Ecosummit is the smart green business network and conference connecting startups, VCs and corporates to accelerate smart green innovation. Ecosummit London 2014 is our 8th conference and happens on 7-8 October 2014 at the Crystal, Siemens’ urban sustainability HQ in the Docklands.

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Investing in advanced engineering start-ups: avoiding the bear
ILIAN ILIEV
CEO, EcoMachines Incubator
8thOctober 2014 EcoSummit, London

2. ©2014 EcoMachinesIncubator Ltd. All rights reserved
Focused on startups in advanced engineering
and high-value manufacturing
A hybrid business model:
a seed Accelerator +
early-stage VC fund
About EcoMachines Incubator
Accelerator programmeincludes equity finance, mentorship, and other services

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Power Generation
Transport
Water
Energy Efficiency
Materials
Smart City
Sectors of Interest
Waste
Industrials

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Accelerator Programme
We help entrepreneurs transform their businessesfrom a startup with a proof-of- concept technology into a high-growth, investable company.
Stage 1
Startup
Stage 3
Follow On
Result
Our 9-month one-on-one Accelerator programmeis specifically designed for hardware & advanced engineering startups.

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Our London location enables access to world leading universities, investors, corporate HQs, trade exhibitions, industry experts...
...proximity to other UK high-tech cluster...
...connectivity to EU, US and key emerging economies
Operating out of Central London...

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EcoMachines Team
Management Team
Advisory Board
Chris Niehaus
Ex-head of Industrials at UBS

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Accelerator Mentors
EcoMachines Team

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EcoMachines Portfolio
Since early 2013 we have backed the following companies:

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Why are we bullish on the opportunities in energy & cleantech?
Source: http://www.ritholtz.com/blog/wp-content/uploads/2009/07/cartoon-spin-bull-vs-bear.jpg

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VC in energy and cleantech: is the model keeping up?
The VC environment has been broadly positive in the last few years
...while cleantech investmenthas moved in the opposite direction

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...yet within sub-sectors, investment trends differ
Source: Cleantech Group i3 database

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Why are we bullish about hardware in energy and cleantech?
•The ‘bubble’ in Cleantech has already burst –look elsewhere for bubble conditions
•Move towards specific, real solutions for mature industrial sectors –with real bottom-line benefits to specific users/clients
•Much easier to have investment discussions firmly focused on real world outcomes –where real cash flows come from
Bubble inoculation?
•Improved CAD design & simulation, 3D printing/rapid prototyping, and more executive experience can lead to leaner, faster start-ups
•Impact is lower capex and faster time-to-market
Lean hardware start-ups?
•Opportunities for energy/cleantech application areas from well-developed platform technologies in materials science, robotics, IoT hardware
•The application of these to industrial problems can lead to significant value release/capture –and novel business models
Horizontal technologies impact?

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The EcoMachines approach 2
What is the Lean Startup method ?
The Lean Startup approach of ‘validated learning’ and iterative product releases has been tremendously influential as an entrepreneurial approachfor Web/software companies...
....Which has seen the bulk of VC investment in recent years...
...So hardware companies shouldbe curious!
Key elements of Lean Startup :
•Minimum Viable Product
•Continuous deployment
•Split testing
•Actionable metrics
•Pivot

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The EcoMachines approach 2
LeanStartup –key elements
Hardwareimplications
Solutions
Minimum Viable Product
It takes more investment and time to build an MVP for hardware
•Virtual prototyping
•Rapid prototyping & additive manufacturing
•Scenario testing with clients
•Industry partnerships
•Low-cost prototyping
Continuous deployment
It takes more time and ££ to do iterations on hardware prototypes
Split testing
Its more expensive to build hardware prototypes
Actionable metrics
Different typeof metrics for hardware and B2B
Use deep sector expertise to identify relevant metrics
Pivot
More expensive
Domarket-product fit testing earlier on
But... Is Lean Startup appropriate for Hardware?

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Some lessons…
The promise: if you get it right, investments in ‘hardware’ businesses can be highly scalable at relatively low capex, and can ‘plug-in’ into existing industrial infrastructure (metallurgy, oil&gas, automotive, water…)
Promising companies:
•Hyperfocused on a specific easy to reach market applications
•Close to an MVP
•Ability to articulate pivots on current business model
•Deliver real and significant benefits to a real client… at the same or lower price
•Team with experience specific to the market application
•Find the low-capex model for growing the business
•Investors with relevant experience
•Business model supporting early cash flows

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What we want to avoid in start-ups!

17. Ilian Iliev (CEO) London, United Kingdom (m) +44 77863 73965(e) ilian.iliev@ecomachinesincubator.com
Contact Us
To find out more about EcoMachines Incubator, please contact us.
ECOMACHINES INCUBATOR LTD. Rainmaking Loft, International House, 1 St Katharine’s Way, London, E1W 1UN, United Kingdomwww.ecomachinesincubator.com @EcoMachinesUK