Incubation. 22 nd May 2015 Riga, Latvia Dr Nicky Dee

Transcription

1 Incubation 22 nd May 2015 Riga, Latvia Dr Nicky Dee

2 Contents All material included in the slides is referenced in the Nesta Reports (see final slide) Brief overview of levers for enterprise What is the successful outcome Varying needs of startups Measuring performance Amplifying impact

3 The benefits of enterprise Job creation Economic development Innovation Civic engagement Development and regeneration Formalisation Tech transfer

4 Variety of levers Co-working spaces Startup support Competitions and prizes Incubators Seed investors Accelerators

5 Betahaus

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7 Hub:raum

8 So what is the difference?

9 Dependency on startup performance Growth driven Accelerator Active seed Fee driven Incubator Coworking Independent BPC Course Inspiration / aspiration Business model discovery Early stage Later stage

10 What s the Difference? A range of startup programmes are needed Growth driven Fee driven Independent Startup Phase Early to later stage Startup to later stage Pre-startup to early stage Examples Active seed Incubator Course investors Coworking Startup Accelerators weekend Business creation competition Hackathon Risk profile if startup High Medium Low quality reduces Workspace Optional, benefits Essential, but threshold Optional include closer links with portfolio size not apparent Numbers of Low (e.g. 6-12) Medium (e.g ) Medium - High (e.g. 50 participants Selectivity of participants to thousands) High Medium Low Figure 1 Abbreviated typology of startup programmes (Dee et al. 2015)

11 What is a successful outcome?

12 Incubator objectives? Primary objective Real estate appreciation Sell proprietary services to tenant Job creation Positive statement of entrepreneurial potential Faculty-Industry collaboration Commercialise university research Capitalise investment opportunity Secondary objective Create opportunity for technology transfer Create investment opportunity Generate sustainable income for the organisation Diversify economic base Bolster tax base Complement existing programs Utilise vacant facilities Strengthen service and instructional mission Capitalist investment opportunity Create good will between institution and community Product development

13 Growth Incubation period Supporting ventures is the primary goal New growth path Old growth path An objective of survival can encourage life-support Time

14 What is success or failure? Real options theory Type Initial outcomes 1 Incubatee is surviving and growing profitably 2 Incubatee is surviving and growing but not yet profitable 3 Incubatee is surviving but not growing and not profitable 4 Incubatee operations terminated while still in the incubator: losses minimised 5 Incubatee operations terminated in incubator: large losses Hackett, S. M. and D. M. Dilts (2004a). "A Real Options-Driven Theory of Business Incubation." Journal of Technology Transfer 29(1):

15 Different startups have different needs

16 Functional Skills: Marketing Functional Skills: IT Functional Skills: Legal/ Government Regulations Coaching on Market and Opportunity Understanding Strategic Information (in general) Strategic Information on Market and Oppportunities Strategic Information on Customers Functional Skills: Public Relations Business Plan Assistance/ Strategy Formulation Personal Recruiting/ Access to Labour Markets Functional Skills (in general) Capital/ Funding (in general) Functional Skills: Finance Functional Skills: Accounting Functional Skills: Insurance Coaching (in general) Coaching on Growth Management Technology Transfer Programmes Library Services University Related Resources/ Networks (in general) Government Grants Coaching on Leadership and Management Capability Faculty Consultants Coaching on Strategy Coaching on Functional Skills Labs and Workshops Outside Capital: Strategic Information on Suppliers IP Assistance Functional Skills: R&D Related R&D Activity Coaching on Innovation Management Databases University Finance Distribution Channels Angel Investors Corporations Manufacturing Venture Capital Bank Loans 18% 18% 25% 20% 25% 33% 36% 11% 25% 17% 18% 33% 27% 30% 22% 20% 22% 17% 20% 20% 22% 20% 21% 27% 25% 30% 31% 29% 25% 27% 31% 31% 36% 35% 33% 94% 93% 93% 93% 57% 89% 64% 89% 64% 89% 87% 86% 84% 83% 80% 80% 80% 80% 80% 80% 79% 79% 77% 40% 74% 73% 44% 71% 71% 71% 69% 69% 46% 67% 67% 67% 56% 64% 64% 63% 56% 50% 56% 53% 41% Companies Without Start-Up Experience That Needed Support Companies With Start-Up Experience That Needed Support

17 Technology and other Help with business etiquette Help with presentation skils Economic literacy training Comprehensive business training programs Assistance with product design and development practices, Assistance with manufacturing practices, processes and International trade assistance Federal procurement assitance Help with regulatory compliance Linkages to strategic partners Business management process, customer assessment service, Assistance with e-commerce Technology commercialisation assistance Intellectual property management Help accessing specialised noncommercial loan funds or loan Help accessing commercial bank loans In-house investment funds Access to venture capital investors Access to angel investors or networks Shadow advisory boads or mentors Loaned executive to act in management capacity Management team identification Logistics/distribution support or training Human resources support or training Linkages to higher education resources Specialised equipment or facilities High speed internet access Networking activities among incubation program clients Help with accounting or financial management Marketing assitance General legal services Shared administrative or office services Help with business basics Other programs Mixed programs Technology programs NBIA

18 Measuring performance

19 Level Community Venture Incubator Stakeholder Entrepreneur Investor Employee University Government

20 How do you measure impact? Approach Methods Examples Control-group concept Benchmarking In situ assessments, before and after Pairing firms, on and off site Surveys, categorisation, interviews, self-reporting Surveys, case studies (Lindelof and Lofsten 2002; Siegel, Westhead et al. 2003b; Dettwiler, Lindelof et al. 2006; Amezcua 2010) (CSES 2002; Knopp 2007; UKBI 2009) (Grimaldi and Grandi 2005; Bergek and Norrman 2008; Patton, Warren et al. 2009) [1] While these studies attempt to benchmark incubator performance, their main methodology is an in situ assessment.

21 Ask the ventures if it works? Critical Important Not important 22.5% 60.6% 16.9% Swedish Vinnkubator Programme had a collaborative approach, asking incubator managers to come up with a monitoring system

22 Monitoring Systems While well suited to encourage routine activity in stable environments, such monitoring systems discourage the creative activity necessary to exploit new technologies, because the application of technical knowledge to commercial applications is fraught with errors, blind alleys, failed experimentation, and surprise successes (Eckhardt and Shane 2010, p4) Evidence suggesting incubation managers can be diverted away from core activities if monitoring is excessive Most monitoring systems currently fail to have meaningful categorisation processes

23 Amplify impact

24 It comes down to people Most measures of incubation confuse adding value with the quality of the selection process Location is critical, the danger of empty buildings what do local people want, what local support is available? The benefit of proximity for networking Access to the market and suppliers

25 Startup ecosystems cities Co-working spaces Startup support Competitions and prizes Incubators Accelerators Seed investors

26 International links between ecosystems Riga Cambridge Berlin

27 Further reading

28 Dr Nicky Dee University of Cambridge