Mix it up

Career

Keith acknowledges that he was actually a big company guy.  Back when he completed his MBA people worked for big companies.  So did Keith.  That is, until he became a consultant.  It was in the 90s that Keith first made a name for himself; helping big companies to restructure and cut costs.  He didn’t realise it at the time but looking back now he thinks he and his partners were being entrepreneurial.  But instead of creating start-ups, they were trying to build big companies.  And it was fun too.  

With this valuable experience under his belt, Keith set up a small venture capital fund and started teaching business growth at London Business School (LBS).  Ten years later Keith is still at the business school and has emerged has one of the UK’s foremost experts on entrepreneurship.

“Over the years I became more involved in building the entrepreneurship capabilities at the school, teaching and also leading the angel investor network.  It’s been a very interesting time since we’ve seen a major shift toward entrepreneurship in this country.  The government has become very committed to stimulating entrepreneurship and on our side we’ve been forging links with University College London, a huge research university.   

Entrepreneurship in the UK

Things have clearly changed since the 1990s. At LBS, for example, we only taught one or two entrepreneurial courses back then.  Most students were pursuing careers in banking and consulting.  But the tech boom was the trigger; that stimulated many young people to look at entrepreneurship.  Today we offer 8-10 courses in entrepreneurship and they’re extremely popular.  Last year we overtook all other departments except finance in the amount of teaching we do.  That’s just how the business school has changed but it reflects what goes on out there.  

I think the recognition dawned among policy makers that big companies were actually destroying jobs in the 1990s, due to all their consolidation and restructuring.  People began to question the old idea of protecting national champions.  The labour government first took the initiative to begin promoting high-growth entrepreneurship.

A lot has happened since then.  And it isn’t focused solely on the start up phase.  Support mechanisms like R&D tax credits, lower tax rates on selling a business, etc—these have an impact across the entrepreneurial life cycle.  Also, numerous role models have emerged.  Richard Branson is the well-know example but there’s so many more.  

I think the UK economy has definitely moved toward entrepreneurship. The genie is out of the bottle.  People are entering the workforce with entrepreneurial ideas.  Most still begin their careers at corporations but we find them coming back to the angel club later with a clever idea.  

London really has become a great place to start a business.  For many reasons, but also because it has that symbiosis: so many large corporations are headquartered here.  That’s great for entrepreneurs who look to develop innovative services for corporations.

The University and Entrepreneurship

Symbiosis also extends to the university context.  London Business School is a pretty unique environment.  It is very business-orientated and attracts high flyers who pay a lot of money to attend our courses.  It’s easy to find entrepreneurs here.  But compare this to University College London (UCL)—that’s like looking for a needle in a haystack.  UCL is a huge university with very strong research credentials in numerous fields, but it turns out that a small proportion of academics really have an interest in creating companies.  It really is quite difficult to replicate the conditions that exist at places like Stanford, a place where much of the entrepreneurial activity is driven by the engineering and science departments, and is located right in the middle of Silicon Valley.

What we’ve done is create courses that bridge both institutions.   For example, our programme ‘new technology ventures’ is 50% engineers/science students from UCL and 50% MBA students from LBS.  That’s turning out to be a very powerful course, a natural laboratory for developing and testing new ideas.  Also, there’s a lot of grassroots stuff going on—the alumni of these courses keep in contact and end up collaborating in ventures later on.  But it also works top down.  For example, the UCL’s head of medicine attended one of our courses.  That equipped him to encourage entrepreneurship at UCL.  Remember, the point is to stimulate high-growth businesses and they’re often tech orientated.  This is why it is so important to bring management and science together—at the level of education.

We’re trying to do the same with the creative disciplines.  Since the success of the technology linkup we’re now forming links with the University of the Arts London (UAL), one of London’s main arts & design institutions.  Again the point is to set up a course attended 50-50 by MBAs and creatives.  I’m a great believer in mixing things up, experimenting with things, until they work.

What about the incubator?

All this is somewhat in contrast with the incubator approach.  We did try it and we did have some interesting start-ups pass through.  But eventually we realised that we were simply in the property business.  There is a shortage of cheap and flexible office space in London—we provided that, but is that our role, as a university?  Also, the inhabitants weren’t getting the synergies that we hoped they would—they weren’t really learning anything from their fellow tenants.  The point is that the private sector or city administrations are probably better equipped than we are to offer these types of services.

Tips for entrepreneurs

There’s so many, but let’s try three.  Firstly, I’d say it’s all about people.  It is so important to think about your founding team.  All the evidence shows that success is dependent on building an effective team, which is really difficult for entrepreneurs, because at the start you can’t pay much.  Thus, it’s probably best to take your time, to think carefully about who you want in your team.  Doing it alone is really hard.

Secondly, make effort to de-risk your venture.  Starting entrepreneurs don’t have time or money, with the result that they don’t do the necessary research upfront.   I see so many propositions where the entrepreneurs are blind to reasonably obvious risks.  This is a key focus of our courses: we emphasise feasibility studies.  

Thirdly, if you have entrepreneurial ambitions, make sure you start building your social capital early on.  Work on your network.  Most people from the corporate world have small networks—often it extends only to their colleagues.  Entrepreneurs have much bigger networks and hence can start making calls to the right people much quicker.