First Footing In The North East

The momentum behind the Connect network was given a lift in the North East with an inaugural Investment Conference held in Newcastle. Glenn Collinson, a co-founder of Cambridge Silicon Radio gave a keynote speech. CSR was a spin out from Cambridge Consultants in 1998 and was lucky to raise their seed funding before the technology bubble burst.

He emphasised that they started out with global ambitions and always believed as a team they could win against the likes of Intel by being more fleet of foot and innovative. They benefitted from Bluetooth being a royalty-free open standard and, as such, a great market to go for (and never having less than $30M in the bank having raised a total of $85M in VC funding!).

Glenn commented that being first is not necessarily good. Those that follow learn from your mistakes and the education/development of the market. Market pioneers take most of the arrows!

Creative Finance & Risk

The Creative Industries sector lies at the intersection between business, the arts, and technology. The innovative marriage of technological advances and intellectual capital provides the main source of sustainable wealth creation in this sector. Learning from experimentation and failure are key to achieving success and sustained growth. Many Creative Industries participants are subject to shifting fashion and new technologies pose a constant threat to existing activities introducing a high degree of business uncertainty. At the same time, this inherent dynamism and change is constantly opening new opportunities and threats. As a result, the Creative Industries tend to be viewed by investors as inherently high-risk while potentially offering high rewards.

We are currently undertaking a project to identify the specific risks relating to investing in the Creative Industries and how they can be mitigated. If any creative types (either brave investors or bright entrepreneurs) out there might be interested in participating in this research, please get in touch...

Anarchy vs. Organisation

Mary Walshock, the founder of Connect San Diego, argues that an innovation ecosystem should be more like a rainforest than a plantation. We want to encourage cross fertilisation, experimentation and, yes, endure some failure if we are to find a new species of business that can thrive by doing things and solving problems in new, improved ways.

Can you project manage this activity or plot a linear path towards success? Once something emerges from the 'forest' that works, then the emphasis needs to shift towards control, replication and nurturing with a 'plantation' mentality to leverage value. These stages of a companies development are very different and the people that revelled in the early-stage anarchy may not be best suited to raising things in straight lines to regimented schedule.

Maybe like organising your Outlook folders, falling between these two extremes may be the worst of all worlds. Let me explain: have you every tried searching for an email in Outlook? If you organise your folders you have to search each one in turn. Its much simpler just to put everything in one folder and rely on a global text search a la Google. Being either totally anarchic or amazingly organised is the perfect state in Outlook, but anything either way is less perfect.

My Outlook analogy says putting a plantation grower in charge of cultivating a forest isn't the most productive approach, but isn't this exactly what happens most of the time? Is partial cultivation as much an oxymoron as organised chaos?

Gender-Based Finance

Budget 2008 introduces a package of measures to support small businesses access the finance and resources they need to start up and grow. What caught my eye was the announcement of a new £12.5M capital fund to invest in businesses started by women.

I have trawled the HMRC website to try to find out more about how is that going to work but to no avail. Most businesses are built around a team, not one individual. Can men be part of the management team and have any equity share? What if other outside investors gets involved that have more testosterone (chemical structure shown) than they should?

Plenty of companies relocate to access geographically-constrained finance. Are we now going to see the first sex change to gain funding? Surely there are better ways to encourage female entrepreneurs than this. Creating an ecosystem that nurtures and support people seeking to build a business would be a better use of this money than distorting the market in this way. Investors should be backing bright ideas and good people, not worrying about genetic makeup.

New Beginnings

Seven of Yorkshire's most innovative companies were recognised for their enterprise at the Innovator/08 awards. Former politician Michael Portillo hosted the evening and presented the winners with their awards. Medipex took the Innovation Champion Award sponsored by Connect Yorkshire.

As one of the few people that has successfully made the transition from politics into the media, in his preamble to the prize giving, Mr. Portillio eluded to his 1997 election defeat and subsequent humiliation on a number of occasions, noting that failure offered new beginnings and that people that had only tasted success lack a certain roundness of perspective in their DNA. He also discussed the benefits of teamwork and camaraderie that those at the top might lack exposure to. Some pivotal moments in politics were the result of an isolation leader making fundamental errors of judgement, partly due to this isolation.

This has similar implications in business where the CEO can benefit from a sounding board for ideas and a sanity check on the direction he or she is taking the ship in. Our new Springboard initiative is worth a look with regard to this.

Not So Free Lunch

We were delighted so many of our sponsors and partners joined us at our annual sponsors lunch.
Over lunch we asked attendees to discuss the topic "Where should Connect Yorkshire increase its momentum and focus?" An Albert Einstein quote:"Make everything as simple as possible, but not simpler" always comes to mind when thinking about how to make the most impact with limited resource. My table didn't get much beyond debating the meaning of the word 'Where', but as someone new to Connect commented "Given that entrepreneurs can benefit from the activities of Connect pretty much for free, it should be a no brainer to become a member." If anyone in the blogosphere wants to have their two penny worth as to how the Connect network can be bigger and better, please feel free to add a comment to this post.

Nothing Ventured...

Deirdre Bounds gave a passionate talk at the Venturefest Yorkshire 2008 dinner. As a former stand up comic I expected a few more laughs, but she mainly focused on her journey from 'bedsit to boardroom'.

What was her take home message? Well mainly that if you have got an idea just do it, even if no one around you gets it: if you believe in yourself you can succeed in realising your vision. This was rather at odds with Ajaz Ahmed's talk earlier in the day where he was lamblasting government support agencies for backing 'lame duck' ideas that were destined to fail and that people shouldn't be given 'false hope' that they can become 'supermodels'

I must admit to being more with Deirdre on this one. Sure, we need to screen out the ideas and people that are just plain daft and applaud the ones that are sure fire winners (because they, like Deirdre, will fly without any outside help or an outside investor getting a slice of the action). But in the beauty contest that is innovation and enterprise, the winners and losers will sort themselves out in the marketplace (think dancefloor, not stage). Out there it's execution and the audience vote that counts: the wisdom of crowds, not the opinion of experts. In my experience, most good ideas start off looking pretty ugly or just plain daft to conventional eyes. As Deirdre says 'We need to encourage weird'.