Saturday, April 27, 2013

Attitudes to failure

Delegations to Cambridge from near- and far-flung corners of the world who are seeking to develop their innovation ecosystems often have a clear idea of what they want to investigate during their visits. They typically want to know what institutions have supported the growth of the cluster, how they have done this, and who the 'key influencers' are.  What attract less attention are the softer issues of culture and attitudes.  Key among these is the attitude to failure, neatly summed up by Andy Richards who said Cambridge is "a low risk place to do high risk things".  Recently completed research at the University of Cambridge Institute for Manufacturing sheds some more light on this issue.  Keith Cotterill, himself a serial entrepreneur and investor, recently completed his PhD comparing attitudes to failure in three successful innovation clusters:  Silicon Valley, Munich and Cambridge.   A summary of his research can be accessed here.

Sunday, July 15, 2012

Cambridge from the outside looking in: weird and wired

The Institute for Manufacturing recently hosted a visit by group of managers from major German corporations. Their programme included talks from academics, business networking organisations, business incubators, innovation-related student societies, investors, and visits to a wide variety of local firms.  I thought that viewpoints captured during the final day of their two-week visit were worth sharing as they reveal interesting trends in the cluster from the external perspectives of large, technology intensive multinational corporations. 

People: While the stories of serial entrepreneurs such as Hermann Hauser and David Cleevely were impressive, and the high energy activities of the students were inspiring, the visitors were particularly interested in the 'second-timers'. These were the highly technically competent engineers in the 30-40ish age range who had set up one company and were now on their second. There was remarkable commonality with many of their stories. The first venture had typically been very 'technology-push', requiring large amounts of funding for product development (based on some terribly clever but often low readiness level technology).  By the time potential customers had been persuaded to recognise the value of the product, the funding had been exhausted. The second venture was much more market-pull, with close involvement of potential customers from the outset.  Engagement of users in the early concept development, the recognition that the technology only needed to be 'good enough', and that the business model was key were all features of these second ventures.
Business models:  The visitors had anticipated hearing the typical generic VC-backed start-up story repeated throughout the visits.  What they actually saw were companies that mostly had no VC backing. Some had Angel funding, but most had started with a combination of grants, personal funds (in some cases the gains realised from successful previous ventures), and revenues from customers. They were mostly targeting a niche where the entrepreneurs' specific knowledge and resources could be targeted.  Many had followed the path described by Eric Ries of getting the minimum viable product in the hands of customers and then adapting in response to feedback from these initial users. Extensive planning, plotting of scenarios and Excel wizardry had been replaced by customer engagement, rapid prototyping, and flexible scale-up.

Cambridge is weird and wired:  There was a level of on-going befuddlement throughout the visit. Our attempts to illustrate the complexity of Cambridge may have resulted in more confusion than clarity: Who was in charge of Cambridge? What is the plan for Cambridge? Why are their so many networks? What is the role of the local government?  But one message did stick clearly: Cambridge is an extremely networked community - and it is that connectedness that provides the fertile ground from which successful ventures can start.  In so many presentations, multiple connections could be clearly seen. That student winner of the business plan competition was also actively engaged in this networking group, and had received funding from that business angel, who was also mentoring this new venture, which was connected to .. etc.  But what could have looked like quite an incestuous community was also shown to be open to outsiders, as reflected in the number of start-ups whose founders had come from outside the region.

Cambridge continues to be held up as an exemplar of an innovative cluster (or 'innovation ecosystem' as seems to be the new label of choice) but the complexity of its activities can be hard to explain to those outside - and for that matter to many inside  - the community.  Cambridge can provide lessons that could be helpful to others, but those lessons are not simple to extract.  If Cambridge wants to continue attract the resources of external organisations, more efforts need to be made to communicate what Cambridge is, what it does, and how those from outside can work with this networked and highly innovative community for mutual benefit.

Saturday, March 17, 2012

TEDxGranta 2012 - Inspirational

The 2012 TEDxGranta event was a joy to attend.  The event, one of many independent events organised around the world as part of the wonderful TED network*, managed to delight, inspire, amuse and cause jaws to drop. I was lucky enough to be one of the speakers at this event (wearing my 'We need more children to be interested in engineering!' hat; and if you want to know more  - with apologies for the shameless plug - come along to my talk at the Cambridge Science Festival on 24 March).  
David Constantine
Co-founder of Motivation
(Photo: vandym2002)

The topics of this year's TEDxGranta talks spanned music, homelessness, animation, Kung-Fu, linguistics, preserving culinary history, computer literacy, and design. (Reviews of all the talks can be found on Doug Shaw's blog, and videos of all of them will soon be available on YouTube).

This event illustrated the best of what Cambridge can do; it drew upon both the strength of the wonderfully rich Cambridge creative and innovative ecosystem, and its wider national and international network connections.  The TEDxGranta team did a superb job in bringing everything together; the venue (The Junction J2) was very appropriate; and the content wonderfully diverse and well-orchestrated.
Merlin Crossingham of
Aardman Animation
(Photo: vandym2002)
But attending this event reminded me of the dangers of getting stuck in a rut.  In common with many others in Cambridge, I am a regular attendee at the numerous high quality technology entrepreneurship related events that run every week across this city.  These events are a key ingredient in the success of the Cambridge high tech cluster, and are great at building our communal understanding and ability to accelerate science and technology to market to address new opportunities. But the majority of such events are, intentionally, deeply business and/or technology focused.  What events like TEDxGranta do so well  - and in fact what all TED events aim to do - is to bring together the worlds of technology, entertainment and design, to paint a bigger picture, using a much richer palette. Attending TEDxGranta was a day very well spent, and I suspect that the impact on me will last a lot longer than most other events I have attended in recent months. 

*If you don't know about TED, click here to access a staggering range inspirational videos.

Sunday, October 23, 2011

Cambridge Cleantech: An idea whose time has come?

Last Friday saw the launch of 'Cambridge Cleantech' at the great new lecture hall at the redeveloped Cambridge campus of Anglia Ruskin University.  The turnout was impressive: 300+ attendees at 07:30 in the morning is quite an achievement for any event.  The success of this launch event  - bringing together investors, entrepreneurs and academics - did seem to point to the notion that a network dedicated to clean tech in the Greater Cambridge (broadly defined) could be bang on the money. But why has this only happened now?
There have been numerous 'green' related local and regional initiatives in the past but none has really managed to bring together the diverse geographic and sectoral interests to act as a voice for the wide range of cleantech organisations in the same way that OneNucleus has done for the life sciences and Cambridge Wireless has done for those commercialising wireless technologies.
This diversity of needs and interests may be one reason for the lack of a single voice for cleantech to date, coupled with the fact that there are so many other business networks into which cleantech, and cleantech-related companies have been able to fit.
Some prior attempts at bringing together 'green' companies have been more publicly-funded push activities, with limited private sector, business-driven pull, and hence lacked market traction.
There has also been the dilemma of the 'C-word'.  While 'Cambridge' is a superb national and international brand, using it (even in its broader 'Greater Cambridge' version) to represent a region that stretches from Bedford to Ipswich, and King's Lynn to Harlow has, for some, stretched both the brand and the patience of those far from Cambridge.
Then there are also changes in the cleantech sector itself (which is not really a sector but rather a collection of technologies applied to deliver some specific benefit but minimise impact on the environment).  This multi-faceted sector is increasing in maturity in terms of consumer uptake, investment readiness, and refinement of available business offerings. But there is still a long way to go in getting the best solutions to market to address the sustainability opportunities presented by the huge range of needs of individual and business consumers.
And this is why a network  - leveraging the power of the Cambridge brand for regional benefit - that represents and lobbies on behalf of this diverse range of organisations, facilitates value-adding connections between these firms, and supports the development of its members is so timely and important.

Sunday, October 09, 2011

Phenomena in Cambridge and Kyoto, and the need for a Japanese Hermann Hauser

"We don't have a 'Kyoto Phenomenon' because we don't have a Japanese equivalent of Hermann Hauser".  I heard this statement at a recent meeting in Japan attended by a small group of academics, entrepreneurs and investors, and it triggered the following thoughts.
There are, of course, numerous outstanding entrepreneurial role models in Japan, individuals who have driven major transformations in industries and defined whole new product categories.  For example, Akio Morita of Sony (who co-founded the company and introduced the famous pre-cursor to the iPod, the Walkman), Masayoshi Son of Softbank (an outspoken multi-billionaire who built Softbank into one of the country's leading internet and mobile phone companies) and Tadashi Yanai of Uniqlo (another of Japan's richest men, who built a global clothes design and retailing empire).
Despite such notable successes as these (and others), commentators highlight the absence of a thriving startup culture - in part a result of the comparatively weak domestic VC industry -  as a key reason for Japan's 'lost decades' (the period since the early 1990s during which Japan's economy has stagnated).  But what about alternative models of recovery?  Though there are plenty of good arguments that point to embedded structural problems with Japanese companies and their strategies, there are also quite a few that point to their ability to respond to and cope with change.   Kyocera's growth from 3,000 to 60,000 employees up to and through the lost decades is an example.  The strategy of Japanese firms in India is another one. But the role of Japanese entrepreneurs in stimulating economic recovery in Japan is, as Ben Goldacre would put it, 'a bit more complicated than that', and so this topic will be the subject of a longer post later in the year.

In the meantime, to find out why Hermann Hauser (and the numerous other successful role models) have been so important to the birth and growth of the Cambridge Phenomenon - and why the absence of a local version of him in clusters elsewhere is perceived as a handicap - come along and hear his views in person at this week's Cambridge Network meeting at Robinson College at 17:30 on12th October.

Sunday, October 02, 2011

Hardware, software, monozukiri, and Cambridge

Last week I went to a talk given at ITEC in Kyoto by Bob Cole from UC Berkeley on the topic of Japanese software. This triggered a number of thoughts relating to my last blog post on the topic of the role of manufacturing in innovative regions. Two key points relating to Bob Cole's talk were:
  • Japan's ICT and consumer electronics industries were built predominantly on innovative hardware solutions, supported by bespoke software. This hardware focus plays to, and helped build upon, Japanese strengths in designing and manufacturing precision goods (the term often used to describe this is monozukiri - the art of making physical things).
  • The world of ICT has moved to being much more software intensive. The recent activities of HP and IBM provide ample support for that point. Japanese companies have been losing competitiveness, and do not seem able to make the transition to a more software intensive approach (but caution is needed in terms of causality and correlation there).
During the talk, the question was asked of the Japanese technology managers in the room 'In your development activities, do you start with hardware then bring in software, or is it the other way round, or do you do both together?'. The response was ~80% for hardware first, software second. A lively discussion ensued, part of which focused on Japanese management structures where seniority rules. The older employees are more likely to be hardware specialists, and software will larger be the domain of younger - and hence more junior - engineers. As a result, hardware dominates. If this is the situation (and there are many other factors to consider before leaping too quickly to conclusions) then for Japan’s ICT firms to transform themselves, different approaches are needed. One idea put forward was for Japanese ICT firms to partner with (or buy) innovative start-ups and use these external organisations to stimulate internal change. This is possible, but research shows that getting very large, old, complex firms to partner with small, new, agile start-ups is very challenging. Also, partnering for collaboration is one thing; expecting culture change within the larger firm as a result of the partnership is a much bigger issue. 
So, what's all this got to do with Cambridge? Cambridge has developed strong local strengths in software (Autonomy, RedGate, etc.) on the back of historical strengths in hardware (Acorn, Sinclair, etc). Cambridge firms have not lost their integration with the hardware side (see ARM, CSR, etc.) and this has been built in part upon collaborations with Japanese hardware firms). Going forward, it is interesting to see how new initiatives are seeking to build on some of these long standing Japanese connections. ideaSpace is building links with a business incubator in Japan (Innovation Jungle, based at the Advanced Scientific Technology Management (ASTeM) Institute in Kyoto). It will be interesting to see how this nacent partnership can help play to the strengths of both Cambridge and Kyoto (which is, by the way, the home of Nintendo – a pretty good example of an integrated and very successful hardware and software company).

Monday, August 29, 2011

Entrepreneurship, manufacturing, and things you can drop on your foot

On a recent business trip to California, I met with some of my former students who are now entrepreneurs and investors in Silicon Valley, predominantly working in consumer internet and mobile apps. These sectors are typified by low capital costs, rapid prototyping and customer engagement, flexible business models, scalability, and potentially (and frequently actual) significant returns to investors. But this success prompted thoughts of whether we could be doing more to support entrepreneurship based around creating value from tangible "things you can drop on your toes" as opposed to the more intangible worlds of software and services.
This opens a whole debate that is way above my pay grade. On the one hand there is the rational but complex debate on what manufacturing actually is, its role in an economy and its impact in growth. There is also the less rational debate about it being somehow 'better' to create value from 'real things'. This is an issue of great interest in Japan at the moment, where the culture of monozukuri (making things) underpinned the phenomenal post-war recovery, but which some believe now hinders Japan's ability to renew itself ("A Samurai would never write software" as one Japanese manager put it in a recent article on Japan in The Economist).
But if we put that debate to one side and take the view that there is a role for creating value from addressing customer needs through the provision of physical devices, then we should make sure that 'manufacturing' entrepreneurs have access to the resources they need to get their ideas to market. One of the most common needs is access to prototyping equipment, the cost of which is typically way beyond any individual inventor or start-up company. The provision of publicly accessible tools (a part of what academics sometimes grandly call 'industrial commons') can therefore be a key enabler for manufacturing entrepreneurs.
There are many examples of organisations providing access to such tools (e.g. for life sciences, the Babraham Technology Development Lab, and for advanced engineering, the Hethel Engineering Centre). These organisations typically combine public and private investment and leverage existing infrastructure to provide support to entrepreneurs. But there is still a need to provide advice, a place for experimentation, and a supportive community for those at the very earliest stages of the development of ideas. It was therefore very pleasing - during the same trip to California where almost everything seemed to be web and mobile focused - to meet with the CEO of Tech Shop in San Francisco. Tech Shop provides a great example of how tools can be provided to support manufacturing entrepreneurs at the very early stages of the development of business ideas. As the CEO put it: "We provide access to tools to help people accelerate their projects". This is not a contract R&D service; it is about providing access to tools and support to help people experiment, explore and develop their ideas. Examples of businesses that have been developed through Tech Shop included Square, Solumtech, DripTech, Clustered Systems and Embrace.
And this is why it is so exciting to see that the MakeSpace project is really gaining momentum in Cambridge, and is about to set up in its new home in - very appropriately - an old factory in the city centre.