Angels reveal all | Enterprising Birmingham | Mifid II hits Smallcaps | SME Energy Rip-off | Start-ups slower in 2017 | Brexit Think: Midsized vs London | Wave of Workspace | Cash Burn Pain | Start-ups to watch in 2018
Digest of news and trends in the GRID marketplace in January 2018.
ANGELS REVEAL ALL
Every week we (The Sunday Times) talk to a business angel, one of the early-stage investors who collectively inject £1.5bn a year into British start-up companies
Malcolm Evans | Peter Evans, The Sunday Times. January 28, 2018
Malcolm Evans, 57, is a Manchester-based investor and businessman. He backs early-stage companies in sectors such as software, manufacturing and the internet of things. Evans’s portfolio includes the software developer RECONFIGURE.IO and ROTITE, an engineering consultancy.
- Areas I like include data, advanced materials, enterprise software, next-generation digital, food and telecoms.
- What I look for: I ask, can this develop into a business or is it just blue-skies R&D? Also, are these people as brilliant as I am likely to meet in their chosen area and will they give their heart and soul to it?
- How to catch up. I’m having a good run with “team venturing”. It’s expert groups of friends and acquaintances identifying and developing ideas, which is the opposite way round to the increasingly inane pitch-fest obsession.
Chris Manson | Peter Evans, The Sunday Times. January 21, 2018.
Chris Manson, 50, is chief executive of NEWABLE, a provider of advice and loans controlled by the 33 London boroughs and the City of London Corporation. Newable, which bought the London Business Angels network last year, invests in funding rounds of up to £2m, focusing on space, digital healthcare and artificial intelligence. It has backed medical device business OXTEX and ADVIZZO, a developer of machine learning software.
- Angel investing … needs to become a professional service. If we do that, it will turn the average investment size [by individuals] from £25,000 to £75,000.
- Better information. Some people choose not to invest because the quality of pre-investment information about the company is not sufficiently good.
- Founders must have . . .Expertise in their subject matter and an ability to run a business rather than develop a product. After that, I look for a willingness to seek help from other people. Some founders are very closed.
- … taking in too much money can backfire, especially if you give away too much of the business and suffer financially as a result.
- Next disrupted industry: Artificial intelligence and life sciences. Britain has huge resources for research, but the investing that supports the products getting to market often comes from overseas, not the UK.
Ramona Liberoff | Peter Evans, The Sunday Times. January 14 2018.
Ramona Liberoff, 47, is chief operating officer of the INNOGY INNOVATION HUB, which backs start-ups in the energy industry. She also invests personally, often through the ANGEL ACADEME syndicate. She has backed ARACHNYS, which helps banks and law firms to carry out due diligence in emerging markets, and REPOSITIVE, a platform that shares genomic data for research purposes. Repositive recently raised £2.5m.
- What I look for: a global mindset and a purpose mindset ….because some of the biggest challenges in the world really need to be solved, and there will be tremendous market opportunities for getting it right.
- I’m in no rush. The average horizon for an investment is growing longer and longer. It’s now 7-11 years. An angel investment lasts longer than many marriages.
- Don’t imitate. You’d be amazed at how many founders are copying and pasting what they’ve seen elsewhere and hoping to make it work.
- Diversity matters. The amount of capital going into female founder teams has remained stubbornly low and the situation is not improving.
- Greed is not good. The road of a start-up founder is long and often unrewarding in financial terms. You need to be extremely realistic about the prospects of getting a ton of cash back.
- Next disrupted industry. Energy. There are some amazing forces at work in the democratisation, digitisation and decarbonisation of energy. As energy demand grows and technology provides more of a solution at a lower cost, the industry will be ripe for disruption.
Nic Brisbourne | Peter Evans, The Sunday Times. January 7 2018.
Nic Brisbourne, 44, is managing partner of FORWARD PARTNERS. Through the early-stage venture capital firm, he has backed businesses such as shop rental platform APPEAR HERE and suit maker THE DROP. Brisbourne started Forward five years and previously worked as a Silicon Valley investor. Last year he raised a new £60m fund to back artificial intelligence and ecommerce start-ups. It invests up to £350,000.
- What I look for: You need a good product as well as a great founder. A lot of early-stage investors will say that it’s all about the founder, but I look for both. Success is really driven by a great product.
- Warning bells ring . . . When people can’t articulate who the customers are and why they will buy the product. It’s amazing how many just want to gloss over these details. I want to know who is going to be buying. Sometimes, just having to ask that question means we’re unlikely to invest.
- Wish I saw more . . .Good opportunities at the pre-seed stage [investments up to £350,000]. The market is just not set up to funnel lots of opportunities to us. We see about 3,000 pitches a year and invest in 12.
- Follow the money. Once you know a company well and trust it, that’s when you follow on with further investment. Because we run a fund we can aggressively follow on with more investment. It happens in well over half the companies we back.
- Wish I saw fewer . . .People who build companies without a deep understanding of what their customers want to buy. It goes beyond saying, “If I build an amazing widget, would you buy it?”, because that produces a lot of false positives.
- Next disrupted industry: Construction. It’s on the cusp of change and we’re seeing the first start-ups selling into the construction industry. There’s a lot of work being done around drones at the moment. The next stage will see construction companies developing their own innovative technology, rather than buying it in.
Birmingham, cradle of the start-up revolution | Peter Evans, The Sunday Times. January 28 2018/
It does not have the swagger of Manchester, the brains of Cambridge or the urban cool of Bristol …but there were 12,108 businesses set up in Birmingham last year, according to research to be released tomorrow by the CENTRE OF ENTREPRENEURS, a think tank. Data taken from Companies House shows it topped the league of local authorities outside London for creating new companies for a fifth consecutive year.
Birmingham is, after all, the country’s second-largest metropolis. Yet, as the table shows, it is way ahead of other highly populated rivals, such as Manchester (8,295), Glasgow (6,189) and Edinburgh (5,176). ….after decades of underperformance since the early 1970s, Birmingham’s economy is now powering ahead. … the redeveloped New Street station … new headquarters of HSBC UK. … the gigantic Library of Birmingham. The city was recently awarded the 2022 Commonwealth Games and will have two stations of the HS2 railway line. …cranes dotting the skyline
Andy Street, the Conservative mayor of the West Midlands and ex-John Lewis boss ….points to about 14,500 digital and tech businesses registered across the West Midlands, which includes Coventry and Wolverhampton as well as Birmingham: “… 60% more than Greater Manchester on the same population numbers.”
…. without significant backing from government so far. George Osborne’s Northern Powerhouse initiative does not include Birmingham. A similar project, THE MIDLANDS ENGINE, is up and running and does include a £250m investment fund. However, it is still in its early stages.
Key to the strategy is retaining graduates from the city’s universities, as well as attracting them from other parts of the country. The West Midlands …average price of a home is just over £180,000, compared with about £470,000 in London …and the commute is usually quicker.
Matt Hicks, 45, co-founded LINEAR DIAGNOSTICS seven years ago as a spinout from Birmingham University. The company is developing a hand-held device to detect infections. Hickslives in nearby Sutton Coldfield and can be at his desk in less than half an hour. “It means you can enjoy a nice lifestyle and run a great business,” he said.
Education technology business LEARNING LABS, which offers an app to help students who do not speak English as their first language to learn more effectively, has grown rapidly since it was founded in 2012. Veejay Lingiah, chief executive, 44, was able to raise £1m in equity and grant funding through contacts in the city, a feat that might have been impossible 10 years ago.
MIFID II HITS SMALLCAPS
Mifid II pushes exchanges to lend helping hand to small companies | Hannah Murphy, FT. January 29, 2018
….worries intensify over the potential fallout from a new requirement, part of Europe’s sprawling Mifid II legislation, for asset managers to pay for investment research separately from executing trades with banks and brokers. The rules have sowed predictions that spending on analyst research will be slashed, forcing brokers to cut their corporate services for less popular and thinly traded small and mid-cap companies. Brokers typically produce expert research on companies — but also help to arrange meetings and roadshows for their clients with investors.
But less research under the changes, which came into force earlier this year, could knock liquidity, increase volatility or even cause trading to dry up in some smaller stocks, experts warn. Companies with no research coverage at all tend to underperform their peers — by 4.2 per cent on average, according to research by Jefferies.
A number of Europe’s largest exchanges are exploring ways to ensure smaller companies make themselves — and information about themselves — more readily available to investors:
- Paris-based EURONEXT publishes research for free for 430 of its smaller companies through a partnership with independent provider Morningstar, but says it was looking at ways to evolve that offer. Euronext will also “give more attention” to the so-called corporate access business. “For small and mid-cap companies it is crucial for them to be able to have meetings and contacts with investors.”
- Similarly, NASDAQ’s European division is “in active dialogue with market participants to support and encourage various initiatives to increase visibility and coverage of SMEs,” says Adam Kostyál, senior vice-president and head of European listings at the exchange.
- DEUTSCHE BÖRSE …decision to launch a new small company index in March last year. Replacing an earlier index, companies on the “Scale” market automatically get research from Morningstar and Edison written on them, a cost incorporated into the €20,000 euro listing fee.
But not all exchanges are intervening. Marcus Stuttard, head of London Stock Exchange’s junior market, AIM says he was confident that similar measures were not needed on his exchange, citing the capital’s well-developed network of small-cap brokers and advisers.
Jeremy Grime, an analyst at UK broker FINNCAP, says the new rules would drive innovation — and collaboration — in the research space, although this would be a gradual process. “Exchanges could start buying research providers,” he adds. “That’s probably how it develops.”
SME ENERGY RIP-OFF
Now energy giants must treat small firms better | Peter Evans, The Sunday Times. January 21, 2018.
The Competition & Markets Authority (CMA) estimates that small businesses pay about £500m more a year than they would if the market functioned properly. Last year, the CMA found that 45% of microbusinesses (fewer than 10 employees) were stuck on their suppliers’ most expensive default tariff.
For too long, small companies have suffered disproportionately at the hands of energy suppliers and unscrupulous brokers. …it can resemble the Wild West. When a business comes to the end of a fixed-term contract, a supplier can switch it to a default tariff with little warning. This can mean an increase of 50% or more. Many of the biggest suppliers hire third-party brokers working on huge commissions to offer deals that ignore the best prices.
Small business customers may use less gas and electricity than big corporations, but they are a priority for suppliers, including giants such as BRITISH GAS and NPOWER. Last year, the DRAX conglomerate bought OPUS ENERGY for £340m. The deal offered an insight into the rewards that are available. As part of its bid, Drax disclosed that Opus — a specialist commercial energy supplier — made a gross profit margin of 19% in 2016. That is a staggering return for what is, in effect, a commodity. Drax said: “The SME market is characterised by lower energy consumption per meter and higher gross margins per megawatt hour, with high customer retention.”
The value of small business customers is such that some suppliers make upfront payments worth millions to third-party brokers in return for fresh prey. However, there are signs that the practice is starting to backfire. UTILITYWISE, a listed broker, agreed to repay £7.6m to an undisclosed supplier after it uncovered “levels of under-consumption in certain contracts”. Utilitywise said last week that it planned to change the way it recognised revenue in its accounts. Its shares plunged 15%.
Some businesses are trying to do things differently. One is SQUEAKY CLEAN ENERGY, a platform that allows small businesses to buy electricity direct from renewable generators. “The big six [energy suppliers] and a number of brokers are leveraging the inertia of small businesses and are earning excessive margins,” said Chris Bowden, Squeaky Clean’s managing director.
Some improvements have been made: suppliers can no longer impose automatic rollover contracts, and they must publish online prices for commercial customers, making it easier to compare and switch.
START-UPS SLOWER IN 2017
Start-up revolution shows signs of fatigue after years of growth | Andy Bounds, FT. January 20, 2018
Britain’s start-up revolution is stalling, with the number of businesses created last year falling for the first time in almost a decade. There were 5.5 per cent fewer start-ups in 2017 compared with 2016, according to research by DueDil, a financial analysis company. It found that 647,923 new businesses were started last year — down from 685,928 in 2016, bringing to an end what had been annual increases since 2008.
Damian Kimmelman, chief executive of DUEDIL, said businesses found it hard to get finance and were concerned about the consequences of Brexit. Budding entrepreneurs say they are also finding it harder to make a living as costs rise and consumer spending is squeezed.
Since the 2008 crash, millions have opted to go into business, with more than 3.95m active companies trading this month, according to DueDil.
One in seven SME owners wants to sell up, close or downsize, according to the FEDERATION OF SMALL BUSINESSES. They cite mounting costs, because of the drop in the value of the pound and increased regulation, as well as tough trading conditions because of a squeeze in consumer spending.
Only 53 per cent of UK businesses survive their first three years, according to data compiled by Mark Hart, professor of entrepreneurship at ASTON UNIVERSITY. A growing proportion of new businesses are run by people who also have a full-time job. According to the most recent GLOBAL ENTREPRENEURSHIP Monitor (GEM), which is compiled by Prof Hart to track start-ups, in 2016 some 40 per cent of people who had established a business in the previous 42 months were working full time, compared to 29 per cent in 2012. Roughly half classified themselves as self-employed or unemployed. “A lot of this business activity is marginal and done round the kitchen table. The transformation from a kitchen table business to something more substantial is a rare event. Is this good for UK productivity or economic growth? It is questionable.”
He believes officials should focus more on helping part-time entrepreneurs. The government has poured resources into programmes such as the Start Up Loans scheme, which lends public money to aspiring business owners at 6 per cent interest over a period of between one and five years. Since its launch in 2012 the START UP LOANS COMPANY has lent more than £375m to almost 53,000 people. The average loan is £6,480. It has only had to write off £5.5m so far, but a quarter of its debt book is in arrears. Many of the companies receiving funds from Start Up Loans barely provide enough income to live on. A recent analysis of recipients who started businesses based on their hobbies found they had an average annual turnover of £65,000 and profit of £15,800 in 2017. As a pre-tax salary based on a 40-hour week, this pays barely more than the minimum wage. Critics say such schemes encourage people to get into debt.
Alan Donegan runs the POP UP BUSINESS SCHOOL. Its workshops — usually funded by councils and housing associations — help people who want to work for themselves. He said many small business owners put in long hours because they are doing things they enjoy, such as knitting. But he advised them not to gamble everything on success. “You don’t have to have money to start a business,” he said. “Putting people in debt adds to the pressure on them.” His suggestions for would-be entrepreneurs include using crowdfunding sites such as KICKSTARTER, where customers can pre-pay for orders.
BREXIT THINK: MIDSIZED vs LONDON
Midsized companies favour break from single market | Andy Bounds, FT. January 15, 2018
A majority of Britain’s midsized companies want the country to leave the EU single market and the customs union, according to a new poll, The RSM Middle Market Tracker - a quarterly survey of 315 companies with annual turnover between £30m and £300m. The survey, carried out by YOUGOV for the accountancy firm RSM in November and December, found that less than half would opt for the relationship Norway or Switzerland has with the bloc, which includes accepting EU regulations in return for single market access.
The view contrasts with that of big business, which has called for the “widest possible rights of market access” after Brexit. Paul Drechsler, president of the CBI employers’ organisation, in December said that market access and “minimal barriers to trade” were essential, as well as the maintenance of common standards.
Simon Hart, Brexit lead partner for RSM, said smaller companies were more nimble and backed themselves to adapt to changing circumstances. “The midmarket can be more reactive and move later in the game. Multinationals need to make decisions about where they are locating their head office now. It may take nine to 12 months to get product licences and regulatory approvals through.” But he said it was vital that the government clinched a deal that reassured foreign investors, not least those from the US, which uses the UK as a bridge to the EU.
About 46 businesses said they would set up an EU presence. Germany and France were the most popular choices, with just two choosing Ireland. EU AUTOMATION, a supplier of industrial spare parts, is one early mover. The Stafford-based business is establishing a German subsidiary with a warehouse in Frankfurt to serve the EU market. At present stock is sent mainly from its Stoke-on-Trent facility but the group fears customs delays and tariffs in the future. Jonathan Wilkins, marketing director, said it also operated a multilingual call centre in Stafford but believed its staff would be able to stay after Brexit. He favours staying in the single market but already ships parts to 138 countries. EU Automation, with 150 workers and a £35m turnover, has warehouses in Chicago and Singapore.
While exporters are doing well, helped by the fall of the pound, companies selling domestically will struggle this year, said Joe Brusuelas, chief economist at RSM, as they pass on higher import costs to the public. “2018 is going to be the year when the British consumer pays the price of Brexit,” he said.
London firms’ Brexit blues show no sign of easing | Russell Lynch, The Evening Standard. January 9, 2018.
Confidence has dropped among London businesses for the fourth quarter running as Brexit overshadows trading, a worrying new snapshot of firms in the capital signalled on Tuesday. The LONDON CHAMBER OF COMMERCE AND INDUSTRY’s Capital 500 survey of businesses painted a picture of sliding domestic demand and drooping export sales between October and December, while costs such as raw materials rose.
Most business leaders are short on confidence and expect economic conditions to worsen over the next 12 months, with expectations for profits and turnover at a record low. More than half of the 577 respondents are struggling to recruit staff, particularly in managerial and skilled manual roles. LCCI is pushing to support London’s would-be exporters such as increased funding for trade missions. Chief executive, Colin Stanbridge.
WAVE OF WORKSPACE
Demand for co-working spaces expands beyond London | Andy Bounds, FT. January 12, 2018
Office block owners in the UK’s provincial cities are scrambling to convert their premises to shared workspaces as technology start-ups drive demand outside London. WEWORK, the US start-up valued at $20bn, arrived late last year in Manchester and its model of flexible, short-term space teamed with coffee bars, activity and collaboration areas is being widely copied.
Flexible office demand across the UK’s regional cities at least doubled last year, according to Savills. Manchester and Birmingham saw the biggest increases. ALLIED LONDON’s new XYZ Building in Manchester includes its first purpose-built shared workspace. The group has already sublet a floor of a nearby building to SoftBank-backed WeWork and has now launched its own All Work & Social brand. Michael Ingall, chairman and chief executive, says the bare concrete and glass structure is the future of city-centre development. “The traditional office is dead,” he declares.
XYZ was almost fully let before opening in November. It includes a dedicated area for fintech businesses, The Vault, which has attracted fledgling groups from London that want to collaborate with fellow start-ups. Big corporates have also rented space, including NCC GROUP, a listed cyber security business, SHOOSMITHS, a law firm, and GLOBAL RADIO.
Tenants are prepared to pay more for less space in return for common facilities. At XYZ, part of Allied London’s £2bn Spinningfields development, space where once desks would have sat houses a ground-floor coffee bar. It overlooks a ramp down to a basement where there are 100 bike racks. There is a gym that will offer meditation and yoga classes, while a communal kitchen has a record player so people can bring in their own vinyl. There is also a top-floor bar and garden.
WeWork pioneered the Pizza Friday concept, offering beer and prosecco on tap. It set out targeting entrepreneurs and start-ups, but more than a fifth of its tenants are now companies with 1,000 or more global employees, including GENERAL ELECTRIC, MASTERCARD and SAMSUNG. It launched in the UK in 2014 and now has 20 locations accommodating 26,000 tenants. This is no longer for start-ups and SMEs that can’t wait to get to a real office. It is their real office
Estate agency Savills found that the take up of serviced offices outside the M25 was 94 per cent higher in the first nine months of 2017 than the whole of 2016. It accounted for 4 per cent of all office space taken. The regions could follow London, where the sector share grew from 2 per cent in 2012 to 16 per cent in the first nine months of 2017.
James Evans, head of Savills in Manchester, says: “Evidence suggests shared workspace drives collaboration and innovation, while some believe a creative workspace is a crucial tool in the battle for talent.” He says the rise of fast-growing tech start ups, which may need to take more space frequently, has boosted the market. “Serviced offices are here to stay and will remain a fundamental part of the workplace offer.”
Many developers now provide at least some serviced offices. BRUNTWOOD, a family-owned group that is among the biggest office owners in Manchester, Liverpool and Birmingham, has converted a dowdy block above Leeds train station into Platform, which has shared offices. It has also opened incubator space as it attempts to attract growing companies early in their life.
IWG, which owns the Regus brand of serviced offices and was targeted with a takeover approach late last month, is changing too. It is ripping down partitions, offering single desks to rent in open-plan spaces and staging networking events for tenants.
However, some believe a bubble is forming. Olly Olsen, co-founder of THE OFFICE GROUP, which operates 37 buildings in London, Bristol and Leeds, says only the best flexible offices will prosper. Last year Mr Olsen sold a majority stake in the £500m business to Blackstone, the US asset manager which has a huge $140bn property estate. “Our sector will flourish and we will be OK,” he says. “This is no longer for start-ups and SMEs that can’t wait to get to a real office. It is their real office. But operators must be choosy about locations. Since they sublet from owners, they need to charge enough to cover their own rent and services while making a profit.” Mr Olsen says he has seen rivals move into buildings he had turned down as unviable. “There are going to be some winner and some losers.”
CASH BURN PAIN
Teach yourself to . . . stop burning through cash | Peter Evans, The Sunday Times. January 7 2018.
Too many start-ups blow up because they spend the money they have raised before they have built a viable business. New companies chasing rapid growth can burn through £100,000 or more a month. That may propel founders into a cycle of fundraising, which reduces the time they can spend running their company. The problem has been worse in recent years, with so much capital looking for a home.
“Start-ups can be lean and still be ambitious,” said Stan Laurent, a partner at HIGHLAND EUROPE. “We care about capital efficiency because it’s often a proxy for the strength of the underlying business.” Laurent said focusing on self-funded growth early on — however difficult that may be — almost always pays off. External investments should fund better customer economics — getting higher returns from those willing to buy what you are selling.
Attempting to “buy growth” through marketing plays into the hands of tech giants, Laurent added. “The only beneficiaries will be Google, Facebook and a few other advertising platforms. That or a bloated sales team.”
Nearly 330,000 businesses ceased trading in 2016, according to the Office for National Statistics. Many of them ran out of cash. Being more efficient cuts the risk of failure — and means founders do not dilute their holdings through multiple rounds of fundraising.
START-UPS TO WATCH IN 2018
Branson & Co’s favourite start-ups of the year | Peter Evans, The Sunday Times. December 31, 2017.
Which start-ups impressed Britain’s top entrepreneurs during 2017 — and what are their hopes for the coming year? We asked five champions of small business for their thoughts.
Sir Richard Branson, founder of Virgin Group
- Scottish company MACREBUR set about finding a way to reduce the frequency of potholes and improve the quality of roads for everyone using them. Inspired by a trip to India, founder Toby McCartney got together with two of his friends, Gordon Reid and Nick Burnett. They developed a unique product that takes waste plastics and turns them into what they call a “high-performance, asphalt binder additive”. It enhances the roads we drive on today.
Sherry Coutu, chairs the ScaleUp Institute and Founders4Schools
- PERKBOX, an online rewards platform, is tapping into a growing consciousness among employers that salary increases and promotions are not the only factors that keep and attract excellent staff. Employers must engage staff by making their businesses enjoyable and attractive places to work, especially when pay rises and promotions are not possible.
- I’m always interested in start-ups that democratise access to information and opportunities. BABYLON HEALTH is doing just that in healthcare. It deploys smart technology solutions to get information and support into the hands of the people who need it much more quickly. I hope to do something similar with WORKFINDER, the service I’ve created to connect young people with career opportunities they really care about. It aims to level the playing field by streamlining access to exciting local work placements.
Next year, we must improve our ability to scale up businesses. Currently, the UK is 13th in the Organisation for Economic Co-operation and Development ranking for growing a business — we must move up the table if we are to attract and retain ambitious young businesses.
Richard Reed, co-founder of JamJar Investments and Innocent Drinks
- FIIT is a sport-tech start-up, launching in January, which combines a wearable fitness device with a Netflix-style streaming service of workout classes run by personal trainers. The wearable tech element means that your vital stats are shown on the screen as you sweat it out — heart rate, reps, your performance versus the last time you worked out. The business, founded by a team of former Google staff and founders of the data analytics platform QUBIT, raised £2.4m from investors earlier this month. Allowing you to work out whenever you want, in the privacy of your own home, will be extremely helpful until you have achieved that new year resolution. Then it’s off to the gym with you, so you can parade around with all the other peacocks and selfie pouters. Until then, in Fiit we trust.
Emma Jones, founder of Enterprise Nation
- Start-ups in the food and drink sector have had a particularly good year. One of my favourites is FORAGING FOX, which makes beetroot ketchup using natural ingredients. The product is gluten free and vegan, and has really caught people’s imagination. This year it went international with a launch in America — a great development for the founders, Frankie Fox and Desiree Parker.
- My other standout company of the year is WATMUFF & BECKETT, which uses vegetables rejected by supermarkets to make healthy products. The company had a rice dish selected for use on Eurostar as a result of attending a trade mission to France.
The mood among entrepreneurs will be one of “resilient trading” — they will get their heads down and focus on the basics of trade, such as making sales, managing money and developing products and services for new markets.
To do this, they need sound advice on topics from digital marketing to cloud accounting, exporting and leadership. And the 49% of entrepreneurs who are not taking advice need to be convinced of its benefits. I firmly believe that connecting small businesses with trusted advisers will guarantee their survival and ensure they are fit for Brexit by March 2019. My one request? That entrepreneurs make the most of what’s on offer.
Stuart Marks, founder of L Marks
At L Marks, we have had the privilege of working with hundreds of start-ups over the past three years as part of our corporate accelerator programmes.
- HOWZ has embraced the start-up ethos and has a genuinely game-changing product. It monitors activity in the homes of elderly and vulnerable people through sensors that record things such as doors opening and closing, and electricity use. This information builds up a picture of their daily routine. If that routine is broken, it may be a warning that something is not right. Relations and carers can then be alerted through the Howz app. Think how useful that is to family members who do not live close by, and local authorities and health workers. This passive monitoring of information enables older people to live independently for much longer, reducing the need for hospitalisation and other expensive care solutions. Howz was one of five finalists selected to join EDF ENERGY’s 2016 Blue Lab innovation accelerator programme, run in partnership with L Marks. The company went on to win the smart home category of EDF’s international Pulse awards, which was hosted in Paris.
In terms of start-ups, I think we will see a lot more creative uses for voice interface technology. AMAZON’s Echo smart speaker suggests the online giant believes that our interaction with our homes is changing, but other companies have quietly been putting more resources into this area, too. SAMSUNG has acquired a couple of companies in the past six months to improve its voice offering. To turn any string of words into a successful outcome requires a lot of data and sophisticated artificial intelligence. However, if the context is specific — calling a customer support centre, perhaps — it becomes easier to define all possible outcomes. We have already seen start-ups providing fairly complex chatbots for businesses, with human beings taking over where the robots stop. Voice interface technology is just a bit of a step farther than this, processing speech and turning written conversation into meaningful verbal communication.