UKIP – the biggest threat to the Cambridge tech industry

I’ve always tried to keep my blog apolitical, criticising politicians from all parties equally. But, given the seriousness of the rise of UKIP, I’m suspending my impartiality for a week. Why? Put simply, I believe that Nigel Farage’s party is the biggest threat to face the UK (and in particular Cambridge) tech sector for many years.

First off, I don’t seriously believe that UKIP will garner enough MPs in the 2015 election to be part of a coalition. But what it has done is to shift the debate sharply to the right in two key areas (immigration and the EU), causing the Tories to talk about curbs on the free movement of workers and set a date for an in/out EU referendum. And given that the Tories are likely to be a central part of a future coalition that is potentially very damaging.

Aside from the general business problems that limiting immigration and leaving the EU would bring, it would hit Cambridge and the startup tech scene in four distinct ways:

1. Education
Many of the highly skilled individuals currently working at or building tech companies originally came from overseas to study in Cambridge. It is already more difficult to get a student visa, and making it harder will simply put off the brightest and the best, who will head elsewhere. And every clever student who goes elsewhere diminishes the wider Cambridge academic population and impacts its reputation and attractiveness to new students.

2. Skills
Pretty much every Cambridge startup I’ve worked with has an incredibly diverse workforce, with employees from every corner of the world. They’ve chosen to come here, or have remained after study, and helped build amazing success stories with their skills. These are incredibly sought after and mobile people – limiting entry for them to the UK will mean they simply go elsewhere.

3. Entrepreneurs
Charles Wang, the founder of US software company Computer Associates once had a policy of only employing first or second generation immigrants in management roles. Wang himself was born in Shanghai and moved to New York when he was 8 years old. His reasoning was that immigrants had drive, entrepreneurialism and a desire to make something of themselves. Given they often arrived with nothing, they had no safety net, unlike established citizens who had never faced the dangers of real failure. Wang’s view is limited – I know plenty of driven, successful entrepreneurs from stable British families, but he has a point. Limiting immigration removes these potential entrepreneurs and the benefits they bring to their adopted country when it comes to jobs, taxes and the wider economy.

4. Ideas
A tech cluster like Cambridge isn’t about individuals, no matter how skilled they are. It is about how they interact together and share and develop ideas, based on their own knowledge and experience. Diversity is key – if you bring together a group of people with similar backgrounds and experience you’re unlikely to get the range of ideas that comes from a wider group. Ideas play off each other and grow – take away diversity and you severely weaken the idea gene pool.

In answering my points, critics may well make one of two arguments. Firstly, that we’ll still let in the best, most skilled people – it is the jobless benefit seekers that we want to turn away. That may be true but will they want to come to a country that appears so unfriendly to outsiders? And, how do you spot the entrepreneur or Nobel Prize winning physicist to be? They could be the yet-to-be-born child of immigrants that initially came over here to work in agriculture or to escape persecution in their home country.

Secondly, people will point to the US, which has restrictive immigration policies, yet the biggest tech/entrepreneur sector in the world. The difference is that the US is a country built on immigration, with a culture that rewards risk-taking and encourages people to try again after failure. We still don’t have that attitude in the UK, and we need free radicals to act as a catalyst to help change things.

The last 20 years have seen a huge expansion in the Cambridge tech scene, driven by the combination of ideas, skills and experience of people from many different backgrounds. Cutting off or limiting the flow of entrepreneurs, workers, students and researchers from outside the UK would completely change this energy and dynamism. It would still survive, but would be weaker, more insular and less exciting. That’s why it is important to tell politicians of all parties that we want to encourage responsible immigration and EU membership to build a successful Cambridge tech sector that benefits us all.

Selling out too early

Cambridge is rightly highlighted as one of Europe’s biggest innovation hubs, particularly when it comes to commercialising ideas that began in the research lab. This has spawned a huge biotech sector, and helped create a series of billion dollar tech companies that lead their industries, such as ARM and Cambridge Silicon Radio (CSR).

The Internet of Things (IoT) has been identified by many commentators as a key emerging market – and one where Cambridge has the ecosystem, experience and ideas to play a major role. So the news that IoT pioneer Neul has been sold to Chinese telecoms equipment behemoth Huawei depressed me. Not for nationalistic reasons, but simply due to the low reported purchase price ($25m) and the fact that the company has cashed out so early in the growth process. While there was a fair amount of PR spin around Neul’s progress to date, I genuinely believed it could join the billion dollar Cambridge club by developing its technology and building alliances and routes to market.

At the same time, Cambridge Silicon Radio is mulling a multi-billion pound sale to US firm Microchip Technology, reducing the number of major, independent, quoted Cambridge companies. Obviously investors and founders do look to realise their profits at some point, but it is important to balance this by looking longer term. While those that put money into Neul no doubt got a decent return, think how much more they’d have received if the company had been allowed to grow and exploit its market position.

I’m not alone in taking this stance. Cambridge Innovation Capital (CIC), the University of Cambridge-backed VC fund, recently warned its portfolio companies against selling out too early and promised to provide long term, founder friendly, capital to help grow the next ARMs and CSRs.

So what we need is the support, both financial and in terms of time, that gives companies the ability to achieve their potential. Not all of them will make it, and many will be niche players that logically fit better within bigger companies – but at least they’ll have had the ability to aim for the stars before finding their real place in the world. Otherwise Cambridge (and other parts of the UK tech scene), will simply act as incubators that turn bright ideas into viable businesses that can be snapped up and digested by tech giants looking for the newest innovation. It is much better for both the local and national economy that some of these startups make it the stock market as fully fledged businesses, creating ecosystems that generate new sectors and jobs. This requires longer term thinking from everyone involved – otherwise the number of billion dollar Cambridge companies will shrink even further.

A Marketing Tour de Force

Unless you’ve been living under a rock for the past few days, you’ll have seen that the Tour de France, the world’s biggest annual sporting event, visited the UK. From the Grand Départ (race start) in Leeds on Saturday to the final British stage from Cambridge to London on Monday, the race has been typified by enormous support, with an estimated six million people turning out to watch at the roadside.

Image from Scudamore’s Punting Cambridge http://www.scudamores.com

Putting that in context the normal total number of spectators for the entire, three week event is 12 million people. Riders described the noise levels at the roadside as ‘like being in a disco’, with climbs in the Yorkshire Dales resembling Alpe D’Huez when it came to the number of spectators. Even the normally insouciant French admitted it was the biggest start to the event ever.

I was one of the six million spectators, on both the Yorkshire stages and as a Tour Maker volunteer marshal in Cambridge and am still reeling from the exhilaration of the experience, with a sore throat from the shouting.

What makes the success even more amazing is the ratio of waiting to watching. The speed of the race means that the bunch tends to be past in less than a minute – even spread out on a climb it is less than 15-20 minutes for the final stragglers to come through. Yet people were in place the day before on climbs and 5 hours ahead of the race coming through on the flat. As someone pointed out to me, at 2 hours, the gap between the publicity caravan and the cyclists themselves was longer than a football match.

What makes people, many of whom had no interest in cycling, turn out in their millions and give up their time? And, what can marketers learn from the event’s success? I’d distil it into six characteristics:

1          Ownership and Pride
From the very start, the Grand Départ was billed as Yorkshire’s chance to shine, with the chance for God’s own country to show the world what it was capable of. This spurred a frenzy of creative ideas, from knitting miles of coloured jersey bunting to painting houses, people and sheep in tour colours. Every community wanted to outdo its neighbour in a friendly, but very serious rivalry. And this spread to the South as well – events and decorations in Cambridge and Essex stepped up a gear as they were determined to rival Yorkshire.

2          Inclusivity
I saw thousands of people on bikes around the stages – and importantly you could cycle on the roads for hours before the race came through, and immediately afterwards. And the bikes (and cyclists) came in all shapes and sizes – from ultra light carbon machines piloted by whippet-thin athletes to shoppers and standard bikes with enormous child carrying trailers. There may have been too much Lycra on display, but it really felt that everyone could take part without being judged on their knowledge of rear sprockets or cycle computers.

3          Planning and providing something for everyone
Recognising that cycling itself wasn’t of interest to everyone, there was a huge range of activities around the tour. From French-themed markets to public art projects, the organisers used the Tour to stimulate a whole programme of activities that brought people together. It wasn’t just the preserve of big business either – from the smallest shop to the largest company, there were opportunities to get involved without spending megabucks to become an official partner. Even if the Tour was just a chance to have a party or visit one of the fan parks with big screens, you could enjoy yourself without travelling far. Planning was meticulous, even if the sheer number of people caused unexpected delays on trains, and all the relevant authorities worked well together to deliver the event.

4          Make it real
For generations reared on seeing sports stars at a distance, the Tour is a complete change. It comes to your town and the riders pass within centimetres of the crowd (admittedly leading to some incidents as spectators misjudged the amount of space needed by a charging peloton). You have the chance to get close to the stars, rather than simply seeing them on screen. From riders signing on before the stage to warming down by their team buses afterwards, the whole spectacle is public and accessible.

5          Not stopping after the event
Too many brands are focused on initial engagement, then treat customers as expendable. Like the Olympics, the idea of legacy was central to the Tour’s success in the UK. Before Saturday, Yorkshire was probably not known by many outside Great Britain. Now, thanks to the power of the TV coverage, it has been seen by billions of people around the world. Already Yorkshire has plans for a follow-up race, and has set out its ambition to be one of Europe’s cycling hotspots, boosting tourism and the economy. We’re in the midst of a massive growth in cycling in the UK, with its associated health benefits, and the Grand Depart will spur many more people to switch to two wheels.

6          Deliver a damn good show
There’s a reason the Tour de France is the biggest annual sporting event in the world – it is absolutely enormous. 198 riders, 440 vehicles in the race convoy, at least four helicopters, and a requirement for over 14,500 beds every night give you an idea of the scale of the thing. The publicity caravan alone takes around 45 minutes to pass any particular spot. People I talked to at the roadside were blown away by the spectacle, the noise, the sirens and the free stuff thrown from the caravan. Spectators really felt that they’d been part of something to remember – no mean feat given the time they’d spent by the roadside.

Marketers should take note from the success of Le Tour en Yorkshire (et Cambridge) and learn lessons on how they can create an equivalent buzz with customers going forward. And Lycra doesn’t need to be part of it………..

The end to rural notspots?

Amidst all the hype about the rollout of 4G and the excitement around fibre optic deployments (note to BT – I’m still waiting, and you said I’d have it in June), the UK has a hidden issue when it comes to communications. Too many rural areas still don’t have a decent, basic mobile phone signal.

In my village, in the middle of Suffolk, only one provider has any reception – and that is just 2G, not even 3G. When the local mast went down for a month last year it paralysed rural businesses, as well as impacting on the lives of local residents. And this is not the Outer Hebrides – I’m less than an hour from Cambridge and Norwich, and 20 minutes from several major towns.

Given my experiences, the news that the Government is considering forcing mobile phone operators to share their networks (so called national roaming), to widen choice, looks like a positive move. Putting aside the fact that the starting point for the new rules was apparently David Cameron being unable to get a signal while on holiday in Norfolk, it should benefit anyone living in the countryside. It will help stem the growing gulf between rural communication ‘have nots’ and urban dwellers with 4G and superfast broadband. A similar system operates in the US, which has a lot more challenging terrain than over here.

Obviously the mobile phone operators are crying foul, pointing out that they have spent heavily on masts in rural areas, and being forced to share their infrastructure will jeopardise future investment. Frankly, I just don’t buy this. Everywhere else they have competition and somehow survive – after all, most people pick a network operator on price/what you get for your money, rather than “do I actually get a signal?” At the moment they have captive markets that they have carved up amongst themselves, forcing people to choose by postcode, not package. Sharing infrastructure makes it more cost-effective and opens up new markets. Additionally the government has promised £150m to improve areas where there is no coverage at all.

The government claims it has big plans to turn the UK into a skills-based, technologically literate society. Entrepreneurship is being encouraged (albeit focused heavily on the media-centric Silicon Roundabout), coding is being re-introduced into schools and infrastructure projects promise faster links between major cities. So far rural areas have been left behind – with high speed broadband projects running late and a lack of skilled jobs hitting local economies. It is time for the government to address these issues or risk creating a two speed economy that deprives those of us in the countryside of the same opportunities open to the rest of the United Kingdom.

Pi at the Palace

The Raspberry Pi is a quintessentially British invention. It was originally created because the University of Cambridge Computing Department felt that new students hadn’t a high enough level of programming experience when they began their studies. So a cheap, accessible machine was designed, using off-the-shelf components and plugging into available devices such as USB keyboards, SD cards and TVs. Like the webcam, another Computing Department invention (it was trained on the filter coffee machine at the other end of the building to avoid wasted journeys if the jug was empty), it combines technology with quirkiness and the British love of tinkering.

From these humble beginnings over 3 million have now been sold. To put this in context it is double the number of sales of the BBC Micro, the original government-backed home computer of the 1980s, and not far off the 5 million Sinclair ZX Spectrum machines that spawned a generation of programmers back then. It has even been shown to the Queen at Buckingham Palace, with founder Eben Upton ticked off by the Duke of Edinburgh for not wearing a tie.

However, the impact of the Pi has gone far beyond sales figures. It has created an ecosystem that spans everything from desktop arcade machines to funky cases. It is also being used within a whole range of other projects, from weather balloons to creating a pirate radio station. You can even run Spectrum games on it, linking back to the 1980s. And all of this from a non-profit company, that is now manufacturing in the UK.

And I’d argue that it has actually had a major hand in putting programming back at the heart of UK education. From September all primary school pupils will be taught programming, as opposed to how to use word processing applications. This will introduce a whole new generation to writing their own programs.

Even if just 5% go on to forge a career in technology, it will deliver a vast new workforce to the sector in the UK – as well as giving the other 95% some basic skills that will help them thrive in a world run by software. The availability of the Pi means it will be central to delivering these lessons, and the community has already created a huge volume of materials for teachers.

Once lessons start I’d expect many more parents to invest in a Pi (either driven by pester power or because they want to help their children succeed) – and at 20 quid for the most basic version it is within the majority of families’ budgets, at less than the price of a new PlayStation or Xbox game.

So I’d argue that the Pi’s rise to prominence hasn’t even really started yet. The combination of its community support, simplicity and the growth of programming means it will go from strength to strength. If you’ll excuse the pun, the Pi really is the limit…………..

Silicon Valley, Europe

Governments across Europe are always obsessing about creating their own Silicon Valleys, rivals to California that will catapult their country/city to international tech prominence, create jobs and make them cool by association. As I’ve said before, this is partly because such talk is cheap – bung a few million pounds/euros into some accelerators, set up a co-working space near a university and you can make some tub-thumping speeches about investing in innovation.

Obviously there’s a lot more to creating a new Silicon Valley than that. So I was interested to read a recent EU survey of European ICT Hubs, which ranks activity across the region. It doesn’t just analyse start-up activity, but also factors such as university strength, external links and business growth. While Munich, East London and Paris top the table, (with Cambridge at the top of tier 2), what is interesting is the sheer number of hubs and their relative strengths, despite many being quite close to each other.

There is a European obsession with a single hub to take on Silicon Valley, but as Paul Stasse points out in this piece on Tech.EU, if you zoom out and centre your ‘hub’ on Brussels, a 400km radius will bring in the majority of the EU’s ICT hubs. So consequently you need to go beyond individual cities or regions to move to a larger scale view. After all, Silicon Valley itself is not a single place, but a collection of cities and towns, that spreads from San Francisco through the Santa Clara Valley. So, while the Santa Clara Valley is geographically 30 miles long and 15 miles wide, the actual area of ‘Silicon Valley’ itself is much bigger.

In that case, why can’t Europe create its own Silicon Valley encompassing multiple hubs? Or even Valleys within countries – it is around 60 miles from London to Cambridge, so it wouldn’t be a stretch to build the M11 Valley (though with a catchier name).

The trouble is, California has some pretty big advantages that have helped Silicon Valley grow. While entrepreneurs and programmers flock there from all around the world there’s one business language (English), one legal system and one predominant culture. Being part of the US gives immediate access to over 300 million people in a single market. Europe’s diversity is both a strength and a weakness – you can’t simply up sticks and move your company from, say, France to Belgium, with the same ease as from San Jose to Palo Alto.

In my opinion what is needed are three things:

1              Be more open
I’m as guilty as the next person, but individual hubs need to look outward more, rather than believing that success ends at the ring road. Only by encouraging conversation between hubs and idea sharing will innovation flourish.

2              Make movement easier
You are never going to change cultures, but the EU has a role to play in standardising the playing field when it comes to creating companies, harmonising legal systems and generally helping create a single market. That way entrepreneurs and companies can move more easily and collaborate, without having to duplicate bureaucracy or red tape.

3          Celebrate what we have
It is time to end the obsession with creating the new Silicon Valley. It isn’t going to happen. Instead, celebrate the ability Europe has to build multiple, interlinked hubs that play to our strengths, rather than bemoan our inability to spawn the next Facebook.

Silicon Valley, Europe may not happen but by supporting existing, successful clusters and hubs we can build a technology industry that can drive innovation, growth and jobs.

The PR war for AstraZeneca

Ultimately the fate of Anglo-Swedish pharmaceutical company AstraZeneca, under siege from US giant Pfizer, will be decided by its shareholders. But that hasn’t stopped the potential takeover from becoming a political football, with MPs, ministers, businesspeople and scientists all providing their views.

Some of them are justified in sharing their opinion – the MP for Cambridge Julian Huppert wants assurances to protect the high value jobs coming to the city from AstraZeneca’s proposed new research campus. University of Cambridge Chancellor, Lord Sainsbury, is concerned about the impact of a takeover on scientific research in the area and beyond.

Others however have fewer grounds for comment, but with a general election next year (and a European poll looming), it is a chance for the main political parties to try and differentiate themselves. It is a delicate balancing act, particularly for the Conservatives. On the one hand, they want to demonstrate their free trade credentials, but on the other they champion investment in scientific research as critical to moving the UK away from being a services-based economy. In many ways it is easier for Labour, as they are able to call for decisive action to stop the takeover, without having to actually implement anything.

Pfizer under attack
On the PR front, Pfizer is facing an onslaught from multiple sides:

• The positive tax implications of buying AstraZeneca and moving its headquarters to the UK have been highlighted as a major attraction of the deal, rather than a desire to invest in research.
• It is also hamstrung by previous behaviour – it shut its research centre in Kent (where Viagra was developed), leading to 1,500 job cuts and has slashed staff numbers following other takeovers. Indeed, the ex-CEO of AstraZeneca has said he has concerns that “they will act like a praying mantis and suck the lifeblood out of their prey.“
• A pledge to keep 20% of R&D jobs in the UK in the event of a takeover has led to worries that posts will be cut in the US.
• Finally, its first quarter revenue fell by 9%, $730m below analyst expectations, as patent protection runs out on key drugs.

The reason for much of this ire is actually retrospective. MPs and the general public are still smarting after the hostile takeover of Cadbury by Kraft, and in particular the broken promises on factory closures given to parliamentary committees by CEO Irene Rosenfeld. There’s a public determination not to be made a fool of again driving a lot of political behaviour.

The Pfizer PR strategy
This means that Pfizer is being cautious and taking the time to get its message across, with CEO Ian Read making trips to the UK (note how his Scottish background is being played up), intense lobbying of the government and assurances being given about jobs in the short-term.

However with less than three weeks until the bid deadline of 26 May, expect the tactics to evolve, depending on what will sway stakeholders. In a way AstraZeneca wants Pfizer to turn nasty, so it can claim protection from the Big Bad American, but I think that its opponent’s PR strategy is too clever to fall for that. It will just chip away, giving what appear to be increasingly concrete reassurances in public on jobs, while lobbying investors and politicians behind the scenes, potentially raising its bid without going overboard.

Will it be enough? Time (and PR) will tell, but I fear that the combination of Pfizer’s stealth approach and the short-term focus of many investors, will take the prize.

Campus vs College – creating the best environment for ideas

Everyone understands that the bigger a company gets, the more difficult it is to create and nurture ideas. There are a number of reasons. The sheer size of the organisation mitigates against change – it is incredibly difficult to get everyone to understand a game-changing idea and align themselves behind it. You get a fragmented approach and the whole thing can get mired down in bureaucracy and finger-pointing.

Large organisations are inherently conservative, with people not wanting to rock the boat, while there is fierce rivalry between different divisions/departments which can lead to ideas being squashed if they seem to tread on someone else’s turf. There’s also a fine line between a strong company culture and having too inward looking a focus. Even successful companies such as Facebook have been accused of a lack of perspective – because they solely use (and love) their own products they assume they everyone else believes they are equally awesome. Step outside the organisation and your obsession is just a minor part of the lives of your customers.

The good news is that the majority of organisations do understand the need for a stream of fresh ideas. After all, the world today is dominated by companies such as Google, Facebook and Amazon that either didn’t exist twenty years ago, or were considerably smaller. Competition in every market is increasing and no-one wants to go the way of Nokia or Woolworths.

So how do you align your company to create the best forum to create ongoing ideas? I’m no management consultant, but I’ve seen a few attempts over the last twenty years and it boils down to three broad types:

1              Innovation silos
In many industries (such as pharmaceuticals), where innovation relies on expensive capital equipment it makes sense to create separate, concentrated, research labs. These have the intellectual muscle and resources but can suffer from their sheer size and distance from the business. They can then hit the same problems as any other big organisation, with divisional rivalry and static corporate culture. Alternatively businesses have focused innovation in standalone business units – either skunkworks operations that are locked away from the rest of the organisation, incubators that support promising ideas at arms length or even smaller companies that have been bought and are run as ideas factories. All of these can work, provided management stay true to their word not to meddle or demand fast results, but there’s still no connection with the wider business and its needs.

2              The campus
You break up your monolithic organisation into a campus style environment, with different divisions occupying their own buildings, but close together. Splitting into smaller teams is good for creativity, and you get the economies of scale of having everyone on a single, but large, site. However the ability to cross-pollenate between groups can be limited – unless you happen to bump into someone over lunch you might be completely in the dark about what other sections of the company are working on.

3              The college
What I think is really interesting about the campus model is that it deliberately mimics the university campus structure. While this makes for a good working environment, it doesn’t help spread ideas. So I think companies need to look at a more collegiate model, similar to that of universities like Cambridge. You have two allegiances/bases – your division (essentially your college) and your actual project (your faculty). So you get the chance to mix with people from other divisions and collaborate on joint projects. Some people may find it disorienting, but if projects are scheduled to last 2-3 years the goal is never that far away.

Innovation is vital in every industry, and the size and structure depends on the sector and the market each company operates in. But I think it is time for more organisations to look at the college structure if they want to nurture and develop a stream of ideas that take their business forward over the long term.

 

Google, Nest and the opportunity for startups

In many ways the news that Google has bought smart home company Nest Labs shouldn’t be a surprise. It has been talking to the company for some time and apparently lots of Google employees had installed the company’s sensor based thermostat in their own homes.

More to the point I think it fits in with Google’s overall objectives. As analysts have pointed out, Google isn’t a search engine company (and hasn’t been for some time), but is about data – collecting it (analysing search results, Google Glass, StreetView) and then using it to either sell you things (through adverts) or make your life better in some way.

With billions of sensors embedded in previously dumb objects that will be communicating in real-time, the Internet of Things promises to create a tidal wave of data. Each piece will be tiny, but if you can bring it together and analyse it you can get an even deeper view of the world around us, and the people in it. Nest’s products are much more than thermostats, and provide Google with the sensor/Internet of Things expertise it needs to add to its product portfolio. It already has Android-based smartphones/tablets to act as controllers, the mapping technology to show where sensors are located and the technology to analyse billions of events in real-time. And with Google Fiber rolling out in several US cities, it has a network to send the data through as well.

A simple example – your Nest thermostat notifies you that your boiler has gone wrong via your smartphone while you are at work. And suggests a registered tradesman that can fix it by trawling the web and any recommendations in your Google+ circles. Or alternatively gives you the address of the nearest clothing shop, so you can stock up on thick jumpers.

Many people (myself included) would find this a bit creepy, but it is potentially possible if you can knit all the technology together. What I think is interesting is how utilities will respond to the future entry of Google into the market. After all, as publishers and others have found, Googlification can squeeze out incumbents through sheer scale and by engaging more closely with customers. Utilities have to decide whether they want to partner with the likes of Google, risk losing the customer relationship and become commodity suppliers of gas and electricity or take a stand and build stronger engagement with customers. In current circumstances that’ll be difficult – people are at best ambivalent about their utility supplier, and in an era of rising prices and poor customer service many actively dislike them.

So there’s a big opportunity here – and something that Cambridge’s cluster of smart home/green tech companies could exploit. For example, AlertMe already has a partnership with British Gas, while Sentec is working with metering companies to make their products smarter. If energy companies don’t want to work with Google then they have two choices – do it themselves (teaming up with smaller tech companies), or partner with larger industrial tech companies, such as Siemens or Bosch. And these industrial giants will need the specialist expertise that smart home companies can provide.

The utility market doesn’t move fast, so don’t expect to see Google running your home in the next year, but the Nest acquisition should actually spur the whole sector on, attracting both interest and investment. The world just got more interested in smart homes, which is good news for relevant startups in Cambridge and beyond.

 

The Cambridge Cluster – what’s missing?

As I’ve said before, startup clusters are springing up all over the place and that’s great. There’s even one in my village (population 3,000) – well, two startups and a group of support services, including myself.

Clusters encourage innovation, particularly through external economies of scale – i.e. by providing access to the people, resources and infrastructure that startups need but don’t have themselves. And the more startups there are in an area, the lower the price of these services as they are shared across a greater number of companies.

A lot of these clusters seem to be driven from outside, particularly as both central and local governments realise that startup clusters are (a) sexy and (b) cheap. Why not give them a small pot of money/some space/a patronising visit to show you’re supporting innovation?

So, putting cynicism aside, what does a startup cluster require – and how does Cambridge measure up? I’ve been looking at Brad Feld’s work on building a startup ecosystem, based on 20 years experience in Boulder, Colorado. The aptly named Boulder Thesis highlights four things that these communities must have:

1. They should involve entrepreneurs and feeders (people/institutions like universities, government, venture capitalists, lawyers, PR people). BUT they have to be led by entrepreneurs if they are to truly take off.
2. Long term. It can take 20 years to build a community, so entrepreneurs need to stick around, even if they’ve built and sold their company long ago. And the same goes for those that fail – encourage them to stick around.
3. They need to be inclusive, welcoming anyone, no matter what their skills or ideas.
4. They need to be active, with a range of events and accelerator programmes to help encourage and nurture startups.

That’s Boulder. Let’s compare it to Cambridge.

Firstly there’s a large community of entrepreneurs and feeders in the city (so a tick there) and entrepreneurs are taking a leading role. And given the longevity of the Silicon Fen success story there are plenty of long term entrepreneurs who have stuck around, from Hermann Hauser to Mike Lynch.

It’s the third and fourth points where I believe Cambridge has issues. Don’t get me wrong, there are some incredibly welcoming people in the Cambridge community and some great events/accelerators that nurture startups. But, perhaps because of the size and depth of the community, spanning everything from medtech to green IT, groups can appear disconnected, with everyone focused on their niche. Some of this may come from the research-led nature of many Cambridge innovations, but, even in academia, cross-discipline working is becoming more normal after centuries of specialism. Compare this to places such as Norwich, which has a smaller (but still substantial) startup community that seems more cohesive, with greater communication between disparate companies with radically different ideas.

What Cambridge does have, and that I think is missing from Feld’s thesis, is the combination of new and old blood. The universities, and increasingly tech businesses, attract talent, much of which stays on and contributes to the ecosystem. But enough leaves to make space for new ideas so that things don’t go stale.

So, in true end of term report style, Cambridge needs to try harder when it comes to building a cohesive, overarching supercluster. It has the constituent parts, but what is needed is stronger glue to stick it together and help connect the bigger picture. Let’s see if 2014 brings a solution to this long term problem.