By joining this group you will also get the opportunity to subscribe to its activity. Join this group
UK Innovation Forum

Articles

« go back

Thoughts From the UKIF Membership

Richard Atkinson - Why needing money is very often the symptom not the disease

Richard is Chief Executive of Second Mile Ltd and is an experienced technology entrepreneur who has led start-ups in the cleantech, automotive, communications, defence and software sectors.  This week he writes:

 

It’s interesting how resistant this one seems to be.  I’ve lost count of how many times I’ve heard speakers say it, books say it, investors say it.   Opportunity starts with customers.   It’s obvious, right?  Yet it’s a perspective that seems to get lost time and again.  The how obscures the why.

 

I recently sat down with a very talented inventor. “We’re all ready” he said.  “We just need money.”  My alarm bells began dutifully to ring; shortage of capital is more often symptom than it is disease.  So was all he needed really money?

 

Well, in the narrow sense that they had a product development plan ready to whirr into action if someone put coins in, yes.  But in business terms, no.

 

As above, a PD plan doth not a business case make.  What was really needed was evidence someone would write cheques for the resulting product.   In this case, the oddity was that he actually had it; he just hadn’t realised its importance.  One potential customer had paid towards the product development, and another had told him he could sell hundreds of a specific variant of his idea.  But this was nowhere in the documents.

 

It’s embarrassingly simple but it bears repeating.  The first plank of a business case is evidence that someone will buy the product.   Crunchy evidence.  Evidence that cost something to give.  That evidence should go front and centre in the investment pitch.  Everything else is detail; the journey finishes with customers, but it also starts with customers.

Comments

Comments

2 people have had something to say so far

Forgetting that opportunity starts with customers; it is so easy to make this obvious mistake. This is especially the case when a projects start from a new technology.

I reviewed a draft of a TSB funding application from a growing SME. It made almost no mention of the market for the product, even though good data was available on key market requirements, price point and volumes along with a known lead customer. All of the focus was on the technical aspects of the project. I hope the quick revision showing the full strength of the project makes it a successful application.

Getting money, be it grant or other investment, needs a well-balanced and presented business case. This is why even very early stage start-up companies need a good balance of technical and commercial skills. This can be a particular problem for University spin-outs, which are often technology lead. It can be really difficult for them to get good marketing input, a lead customer and put together a creditable business case.
Posted on 21/04/12 16:54.
Andrew, very interesting that your experience so closely echoes mine.

Richard
Posted on 09/05/12 14:33 in reply to Andrew Larkins.

Most read articles

Thoughts From the UKIF Membership

David Coates - Open Innovation David is a nationally recognised figure in innovation and...

Thoughts From the UKIF Membership

Richard Atkinson - Risk Capital:  Risky for whom?   Richard is Chief...

Thoughts From the UKIF Membership

Richard Atkinson - Why needing money is very often the symptom not the disease ...