By Francis Moran and Leo Valiquette
This is the 20th article in a continuing series that examines the state of the ecosystem necessary to successfully bring technology to market. Based on dozens of interviews with entrepreneurs, venture capitalists, angel investors, business leaders, academics, tech-transfer experts and policy makers, this series looks at what is working and what can be improved in the go-to-market ecosystem in the United States, Canada and Britain. We invite your feedback.
Throughout this series, we have often referenced startup accelerators and the important role they play in the commercialization ecosystem, as well as where government support fits into the equation. So we thought it was time to take a closer look at these entities by profiling three different ones from Canada, the U.S. and the U.K.
We caught up recently with Jon Bradford, the man behind The Difference Engine and Springboard, two U.K.-based startup accelerators that took their inspiration from TechStars and Y Combinator in the U.S. The Difference Engine was an initiative supported by public funds that launched in the north east of England two years ago. The goal was to address the lack of quality VC deal flow for startup technology companies and prove, as TechStars had in Boulder, CO, that an accelerator didn’t have to be based in a high-tech hotspot such as Silicon Valley, or even a major city.
While that program was successful, funding cuts to regional economic development, as well as a desire among angel investors to regroup in a more central location, led to what was essentially v2.0 of The Difference Engine, Springboard. Springboard is an intensive 13-week program based at the ideaSpace Enterprise Accelerator, part of Cambridge University’s state-of-the-art Hauser Forum.
What follows is Part I of an abridged transcript of our conversation. Part II will run Monday next week.
How do you describe the role that Springboard plays in the commercialization ecosystem? What gaps is it intended to address?More often than not, it isn’t the lack of core technical competency that holds companies back, but the lack of business experience. Most developers tend to revert to type, which is essentially code. More often than not, they don’t like talking to customers and therefore, in this magical world where we talk about product/market fit, that assumes we’re developers who are willing to actually speak to people … but developers don’t like criticism. They don’t like being told that what they’ve got is rubbish.
So that’s part of the process and it helps when one has an experienced entrepreneur who’s been through that cycle or process before, where they can help them understand why customers react the way they do and, in certain instances, how they can build upon that and create value from it.
Springboard’s model was based on TechStars and Y Combinator in the U.S. In your view, is anyone else in Europe, Asia or elsewhere getting this idea of startup acceleration right?
Yes, in Europe we are still relatively early in the ecosystem relative to the U.S. The original startup acceleration was Seedcamp, which was set up by Saul Klein and Reshma Sohoni. However, since then there have been various other programs that have sprung up in addition to The Difference Engine and Springboard – including Startup Bootcamp and Hackfwd.
Is Springboard in the business of picking winners or losers? How does it decide where and how to apply its resources?
We pick the teams which we can add the greatest value to – we are team centric, not business centric.
I know I’m not perfect. For Springboard, I went through a selection process, picked 10 teams, made 10 offers. One of those teams declined to take up an offer, reason being was they’d just raised half a million pounds. We found ourselves with a free slot.
Coincidentally, one of my investors happened to be at a conference where he had seen a team present and we were having a conversation. He said, “I’ve seen this exceptionally good team, it’s XYZ.” I said, “Are you sure?” he said, “Yeah.” I said, “You do know we missed them on a cut, we didn’t even get to speak to them. We pulled them out almost immediately.”
And it clearly identified that this is a very imperfect science. We are going to miss teams. That’s kind of the first thing I say to people when we make our decisions and I think it’s a good point to highlight.
However, how we go through that process is we look to identify a team that is what I call “doers, not talkers.” As Brad Feld (co-founder of TechStars) says on a regular basis, “Entrepreneurs do stuff.”
So what you want to try and do, even in a non-commercial fashion, is go to the team members and ask, “What have you done up to this point in your life? Can you demonstrate or articulate to me that you’re someone who just gets on and does stuff, as opposed to somebody who just sits on the fence and talks about it.”
I think that’s a key differentiator. Brad’s right. It’s people who do stuff. That’s the people we try and identify for the program.
Describe some of the successful graduates you’ve seen so far from either Springboard or The Difference Engine. What were their winning characteristics?
ScreenReach, from the first cycle of The Difference Engine, raised £250,000 two days after the program ended in June 2010 and subsequently raised a further £500,000.
If one looks back at ScreenReach’s application form from what it is today, (co-founder and CEO) Paul Rawlings was somebody who had been tinkering for a while. He’s been doing little projects, made $10,000 here, $10,000 there on a quick buck. Clearly he has an eye for doing a deal and making money quickly as a person rather than specifically as a developer. As a developer also he’s had a nice run in short projects where he’s kind of done things to disrupt people … he merged Twitter and eBay and came up with “TweeBay,” over a weekend … then got a cease and desist order from eBay.
The other thing we identified as part of doing the program is that he is very open, he was not proprietary about his ideas, he was very open to new suggestions, new directions and wasn’t wedded to, “Look, this is what I’m doing and I’m not going to listen to anybody else.”
I think having an open mind, being able to listen, to react in a positive fashion was probably the making of him. He was also not very selfish about bringing in other team members, making sure he had a good team around him beyond the program itself. One of his mentors became one of his members of staff and that triggered the initial financing round.
Next week, Jon shares his thoughts on company failure, measuring success and just getting on and doing more stuff to accelerate more startups.