If news headlines were a way of measuring and analysing success, the local tech sector would be solely dominated by foreign direct investments that bring overseas firms into Northern Ireland to benefit from our well-skilled, loyal and relatively cheap pool of labour (along with lucrative assistance from Invest NI).
Yet large firms with back office software teams and test labs on these shores do not alone make an industry. The bigger the enterprise, the harsher the impact of any future drastic relocation or downsizing decisions. Growth in Northern Ireland cannot just be limited to stealing jobs from more expensive locations around the world. Long established indigenous companies like Kainos as well as smaller world leaders like Airpos prove that local firms can also export software and skills from a local base. Since the NI economy relies on SMEs why should the tech sector look any different?
You need crèches and playschools to feed into primary schools, post-primary and then third-level education. Even ski resorts have nursery slopes. Incubators or accelerators fill the gap for entrepreneurs who have yet to mature their idea and aren’t ripe to attract significant investment and funding.
Before thinking about whether Northern Ireland’s tech sector has the necessary level of support in place, let’s learn more about what the concepts behind accelerators.
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On Friday morning I spoke to Jon Bradford, an accelerator expert and MD of TechStars London. He returns home to Belfast later this week to participate in the ICONS Festival running in the new Titanic Exhibition Centre.
The style of business is changing … The necessity for bricks and mortar has somewhat reduced. If you walk into any coffee shop this morning in Belfast I can imagine a third of people sitting there having meetings. If you go back 25 years that would have been unimaginable.
Over a few short months, accelerator schemes offer the space and support for entrepreneurs to develop their new ideas and have the best possible environment to help them flourish to the stage that they’ll be able to attract seed funding and grow their business.
The magic power of that is it combines a very small amount of money [with] a lot of love from smart mentors who have been there and done that.
From his experience, Jon sees value in “working with really smart people who … can help [you] avoid the pitfalls of what it is to start a business”.
Flashy buildings are not required for accelerator spaces. [I visited the MassChallenge accelerator in Boston back in September 2012 and saw it operating in a ‘bare’ unfinished open-plan floor of a building packed with tables, chairs, power cords hanging down from the tile-less ceiling, and a couple of open areas with PA systems for launches and masterclasses. Worth noting that MassChallenge is a “no strings attached” accelerator, taking no equity from any of the start-ups they support.]
Jon says it’s about the people and the collaboration rather than the physical infrastructure. He jokes that he could run an accelerator in a car park if “I had the right people helping me”. Collaboration is key.
One of the examples of how you do that is we get people to sit really close to each other and we make it slightly uncomfortable because they’re only going to be there for three months and the process of them sitting side by side, elbow to elbow, in a relatively confined space encourages them to spend more time talking to each other than hiding in corners of the room. Collaboration and trying to encourage people to participate and work almost in a peer to peer structure.
A good idea has to be implemented in order to be successful. Ideally the execution of your idea will either succeed in stages or “fail fast” before you burn too much money, effort and reputation going the wrong way. Resilience – and good advice – will help you rebound and try again.
Jon holds to the view that start-ups need to concentrate on what they learn from their mistakes and failures. When successful start-ups are being hailed, should we also build into the messaging that they may have tried other lines before finding this winning approach?
“Totally” says Jon. A friend of his in the industry holds “a wake for their start-ups when they die, and put them to bed, saying ‘it was a good try, we put in all this energy and effort, but unfortunately it came to nothing, I’m putting a line under it’”.
When genuine entrepreneurs fail “they get really pissed off and want to do better the next time [but] they don’t spend their time dwelling on the past”.
Jon has “a huge amount of time and respect for the guys” at local Belfast start-up BrewBot who participated in TechStars Austin in 2014. They’re making a beer-brewing robot which is controlled and monitored by your smartphone. Pick or refine a recipe and the Brewbot machine takes care of the temperatures, timings and volumes as you
reproducibly turn water into beer. miraculously
Jon reminds Northern Ireland entrepreneurs that it’s easier, cheaper and faster to do a start-up than it’s ever been before. Tech start-ups are “no longer a Silicon Valley only phenomenon”. As a remote island off an island off mainland Europe, does Northern Ireland’s location matter?
No, distance doesn’t matter in a digital sense.
But Jon adds:
Entrepreneurship is a physical contact sport. It’s all about bumping into people, meeting smart people, having smart conversations.
He encourages entrepreneurs in Northern Ireland to go and meet other smart entrepreneurs face to face, locally and abroad.
Some innovators may choose to up sticks and move to other locations (eg, the US). But we shouldn’t hold them back. Having become successful they have the opportunity to backfill value at a later date, whether building tech teams in Northern Ireland, transferring knowledge or building networks to connect back with their home city.
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With this in mind, what support is there in Northern Ireland for people with innovative ideas for software or hardware?
Various public and private mentoring and business development schemes operate in Northern Ireland. InvestNI have been running the Propel programme for five years aimed at “high growth start-ups” while Pentech Ventures support “ambitious entrepreneurs” under the banner of techstartNI. Some individuals and small companies have found them useful, but others question their rigid frameworks and measures of success.
But there is still a gap further down the slope in NI’s tech sector to support people who still need to further develop their ideas before seeking funding.
Surprisingly I can only find one accelerator space for tech start-ups in Northern Ireland. Start Planet NI was announced by DETI/Invest NI in May 2015 with room to incubate a mere 10 teams (of which half are expected to be from outside NI). Coincidentally it’s application deadline has been extended until tonight at midnight. A minimum of £15,000 in seed funding is offered to each team in return for an equity sacrifice of 8%.
An independent incubator StartVI was started in 2009 – the strapline was “6 companies, 6 months, 6 per cent” – but it closed a year later when the building they rented space in was condemned by the NI Fire & Rescue Service!
Since then various other schemes for incubators or accelerators have been proposed but, to my knowledge, not one of the recent schemes has made the leap off the drawing board. The NI Science Park facilities in Belfast and
the North West offer managed office space for better-established start-ups (realistically those which already have seed funding), but there’s nowhere for nascent ideas to be worked up over three or four months, collocated with other new starts, at low cost and with access to good mentors and advice. NI Science Park seem to be the only such facility in Europe without an associated tech accelerator with specific mentoring! Derry
Asked about the lack of provision for accelerators in NI, Marty Neill – CEO of AirPos which began life as a local start-up – bemoaned the six year hiatus …
… to form any sort of incubator after rejecting the chance to support an industry led one [startIV] coupled with the relative failure of the Access to Finance initiative thus far as well as the dissolution of Digital Circle [NI digital content provider body] and Momentum NI [digital/ICT trade association] has left the start up space drained of funds, fragmented and lacking in spirit.
It’s high time the industry stopped looking to Invest NI and its associated agents for leadership in the start-up space and instead began the process of building the structures that exist elsewhere, where there is no public sector intervention. The public sector would be much better in a supporting role to those interested in pushing forward.
Perhaps Jon Bradford’s presence in the city this week along with his message to conference delegates will galvanise action – if necessary independently without explicit public sector involvement – to create the type and scale of support needed to sustainably grow the local tech sector.