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?

www.enecsys.com

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.

www.breathingbuildings.com

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.

http://green-tide.org/

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.

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.

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).

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.

Silicon Something: Necessary but not sufficient

In late 2010, David Cameron unveiled plans to support the continued development of London's 'Silicon Roundabout' - the cluster of predominantly web-related start-ups that have grown up in east London - to help make it "one of the world's great technology centres" (wired.com). Following this announcement, The Economist noted that: "Measured by the concentration of technology firms and the availability of generous and informed investors, California’s Silicon Valley is still in a league of its own. But in the second division of hubs, this chunk of east London is near the top, along with the likes of Boston and Tel Aviv. That its growth took place so quickly, and during a recession, is remarkable enough: the high-tech zone in Cambridge has taken decades to evolve. But the fact that Silicon Roundabout also emerged without government support, or even direct links with universities, should pique the interest of countries that have tried to cultivate technology hubs without the same success" (economist.com).

This can be seen as an interesting illustration of the role of innovation journalism and the use of metaphors in focusing attention onto a particular region and helping attract resources to support growth. This effect was described in an interesting article by Uskali and Nordfors on the role of innovation journalism in developing regional innovation ecosystems such as Silicon Valley (tweeted by Sherry Coutu of, among many other things, Silicon Valley Comes to Cambridge) . The key conclusion of the article is that innovation journalism: "[..] is essential in innovation economies, since a) an innovation is the introduction of something new b) it is difficult to discuss new things if there is no common language for them and c) journalism is a key actor for introducing common language for innovations, so that they may be discussed. " (Uskali and Nordfors, 2007).

For Cambridge, there have been two key 'labelling moments'. The first was the publication of the "Cambridge Phenomenon" report in 1985 by Segal, Quince and Partners (now SQW). The second was the 1998 article in the New York Times entitled "In Old England a Silicon Fen: Cambridge as a High-Tech Outpost". Both the 'Cambridge Phenomenon' and 'Silicon Fen' labels have proved remarkably effective at providing a hook onto which numerous innovation-related news stories can be neatly hung which, in turn, help attract the interest of policymakers, investors, and entrepreneurs.

Innovation journalism seems to play an important role in the development of a regional cluster, and the catchy labels or metaphors may provide a useful focal point onto which the interest of investors and entrepreneurs can be targeted. But the wonderful list of 'Silicons' published at http://tbtf.com/siliconia.html show that a memorable name may be necessary but is not sufficient to ensure the development of a great technology centre.

Help wanted: Cambridge Museum of Technology and Cambridge Phenomenon

Posting from Dr Peter Long, Cambridge University Engineering Department:

The Cambridge Museum of Technology is using the Science Festival to put on an initial exhibition about the High Technology Industries of Cambridge. The museum plans to keep the exhibition open during the summer period and to continually develop the exhibits with feedback/input from visitors and interested parties during the period.

The initial displays will hopefully include displays, posters and exhibits (photos, documents, products, bits of tech, etc), about:

1) The industries that were active around Cambridge in the 40s, 50s 60s which acted as a foundation of the subsequent technological boom and source of skilled staff;

2) The consultancies, large and small that have been built up in the Cambridge area;

3) Computer related industries, including those in the microcomputer boom;

4) Computer games industry;

5) Biotechnology;

6) Inkjet printing;

7) Computer Aided Design (CAD);

8) Geographic Information Systems (GIS);

.. and many others.

If you were part of the recent industrial growth of Cambridge either as an inventor/employee/owner/investor, the museum would be very interested to hear from you. In the first instance, please can you email Dr Peter Long (pjgl2@eng.cam.ac.uk) to let him know what you might be able to lend the museum.

With thanks in advance for any help you might be able to provide.

If you know anyone who may also be interested in loaning/donating information/exhibits or assisting in the development of the exhibition, please point them to this page.



--
Peter J G Long PhD
Senior Design Engineer
Cambridge-MIT Engineering Exchange Coordinator

Cambridge University Engineering Department
Trumpington Street
Cambridge CB2 1PZ

Tel 44 -(0) 1223 -332779

Tech Syndrome - The Cambridge and/or European Disease?

Viewpoint from Martin Rigby, CEO of psonar and author of Candid Capital blog.

Why is it that Cambridge, and even Europe as a whole, still doesn't really get the idea of market-led innovation?

Psonar, the cloud music service of which I'm co-founder, was lucky enough to be selected for the Discovering Start-ups event run in Cambridge last week. The panel of judges was impressive with a cross-section of Europe's VC, telecoms and tech cluster elite. The 22 businesses showcased were of varying degrees of maturity across a range of technologies. It was a well-run event and we had three approaches from potential investors.

What struck me however, when I saw the businesses selected as the winners, was the focus on the cleverness of technology rather than the market vision of those businesses. Innovative technology is laudable, but only where it is part of, and subordinate to, a business model that is driven by market opportunity. If the cleverness of the solution, rather than its ability to capitalise on an attractive and profitable commercial opportunity, is seen as the most important characterictic then the person making that judgement is suffering from "Tech Syndrome". It seems to me that with the notable exception of Cambridge Temperature Concepts and, to a lesser extent, Magic Solver, the winners showed that the judges were suffering from Tech Syndrome - or maybe there wasn't any choice.

So why is this? At the excellent celebratory dinner in the hall at Newnham College, the guest speaker was Laurence John, CEO of the Amadeus Seed Fund. Laurence is an enthusiast for what he does and always a pleasure to listen to. He was at pains to emphasise his belief that Cambridge is too much in love with technology and not focused enough on applications. To illustrate this, he suggested, for example, that new applications exploiting the capability of cameras that "know what they are looking at" would be the kind of innovation that start-ups should be pursuing instead of simply smaller, better, cheaper or higher performance devices themselves.

While I agree that focussing on the application is better than focussing on the technology, really valuable innovation has to make the extra leap to being market-driven. Taking the same example as Laurence - cameras that know what they are looking at - why is it useful or beneficial to consumers or businesses to have devices with this capability? Even if there are needs that can be met by this application (which I would argue is really an assembly of technologies) are those needs part of one or more markets which a business can address coherently, acquiring the knowledge and experience to exploit them fully and profitably. Or is it really no more than clever technology, apparently productised but, in reality, in search of a profitable market opportunity?

I'd contrast this love of technology, of gizmos, to the approach of the really successful US venture funds. Take Menlo Ventures for example:

"At Menlo Ventures, we invest in entrepreneurs that Think Big. We seek passionate teams with big ideas that can disrupt existing industries or create entirely new markets. Our track record over the past 32 years of helping companies achieve market leadership through great strategy and great execution speaks for itself...".

Of if you look at Sequoia Capital's investment criteria, the word technology, or even application, isn't mentioned once.

Welcome to the world of "Think Big Syndrome"!

12 December 2010