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.

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.

 

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 15^th 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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Tapping into the herd mind

Yesterday’s Another Marketing Conferencesaw a number of illuminating and involving presentations, designed to provide ideas and guidance for marketers of all types. Held in Cambridge, it had some great speakers, slick (but not too slick) organisation and a wide range of delegates.

English: Deep in thought………. Separate from the remainder of the herd but with a wonderful view. (Photo credit: Wikipedia)

One presentation that stood out for me was Mark Earls (aka @herdmeister) talking about how marketers are essentially failing to understand their customers. We treat consumers as rational, thinking beings, when essentially we’re dominated by a desire to avoid thought and follow the herd. As Nobel prize winner Daniel Kahnemann put it: “We are to thinking as cats are to swimming. We can do it if we have to, but we don’t particularly like it.”

Mark outlined four handy principles:

1. People do first and think later – they might post-rationalise their decisions and believe they acted logically, but that’s after the fact.
2. We’re far more like Captain Kirk rather than Dr Spock, so you need to make it easy for people to make decisions, rather than thinking.
3. People aren’t looking for the best, they are looking for ‘good enough’. We’re living in a universe of too much stuff, the vast majority of which doesn’t involve life or death choices. So we’ll generally go with what satisfies the need rather than spend days searching for the best possible option.
4. People harmonise with other people automatically. In an uncertain decision landscape we’re most likely to choose what our peers are choosing rather than listen to marketing around us. We learn by copying others.

What I think is really interesting is how this plays out in social media and online. We tend to Like what our friends Like, we want to follow people that our friends follow and watch the videos that they do. So once something gets momentum behind it (think Psy’s Gangnam Style) it just grows and grows.

You can see this as depressing, as essentially it explains mob behaviour, but as marketers we need to understand how customers operate if we’re going to successfully engage with them. What decisions are independent and what are herd led? Structure campaigns accordingly and you can change behaviour and ensure your message gets across.

There’s more on this in the new book Mark has co-written “I’ll have what she’s having“ which was handily included in the goodie bag from the conference and has moved to the top of my reading list. Watch this space for a fuller review.

ARM about Face?

At the launch of Tech City in 2010 David Cameron stressed that he wanted the initiative to help encourage UK ideas and entrepreneurs and pointed to Facebook as the perfect example of the type of business the area could create. Unsurprisingly given Facebook’s share price issues it isn’t a name that he’s been bandying about recently but the message was clear – content, and web-based businesses are the future for UK technology.

Unfortunately that message is wrong on a whole stack of levels. There is a place for content/web-based businesses (unless it is yet another social network)

ARM Breakout Boards (Photo credit: Randomskk)

but as part of a varied ecosystem that spans different technologies rather than as the figurehead of UK Plc. Content-based businesses tend to be lean (so not many high powered jobs), use resources across the world (so not a huge investment in the UK) and can be run from anywhere, making them ultra-portable. Therefore you need a lot of them to create critical mass and actually deliver measurable benefits to the economy, rather than providing appealing photo opportunities.

In contrast, national politicians are a lot less effusive about companies like ARM that provide the technology that underpins real, physical products. In many ways ARM is essentially a software company – it doesn’t make its own chips, licensing its intellectual property to others around the world. And doing so very successfully – with over 20 billion ARM-based chips shipped to date it dominates particular sectors, such as smartphones and tablets.

Comparing ARM and Facebook throws up some interesting statistics:

• The US social network has more employees (nearly 4,000 compared to ARM’s 2,000)
• At current share prices Facebook is valued (even now) at $41 billion; in contrast ARM is worth a paltry $12 billion.
• 2011 turnover for ARM was $781m, dwarfed by $3,711m for Facebook
• Profits for the same period were $2,851m for Facebook, $350m (£221.7m) for ARM
• But taking a closer look Facebook’s gross margin in 2011 was 76% compared to ARM’s 94.4%

Clearly Facebook is bigger, richer and earning more money – even if it isn’t necessarily paying full tax on its UK earnings. But once you add in the ecosystem of companies developing applications/chips around each company then the picture changes. ARM is at the heart of an enormous global community of chip companies, design houses and embedded engineers, all developing using its products – and paying royalties on everything they create. It has spawned a number of spin-offs, in Cambridge and beyond, and essentially created a business model that is now widely copied by other fabless semiconductor companies.

So looking beyond the hype, I firmly believe that ARM has delivered much greater benefits to the UK economy than companies like Facebook. It has built up our skills and innovation base, contributed to the formation of the Cambridge technology hub and created opportunities for highly paid, sought after jobs. Now’s the time for politicians to recognise ARM’s success and use it as an example of what UK tech should be about, rather than solely focusing on the latest trendy web-based businesses.

Cows, herds, social media and innovation

Cows on Coe Fen (Photo credit: James Bowe)

When it burst upon the scene, social media (and indeed the whole internet) was seen as a chance for individuals to get their voices heard. Whether it was campaigning on big issues not covered by the mainstream media, providing a stage for new musical or film-making talents, just updating your family and friends or making it easier to find a new job, social media was the great leveller, removing the middlemen and letting us all be ourselves in front of a world audience.

But in fact it hasn’t really worked like that. Those with the highest number of Twitter followers tend to be established celebrities, who use it as a channel to broadcast their views and while a number of new talents have popped up from social media you get the feeling many would have made it through other means. People can share much more of their lives online, but that doesn’t mean the world is listening (or can even be bothered to find them).

This state of affairs isn’t really surprising, for two main reasons. Firstly social networks aren’t that clever. For example, they automatically suggest people you’d like to follow/friend dependent on your background and contacts. So you don’t get exposed to random influences in the same way you would if you picked up a paper, tuned into the radio or went out and physically met people at an event. You get the chance to connect to more people just like you – hardly very individual.

Secondly, seeking social approval is hard-wired into a lot of us. Going back to our early development when we needed to stick together as a tribe to survive, we want to be accepted and within the pale. So in general we’re not likely to make the effort to go off and find random connections or come up with wildly contradictory views. If you want to see this translated into internet terms just look at how quickly some things trend on Twitter or the number of comments on certain Daily Mail articles.

So we’re all part of our herds, likely to think along broadly similar lines on or offline. This makes it a lot easier for marketers (and politicians) – rather than having to deal with people as individuals you can lump them together into particular demographics and then deal with them en masse. The problem with this is that genuine innovation tends to come from the mavericks – the people that run against the tide and aren’t afraid to be different. However in an atmosphere of conformity they can be lost, or, in the case of social media shouted down by the vocal majority. And this means the opportunity for innovation is stifled and rather than someone introducing an earth-shattering new business idea, we get yet another slightly different social network launched.

But all is not lost as there are genuine new ideas out there. And rather than heterogeneous clusters such as Tech City, the majority are coming from academic research, in Cambridge and elsewhere – where blue sky thinking is encouraged. Not every idea will work, not every idea is practical, but it provides an antidote to the herd mentality. And as we become more and more reliant on social media we need to encourage and fund this left field innovation and take the time ourselves to look further afield when we widen our own circles on social networks.

Why aren’t more MPs Twits?

Public trust in politicians has never been amazingly high, but it seems to me that it is at an all time low. The impact of the expenses scandal, the Leveson enquiryand a general disbelief that they can do anything to get us out of the current economic mess have led to a real disconnect between politicians and their electorate. You can see this in falling turnout at the polls and a growing cynicism that our elected officials have our needs and concerns at the heart of what they do.

Free twitter badge (Photo credit: Wikipedia)

The wider that this disconnect grows, the greater the danger that people will simply switch off from politics and democracy will be endangered. What is needed is a new way of building bridges between politicians and the communities they serve, and technology offers some great new channels (and new pitfalls).

As a student I remember you could just turn up at the House of Commons and ask to see your MP – if they were free they were pretty much honour bound to come down and talk to you. Of course it didn’t work if they were busy (as Prime Minister my local MP was running the country) and nowadays the security checks would take an age, but at least it advertised they were accessible in some way.

Looking at technology, you’d think email would be the perfect way of communicating with constituents. However in an era of Freedom of Information Act requests many politicians are now too scared to commit themselves to responding to emails in anything but an anodyne, inconclusive way – the fear is that their words will be dragged up to haunt them in the future. While I don’t buy this – words are deeds after all and you should have the courage of your convictions, it means we need another way of keeping track of our elected politicians.

The perfect channel to me seems to be Twitter. MPs can provide short updates on what they are doing, be accessible to constituents and actually demonstrate what they are doing all day. They will also come across as more human, though we can probably live without knowing what they had for breakfast. Obviously Twitter sits alongside other channels such as constituency surgeries, answering correspondence and face to face visits, but it provides a real-time view into the politician’s daily life.

That’s the plan, but not really the reality. Talking to Cambridge MP (and prolific tweeter) Julian Huppert, at last Friday’s Creating Cambridge BBQ, I was struck by the gulf between those that have embraced the channel and those that shy away from it. It isn’t about age or party – my local MP in Suffolk uses Twitter mostly to RT point scoring stories knocking the opposition, with nothing about what he does all day. And he’s a similar age (if not younger) than Julian Huppert.

So here’s my manifesto for making MPs (and indeed all politicians) more accessible – get them onto Twitter and make it compulsory to tweet all the meetings they attend, their voting records and the constituency visits they make. That way there’ll be a complete public record of what they’re up to, allowing their constituents to question them, increasing engagement and hopefully re-connecting politicians and the electorate.

Idea Transform – where are they now?

idea (Photo credit: Tony Dowler)

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………..

Where’s the money going?

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.

Punting in Cambridge, UK (Photo credit: Wikipedia)

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.

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