Hit the accelerator

January 2015

London skylineOne of the ways in which companies can grow is to join an accelerator. Toby Kress runs the London Accelerator. He spoke to Henry Tucker MBCS about it.

Accelerator London is the London Met University’s business incubator space. It’s a real-world ecosystem of startup companies, growing businesses that connect to the university. We have about 30 startups, mostly in the technology space, anywhere from a team of founders up to about 30 people.

Around that we run student enterprise programmes so that the next generation of founders and young entrepreneurs can come and connect with the founders in the building, get the skills, knowledge and confidence, so that when they graduate they can start their own businesses.

What services do you provide, why do companies come to you instead of going out on their own?
There are lots of options now for startup companies, technology companies, growing companies, especially in London and in TechCity where Accelerator is based. They range from different verticals, so you have accelerators and incubators that help one particular industry, that could be healthcare or finance and then there are different accelerators that help companies at different stages of growth.

We specialise in helping companies that are post-revenue or seed round funding, growing to a round A of investment. Usually when they join us they are a small team and when they leave us they are 10-20 people and they have raised over £1 million.

What those companies get when they join the Accelerator is a fantastic office space right in the heart of TechCity, but more than that they get a community. We select the companies that come into the accelerator very carefully to be part of this ecosystem.

That peer-to-peer support is incredibly valuable when you are a growing company because you are not going through this alone and you’re not going through unique experiences. There are companies that could be six months or a year ahead of you, that can be really valuable in the decisions and mistakes they’ve made and feeding that back into the young companies that come into the accelerator.

So that’s part of the value we provide. We also have mentorship and connections to industry and finance, so it is a general support package for companies to take some of that admin and strain off them and allow them to focus on growing their business, which is what they are great at.

How do you judge the companies that come to you?
There are three main areas that we look at when we get applicants. One is the market for their idea, there has to be demand for what they are looking to supply. Second is the idea and the industry space that they are in and third it’s the team.

We get lots and many of them don’t make the interview stage. Those that we believe in, we get them in for an interview, one-on-one, and we actually introduce them to some of the startups in the building too because we believe it’s that relationship that’s really important too. The ones that we think have potential, we bring them in and help them grow from one to two years.

So what sort of services do the mentors provide?
Mentors provide a whole range of support and advice for the companies in here and we have a range of mentors. Half of the mentors are founders themselves, people who have been through this process themselves and they can feed back some of that learning.

We have mentorship that happens in the building, we have the startup companies that are in here who will mentor the students from London Met University that come in here and then we have outside mentors who have had successful exits from companies who can come back and feed in their knowledge to the companies in the space.

Now that can take a couple of forms, our group of mentors can come in and have an area of expertise that you can tap into as and when you need it, or you can start a one-on-one relationship with a mentor and have someone to go back to, a kind of sounding board, as you progress your company.

Is it compulsory or is it voluntary?
It is completely voluntary for the companies who are in here, but we do select companies that do want to engage with us. There is no point coming to a business incubator if you just want to be on your own and grow the business yourself, it’s very much about connecting with the community and connecting with the support structure. We never really get people who turn us down because it does add value, but it is completely optional for them.

What is it about the silicon roundabout area that has made it such a hub for the UK’s entrepreneurial tech space?
TechCity is an interesting geographical space, it has an interesting history. Shoreditch has been the home of creativity and the arts scene for decades it’s got that vitality about the area. That brings good bars, good restaurants, good nightlife, a good social scene. It is also right on the doorstep of the city, so it has access to finance, that kind of connection between industry and creativity and over the last five to ten years it has just been incredible to see that kind of technology sector bloom in this area for those reasons because of the natural resources here.

As that has grown organically, obviously initiatives like TechCity have come in and put an umbrella over it and shone a light on it internationally, which means London is now attracting the best talents and the most investment from around the world.

TechCity and London is now the third largest tech hub in the world after New York and San Francisco. It’s actually the fastest growing and we are really excited to be right in the middle of it and feel that the location is another added bonus to the company.

The TechCity initiative is a government led one, do you think that it’s a good idea? Do you think there should be any government intervention in things like this?
I think it is important to say that this was happening anyway. It isn’t a government driven exercise, it is an organic group of organisations who have come together and seen a power in being in that one space, going to the same bars, bumping into people and there is a real value in that for organisations.

I think what something like TechCity has done is to amplify that. It has added value in terms of showing that message internationally and help to bring in more talent from overseas. The government has had good initiatives, things like the entrepreneurship visa allowing more people into the country who want to make this their life.

Also changes to the tax system to make it easier for people to invest in startups. We all know it is an incredibly risky area, but lots of people are interested and that makes it very exciting. Initiatives like SCIS and EIS, what the government has done is to take away some of that risk and allowed a whole new level of angel investor and individual investors to come in and that has helped investment at that early seed stage.

Is there more that the government could do?
I don’t think it should be government led. I think what the government is doing with TechCity is good. Such as going out and getting feedback from organisations and feeding that back into No.10 and if they can make changes to policies that allow it to take away red tape and allow startups to do what they do, I think that is how government could come in to play a role.

What are your thoughts about the UK as a whole in terms of innovation and entrepreneurship?
There are obviously hubs outside of London. Places like Cambridge have amazing technology and history, they have the university and the skills and knowledge there to make that work. They pop up all over the country and that’s to be encouraged for the whole nation.

I think what makes places like London, New York, San Francisco, Berlin and a few other places in the world special, is that scalability. When you start to go beyond what’s possible in smaller cities it starts getting really exciting. London is only getting to that level now where we can create billion dollar companies and we have had two $2 billion valuations in the last year and before that, that didn’t really exist in London.

It is hard to get to that scale in smaller cities, even if they start outside they will often move to London or San Francisco. Certainly the more areas of innovation that we have the better, but there are always going to be clusters and they will be around the major cities.

Most of your startups are technology based, is that for a particular reason or is it because technology is booming at the moment?
There are lots of reasons why people are starting companies at the moment, that trend is on an upward curve. One of them is around technology making it easier to scale and cheaper and faster to start a company. It takes a lot of the risk out of you as an entrepreneur to do this.

There isn’t really a downside, besides you spending two years of your life on an idea that doesn’t work. Even if you do that, the experience that you’ve been through, the people that you’ve met and the skills that you have gained will put you in a better position than you were before.

That is only really possible using technology as your base, so that is why so many of these exciting scalable companies are based around technology innovations. What we do here, we are not limited to technology companies, especially within our student programme.

I mentioned that Accelerator London is London Met University’s business accelerator and we have a whole range of student enterprise and entrepreneur programmes for people coming through London Met and when they graduate starting their own businesses.

Many of those will come from the CAS, the school of architecture and design, so they will be designers, makers and people who will have a business, anything from one person being self-employed or a sole trader, up to an agency with a new creative take on a scalable business. We give them that early level support across that whole range.

Once they enter the main accelerator programme having that peer network where people are going through a similar journey is valuable, which is why we get companies together that have something in common. Often that is with a use of technology to scale their businesses.

Where do you see the accelerator going next?
The industry is changing so quickly that it’s hard to tell. There has been a big shift in terms of the support structure for startups in the last few years, terms like incubator and accelerator are now common language.

They are continually being adapted, a traditional accelerator programme is 12-14 weeks of support and then you are pushed out the other end.

That’s where someone like us steps in and helps those companies. We’ve seen a gap in terms of support after that seed round. There is a lot of support at that bottom layer, but that next step is just as tricky. We step in and see our role in the ecosystem.

Video interviews
Accelerator London - Watch our video interviews with accelerator head, Toby Kress and three of the startups -  James Critchley, Cloud IQ, Quinn Koike, EthicalBox and Tom Jeffs, Lucidica.

 
Image: iStock/519026565

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