Digital Ecosystem ‐ SWOT Strengths Weaknesses Talent (private sector and HE sector) IT supply chain controlled by non cloud Resources (P&HE) model Strong grass roots community with HE insItuIonal Internal culture common desire and common vision of UK Funding model future plaForm UK incubaIon model Russell Group UniversiIes NaIonal policy approach prevents criIcal Pool of experienced and track record mass or scalability operators from Web 1 community. Globally trusted governance environment Globally trusted supply chain partner Tech savvy emerging UK employee base London based scalable venture ﬁnance Opportuni2es Threats Coalescing of digital community Current run rate = negligible market share in digital economy plaForm Refocusing of local government procurement to Open source and cloud UK PLC business exisIng plaForm not ﬁt for purpose in terms of global based with local supply compeIIveness nor in order to support Associated innovaIon creates condiIons innovaIon and growth for UK to own sizable market share of digital plaForm Ability to aUract signiﬁcant venture funding to scalable ecosystem ModernisaIon of UK enterprise operaIonal funcIons Export of UK owned and UK developed digital products and services
UK overview NaIonal hub and spoke network of UniversiIes Data Centres Incubators Major clusters around London – oxford Edinburgh/ Bristol Birmingham Yorkshire North East Glasgow cambridge brighton TechCity in London (UK Hub) Fed and underpinned by all naIonal clusters CollaboraIon cluster New data centre village infrastructure
ICT Value Chain Venture ﬁnance Massive underinvestment in UK plays Links to other global US & Europe = Strong – everywhere else = weak innovaIon hubs Public sector Private sector Controlled by legacy IT models procurement procurement HE Research Needs to be private sector led / driven Needs raising up the value chain Grass roots community and formalising Broadband infrastructure Data Centre infrastructure not ﬁt for purpose (connecIvity and data centre)
ICT underpins naIonal innovaIon • new ICT ecosystem underpinning all economic acIvity in UK PLC and speciﬁcally innovaIon and growth in sustainable energy healthcare and advanced manufacturing TICs Healthcare Sustainable Advanced Professional Business EGovernment energy Manufacturing and ﬁnancial eﬃciency Learning and services educaIon BROADBAND/CLOUD CLOUD PRODUCTS ICT TIC INFRASTRUCTURE AND SERVICES
Pockets of world class across the country Hubs Research based Private sector successes – • Techcity innova2on in spite of weak • Cambridge science park • Russell group ecosystem • Daresbury science park • N8 • Lastminute, Freeserve, • Media city etc 365media, Pace Micro, PlusNet Nothing brings them all together
Economic model and beneﬁts Growth & Business innova2on Industry Reduced cost Engagement Product / Service Services innovaIon Future prooﬁng Manufacturing economic segments Technology Retail Self determinaIon (not just serving Commercialised IP Public Sector foreign owners / sourced internally foreign market via collaboraIon demand) (HE & PS segments)
IncubaIon 2.0 EvoluIon started with and matured with www.techstars.org www.ycombinator.org, then • World class development lifecycle www.plugandplaytechcentres.com (intensive collaboraIve bootcamp) • World class networking • World class business review • World class mentoring • World class funding access Business failure rates reversed…
UK IncubaIon Business link Seedcamp.org replicated the was the answer for 99% of start‐ups… ycombinator model and has established and 9 out of 10 UK start‐ups sIll fail… a strong US and European funding network, and springboard.com is replicaIng the techstars model.
Going beyond the US model Idea development – Collabora2on Incuba2on 2.0 Grass roots engagement centres Virtual and physical interacIons • Techstars programmes in all • Coalescing all private sector major tech hubs assets into a collaboraIve • Full engagement by Russell resource group and N8 universiIes • Driving public sector procurement and inﬂuencing local private sector procurement
In summary Business UniversiIes All incubators acceleraIon • are missing the • have had to be • is all about events, opportunity by implemented as development, only focusing on property startups and SME level 1‐3 of the businesses development research commercialisaIon stack
The SCR view The delivery of the strategy is in two phases: • Linking all exisIng assets (networks and incubators), creaIng the collaboraIon centre network • Wholesale Data centre infrastructure and associated ‘Science Park’ establishing the physical hub
What we will develop ENTREPRENEURS • Upskill them SMEs • Connect them • Encourage them • Scale them INTERNATIONAL • Upskill them • Connect them innovaIon hubs and corporates Higher Technology Strategy Board EducaIon CORPORATES UNIVERSITIES Public • Unlock value of IP • Make aUracIve for Sector student recruitment • Generate research GRADUATES opportuniIes • Enable to create jobs in area • Retain them BOOTCAMP Other regional support PRIVATE FINANCE • eg. InnovaIon specialists • AUracted to quality projects 3rd Blue Sector light AMRC DIGITAL REGION DATACENTRE • CreaIng projects to • Localised capacity to • Link to it informally uIlise network and drive support digital ecosystem innovaIon • NaIonal cloud infrastructure • Economic landgrab
How do we pay for it? TIC Innova2on & Economic Development Project funding Programme funding Collabora2on RGF func2ons 2 Tech ERDF VC Accelerator Enhanced Capital DataCo 1 Data Centre Allowances Privately Funded Infrastructure
3. Longer term – use trust model to create a Commercial model revenue stream from DC for philanthropic projects in CDI and associated growth spaces 2. Leverage funding availability with private and in kind match to fuel the collaboraIon ecosystem including events 1. Private fund raise to create the DataCentres in Enterprise Zones by leveraging Capital Allowances
The CDI Ecosystem Business Schools Student Enterprise HIGHER IP CommercialisaIon EDUCATION Research SECTOR KTPs MarkeIng Econ Development Teams PUBLIC City Development Co.s SECTOR Seed funding A round FUNDING CDI Business Support Inward Investment teams B Round & PROF SERVICES Collabora2on Legal, Tax & AccounIng Hub Virtual & Physical (using all HE & LA property assets) Mentoring Roadmap ValidaIon ADVISORY BOARD Business plan validaIon SMEs (in region) Network Corporates (In Region) PRIVATE InspiraIon SECTOR Target Businesses (not IR)
How is the CollaboraIon Centre Network run? Advisory Boards (funding CollaboraIon Hub Governance Board and tech – split by sector) operaIons • Senior representaIves from • Panel of proven tech • Sector speciﬁc team driving Local authoriIes, HE sector, entrepreneurs and investors and direcIng public sector, and private sector. – UK and internaIonal. Will HE sector and private sector • Responsible for funding and be ﬂuid (ie not all members resource for selecIng the Advisory involved all the Ime) • Implement and uphold the Board and any key • Key in aUracIng Ier 1 CCN’s ethos and operaIng contracts, and for ensuring supporters (incl. companies methodology. that the park is properly and investors) supported across the • Responsible for aUracIng, Councils and the universiIes selecIng and supporIng • Guardians of the Centre’s entrants to the CCN process ethos and operaIng • Guardians of the CCNs ethos philosophy and operaIng philosophy
People structure Collaboration Teams (sector specific) Extended team Inc Public Sector & HE sector Public sector | HE sector | Private sector Collaboration Hub Governance Board Tech advisory Boards Funding Board Major shareholders • Public sector • HE sector Minority shareholders • Private sector parIcipants • Professional Services Partners
CollaboraIon Centre funcIons Start‐up incubaIon & Supply chain InnovaIon business acceleraIon collaboraIon • Industry and cross industry • Mentor led start‐up • Product and service events incorporaIng Public compeIIons (per industry). innovaIons sector, HE sector and • Co‐working spaces. • Public procurement. Private sector parIcipaIon. • Start‐up units / oﬃces. • Corporate procurement • Technology roadmap • Mentor led corporate evaluaIon / invesIgaIon / development of SMEs development. • Enhanced access to ﬁnance • Networking (physical and virtual) and content development. Supported by professional service partners
The value of collaboraIon Enables best of class to be Brings together the assets Eliminates replicaIon established Enables cross selling and cross‐ Establishes the proposiIon of ferIlisaIon between industry SImulates innovaIon “sum of the parts = greater than” segments
ParIcipants Schools / Colleges / UniversiIes CollaboraIng Tech industries Corporates CollaboraIon Nesta / Centre UKTI / TSB Tech SMEs Network Local AuthoriIes / Freelancers NHS / Police Professional Services ﬁrms
InnovaIon through parIcipaIon Interac2ons Innova2on Startup Business Major • Social networking • Idea, concept Crea2on Development Projects • Meet‐ups and prototype • Tech Accelerator • Projects • Corporate and • Events development • KTPs public sector • Problem and soluIon • SMEs procurement sharing
CDI Events & AcIviIes Annual Showcase event Quarterly Review and CollaboraIon camps Monthly associated publicaIon (all CDI parIcipants) CollaboraIon camps Daily Start‐up boot‐camp (smaller & sector programmes speciﬁc) Blogs Business acceleraIon Digital publicaIons News bulleIns programmes (what’s going on) Physical & • Use of LA and HE owned buildings SCR LEP “Linkedin like” environment Online • SCR LEP online tender & procurement resource SCR LEP online knowledge base assets
What are collaboraIon camps? 0.5 ‐2 day event held Debate & Idea evenings or over a development and Structured yet Par2cipants free ﬂowing Follow‐up is tracked weekend problem sharing • Hosted in a LA / HE • Bringing diﬀerent • CDI evangelists, CDI • Framework and • All captured digitally owned venue people / organisaIons mentors, CDI agenda is established and tracked online (locaIon is distributed together to discuss businesses, and published in • Flow into future around the region topics of interest and entrepreneurs, public advance events based on explore soluIons to sector delivery heads, • Segments are • Flow into start‐ups, commercial / problems HE researchers, HE delivered in such a spin‐outs or projects technology themes) • ICT and its social or commercialisaIon way as to maximise • Review and commercial use is the people, funding parIcipaIon and associated publicaIon common theme people, business sharing support people, chamber of commerce representaIves, 3rd sector people / organisaIons, industry representaIves or interest groups Example 1 Example 2 Example 3 Example 4 • Local Authority delivery head has to • Industry representaIve has knowledge • Local Authority department has a social • Higher EducaIon researcher working in reduce costs by 30% within 2 years, content and business processes that inclusion / wellbeing programme that partnership with private sector shares the problem with the parIcipants need to be automated and placed online, needs automated processes, online technology businesses, shares the work and encourages proposals to be made shares the opportunity and encourages community and speciﬁc technology they are doing in a speciﬁc area post event proposal to be made post event. developments to support its success. adverIsing its availability to people that me be able to make use of it.
What are Start‐up Boot‐camps? Sustenance funding Access to appropriate Accessed through a Intense incubaIon and provided during business development compeIIon mentor programme programme funding • Best ideas / business • 3 month process based • Cost of living contribuIon • Quasi public / private plans / projects are on pre‐idenIﬁed best of £5k per individual sector funding selected pracIce procedure parIcipant • Venture capital • SelecIon process is • CollaboraIon between • Minimum of 3 people per • Angel investment transparent and is heavily incubatees and also with team inﬂuenced by advisory wider community is • ExpectaIon is that all board panel input encouraged waking hours are put into • Founder locaIon • Managed, delivered and the project net of social / irrelevant, but incubaIon supported by the “CDI family breaks programme is carried out team”. within LEP region Cost of the programme to the incubatees? Follow‐up is tracked Business acceleraIon programmes • Founders give up upwards of 10% • All captured digitally and tracked • Run on the same basis with higher of equity in the project / business online quality inputs and an enhanced which is held as an asset by the • Flow into future events process incubaIon business vehicle • No fees
Who interacts? Seasoned Professor Uni. Student School student entrepreneur • Engaging in a • Part of a startup • Immersed in the • Mentoring bluesky research in the bootcamp technology businesses and project in the • ContribuIng to • Primary students entrepreneurs in Digital Hub community ‐ Learning incubaIon centre • ContribuIng IP to project in Digital through guided • Leading a startup in Hub play community incubaIon zone • Fostering school • Secondary project in the • Running an parIcipaIon students – Digital Hub informal event in • ParIcipaIng in Working on app • ParIcipaIng in the town square events in town development events in town • Drinking coﬀee! square projects with Uni square • Drinking coﬀee! Students • Drinking decaf delivering the coﬀee! content 30
Who interacts? cont. Public Sector change SME Tier 1 Techs Professional Services managers • Accessing free • Accessing free • Having plaForm • Pipeline innovaIon innovaIon capabiliIes adopted • M&A opportuniIes • Accessing University • Accessing University • Guiding and • Fee opportuniIes assets properly assets properly inﬂuencing from mature • Building roadmaps • Building roadmaps innovaIon companies and larger due to greater due to greater • Engaging in events in projects visibility of market visibility of market town square • Having coﬀee! and corporate and corporate • Sponsoring and roadmaps roadmaps mentoring • Low risk go to market • Low risk go to market • Popping in for a cup through partnerships through partnerships of coﬀee! • ParIcipate in • ParIcipate in collaboraIve supply collaboraIve supply chain and access chain and access larger project larger project procurement procurement • Drinking lots of • Drinking decaf coﬀee! coﬀee! 31
Who interacts? cont. First Ime Corporate ICT worker Investor entrepreneur • Part of a business • Engaging in a bluesky • Funding startup in acceleraIon process R&D project in the the incubaIon in the incubaIon collaboraIon centre centre centre • ContribuIng IP to a • Sponsoring a • ParIcipaIng in spinout in incubaIon research project in events in town zone the Digital Hub square • Running/sponsoring • Funding acceleraIon • Drinking lots of an informal event in of an established coﬀee! the town square SME • Drinking decaf • Engaging in events in coﬀee! town square • Popping in for a cup of coﬀee! 32
Commercial Models 3 diﬀerent types of commercial engagement which lead from one to the other InnovaIon CollaboraIon Major Procurement
InnovaIon – Everyone is “co‐invesIng” SImulaIng Stage 3 Producing Engagement entrepreneurial start ups development • RelaIonship • SImulaIng Public/ • CompeIIon based building (public, HE/Private sector • Bootcamp HE, Private sectors) parIcipants to development • Discussing themes/ collaboraIon and process challenges adopt open culture • Mentor led with • Developing • Idea / concept / access to ﬁnance soluIons strategy • Based on Techstars development model Framework developed between CDI team and professional services partners
Commercial CollaboraIon – ParIcipants are “trading” Commercial Engagement Contracts Framework • Developing • Establishing means • Governance soluIons to of contracIng and • IP protecIon idenIﬁed need partnering • JVs • Discussing themes/ • ProtecIng • SPVs challenges commercial • Frameworks • Developing long sensiIviIes • Tendering term strategies • ProtecIng complex inter company / • Procurement organisaIon relaIonships Framework developed between CDI team and professional services partners
Major Procurement Projects – developed Supply chain meets large scale demand Public sector and large Why? Future enterprise • No oﬀ the shelf • Problem understanding • Approach can be soluIons • SoluIon development replicated and exported • Can’t put out tender • Customised to other regions and requests without design requirements response other public sector • Can’t issue a soluIons and design areas requirement without • Tailored procurement diligence and design and tendering • Cloud compuIng model forces an innovaIon process • Relevant skills not inside public sector supply chain currently Framework supported by professional services partners
Impacts and outcomes Mentor led programme and pressed investment + collaboraIon ecosystem = new startups and new jobs Same mentor led blueprint enhances SME growth = growth %age and incremental jobs Academia + collaboraIon ecosystem = faster commercialisa2on process, higher success rates and pipeline of of applicants to mentor led programme All of the above = shixing the economic needle into sustainable growth and transformaIon to knowledge economy
IncubaIon 1.0 Build it and they will come………… • Lots of money raised • Paid for buildings • Paid for lawyers and accountants PASSIVE MODE: wai2ng for business and pipeline to generate DIDN’T HAPPEN – invested in 10, 8 failed, 1 broke even, 1 succeeded…………….
IncubaIon 1.0 failed – why? It was about knowledge It was NEVER about transfer • buildings • Entrepreneurs with track • lawyers and accountants record ensuring tested ideas and properly developed plans were backed • Mentoring through the early risk phase for a start‐up
IncubaIon 2.0 ‐ YCombinator Tier 1 VCs and entrepreneurs, binding together to deliver • IncubaIon 2.0 • With startups being based in home towns and locales, but working through Y‐ combinator model on an event basis, through which business acceleraIon was delivered.
IncubaIon 2.0 ‐ Plugandplaytechcentre Building on YCombinator model • Start‐up based on PnP faciliIes ‐ cheap space, with a “no walls” environment • Mixing people up and gezng results by creaIng interacIons • Eg. Seed stage startup in next pod to a $400m exit
IncubaIon 2.0 ‐ Techstars Building on YCombinator & PlugnPlay model • Created standardised intensive residenIal bootcamp environment • Ensured that it was milestone and KPI driven • Mentors add value in this environment, not deﬁne the programme This matured model can be applied to all collaboraIon acIviIes, not just start‐ups
Techstars KPIs Status Number of Companies Percentage AcIve 27 69.24% Acquired > $2M 5 12.82% Acquired <= $2M 1 2.56% Failed 5 12.82% Other 1 2.56% Techstars results web page
Diﬀerence Engine KPIs Status Number of Companies Percentage AcIve 17 69.24% Failed 2 12.82% • Diﬀerence Engine has not been in operaIon long enough for exits to have occurred yet, but this is due to start in its third year of operaIon, thus raising equity capital for the programme.
Ycombinator KPIs Status Number of Companies Percentage AcIve 150 71.1% Acquired 21 10% Merged 1 0.5% Deadpooled 26 12.3% Unknown 13 6.2% AcIve Acquired Merged Deadpooled
Seedcamp KPIs Status Number of Companies Percentage AcIve 40 87.5% Acquired > $2M 3 7.5% Failed 2 5% AcIve Acquired > $2M Failed