The Startup Incubator Model is broken !
RBS Group is more than a highstreet bank LSE: RBS wiki despite not so long ago (2009) being the worlds largest company by both assets and liability measures it is now 81% owned by UK Gov.
The UKGov is not a hotbead of innovation - The Speaker in the Lords still sits on a woolsack to celebrate their illustrious past.
Experienced engineers often say - If it ain't broke don't fix it!
however with RBS weighing in at a mere £20B market capitalisation just five tumultuous years later, a bit of fixing may be in order.
They seem to be taking change seriously.
The biggest takeaway for me (beyond enjoying a great session) was that it crystallized some thoughts I have been having in terms of broken mentoring and Incubator models over the past year. In fact it made them obvious.
I had seen what i thought was a serious problem in B2B innovation that will not be solved without disruption. However the disruption came from the last place I anticipated.
What am I getting at?
|A room full of "Mature" individuals|
Look at the people in the room
Now consider them as tech. founders and startup evangelists
- what do you notice ?
|Hint - How old are freshly hatched chicks?|
People talk of business evangelism so when Paul said to Timothy:
"Let no man despise thy youth; but be thou an example of the believers, in word, in conversation, in charity, in spirit, in faith, in purity."
He didn't mean us ! :)
In contrast with the normal startup scene gathering at a Seedcamp mentoring session or rockstart accelerator these people (myself included and with some notable exceptions) are getting pretty bloody old !
Why is this ? My answer is not a rant, more an argument to "choose horses to suit courses"
There are two sides to the coin.
The B2C innovation market has been driven by the social media startup (round up the usual suspects), introduced some excellent taxi-hailing apps, provided the means to find a place to lay your head overnight and serves big data.
These requisite skills are largely driven by the worldly experience as may be gained by a schoolgirl or boy or college graduate, fired by the enthusiasm of youth, and with all the passion of a toddler who is prepared to run full tilt at a table enough times to realise that such things hurt !
While "getting on an aeroplane to attend a business meeting" soon loses its charm. In the mould of Silicon Valley they rightly refuse to fear failure (there are no lasting consequences), they are as good as their pitch (but not necessarily as their word), and are prepared to move a few thousand miles or kilometers from loved ones for a crack at hatching a scheme in an incubator. They deserve the chance.
For every few dozen eggs that are incubated a few emerge and one or two may become unicorns (mixin: metaphors from the investor perspective). There is a lot of "follow" investment chasing these markets, so either an investor has great deal-flow because he or she contributes or they become a useless commodity overhead which could be replaced by a more efficient investment market index. (Sorry if the truth hurts)
The flip-side is still in the air but
RBS just reminted the coin!
YES RBS have failed - they are a banking institution after all (and I too admit to some feelings of mild schadenfreude). They also stand to be disrupted (bitcoin etc).
But somehow they have the maturity to survive (founded 1727) - Did you ever notice that banking and education (who teach the markets) are amongst the most conservative and successful long term organisations? These are not the lean, the fail-fast, the "can I have a do-over?" market. They are the proven, the battle-scarred and weather-beaten, the worldly wise survivors of great conflicts.
And they are being told to innovate,
by the markets and by the educational institutions.
Companies are even forming to promulgate such aims (yesterday Market Gravity did a great job).
However, when you consider energy and waste, you are talking timeless human needs (rules do not change, experience is invaluable) that applied equally to your average cave-girl or cave-man (who probably looked a lot less pretty than Raquel Welsh and perhaps more like Oetzi who emerged from a Glacier in the Alps a few years back
|Raquel - not so much !|
|Well dressed, a great set of tools -|
looked like he knew a thing or two.
Neither sustainability nor survival
is a beauty contest
They don't have such wide appeal because engineering is like this - unforgiving!
Many die but some survive. Like me they may be opinionated, will not go live in a commune on ramen noodles for three months, may know far less about social media than they do about high voltage powerlines, waste water treatment, emerging materials science or in our case diagnosing energy waste. But even at 40-50 years old they still have passion , they are in the game, their word is proven, and their experience tested. These are friends worth having in a crisis, they have real networks in real life.
So, while VCs and even the odd Metropolis funds yet another round of cookie cutter college apps, or host another clutch of eggs in their incubators, I think RBS is in effect saying - "Hold on a minute !"
"Don't kill the Golden Goose, why not teach these old dogs some new tricks, and maybe, just maybe some of these bloody ugly ducklings will emerge as beautiful".
One key to B2B success is understanding problems with deep domain knowledge, experience in surviving complex environments, and getting to know your friends.
RBS has a huge property portfolio and some fascinating sustainability challenges.
It isn't an incubator and the set up looks more like a gladiators arena, but the great thing is I bet there will emerge more than one winner !
Exhibiting timeless wisdom RBS just invited an industry to a great feast. LK 14 15,24. explains clearly who the winners and losers will be. You only need to show up - but do you have fields to attend or somewhere else to be ?