The TSB and baby elephants…
Well, there’s something that doesn’t happen to me every day – a fairly impromptu 1-hour meeting in a Starbucks on Piccadilly with David Bott, Director of Innovation Programmes at the Technology Strategy Board. Despite having gained his business experience at ICI and National Starch (which you might think would be enough to suck the marrow out of anyone’s bones), he turned out to actually be an interesting and surprisingly passionate guy. Incidentally, he claims that his blood boils if you ever call him the B-word (‘bureaucrat‘), so probably best avoid that if you happen to meet him, OK?
First off, he gave me a whistlestop tour of the secret political history of the TSB – basically, it started off as a fairly small advisory board to the old DTI (hence its name), but then got fashionably spun out into a Swindon-based quango, at which point most of the civil servants jumped ship. (What’s wrong with Swindon? I fondly remember the map of it inside XTC’s second album “Go 2“.) Anyway, when the music stopped, the TSB business people were left holding
the baby a portfolio full of ‘tech fairy godmother’-esque give-away-money-for-collaboration-but-glacially-slowly programmes to administer: an unwitting reverse takeover, if you like. Yes, things were definitely more ‘calendar’ than ‘timetable’ back then, but they’ve generally managed to tighten The Process up so that a typical grant application is faster than your pet elephant’s pregnancy, which is without doubt A Good Thing (the improvement, I mean, not the pregnancy).
Continuing its kaizen, the TSB’s next stretch targets are clearly (a) aiming more at startups than established SMEs, and (b) trying to get to final grant insanely fast, both trends well exemplified in the recently-
mislaunched Tech City Launchpad1 competition. But, of course, now that Round 1 of that is over (and my somewhat outrageous pitch got through successfully, thanks for asking), his group has embarked on an as-yet-not-quite-fully-focussed ‘hearts and minds’ short-term offensive aimed largely at business angels – for without angelic buy-in, the TSB’s promissory note Tech City prizes would amount to basically zero. As part of all that, Monsieur Bott will be talking at the BBAA’s big yearly shindig / summit tomorrow, so it’ll be interesting to see what reaction he gets there.
What next? Well, at this point in the blog ‘meta-script’, I’m supposed to run the gauntlet a bit: be a bit vituperative, prick a few bubbles, Tell It Like It Really Is – you know, the whole ‘Bite The Hand’ pattern. Or else I’m supposed to roll over in gratitude and relief at getting through the first round. But back in the real world, things are much more complicated than either of those comedy blogging extrema. I’m sure you can guess what I’d like the TSB to achieve at the angel pitch day in August: a barnstormer of an event, a televised tech evangelical hoedown, crackling with genuine investment fervour and (why not say it?) people signing standard contracts and writing cheques. But (though I’ll stress that David Bott didn’t explicitly say this, it’s just me reading between the lines a little) the TSB people seem to me to be in something close to awe of the angel community (and in particular the angel networks), which makes me wonder how on earth they’re going to pull that whole trick off while treading on eggshells.
What it all comes down to is this: I don’t honestly believe that UK entrepreneurs collectively lost the plot over the last four years, that en masse they all suddenly decided to pitch unfundable propositions. Rather, the real problem was that a lot of lead angels left the arena (wings seared by a down external market), at just the same time that banks were restructuring both working capital and early stage startups right out of their portfolios. All that’s left standing is a new generation of so-called ‘latent’ (i.e. wannabe) angels, enticed by the tax breaks but appalled by the increasing time to exit (which in turn has largely been caused by Euro VCs moving their portfolios downstream to ever later-stage businesses). As I discussed a while back, all the trends are headed in the wrong direction.
Hence from my perspective, the situation right now is that the TSB people have only just started engaging with the real startup finance disaster movie that’s been unfolding over recent years: so this is where their collective challenge suddenly morphs into something subtler, darker and trickier. Finding ways to give money to techies to help them build interesting, market challenge-driven stuff is essentially a fairly easy gig: but understanding, influencing and steering investment psychology is very much harder. Welcome to my world of pain, David! Enjoy!