Catapulting the UK into the future
The UK has always been full of people with bright ideas, but in many cases we’ve been let down by an inability to commercialise them. While it is wonderful to be known as a nation of inventors, it would be even better for the economy to translate this potential into strong companies, exporting around the world and employing skilled staff at home.
Turning this innovation into viable businesses requires focus, bringing together universities, companies and engineers to work together around certain areas and specialisms. Cambridge is the perfect example of a series of clusters (embedded, biotech, computer games, natural language processing), where participants feed off each other to move a particular industry forward. It is essentially an unofficial version of Germany’s Fraunhofer centres, which have played a large part in driving German innovation.
The good news is that the UK government has seen the potential of clusters and, thanks to a report from Hermann Hauser, set up the Catapult programme. This has established seven centres across the UK focused on high value manufacturing, cell therapies, offshore renewable energy, satellite applications, the connected digital economy, future cities and transport systems. The Satellite Applications Catapult has just been launched at Harwell, outside Oxford, on the same campus as a new technical centre for the European Space Agency. All seven centres will be operational in 2013, as part of the £440m the Technology Strategy Board (TSB) is investing in innovation this year.
This is great news, as is a recognition of the growth of unofficial clusters (such as security in Worcestershire) and support for them. But there are two areas that need to be addressed if clusters are to achieve their potential. Firstly, as a report from the Big Innovation Centre at the Work Foundation pointed out in January, the programme must be scaled up. Seven centres is a start point, but more are needed and those that exist require greater resources if they are to match other countries. Simply relying on British ingenuity to sidestep budgetary concerns is not going to work.
Secondly, Catapults have never been designed to launch commercial products – they are simply a stepping stone on the journey, providing the early stage support and specialist facilities to get an idea moving. My fear is that this innovation won’t necessarily produce another generation of ARMs or CSRs, but fledgling companies that are snapped up by international players. A huge number of small and midsize businesses find themselves unable to make the leap to the big league and opt for acquisition rather than pushing on to the next level. There needs to be a focus on why these UK innovators aren’t achieving their potential independently and help provided to ensure they make the jump to stable, quoted companies. That’s going to take greater investment and access to a wider pool of skills (such as marketing, sales and business development) to accelerate growth. We need a Rocket programme alongside our Catapults if UK ideas are going to achieve their full potential.
Microsoft the innovator?
The PC market has obviously been having a tough time of it recently, with sales plummeting 14 per cent in the first quarter of 2013, according to analysts IDC. The combination of the rise of tablets and smartphones, the global recession and the resurgence of Mac sales at the top end have all put a dent in sales figures. And this has obviously hurt the divisions of Microsoft that make most of their money from PCs, particularly the Windows operating system.
At the same time Microsoft has realised that it needed to up its game in the faster growing smartphone and tablet market to compete with the likes of Apple and Android. But then someone somewhere decided that solving these problems required a single solution. The result? Windows 8, a new universal operating system that would work across PCs, tablets and smartphones, giving the same look and feel whatever device was being used.
Unsurprisingly for something that tries to appeal to everyone, Windows 8 is dreadful. Its completely new, tile based interface may work well on tablets and smartphones – though given Microsoft has sold less than a million of its Surface tablets (compared to 19.5 million iPads) it is difficult to make valid comparisons. But it has flummoxed traditional PC users who have to learn a completely new interface that seems very much focused on consumer needs, with fast links to music and videos, rather than business requirements. No wonder that companies are putting off PC purchases in the current climate – why splash out on something that will require a lot of training when Windows 7 works perfectly well.
The talk is now of a redesign for Windows 8, but my concern is how it has got to this stage. Microsoft has never really had a company-wide culture of innovation – from the original Windows it has tended to improve upon what is out there and deliver it well. Yes, it has areas of innovative research (the Cambridge office responsible for the Kinect for example), but (business) people buy Microsoft because it is the safe option.
Instead of following that path this time, it has thrown out everything that has come before and decided to re-invent the user interface. Not just on one device, but across three – PCs, tablets and smartphones. Neither Apple nor Android have attempted that, because there are significant differences between small screen size mobile devices and PCs/laptops. Given that lots of people (including myself) still moan about the changes made in the last version of Microsoft Office, this has resulted in perplexed users and falling sales.
Microsoft can still fix Windows 8, but what it really needs to address are the issues that led to its development direction. People (and their devices) aren’t ready for a universal operating system and the fall in PC sales mean that Microsoft isn’t in the position of power it occupied five years ago. No-one seemed to realise that, hence trying to force feed the PC market with a completely new concept that seemed doomed from the start. Everyone wants to be Apple the stylish innovator, but Microsoft needs to take step back and come to terms with its role as the boring bloke in the suit that makes things tick. After all, there’s nothing worse than Bill Gates trying to look cool…………
When to give up
It used to be that failing in business was a potentially catastrophic black mark in the UK – essentially the end of your career. But over the last decade attitudes have changed, driven by a more American view that it is better to have tried and not succeeded than to not to have bothered at all. There are a thousand and one reasons that a venture might fail, many outside your control, and as long as you learn lessons you can bounce back stronger.
This more relaxed attitude to failure is reflected in the growth of startups in the UK. Rather than leave university and go and work in corporate Britain, setting up on your own is a viable choice – if it doesn’t work you can always try the 9 to 5 in a few years time. And as the Seth Godin quote goes, “If failure isn’t an option, neither is success.”
But if the stigma of failure has been removed it brings another big question – when do you give up on your idea/business? Do you shut up shop at the first signs of trouble or soldier on when all chances of success are gone? That was the topic of an entertaining discussion at last week’s Pitch and Mix in Cambridge, which got me thinking about the whole topic.
It is easy to look at businesses or individuals where it would have been easy to give up when they hit the first roadblock. Harvard made Mark Zuckerberg take down the first version of Facebook and nearly expelled him – but he learnt from the experience and moved on. In Cambridge, ARM was essentially created within Acorn as Intel wouldn’t sell the computer manufacturer the chips they needed. The business pivoted and is now a multi-billion dollar world leader.
What came out from the discussion were two main ways of helping you to know when you’ve really failed and it is time to give up.
Firstly, set realistic objectives and goals for your company/project, with a timeframe attached. It shouldn’t be a hundred page business plan that controls your life but an idea of what success looks like and the time it should take to get there. Whether as simple as “we need to have made our first sale in 18 months” or more complex, use it as a guide to when to stop. If you get to 18 months and there’s no sign of a customer then you should probably give up, but if you’re negotiating with a couple, then extend your timeframe. Build a plan to get to your objectives – what needs to happen for you to make that sale/launch the project within your timeframe.
Secondly, get independent advice. Everyone involved in startups must have passion – if you aren’t enthusiastic about the idea you won’t put in the hours to make it work. However perspective is more difficult – you are simply too close to the coalface to provide an objective view of reality. So find yourself an independent mentor, who understands your business and what you are trying to do and give you advice and perspective on the way forward.
More businesses fail than succeed, but don’t take it personally, learn and move on. And marry passion with perspective to work out when to throw in the towel and start again.
Being too casual
Video games are big business. Whether you measure it on the £1 billion contribution to UK GDP of the industry, or the amount of time my children spend playing Angry Birds, the impact is enormous. In Cambridge alone companies such as Jagex and Frontier Developments employ hundreds of staff, an estimated 10% of the UK’s games developers.
But the era of the blockbuster console game is coming to an end. Despite the recent announcement of the Sony PlayStation 4, more and more games are now played casually on smartphones, tablets or simply online. As the current furore about the in-app charges
run up on iPhones and iPads demonstrates, all of these small payments add up to a big (and ongoing) windfall for developers. Rovio, the creator of Angry Birds, and king of the casual game companies, is allegedly worth as much as fellow Finnish tech company Nokia.
Handheld consoles have suffered – now analysts predict it could be the turn of the big budget gaming devices such as the Microsoft Xbox or Nintendo Wii. Ouya, a new Android-based console is now shipping at the knockdown price of $99 following an $8m Kickstarter funding round. As any gamer/parent will know, it isn’t just cost of the console, but the price of the games that adds up. And the Ouya’s games are expected to be low cost apps as seen on Android devices but beefed up to use the power of the console. Ouya’s not alone, with UK-based PlayJam launching its own portable GameStick Android device.
But there’s a big marketing challenge for these low cost consoles. Casual gamers with a tablet or smartphone need persuading that they should shell out for a separate device, as well as investing in new games, particularly as many already have a PC. Serious gamers will look at the quality of the games available compared to the blockbusters available on big brand consoles while children (a key market for games) want to be able to play the same games as their friends. Additionally the likes of Microsoft and Sony have been working to turn their consoles into home entertainment hubs, acting as the bridge between the living room TV and the internet to try and cement their position in the market. Essentially it is chicken and egg – people won’t buy a console until they know there’s sufficient games available, while serious developers won’t invest until there’s a big enough target market.
I can see two ways for the likes of Ouya to get round this dilemma – and it’ll take bravery and a bit of radical thinking. Firstly, adopt the same business model as casual games themselves – give away the hardware and charge for anything beyond the basic, either as a one off or on a subscriber basis. Risky, but it gets consoles into people’s houses and if they then take 30-40% of each £1.99 spent on a game they will build a subscriber base and some revenues. The second way is to partner with companies with a big brand to bring the hardware prices down to under a tenner. Whether it is a telecoms company (Sky, BT or Virgin Media), a retailer (Amazon, Tesco) or actually an Angry Birds-badged console it would widen the audience beyond the early adopter. The worry here is that as we move to a cloud-based future traditional console makers will go down the same route and already have major brand recognition.
However the gaming wars play out, the old market of monolithic consoles is under serious pressure – now is the time for new business models and smart use of subscription and cloud-based ideas if new comers are going to emulate Rovio, rather than follow the likes of Atari into bankruptcy.
Do you really Like that?
Be careful what you like on Facebook – that’s the warning to take from research carried out by the University of Cambridge. The project used algorithms to predict religion, politics, race and sexual orientation based solely on what people chose to Like on the social network.
By correlating personality tests and the demographic information of 58,000 volunteers, the researchers were able to compare Likes with an astonishing level of accuracy. The algorithm used was 88% accurate in predicting whether someone male was gay or straight and between 65-73% accurate in guessing marital status and substance abuse for example. And it wasn’t based on simple linking – fewer than 5% of gay users clicked obvious likes such as gay marriage. Instead it used information such as likes on TV shows, films and music.
This is music to the ears of marketers (and social networks desperate to sell advertising to them). It could even help Facebook’s depressed share price perk up a little. And if you can accurately predict detailed demographic information from just one part of a person’s online footprint, imagine what you can do if you add in web browsing, search and other social network data. No wonder Google wants you to sign into its multiple services so it can collect the maximum amount of data, whatever device you are using.
From a consumer point of view there’s two ways of looking at this – most people will see it as an intrusion into their privacy and change their settings, but brands may well rationalise it as offering people exactly what they want. And as Mark Earls has pointed out in his book I’ll have what she’s having a large number of people’s decisions are herd led. So offer them an easy option that means they don’t have to think and they’ll jump at it. In many cases consumers may not even realise they are being sold to – which could be very worrying when people start being segmented on sexuality, religion or political affiliation.
So marketers need to treat this data with caution. Yes, it gives unprecedented insight but be too aggressive when using it and you’ll cause a public outcry which could damage your brand – and trigger governmental action to tighten privacy settings on the likes of Facebook.
However my own view is that we’ve been here before. Remember when store loyalty cards came in everyone predicted that we’d be laser targeted with relevant offers that drove us to up our spend? But if I get a mailing from a well-known chemists the vouchers are pretty much identical to my wife’s, with obvious male/female differences. It seems that marketers haven’t got to grips with shopping data in enough granular detail to deliver the killer offers that will drive me to automatically purchase without thinking. We may have the data, and even the technology to analyse it, but until marketers move to a digital mindset we’re unlikely to be brainwashed into buying things we don’t even know we wanted.
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Standing out from the Crowd (funding)
Turning your brilliant idea into a world-beating product requires a lot of things – drive, commitment, flexibility and often a large slice of luck. But one element it can’t really do without is money – whether to develop prototypes, employ staff or simply pay your own bills.
Finding funding has never been easy, but the range of potential sources does seem to be growing. As well as traditional sources such as VCs, banks, angels and friends and family, there are a range of government grants and multiple competitions that can potentially help startups take a step forward. I’m not saying this necessarily makes gaining investment easy, but it does give more options.
And another option that is expanding rapidly is crowdfunding – sharing your idea with the world and getting them to back it before you start the expensive business of actually producing anything. If you don’t attract the pre-orders then it should probably act as a wake-up call – are you producing the right product that people actually want?
There’s been a run of successful, over-subscribed launches on sites like KickStarter. The company behind the Pebble smart watch raised over $10m and will start shipping real products this month. On a smaller scale, projects like photography book I Drink Lead Paint hit its target of £10,000, unleashing the thoughts and images of Mr Flibble onto the world. And B2B versions like Funding Circle have attracted government backing, making £20m available to British businesses over the next 12-24 months.
With growth like this, it is no wonder that Deloitte predicts that crowdfunding will double in 2013, raising £1.9 billion globally this year. Not huge in the scheme of overall investment, but potentially opening up funding options to smaller scale projects in a simple way.
But, with more and more projects out there looking for crowdfunding, how do entrepreneurs get people to view what they are doing – and potentially part with their cash? Kickstarter’s own stats show that just over 40% of projects hit their funding targets, showing it isn’t as simple as launching and waiting for the money to roll in.
This is where an enormous opportunity arises for the marketing and PR industries to get involved. Crowdfunding projects need marketing in the same way as any other product, identifying target audiences and demonstrating the benefits your new wonder widget brings to them. And then you’ve got to reach them, using both social and traditional media to identify the influencers that are likely to help you spread the word and convincing them and the world at large. Obviously the downside is that projects don’t tend to have any ready cash, but for anyone brave enough to go for payment by results the business is out there. At a time when the PR industry is suffering financially, creating smart, all-in-one services that help you get crowdfunding or launch your new iPhone app are just what it needs to be developing to recapture growth and build relationships with the next generation of smart businesses.
Lucky vs hard working
What brings success? Is it hard graft or can you short circuit the years of work by just being a bit lucky?
That was the topic of a recent CfEL Enterprise Tuesday, where entrepreneurs Rahul Vohra and Shamus Husheer discussed what makes some businesses succeed when others fail. For the lazy amongst us, the unfortunate conclusion was that you need hard work as well as opportunity if you’re going to make it big. But you do need both – as Shamus pointed out, if hard work led to success, every woman in Africa would be a millionaire, and unfortunately they’re not.
Essentially you need to put yourself in the position to be lucky – so make sure that you are in the right place at the right time, and then grab the opportunity. For me the perfect example is Mark Zuckerberg and Facebook. He took an existing idea (a paper directory of students) and wrote an initially simple computer program to put it online solely for Harvard University students. As any programmer will tell you, Facebook itself isn’t the world’s most complicated piece of code, but it attracted users and the rest is history.
But look a bit deeper and there’s more hard work involved – Facemash, the first version of Facebook, was closed down by university authorities for breaching security, copyright and individual privacy and Zuckerberg was lucky not to be expelled. So he persisted, refined his idea and tried again. From Rahul and Shamus’s experience iteration is a key part of success – things aren’t necessarily going to work first time, but that doesn’t mean your idea is worthless. Other people came up with Facebook-like services but through hard work Zuckerberg’s got the users it needed to take off.
So, while it is an easy response to describe someone successful as ‘lucky’ you make your own luck in this world. Aspiring entrepreneurs need to make sure they are looking for opportunities, making intelligent guesses about what might be a success and then working hard to develop a product or service that customers actually want. Like a swan, ‘lucky’ people may look calm, but underneath the surface their legs are paddling very hard………
A weekend to change the world (part 2)
At a time when the world seems full of young companies aiming to be the next Facebook, it is easy to write off technology startups as predominantly pointless pipe dreams that won’t contribute anything meaningful to society.
But the good news is that the power of technology can change the world. Whether it is in education, improving the environment, revolutionising healthcare or helping communities the power of technologies such as the internet, mobile telephony and even social networks can change many people’s lives for the better.
Unlocking these ideas and giving them the help and support they need to take realise their potential is the mission of Idea Transform. A Cambridge-based initiative, backed by the University of Cambridge’s Centre for Entrepreneurial Learning (CfEL) it supports meaningful startups through events and mentoring.
Run by a stellar organising team (including myself), the first Idea Transform weekend attracted over 100 entrepreneurs, developers, students, business people and mentors. 26 ideas were pitched on the Friday evening and teams then formed to work on projects, which were judged on the Sunday evening. Projects spanned healthcare, education, the environment and community.
The range of ideas was astounding – from in-road electric charging to biometric identification for healthcare. What united them was that they all had the potential to change the world – and a plan for achieving it. Attendees threw themselves into the weekend, bringing their skills to bear on helping develop the ideas, ably supported by our experienced mentors and inspiring speakers.
The great news is that Idea Transform 2013 is now up and running. It will be held between 15-17 March 2013 at the Cambridge Judge Business School and promises to be as exciting and exhilarating as the 2012 edition.
Whether you’ve got an idea that you want to work on or have skills or energy that can help develop projects, take a look at www.ideatransform.org and come along in March. With high level speakers and experienced mentors, you’ll learn new skills, meet new contacts, have fun and contribute to making the world a better place. Sign up now!
Social media elections – Obama vs the Police Commissioners
As the excitement of this week’s Police Commissioner elections galvanises the nation and sparks heated debate, I thought it would be worth looking at the role of Twitter in the gripping contest.
After all, looking back at the US election we saw a huge online turnout with voters from coast to coast giving their views and the Obama victory photo becoming the most liked and retweeted post ever. Social media was seen as a critical bellwether to who was going to win, with online sentiment analysis adding to exit polls in the data available to the candidates and media. And after the event voters made their feelings known (or were perhaps just fickle), with Mitt Romney’s Facebook page losing fans at the rate of 847 per hour. Go on, click on http://www.facebook.com/mittromney and see the fan count fall.
However when it comes to the Police Commissioner elections, at least in Suffolk, social media isn’t really centre stage. Of four candidates, one (Bill Mountford of UKIP) isn’t on Twitter and the Conservative and Independent candidates boast 242 followers between them. While they are both posting regular updates, only Labour candidate Jane Basham seems to have really been embraced by the medium, with 773 followers and a whopping 2,576 tweets. And the #suffolkpcc hashtag is generating on average 7-8 tweets a day, with none over the weekend. A quick look across the border at Cambridgeshire reveals similar levels of tweeting, so I’m not living in an isolated pocket of disinterest.
Of course comparing a local police election to the US Presidential contest is unfair. But what depresses me are two things. Firstly, we’re continually being told that social media is handing power back to the people, giving us the opportunity to communicate with our elected representatives and get our points across. And politicians have embraced Twitter, even if many just use it as a chance to retweet party propaganda and show off their own importance. But, equally importantly, I believe that the Police Commissioner elections should be about independent candidates as much as those backed by the party machines – social media levels the playing field as it is cheap, accessible and available to all. Everyone should have a view on law and order and, whatever it is, now is the time to get it across to those that will lead your police force in the coming years. Don’t just vote, tweet!
All Twitter figures correct as of 9pm, 13 November 2012
Bringing Silicon Valley to the UK
Silicon Valley comes to the UK (Photo credit: Cabinet Office)
Looking out at an another chill autumnal morning, the lure of Silicon Valley’s sunshine is increasingly powerful. But there’s a lot more to the success of tech companies in the US than simply climate. The question is what is it and can we in the UK learn how to replicate that success here?
That’s one of the key missions of Silicon Valley Comes to the UK (SVC2UK), a programme of events across the UK that brings across leaders from US companies such as Google, LinkedIn and Facebook to help, nurture and assist local entrepreneurs and their companies. Originally a Cambridge event it has now spread across the UK, covering London and Oxford as well. The theme of this year’s programme is scale – addressing the fact that while the UK and US are pretty evenly matched when it comes to starting up businesses on a per capita basis, the UK’s scale up rate is less than half that of the US.
Another strand of the programme is looking to uncover the next generation of startups through intense bootcamp events. The most interesting one of these is the Future Business weekend being held in Oxford and running in collaboration with SVC2UK.
It is looking to build on the research strength of the UK by providing access to existing patented technologies and essentially allowing teams to generate new ideas and innovative businesses around them. It’s often said that not enough research makes it out of the lab, and the event aims to change this by taking scientific intellectual property and making it available, along with support and mentoring.
Held between 9-11 November the weekend will be run by the Oxford Centre for Entrepreneurship and Innovation (OxCEI) together with the Future Business Pre-Incubator (FBPI) and Silicon Valley Comes to UK (SVCUK). The aim is bring together entrepreneurs, scientists, technologists and mentors to generate ideas and new companies to take existing patented technology to market.
The event uses the proven Idea Transform methodology, which underpinned the extremely successful Idea Transform weekend in Cambridge back in April 2012, providing structure and support to teams through mentoring, team creation, inspiring speakers and networking. And the good news is that selected projects from the event will then be supported through the Future Business Pre-Incubator with access to facilities, resources and ongoing mentoring.
Silicon Valley Comes to the UK starts on 15th November with an event at the Houses of Parliament – to find out more visit the website at http://www.svc2uk.com/
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Chris Measures
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