We hope you’ll agree. Never seemed to quite make it to the top of the never ending list of priorities and then when it did our favorite designers were booked up for months (that’s what happens when you are good.) Anyhow it was their concept and we loved it. I hope you like it too. So now you really can go visit Nauiokas Park, at least the one in the cloud!* And while you are there, don’t forget to stop by and buy a book or two, we figure if we sell 130 million books or so, we won’t need to raise any outside capital and better yet we will have created an enormous community of like-minded souls to help us in our mission to catalyze innovation and well, change the world.
And for those of you who always wondered it’s: \ˈnī\o-kas\ˈpärk\ -
Etymology: Modern finance, from Anglo-American, from Banking, Trading and Technology, from Latin crescere to grow, visio to see and successus
Date: 21st century
1 a : a place where capital and ideas meet b : a space at the intersection of financial services, markets and technology
2 a : an area designed to nurture and grow companies with “disruptive” business models or technology b : a place where expertise in strategy and operational execution combine with experience and a vibrant network to create value
3 the center of an ecosystem from which will grow the next paradigm in financial services and markets
4 a state of mind characterized by creativity, curiosity and an openness to new ideas
5 a place where innovation grows
And remember, everything takes longer in a start-up than you thought it would!
* In the spirit of eating our own dogfood, we used cohesiveFT’s Elastic Server toolset to set up our -admittedly very simple – virtual web server in the cloud.
Every executive committee member of a large bank, exchange or insurance company should read Kirk Wylie’s latest post to understand why their cultures are broken and why they so regularly find their organisations blithely running off the edge of a cliff, comfortable in the knowledge that, “well, hey at least we’re all doing it so it must be ok” and safe in the knowledge that their is a big taxpayer airbag (or trampoline?) at the bottom protecting them from any nasty consequences. Of course they are unlikely to – except in the unlikely event that it gets published in one of the traditional echo chamber publications like the FT or the WSJ.*
I’ll resist the temptation to copy/paste the whole post here but please go read it as this excerpt doesn’t give it justice:
Independent, entrepreneurial techies can actually make the biggest impact in the organizations that fight against them the most: they’re the ones that need them the most. Use them as agents for change, challenging assumptions, challenging entrenched attitudes, challenging technical group-think. Otherwise, your worst employees (the ones who can’t really get a better job elsewhere) win, and you as an organization fail.
Kirk is speaking of technologists, but the same thing applies across the organization. But big organizations kill entrepreneurship, actually it’s in their DNA. It’s not news, tall poppies and all that. As I was leaving 16 years of working – mostly happily – in big organizations I spent a lot of time thinking about why this was (and also why I hadn’t noticed it earlier in my career.) The answer to the second question was really because of luck. For 90% of my investment banking career I had the good fortune to be right in the heart of building three new and transformational markets: first the Ecu/Euro market, then the European credit markets and finally the move to ‘electronic’ capital markets. Throughout this part of my career, innovation, entrepreneuralism and independence actually helped me succeed because there was no pre-existing status quo to upset. This only became apparent to me in hindsight.
The answer to the first question is now obvious to me, but it wasn’t always so and really only revealed itself when I left and was able to step back and look at the machine from the outside. The expression ‘well-oiled’ machine says it all. This is the ultimate compliment used to describe a successfully managed organization. So where does non-linear innovation, disruption, questioning fit in a well-oiled machine? It doesn’t. In fact the more ‘well-oiled’ the machine, the less tolerant it is of exceptions. (Which also explains why I operated happily for so long at DrKW!) Switching metaphors, entrepreneurship is seen as a virus in these companies and they produce potent ‘corporate antibodies’ to seek out and subdue any such viral outbreak and they do everything (pace Kirk) to innoculate themselves against them in the first place.
But what is a CEO to do? The ‘well-oiled’ bit is equally important. I am sympathetic to this. (I mean if I was in charge I wouldn’t want too many of me’s running around, that would be chaos.) It’s not an easy question to answer and is made even harder (especially if you are running a public company) by the fact that the visible benefits of the entrepreneurial genes are only realized over time – I’d guess at least 4-5 years at a minimum and sometimes it might take as long as a full business cycle. And yet the average leadership tenure in these organizations is at best at the short end of that, and the compensation and stock market cycles are much shorter. I’ll be frank and say up front, I don’t have an answer but I’ve got a couple ideas I think are worth trying.
The first is to set – from the top – a deliberate human resource policy of seeking to “doping” the organization with a limited and controlled number of people like Kirk. (Doping is the process of adding controlled impurities to a material – for instance a semiconductor, or metallic alloy – to improve it’s useful properties.) This needs to be managed very deliberately, like a program – put a senior HR person in charge of this and manage it: these people will likely have a higher turnover, complain more often, get into trouble, want to change projects and/or departments and so need their own career track. I’m not sure what the correct ratio is, but I would guess it’s on the order of 1-2% of total staff, not necessarily evenly distributed throughout the company. (I knew my Materials Science degree would come in handy one day!)
The second is to create – and then protect institutionally, not personally – a specific department dedicated to exploring ‘white space’. When I say protect institutionally, I mean frame it like a trust so it cannot be undone or hacked by successive waves of management and is insulated from the quarter on quarter, year on year vagaries of the economy and/or the companies results. If you don’t do this, you will inevitably fall victim to the problems Azeem enumerates in his great post on why corporate venture capital (almost always) doesn’t work. Before all the serious, “pragmatic” people out there roll your eyes all at once (if indeed any such types would consider wasting time reading a blog) this doesn’t and shouldn’t need to be a big ask. Again probably on the order of 1-2% (even less for the biggest companies), of resources. The best example in practice I can think of is Xerox PARC, although the irony there is that Xerox didn’t really figure out how to plug PARC’s non-linear thinking and brilliant innovation back into the company (or at least not very well.) But perhaps that is not a bad thing (in proving my point) because I would posit that all other things being equal, Xerox’s share price has been higher (than it otherwise would have been) because they owned this asset. This cheap, deep out-of-the-money call option on the future. As far I as can tell, this is also what BT is trying to do with BT Design led by my friend JP and it is heartening to see that – at least so far – he is being allowed to continue to pursue this vision despite (and hopefully even because of?) the very poor results of the past couple years. I don’t know of any truly analogous initiatives in big finance.
And indeed that is (one of the reasons) we decided to set up Nauiokas Park. Clearly we’re not the whole solution, but we think we can play a key role for big financial institutions: a way to have (some of) their cake and eat it too: by entrusting a relatively small amount of financial capital to us, we think we can create just such a verdant ‘garden of innovation’, allowing them to harvest the fruits of some of the most dynamic entrepreneurs active in their industry, while protecting and nuturing them, away from the noxious antibodies of the corporate organism. Indeed, taking a page out of John Seely Brown, I guess you could describe our mission as seeking to create a vibrant knowledge ecology for finance and markets, and help our stakeholders profit from it:
There’s a fundamental change from finding ways to innovate inside a corporation to leveraging the knowledge ecologies of many little companies in places like Silicon Valley. You find that the shift turns much of the classical R&D into A&D – that is, acquisition and development. Larger companies can buy the research they need and instantly acquire a diverse portfolio of research groups.
I’ll be honest though, it’s not an easy sell. Even for the corporate leaders who ‘get it’ the reflex instinct is to think (sometimes aloud) “makes sense, but we can do that ourselves”. Well, you can’t prove a negative, but we’ve spent a long time inside these same big financial institutions, and our many years of experience led us to conclude that it is bloody hard to do (for all the reasons above and more.) On the bright side, being challenged makes you think harder and forces you to refine and adapt your ideas, ultimately making them better. Hearts and minds. Hearts and minds. Wish us luck.
* Just to be clear, I have nothing against the FT or the WSJ per se, I read them regularly (well WSJ not so much) and think they are solid publications. I’m not suggesting they aren’t important sources of information and opinion – you’d be stupid not to read them if you are in finance – just that, and this is the wonderful thing about the world in 2009 – I think you need to read much more widely and in particular embrace at least a diversity of viewpoints, if not views.
We can make our world smarter.
Intelligence can be infused into how we manufacture and sell… move goods, people and money…
The world is ready for a smarter planet.
Find out how to build it together.
If you would rather avoid wading through the inevitable corporate speak on IBM’s website, a good place to find out about what they are doing and how they are thinking is this recent article “IBM’s Grand Plan to Save the Planet” from Fortune:
In the parlance of the information technology industry, these situations all represent “dumb network” problems. The term sounds pejorative, but it simply means that we don’t truly understand commuter traffic or electricity flow or the inner workings of the cacao genome, and as a result our highways, utility grids, and cash crops are not managed as effectively as they could be.
The good news is that we now have the technology to convert these analog distribution systems into multidirectional “smart” networks. Readily available sensor technologies like RFID chips and digital video can track movements in granular detail. Cheap data storage, powerful analytics software, and abundant computing capacity give us the ability to warehouse and make sense of all that information. With the knowledge we’re gaining, we can remake our world in a more efficient way…
…So Palmisano is encouraging his employees to think even bigger, to scout out any dumb network that can be made smarter. Because, as any self-respecting capitalist knows, in great pain lies dormant profit. “We are looking at huge problems that couldn’t be solved before. We can solve congestion and pollution. We can make the grids more efficient,” he says. “And quite honestly, it creates a big business opportunity.”
By now, you probably understand why this resonated with me; there is significant congruence with the themes explored here and that underpin the foundations of out investment thesis at Nauiokas Park. In particular applying the amazingly powerful computing technologies that exist today to make sense of highly complex systems and networks, and of course to analyze and extract meaning from enormous and growing data sets. (Of course it’s also nice that they seem to have been inspired by our logo when designing their icon for ‘Smarter Money’!) On their website, IBM describes the opportunity they see for Smarter Money for a Smarter Planet:
Money, in other words, has been reduced to zeros and ones. It’s intangible, invisible. It’s information. Which is central both to the problem we face and to its solution.
Without question, the replacement of physical money with electronic money — and the spectrum of financial innovations that have accompanied it — have helped the world’s economy grow and prosper. But our technical and management systems haven’t kept pace. They couldn’t provide warning signals of risk concentrations, over-leveraging or underpricing. Banks could repackage risk and sell it, but they couldn’t value an individual loan in order to unwind the debt when needed. However, the same digitisation that has helped create this challenge is starting to provide the means to solve it. Intelligence is being infused into the way the world works, including our financial systems.
We’re all aware of advances like online banking, but the transformation happening underneath is far more profound.
Unprecedented computing power and advanced analytics can turn oceans of ones and zeros into insights, in realtime. Which means we could potentially have a more transparent, predictable and intelligent financial system for a smarter planet.
While it is very exciting to see a giant like IBM get behind such an intelligent and forward thinking strategy, I must admit I was a little disappointed not to find more substance on the Smarter Planet websites. It’s not that I suspect this is just a nice marketing campaign, rather that the communications department needs to work a bit harder to plug in to the projects and ideas IBM is working on in the trenches so to speak to make this vision a reality. And I think they could do more to engage a wider community through their Smarter Planet Blog and/or other social communication tools. Again as it is now it seems a bit sterile and very much a one-way broadcast, as opposed to a two-way dialog. Indeed one of the things I’ve tried to do – both through this blog and with our company – is to help to build a community of people interested in debating and shaping the future of financial services and markets. I think we have had some success, however I have nothing like the reach or resources of a giant like IBM and so it would be fantastic if they were to join the conversation and amplify it far beyond our modest community.
The Fortune article concludes:
Leadership positions, as the company knows all too well, come and go. But with luck, the tone of “Smarter planet” will remain. The message – that technology can be deployed to greater ends than creating the next fetishized cellphone – is bigger than any single company. And so, too, is Palmisano’s epiphany. He deftly led IBM out of the dotcom doldrums. Perhaps more important, he has revealed a model for monetizing scientific research in a way that benefits humanity.
Sure, not everyone can afford $6 billion a year for R&D. But real innovation rarely comes from big, rich companies. With luck, IBM’s ad campaign, coupled with its blowout 2008, will call scientists and entrepreneurs to arms. They’ll see our archaic global shipping infrastructure, a dilapidated educational system, disappearing honeybees, the fraud on Wall Street, and think, I know how to fix that. And I can make a killing doing it.
A plethora of groups left empty-handed by the Budget are queuing up in Whitehall to lobby the government over the £750m cash pot allocated towards the vaguely defined strategic investment fund.
Well since I don’t know Lord Mandelson and I’m admittedly a neophyte when it comes to navigating public sector bureaucracies, I thought that rather than go stand in line of what is certainly a very longish queue, I’d make our case from this little soapbox in case one of my readers has the Minister’s ear! (That way I’ll have no regrets, you never know until you ask and all that…) So here goes:
Over the next decade and beyond, a tremendous opportunity exists to profit from the emergence of a new paradigm in financial services and markets. Disruptive business models, products and services – enabled by exponential improvements in technology – will fundamentally challenge incumbent firms and market structures. These new approaches will drive a reconfiguration of the financial industry and the structure of many markets within the wider economy.
Nauiokas Park was created in order to take advantage of this opportunity. Marrying patient long-term growth capital with expert operational and strategic advice, we seek to create wealth for all of our stakeholders by anticipating and catalyzing change through investments in entrepreneurs and companies that will lead and shape the new industry paradigm.
Given the importance of the financial services sector to the UK economy, the relative dearth of venture capital focused on supporting and developing innovative start-ups in this sector threatens the long term health and competitiveness of the UK financial industry. The lack of a vibrant ecosystem of entrepreneurs in financial services*, hobbles the forces of competition and creative destruction and will ultimately undermine the long term competitiveness of the UK as a modern 21st century financial centre. Nauiokas Park is ideally positioned to address this and as such is an obvious partner for the UK’s Strategic Investment Fund.
Of course, one would also have to carefully consider what constraints such an investor would bring but at least to begin with, we’d come into any discussions with an open mind.
[Waiting for the phone to ring.]
* I have excluded hedge funds from this definition – not because they are not entrepreneurs, they most certainly are, but because their talents are focused on novel and unique strategies for investing and trading and not on developing new, innovative and disruptive business models or approaches to providing services.
I like to compare large businesses to factory farms. What they are supposed to do is produce things predictably at scale. And surprises aren’t welcome; you just want to mass produce and so the way you manage a factory farm is with techniques to eliminate surprises, eliminate defects, be close to your customer, optimize productivity and efficiency. And then what you want is little gardens or greenhouses, not one big lab but small gardens or greenhouses that are loosely connected to the businesses. So they might be located within a business unit, they might be in a corporate group – it depends on the culture of the company where they should be located. They might be outside of the corporate walls; it may be connections with companies in Silicon Valley. It’s all about nurturing, it’s all about surprises. It’s all about having no goals. It’s all about gaining information and being prepared for the future… Having a vision, having a shared purpose – those people can’t get isolated from what the corporate mission is because then they’re off in left field. But this loose coupling…and you don’t want to manage them the way you manage your day-to-day business.
It’s great to hear someone with Judy’s experience and credibility articulate many of the important ideas on the structural failing of corporate innovation; understanding and mitigating these failings is a key pillar in our business plan and value proposition. And obviously at Nauiokas Park we love her garden metaphor!
* unfortunately McKinsey is another site who doesn’t make it easy to embed the video elsewhere, so a link is the best I could do.
Zoopla.co.uk is a unique property website offering users information and tools to help them make better-informed property decisions. Our aim is to provide the most comprehensive source of residential property market information in the UK to help buyers, sellers, owners and estate agents alike and give them an advantage in the property market…
…We have started by providing FREE value estimates, sold prices and local information as well as letting users add content by editing information and uploading photos. We are the UK’s fastest growing property website and by far the largest and most active property community in the UK, with over a million user contributions to our website in 2008 alone…
…Our value estimates are calculated using a proprietary algorithm (a secret formula) that we have developed by analysing millions of data points relating to property sales and home characteristics throughout the UK. The algorithm works by comparing relationships between home prices, economic trends and property characteristics in given geographic areas. Our estimates are constantly refined, using the most recent data available and a variety of statistical methodologies, in order to provide the most current information on any home.
We are still testing and improving our features and tools and recognise that things aren’t perfect yet…
So what’s so interesting about Zoopla!? Or perhaps more specifically, how does Zoopla fit into Nauiokas Park’s investment universe? Two words: rich data.
In Zoopla, Alex and Simon Kain (co-founder and CTO), have leveraged the web to feed intelligent algorithms that allow them to bootstrap basic, publicly available data, into an increasingly more robust, accurate, rich and granular dataset of UK residential property.
They have built the site in a way that naturally compels visitors to improve and enrich the dataset. This user-generated data is not only very valuable but is itself subject to Metcalfe’s Law and so adds tremendously to the sustainable advantage of the site and their database. This is not trivial. When I was running a Credit Trading business, complex-data quality issues were absolutely critical to running the business efficiently and having effective risk management. We, like other banks, were plagued with bad quality (inconsistent, out-of-date, missing, etc. etc.) data. As a part of the ‘web-ification’ of our business (pre Digital Markets stuff), one of the single most effective things we did was to expose our various data structures to broad populations of users within the bank and allow users to correct and enhance the data on an ad hoc basis. Of course the ‘data priests’ were aghast…but it worked. Really I think it’s just applying a variation of Linus’ Law: “given enough eyeballs, all bugs are shallow.”
But how does a unique, rich, ever-improving, granular, transparent, database of UK property prices fit with Nauiokas Park’s focus on disruptive business models and technologies in financial services and markets? Well, we think Zoopla is ideally positioned to drive and benefit from a fundamental shift in the economic structure underlying the property markets. (This is a theme regular readers will recognise,) ie the shift from a market predicated on information scarcity to one build on information abundance. And you don’t even have to be particularly clever to work out how this is likely to play out, as property is the ith market in a series of [N] markets to have this thrust upon them. I don’t want to give too much away, but for the City types out there just think back to the bond markets of 1990. (For Wall Street types you only have to think back to oh about, 2004…) All other things being equal, as this “phase change” occurs in an industry, value moves away from transactions (matching) to data. (Think Merrill Lynch vs. Bloomberg LP over the past few years as a reasonable pair trade in this vein. Or all investment banks vs. Markit Group…)
Post-2008, even the proverbial man-in-the-street knows there was a data… how would you say… “issue”… when it came to the intersection of residential property and finance… Now I’m not suggesting (not quite anyways) that had Zoopla existed and been well-established globally years ago that the sub-crimeprime crisis would not have occurred (stupid is as stupid does)…but having easy access to the kind of readily “digestable” data available from Zoopla would clearly have been a boon to any responsible mortgage underwriter or securitization professional. In fact, I’d go so far as to say that today were I an institutional investor in UK RMBS, I would require that the underwriters/originators of the pools provide me with a FTP feed of the individual Zoopla data of every property in the pool. And if I were running say a big UK mortgage book and/or originator, I would certainly be interested in having an independent automated external mark-to-market run at least monthly, probably weekly…you get the idea.
And finally, whenever you have good, digital, reproduce-able data, well there my friend you have the makings of a myriad of listed and OTC markets in that underlying. Think Case-Shiller only better.
We are truly excited by the myriad of business opportunities available to Zoopla as it continues to grow and improve its core database and builds products and services on top, but perhaps most exciting is being able to participate once again at the early stages of a company that is set to play a key role in transforming an important and large marketplace, reducing friction and creating an entirely new value paradigm. Even reminds me a little of another UK start-up you might have heard of called Betfair… And we can’t wait to see what Alex and the team will achieve in the next few years and look forward to helping them in any way we can.
So, if you live in the UK, what are you waiting for? Go Zoopla! your home, claim it, enhance the data and presto, you now have effectively a pretty good proxy ticker-tape for (probably) the most important asset you own.
The collapse of major businesses and the failure of governments to stem the tide of bad news around the economy has created an environment rich in opportunity for entrepreneurs, according to business leaders meeting held in London this week.
Speaking ahead of the event, keynote speaker Ed Wray, chairman of Betfair, said: “2009 is going to be a turbulent year but it will provide an opportunity for entrepreneurs to come forward and help take the UK out of recession and into the next period of economic growth.
“The US will be the first out of recession because it has an economy built around mass entrepreneurship – the UK now needs a large slice of that same kind of creativity, innovation and entrepreneurial flair.
“Every great business must be able to survive a downturn and successful businesses forged in the current conditions will be fundamentally far stronger by nature. The pressure cooker conditions of the current economic climate will undoubtedly create some new household names of tomorrow.”
In a nutshell, when we are talking to investors, our number one message is that these tough economic times are exactly the right times to invest in the next generation of businesses and business models. That in times of falling multiples, de-leveraging, uncertain cash-flows and/or discount rates in mature companies and markets, building new businesses is a fundamentally uncorrelated risk. Furthermore, the risks and challenges for new companies and new approaches is almost always on balance lower than it is when the economy is booming: first and foremost, talented people are more available – financially and psychologically – and since this is the most important ingredient for 99% of young companies, this is incredibly important. Secondly, inertia is much easier to overcome, you don’t have the ‘if it’s not broke, don’t fix it’ apathy that can be very difficult (and extremely frustrating) to overcome; if you have a better mouse-trap, people will actually notice and act. Finally, the prevailing sentiment of caution and skepticism means that – and of course this is a generalization but a valid one I believe – everyone, including entrepreneurs, investors, customers, employees – tends to be more focused and realistic. This means that fewer flimsy or “me-too” start-ups are floating around and innovation and disruption are considered in a more sober and analytical context. Less froth.
So I can hear you saying, Sean, c’mon…stop talking your book – really now, start-ups? (private) growth-stage companies? No risk? No way! Some – many? – of these businesses won’t end up working, even if they have clever ideas and people. You can lose most or all of your investment.
Well, of course you can and of course there is risk. There is always risk. I’m just not convinced that it is bigger or harder to navigate or understand than some of the alternatives. Large cap public stocks for instance…had you bought say shares in RBS, just two years ago you would have lost 96% of your money.* Barclays – 86%.HBOS – 94%.Citigroup – 94%. Not to mention the 100%-ers. Blue chips. Yes well, the poker analogy does seem to hold! (* all are approximate numbers, not including dividends, etc.) Equally, not even the most bullish of analyst or executive at any of these firms would have suggested that there was the remotest possibility of a 10x, or even 5x return over the next few years at the prices then prevailing…and understanding the dynamics of what will drive the returns is enormously (exceedingly?) complex. Of course to be fair, you could have changed your mind and sold your shares in any of these companies on any day which is something you are unlikely to be able to do in a small private company. So clearly you can’t have all your eggs in this (illiquid) basket but on the plus side, the illiquidity focuses the mind wonderfully and helps avoid getting caught up in market “noise”.
So how does one mitigate the risks in new, entrepreneurial ventures? Well there are a number of approaches that can work and like anything it’s generally a combination of experience, analysis and hard work. Not very enlightening I know. Our particular approach puts a lot of focus on using our domain knowledge and focusing on one – albeit vast – component of the economy: financial services and markets. Also, we have developed a series of investment themes, built on a number of what we believe to be fundamental medium to long term secular trends that will drive the growth and shape of the industry and the economy in the decade to come. Indeed, these trends and themes are the basis for much of the material here on my blog since I started publishing three years ago. We then look for ideas and companies within these themes that are instrinsically aligned with these trends. Where relevant, using our knowledge of the structure and business models of the mainstream participants, we also look for ideas, companies and technologies that have the potential to fundamentally disrupt an existing market or business model by providing the same product or service in a vastly cheaper and/or improved way. Easy.
Finally the event referred to in the opening quotes is a great new (to me) website / community – entrepreneurcountry.net – developed by Julie Meyer at Ariadne Capital; and for any prospective / budding entrepreneurs out there, here is a great 10 minute video with a few tips on raising capital from Julie herself:
We’ve chosen ‘where innovation grows’ as our tagline at Nauiokas Park. It reflects the ambition we have of creating and tending a ‘garden’ of entrepreneurship and innovation in our sphere of competence (financial services and markets – broadly defined.) But an equally appropriate, however blunt tagline would be:
Going long creativity.
One of the greatest challenges when starting a new venture is articulating concisely what it is exactly that you are setting out to do. There is a natural tension between describing in detail the thesis and proposed path, with all of its details and subtleties, and capturing the essence of the idea in a way that is immediate and will resonate with anyone. Our company is about investing time, capital and ideas in people and firms that bring creativity and innovation to bear on the world of finance and so distilled down to the core our investment strategy is “long creativity”.
Knowledge is about the past; entrepreneurship is about the future. In a crisis the world of expertise pulls the global economy ever deeper into the past, where accountant-economists ruminate on the labyrinthine statistics of leviathan trade gaps, tides of debt and deficits, political bailouts and rebates, regulatory clamps and controls, all propping up the past in the name of progress.
The crucial conflict in every economy, however, goes on. It is not between rich and poor, Main Street and Wall Street, or even government and the private sector. It is between the established system and the new forms of wealth rising up to displace it–all the entrenched knowledge of the past and the insurrections of futuristic enterprise and invention.
And it is this tension between the established and the new, where in particular we hope to add the most value: by intimately understanding the strengths and weaknesses (and fears) of the ‘establishment’, we believe we can help the new, the creative, the diruptive navigate around some of the avoidable pitfalls and wherever possible create alignment of interests.
Ultimately, truly innovative and creative solutions to real problems and challenges will prevail. However, ‘ultimately’ can take a long time; and time has value. Hopefully we can help reduce this time and help our investors, entrepreneurs and ultimately (you need to think big) our society capture more of this time value by accelerating the process. It’s a long term view of course, but you can’t approach the opportunity in any other way if you believe that change happens more slowly (than you expect) in the short term, but (much) more quickly in the long term.
I’ve been on record for many years saying – in effect – that the financial services industry has been structurally “short” (strategic) creativity. (Although I’ve not until now articulated it thus.) It’s a seductive but dangerous position to have: like any short deep out-of-the money option position, you collect (relatively) small premia for a long time and then…you blow-up. We plan to be on the other side of that trade. A hedge you could say…
I’m not sure how many emerging entrepreneurs are amongst my readers, but if you are in the midst of starting up the next great disruptive soon-to-be-huge (don’t worry we’ll give you 2-3 years to get to the huge part…) then perhaps you should be considering throwing your hat in the ring to try to win one of the highly prestigious and extremely valuable invites to seedcamp 2008:
Seedcamp is where Europe’s top young founders can come together in one place.
From securing funding to developing the right network, young entrepreneurs in Europe face challenges in building globally competitive technology businesses. Through the provision of seed capital and a world class network of mentors, we want to provide a catalyst for Europe’s next generation of entrepreneurs.
We’re now ready to accept applications for Seedcamp Week 2008, have opened the gates to our online application system, and are anticipating another great pool of entries. For additional information, and to review the questions prior to applying, you may download our 2008 application guide. We’ve also posted milestones on our key dates page. We encourage you to think through each question carefully and also to apply well before the August 10th deadline. You really don’t want to be trying to submit the application at 11:59pm with 100 other people!
As noted before Seedcamp Week is set for September 15-18 2008 in Central London at UCL.
For those of you that are unaware, seedcamp was launched last year to provide a focal point for the start-up community in Europe. Realizing that one of the key strengths of Silicon Valley is the broad and deep ecosystem supporting start-ups and new ventures – human capital, specialist financial capital, legal and other operational support, etc. – and that all these elements existed in Europe but tended to be geographically dispersed and somewhat ‘hard to find’ for an aspiring entrepreneur, Saul Klein came up with the brilliant idea of creating seedcamp. Last year was the first year, and despite an extremely short gestation period and steep learning curve, the week was extremely successful and enriching for all that attended: investors, mentors, suppliers, and of course entrepreneurs. This year I’m sure it will be even better, building off the lessons learned last September and a year of hard work by Saul and CEO Reshma Sohoni and her team. To give you an idea of what goes on and why attending is actually more important than winning (seedcamp invests in a small number of the start-ups judged ‘best in show’), think of it as an extremely intense 5 days of Entrepreneurship University: if you go in with an open mind (and no fear of sleep deprivation) you’ll come out with an education and network worth (dare I say) more than a year at Wharton or LBS. My company, Nauiokas Park LLP, is proud to be a founding investor in seedcamp alongside some of the giants of European venture capital – and as a start-up ourselves, it’s even more fun to participate – one minute giving advice, the next minute taking notes!
Last year saw a predominance of consumer-oriented internet business ideas, I know one of the hopes for this year is to garner a broader and more heterogeneous group of applicants. Speaking selfishly, I’d love to see one or two killer idea in financial services, markets, data and identity fields.
So what are you waiting for? Dust of that business plan, spruce up that website, and hopefully we’ll see you in September! And to whet your appetite, here is just a tiny taste of the profound advice that surrounds you at seedcamp(!):
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By now, you probably understand why this resonated with me; there is significant congruence with the themes explored here and that underpin the foundations of out investment thesis at ![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_c.png?x-id=854c3cc5-9621-4020-a308-66b6d1ecc635)
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