Sharing good practices in scaling Milan Scaleup Summit Dr. - PowerPoint PPT Presentation

Sharing good practices in scaling Milan Scaleup Summit Dr. Christopher Haley Head of New Technology & Startup Research, Nesta 16th March 2018

Agenda Introduction (5 mins) 1. Important common factors in scaling (10 mins) GROUP: Discussion of barriers & tactics (30 mins) 2. Corporate collaboration as route to scale (15 mins) GROUP: Discussion of corporate experiences (25 mins) Concluding remarks (5 mins)

1. About Nesta Research, Analysis & Policy Tools & Skills Practical Programmes Mission to promote innovation Est. 1998 by UK government Investments Now independent charity Staff ca. 200 people Spend ca. £32m p.a. Health Education Creative Gov’t Innovation Economy Innovation Policy

Nesta becomes 1. About Nesta (startup investment) a charity, investment focus switches to Currently 19 equity & loan impact investments into startups (~£25m). 5 commitments to early-stage Active ventures investment funds. program initiated including fund investment National Endowment for Science Technology and the Arts founded as a non- departmental government body supporting innovation 1998 2005 2012 2017

1. About Nesta (startup research) 2015 2016 2011 2012 2013 2014 2015 2016 2017 AccelerateUK Capacity Building in Colombia

Agenda Introduction (5 mins) 1. Important common factors in scaling (10 mins) GROUP: Discussion of barriers & tactics (30 mins) 2. Corporate collaboration as route to scale (15 mins) GROUP: Discussion of corporate experiences (25 mins) Concluding remarks (5 mins)

2. Barriers to Scaling THE 5 KEY BARRIERS TO SCALING THE MARKETS BARRIER THE TALENT AND SKILLS BARRIER THE LEADERSHIP CAPACITY BARRIER Accessing customers other Finding employees to hire who Building your leadership capability markets /home market have the skills you need THE FINANCE BARRIER THE INFRASTRUCTURE BARRIER Accessing the right Navigating infrastructure combinations of finance http://www.nesta.org.uk/sites/default/files/barriers_to_growth_0.pdf & http://www.scaleupreport.org/scaleup-report.pdf

2. Barriers to Scaling: i – Talent & Skills A combination of social skills and tech remain key TALENT for school and graduate recruits, although social Questions: skills ranks top when force ranked How do you make yourselves attractive c.f larger firms? Would links with universities help? Do you incentivise referrals? Do you have some contrarians?

2. Barriers to Scaling: ii – Access to Finance While three quarters of A quarter are using equity FINANCE scaleups use external finance, finance now. The key barriers 4 in 10 say they do not have are the loss of control or a Questions: the right amount of finance in lack of suitability place for their needs Do you know how much finance you Types of Finance Used Attitudes to Equity Finance need? Do you understand the different types (inc. alternative finance)? Do you know where to look?

2. Barriers to Scaling: iii - Leadership Recruiting people with experience of growing LEADERSHIP a business is key, as are non-exec directors and connection to a network of peers Questions: Who do you turn to for advice? How do you make time for your own professional development? Do you make use of local business networks?

2. Barriers to Scaling: iv - Infrastructure Physical space and active ecosystems matter. INFRASTRUCTURE 64% report access to infrastructure and premises is critical to growth. Questions: What research shows: If looking for accelerators & ➢ Evidence for the benefits of clusters incubators, what ➢ Physical transport links matter, even for service companies checks have you ➢ Digital infrastructure matters, but need digital skills & tools to done? really benefit ➢ Accelerators & Incubators: Huge differences in models; a Do you know how minority may be predatory or harmful your location ➢ Inflexible leases: Companies with high rates of staff growth may performs cf. others? find themselves locked into leases with landlords that dissuade them from hiring Are you linked with universities?

2. Barriers to Scaling: v – Access to Markets The procurement process and the time it takes to win a contract are the key barriers to working ACCESS TO MARKETS more with government or large corporates Questions: How do you convince buyers that you’re not a risk? When do you decide to walk away? Are you on their pre- procurement radar?

Agenda Introduction (5 mins) 1. Important common factors in scaling (10 mins) GROUP: Discussion of barriers & tactics (30 mins) 2. Corporate collaboration as route to scale (15 mins) GROUP: Discussion of corporate experiences (25 mins) Concluding remarks (5 mins)

2. Group Exercise (25 mins) What have been your greatest barriers to growth so far? What do you wish you ’ d known 3 years ago? What do you anticipate being the biggest barrier to growth over the next 3 years?

Agenda Introduction (5 mins) 1. Important common factors in scaling (10 mins) GROUP: Discussion of barriers & tactics (30 mins) 2. Corporate collaboration as route to scale (15 mins) GROUP: Discussion of corporate experiences (25 mins) Concluding remarks (5 mins)

3. Corporate collaboration as a route to scale

3. Corporate collaboration as a route to scale: mechanisms Key:

3. Corporate collaboration: motives

3. Corporate collaboration as a route to scale: benefits to scaleup % reporting factor as a benefit. Nesta survey, November & December 2015, N=134

3. Corporate collaboration as a route to scale: barriers % reporting factor as a barrier. Nesta survey, November & December 2015, N=134.

3. Corporate collaboration as a route to scale: barriers

3. Corporate collaboration as a route to scale: barriers

3. Corporate collaboration as a route to scale: barriers

3. Corporate collaboration: common mistakes that scaleups make Focus on what you can do for 1. Weak Salesmanship the corporate, not what they 2. Poor Research can do for you. Understand 3. Not Listening / Over-interpreting their pain-points before trying to sell. Think hard about your 4. Wrong Language value proposition. If tech- 5. Over-promising based, consider Everett Rogers’ ACCORD framework. 6. Misjudging timing 7. Dependency “ I don ’ t mind being sold to. I 8. ‘Chasing the ball’ ” mind being sold to *badly* 9. Not knowing when to quit

3. Corporate collaboration: common mistakes that scaleups make 1. Weak Salesmanship Surprisingly few examine what the corporate actually needs. 2. Poor Research Look at their strategy, recent 3. Not Listening / Over-interpreting acquisitions & other news. 4. Wrong Language 5. Over-promising “ If someone has done their 6. Misjudging timing homework on LinkedIn 7. Dependency and Google, I’m instantly more inclined 8. ‘Chasing the ball’ ” to listen to them. 9. Not knowing when to quit

3. Corporate collaboration: common mistakes that scaleups make Too many report startups 1. Weak Salesmanship ‘hearing what they want to 2. Poor Research hear’, ignoring hurdles and 3. Not Listening / Over-interpreting interpreting polite interest as meaningful engagement. 4. Wrong Language 5. Over-promising “ Young companies are very eager. But they’re also 6. Misjudging timing much too naïve. 7. Dependency I probably saw 20 firms 8. ‘Chasing the ball’ that day and each was 9. Not knowing when to quit convinced they’d win ”

3. Corporate collaboration: common mistakes that scaleups make 1. Weak Salesmanship VC’s may welcome ‘disruptive 2. Poor Research innovation’; corporates (generally) don’t. Incremental innovation, 3. Not Listening / Over-interpreting which preserves processes, is an 4. Wrong Language easier fit than radical innovation. 5. Over-promising 6. Misjudging timing “ I don’t want to be 7. Dependency ‘disrupted’; I just want ” 8. ‘ Chasing the ball ’ to get my job done. 9. Not knowing when to quit

3. Corporate collaboration: common mistakes that scaleups make 1. Weak Salesmanship Trust lubricates relationships. Hype erodes trust. Honesty 2. Poor Research about your stage of 3. Not Listening / Over-interpreting development & realism over what you can’t do, will get to a 4. Wrong Language deal faster. 5. Over-promising “ 6. Misjudging timing Every startup that over- hypes itself makes me 7. Dependency less inclined to believe the 8. ‘Chasing the ball’ ” next one that I meet 9. Not knowing when to quit

3. Corporate collaboration: common mistakes that scaleups make SMEs massively underestimate 1. Weak Salesmanship timescales until deals are 2. Poor Research finalised, and often surprised 3. Not Listening / Over-interpreting by how slow corporates move. Understanding procurement 4. Wrong Language cycles is also important. 5. Over-promising 6. Misjudging timing “ It’s awful, but 7. Dependency sometimes a great product just doesn’t 8. ‘Chasing the ball’ ” fit my buying cycle 9. Not knowing when to quit