Jon Treanor, CEO, Conduit Partners, talks to Electronics Weekly about the Carbon Trust Incubator programme, support for low carbon innovations, and the benefits UK electronics companies can expect...
1. Conduit has recently been appointed as a Carbon Trust Incubator Partner. Can you describe the programme and its aims, and your role in it?
The Carbon Trust was set up by Government in 2001 to accelerate the move to a low carbon economy. The aim of the Carbon Trust Incubator programme, essentially, is to identify and provide support to the most promising UK technology companies that are helping to reduce carbon emissions.
Early-stage businesses that are innovating in low carbon technologies can apply for up to £70,000 of expert support services, which are delivered by appointed Carbon Trust Incubator Partners. The role of Conduit and QinetiQ as a joint Incubator Partner is to help these early-stage ventures succeed by providing our experience, expertise and technical know-how, as well as access to finance and our global network of contacts that can, ultimately, fast-track a small company through to decision makers in large companies and international markets. The services that we offer as part of the Incubator programme range from initial market and technical due diligence through to business planning, fund raising and commercial exit.
2. What type of low carbon innovations are eligible for this free support?
The definition of "clean tech" encompasses the A-Z of science and technology, including everything in between and everything beyond. The Carbon Trust provides a Low Carbon Technology Assessment (LCTA) matrix as a guide but fundamentally we're looking for product-led innovations that can scale and make a material difference in reducing carbon emissions. Typically, there is a technology and IP base at the heart of this innovation, so that value can be built into the company as it grows.
One obvious example of low carbon innovation is marine tidal devices that enable us to efficiently harness marine energy that could then be used to replace the burning of fossil fuels. Another example would be if a company has design automation technology that really enables designers to efficiently exploit low power parallel processing architectures and quickly take them to volume fabrication. In volume, the multiplier effect means that this type of innovation can add up to significant carbon savings.
3. What benefits can UK electronics companies expect from the programme?
Businesses that are commercialising novel low carbon technology can contact us now and apply for up to £70k of funded support. The primary benefit of access to these services is the ability for early-stage ventures to reach their commercial milestone or funding position much more quickly than they would be able to by working on their own.
Once a company is accepted into the incubator scheme - entry is very competitive and the bar is set high - we create an individual work programme of services accompanied by a set of clear deliverables and milestones. Incubator companies can draw upon the experience of Conduit and QinetiQ to shape their business plan, their market entry strategy and their technology development, from leaders in their field. For example, cutting edge defence-related programmes have always demanded the highest performance, and many of the innovations that drive electronics come from the defence space, so our combined experience is highly relevant and valuable for this sector.
4. In terms of early-stage business-building, what key ingredients are needed for commercial breakthrough?
Money, Markets and Management are the key ingredients. What that boils to is a good team of people, a really clear focus on - and clear routes to - your chosen markets, and being able to articulate your value proposition very clearly. And you're going to need cash flow and working capital. If you're seeking investment, you need money that is going to add value to the company, and money that can fast-track you to a corporate decision-maker in a large organisation. Getting this mix right is crucial, whether you're looking to get to initial revenues, create a commercial breakthrough, or develop your business internationally.
5. What do you think will be the key challenges ahead for electronics start-ups?
In a down market, you need to inspire investors, differentiate yourself and demonstrate that there is a clear and compelling market need for your product or service. If electronics companies are developing a new chip, you need to be able to show how you are going to fund the move to the next process nodes. Similarly, how are you going to engineer an exit that will excite investors? If your company is looking at a new architecture, what is your marketing strategy to overcome the incumbents?
Fundamentally, building a sustainable, high-performance business is about focus, alignment and agility. In challenging times, business need to think about new business models and new market entry points, and even new service or platform-based offerings that can create derivatives and drive growth.
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