Computer Lab’s ‘nannies for newcos’
Cambridge University’s Computer Laboratory in the UK believes it has created an ecosystem that shields its technology spin-outs from the failure rates afflicting so many global startups.
Only a tiny handful of the circa 190 spinouts from the Computer Lab have failed to make the grade in business and Professor Andy Hopper, who heads the innovation hothouse, says it is no accident.
He told me: “At the Computer Laboratory we produce great technology insights so the companies which spawn from that knowledge are bound to do much better than average.
“The human capital we produce is as good as anything in the world and tends to have a broader outlook than from other departments. Finally we have the Graduate Association so the newcos are looked after by a better set of nannies than in most places.
“As for me all my companies have at some level succeeded. And why shouldn't they? In my case the model has been to go beyond the above whereby ‘PhD student becomes business partner’ in most cases.”
Resilience appears to be another quality of Computer Lab alumni. Craig McMillan is a good example. He honed his software engineering and entrepreneurial skills under Professor Hopper’s tutelage and with ethnologist Charles Armstrong has emerged from ordeal by fire and brimstone to establish Trampoline Systems (www.trampolinesystems.com).
The company joined the Lab’s coveted ‘Hall of Fame’ when it won the Cambridge Computer Laboratory Ring Company of the Year title recently, following such luminaries as Jagex, RealVNC and Ubisense – all world leaders in their technology segments.
Trampoline develops software that analyses large quantities of email and other data to map relationships and subject matter across large and complex networks.
The company created the Tech City map that Prime Minister David Cameron so admired and has just landed another major – potentially gamechanging – piece of business.
Armstrong said when receiving the Computer Lab Ring award that the company had probably arrived “10 years too early in the market” when it launched in September 2003 but thought it had crossed the Rubicon in 2007 when it secured £3m investment only to have the backer run out.
“We had negligible revenues and a large engineering team – and a void where our investment should have been,” Armstrong said.
Talking to Business Weekly about startups’ successes and failures, Armstrong said the experience initially left him with mixed emotions of “fear and anger” but said the adversity “really fired me up. That is the point where our adventure really began.
“It was really healthy for me personally to have the conventional route to growth closed off. We had to rethink, take stock and restructure our business model. We went down the route of equity crowd funding, which was unique at the time, and the move really paid off.”
Looking back, Armstrong reckons Trampoline got most of the calls wrong when it started out. His biggest regret is not having been able to find a mentor at the outset that would have appreciated the culture of the business and helped steer it through the minefield.
Pre-conceptions of how a startup could survive, thrive and mature could never match the experience of “going through the crucible” and discovering at first hand how following the lean startup model could avert most crises, Armstrong says.
“I was in awe of the investment community and that was no position of strength from which to negotiate. In fact many of my initial assumptions were suspect as I reflect on our early days.
“There is no ‘one-solution-fits-all’ template for startups to follow. They have to be prepared to take the plunge and get that initial product into the hands of customers as soon as possible – and act fast on feedback.”