venturelab twente softlanding and new business incubation

The Entrepreneurial University

Global Perspective European Business Incubation

ProgramsBy

Aard Groen and Jaap van TilburgDutch Institute for Knowledge Intensive

EntrepreneurshipNikos - University of Twente

The Netherlands

NBIA - Kansas - 22 April 2009


Presenters background

Aard Groen• Professor knowledge intensive

entrepreneurship• Director of NikosJaap van Tilburg• Entrepreneur• Senior consultant and CEO incubators at Nikos


Presentation

1. Technology-oriented Business Incubators in Europe, trends and challenges.

2. Cases Twente University 3. VentureLab Twente, Your Gateway to success

in Europe4. Q&A5. Links


EU Survey’s on Incubators (nr=source)

1. EU Survey in 2002: Benchmarking of Business Incubators– Download:http://ec.europa.eu/enterprise/

entrepreneurship/support_measures/incubators/index.htm

2. Worldbank Survey in 2006: Incunomics– Download:http://papers.ssrn.com/sol3/papers.cfm?

abstract_id=1340211

3. Nensi project in 2008: Nensi Guide– Download:http://www.nensi.eu/a_data/

nensiGuide2008.pdf

4. National survey’s5. Own experience last 30 years


Definition Business Incubator (1)

an organisation that accelerates and systematises the process of creating successful enterprisesby providing them with a comprehensive and

integrated range of support, including: incubator space, business support services,

and clustering and network opportunities


Incubator business support instruments (3)

1. Premises2. Coaching/Mentoring3. Initial competence diagnosis4. Business plan support5. Training6. (Test)use equipment7. 1stline, generic support8. External professional advice and consultancy9. Access to seed and venture capital10.Threshold lowering, support budget


Distribution of 936 BIs accross the EU (2)


Figures and trends

• Rapid growth 48% < 5 years old (2) – especially in Middle and Eastern Europe

• 5,500+ people work in Europe’s business incubators, offering services to around 24,000 firms (2)

• Not for profit 70% (2)• Focus on innovative firms 58% or a niche 29% (2)• Strong diversity

– In key dimensions like internal organization and services (2)

– In neighboring and relatively similar economies (2).


Figures (n=170) (% respondents)(2)

Year BIs began operations • 1981-1985 6%• 1986-1990 8%• 1991-1995 14%• 1996-2000 25%• 2001-2005 44%• 2005- 4%

Tenant firms currently in BIs• 1-10 27%• 11-20 31%• 21-30 16%• 31-40 8%• 41-50 6%• 51-60 5%• 61- 8%


More figures (n=170) (% respondents)(2)

Sources of sponsorship• Publicly sponsored 48%• Privately sponsored 12%• Mixed sponsorship 38%

Financial services offered by BIs• Assistance in financial planning 79%• Referrals to a network of investors 76%• Non-reimbursable grants paid from public funds 41%• Loans tied to added-value business services 12%• Seed capital in return for equity 23%


Challenges

1. Concepts for Middle and Eastern Europe (5)1. Start-up training and Businessplan

competition in SE Europe2. New dynamics in Western Europe

1. Develop virtual incubation services (1)2. Make management services profitable (2)3. Clustering and networking of incubators (5)4. Diversify and innovate incubators (5)


Q&A on Incubation in Europe


Incubator programs Twente University

• Geography• Regional profiles• Incubator programmes• VentureLab Twente


Twente – The NetherlandsBusiness & Sciencepark Enschede

University

Germany


Business & Sciencepark Enschede

• 40 hectares• 250 companies• www.sciencepark.nl


Profiles Twente

• Region Twente: Former textile, 500.000 inhabitants

• Largest city is Enschede: 155.000 inhabitants• University of Twente: Entrepreneurial research

university, founded in 1961. Staff: 2.700, Students: 8.000 www.utwente.nl

• NIKOS: The Dutch Institute on Knowledge Intensive Entrepreneurship with a focus on “Entrepreneurship in Networks”. Staff: 50 www.utwente.nl/nikos

• Start incubator programs: 1984


KEB / VentureLab

Twente incubator schemes

Money

Networks

Tasks and skills

Strategy

Phase

Role (4S)

1. Opportunityrecognition

2. Opportunitydevelopment

3.Opportunityexploitation

TOP scheme

BTC incubator / Mesa+ incubator / High Tech Factory


VentureLab

Twente University Incubator schemes

1980 - 1989 1990 - 1999 2010+

TOP scheme

Mesa+ incubator

2000 - 2009

BTC incubator …. enlargement

KEB …. franchise

High Tech Factory


BTC-Twente incubator (since 1983)


BTC figures

• Number 1 choice in Europe by Control Data Corp. • Founded in 1981, operational begin 1983• Net space 4,000 sqm• In 26 year 450 tenants and 4,000 new jobs• Average stay: 3,5 years• Educational background : 85% university• Business failure: 4%• BTC runs now also 3 other incubator buildings• New: Enlargement (+ 10,000 sqm) & Management

Services)• More: www.btc-twente.nl


TOP program (since 1983)

• Support in business plan and finding university link

• University mentor (synergy!)• Use of University facilities, laboratories etc.• Business mentor• Use of University network and image• Support by TOP committee• Interest free loan of € 20.000 (increased since

2006)

• www.utwente.nl/top


“Spin-off entrepreneur is excellent human bridge between university and business

community”


Number of Top companies 1976–2007

0

100

200

300

400

500

600

700

1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006

Without TOP TOP


TOP Impact on Research Groups

• Development of new expertise center / facilities• Continuation of existing facilities• Income from use of equipment and expertise• Joint R&D projects• Student & graduate positions• Additional expertise/sparring partners on arm’s

length• Inspired by network of entrepreneurs and sme’s• Test and external application of knowledge in market• New ideas for research


Mesa+ incubator / High Tech Factory

1. 450 Researchers in nanotechnology2. Turnover € 35 mjn (55% in competion from external

sources)3. Incubator cleanroom facilities: Ca. 30 spin-off companies 4. Planning High Tech Factory for joint production facility

• 40 Companies• Start 2010

5. Mesa+ international ventures6. http://www.mesaplus.utwente.nl/Starting_entrepreneurs


KEB – (since 2003)

• Groups of 50-60 participants (6x) + individual participants

• In one location of 1,000 m2• For 5-6 month fulltime• Start without business idea• Facilities, training, coaching, networking• Realized KEB projects: 7 in 3 locations• Rural -> City -> International• (Inter)national expansion via franchise


KEB project - Results

• Participants: 490 (first 5 groups)• 190 (40%) started own company • 73 (15%) are still preparing start• 39 (8%) stopped company• 78 (16%) did not start company• 21% unknown• Employment provided: 389

• 195 entrepreneurs• 62 partners• 132 employees


Venture Lab Twente: Realising ambitions with High Tech

Prof. Dr. Aard J. GroenProfessor of Innovative Entrepreneurship


A story: High tech start up (University Spin Off)

• High tech start up • Patented technology• Strategic alliance with a large company who could

enter this technology in a mass-production market, very high potential for high growth of value creation.

• Demands from the firm to work 1-1,5 year on product development in stead of technology research, but….

• Owner makes a sail trip around the world• Other applications with time to market of >5 year

are more interesting (as technology research)• Fails to develop the mass-production product…...


Growth?

• On average 10 fte / spin offSome larger examples:• PNO-consultants 500 employees (subsidy advice)• Booking.com (500 empl.) Sold to Priceline.com (Nasdaq)• Switch 100 employees (IT services)• C2V; Lionix; Micronit 40-60 employees (Nano-tech based)

• Fast technology top 50 of Deloitte: Virtu secure (recently sold to equinix (Nasdaq) Xsens (sensors for place and movement) Topicus; (IT in education) Micronit; (lab-on-chip) ;


Basic research question:

• How come that technobased firms are developing so differently? How to explain differences in growth?What can be done to support firms to realize their potential?

• Theoretical perspectives: drawing onentrepreneurship process social system theorytechnology dynamics

searching multi-level, multi-dimensional actor oriented perspective to be able to describe, explain and design entrepreneurial processes in networks.


The entrepreneurial process

Opportunity recognition

Opportunity development

Value creation

Entrepreneur

Network

Imagination


Evolvingsociotechnicallandscapes

Novel“configurationsthat work”

A patchworkof regimes

3

2

1

[1 ] N ove lty, shaped by ex is ting reg im e[2 ] E volves, is taken up , m ay m od ify reg im e[3 ] Landscape is transform ed


Social system model (4S)a.o. Groen et al, 2008

ScaleEconomic adaptation leading to efficient production ECONOMIC CAPITAL

Social networking SOCIAL CAPITAL

Skills & valuesPattern maintenance based on culture, knowledge, rules etc. CULTURAL CAPITAL

ScopeGoal attainment using strategies, power STRATEGIC CAPITAL

Social networking SOCIAL CAPITAL

Businessactor

Academic actor

Skills & valuesPattern maintenance based on culture, knowledge, rules etc. CULTURAL CAPITAL

ScopeGoal attainment using strategies, power STRATEGIC CAP.

Scale Economic adaptation leading to efficient production ECONOMIC CAPITAL

Network

Integration of scope, skill, scale in social interaction


4 S Business support Model Nikos

Entrepreneur and

Enterprise

Scope: From Idea

to Strategy

SocialNetwork-Contacts

Skills:Patterns of

Organisation

Scale of Economy:Financial means

• Ideas• Assessing the opportunity • Strategic processes• Business plan

• Culture, values, norms• Facilities• Personel arrangements

& Systems • Knowledge

Contacts with:• Clients• Suppliers• Experts• Colleagues• support agents

• Own capital • Bridging development

period• Financing investments

- Seed & Venture Capital- Loans


Entrepreneur and

Enterprise

Not market oriented

Scope: from idea

to Strategy


Skills:Patterns of

Organisation

Scale: Economy:Financial means


• Culture, values, norms• Facilities• Personelarrangements





- Venture Capital- Loans

Mono-disciplinaryteams (tech)Management skills

Strategic drifttechnology/marketSmall ambition

“Death valley”Long time to marketHigh costs-high riskLittle VC available

Academic networks too little market networksBalancing weak-strong ties

Reasons for small growth


1. Entrepreneur high ambition

2. Product and market with large (world) potential

3. Multi disciplinary entrepreneurial team from beginning

4. Sufficient venture capital in early phase

Four success factors for growth*(Leuven, Stanford, Cambridge)

* Martijn Enter; Identifying factors that contribute to high-groth knowledge intensive ventures; Nikos , February 2006


Support instruments

Entrepreneur and

Enterprise

Coaching, Training

& Courses

Scope: from idea

to Strategy


Skills:Patterns of

Organisation









Knowledge & SpaceOrganisationalsupport

Strategic Coach

Soft loansParticipation

ContactsBrokerage


VA

LU

EC

RE

AT

ION

Training programFollows the value creation process

in relation to 4S model and 4 teamroles

Opportunity recognition

Opportunity preparation

Opportunity exploitation

CTO/COOCulture Capital

CFO

Economic Capital

CEO

Strategic Capital

CMOSocial Capital


What is VentureLab Twente? – the Design


Inspirations for designing VentureLab

KEB for Group Approach• Group based: n=60, 4-6 months, full time – 3

days/week (women from 15% to 50%)• Intensive training, ideas brought in, process of

enterprise concept development

TOP for University Interaction• How to connect with academics• Use of university facilities


Advisors

Technology

Screening Process

Research institutes

/ firms

Participants

100 Interested Individuals

Screening Process

TOP-Teams

Training Program

Lecture

Project ‘normal’

Company

Staff & Entrepreneurs

Instructors

e.g. TOP

Follow up (support)

Network (eg. VC’s)

Design Venturelab Twente

Selection &

Matching

High AmbitionCompany

60 selected Individuals

TIMELINEMonth 1 Month 4-12Month 2 Month 4-6Month 3


Entrepreneur and

Enterprise

Entrepreneurial

and market orientation

Scope: from idea

to Strategy


Skills:Patterns of

Organisation









COO / CTOBalanced teamsoperations organized, Q-systems in place &product offering

CEOClear Growth ambitionStrategic focus• developed T-M-O• strategic process/network• path of value creation/exit

CFOManaging cash flow roundsof investmentFFFVenture capital(Formal-informal investors)

CMOStrong connections with market (suppliers-clients)Managing strong & weak ties(in business & academic world)

Characteristics of VentureLab Twente Ventures


Target Groups VentureLab Twente

1. Graduates and PhD’s who want to become entrepreneur

2. Serial entrepreneurs in high tech3. SME’s new business developers4. Large firm new business developers5. Soft landing incoming entrepreneurs from

abroad


High Tech / High potential Group based selection process

1. Self selection + continuous assessment 2. Intensive training, general ideas brought in,

process of enterprise concept development3. Selection of high potential T-M-F teams

matched with high potential business concepts

4. Small group/personal coaching with high level business coaches

5. Network with international VC-funds, CTO’s, universities, industrial partners …

6. Office space 1000m2 and equipment/facilities


Expected Results

• Groups of 20-40 persons• 15 firms based on own idea development of

participants (after 5 years 12 firms, employment >120)

• 2-3 firms based on high potential ideas matched with teams based on selection during program (after 5 years, 1-2 firms, employment >250)

• 3 groups per year, 3 years employment after 8 year >3000


VentureLab Twente - summary

1. (Inter)national groups of participants2. Potential high-tech entrepreneurs3. Ambition for high growth4. Link to research and business community5. Multi disciplinary entrepreneurial teams6. Support by training, experts, coaches,

CEO’s, VC’s etc.


Further information

• www.utwente.nl/nikos• www.utwente.nl/top• www.venturelabtwente.com • www.kansrijkeigenbaas.nl • www.kennispark.nl• www.sciencepark.nl• www.btc-twente.nl • www.tpoint.eu • www.epis.org.uk• www.nensi.eu• www.mesaplus.utwente.nl/starting_entrepreneurs


Thank you for your attention,

time for Q&A

Aard Groen [email protected] Jaap van Tilburg [email protected]

Your gateway to success in Europe!

venturelab twente softlanding and new business incubation

Technology

incubator btc incubator

business support services

definition business

btctwente incubator

university business

university facilities

business community

incubator space