IBM gives tech entrepreneurs a leg-up
Pressure is mounting on large technology vendors with offices in the UK to extend a helping hand to start-ups and small businesses that are struggling to navigate the current economic landscape. With limited resources, entrepreneurs need help...
The mood was summed up by former Skype vice president and Telefonica global innovation director Russ Shaw at the launch of a new private sector-led advocacy group called Tech London Advocates last month, who said:
“The government has done a great job of really promoting Tech City and getting behind it, but the thing that was missing for me was, where is that private sector ecosystem that's going to come together, that's going to give this a really big push, that's got the contacts, that's got the access to capital and talent? ... It's really going to be down to us to make this happen.”
At the same event I bumped into Kevin Farrar, IBM Global Entrepreneur and Academic Initiative Lead for UK and Ireland, who is one of the so-called 'advocates'. When I asked him what he thought of the new initiative, he said “I feel good about our position on this front.”
IBM is one of several large technology vendors that collaborates with early stage start-ups to foster innovation. The company's SmartCamps give entrepreneurs an opportunity to develop their products or services with help from IBM's own in-house team. IBM also facilitates meetings with VCs, angel investors, business leaders, and representatives from local and central government.
“I very much feel that the differentiator for our start-up programme is that it's about a partnership. It's not a case of just chucking our software out to as many developers and start-ups as possible to get the widest reach. We deliberately are looking for quality versus quantity,” said Farrar.
“Yes, we want them to be using our technology but we will also connect them with the right people on our side of the organisation who can help from an industry perspective - marketing and making those connections with our network, our clients and business partners, who can add value to the start-up, so it's very much a win-win situation.”
Much of IBM's work with start-ups builds on the company's Smarter Cities initiative, which aims to provide local councils with tools to analyse data so that they can make better decisions and coordinate resources to operate effectively. Rick Robinson, Executive Architect for Smarter Cities at IBM Software Group Europe, said that it is often small businesses that come up with the most innovative new ways of doing things.
He pointed to 'mashup' technologies, which began as a start-up idea for stockbrokers to compile information about the companies that they were considering investing in. A few years down the line, Yahoo had launched its own version of the technology called Yahoo Pipes, and IBM was building an enterprise version and selling it to customers in local authorities.
IBM is now exploring how to bring the resources of big organisations, that have the ability to invest in research and development, into the hands of small organisations that are “innovating in context”. Robinson said that, together, IBM and city institutions can bridge the gap between big industries, like health and transport, and the entrepreneurs that want to sell their products and services into those industries.
The company is actively involved in places like Sunderland, Bristol, Birmingham and Dublin to bring together local councils, university students, academics and local incubators, in order to help open up the market to small businesses and entrepreneurs.
“We're building relationships with the incubation facilities, because that builds the networks; it allows those connections to be made more easily, and it's a trusted introduction to a conversation - it's not just a cold call - and that makes a difference,” said Robinson.
This is just one example of how large companies can do their bit to support the tech start-up community in Britain, and there are bound to be many other models. Importantly, however, Farrar said that helping start-ups should not be an act of charity - IBM would not be run its Global Entrepreneur programme if there was not something in it for them.
He explained that, once start-ups are generating revenue, then IBM will get some revenue drag through embedding its technology into their solutions. By partnering with start-ups to develop solutions that fulfil specific needs, IBM can also ensure that the needs of its clients are catered to, making those clients more likely to renew contracts in the future.
My initial reaction to this was, how selfish of IBM to only support start-ups in order to further its own business - surely this is not in the spirit of Tech London Advocates. But, on reflection, this is how a true business “ecosystem” should operate, because employee engagement with corporate social responsibility (CSR) projects tends to run dry within a few months, whereas genuine business propositions have lasting appeal.
By identifying areas of research that are mutually beneficial to both parties, large companies can create a sustainable model for supporting Britain's tech community. While the large companies like IBM may benefit, the biggest impact will be on the start-ups themselves which, with the right support and the right contacts, could end up becoming world-beating companies.