at Level 39 and provided with a ‘chaperone’ from each of the banks to help them find their way around the labyrinth of people with buying interests and requirements in the bank.

Level39 is now hosting a number of other innovation and acceleration programmes – created by ‘Pivotal Innovations’ which provides custom-designed programmes for corporations and governments looking to innovate and grow.

One of these is the Future Cities ‘Catapult’ Centre (supported by the Technology Strategy Board), which in partnership with Pivotal Innovations is convening cross-sector dialogues (starting with executive breakfasts) with key stakeholders and thought leaders – in finance, real estate, industry and government. The debates will explore viable solutions including critical issues in financing future cities.  They will explore models (eg Rio de Janeiro, Portland Oregon, Songdo in South Korea) and will ask what will interconnected, high-tech, smart cities be like. What new kinds of partnerships might be needed? What investment models might be called into existence? And what enabling policies might make it all happen?

Dassault Systemes, Europe’s second largest software company, has chosen to partner with Level39 and Pivotal Innovations as it expands its strategic focus on financial services in the UK. Its 3D FinTech Challenge 2013 (http://www.f6s.com/3dfintechchallenge2013/info) invites startups to develop solutions for the visualisation of client data in financial services, as a way to condense and simplify such data, such as capital exposure, risk and identity, of which it is often difficult to get a clear perspective, into “single views”, which can be readily understood and acted on. This collaboration too has involved a series of breakfasts with senior executives from London’s banking and insurance industries. Dassault is also showcasing some of its current technology at Level39, such as 3D visualisations of cities like London and Paris on giant touchscreen display units, as an innovative way of presenting information

Designed by Gensler, who also designed Google’s and Facebook’s offices, Level39 has a very wide variety of spaces. It has attracted early-stage businesses eg in retail and financial technology, to take small scale spaces – both entrepreneurs and intrapreneurs – because of its unique ‘connectious’environment. It has 77 drop-in desk spaces, in all sorts of configurations – either for individuals or for startups – most of those startups already post-revenue.

It also has spaces that are specially tailored for innovationism: there are four ‘Sandboxes’ – for Hackathons, for cafeteria-style meetings, for board meetings or discussions, and for presentations, as well as a superb conference room – all with great views over Canary Wharf. Facebook recently held a 48-hr Hackathon in one Sandbox; and the local banks recently held one whose aim was to test their security systems – by trying to hack into each other’s!

It has a cafeteria area with its unique iPad controlled coffee machine; and a Club Lounge will open shortly – for meals, where you can meet and entertain guests (and where you can get a discount if you also agree to commit a certain amount of time to mentoring.)

So what is its secret? In addition to the spaces, perhaps its most valuable asset is Pivotal Innovation’s capabilities in generating and curating provocative innovation events and programmes; and its ability to bring together people with common interests and purposes but who don’t yet know one another.

Its extraordinarily rapid growth (it will shortly open more drop-in spaces on Level 42) and its vibrancy suggest that it has some magic that might be of interest to other cities, like Bristol, Manchester or Liverpool; to other retail centres like Blue Water, Brent Cross or the Airports; to other clusters like the Thames Corridor, Science Parks or Dundee as a centre of the games industry; or even to the NHS or the MoD.

Innovation in the UK badly needs ‘pull’ as well as ‘push’

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Innovation in the UK has suffered a short-term decline in expenditure. In continuing to attach high priority to innovation CEOs have evidently been distracted by the need for fire-fighting. While Nesta and the TSB seek to chart the paths forward for innovation, CEOs need to provide support, as does the Association of Managers of Innovation in the US in its own valuable way (1), for the embattled members of their staff whose job it is to build innovation into their organisations. (Join our Autumn Seminar for leaders of innovation – see below.)

 

It is widely reported that most CEOs now see Innovation as their top priority, but there are few signs of this. Nesta reports that investment in innovation in the UK has fallen sharply since 2008; and that investment in fixed assets fell and became increasingly dominated by bricks and mortar at the expense of technology. Geoff Mulgan, Nesta’s CEO, has observed that Research & Development has been declining in productivity, (though expenditure on innovation may be ten times that on R&D), and that the innovation spend has been increasingly oriented to social and public services and user innovation.

CEOs have evidently been fire-fighting rather than focusing on innovation; and where corporate responsibility for innovation is delegated to others, those people find themselves ill-supported, with fragile budgets and in constant competition with those running existing parts of the business.

Innovation has been led by the rapid evolution of communications technology, and in the process it would seem to have left the development of applications of those technologies languishing in its wake. In rating Innovation as their top priority, CEOs evidently expect the rate of change they see around them to generate rising demand for innovation. So how do we re-ignite innovation?

The two main instruments of innovation in the UK have been Nesta and the Technology Strategy Board, each working in rather different ways on different aspects of innovation. Nesta, now a charity, is almost exclusively a research organisation, working on policy more than on practice (with some exceptions, especially its leading-edge work on Accelerators), and working mainly in the field of social and public services.

The TSB’s main role, with funds several times those of Nesta (on which it has calculated that there is a handsome return), aims to seed technological innovation in areas of potential economic advantage to the UK, which it does through competitions, grants and the funding of organisations (the Research Councils, KTPs, the KTNs and the Catapults) on specific technologies and initiatives.

Both organisations are essentially about ‘push’ rather than ‘pull’, about identifying the future rather than about encouraging the various elements of the economy to adopt leading-edge practice. Neither seeks to raise the level of innovation practice among individuals and organisations up and down the country.

The Association of Managers of Innovation in the US is at the opposite end of that spectrum. Its objective is to provide a forum in which practitioners can learn from each other’s experience. Its members are leaders of innovation in organisations, whom it supports with e-distributed information and communications, educational programmes, member interactions and personal support; and it brings its members together in twice yearly meetings held throughout the US. As it moves into its fourth decade, Stan Gryskiewicz who founded it when he was at The Centre for Creative Leadership in Greensboro, has been reflecting on its processes.

Two vital principles of the AMI community are:

1. Dialogue of differences – the valuing of and seeking of cross generational, cross disciplinary, and cross industry dialogue; and the unique perspectives this dialogue engenders, and

2. Reciprocity – as a way to facilitate learning, members share with each other their experiences of managing innovation – both their current problems and opportunities and their successes and failures.

A global association of the world’s leading social entrepreneurs, called Ashoka provides a useful model for the AMI learning community’s meeting process: it seeks to build communities of innovators who work collectively to transform society – by bringing people together who are not typically gathered; by breaking down the walls between them; and by engaging ‘applied empathy’ when contemplating change – meaning that the agent of change must comprehend and be guided by how their action will impact everyone around them and into the future.

In the UK, while Nesta and the TSB work to identify and pioneer leading-edge practice, leaders of innovation often function in desperate isolation, when engaging with others – especially with those who are in a similar situation but different context – might be both valuable and stimulating. Turning ideas into innovation and research into practice might benefit from the principles and aspirations of AMI in the US.

 

(1)  http://www.aminnovation.org

 

We are holding a Seminar in the Autumn for leaders of innovation – to provide opportunities for them to exchange experience (under Chatham House Rules) and to learn from each other’s strategies and tactics, and successes and failures – typically about initiatives, budgets and support.

For more information, contact me at john.whatmore@btinternet.com

Accelerators getting more choosy and more targeted

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Accelerators attract quantities of applicants, a number of whom have ideas for new businesses that are very evidently non-starters, some even barmy; many have ideas of limited scope, some of whom present poorly. A few have an immediate appeal as really disruptive, or as having an innovative approach to a big issue, though not necessarily demonstrating outstanding entrepreneurial qualities. How are selection processes trying to deal with these issues?

 

  Accelerator Academy originally opted for a computer-based test for applicants (about entrepreneurial potential) together with application form and interview; but it now relies more on having two of its staff hold Skype-based interviews  with candidates that aim to explore how well the programme suits the candidate and vice versa.

Imperial Innovations’ student Accelerator has adopted a two-stage application process, the first of which is simply a single line pitch and 500 character description, designed to force applicants to think concisely about the problem being solved and who are the potential users. Workshops once or twice a week during the following two months on various topics including funding sources, legal, and perfecting the pitch, and next year also time to work on their products (technical or business aspect) help the students to focus on each area of their business (value, customer relationship, cost structure etc). And then students are invited to complete a more in depth application based around their learnings and using the business model canvas as a framework. Finally the top 20 are invited to semi-final pitches and 5 go through to pitch for funding and intensive mentorship.

Newcastle’s Science City incubator is currently planning to hold sessions at which experts in the field in question talk about topical problems that are ripe for solution – in an attempt to get candidates to tackle issues of significance.

      Bethnal Green Ventures has cast a wider net: regional meetings have been canvassed; and candidates are invited to meet and talk about themselves and their work. Some assessment can then be made of those who later make formal applications about their progress and their entrepreneurial capabilities as well of course as their project.

Biocity in Nottingham runs three-day Bootcamps for aspiring entrepreneurs to develop their ideas for new businesses – that might find a place in the Biocity Incubator, the Nottingham Cleantech Centre and Antenna – two other specialist incubators in Nottingham.

The Royal College of Art’s incubator consciously takes candidates who have identified issues that entail significant engineering or IT Development. Oxford’s Said Business School has provided an opportunity for people to identify commercialisable opportunities from among a portfolio of IP from the European Space Agency and from CERN, in the hope that some of those people will choose to work together, perhaps taking space in Harwell’s Science Park, to develop a business of the IP.

The latest Wayra Lab cohort of 16 were invited, along with as many other candidates, to Wayra Week, where they were helped to identify the special focus of their proposed business and to learn how best to pitch it; and where at the end of the week they made their submissions to the seven assessors.

The 16 who won places in the Accelerator started off with a week’s Bootcamp – of instruction in essential aspects of business, and surgeries with experts. The week included a pitching session with mentors, at which each new team hade 2 minutes to pitch to the hundred or so mentors present and each mentor had 45 seconds to pitch to the teams, after which they were left to make their own contacts. It is the quality of the contacts that seems to be the most valued aspects of Wayra Lab.

Like other Accelerators EntrepreneurFirst (which is sponsored by several leading corporates) whittles its c600 applicants down – to 35 – by a three-stage selection process. But EntrepreneurFirst has adopted a year-long programme of periodic development and support for its potential entrepreneurs prior to its 6-month progamme.

Over the course of the summer, they have participated in team building selection and development days, including a 2-day session in which three teams of 5 had to make a 3-minute film on a theme around the Year 2022, and then get as many people as possible to view it – all in two days. Two months later, when in early August their university exams were over, they had a fortnight’s residential bootcamp, where they received training and support from entrepreneur mentors on how to build a lean startup. This also required them to test their early startup ideas with customers – a task designed to help understand product communications and the difficulty of getting heard!

At the end of  the programme that starts in September, while some teams will pitch to potential funders for ongoing support, others will be helped to find different roles in some of the more successful teams.

 

So who will fund an extended process of this kind?  If the Knowledge Transfer Networks were to take up the challenge of encouraging Accelerators on behalf of their different sectors, they might find that the benefits were worth the cost of providing support of this kind. The TSB has already identified areas associated with social or economic need where emerging technologies are likely to be able to contribute; and has run competitions for significant grants. Perhaps in addition, it should fund Accelerators in each such area.

 

Copyright 2013

John Whatmore                                                                                             May 2013

The Centre for Leadership in Creativity

London

 

 

Making use of existing IP to start new businesses

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The Future Business Pre-Incubator (‘FBPI’is looking to find ways of leveraging the UK ’s (and Europe’s) technologies into new businesses, and so contribute to economic growth. With YCombinator and Techstars in the US focusing on internet businesses, FBPI is looking to see how to combine UK (and European) entrepreneurialism and support with IP that has been generated by some of the world’s leading scientific academic communities.

          Last Autumn, FBPI held a week-end at Oxford ’s Said Business School whose objective was to see if groups of business people, engineers and scientists could come up with ways of commercialising some of the publicly funded IP that was presented. Out of eleven ideas, one group registered a new company the following day, which quickly found ongoing funding (and is likely to take space in the new European Space Agency (‘ESA’) Incubator at Harwell); one more is in negotiations to license technology and has applied for the ESA Incubator, and two more are awaiting feedback on the technology before continuing their application.

The recent rapid growth of start-ups in the US, especially in internet businesses, has not been matched by anything remotely comparable in the UK . FBPI asks how we can create similar heightened levels of activity in other regions and industries; for example, how to exploit the differential capability that Europe has, by focusing on science and technology and engineering based businesses.

FBPI notes that the traditional software/mobile incubator follows a US model in a segment where Europe does not have a competitive advantage. What this network does is focus on existing patented technologies, to which entrepreneurial talent, expert mentors and seed-funding can be applied. All of these, FBPI notes, are available locally. The Thames Valley area is one of Europe’s largest hi-tech clusters, with a number of outstanding scientific facilities at Harwell alone, and is close to the regional HQs of three large mobile Telcos; at Oxford it has two universities and two Business schools; it has one of the world’s largest science parks and two other significant ones, the European Space Agency incubator and the Science and Technology Facilities Council’s Innovations Technology Access Centre.

FBPI sees its process as an open market that connects ‘knowledge pools’. Supporting the development process from its beginning and up the escalator of growth, it will aim to seek entrepreneurs among local institutions and communities; it will seek access especially to ESA’s, CERN’s and other IP portfolios; it will run start-up week-ends designed to identify commercialisable IP and match it with appropriate entrepreneurs; it will enable prospective new businesses to have suitable accommodation in incubators; it will ensure that cohorts of mentors from academic and commercial institutions are available; and it will seek to ensure that development capital is readily available. In addition it will seek to collaborate with or franchise an Accelerator brand, that will help to validate its regime.

Having tested the efficacy of the start-up week-end to produce IP that might have commercial potential, FBPI is now seeking to replicate these, by catalysing 20 such week-ends over the course of the ensuing two years, each one in a different area; for which it has pitched for £300k funding from the Technology Strategy Board and other funders.

John Whatmore                                                                       March 2013

The Centre for Leadership in Creativity

London