Support that needs to be proactive

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Support that needs to be proactive Founders sometimes know little about the fields which they are aiming to enter – or about business. Those who manage any kind of co-working arena need to be able to link their young businesses with people whose experience and expertise meet their often fast-changing needs.

Brent Hoberman once described life in a startup as like throwing yourself off a cliff and learning how to build an airplane on the way down. ‘Every week a new issue about which you had never thought before’, said one founder. So how can young businesses be supported to help them identify and find solutions to problems they have never encountered before?

The Director of incubator Sussex Innovation Centre – an experienced expert in young businesses, makes himself available in the café every morning for an hour or so – for anyone to come and discuss a problem.

YCombinator, Watershed Bristol and Entrepreneur First all require their young businesses to meet weekly where a member of each team has to talk to other members of their cohort about their problems, their progress and their plans (notes are circulated afterwards at Watershed to the entire cohort).

The mentor manager of one recent cohort at Startupbootcamp’s Fintech accelerator made it his business to meet each team in the cohort once a week, and ask about progress and problems – each week with a different member of the team.

Wayra Lab, an accelerator (for scaleups) requires its young businesses to have regular monthly meetings with their shadow board, that includes two outside ‘directors’ – a schedule that is being adopted by most growth programmes – for their peer-to-peer meeting groups with advisers.

At BioHub, (last year’s Biotech Incubator of the Year) – home to 200 young businesses, the Incubator Manager aims to meet every team once a month; at the Tramperies, proximity to existing trade businesses makes access easy to experts on many topics. At Cockpit Arts’ incubator – home to 140 young businesses, many of them avail themselves of peer-to-peer ‘action learning’ meetings, regular discussions with the team of business coaches, and referral to specialist advisers. But I know of some incubators that do not have mentors with whom you might be put in touch.

The essence of informal meetings like these is that they are different to Board Meetings in that they are not so much about policies, organisation and management as about current obstacles and how to get over them (why is progress slow; what makes the product fail occasionally; who are the best customers for this product) issues that frequently occur in young businesses, and where appropriate experience and expertise can make a timely and vital contribution.

The problems for the accelarator or the incubator are how to stay abreast of each business’s current problems and how to bring the best help to bear onto each problem.

Paul Miller at Bethnal Green Ventures simply asks weekly of each startup in his accelerator programmes:

  • What have you achieved last week
  • What will you achieve next week
  • What is stopping you, and
  • What have you learned.

Thibaut Rouquette, Mentor Manager at Startupbootcamp could find someone with the necessary experience from among the large cohort of its mentors to whom he had close access; and if he could not find an appropriate expert, he would use Google to search recently held conferences in order to find the name of an expert, and then e-mail to ask him or her to have a conference call with the startup – from which other help might follow.

Priscila Bala of Octopus Ventures commends finding and nurturing relationships with individual advisory board members; but for startups and their ilk, it is someone in the accelerator or the incubator who has to provide the necessary nexus.

John Whatmore, July 2017

 

 

 

 

 

 

 

 

 

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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

SETsquared tops Trumps

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SETsquared tops Trumps 

The top Incubator illustrates the range of support that can be offered to young businesses.

Karen Brooks of SETsquared, a partnership of five universities centred on Bristol, recently rated ‘Global Number 1 University Business Incubator’, spoke at a recent ‘Knowledge London’ meeting of leaders of university incubators about the six programmes – at a variety of levels in the innovation pipeline and in various sectors – that SETsquared runs; and added that it was all about a mutual relationship with industry – understanding what business wants; and she commented that SETsquared had no academics on its staff.

The most striking contrast, I suggested at that meeting, between Accelerators most of which are branded ‘pop-ups’ (as c.12 week programmes) and Incubators many of which are in universities, is that the former:

  • are more involved with their businesses
  • provide more input and support,
  • have many more contacts with the business world.

But SETsquared is a leader in all of these respects.

At the Pervasive Media Studio at Wastershed, Bristol – a twelve month home to a dozen young businesses, over lunch together on a Friday everyone has to talk about their progress, about which notes are immediately circulated so that teams can meet up to learn from one another’s experience. Jim Milby, until recently a Director of Barclays Bank, who mentors at Startupbootcamp, insists on a weekly review with his team wherever he is a mentor. Paul Miller, one of the authors of Nesta’s The Startup Factories, and founder of Bethnal Green Ventures – a winner of a major grant from the Cabinet Office’s Social Enterprise Startups programme – holds a review once a week with every team in the Accelerator. At ‘Office Hours’, he asks the same questions of each team “What did you achieve last week, what will you do next week, what is stopping you; and what have you learned”.

Accelerators provide more input and support, especially in the form of mentors, notably with specific advice eg on design, potential customers, fundability etc – often in a ratio of four or five to every team. Techstars, Startupbootcamp and Wayra Lab all have around 150 mentors for each programme, (as does SETsquared,) among whom two or three are regularly attached to each team; and Seedcamp has even more.

As does SETsquared, they have many more external contacts with local practitioners, experts and entrepreneurs in businesses in the sectors in which their young businesses are involved, upon whom they can call for specific help. Moreover their leaders are often entrepreneurs themselves.

Incubators are still essentially providers of office space more than they are facilitators of business development, but it takes little (often only a canteen) to encourage their occupants, who are all on the same growth path, to draw from others’ experience and find the essential help that they often did not know they needed!

John Whatmore, November 2016

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

A lab head and product developer

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A lab head and product developer

She encouraged her students to tackle issues that could have commercial appeal as much as scientific value, and helped them to realise their commercial capabilities as well as produce great science. (Science 12 June 2015)

Jackie Ying was eager to push her already productive lab at MIT into the life sciences. Todd Zion was first attracted to her lab because of her fanatical work ethic, and her business-minded approach appealed to his nascent interest in becoming an entrepreneur – she says that every graduate student should tackle a project not only of tremendous scientific interest, but also of great commercial potential.

He was asked by Ying to see if the same technology her lab had used to make a nano-emulsion to coat the turbines in jet engines could create a platform for delivering insulin to treat diabetes. He spent two years trying to find a material that prevented the insulin from leaking out before he realised that the secret lay in chemically modifying the insulin itself. The discovery led to SmartCells, a company he and Ying co-founded in 2003, which was later sold to Merck for an undisclosed sum.

His business savvy drew the attention of Lita Nelsen, the longtime director of MIT’s technology licensing office because of the way he had run the company as a tight operation, and he was soon back starting another company with his former colleagues.

Ying says that roughly a quarter of her MIT students have founded companies or gone to work for a startup, but she has chosen not to take that path. ‘What interests me’, she says ‘is bringing the technology to a certain level where you can spin it off and then playing an advisory role to make sure that things are running smoothly.’

Andrey Zarur, one of Ying’s first graduate students who developed the technology that Zion later modified to create SmartCells says Ying ‘would take me with her on visits to companies to get funding for the lab. And I would make the presentation. People thought she was taking advantage of me because she made me do three PhD projects, but this was preparing me for the life I want’.

Ying went on to become the founding director of the Institute for Bioengineering and Nanotechnology in Singapore (‘IBN’) – to spread the twin gospels of top-flight research and entrepreneurship that she had learned at MIT. Her record over the past 12 years suggests that she has done exactly that. IBN has generated more than 300 patents, 80 licences, and eight startup companies.

Sometimes, she suggests, faculty members need help in finding a project with commercial promise, and sometimes she needs to find partners in industry to help with a project. Overall she hopes to find a way for IBN to help nurture new companies without losing all the scientists who did the technology’s foundational work. ‘We will continue to help the firms with research’, Ying says, ‘and maybe they will give us not just royalties but some shares to the people involved.’

John Whatmore, February 2016

Related news:

* It is rumoured that Telefonica’s Wayra Lab is in discussions with Isis, Oxford University’s technology transfer organisation, to set up a unit in Oxford like that of the former’s Accelerator in London.

* Imperial College now has at least four accelerators, each in a different field, each designed to encourage an entrepreneurial environment alongside high quality academic research and teaching. (A full description of these will appear shortly in my blog series.)

Link

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

Mentoring: great benefits, but considerable problems

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Mentoring: great benefits, but considerable problems
The benefits and the problems are well recognised. Several different routes are evolving, and four distinct approaches to the managing of mentors have different benefits and different problems.

Among the benefits that mentors are recognised as offering are their contributions from personal experience, their specific knowledge and expertise, and the contacts they can bring about. Among complaints about mentoring are their uncertain availability, the fact that they may offer conflicting advice, and their potential for incompatibility. Above all, confidence and trust are quintessential factors in the equation. Entrepreneurs are on an express train and they don’t want to be held up by being mis-routed down branch lines.

The managing of mentors has been seen as no more than simply putting them in touch with potential mentees. As yet there have been no serious attempts to manage cohorts of mentors in order to overcome the problems mentioned above, though Startupbootcamp has set great store by the quality of its mentoring; Seedcamp and Techstars great store by their ability to find you just the expert you need; Healthbox has set out to offer advice to startups about making effective use of mentors; Wayra Lab encourages its teams to form non-executive boards; and startup eRipple is seeking to facilitate and enhance the matching process.

What kind of mentoring regime do you espouse? There are at least four different approaches, each with different benefits and different disadvantages:
The reactive: if an incubatee wants some specific help, a mentor with the appropriate expertise can be found. This depends on the incubatee’s inclination to use mentors, on his/her perception of needs for help, as well as on the effectiveness of the linking process. (Bethnal Green Ventures, Bathtub 2)
The proactive: helps incubatees to identify the kind of help they need from moment to moment and can wheel up a mentor appropriate to that need. This approach adds in the expertise of the regular supervisory facilitator – to help identify the often rapidly changing mentoring needs of inexperienced entrepreneurs, but it depends on being able to wheel up not just the right expert, but just the right mentor for this team. (Techstars, Seedcamp)
The mentor programme: a regular programme of mentor visits, each with a different expertise. Useful for those incubatees who happen to need that kind of help at that very moment. (Canary Wharf’s Level39)
The mentor attachment: where a single mentor is attached to each incubatee/team for a duration. More a coach than a mentor, there will be few people who can provide effectively for all of the rapidly changing needs of entrepreneurial teams eg for experience, expertise and contacts. (Birmingham Innovation Campus, BioCity, Wayra Lab – encourages its teams to form non-executive boards; but how are they managed?)

With eRipple I am working with a number of mentees to understand how effective was the mentoring that they experienced and what made it so.

(1) ‘Getting advice in early-stage ventures’ describes the different sources of support and advice that entrepreneurs find valuable – in Accelerators. http://wp.me/p3beJt-96
(2) ‘I am a fly-on-the-wall at an Accelerator’s Mentor Day’ includes descriptions of different roles that Mentors play. http://wp.me/p3beJt-8N

John Whatmore
December 2014