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

Cambridge: 10 years on .. but how much further forward?

The Cambridge Phenomenon conference provided an opportunity to reflect upon the development of Cambridge over the past 50 years, but two smaller events triggered an interesting question relating to more recent history. The first event was a college dinner hosted for a visitor from mainland Europe. At the end of the dinner, discussion turned to the European approach and attitudes to entrepreneurship. The views expressed by those present were varied but included:

• On European entrepreneurs: "We lack the relentless, obsessive focus on building high growth, market leading businesses. We just don't have the ambition and we don't work hard enough."
• On competition from China: "While growth and scale of activities in China is immensely impressive, this has been largely focused on developing production and, more recently, R&D capability. Europe needs to recognise that it has the capabilities that allow us to compete on a different basis."
• On the Cambridge cluster: "We may have many of the features of a Silicon Valley-type innovation ecosystem, but we are still not completely 'getting it'."

These views (which do not reflect my own) are very similar to those being expressed back at the end of the last millenium when there was increasing interest in supporting entrepreneurship as a means of driving economic growth. If these issues matter, and given we've had 10 years of significant efforts focused on promoting entrepreneurship, are we any closer to addressing them?

The second event was a meeting of some organisations that have been involved in supporting high-tech businesses in Cambridge over the last 10 years. I compared the minutes of that meeting with those of a meeting of the same group of 10 years ago. Again, most of the issues and concerns discussed were the same as they had been a decade earlier.

A question prompted by these two events is: What has really been achieved in the past 10 years?

Clearly, much has been achieved. The volume of activities focused upon supporting entrepreneurship and innovation is measurably higher (e.g. mentoring, angel investment - both quality and quantity, education, events, incubation, etc), and some of the economic outcomes are very impressive (e.g. number of US$bn-valued firms, number of firms dominating their chosen markets, jobs created, student interest in entrepreneurship, volume of license income generated from IP, etc). But, in these resource-constrained times, now might be a good time to reflect on the balance between what we are doing and what we are achieving so that in ten years from now we are not forced to point to the same concerns again and say 'We really must do something about that'.

Makespace - very cool & much needed in Cambridge

Last night's Makespace meetup at the Hauser Forum was fun, informative, and highlighted a key gap in Cambridge innovation ecosystem (i.e. where can people in Cambridge who want to make stuff go to meet with similar-minded people, and get their hands on the tools and support they need to make their ideas a reality?) .. and pointed the way to how this gap could filled.

You can read more about the event, view the pictures and see the comments made by attendees at the Makespace meetup site, but for me the event was exciting because:

• It showcased examples of amazing technical ingenuity using tiny budgets (Cambridge University Space Flight - the students who put teddy bears in space)
• It made the link to the importance of prototyping and demonstrators in getting ideas converted into real products (Cambridge Consultants work on technology demonstrators and A1 Technologies 3D printing technologies)
• It reminded us that sometimes very clever people - with excellent technical skills - can still make big mistakes (Sinclair C5)

A big vote of thanks should go to Simon Ford and Jonny Austin for getting this initiative going, and we should all look for ways to help get further activities (such as a FabLab in Cambridge) resourced.

What does 'open innovation' mean for the Cambridge high tech cluster?

Cambridge has been noted for its ability to 'punch above its weight'. Despite the cluster being relatively small (the population of the city being only around 100,000), it has produced firms that lead global markets in - amongst others - areas such as microprocessors for mobile devices (ARM), industrial inkjet printing (Domino Printing Sciences) and meaning based computing (Autonomy).

Part of the reason why Cambridge firms can achieve global scale and take on much larger rivals is through the effective use of various forms of collaborations, ecosystem building or 'open innovation'. Open innovation describes the ways in which companies can create value through innovating in partnership with other organisations. The topic is attracting high levels of interest from policymakers, consultants, multinational corporations and academics. It is being hailed by some as the 'new way' to improve companies' abilities to innovate, accelerate regional economic recovery, attract investment and link with the science base. But is it really anything new? Is there any evidence that it really works? What does it mean for start-ups, medium-sized firms and multinationals in and around Cambridge? What can be learned from the experience of those Cambridge firms that have implemented open innovation strategies?

Building on the outputs of recently completed research, a new project will shortly be started at the Institute for Manufacturing which will examine the different strategies used by Cambridge firms in implementing open innovation, and contrasting this with approaches used elsewhere. As part of this new research, a talk will be held on the 13th May to review and prompt discussion on the background, current practice, and implications for future of the Cambridge high tech cluster of the emerging (or perhaps very old) phenomenon of 'open innovation'. For more information on this talk and to register, see the IfM's events page.