A Plot for Upstarter

At Plot we have always had to work behind non-dislosure agreements, some lasting years, which limits our ability to share what we have done and also what we can do with others. It has been like working in a secret backroom.

We’ve founded UPstarter for two reasons – one so we can work out in the open and share our experience and knowledge, not only from what we’ve done before (NDAs permitting), but also from what we build going forward.

Our second reason is that we have a goal to design a way of working with people with ideas for new products, services or initiatives (whatever they may be) especially to help them translate those ideas into successful enterprises.

We believe ‘incubation’ is a subversive act of reminding people of their natural abilities to create their own living, and we are calling our incubation service Upstarter

The Backstory

You would need to have been living somewhere pretty remote to not have noticed the boom in incubators in the UK and elsewhere, especially in the USA. Universities have set them up. Banks have set them up. Corporations have set them up. These days everyone and their dog runs an incubator/co-working space. Accountants offer ‘value adding services’ for startups, Tesco is backing one, Science Museum is running one. Even London Stock Exchange gets a look-in with its Elite programme. Incubation is a busy space of interested parties encouraged by the pace of development and the hopes of infinite scalability and lots of cash.

Bringing new ideas to market in fast growing profitable companies is the dream not only of entrepreneurs, but cities and countries. People in the UK have wondered long and hard about why we don’t have our own Silicon Valley — as if the fact that we don’t makes us inferior or plain unlucky. Close examination of the forces, mindset and resources that have been available to people developing new technologies over in the USA, show that the Valley ecosystem is a machine for making startups that is both immensely fortunate and to a degree well-managed serendipity.

Places where entrepreneurs flourish often get re-branded as Sillicon Fens, or Roundabouts. The nearest we get to an actual viable and active new local ecology is in Boulder, Colorado. It has a wonderful local swarm of entrepreneurs and VC’s operating successfully outside of Silicon Valley. It is an inspiration to other cities who might be trying to create their own resilient network of businesses or those who simply want to recover from recent financial peril. It’s a modest phenomenon, and a successful one. Boulder includes component supplier and manufacturers Sparkfun and Techstars. Their poster boy is Brad Feld and his popular lean startup approach in the very same place where Spark Fun will make your custom microcontroller boards.

All credit is due to homegrown ventures, Arm and Autonomy for their successes. Whilst pundits write books and articles about why the UK does not have its own Valley, no real value is gained by comparing ourselves to them. That being said, things have changed significantly in the past 3 years in terms of what kind of support is available for startups in the UK, EU and the US and elsewhere :

  • In 1980, there were only a dozen business incubators in the U.S., according to the National Business Incubator Association.
  • As of October 2012, there were over 1,250 incubators in the United States, up from only 12 in 1980. NBIA estimates that there are about 7,000 business incubators worldwide.
  • More recently we have seen a rapid burst of incubator growth outside of Silicon Valley, across the US and EU outside of major cities and especially in London and New York.
  • The recent boom has been almost exclusively in the world of software and app development. 12 months ago there was no interest in hardware startups. As interest broadens as to where the next big thing will come from, new incubators are established. Two examples of newer incubators focused on investing in the hardware space –Haxel8tor in China and Highway 1 on the West Coast.

We have looked at patterns in incubation services, in 2004, and in 2013. We see an increase in diversity of incubator types, creating more specialised forms. There is a pattern to this diversification, and we have a strong hunch about why the world needs another, very unique one.

Incubation in the UK

On returning to London from our 3 year stint as Visiting Professors at Carnegie Mellon, we wondered if the UK startup scene was well served enough already with incubation and acceleration programmmes. There are approximately 300 business incubators in the UK according to these guys. Naturally, it changes everyday, and everyday sees new kinds of incubators.

The desire to be the source of new successful businesses is appealing to many. Now more and more organisations have got the bug of growing some high value entrepreneurial talent locally. This is evidenced by an abundance of co-working spaces for startups, like Hub Westminster or startup incubators such as St. John’s innovation centre in Cambridge (more co-working space plus a bit of cash) and more recently in accelerators (3 month pressured sprints of activity coached by experienced mentors and a bunch of cash) to Y Combinator in Palo Alto, from Tech Cube in Edinburgh to to Seedcamp investment and mentoring.

There has also been an explosion in new self-organising collaboration formats – for gathering together and thinking about how we work, or to have an intense session around an idea or theme, to make and explore things, such as: hackdays, hackathons, meetups, bootcamps, social innovation camps, service design jams, (what happened to unconferences, foocamps, pecha kutchas and bar camps?). These formats generate a million new ideas that can go on to become new enterprises.

The same has happened with the support structures that exist around developing and commercialising new business ideas. Way, way back in 2004 we did a UK study of what was then being called “incubators” and these ranged in their offers from, on the one end of the spectrum a cheap workspace through to a structured programme and mentored service to support starting up. The term incubator was very ‘stretchy’, and managed to make all kinds of things appear startup friendly. Some harnessed local regional money, to creating interfaces for larger industries that could not work with smaller companies, but could buy and absorb them, there were many reasons for else things existing, even if they did not share the same ethos or purpose. We repeated this in the US last year, comparing models and costs. It’s all good stuff. The term incubation continues to vary widely in its meaning. Some incubate the person, some the team or the idea. Here are some patterns.

The Academic Sector

In the UK, the academic institutions themselves often own the IP that gets created by students. In times of fixed budgets, this IP is seen as a potential revenue-generating, nest egg for universities to commercialise. (Well, that’s the theory, the practice is a little different.) Since the early 2000’s UK Universities have worked to unleash this value through what they call ‘tech transfer’. In the US, universities don’t necessarily own the IP, and as a result work harder to support students in creating startups, as not all institutions can or want to make a claim.

In the UK universities have been talking for some time about creating a version of ‘incubation’ combined with ‘technology transfer’ enabling a sharing of the value of brains and knowledge created in such spaces. Imperial Innovations, Cranfield, Oxford University and Essex University have also offered some incubation for some time now. One of the oldest incubators is St Johns in Cambridge, based on the Science Park. In the US the support for startups is highly developed, as with Stanford University and many business schools such as NYU Stern have cash competitions for new business ideas, combined with some workspace.

Academic incubators have diversified. The most interesting and established in this space, and with a design direction, is undoubtedly Pratt Design Incubator in New York. This sustainable design and social innovation incubator has been run now for some 11 years by Debra Johnson. Another, Design London is a joint effort between RCA and Imperial college. Central St Martins in London has successfully collaborated through its design incubator with Method, in an academic-commercial collaboration called MethodDesignLab. The Pervasive Media Studio has been running in Bristol for 4 years, and operates as a successful incubator of ideas and new collaborations between academics, and creative/makers/writers/dramatists and technologists.

The Commercial Sector

Managing talent is a huge corporate challenge. Its great when your employees come up with exciting new ideas, and in the best they are encouraged to spend time in developing them, but then where do they take them? In-house incubators or innovation labs are a dynamic way for corporations to explore new ideas or technologies. It gives their staff space to explore their ideas, or work on new areas they are interested in, and the company benefits from people bringing in new thinking into the company and sharing it to inspire. Ogilvy have a lab, to “Educate, Inspire and Change” their office. Some aim to develop new areas of work or knowledge, like Telefonica or focus on new products and technology applications, such as Citrix’s Startup Lab. Some are there simply to retain talent that might go off and start their own companies.

In London a recent boom occurred in new companies providing space and services for startups, attracting Google campus who brought a space to co-locate others such as the Techhub accelerator and their co-working space Central Working. This has built upon the opportunities created by co-working spaces like The Trampery bringing their brand of extended co-working spaces across London, and their recent collaboration with the multi arts venue: the Barbican with their Fish Island Labs.

For those who cannot either get into an acceleration or incubation programme or commit to 3 months inside one, there are organisations who run day and night classes to start people on their way, in their new ventures, such as General Assembly in London, San Francisco and New York.

The Social Sector

The social sector in the UK has kicked up a storm in the recent years. The spaces for ‘social innovation’ work, funds and incubators have grown also, fuelled by a financial crisis and the need to do more with less, endorsed by the Big Society rhetoric.

In their partnership with UnLtd, WAYRA, Telefonica’s global tech start-up acceleration programme, is 50% funded by the UK Government, for start-ups that make a positive social impact based in London Wayra UnLtd. The World Bank has an ideas incubator, Grameen Creative Labs which focus on incubating ideas in locations around the world. In New Orleans Propeller offers social innovation incubation and acceleration. Smaller more flexible and more localised services for social startups like Nightriders in Glasgow are bringing a really refreshing new approach to small social entrepreneurs.

The Public Sector

Public sector spaces for incubating ideas have been patchy in the past, with initiatives such as the now closed NHS Innovation Lab, or successful in relationship development such as the BBC Innovation Labs – less a space for startups and more a space for connecting small companies with ideas to bigger institutions who need some innovative thinking but find it hard to develop it internally. (Its three-year life was fruitful in many ways.)

NESTA have been engaged in this space for a long time. As a supporter of innovative work, they have created multiple initiatives, such as the Dreamtime Fellowship, or Pioneers initiative, sponsoring individuals through other programmes, and now funding directly specific themes. Start up Britain by the Centre for Entrepreneurs toured the country to get people excited about being an entrepreneur.

Speeding Up

Incubators are now being superceded by the development of accelerators: organisations that put the company and the idea through a high-pressured space and time to get them to investor-readiness and product-honed perfection. It’s a process that works well for high-tech, high-growth, high tech startups and a million apps have been launched through this approach. Startups compete to enter and get a whole host of benefits. There is a core set of services that is common to most: focused time to work on the idea; access to experienced advisors; talent; ideas; cash; networks. The reality can be different. A great review of what accelerators do and don’t actually do is available here.

Each acceleration programme (whatever its focus) has its own methodology, its own mentor network and success measures. Y Combinator, Techstars, Techub, Seedcamp, or themed such as Springboard IoT… Each has its own expectations of return on its investment, and a range of forms this can take. The aim is often getting the startup to the next round of funding and scaling up the operation. However, research shows that the things that startup companies seek out in becoming part of these accelerators (well, apart from the money) such as mentorship and advice for example, are not always what they get.

Designers?

Our experience is in design and innovation. We have seen the role designers play in creating value where little existed, and where they blend so many different aspects of needs into a balanced form of successful product or service. The role of designers in business has changed, and now the role of designers in startups is changing. Design thinking is prevalent in business speak now. John Maeda has become Design Partner in Kleiner Perkins. As Tim Brown, says in 5 new careers for the 21st century,

Combining entrepreneurialism and design is the hot thing in Silicon Valley these days. Every start-up worth its salt has a designer on its founding team. Venture capital firms are including designers in their inner circles, too.

Interest in design as an innovative approach has grown, and many designers have become business founders themselves. We think this is a good thing – Nest, flickr, Plumen, Makie and Sugru are all examples of designers who have gone on to found their own companies.

One of the reasons it’s easier for them to do so now, is the fact that the tools are inbuilt – for making, prototyping, distributing. This makes being a designer/founder so much more a possibility, and that makes starting up an new business idea, getting customers and prototyping all so much easier. But, in our design schools and universities we don’t encourage them to go out into the world and create powerful companies that change the world. Instead we train them to respond to others visions, needs or briefs. We don’t train them to frame or develop their own. Strange really, when there is no conflict in being a designer and an entrepreneur.

In the UK, we don’t yet give designers the kinds of entrepreneurial skills they might need in order translate an idea into a business. But we could. There could be three impacts of doing so:

  • new businesses, based on real human needs, that have the potential to grow
  • new entrepreneurs, with the confidence to develop new ventures
  • new entrepreneurs who can repeat the process

We’re not alone in our thinking. A group of universities, Google and Hyper Island in NYC have gathered together to set up such a course for students in the city called 30 Weeks. Method and Pratt Design Incubators are seen to be making things work.

The Designer Fund is the first of its kind fund set up in the West Coast that is directly aimed at designers with business ideas, and also extends that by the Bridge, setting up designers directly with startups to get firsthand experience. In meeting them, we understood that there is a whole world of new opportunities out there for designers, creatives and makers that are not yet connected up. Startups are no longer only for tech heads or geeks, and designers have started to get in on this game, rather than only designing for someone else.

Governments are starting to at least acknowledge the contribution that creative businesses make. “Official statistics published today reveal that the UK’s creative industries are now worth £71.4 billion per year to the UK economy.” The DCMS report: but these creatives are not usually encouraged to do their own thing, to take their work and make it make money for them. Designers and makers needs are different, because they think differently. The core skills they have and the approaches they use are perfectly tuned for startup. They can also think like entrepreneurs, given the chance and the opportunity:

“the design community is saturated with great commercial minds that have never been put into roles with deep commercial responsibility”
. ThinkTiv

We believe there are many design entrepreneurs are out there with new ideas about services and products poised to replace the things that no longer serve us well. Products that reduce impact, services that create pleasure, or security, or improve on the quality of connectivity between us.

What’s missing from this picture?

There is a common assumption, amongst the tech startup communities that, if you work with the best brains, you’ll get the best startups. We are unconvinced about this.

There are a lot of bright people making the kinds of businesses that are creating solutions they want, but not necessarily with wider appeal. Gawker blew the lid on this dominance of an entrepreneurial ‘type’: “people who do not fit into the archetype of the precocious programmer are routinely dismissed as unworthy” As a result, much of the output from west coast accelerators and increasingly elsewhere are software apps designed for the people who create them and this is increasingly becoming a bubble of self interest. Within these programmes, there is more than a hint of a the lack of women and people of colour in the cohorts, and those who do attend find themselves experiencing odd or discouraging treatment that alienates them.

Startups are only for geeks? We don’t think so. We think engineers have had enough of the action. We want to create some space for the designers and makers (and others who are the not the usual suspects: anyone know a Mumpreneurs?)

We believe there are many hidden entrepreneurs out there, who given the right opportunity would flourish. We want to open up the opportunity of ‘making businesses’ to more people (beyond the young-educated) who might actually understand a different market and see them create a mesh of interconnected micro-businesses .There is so much to be gained from a blooming garden of new startups aimed at multiple and intersecting markets, all mutually supporting each other.

Also, we know the value of strategic design for early stage startups (our work at the Design Council), and we understand the value strategic design thinking creates when it enables startups to envisage a bigger perspective that in turn gets them thinking big and thinking in detail. So we’re going to put strategic design at the very heart of what we do.

Prototyping Upstarter

In our industry there is a phrase — eat your own dog food — which graphically illustrates the point that if you are asking others to do something, you should be doing it too. So that’s what we’ve been doing, prototyping the incubator.

Here’s the concept:

  • Its a nomadic incubation service to be delivered where it’s needed (not in a building we need to keep full), that comes in the form of a plug-in to other spaces where the (overt and covert) hidden and recent entrepreneurs can develop deep understanding of their markets and develop a great business proposition as a response.
  • We show them how to do it – not just tell them. We ask them for their time and commitment, and openness to change and grow.
  • Our service currently takes the form of workshops and small programmes (with full details announced on our website) – incorporating components of a tried and tested curriculum we have developed over years of working with all kinds and sizes of organisations.
  • Ours is a sector agnostic approach – combining commercial, social and not-for-profit startups to work together.
  • Our startups do not need to be high-tech/high-growth, but they do need to be ‘high impact’.
  • Our mentors will be the best we can get from the tech, design and business world

Our ambitions are big – we will get our own money too, to give our startups the chance to leap into the future. We’ll connect with the kinds of angels and business investors who equally have tired of financing the high tech growth, and are now looking for something a little more meaningful.
 We’ll run bigger programmes. Later we’ll work at different scales, with underserved audiences on under resourced issues.

Five pilots are in the bag, from London, Bristol and Barcelona. We used these to test out the Upstarter concept, and to see if there is a place for it. These first pilots focused on designers, creatives and new digital makers (although we didn’t say no to the foodies and the artists that came through the door).

You might call it a test drive, we call it prototyping an enterprise.

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