When I think back to why we applied to Seedcamp, it was probably the money that attracted us in the first place. We’d been working on School of Everything for about a year, running the company on a very small amount of cash which was rapidly running out, so â‚¬50,000 of investment was quite enticing. My guess is that for a lot of teams applying for accelerator programs, in advance of being accepted, it is the idea of investment that initially peaks their interest in applying. I’d like to test that hunch though.
In truth what accelerators give first time founders is actually very different. Having spoken to quite a few companies that have been through Y-Combinator, Seedcamp and the like, there are a few themes that stand out:
Accelerators give you the chance to meet people in the tech industry, both from successful startups and in larger tech businesses. Many of the people I’ve spoken to have told stories about how they met people who later went on to help them be successful. This could be the guy from PayPal who tells you what you need to do to take payments in a particular way or the branding consultant who gives you the insight you need to change your name. For Seedcamp, Techstars and Springboard, this is achieved through ‘mentoring’ (for example see this list from Seedcamp) while in the case of Y-Combinator, the speakers are the most obvious exposure the teams have to people who are already founders.
Accelerators give you introductions to investors and time face-to-face with them which can be hard to get for first-time founders. Because accelerators do a great job of providing a quality pipeline of new companies (more on that in a future post), a lot of investors make sure they go along to accelerator events and getting them all in the same place is something that is a very rare opportunity for new companies.
Accelerators give young companies validation. The idea that you’ve been vetted by a group of successful founders and investors helps any early stage company, whether that’s with journalists, or investors or potential clients. It helps to be able to say that you’ve been selected as a ‘promising startup’ by an accelerator program. The value of that validation is linked to how well the program is regarded. Saul Klein has written about this in relation to Seedcamp.
Accelerators give you a peer support group. Strange as it might seem it’s actually quite hard to meet people who are doing the same thing as you, even in London and to some extent in other tech hotspots. And for teams who are starting out elsewhere, it’s really tricky. The problem is that most interactions with other founders are very superficial and you really need to be spending time in the same building or meeting each other regularly over the course of a few months to get to know them to a level where you can provide each other with meaningful support.
Finally accelerators provide pressure. A number of people have said that one of the things they got out of an accelerator program was a deadline and basic framework for getting there. Of course every company should be able to provide this themselves, but in reality in the early days it’s tricky to do.
So those are first thoughts. Let us know if there’s anything we’ve missed in the list of benefits for founders. Related articles
As we start working on The Startup Factories there are a few things we need to get straight. First of all we need to try and settle on a definition of what constitutes an accelerator program. Quora is doing a great job of listing the kind of scheme we’re interested in as they pop up, but what are the defining features? Our first thoughts are:
They work with pre-seed stage companies — usually with small teams (2–4 people) of first time founders.
They are selective — they have some form of application process, this could either be by referral or by an open application system with expert judgement that picks the most promising companies.
They are time bound — they have an intense period of support for companies that usually lasts for three months, although there is often some form of support beyond this period.
They support teams in cohorts — they tend to take companies in batches to create peer support. This can be anything from six per cohort up to over 30 in the case of Y-Combinator.
They have a heavy focus on mentoring — bringing in people from the local tech and business communities to help the companies
They have the aim of securing further funding for companies. Accelerators are often described as ‘on ramps’ to the investment world.
Then there are a few features that accelerators have different approaches to:
Providing shared office space — Y-Combinator and Seedcamp don’t provide shared office space, Techstars and Springboard do.
Providing finance at the beginning of the program — While most accelerators do provide finance up front, Village Capital for example provide a prize at the end of the program.
I’m sure we’ll come up with a sharper definition as the project progresses — in the grand scheme of things it’s early days for the accelerator model and things will change over the next few years. There’s also a lot of room for diversity within the model because the context makes a big difference. Whereas we know an awful lot about starting companies using bank credit because the model has been in place for centuries, we’re only just learning how to create and support new businesses in the internet age. Related articles
I’ve just finished reading Katharine Hibbert’s bookÂ Free: Adventures on the margins of a wasteful society and thoroughly enjoyed it. It’s a great piece of journalism, along the lines of Nickel and Dimed, where Katharine lives the life herself to get a level of depth and detail that wouldn’t be possible otherwise.
The premise behind the book is to try and find out whether it’s possible to live for free in London. As the credit crunch started to take hold Katharine found herself without a job or the means to pay for expensive rent so she tried to squat and scavenge everything she needed to live in the capital. It was hard to start with but as time went by she learned the ropes and started to realise quite how many empty properties there are and how much food from cafes and supermarkets goes to waste. She also finds a completely informal support network that keeps the whole hidden world slightly safer.
I actually met Katharine a few weeks ago to talk through an idea she has for a startup (I’m sure you’ll hear more about that soon). But what struck me is how many opportunities there are for businesses in this area. In many ways Lisa Gansky’sÂ The Mesh is about the same issues that Katharine is writing about. That book is all about how people are finding areas of activity where there are massive inefficiencies and creating ways of co-ordinating and organising people and resources to create value. Of course, I’m not the first person to have this idea. The title of this blog post comes from a Demos report written byÂ Robin Murray in 1999 which is still (sadly) incredibly prescient today. Perhaps Robin was just ahead of his time — and actually it needed an economic downturn to get people really thinking but I think we’ll see loads of new businesses that turn all kinds of waste into value over the coming years. Some will get more use out of physical goods, others will make property more efficient, others will reorganise whole systems so they operate more sustainably but I can’t help but think that it’s a great area to explore if growth and consumer confidence carry on their current paths.
I’ve just started working on a great little project with Nesta looking at the new breed of ‘business accelerators’ that are helping early stage high tech companies in the US and Europe. We’ll publish it as a short book in the middle of the year but up until then I have the fun job of finding out all about the likes of Y-Combinator, Techstars, Seedcamp and Springboard and working out what really makes them tick.
I first came across the idea of accelerators when Matt Jones and Matt Locke suggested we should apply as School of Everything to the newly created Seedcamp in 2007. It was quite an experience. Dougald did a lot of the work on our application which I seem to remember us pulling together very quickly, then we had an incredibly awkward conference call with the judges where I think they’d already heard about 40 pitches in a day and some were quite obviously a bit bored. But a couple of days later Reshma called back and asked if we could make it. We jumped at the chance.
I think it’s safe to say that none of us really knew anything about the tech startup and investment world at that stage. We had met a few investors through a friend but it was very clear even then that we were ‘too early’ for any of the London VC firms. We’d also met one angel investor but the idea that someone would invest the money themselves rather than through a fund was new to me at that stage. In the five days of the Seedcamp week we learned an incredible amount about that world and the whole thing gave us a leg up and certainly inspired me to pursue it further. We went away with a bunch of people telling us we had something that might just work as well as a few who didn’t quite get it of course.
Although we didn’t get any investment from Seedcamp or immediately from any of the people we met there, it did serve us very well over the following months. Within six months we’d signed a seed funding deal with a whole bunch of angel investors as well as the Young Foundation and Channel 4 which I’m really not sure we would have got if it weren’t for the validation that Seedcamp gave us and the things we learned about that week.
Since then I’ve been a mentor for Seedcamp and enjoyed it a great deal. I was at mini-Seedcamp in London yesterday as it happens. I like seeing early stage companies pitch and helping where I can. I do think there are a few things that could be improved on but in general I think it’s is a brilliant addition to the London tech scene and can celebrate a lot of success both directly and indirectly.
I think it was Saul Klein (co-founder of Seedcamp) who first mentioned Paul Graham to me and that was when I started looking at Y-Combinator. It’s become one of the most interesting institutions in Silicon Valley (although it didn’t start out there oddly enough) and the more I learned about Y-Combinator, the more I thought it was a fascinating model, with almost every stage of the process thought through and optimised. As we started to develop Social Innovation Camp in the UK, Anna and I started to think that we should move to more of a Y-Combinator model for social startups. Hence Bethnal Green Ventures which we ran the first cohort of between October and December 2010.
I’ll be posting early thoughts and some snippets from interviews as we develop The Startup Factories (our working title for the project) here. We’ll be travelling to visit some of the US accelerator programs in late February and we’re lining up some brilliant contributors to write essays that we think will help people understand the phenomenon. I’ll still be working on School of Everything pretty much full time so this is going to be an interesting exercise in time management for me but it does feel good to be getting back to a bit of research and writing. Related articles
It was on the tip of everybody’s tongue, Matt Biddulph just gave it a name. Silicon Roundabout has actually been thriving for over a decade, with hundreds if not thousands of digital businesses in the East End starting up, thriving, failing and starting up again. I’m a fan of the Government’s idea of a tech cluster in East London. They haven’t actually done anything yet — which is fine — but the idea of focusing efforts on one area and clustering support and incentives in an area where something is already going on is a good one.
Last week I was invited along to a meeting at BIS organised by McKinsey where a whole host of London tech and policy bigwigs got together to talk about what the Government should actually ‘do’ to promote the cluster in East London. There were several ideological clashes in the room, most prominent was the idea that Government should do absolutely nothing and just get out of the way. But there is no industrial cluster anywhere in the world that has developed without Government help. Silicon Valley, although held up by this group as being the example, would never have existed if it weren’t for masses of Government money after the Second World War and it continues to thrive because of defence contracts, SBIR grants and public funding of many of its universities.
I talked a little bit about how networks grow and I think they expected me to say everything was terrible but I actually don’t think there are many problems. East London is awash with people plotting new projects and startups and if you want investment and are right for investment, then it’s certainly not impossible to get. There are so many meetups going on it would be impossible to go to all of them. Minibar has been going for five years, Berg and Huddle do their drinks things (as do many other companies) and Seedcamp provides a focus for early stage investing as well. Of course there is far more room to grow and I think the number of tech companies in East London could grow by a factor of ten quite easily provided that the talent keeps coming and the infrastructure keeps improving.
There were a couple of other things I thought were important. First was how it would be better to focus on ‘founders’ than ‘entrepreneurs’. One of the great things about the tech world in the UK and elsewhere is how collaborative people are and how people in this scene realise that the businessy bit of starting something up is only part of it — you need fantastic coders, designers, writers and strategy people to make something work and they’re all equally valuable.
The other thing I talked about was how we could do with a big showpiece digital festival in London. I think we need to make it a celebration: much more of a SXSW than a trade fair so it should be in town and definitely not somewhere like the ExCel. We should also time it to coincide with other great things going on in London and the UK to attract people from around the world who want to launch their products and see what’s going on in the Roundabout.
Finally, the name East London Tech City needs to go. Let’s stick with Silicon Roundabout and be proud. Related articles
There are some bits of starting a company that everybody has to do, no matter whether their aims are to change the world or not. I thought I’d just write quickly how we went about doing the legal setup, banking and accounting for School of Everything because when we started out, I had no idea how those kind of things worked and what you needed to worry about.
First of all there’s setting up a company in the first place. In the UK this is very, very easy once you’ve made the decision about what type of company you want to be (see a later post for how to make that choice). There are hundreds of services that offer online company registration through Companies House. I used Company Wizard and it was a very straightforward process, costing about Â£35 and was all done within a few hours. Unless you have all the details worked out at the stage you register the company, it’s worth keeping things simple. Go for the minimum number of directors and give the founders the minimum number of shares to get the percentages right but don’t worry too much about everything else — you’ll update it and change it when you take on investment or if anything changes along the way.
Next you’ll need a bank account. This can take some time and is worth getting right because I got it wrong and have struggled a bit ever since. We went with Co-op Bank because I’d been a customer for ages and liked their ethical stance. The main problem has been their online banking which until last year was one of the worst web services I’ve ever seen. Now it’s just middling but it can really slow you down if you’re not careful. If I were you, I’d look very hard at how good banks’ online services are before taking the leap.
As you get a bit further down the road and start dealing with real money you’ll need an accountant. When we started out, I naively thought that all accountants were pretty much the same but I’ve now seen that we were very lucky in choosing ours after seeing other companies spending far more time and effort on accounting than we have ever had to. We chose Complete Accounting Solutions on Seedcamp’s recommendation and have a service where we pop everything in the post once a month, answer any queries and they do everything else. I am intrigued by Crunch which looks like a good service but make your choice based on which service is going to keep everything above board but save you the most time.
You’ll also need lawyers and again I’m very thankful that we chose Keystone Law early on. Here you can end up spending a fortune so you do need to bare price in mind and since lawyers generally charge by the hour, I think you’re looking for a lawyer who has lots of experience at doing what you want them to do so they can do it fairly quickly. All of the people we’ve dealt with at Keystone ‘get’ startups and have been great at explaining what we can and can’t do. Other lawyers are available but I’ve been very happy with everything they’ve done for us.
All these things are important and if you get it wrong they can really drag you down. I’d say go with personal recommendations but do remember that there are lots of friendships in this world that can lead to people recommending people who may be good but aren’t suited to what you want to do. So take the time to understand exactly how the people you’re going to work operate and ask them a few questions to see how well they can explain things to you. After all, when you start something up, the buck will more than likely stop with you, so you have to understand all the boring bits as they relate to the company as much as the people who are advising you.
I’ve actually found what I’ve called here ‘the boring bits’ really interesting. I didn’t know much about how companies worked before I started and now I’m very glad that I do. I think it’s one thing that puts people off starting their own organisations but it shouldn’t really. It’s all pretty straightforward once you get into it and there are plenty of people around to ask for advice as well as places online to get information. So don’t let the minutiae of running a business put you off. It’s not as scary as it looks. And if you’d like to join Bethnal Green Accountancy Club, just let me know.
This is roughly what I said at Be Bettr on Friday 14th January 2011 at the Conway Hall in London. Thanks to Matt Jukes for organising!
1) When we hear the word education most of us think of a classroom, of a teacher standing at the front, of kids sitting at rows of desks. Perhaps the slight smell of a distant canteen. Of course not all schools are like that but when it comes to learning throughout life we hold on to the metaphors and images we grew up with. It’s very hard for us to think of an education system for adults that doesn’t mirror those that are basically drawn from our own experiences, but I think we need to, and perhaps in doing so we could end up rethinking education for everyone, including that of children. For me it’s about how you reorganise the system — I’m not so interested in content, I think the demand for that comes from people anyway. So today I want to talk about a few hacks to the system we’ve tried with School of Everything and why I think we can reclaim some old ideas in modern times.
2) First a couple of pieces of context to what we’re doing. The human race tipped over to be majority urbanised in 2008. Nearly 90% of the UK population lives in an urban area. Since this is where the people are, this is where the ideas, knowledge and skills are concentrated too. While cities have been the great drivers of society and economy, they of course have their faults. They massively lack the social infrastructure of old. When Michael Young and Peter Wilmott wrote in detail about Family and Kinship in East London in 1955, what they found was aÂ world rich in social relationships, networks of dependence and mutual support that helped them face the adversity of insecure and low-paid employment. They charted what would now be described by government types as “social capital” and how it made urban neighbourhoods function effectively.
3) A whole raft of factors set about gnawing away at those bonds throughout the 60s, 70s and 80s. While there were improving levels of health and education, other factors like urban planning changed the way people related to each other. And as Clay Shirky points out — television sucked up our cognitive powers. While TV did open up new learning opportunities — Michael Young himself went on to create the Open University based on the sophisticated new technology of the time (BBC 2) — it also eroded social time and diminished the amount of time that people spent in civic spaces and activities. The car also enabled people to speed through their own local area, avoiding their neighbours. So to my mind, the car and television made urban areas lose some of the efficiency they had developed in relation to learning and building relationships with other people.
4 ) I think it’s only now that we’re just beginning to invent ways of making the city as efficient as it could be. Silently the city is becoming connected to the internet. We are teaching the internet about the real world, geotagging cafes, adding data about hospitals through Patient Opinion. Telling it where people are with mobile phone signals. Technology is just starting to become a layer of the real world, as roads and sewers did before. It’s not the cables and transmitters that matter but the representation of useful information that can be connected. As Clay Shirky says, technology only becomes interesting when it becomes boring.
5 ) Over the past 3 years we’ve been working on School of Everything. We started out with a simple proposition — that we could use technology to connect people who had something to teach with people who wanted to learn. What we built was a listings service where people could say what they could teach and students could provide feedback and ratings of that teaching. Most of the learning going on was one-to-one and it’s worked pretty well. We’ve helped tens of thousands of people find learning opportunities in their local area and as time has gone on we’ve added features. January is always our busiest month as people learn something new as a resolution.
6 ) But in the middle of last year we started to feel there was something missing from our plan. We started to see that there was real power in learning in small groups rather than just with a teacher. It coincided with the economic crunch and us seeing people often having a bit more time on their hands but willing to spend less on learning stuff. As we started to explore, we came across the idea of Study Circles in Sweden or studicirkeln as I’m told they’re called. They developed over the course of the last century and have gradually become the predominant form of adult education. Today there are roughly 300,000 of them. It turns out there is some heritage in the idea in the Young Foundation as well.Â In the 1970s Michael had the perfectly sensible idea of running them on trains and so throughout the 1970s and 80s it was fairly common for people to meet up on the 17.18 to Stevenage or any one of 100 other trains across the country to learn something new for the 30 mins of their journey home.
7 ) We started five Groups in Bethnal Green. Each group had 6–12 members and covered a different subject in a different kind of space — we covered everything from cookery to code, art to accounting. We met up regularly, sometimes bringing in people who knew more than we did, sometimes just getting together with people who were interested in the subject. Of course we realised this was going on all around us already whether through church house groups, book groups or other subjects in peoples homes.Â What we found was that it works — it helps people learn new things and build new relationships.
8 ) This week we’re opening up the system to other people and we need people who are willing to make things happen. Self organisation needs a little bit of organisation. Call them community organisers, learning champions, whatever you like but they are people who give self organisation the nudge it needs — they set the patterns. We hope what we’ve built fits the needs of organisers, making their lives simpler and enabling them to have greater impact. We’re looking for people who want to back the organisers — who want to support networks of groups. Whether they’re local authorities who want to see more self organised learning in their areas, companies who want to see their staff learning from one another or campaigns that want to create networks of groups meeting up regularly to learn about an issue.
9 ) Sugata Mitra says “Education is a self-organising system where learning is an emergent outcome.” When you think about it a university campus is just a collection of facilities with a bunch of people who are motivated to learn new things come together. The organisational infrastructure of a university is possible to recreate using technology. I suppose what we’re trying to create is the invisible, yet practical university.Â No quad, no clock tower, no vice chancellor’s suite, but full of people who want to learn and people who can help them. We just provide a way of seeing and organising that layer of learning opportunities. We want to see neighbourhoods becoming schools. Putting to use underused buildings and encouraging people who have something to teach, to share with other people.
10) Hacking is about simple interventions that change everything. Using the weight and momentum of what exists to help change its direction. It’s Jujutsu with ideas and code. We’d like your help to use this simple hack — the idea of the learning group, to try and revolutionise adult learning. Thanks for listening.
One of my favourite reads of 2010 was Kevin Kelly’sWhat Technology Wants.Â The idea at the heart of the book is that technology’s evolution is inevitable and even predictable and that our future as the human race is bound up with the direction that it takes.
Kelly traces all technology in a long historical arc looking not just at the gadgets alone but at what the combination of technology and human activity enables. He argues that it’s the combination that matters, not either one in isolation, and I completely agree. Kelly calls this combination the ‘technium’ because there isn’t another word for it yet.
What I love about the book is that it leaves you thinking on the biggest possible level. It’s way beyond the level of Facebook/Apple valuations or whatever new app is out this week. It’s a look at technology and the human race’s place in the universe.
There’s a short section later on in the book where he talks about just how amazing the internet is as an invention and talks about the joy that he feels using it. I feel that too. Clay Shirky says that technology only becomes interesting when it becomes boring — which is very true — but when you take a breath and realise what’s going on as you use the technology you’ve become used to, it’s quite possible to accidently blow your mind.
At a more down to Earth level it set me thinking about how I use technology in my own life because the book isn’t straightforwardly positive. Kelly explores how the Amish decide which technologies to use or not bother with. He quickly dismisses the idea that the Amish are anti-technology and finds a number who use mobile phones and solar cells. What happens is that a member of the community will suggest that they try out a new gadget and then meet with the bishop to talk it through. They will decide to have a trial period and everybody agrees that once that period is over they have to be willing to give up the technology if it hasn’t had a positive effect. I think I might start to do something similar and I’ve certainly become much more aware of what I use since reading the book.
Kelly’s previous book Out of Control (written in 1994), is still one of the best books about the web ever written in my opinion. It captures the distributed, emergent ‘feel’ of the internet in a way that no other books really have since, perhaps with the exception of Steven Johnson’s Emergence. That’s important because for me that’s the best use of the book as a form. I get a bit fed up with books that are really just extended feature articles. For me a book should absorb you and leave you with a feeling rather than just being a way of distributing information and ideas. With What Technology Wants, I think Kevin Kelly has done it again: opening up a new way of seeing the world and even Universe around us. Related articles