Nothing Ventured...

Deirdre Bounds gave a passionate talk at the Venturefest Yorkshire 2008 dinner. As a former stand up comic I expected a few more laughs, but she mainly focused on her journey from 'bedsit to boardroom'.

What was her take home message? Well mainly that if you have got an idea just do it, even if no one around you gets it: if you believe in yourself you can succeed in realising your vision. This was rather at odds with Ajaz Ahmed's talk earlier in the day where he was lamblasting government support agencies for backing 'lame duck' ideas that were destined to fail and that people shouldn't be given 'false hope' that they can become 'supermodels'

I must admit to being more with Deirdre on this one. Sure, we need to screen out the ideas and people that are just plain daft and applaud the ones that are sure fire winners (because they, like Deirdre, will fly without any outside help or an outside investor getting a slice of the action). But in the beauty contest that is innovation and enterprise, the winners and losers will sort themselves out in the marketplace (think dancefloor, not stage). Out there it's execution and the audience vote that counts: the wisdom of crowds, not the opinion of experts. In my experience, most good ideas start off looking pretty ugly or just plain daft to conventional eyes. As Deirdre says 'We need to encourage weird'.

Building An Innovation Ecosystem: Rainforests vs Plantations

Prof. Mary Walshok the founder of Connect in San Diego gave an inspiring talk at the Knowledge Capital Annual Lecture in Manchester focusing on the elements that led to their region to develop beyond tourism, real estate and agriculture into a powerhouse of technical innovation. She emphasised the need for regions to recognise and develop the assets they have but also to address the gaps then connect things together. As she note: "Like in Particle Physics when things collide you get reactions". The Connect program was that catalyst that brought people together. She emphasised the importance of community over company, shared purpose and a "sense of place".

Another interesting observation was that an innovation ecosystem should be more like a rainforest than a plantation. In this environment there is more uncertainty, density and diversity where the hybrid ideas arise from cross fertilisation and serendipity more than any organised linear process. Once a new idea has formed and proved itself to have something new and beneficial to offer to the market that's where cultivation and organisation become important.

Something for Nothing...

Surely the best deal is the one that generates the greatest return on investment. But those apparently in the know keep telling me Proof-of-Concept funds can't make money. But aren't business angels tying to make money and they are managing their own mini -POC fund. If you can make money on a small scale why, I ask, doesn't this scale up?

If you watch Dragon's Den they are always looking for the largest percentage of equity they can get. But 100% of nothing is still nothing, so you could say that it doesn’t matter whether you get 20% or 40% (this has been the argument of a few VCs who seem to cut much more generous offers than the dragons do) given most will fail.

Surely the point is that for the 1 in 10 early stage deals that really do fly, what percentage you have of that one is very much the differentiator when you come to analysing the overall portfolio returns. Is the problem then that larger funds just aren't prepared to get down and dirty with regards to valuations whereas individual business angels are very much focused on getting more for less? The fact that an early stage business will often get the cheapest money it's going to get i.e. grant funding followed immediately by the most expensive in terms of equity investment does little to help the situation!

Web 2.0 Startup - Plain Sailing

I attended the North West Startups event organised by Manoj Ranaweera in sunny Manchester - OK it was raining. Four interesting speakers. Stuart Scott-Goldstone talked about the legal aspects of a venture capital investment - necessary detail. Doug Stellmann of YFM Group gave some candid thoughts on investment from a VC perspective emphasising the importance of a stong management team that can react to change, admiting that very few investments follow closely to their business plan however perfectly crafted. The ability to sail through the trials and tribulations of a startup differentiates the winers from the losers. Paul Barraclough of Tecmentor talk on a subject close to my heart - crossing the chasm from early adopters to the mainstream and that very few companies find this plain sailing which reemphasised the need for agile management. Finally, Pam Holland ex-TeleCity reflected on her experience of staffing up a fast growth technology business - nice problem to have, but they didn't seem to have cracked the basic challenge of how to make more money the more you do. Spending money is a lot easier than making it!

On the Web 2.0 front (which was the main interest of entrepreneurs there) the prevailing view from the VCs was any application that you can code up in 3 months could be easily replicated in Bangalore or China, so from a professional investor perspective they would be unlikely to back it given so little barrier to entry. So think about creating something with a little more substance or have paying users before approaching a VC!

The Best Of Both Worlds

So Facebook has an open API that allows you to add-in your application and tap into the millions of users on the platform. What's so innovative about that? Microsoft opened up their Office applications in the mid-nineties to allow add-in components to be seamlessly integrated into the GUI to complement and extend their platform in niche areas. This was good for the vertical market developers who didn't have to try to duplicate this base functionality and good for Microsoft who could get even better entrenched into these markets.

Similar business models have come to the deep and murky world of relational databases with the ability to create new object types in Oracle via 'data cartridges' that appeared on the scene in the early noughties. So my crystal ball didn't have much difficulty in predicting this development as the Web matures - but as they say hindsight is 20:20 vision. The good thing about this iteration is unlike those that went before the loosely coupled nature of the Web means that these component-based solutions are unlikely to interact in negative ways, but equally you may be able to see the joins, but the Web has taught us its benefits outway these disadvantages.

I look forward to seeing more innovative mashups and better support for component-based Web development rather than everyone reinventing the wheel and having to develop the basic backbones of a Web application. However, the hoards of web development companies that are out there may not quite see it that way! The benefit is that horizontal platforms providing generic capabilities can be extended to do more vertical market things, so the consumer gets the best of both worlds.

Selling Equity: The First Resort

Selling equity in your business is hard, expensive and like oil, it's not a renewable resource. If you have any other easier or cheap alternative source of financing your business you should take it, but equally if you don't, do you really want to miss out on realising your dreams by preciously holding on to it - which is what far too many people do.

In business, a smaller slice of a bigger pie is invariably bigger than 100% of nothing. But therein lies the rub: An equity investor is looking to invest in a business that is scalable i.e. it can grow beyond being a 'lifestyle' business. So if you are serious about changing the world, gaining an equity investment should be your first and highest priority, as this is your only realistic means taking your business to the next level.

Our experience is that you can't be too prepared and our investment readiness process is invaluable in putting the foundations in place on which you can confidently pitch for the investment you need. How much is usually the next question. The reality is you need to find a balance between seeking too little and too much. This is where a business plan with realistic cash flow projections comes in. You need to have enough equity funding to meet you maximum cash requirement to get your product or service to market. Once you start selling something and you (just) need working capital, your funding options are cheaper & more varied: Factoring, overdraft, loans, etc.

Beating A Path To Your Door

Interesting post on TechCrunch on the top ten tips for startups. Not so sure about tip 9: "Don’t plan a big marketing effort. It’s much more important and powerful that your community loves the product."

The biggest mistake a startup can make is to believe if you create a better mousetrap, customers will beat a path to your door. Yes, if it’s a totally great or revolutionary idea maybe word of mouth will out, but the reality is that for us mere morals, we need to find a balance between developing an even better product and selling what we have.

Remember: out of 10 people, one will buy your product just for the hell of it (or they thought it was something it wasn’t); one will never buy it no matter how good it is; and the other eight could generally take it or leave it. How many of those eight you convert into customers, and at what cost, will dictate how successful you ultimately are.

Our FastInvest loan scheme is designed to give young technologies that push needed to get out there marketing and selling their product. Yes, make it better, but it's never too soon to start validating market demand and selling!

New Year Predictions

OK here goes:

Connect Yorkshire helps even more companies get investment ready and pitch for investment through its flagship investment forums, investment challenges and business plan competitions.

The rest of the Northern Way embrace the Connect model and it is rolled out in the North East and North West.

An online community of best practise, participation and support develops that brings together entrepreneurs with the resources to they need to help them succeed that extends beyond our traditional geographic boundary and the Web 2.0 community.

Yorkshire Forward announces a region-wide investment fund as a follow on for Partnership Investment Finance and the South Yorkshire Investment Fund that incorporates a much needed seedcorn element.

Component-based, service-oriented applications finally take centre stage with Web Mashups and loosely-coupled applications 'Web 2.0' increasingly replacing the monoliths of the past.

Connect launches its 'Springboard' initiative to help early stage propositions get their business plans into shape.

I finally access and use a Web site in a meaningful way through my mobile phone.

One can but dream...Happy New Year!

Act Local, Think Global

David Parkin dropped in to the office to update us on his new venture http://www.thebusinessdesk.com/. Subscription is free (see my recent post on this subject) and his business model is based on paid-for advertisements. While online offers the potential for currency of news, I guess the other benefits to be exploited are new media based, such as what is the most popular story, ability to comment on articles, see what other articles readers of a story have read, multimedia content, content targetted adverts, automated links based on keywords in content, etc. The geographical focus is also a big selling point, but equally major players are looking at how to localise their offerings, such as ITVlocal. A company that presented at our recent Investment Forum (http://www.towntalk.co.uk/) is seeking to develop an online equivalent to the booklet advertising local services that comes through your letter box each month.

Whether you come from the local side up or the global side down, the bottom line is that you need to connect with a community in a meaningful way and offer them access to something they might want at reasonable cost in terms of time, money and effort. Then seek to replicate the model in as many sensible places as possible! Hopefully what works in one geographic location, hold water elsewhere. That is what equity investors are looking for: a proposition that is scalable!

Putting The Customer First

The process of gaining Customer First accreditation something we have embarked on recently. In a previous post I noted there is a fine balance between having satisfied and happy customers. The key thing is to make sure you are customer focused and there is a real need for the product or service you provide; only then will people be prepared to pay you for it!

The balance between process and performance is often a difficult one for small companies to juggle. A great process (from a quality perspective) is really focused on reproducability and cost. When you are doing something repetitively or seeking to lower the skill level of delivery then it's all about optimising the process in terms of cost and certainty of output. If you are trying to improved the output a methology or framework may facilitate, but you are still taking about a process that is very dependent on the skills and unique insights of the participants.

All young companies should strive to implement replicatable process at the appropriate point of their developement. A key point is where selling a company's product or service is replicatable and a salesperson can be employed effectively. Out FastInvest loan scheme is specifically designed to help companies make this transition. Now that is really what I would call putting the customer (i.e. sales) first!

Proving The Concept: Chicken or Egg

Listening to pitches from University projects at a recent Yorkshire Concept Fund meeting it is clear there are two schools of thought about what proof of concept means. To a scientist it's that the concept works technically; to an investor it's that there is market demand for a working system. Ideally, you would demonstrate market demand before embarking on a technical development (if commercial success is your primary goal). Equally, without something to show it's often hard for potential users to get excited about a lot of hot air and hand waving.

The most extreme of these I've seen is the search for synthetic blood where apparently the US military have a cheque with quite a few zeros on it waiting for someone that can come up with something that meets their spec (one of the Yorkshire Forward Bioscience Fellows projects). Hence the scientists have quite a clear specification of what would constitute success commercially and they can focus on the science in sure and certain knowledge that if they crack it they are onto a commercial winner. The other extreme is what we see occasionally at Connect where the technology is paper thin but (in theory at least) the brilliant insight or innovation will set the world alight. The only problem is then barriers to entry are equally low so IP protection becomes the name of the game.

In reality most propositions fall somewhere between those extremes and there has to be some give and take. The technologists have to get something operational to some degree in order to demonstrate the propotype (or Version 1!) to potential customers before the latter will be able to get their head around exactly how much it's going to benefit their lives. Nomatter how much we might like to get validation of market demand before spending money on development in most situations the egg does have to come before the chicken and technical feasibility has to be proved before serious commercialisation work can begin. However, getting the right balance between technical push and market pull is project specific.

Information Wants To Be Free

According to Wikipedia, this phrase was supposedly first pronounced by Stewart Brand in 1984, citing the fact that the cost of dissemination is getting lower and lower. However, the effort required to generate high-quality information ain't getting any cheaper.

But equally a lot of people view their information as free for dissemination as they make their money in other ways, like IKEA. You could say the likes of Google are parasitic and without information to search they wouldn't be able to sell advertising space, but I would argue it more of a symbiotic relationship. The concept of consolidating freely available information then selling easy access i.e. adding value is as old as the Bible.

With the trend towards Open Source the argument goes that enabling technology like operating systems and other basic building blocks that benefit everyone should be free so that, like Isaac Newton, you can reach greatness by 'standing on the shoulders of giants' rather than reinventing the wheel. I think there is a strong argument that if public money is spent on R&D then the IP should be made freely available. However, those who create valuable information (and whose business model requires payment) deserve to have their copyright and commercial integrity respected.

Convergence: Jack of All Trades or Master of One?

The whole TV/Broadband/Mobile/MP3 world sees to be heading for one point on the sunrise aimed at producing one appliance that is all things to all men: Whether its one box or one handset it has to do it all. This reminds me of the eternal battle ensuing in the software space between ERP systems (get you systems and processes right, then pore concrete on them) versus best-of-bread applications (malleable components linked together using open integration technologies allowing swap and change). It invariably boils down to whether you want something that is 90% good at doing lots of things or many things that are 100% good at doing just one.

In an earlier post, I talked about focus, focus, focus. Think of the last 10% being innovation and the 90% being the existing substance. For some markets the benefits of the innovation offset the complexity of having multiple vendors; for others simplicity and consistency is the name of the game. For most innovators, a market that has developed to this point of maturity is not a good place to be as you will face an uphill battle to see off the entrenched competition who will undoubtedly cover more bases than you do. So you need to find a peripheral market, which is undoubtedly smaller, where your value proposition can hold sway against the entrenched competition. When you are starting out, don't seek to be a jack of all trades, be master of one.

First Mover Disadvantage

One of the interesting themes discussed at TechTalk in association with our Investment Forum in Sheffield yesterday was that he who dares doesn't always win. Being first to market can mean you do all the R&D, validate the idea and educate potential users only to see the competition eat your carefully prepared lunch. Equally, being best technically doesn't necessarily equal success either.

As Lee Strafford emphasised as he spoke about his success story at Plusnet, route to market can be a real differentiator when it comes to execution. Stuart Green CEO of ZOO Digital warned that while you are evangelising about how beneficial your innovation will be to users, potential competitors will be readying themselves to shoot arrows in your back. And Steve Barnes, CEO of Infoserve reminded us that history is littered with those that tried first and failed or thought being (second) best equals success. Oracle didn't have the first relational database and VHS wasn't the best video technology, but each ended up the 800lb gorillas in their respective markets.

Being at the bleeding, rather than the leading, edge can leave you exposed if the market or infrastructure just ain't ready. Equally stealing a march on the competition is what innovation is all about, so this all has to be finely judged. Being first or best certainly isn't a prerequisite for commercial success.

There Be Dragons Ahead

At the Business North West event, Doug Richards of Dragon's Den fame gave a inspirational talk charting his ups and downs (yes even he has them!). Mainly anecdotal, but some of his take home messages that particularly resonated with me were:

1. Luck and serendipity plays its part in any successful venture; the path to greatness is not deterministic. Deal with it.


2. Don't only listen to those that have only tasted success; they are the exceptions not the rule. Also take council from people that have tasted failure as well. Inductive learning requires negatives as well as positives.


3. Yes, have a cunning well thought-out plan but be prepared to deviate from it as necessary (recognising this is not what funders necessarily want to hear): The reality is that you have to be flexible and opportunitistic (which is what the big boys aren't, so you have the advantage).


4. Cash and share price are not equivalent currency: Market Cap ain't worth anything until you have exited with money in the bank.
   
5. Leadership is about enpowerment. "Ask for my forgiveness not my permission". The founder/CEO should strive to be operationally redundant - he or she is generally not replicatable nor reliable. Surround yourself with people more able than you!

Pile It High...

At BarCamp Leeds last Saturday, Dean Saddler CIO at PlusNet evangelised about how you can build a web-based applications quickly and easily and one of the tricks was to repackage and reuse the same underlying technology in different market niches and applications.

His take on monetisation was that if you have been smart about development, you only have to charge sensibly and adopt a subscription model to take market share from bloatware providers charging perpetual licence fees (where have I heard that before?). He also emphasised that his development plan only extended as far as the next round of features that users had requested. Sounds like the whole concept of component reuse and evolutionary development has finally caught up with web designers!

Not sure I totally agree you can produce something of any substantial worth so cheaply - even if you outsource development to China - but the idea that you have to work smart, reuse components, adopt incremental development strategies that keep you close to the users and offer something significantly better and cheaper than what has gone before is undoubtedly true.

Yorkshire Means Business

Nice to see former Yorkshire Post Business Editor David Parkin's new venture hit the streets (OK its virtual equivalent!) this week. http://www.thebusinessdesk.com/ aims to bring news, information and events about and for the business community based in Yorkshire. Needless to say I have signed up for news alerts and it will be interesting to see how this venture progresses versus more traditional publications, not least the YP!

As with my previous post on monetising online communities, the key to such a venture will be how to produce content at reasonable cost and in the business model who pays for what, when. I am sure he has done his numbers -particularly as Colin Glass is his Finance Director!

The Second Bounce

Ronald Cohen of Apex fame argues in his new book that the everyone can see the first bounce of the ball; it's the second bounce that is uncertain. And it is only in situations of uncertainty that significant investment gains can be made. Well I beg to differ - until you bounce the ball once there is the highest degree of uncertainty - one can only guess at the outcome. Once you have seen a bounce, you have data to predict pretty well what the next bounce will do and even fix things that fall flat!

Releasing Version 1 of a product into a market is always the most uncertain stage. Once users have something to play with they can give you feedback and the whole market research process can be brought to bear on the problem. When all you have is ideas, hand waving and hopefully some passion and a committed team, most potential users will still just stare back blankly at you - they ain't good at looking at a blank canvas and saying what will make it a masterpiece.

That thought dovetails pretty nicely with a talk I caught on the first bounce at BarCamp Leeds on Saturday on the futility of trying to predict the future. Sure, it's hard but unless you can make an educated guess at where things are going how can you ever hope to align the technology idea you are working on with what the future holds. That said, the prevailing view was that the best way of predicting the future is to implement it!

Monetising Digital Communities

With the rise of Web 2.0 promoting participation, sharing and collaboration it still requires that someone pays for it all. Advertisers may now be able to target viewers by their individual profile and as pay per view gives way to pay per response the theory goes that communities means money. Subscriptions are another way of generating revenue and the great thing about online is that you can collect this little and often or integrate a smorgasbord of premium services at a price, while maintain the ethos of everything being free at the point of delivery. Taking a percentage requires an online transaction, but for some communities this may be part of the business model. How to gain users is always the first challenge, but how to turn users into revenue is always a bigger one!

The likes of YouTube, MySpace and Facebook (Microfoft paid about $500 per user for their stake) can put of the day they make a buck (although with the fikkle nature of consumers they might need to hurry it up) , but for others the balance between building a community and getting paid in something other than spirit is a little more pressing.

Shifting Sands

Project Sahara is a new initiative which I am sure Lee Strafford will be plugging when he speaks at our Techtalk 2007 event in Sheffield on the 28th November. He is seeking to create a community of Web 2.0 companies across the North of England and provide a support infrastructure to maximise the potential of their early stage ideas. This will potentially incorporate physical incubator space, mentoring and all the other things an early stage business needs. In addition, they are seeking to develop a set of online tools that members of the community can contribute to and ultimately benefit from.

Fear Of Failure

A recent survey by Orange reported no shortage of bright ideas, but cited the lack of confidence and a fear of failure as the main reasons for sitting on their hands. Orange said that budding entrepreneurs needed more encouragement to succeed. They called on help to be given to develop talented would-be entrepreneurs and to cultivate an appetite for rational risk in the education system.

A particular focus of Connect is to help innovators hone their ideas and share best practise through our Investor Readiness workshops and mentoring schemes. The role of Proof-of-Concept funding cannot be underestimated in helping these fledgling ideas gain momentum and we continue to lobby for improved business support in this area.

Investor Readiness

The Sunday Times featured an interesting article on Investor Readiness that echoed many of the experiences that we find with people who go through our IRP programme. These are given by experienced professionals and business people who give their time freely to help young technology entrepreneurs understand their proposition from the perspective of an investor. The lessons learnt are invaluable as is the ability to share experiences with other people following a similar journey and seasoned professionals that have heard it all before. Our next IRP workshops are being held in Sheffield on the 7th and 14th November. If you fancy coming along, please contact us.

The Value Of Networks

Metcalfe's law states that the value of a network is proportional to the square of the number of those involved. The number of unique connections in a network of a number of nodes (n) can be expressed mathematically as n*(n-1)/2. Perversely, the basic tenet of modern organisational theory is how to manage this complexity and structure companies so that as they grow this proliferation of connections is managed effectively.

However, when it comes to the virtual world the more the merrier is usually the case and only when an application focused on participation and involvement reaches a certain critical mass do those involved start to interact effectively. This relates to the fact that although the number of potential connections may be large, the number of relevant connections may be much smaller. Obviously if we are talking about directed connections i.e. you know the number or address of the person you want to 'call' then all is fine and dandy, but much of the success of tools like LinkedIn and FaceBook relates to the ability of the software to facilitate members of the network finding like minded people to interact with and build up connections based on declarative information embedded in profiles. The success of using structured information to facilitate or prompt interactions is a major development over traditional web-based directory listings.

If you also think about the comparison to physical networking - what is the chance of bumping into someone at an event are inversely linked to the paucity of the network, so the focus is to maximise the focus. With online networks the goal is to maximise the number of participants and ensure relevant people find each other using the functionality of the site. With our new resource portal http://www.mydealmaker.co.uk/ we are trying to balance the focus on signing up more users with efforts to improve the functionality of the site so that users find connections of interest as the beta progresses.


By the way, we are looking for participants for focus groups to be held over lunch from 12.30-2.30pm on Wednesday 31st October and Monday 5th November at our offices in Leeds. The aim of this is to help inform our strategy for provision of online services with specific focus on our new opportunities portal http://www.mydealmaker.co.uk/. We realize this is short notice, but if you can spare the time we really would appreciate your input. We promise no homework is involved! If you would like to have your say in a physical way, please email us.

Focus, Focus, Focus

In real estate investment the mantra is location, location, location but for a startup company it should be focus, focus, focus. Far too many companies bite off more than they can chew even before they have cut their milk teeth. While big markets numbers may turn some people on, it's always better to be a master of one.

This is what Ev Williams (founder of Blogger & Twitter) has to say about this:
“Focus on the smallest possible problem you could solve that would potentially be useful. Most companies start out trying to do too many things. Focusing on a small niche has so many advantages: With much less work, you can be the best at what you do. Small things, like a microscopic world, almost always turn out to be bigger than you think when you zoom in. You can much more easily position and market yourself when more focused. And when it comes to partnering, or being acquired, there’s less chance for conflict. This is all so logical and, yet, there’s a resistance to focusing. I think it comes from a fear of being trivial. Just remember: If you get to be #1 in your category, but your category is too small, then you can broaden your scope—and you can do so with leverage.”

Most businesses need to cross the chasm from early adopters to the mainstream and that's a lot easier when you have a whole product however small, then you can start to add +1 extensions to grow your market. The downside of trying to calve off too large a slice of market real estate too early is that you never have enough substance in any specific area to transition your product or service to the mainstream which is where you will make your money - however big or small your target market is.

Jam Tomorrow

Directorbank recently announced it is taking equity stakes in young companies in lieu of their fee for placing staff. A number of Connect Yorkshire partners also work with companies on a contingency basis and look to take a stake in return for the effort they put in. Is this a good idea? It can be a good way of building trust and aligning the interests of the advisor with that of the company. I am surprised more service providers aren't prepared to take a punt and put their money where their mouth is. One our sponsors Winburn Glass Norfolk is well known for its innovative approach in this area.

Taxing Times

The Chancellor's decision to change the Chapital Gains Tax (CGT) rate to a flat 18% and abolish taper relief seems like a gut reaction to the fact that private equity bosses are only paying 10% on their 'carry' on successful investments. Caught in the cross fire are entrepreneurs that now are going to have to pay nearly twice as much tax on exit. The fact that the Enterprise Investment Scheme (EIS) allows up to £400K of any gain to be rolled over into a new venture softens the blow, but these changes that come in in April 2008 give a big incentive to exit before then!

Sainsbury Boost For Connect

Lord Sainsbury’s review of the UK science and innovation system. includes a glowing endorsement of the CONNECT model:

Recommendation 9.5
Drawing on the success of the CONNECT scheme in San Diego, RDAs [Regional Development Agencies] should support services for high-technology entrepreneurs around our world-class universities similar to the CONNECT service within the BSSP [Business Support Simplification Program] framework.

Connect assists technology-based companies and entrepreneurs in refining their business and financial strategies through a group mentoring process. It assists with the development of business plans and business presentations, and provides a forum in which the entrepreneurs can present their refined business model before a group of business, marketing and management experts. The scheme’s success steams from its holistic approach, the range of expertise it provides and the fact that “none of us are as smart as all of us”.

Distance No Object?

VCs often tell me that it’s the quality of the company that drives the deal, not the geography. So is where you start a business really that important? According to Library House London is a magnet for new venture capital backed businesses despite the expensive rent and salaries. They point to the number of successful exits as a ratio to the number of deals done as an outcome measure. Apparently, in London the ratio is 2:3 whereas in the North the ratio is no more than one in four. Does this in any way relate to the geographic remoteness from the major financial market? One blip in this statistical argument appears to be the Emerald Isle where, albeit from a lower base, the ratio of exits to deals is one in two. Maybe it’s the Guinness that aids the deal making!

Is one way of breaking down these geographic barriers to utilise technology more? Connect has recently released a online portal, http://www.mydealmaker.co.uk/, designed to allow companies wherever they are to pitch their investment proposition whenever they want. The idea is that even if a VC can't find the time or the rail fare to come to our Investment Forum, they can at least take a looksee at the cream of the technology crop from across the region. Equally, entrepreneurs no longer have to wait for the next Forum to come around in the hope that they get a presentation slot. We look forward to our first online investment success and to improving our ratios!

Online Research Versus Legwork

There seems to be an increasing trend to research opportunities online before expending too much physical effort evaluating the options. Who last went looking around a new neighbourhood looking for houses, rather than first having a trawl of Rightmove? Tesco have just launch a new comparision website to compete with the likes of MoneySupermarket. So there must be money in them there hills. And with MyDealMaker debuting, even venture capitalists and angel investors can get in on the act and search for entreprenurs with big ideas looking for funding that meet their search criteria.

Where will it all end? In the lead, not supprisingly, is Formula One. Car design is apparently moving from using computer simulation to validate an hypothesis to ab initio models where nothing physical is made until the computer says yes. Drug design has similarly embraced the idea that sampling chemical space is best done virtually before that expensive step of synthesising anything is taken and anyone gets their hands dirty.

Who, thirty years ago, would have believed that computers would be used for screening potential dates/mates before 'pressing the flesh'! And if you had said we would all be texting like mad, rather than videoconferencing by now you would have been laughed out of the room. As the BT futureologist at a recent YSTN event commented, maybe we should be employing more phycologists to help design new products, rather than leaving this entirely to the technologists!

Fail Fast, Fail Early

Not the most inspiring of titles, but ask any medicinal chemist what the chances of his or her lead molecule making it through clinical trials and it's about one in ten (and falling). And no matter what anyone tells you, no one knows which development projects will fail when on the journey from the lab to your bathroom cabinet. Yes, that pill you pop for hay fever or hypertension is the result of a whole lot of great science and one big dose of good fortune.

The development strategy of big pharma embraces this fact as they seek to spend the least amount of money on the ones that don't make it. Fail fast, fail early is their mantra. So why don't they run tests in parallel (assuming it's ethical and legal) and speed up the process? Unfortunately, with these odds history and a few calculations in Excel tells you its a mug's game to try to rush perfection to much. What you need is a development pipeline (which is what equity analysts sweat about as the last blockbuster goes off patent) and then you can play the numbers game and be reasonably patient.

But wait, what about small guy who just has one or two throws of the dice and mix in a doze of commercial reality that their wonder drug or medical device has a limited market potential? And what if they don't have the luxury of funding their development from previous successes? Then they have to raise funding from VCs who don't want to wait a decade to see a return and even then the market potential may not give sufficient returns to make the investment add up financially. This is the problem facing many Healthcare Technology companies and it ain't easy to beat the numbers.

Complaining about the short time horizon and greediness of VCs is about as useful as trying to rush a product through clinical trials (and by that I mean spend more money on failures faster). It just isn't that productive. So what is the answer to this connundrum? The obvious answer is to licence more things earlier and accept a smaller slice of the pie if they make it through to market - which is what most smaller biotechs do. Alternatively, you can find a friendly source of development funds that is prepared to wait for a return and see your project through from cradle to grave - it's called working for Glaxo! But is there a third way?

InvestorQuest Final

The Saturday Yorkshire Post featured our Red Carpet Day where the 10 InvestorQuest finalists fought it out for a slice of the £1M of funding on offer. Whether they are successful in their quest only time will tell, but four walked away with £1K of consultancy support kindly donated by the event's sponsors Clarion solicitors (who hosted the event), Murgitroyd & Co, Mazars and Turnkey.

It was interesting reviewing the initial comments of the panel of investors. There concerns were less about how clever the technology was, but more about whether the IP was protectable, barriers to entry, routes to market, vertical market focus vs infrastructure play, return on investment, etc. Although each presenter was mentored prior to the event, only a minority had developed these aspects sufficiently to satisfy the investors appetite for business strategy, rather than technical detail.

Developing an Innovation Strategy

Rob Hulme from Smith & Nephew spoke at the first of our Business Fitness workshops in Hull on developing an innovation strategy. He emphasised their strategy has moved from closed innovation to a more open approach to embrace ideas from outside. Another of his themes was the concept of teamwork and cross-functional approaches noting that breakthroughs often occur at the interface between two disciplines.

A interesting observation was on the competing pressures of Process & Bureaucracy and Passion & Anarchy that a company needs to find an appropriate balance between to maximise its potential. Too much bureaucracy and innovation risks being stiffled in favour of the status quo. But equally too many mavericks trying to change and tinker with things then chaos reins.

This complemented my discussion in the previous session on Business Strategy & Planning where I focused on the chasm between Visionaries and Pragmatists. Visionaries are by definition more driven by passion and a quest for radical improvement, whereas Pragmatists are looking for more incremental, managed evolution to improve the current situation. Most managers coming from larger companies have these pragmatic skills in spades, but may lack the open mindedness and willingness to experiment and even fail that sets out the visionaries from the rest.

There are four more seminars in the series which promise to be equally inspiring! Click here to find out more...

What Is The Optimal Length Of A Queue?

There is a fine line in business between having satisfied customers and happy ones. If all your customers are too happy you are probably not charging enough for your product and service or indeed doing too much for them for too little. This can be a difficult habit to break, but can be the difference between success and failure.

Early in my career I worked for a software company that everyone loved, they just didn't make any money and were taken over by another company that did. The only difference I could make out between the two was the one that was successful charged their customers for everything they could and should. The other went out of its way to keep its customers happy, but didn't charge them enough for the privilege.

Do you want to be liked or respected in business? If it's the former, you probably think the answer to the question posed is zero. If it's the latter, a better answer is three...

That Original Idea

As we embark on our InvestorQuest Challenge, we ask are you like John Nash in A Beautiful Mind (looking for that original idea that will be the basis of your business, rather than just delusional). Surprisingly, good ideas for a business are often less than original and are often pretty simple. In 1978 (yes, nearly thirty years ago) I wrote a program to play blackjack, so you could blame my 'idea' for all those Internet betting sites out there today. Simon Nixon, the founder of moneysupermarket.com, had a brilliantly simple idea to provide consumers with independent comparison of insurance products that he took from inception through to a £1B stock market flotation.

What differentiates those that succeed is often not the idea for the business, but their single minded focus to exploit an idea and find an addressable market for it. Turning a fledgling idea into a marketable product is the key and so is avoiding the pitfalls along the way. That's why when asked whether an investor is more interested in the idea or the management, often the answer is the latter. Good ideas are surprisingly plentiful, it's the ability to execute that maketh the business. That said, you need an idea!

Don't Trash The Competition

Marketing is all about differentiating yourself from the competition, but what's with the current spate of adverts that lead on what's wrong with your competitors, rather than what's right with you? I was always told never to speak badly of the competition when in the company of customers. "I couldn't possibly comment" says eons more than any direct insult ever could.

This seems to be a bank thing. Nat West and Nationwide are both running TV adverts parodying a fictitious bank that doesn't listen to its customers and employs morons. Maybe it's just me, but I can't help thinking the only association created is precisely the unintended one.

Has anyone done any studies on this? Put viewers in a room and show them the employees in the advert and ask who they work for. My guess is that there will be a significant correlation that isn't the desired one. Surely, a marketing agency is spending millions of pounds on this without thinking this one through (surely, it doesn't work like that?). Or just maybe mud does stick to the slinger...

Work On The Business, Not In It...

The Prime Minister, Gordon Brown, has curtailed his holiday in sunny Dorset to rush back to Downing Street following the outbreak of foot and mouth disease on a British farm. Is this driven by a need to be seen to be doing something from a PR perspective or does the CEO of UK Plc need to work on his delegation skills more?

Any good CEO has to balance involvement (interference?) in operational matters against taking a more strategic view. Delegate to little and too much weight lands directly on his/her shoulders. Delegate to much and risk the fate of Metropolitan Police Commissioner Sir Ian Blair by being accused of not being in control.

A key stage in any business is when the CEO can focus on working on the business, rather than in it. This requires that a management team is assembled that can take primary responsibility for operational matters. Sure the CEO might be the best person to do everything and make every decision (which he probably had to do to in the early days), but he or she has to sleep sometime (and even take the odd holiday).

Suck IT and See

Do visionary/successful companies try lots of things consistent with their goals and and keep the stuff that works. Or do they know exactly how to get to where they want to be and home in on perfection like a wasp buzzing towards your pint of beer?

The ultimate suck it and see company has to be 3M. All things big start off small, but who knows for sure what will grow? They recognised that you need to develop a pipeline of little things and keep nurturing those that work. Time to market is also key. In the 1970's Glaxo was one of many drug companies climbing the greasy pole. Then their researchers discovered a potential wonder drug, ranitidine. Instead of doing toxicology testing sequentially, they decided to save time by running the toxicity studies in different species in parallel. By taking a calculated risk Glaxo were first to market and the rest, as they say, is history.

So one could conclude that if you want to make a bee line for success, you need to take a leaf out of Charles Darwin's book and try lots of things and keep the ones that work, and if you are going succeed, make it snappy!

Connect Yorkshire on FlickR

We have set up a Connet Yorkshire Group on FlickR and posted some of the photos from our recent Investment Forum there.

If you would like to join this group and view the photos, click on the following link

http://www.flickr.com/groups/connectyorkshire/

Death Of Animal Testing

An interesting article in June 18th issue of C&E News predicting reduced animal testing in favour of experiments utilising human cells and components by the USA National Research Council. They say advances in systems biology and methods to test cells in vitro is reaching the stage where it will provide more information on human toxicity than high-dose in vivo testing on animals.

This may cheer our Venturefest Yorkshire Business Plan winner, Kirkstall Ltd. who are developing a multi-chamber bioreactor that utilises human cells. To read the NRC report, click here.

Those Who Can Do

I have been involved in developing software applications for more years than I care to remember and here are a few thoughts:

1. You are only a naive user once. Watch a new person try to use your software application and learn from what they can't easily do. Once you are trained, anything is intuitive.
2. You don't build new software the way you build a house - those that try to make it into a linear process with prescriptive completed outputs at every stage are doomed to failure - even if the project plan looks pretty. There is always a non-deterministic aspect to any complex system. Agile approaches, adaptive planning and iterative development is needed.
3. That said, you should always seek to reuse building blocks and design the components of the system with this in mind. If you have to reinvent the wheel each time, you are doing something wrong.
4. Don't expose too many end users to pre-alpha software (apart from those sacrificial virgins mentioned in 1) - they will not be able to see past the first bug/crash/wobbly and will not thank you for an early look at anything short of perfection.
5. So don't let core developers design a user interface. Their perspective is clouded by what is going on deep in the bowels of the system. A business analyst that has empathy with and understanding of the user requirements should always be part of the team and in small projects is more important than a 'project manager'. They can fein selective amnesia to immitate 1 and 4.
6. Everyone is qualified to criticize and say what’s wrong with a system; it’s a lot harder to contribute innovative ideas and define what’s right!

TechTalk 2007

TechTalk 2007, held in conjunction with the Connect Yorkshire Investment Forum, saw speakers focus on what is the recipe for high-tech success. Gwyn Humphreys emphasised that customers can often be your cheapest source of money and if you can cut a deal with early adopters where they help fund development of the technology, then that is a great way to avoid giving away too much equity too early on. At the other end of the spectrum, Stephen Allott emphasised that if you have a developed product, the secret to world domination is a motivated and well incentivised sales force. Steve Garnet from Salesforce.com evangelised about software as a service and the rise of utility software. This goes hand-in hand with a 'pay as you go' subscription model, rather than upfront licencing. My experience is that this is a win-win if software companies can adapt to this model from a cash-flow perspective as it is a lot easier sell product and the revenue stream is annuitised, which is highly valued by an investor. Graham Bowland from Surgical Innovations spoke about the challenges and rewards of entering the US market. Overall a great afternoon of inspirational talks!

10 Things Not To Get Wrong When Building A Technology Business...

At the i-techpartners academy event at Daresbury, Richard Veal from New Mind reflected on what he had learnt (the hard way!) in building his business, a lot of which resonated with my own experiences:

1. There isn't a shortage of work to go around - collaborate, build on the work of others and stop your techies insisting on reinventing the wheel.
2. Ideas are cheap and surprisingly plentiful, it's implementation that's hard. It also helps to focus on one idea, so select the right one!
3. Don't believe your own hype: success is not necessarily replicable and equally if you fail at first, try and try again.
4. Being an MD is a lonely place - you need advice, mentoring and an external perspective.
5. Generic business advice is useful, but specific advice is invaluable from someone who really understands your market/technology.
6. Get your organisational structure right as soon as you can. An average employee in the right structure (and motivation) is better than a good employee with the wrong one.
7. Build in scalability into your business model from day one; it's hard to retrofit.
8. You will need twice as much time and money as you thought you would!
9. Networks are important to long term development. External focus is needed to understand the wider picture and assess impact internally.
10. Success is specific, run your own business - it's your story, write it.

See also my top ten tips on raising investment!

£25 Million Entrepreneur Challenge

The Bank of Scotland Corporate have launched a £25 Million Entrepreneur Challenge with the aim of providing support for driven, well-established businesses that aim to continue growing and become dominant forces in their markets.

A maximum of five businesses will share up to £25 million of funding plus valuable business opportunities. With a funding package of up to £5 million entirely free of interest for three years, each of the successful businesses will also gain coverage for their business in the pages of The Sunday Times and exposure to local media, along with opportunities to network with some of the UK's top entrepreneurs.

Sounds like a serious way to gain both finance and profile.... The closing date for entries is 15 August 2007, Good Luck!

Fuelmyblog

If you are looking for a new blog to read or want to find out what others are reading online visit Fuelmyblog.com.

The website allows bloggers to publicise their own blogs for free and recommend other sites by voting on them. It also has useful forums were you can go to get top advice on how to market your blog and increase your readership - it's worth a visit!

Fuelmyblog is the the brainchild of a group of Yorkshire entrepreneurs who have teamed up with a British blogger in France to launch the new business venture. Kevin Dixie based in La Rochelle, Ian Green of Green Communications and Marcus Dyson of Eleventeenth.com have big plans for the site and will be introducing podcasts, compeitions, blog chat radio and a range of other features.

Girl Power

Library House reported some depressing statistics this week in their newsletter. Comparing the numbers of male to female business leaders, Library House demonstrated that women are not just lagging behind in the career stakes - they seem to have fallen off the scale all together.

The article left me wondering where all the girl power had gone.... The low lights of the article included that 95 per cent of the chief executives at venture-backed companies were men and even worse, in 2006, 97 per cent of newly appointed chief executives were men.

Despite being woefully out numbered the stats did point out that when a women was in the driving seat the company performed better. Female chief executives delivered higher revenues using less capital and the average company run by a woman had annual revenues of €12.5m last year compared to €11m for those run by men! Hooray - a ray of light.

So where has all the girl power gone? Since working for Connect Yorkshire I have often wondered why the technology business sector is so dominated by men. Very rarely do we come across a female entrepreneur and even less likely is a female investor. You only have to turn up to one of our Investment Forums to see just have out numbered the girls are.

Maybe it's because in the past there have been few role models. Women who have taken on the business world and really succeeded without being viewed as cold hearted (or of having an unhealthy obsession with shoulder pads) were few and far between.

I certainly do think that the generation of female 20 and 30 some things now coming have the positive role models needed and more critically have the confidence to know that they are just as likely to achieve as their male counterparts. Coupled with flexible working conditions that make it easier to achieve work/life balance I hope that when Library House repeats the stats in 5 - 10 years time it will show a completely different story.

BarCampSheffield

There is a BarCamp happening in Sheffield on the 26th / 27th May 2007 at PlusNet, Internet House, Sheffield, S1 4BY

For those who don't know what BarCamp is the following definition is on Wikipedia: BarCamp is an international network of unconferences — open, participatory workshop-events, whose content is provided by participants — focusing on early-stage web applications, and related open source technologies and social protocols.

BarCamps are organized (and evangelized) largely through the web, harnessing what might be called a Web 2.0 communications toolkit. By "open-sourcing" the organizational process of a Foo Camp unconference, that is, codifying it in a wiki and making that publicly available, BarCamp seems to have struck a chord. It has since been implemented in 31 cities around the world and is serving as a reference for unconferences in other fields.

The organisers of BarCampSheffield rightly point out that the UK is at the forefront of innovation within the areas of Web 2.0, OpenID, Social Networking etc.. They feel that the north of England is full of enterprising and innovative individuals / businesses who want a event outside of London where they can talk to kindred spirits. Everyone is welcome - click here for more information.

Hot science, cold commerce

We spotted an interesting article - this weeks Science Business Viewpoint . In it Domenico Valerio talks about the lessons he learned whilst starting-up a gene therapy company. Domenico is now a general partner in a new Dutch venture capital fund, Aescap Venture and also gives insight into the kind of entrepreneurs he’s now looking to fund.

The top tips we picked up on are:

Know the strengths and weaknesses of your technology
Don't be a scientific entrepreneur with your heart lost on the technology, be more of an entrepreneur than a scientist

Work with the best
That includes investors, as well pulling together a top management team and passionate staff

Say no to the second best
Even when there is pressure for the business to grow, don't take on second rate employees

Create a culture in the company that is business-like
Understand your customer from an early stage. Licensing activity may be a difficult strategy to adopt but the benefits are not just about generating cash. It can give you an insight into your customer's perspective that you may not other wise get until it is too late.

Accessing the right finance

We take calls every day from entrepreneurs wanting to know what funds they can access for their growing businesses. Sometimes they might be able to get their hands on a grant but mainly its bank finance, loans or equity investment that are their better options.

Our workshop next week with deal with this subject and help will be on hand to explain exactly which options you should be going after.

Accessing Support and Funding and Due Diligence by Investors starts at 4pm on the 16th May and will be held in Leeds.

Log your blog

We have just added MyBlogLog to our blog - its a way of finding out more about the people who are reading your blog.

For all this talk of a global conversation throughout the blogosphere, there's a lot to be desired. It's a two-tiered system, with bloggers talking amongst each other and the majority of the readers looking on from the fringes. You may get to call out something from the sidelines by leaving a comment, but things could be so much better. For everyone.

MyBlogLog enables you to take advantage of your existing presence on the Web and ties it into communities of like-minded readers and authors to add context to the conversations in which you take part.

So if you have a blog on your company website make sure you add MyBlogLog - that way your readers will be able to see each other and you will have better visability of your potential customer base.

Is the World Flat or Spikey?

Jonathan Kestenbaum, Chief Executive of NESTA, spoke at the Leeds University Innovation & Enterprise Gala Dinner about what factors enable innovation to flourish. He focused on one main theme: The world of innovation is 'spikey' and regions need to develop the support infrastructure and conditions to make them more likely to be where ideas 'happen'.

Moving from a linear process to a richer/broader model, bringing together cross functional teams with innovation occurring at the interfaces of disciplines. Ecology/systems of innovation and the view that innovation occurs in pockets, rather than it being able to thrive anywhere i.e. the world of innovation is not flat! Going against Thomas Friedman's thesis The World is Flat: a Brief History of the 21st Century, he argued Atlantic Monthly's view that the "The World is Spikey" is more to the point.

The trick is to leverage tacit knowledge, that shared uncodified stuff and deploy key strengths, rather than simply try to replicate what was done elsewhere: you can't simply clone silicon valley. The emphasis on networking, serendipidy and common purpose resonated with the Connect model.

DIY Social Networks

Whilst surfing the internet we came across Ning.com a website that allows you to create, customize, and share your own Social Network for free in seconds.

Started in 2004 Ning powers over 46,000 social networks and counting. We discovered some useful networks for the budding entreprneurs inlcuding My Start UP Network and SmallBizPod .

For all those who are keen to give their business the web 2.0 makeover they have private label options for businesses. Perphaps this could be the perfect way to communicate with your customers and for them to chat to each other???

mentoring + money = success

A winning formulae for early-stage technology companies includes mentoring says NESTA mentor, Alan Edwards.

In his recent article on the NESTA website, Alan very wisely talks about how entrepreneurs (and those who investment in them) should make sure they have mentors who are able to provide advice on the basic elements of running a business but who also have sector specific knowledge.

He goes on to explain that given seed funding, early stage businesses have a limited time before that money runs out. To get another round of funding, they have to prove that they have achieved their year-one objectives and are capable of managing any resources awarded to them. All of this on top of coping with the fundamental issues of starting a business. Mentors can help with making judgement calls - helping to ensure that the business remains focused and on track.

But where do you find a mentor? Hopefully the below links will be a starting point in your search...

NESTA have a network of over 200 mentors to provide expert business advice

The Unit is a business incubator centre in Leeds that provides it client businesses with a pool of mentors

Forward Ladies is a business Womens' network and support group with a mentoring scheme

Mentor Bank run by South Yorkshire Investment Fund and has over 450 mentors

Wisdombank

Top ten tips on how to attract investment

Needless to say you’ve come up with a great idea and all you need is some money to make it happen. Here are my ten top tips on how to attract an investor:

1) Come up with a persuasive elevator pitch that captures the essence of what your idea is and what problem it solves.

2) Demonstrate passion and commitment: an investor wants to know you are going to put all your energies into making your idea a success.

3) Research your market. Make sure you have validated that there is a demand for your product or service and can quantify the market opportunity.

4) Know your competition. You are out to steal their lunch, so make sure you can articulate the benefits of your solution over theirs - and remember no competitors equals no market!

5) Start selling as soon as you can. The quicker you prove your value proposition and can start generating revenues the better – real customers are you best friend when it comes to raising finance.

6) Write a business plan. Your financials projections should be based on realistic assumptions and don’t forget to say what you will use the money you are looking to raise for.

7) Acknowledge your limitations and explain how you intend to overcome them. You may not be the finished item and be honest about the challenges you face.

8) Practice makes perfect, so in developing your investment pitch rehearse, rehearse, rehearse.

9) Be persistent: You will have to kiss a number of frogs before you find your prince and typically the process of finding an investor can take six months.

10) Be choosy who you accept investment from. Do they bring anything other than money to the party? And remember you are going to have to work with them, so you need to be able to get along.

Hook a Business Angel

Do you know how to write a business plan and hone your executive summary in order to get the attention of an investor?

Find out how potential funders will view your business plan, what they look for, and how to ensure they get beyond the first page at the Connect Yorkshire’s next workshop.

Practical Business Plans and How to Hook an Angel

Wednesday 2nd May 2007
The Headingley Suite, Crowne Plaza Hotel, Wellington Street, Leeds, LS1 4DLN
4:00pm for 4:30pm start, finishing at approximately 6:45pm

This is the first workshop in Connect Yorkshire’s forthcoming Investor Readiness Programme in Leeds. Enrol on all or any of the free events and benefit from our unrivalled expertise in helping technology and knowledge-based companies, like yours, raise finance - whether bank, grant, loan, venture capital or business angel.

The programme is a series of six free-of-charge workshops, all to be held in the evening in Leeds with a buffet.

If you have a great business idea but face a funding gap these workshops will help you protect your idea, refine your business plan, hone your sales pitch and, generally, make the most of your proposition. Maximise your chances of raising finance and do all you can to ensure your business achieves its potential, register now for all or any of the workshops.

We look forward to seeing you there!

Listen in

We like the SmallBizPod, a podcast for small businesses, start-ups and entrepreneurs in the UK.

The latest podcast examines the European technology/web sector and the state of venture capital on the continent with Alex Vieux, publisher of technology business magazine Red Herring.

It's definitely worth a listen...

I'm blogging whilst on Myspace, YouTube, Facebook, Bebo, Linked In....

Victor Keegan of The Guardian wrote an interesting piece on blogging in yesterdays edition.
In it he discusses a survey by Technorati indicates that the expand of blogs and bloggers continues, with an estimated 70 million weblogs! However the uptake has been at a slower rate than antipicated and that blogs haven't taken off in the way that social networking site such as Myspace have.

With over 170 million members of Myspace and 5,000-plus videos uploaded to YouTube every day blogging is lagging behind. Victor sees this as a preference to communicate directly with others who have similar interests and opinions rather than just sticking a weblog out there in the internet universe for any man and his dog to read. We couldn't agree more.....

Connect Yorkshire has recognised that online networking is a powerful force and will soon been provide busy entrepreneurs with MyDealMaker. The portal will be an online networking space that will provide technologists and investors with a way to make contact and forge deals. It will have with all of the web2.0 facilities you could wish for! Watch this space.

Join the Club

Reducing your carbon footprint has become a priority for many people in the UK and it seems investors are as keen to pump cash into all things green.

We noted that Whizzgo, the pay-as-you-go car hire business has been in the news again this week - this time with the launch of the scheme in Sheffield.

Whizzgo's concept is to provide cars to hire by the hour, at short notice, within a few minutes walking distance of a drivers home and workplace. By offering a car club service that is convenient giving up your car is now becoming a real alterative.

Managing director Charlotte Morton pitched for funding at the Connect Yorkshire Investment Forum in November 2005 and since then, Whizzgo has netted quarter of a million pounds worth of funding from Yorkshire venture capital group Viking Fund.

It seems other investors have recongised the potential of the car club phenomenon and we noticed that Streetcar the UK-based self-service car rental company, raised £6.4m (€9.5m) from Smedvig Capital this week.