This page contains the second part of an interview with Nick Coutts which was absolutely stunning, but too long for one post ?. You might want to start from the first part where you could read about Nick Coutts. Then we discussed how the city council and the universities should spend money on innovation. Nick underlined the importance of the effectiveness of the communication in the technology transfer.
Now let’s concentrate on entrepreneurs. How can startups create maximum social/economic/environmental impact?
You are right, entrepreneurs drive the whole process. From my experience I believe that the important thing for them is to focus on growing their impact and avoid all distractions. The growth could be achieved by:
-
Avoiding duplicating projects that are already being funded.
-
Developing ways of measuring the social, economic and environmental impacts of their projects.
-
Designing feedback loops into their projects that capture data about impacts.
-
Setting targets that are ambitious for their projects; eg the number of people to be employed by the venture: in the venture and upstream and downstream in the supply network of the venture.
-
Planning and acting globally.
Most startups need funding, hence is important for the region to attract investors. How can investors can get the very high returns from investing in startups without very high risks?
I think that there are four main factors that need to be fulfilled on the investors side:
-
By moving from subjective and emotional criteria for selecting projects in which to invest to using or working with people who have rigorous, objective, evidence-based tools and methods for selecting and actively tracking investments.
-
By allocating sufficient funds at the start and releasing funds according to performance thus avoiding the penicillin problem: providing less that the startup will need, requiring the startup to have several funding cycles that take time and effort away from developing the venture and increase time to market and therefore risk.
-
By avoid the risk that results from funding a project with conditions that constrain the amount of time and investment needed to succeed, since information about the amount of time and money needed will not be available at the start of the project.
-
By funding which projects that use proven effective practices for startup management and innovation management.
Nick, thank you for all those points. You provided a very clear vision of what should be the mission of four main players in the innovation ecosystem: entrepreneurs, local authorities, investors and universities. Now let’s try to think of all of them together. Imagine we have a city with network of investors, startups, universities. Let’s assume that all of them make sure their mission is very much aligned with the points you have risen. Let’s assume that we also have a very supportive city council. How can we allow them to work more effectively?
By transforming the all the resources available in the city for innovation into services. For example, a startup may need access to a laser cutter. The team will need to know to size and type of material than can be cut; the cost; the time required; the location; the availability of a machine; any training needed and other factors that may be barriers to finding and using the equipment. Transforming the resource into a service that provides all the terms of access and use will reduce the barriers to use and hence increase the return on the value of the asset being used and well as saving the venture time – which can also help to reduce costs and risks.
We mentioned the communication problem. It is important to overcome this barrier by providing pathways that show efficient and effective ways of identifying and using the resources available in the city.
Startups have very dynamic structure. Their needs are changing very quickly. The good startup community should assist them by allowing the startup to continually reconfigure their resources as the needs of their startup change.
“Innovation as a service” (IAS) sounds like a fantastic strategy for ecosystems that are in the first development phase – activation. I believe that Lodz is a great example of such an ecosystem and IAS would be a very promising strategy for our region. Can you, please, help us by giving us key points on how to implement IAS effectively in our ecosystem?
Of course. From what I have seen in Lodz I can conclude that you are right about the potential of this region. The people I have met here have great potential, the city has everything that is needed to for the ecosystem to grow and flourish. This process could be slow or fast depending on how well you use your resources. There are great reserves that could be activated very quickly and at low cost if the use of resources becomes more effective. I am sure that IAS would be a good approach for that. If I was in your position I would start achieving this by the following means:
-
By setting up a platform to share all the resources.
-
By providing resource owners with templates that make it easy for them to make the resources they offer into services.
-
By managing the platform for innovation as a service provided by the city that makes the most efficient and effective use of the resources and hence increases the value of the resources.
-
By providing easy access to resources for innovation, cities will benefit from a higher rate of successful startups, with more jobs, more tax and a more interesting place for people to live and work.
I believe that in the age of the smart city we need to start thinking about the wider role of the city in the life of its habitants. Innovation as a public service will become as important as other services provided by the city: education, health, emergency services, housing, transport and culture.
