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.
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.
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.
Technology has the potential to deliver immense benefits to society in areas in diverse as healthcare, education and transport. The first Idea Transform weekend, held in Cambridge in April, aimed to unlock this potential, providing the skills and mentoring to turn ideas into reality.
So what’s been happening in the last three months? To find out Idea Transform held a meet up last week to give the chance for projects to discuss their process, and attendees to catch up. As an added bonus, Nic Lawrence of Light Blue Optics shared his thoughts on the startup experience and what lessons he’d learnt over the last eight years. Be hungry, keep learning, ask questions (both of yourself and other people) and build an outstanding team and culture if you want to succeed.
Two of the winning teams, Sim-Prints and Imvoto provided an update on progress, while Michele Mattioni talked about his project to link local food producers with their local buyers, which he pitched at Idea Transform and has been working on subsequently.
Sim-Prints uses a combination of finger-print biometrics and mobile phones to enable healthcare workers to collect and check patient information in the developing world. Winners of both the overall and healthcare prizes at the Idea Transform event the project has moved forward and is currently looking to create a prototype, while continuing to talk to both investors and foundations/NGOs to fund next steps. It has also made important decisions about structure, adopting the social enterprise model and abandoning the idea of patenting its technology, instead focusing on the delivery of the system.
Mobile learning provider Imvoto has also used the lessons learnt at Idea Transform to refine its project. Imvoto allows teachers to set maths questions for pupils to answer on mobile devices, enabling them to monitor attainment quickly and easily. In response to feedback from mentors, Imvoto has introduced adaptive testing to the product – meaning that future questions are made either harder or easier depending on a pupil’s answers as well as completely rewriting the teacher module. Following initial testing Imvoto is looking to launch a full beta programme in September.
So three months after Idea Transform, the good news is that most of the winning projects – and several that never made it past the pitch stage at the weekend are both still going strong and seem to be well on-track to help turn their promise into reality. Watch this space for more updates as they develop………..
In a week that saw the publication of the long-awaited Cambridge Phenomenon book, celebrating 50 years of innovation in the area, some more sobering figures concerning continued investment have been published.
Research from tech-focused investment group Ascendant found that while generally VC investment is up in Q1 2012, money doesn’t seem to be coming to Cambridge. £307m was invested in tech companies in the UK and Ireland – with £188m going to London-based outfits, and £27m to Irish ones. Cambridge (and Oxford) saw very little new money.
While it can be misleading to generalise based on three months of data this could be a worrying trend as centralised government action to boost London’s Tech City draws potential funding (and talent) away from the Cambridge ecosystem. After all, as Rory Cellan-Jones points out in his BBC Blog, Cambridge has potentially a better chance of creating world-class tech companies than London as it has already developed an ecosystem with research at its heart to feed innovative ideas to the market. But investment funding for Cambridge is key – not just in ‘scientific’ spinouts such as Owlstone and ARM but the more internet-style businesses and the thriving cleantech sector that Cambridge also supports.
So how does Cambridge compete against the media-savvy Tech City community when it comes to gaining funding? I may be biased as a marketer, but really feel that public relations has a strong role to play. There is still a tendency amongst Cambridge startups to treat PR as an afterthought rather than an intrinsic part of how you create a company and drive its success. You need to know your audience and deliver the right message to it at the right time using language they understand to succeed. Otherwise the risk is that Cambridge will become seen solely as the domain of technical wizardry rather than as a driver of customer-focused innovation that leads the UK tech scene.