Bill Buchanan - My Bluffer’s Guide to Spin-out Success

I often get asked about what makes a successful university spin-out, so here are my observation for any budding academic team looking to spin out: You need a solid academic base. A PhD programme is often an excellent base for a spin-out, as it involves three or more years of extensive study into every aspect of a given field. This involves both a macro and micro viewpoint of a problem, and it develops the skills that support the articulation of new knowledge and new discoveries. A great team, too, often has a foundation of both theory and practice. You need vision. Any company can innovate but fail to take things forward. A great team needs a visionary leader and who knows how to take something to the place which achieves this vision. They are a creator of a seed that is likely to sustain the company into its future. Build a team, focus on quality and keep them. I know it sounds obvious, but it’s not easy to build a team in academia. There are too many barriers and academic structures that get in the way of team building. Try and create a team with complementary skills, and don’t just build with a single focus on one skill. You need testers, coders, cloud scalers, documenters, presenters, and many other things. Try to always focus on the quality of your work and not quantity. Quality gets recognised, but quantity often does not. Anyone can produce a 100 research papers, but it takes a great team to produce a single groundbreaking paper. Get the right leader for the right stage. There are different types of leaders. Those who people respect for their technical expertise, those who understand how to make their offering to the market, and others who can scale a company. Get the right leader for the right stage — as they are often different people. Without a visionary, you will not need the next two leaders. Protect your IP. I know many dislike patents, but it’s a dog-eat-dog world of innovation, and if you fail to protect your IP, others will come along and “borrow” from it or even “steal” it. Get a patent, if possible — not to attack others, but to defend yourself. The last thing you want is to licence your own invention from others. Abstract your ideas. While words are great, pictures and abstractions are so much better. Draw your ideas and concepts in a way that engages others. Research papers can be good. The importance of having peer review for any contribution to knowledge cannot be underlined enough, but, know that you have some IP protection in place and that you are further along the route than others in the development of your innovation. If your company wants to be a leader in its field, it needs to show that it has a strong scientific and technical base. And articulating complex thoughts in a research paper is a great way of showing that you have a core understanding of a field. Have a log book. I know this sounds trivial, but I have seen the difficult side of managing IP — when something becomes successful. It does no good in the future to say that you invented something when you have no real evidence. So, keep a log book and write down your thoughts as you develop your research, and get it signed by a trusted person (and with a date). I am still a fan of hardback log books and love it when a PhD student takes one along to meetings and jots down ideas. You need industry. A great invention will go nowhere without it being built at a production levels, and which matches to problems in the market. As early on, try to get industry involved, and focus the work. Build a team with theory and practice. Do not have one without the other. A great research team has the knowledge to ground the work in academic practice, but it needs practical skills to implement it. The leader is not the boss. The leader is not a role. The leader is whoever is sustaining the work. Research grants are a vehicle to sustain your vision. Unfortunately, many academics see research grants as isolated projects which must be implemented and delivered. They are routes to career advancement, and where they can tot-up their total grant income and display it as a KPI. But, are also stepping stones to your true innovation — each grant sustains the work and the team but takes you forward one little bit. Investors invest in people and not just innovation. Like it or not, investors are typically not investing in the great new invention but in the team that will take it forward. In most cases, this involves a break between the academic research and the spin-out. Four slide rule, always. You only need four slides: the problem, you and your team, your innovation, and how you will execute. Don’t bore your audience; inspire them into your dream and vision, and listen to what they say. And, remember, it has a great simple opening slide — so dwell there as you introduce yourself and your vision. And end with a bang! Define the culture at an early stage. This might not seem to be a core focus, but it is important to lay out the ethics and morals of the company and how it will share any success that it gains. Those who invest their time and energy at an early stage should see rewards, and where no one is seen to have more than the share they deserve. Pick the right place and the right people. Don’t grow your company in a place where you cannot attract the best talent. Pick a great city, and place yourself there. Get an amazing HR team in place. This is fundamental. Great companies are created by great people. Your recruitment should focus on those who focus on quality. They are people with an eye for detail but who can abstract things and who are able to focus on things. They are basically people who care more about responsibilities than their job titles. Recruit people for their talents and passion, and not because they have years of experience in given technologies. For example, it is often better to take an engineer or mathematician and train them in coding than to take a computer scientist and train them in engineering. Remove bureaucracy and rigid structures. Committees, bureaucracy and rigid structures often stifle innovation and allow some people to hide from their responsibilities. Rigid structures stop people from working across departmental boundaries, so try and be flexible — and allow a cross-fertilisation of ideas. No hiding place. There should be no place to hide a small and growing company. Those who fail to match up to the pace of the company and its vision should be allowed to leave. But, for those who do, the company should do as much as it can to retain them. Don’t let any good employee leave without trying your best to keep them. Know why people want to leave, and try and address these things at an early stage. You need a common goal and purpose. A core part of a great team is that they have a core goal and purpose and where everyone shares this. A company must recruit for these purposes and find those who match them. A bad hire is a wasted opportunity and will only cost more money in the future. See №17. Praise those who are successful. A great team celebrates the success of their members and does not see it as a threat to themselves. Don’t hide success in whatever form it appears. And finally: Success leads to more trust. When you write a research proposal, you have a long statement about why you should be trusted to gain the funds. A core part of this is defining and articulating your success. No one ever really defines all their failures, but for anyone who has been successful, this is probably been a core part of the reason they have been successful. So the more success you have, the more likely that you will be trusted with other people’s money and time. If you cannot articulate your success to others, you will often struggle to influence others. Document and capture your successes are you go along, and get others to make comments on them.