Sunday, 23 June 2013

Shaping the world's best accelerator for high-tech startups: HightechXL

Building on the shoulders of Giants

These last two decades have been totally disrupted by the Internet. There isn't a business that hasn't been affected. And the virtual connectivity as well as cheap access to powerful technology has also affected the way companies innovate. Most of us are walking around with several thousand times more computing power than NASA used to send a man to the moon in 1969. The so-called Apollo Guidance Computer (AGC) used a real time operating system had approximately 64 kilobyte of memory and operated at a speed if 0.043 MHz.

The AGC had a miniscule memory....

It feels as if the speed of disruptive change is no longer linear. But it is logarithmic. 8 comes next to four instead of 5.

End User Innovation - Early Business Model Canvas?

The late Peter F. Drucker, the Austrian-born management consultant, is often credited with explaining how larger manufacturers innovated in the past. Basically they locked themselves away in secret labs, developing products they could patent and then sell to the public or other businesses. As the world becomes more connected, this is becoming harder and harder to do. 

Meanwhile, along came the notion of End-user innovation. A person or a small company develops an innovation for their own use because existing products or services don't meet their needs. Access to powerful computers as well as cheap hardware has made it possible for brilliant companies to start in the back of a garage, often funded by personal savings. 

In 1988, MIT economist Eric von Hippel identified end-user innovation as, by far, the most important and critical in his classic book on the subject "Sources of Innovation" now available for free download.

In addition, the famous robotics engineer Joseph F. Engelberger asserted that innovations require only three things:

1. A recognized need,
2. Competent people with relevant technology, and
3. Financial support.

The Kline Chain-linked model of innovation places great emphasis on potential market needs as drivers of the innovation process. It also describes the complex and often iterative feedback loops between marketing, design, manufacturing, and R&D.

To use this sounds like very early thinking that we know call the Business Model Canvas.

Adapting these ideas to 2013

Jed Cristiansen is an American living in London. He's raced solar-powered cars across the Australian outback, operated nuclear reactors and US Navy submarines, been a consultant, and currently works for Google.

Jed Cristiansen
In 2009, he wrote an extensive paper outlining how people could copy Y combinator, the successful accelerator program that kicked things off in Silicon Valley. It's inspired us to build a more focussed program in the South of the Netherlands. The report is an extensive analysis, but draws relatively simple conclusions. 

To be a continued successful seed accelerator program, you need to have a financial model that works, provide value to the companies that you invest in, and invest in the best possible companies.  That means the best possible companies need to prefer your program to any other.  

Jed now runs Seed-Database which monitors the successes of the Accelerator community. That turns out to be around 169 different programs, most of which are still in business.

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