Accelerate this... The rise and rise of Tech Accelerators

Tech Accelerators are all the rage – so what’s the big idea

This month, Barclays Bank in the UK, launched its sponsorship of a new London based FinTech Accelerator.  Barclays has, according to its own PR machine, again proved itself a leader in innovation.   Barclays is in the vanguard of the major UK Banks who are looking to utilise a Tech Accelerator to help them build a meaningful relationship with those innovative creative types who have the big ideas required to revolutionise the Banking industry.  However, they are not alone, as according to Sally Davies of the FT, there are now at least 4 FinTech Accelerators based in London alone.  http://www.ft.com/cms/s/0/112c6932-bf37-11e3-a4af-00144feabdc0.html#axzz355VyuFLh

And it’s not just Finance organisations that have gone Accelerator crazy, there are also MedTech and CleanTech Accelerators.  So, is this love of the Tech Accelerator the start of a beautiful and productive partnership between Big Business and Tech Start Ups or is it as likely to succeed and be as shortlived as a Britney Spears Vegas wedding?   This blog attempts to get under the skin of the Tech Accelerator craze and get a sense for why they are the “must have” accesory for any self-respecting industry heavyweight in 2015.

What is a Tech Accelerator?

A Tech Accelerator is usually found in the following format.  A collection of small entrepreneurial start ups and/or entrepreneurs who are bought together (sometimes following a selection/competition process) in an environment where they are provided with some or all of the following in an effort to accelerate their business development: seed funding, premises, access to private networks, mentoring and exposure to new markets.  In return the start ups give up some or all of the following:  percentage of equity, sole rights to IP and preferential purchase rights to the Tech Accelerator’s sponsors in order to bring proprietry innovation to the sponsor’s business.

Why do Big Businesses want one?

Simple – they are desperate to find relevant digital innovations that they can incorporate into their businesses. They are convinced that they have neither the skills nor culture capable of generating enough innovation at the speed required.  In essence, the disruption that is being wrought by the digital revolution has scared the pants off most established businesses - even a passing glance at the turnover of businesses in the FTSE 100 or Dow Jones 100 is enough to make any vaguely competent CEO aware of the fragile and transitory nature of their business.  This maelstrom of digitally driven change and uncertainty creates a voracious demand for the type of rapid innovation required to ensure a big business keeps up with an ever changing marketplace.  Big businesses see start ups as a rich source of disruptive thinking and innovation and they want in.  There is also a nice additional pay off for the brand of the big business through their association with cool Start Ups.

                 

Why do Start ups want to participate?

Simple – cash flow, access to markets and a sense of kudos.  For Start Ups cash is like oxygen to fuel their creative fires.  It doesn’t take much but it does take some to keep them stoked and they are happy to take what’s on offer.   Access to markets is also hugely valuable as it can support more rapid customer acquisition and a sense of kudos is important as there aren’t many entrepreneurs known for their lack of ego.   What’s interesting is that the Start Ups are also bombarded with other goodies that they probably don’t realise the value of at first glance.  These extras such as business mentors and guides, access to Start Up networks etc are often what can make the difference for the Start Up but its not generally why they join a Tech Accelerator.

Why are Tech Accelerators the hot cool thing now?

What is fascinating is that Tech Accelerators are a relatively new phenomenon and its interesting to figure out why they are proliferating now.  Here’s my view.   Essentially big businesses have an insatiable demand for digital innovation that it can’t meet itself.   Big Demand.  On the supply side there are now more entrepreneurs and Start Ups than ever before.  It appears that the cool kids graduating from Uni no longer want to be consultants, bankers or lawyers.  Now according to the Wall Street Journal they all want to be entrepreneurs.   Consistent Supply.  http://blogs.wsj.com/atwork/2014/03/17/m-b-a-s-want-instant-entrepreneurship-gratification/

So pervasive is this love of the entrepreneur in modern culture that Barbie recently launched a new version of Barbie – specced out as an entrepreneur.  http://www.independent.co.uk/news/business/news/barbie-means-business-as-mattel-launches-entrepreneur-doll-9549148.html 

So there is both big demand and consistent supply.  However, the two elements (big business and entrepreneurs) do not make easy bed fellows.   So what has enabled this profusion of Tech Accelerators to spring up?   There seem to be a few key requirements:

Viable Brokers:  Big Business and Start Ups speak a very different language and have very different needs.  When left to their own devices the coupling just doesn’t work.  As a result a series of brokers have sprung up to facilitate the coming together.  Some are bespoke organisations (TechStars et al) others are the big consultancies (Accenture et al).    These brokers enable the two parties to cooperate effectively and create and manage the Tech Accelerator “Deal” that the two parties sign up for. 

Worthwhile Packages:  What the brokers have been able to do is to create a “Deal” that appeals to all parties.  This includes the necesities of funky location, decent funding, suitable share holding and excellent access to new markets as well as the non-tangibles such as maintaining control of decisions and creative direction and the provision of relevant and credible business mentors.

Credible Partners:  At the best of times entrepreneurs are generally allergic to big business so it is important that the sponsoring partners are credible and have at least some sense of innovation about their history. 

Focussed Accelerators:  Finally of major importance is that the Accelerator has a focus e.g. FinTech, MedTech etc.  This allows the Start Ups to feel relevant and the innovation to be meaningful to the sponsor.   Much as it would be amusing for Barclays to sponsor a Tech Accelerator that created another interesting digital way of booking a restaurant table it is highly unlikely to be of use to either party.  To facilitate the set up of a relevant Tech Accelerator it is of vital importance that the brokers can a) help the sponsors identify and articulate their key issues in a simple and meaningful way and b) help the sponsors select and recruit an appropriate cadre of suitable Start Ups to participate.

So what’s next for the Tech Accelerators?

I think we have only just seen the start of what is likely to be a profusion of Tech Accelerators.  As big business becomes more transparent and therefore more prone to disruption I think we are going to see the launch of more and more Tech Accelerators.  So as well as more FinTech, MedTech and Clean Tech Accelerators stand by for ProfTech Accelerators (focussed on professional services), EnergyTech Accelerators (focussed on the energy markets) and GovTech (focussed on innovation in government).   It should be a lot of fun.

Soccer Innovation - the best is yet to come - a world cup indulgence

On the eve of the World Cup I’ve succumbed to a massive piece of self-indulgence.  To celebrate the World Cup I’m writing a topical blog on two of my passions – innovation and soccer.  At first blush it would appear I have set myself a bit of a herculean task.   On the face of it soccer hasn’t changed much since it was first codified in 1863, in fact it hasn’t changed all that much since it was first mentioned on crinkly old pieces of parchment in the 12^th and 13^th centuries.  Today, it’s still ostensibly two teams kicking an inflated bladder around a pitch trying to embed it into a goal – all very jumpers for goalposts.  However, the more I thought about it, the more innovation I could see in the world of soccer – especially at the highest levels.  Given the amount of money that is generated from the world of soccer it is unsurprising that there is innovation in all aspects of the game.  After all, keeping the product fresh is key to growing and maintaining the global audiences and consumers.   What is surprising is that there isn’t more – particularly given the success of sports like cycling in applying innovation to improve performance.   It seems to me that soccer is lagging behind other sports and could do better.

So let’s have a look at the innovations of today before I get excited at the end of the blog about what we can expect to see in the near future.  Here’s 10 areas of soccer innovation areas for you to muse on.   I’ve handily given them an Innovation Rating out of 5 to indicate how much innovation has taken place in the area.  Please feel free to disagree or use the ratings as a means to start a cracking debate in your local pub or bar.

1. Stadium Design – At first glance stadia haven’t changed much since roman times, but look closely and you’ll see the masses of innovations now being built into our modern stadia.  From the towering innovative architecture that is capable of supporting a retractable roof, giving unrestricted views and drawing tourists to admire its curves and lines, our modern stadia are rippling with innovations.  Since the horrors of Hillsborough, Heysel and Bradford safety led innovation has rightly transformed the experience of football for the fans in the stadium.   Don’t say it too loudly as the die-hard fans will keel over at the thought, but its almost starting to feel as if, when it comes to stadium design, fans are being treated as valuable customers that clubs would like to have return again and again.  However, even at the best stadia, (Wembley, The Allianz Arena, The Camp Nou etc)  it still feels as though there is more to do to ensure that everyone who attends has the experience they are looking for – too often stadia are designed with seemingly only the needs of a physically mobile 20-30 year old, beer drinking, pie eating, male in mind.  Important though that demographic is, its time for stadia designers to do better.    Compared to other arenas of mass public gatherings e.g. airports, museums, theme parks etc the amount of innovation is still average and certainly not as “digital”. 

Innovation Rating – 3/5 not bad innovation but more to do to get on the cutting edge

2. Pitch Design – Soccer in the 1970’s was too often played out between two teams fighting their way through boggy quagmires where silky skills were easily overpowered by sheer strength and endeavour.  During the 1980’s football dabbled with using astro turf pitches as an all weather solution before giving them up as a bad idea (I still have the carpet burns).   Instead massive work has been undertaken to engineer and maintain better hardy grass surfaces.   Whether it is the use of industrial scale lighting rigs to encourage the grass to “grow” or the introduction of more “hardy” grass mixes, drainage technology, watering regimes, under-soil heating etc the focus has been very much on making the best possible grass surface.   Today the number of lumpy, bumpy, muddy pitches is much reduced.   Interestingly rugby union is now happilly experimenting with hybrid pitches and it may now be time for the soccer authorities to look again at the development of artifical pitches in order to be able to literally create a truly “level playing field”.  

Innovation Rating – 3/5 good efforts in a narrow focus, need to look more broadly for non-grass solutions

3. Kit Design – Teams are still wearing shirts, shorts, socks and boots,so on the face of it not much has changed here since the dawn of the game.  However, we are all well aware of the plethora of lightweight, breathable fabrics that are available on the market that are slowly making their way into the design of football kits – it just seems to be a lot slower than other sports, cycling, rugby, swimming etc where clothing design and innovation seems to have continued at a pace.   Much more effort appears to have gone into changing the colour of the kits than changing the capability of it.   When we look at the specifics of boot design, yes some good work has been done to make boots more comfortable, wearable and slightly less likely to cause a miss kick.  However, there are still big questions about the protection afforded by modern boots and there are seemingly a higher number of broken metatarsals and ligament injuries than ever before. 

Innovation Rating – 1/5 much more to do – especially on player safety

4. Ball Design – Whilst it’s hard to argue that the ball itself hasn’t changed since it was a heavy leather bag, I still can’t help thinking that a lot of the more recently heralded innovations are more about marketing and ball sales than they are about the actual capabilities of the ball.   Clearly the modern ball is a much more safe and reliable ball than those of the past so we have to give some credit.   There is also the question of whether there is actually more you can do with the ball that wouldn’t fundamentally alter the character of the game.

Innovation Rating – 2/5 but that’s probably enough

5. Player Conditioning – Well if there is an area of the game that has transformed itself it’s this one.  From happy amateurs to overpaid prima donnas in just a few decades.   In a post Bosman world of massive contracts, agent’s fees and advertising revenues players are transformed from the willing, gritty amateurs that downed a couple of pints before the match to cosseted professional athletes.  There is a massive amount of data driven technology and infrastructure available within the top clubs to help a player get to and maintain peak performance.  However, whilst the benefits for the players are clearly high so are the strictures.  Many players are constantly on rigorous exercise, physio and diet regimes whilst also being constantly watched by the press.  Whilst my heart is not bleeding this does limit their opportunities to party like their peers from school.  On the plus side they now have access to psychologists and coaches to help them with their angst.

Innovation Rating  - 4/5 major innovation in this backroom area, very data driven

6. Team Management – As an outsider this is a more difficult one to judge.   Certainly there’s a lot of airtime given to discussing this area but I’m not sure I see any great innovations.  Now whilst systems evolve, from Sir Alf Ramsey’s wingless wonders, through the joys of the Xmas tree formations and on they all seem like different tunes on the same piano to me, therefore qualifying as relatively minor innovations. Of further minor innovative note is the introduction of Directors of Football, new training methods and regimes and the array of extra backroom staff (physios, dieticians, psychologists, interpreters etc), but when all is said and done I can’t see much innovation in this area and man management is still, in my opinion, well, man management.

Innovation Rating 1/5 – I may be wrong but I can’t see much

7. Media Coverage – Here’s an area that is seeing more and more innovation.  Whilst the coverage of a game in the printed media has not seen much change the live coverage of the game via TV and online media has undergone an array of innovations.  From being able to watch games on your mobile phone to being able to choose specific player cams the coverage of the game continues to expand.   There is a lot more to be talked about here but the innovations being delivered in this area are really being driven by the media and broadcast companies rather than by the soccer industry itself.

Innovation Rating 3/5 – good so far and more to come

8. Game Control – Given what is now at stake in the professional game the role of the match officials and stewards has become increasingly important.  We now have professional referees, 4^th officials, 5^th officials and occassionally even 6^th officials.  The game is slowly (too slowly) introducing technology to support the match officials – although it should be noted that soccer has been much slower to act than other sports and it feels as if it is constantly playing catch up with fan’s expectations in this area.  It’s also worth flagging that the whole area of stewarding and crowd control has seen a much greater level of development with the introduction of new stewarding techniques and technology to help identify and bar persistent trouble makers.  As a result football is a safer and better experience for all.

Innovation Rating 2/5 – slow so far and plenty more to do

9. Soccer Marketing & Sales – perhaps surprisingly this is one of the areas, that I contend, has seen the most innovation.  Clubs have left no stone unturned in the bid to extend their brands across the globe and even outside of soccer.  Whether it has been launching a vast array of branded products – everything from credit cards to branded cutlery sets the big clubs have tried it – although, to be fair, not everything has worked.  Promotional tours to far flung corners of the globe to drive up the fan base have become a staple part of the pre-season schedule.   Now the challenge is for the big clubs to extend their reach beyond soccer.  Many (especially the Spanish) have a history of this but with the advent of more and more interest from the US in soccer the concept of the globl sports club and brand is becoming a reality.

Innovation Rating 3/5 – Lots tried and some has worked – expecting to see more

10. Soccer Finance & Soccer Governance – Only in the last couple of years have we seen the first signs of the game getting its act together in this area with the introduction of financial fair play rules and fit and proper person’s reviews for owners.  However, mention illegal betting scandals, Blatter, ongoing racism, sexism, homophobia and vote rigging and we all know there is a massive amount more that could and should have been done in this area.

Innovation Rating 0.5/5 – too little, too late

So there you have it a whistle stop tour of the state of Innovation in the game of soccer today.   Some pretty good, some pretty bad.   So what about the future.  This is where I can get really excited as I can see a whole new set of innovation occuring that relate to the real-time performance of the players.   We already know that due to the sensors fitted in F1 cars that their management teams are able to extract and analyse vast amounts of data that they can use to improve the performance of their cars in real time – the future of soccer will be similar.

With the advent of wearable sensors, ingestible sensors and embedded sensors it will make it possible to extract massive amounts of data on each players performance in real time.  Imagine being able to monitor acurately a players gait after a heavy tackle – no more guessing about whether they are limping – it wil be clear in the data.  Imagine being able to tell whether a players energy or hydration levels are reaching a critical low point that could cause a possible lapse in concentration.   Imagine being able to tell whether a player is performing at their normal levels of performance or is perhaps suffering from a virus.   We already have the ability to track the distance run by a player, the passes made by a player and many more data packed stats.  I will be amazed if, that in the not too distant future, managers will be faced with an array of real time data on which they can make better real time decisions.  It should be fun – here’s to a fun and innovative future.

The Growing Pains of Rapidly Expanding Businesses - Part 4

In Parts 1, 2 & 3 of this multi-chaptered blog I looked at six of the Growing Pains associated with rapidly expanding businesses - Changing the Starting Line Up, Building the Business Infrastructure, The Premises Conundrum, the Clique Communications Challenge, Plugging the Process Gaps and the Joy of Regulation.  I compared these business Growing Pains to the growing pains experienced by rapidly growing teenagers.  

In this, the final blog of the series, I’m going to look at the four remaining growing pains.  These four growing pains are very similar to the challenges a teenager faces as they make their final transition from home life to university life or work.  The first of these is the Hiring Hiccough, the second is the Culture Preservation Seduction, the third is the Complexity Jam and the fourth is the Honey Trap of Fame.  The challenge is of course to stand on your own two feet and make your own high quality decisions amongst a storm of distractions and conflicting advice without the benefit of history to guide you.

Let’s have a look.

The Hiring Hiccough

When your business is growing rapidly you naturally need to hire new employees to help – usually lots of new employees – usualy in a hurry.  The challenge is that the senior executives and managers are often too busy running the business to run an effective hiring process.   Like a teenager juggling lectures, work, social life, hobbies and families there is just too much to do.  So how do you recruit the quality and volume you require at the pace you desire.  The standard screen the CV, conduct a phone interview, conduct a preliminary interview, undertake psychometric testing, conduct a structured interview and complete a final interview process is OK when hiring on an occassional basis but can seem massively elongated, complex and time sapping for managers when you are looking to recruit at speed in bulk.   So what are the alternatives?   There are a number.   Some are better than others.

Option 1 – stick with the standard process - it will deliver good hires but will be exceptionally painful and may hamper growth and delay key product launches, system upgrades etc.   Many organisations are trying to make as many of the steps as possible self service (delivered over the internet) in an attempt to reduce the staff hours required to support the process.   However, more often than not, it is still “high touch”

Option 2 – shorten the process – drop out a few of the recruitment process steps and commit to making rapid decisions.  Whilst this sounds good in theory it often doesn’t reduce the burden on the business management by much and tends to increase the risk of poor hiring – this of course creates its own problems.

Option 3 – lower your standards – this allows you to take in many more hires at speed and you can use the probabtion period of the first six months of employment as a kind of extended job interview.  However, this is often a recipe for disaster as most under pressure managers will neither manage low performing staff effectively or exercise the option to let an employee go before the end of their probation period.  The end result is an organisation weighed down by poorly hired, ineffective resources that they struggle to develop or manage out of the business.

Option 4 – hiring as a project – one of the more effective solutions is to actually see the need to recruit and onboard a large volume of people as a project in its own right that requires dedicated resources and budgets.  Rather than rely on the best “side of desk” efforts of the management appoint line staff + contractors/consultants to work full-time as interviewers, screeners etc on behalf of the business.

Option 5 – outsource hiring -  really a version of Option 4 – has the least impact on the schedules of business management and can be very effective.  However, it can lead to dissatisfaction from both candidates and hiring units who are kept apart from each other until the hiring is completed

My recommendation – is stick with Option 1 for as long as possible and when it is just too slow and painful swap to Option 4 or 5.  Whilst Options 2 & 3 sound attractive they are only ever going to work in a mature business and the undesired consequences are just too hard to manage in a rapidly expanding business.

The Culture Preservation Seduction

When you have had the joy and excitement of overcoming obstacles and building new relationships and creating a bit of history as a successful start up it is hard to see that history and the culture associated with it, become diluted by new people and new ideas as your business rapidly expands.   Assuming you are managing to hire effectively you will now have lots of new people joining your rapidly growing business.   They don’t know your culture and they don’t know your ways of working.  They are bringing in new ideas, new ways of behaving and some of it seems counter-cultural.  So what are you going to do?   This is of course a challenge that entrepreneurs often face and unsurprisingly the obvious solution is often not the best.  

The knee-jerk solution will see the reintroduction of a number of cultural traditions from the start up phase that may have faded out of fashion (e.g thursday night beers, cake for birthdays, monthly brain jams, etc, etc).  These activities will seek to “recapture the entrepreneurial spirit of the start up”.   Now whilst they are OK activities in themselves and may well be enjoyed and serve a purpose, no amount of gimmickry and nostalgia can recreate the culture of the start up.   This is actually a good thing.  The business has changed, its no longer a start up and is now rapidly growing and like a student who insists on going back home every weekend of their first term in college, by trying to cling to the past  you are in danger of missing the excitement of the here and now.  

Of course it is important to remember and celebrate the corporate history, but it is really important not to preserve the start up culture in aspic.  The solution, be brave, create a new set of cultural norms and ways of working for this rapid growth phase – do by all means base them on your values and principles but don’t base them on your old ways of working.   Engage the new joiners, create new history and celebrate the growth and progression of your culture.   If you try to preserve the start up culture your business will struggle to grow and will eventually die.

The Complexity Jam

Entrepreneurs can often be “fire, ready, aim” kinda people by nature.   They are not afraid to take big risks, they survive on their wits, their instincts and their ability to rapidly draw conclusions and act.  These are all admirable qualities and almost all essential for leading a successful start up.  However, they can be an absolute disaster for the rapidly growing business as it wrestles with a growing amount of complexity. 

Daniel Kahneman has recently championed the idea of human beings having two decision making systems – the “always on” system 1 that allows us to rapidly make sense of our surroundings and make quick decisions and the “big thinking” system 2 that we deploy when we need to really think things through.   He also pointed out that system 1 was prone to errors that were only visible if we force ourselves to use system 2 to properly analyse the situation.   The challenge for entrepreneurs in rapidly growing businesses is therefore how to slow themselves down enough to ensure that they are applying system 2 thinking to deal with the growing complexity in their business.   It's the business equivalent of the student who has to learn that simply regurgitating other people's ideas and opinions is not enough to get top marks.  Original thought is required and that takes time and effort.  

The answer is for the entrepreneur to delegate more so that they can concentrate on a fewer number of high value decisions that require a higher level of analysis.  They need to start demanding more data and better analysis.  Now before you all start having a heart attack and wondering whether or not I have lost the plot, what I am not talking about here is a call to introduce analysis paralysis, but rather to introduce a way of making decisions that is considered and takes account of the inherent complexity that the business is now carrying as it rapidly expands.  This is really the first step on the road to building a mature governance structure for the organisation, one that lays out clearly the people or bodies that can commit the organisation to action.

So my advice – when you feel like the business is getting too complex and that the quality of decision making is deteriorating, that’s the time to invest time and effort in revisiting your governance process.  Whilst seemingly a dull activity it can genuinely unjam decisions and lead to a rebirth of activity and growth.

The Honey Trap of Fame

And finally – the last of the growing pains – the Honey Trap of Fame.  Now whislt this is obvious it is still worth mentioning as there are not many entrepreneurs who don’t see themselves as the next Richard Branson or Steve Jobs.   When a business enters a phase of rapid expansion it is very likely to attract media attention.  Specificlally the press are keen to find the human interest stories behind the person/team that built the business. 

Now as previously hinted at throughout the other blogs in this series, entrepreneurs can have a bit of an ego and the chance to see their images and words repeatedly appearing in the media is intoxicating.   For those that manage it well it can be a tremendous opportunity to market the business.   For those that manage it badly it’s a one-way ego trip to bad business as in order to chase further media opportunities your claims, behaviours and quotes get more and more exotic and detached from reality.  Like the student in the bar, high on alcohol and excitement your jokes and ideas are funny at 11pm but overstay your welcome and your musings will have lost coherence, credibility and audience by 5 the next morning.   Learn when to stop and leave the audience wanting more.

The solution to the lure of the Honey Trap of Fame – find some wise advisors who understand you, the world of business and the world’s of media and PR.   They will help you stay grounded, be clear about your message and help you to maximise the benefits of the exposure that you choose to receive.  It’s not rocket science but it makes sense.

OK – that’s it.  I’ve now outlined the 10 major growing pains of rapidly expanding businesses.  I hope you have found this 4 blog series helpful.  If you want to discuss any of the issues raised or get in touch for help or advice you can contact me at rickfreeman@addonova.com   In the meantime may you find great delight in building your own rapidly expanding business.   I know I intend to have fun with mine and I hope I have the humility to take my own advice.