Got a great idea for a product, but no idea how to get it to market? Forget Dragon’s Den, business incubators are the way forward, reports Stephen Cousins.
On a quiet residential street in Darlington, County Durham in 2006, the sound of sawing and hammering is heard coming from one of the homeowner’s garages. Inside, while his neighbours sleep, car park maintenance man Kevin Lee is labouring and sweating over a workbench, constructing the prototype for a contraption he’s convinced could revolutionise the lives of maintenance workers across the country.
Lee had just experienced a Eureka moment, inspired by the long hours he had spent digging up car parks to replace damaged bollards for Tesco. “What if I can design a simple device that will remove a bollard in a fraction of the time without damaging the surface?” he thought. Apart from making his job easier, the invention could save the supermarket substantial sums in maintenance costs. After 21 long nights in his garage, he emerged with the XXtracter prototype (see panel).
But with little money or business knowledge, Lee had no idea of how to get the product to market. After fruitless visits to his bank and Business Link, he eventually approached the North East’s government-funded business incubator Design Network North (DNN), which was so impressed by the idea it awarded him a £16,000 grant to pay for R&D and a product designer. “Without DNN I’d have been really stuck,” says Lee. “I had no idea organisations like this were out there to help people. Together we have built several working prototypes and now a bollard distributor is interested in taking XXtracter to the next stage.”
For construction entrepreneurs like Lee, or SME businesses with an idea for an innovative product or technology but little idea of how to get into the market, publically-funded business incubators offer an invaluable, if little-known service. They provide workspace, coaching and support services for free or at a reduced cost.
Most of them offer opportunities for networking, collaboration and best practice advice, their in-house experts can help firms develop and problem-solve innovations, and many will offer grant funding for research and development or pay for a third-party specialist.
According to UK Business Incubation, the professional body representing the sector, there are currently around 300 business incubators in the UK, mostly run on a not-for-profit basis. Around a third are linked to host universities and receive funding from the Higher Education Funding Council, a third are off-shoots of science and enterprise parks, and the final group are sponsored by local authorities and the nine English regional development agencies (RDAs), in most cases also drawing on funding from the European Regional Development Fund (ERDF).
Activity in this latter group has increased hugely in the last five or six years — the combination of RDA and ERDF funding accounted for 48% of business incubator finance in the UK in 2009. Under the new government, the question mark over the future of RDAs means it is likely that some incubators will be wound down. But others are confident that they will survive for the foreseeable future,
as the ERDF funding they rely on is guaranteed until 2013.
The focus of business incubators varies. Some cater to a range of industries, while others target a specific sector, like construction, or focus on a theme, such as design or technology. Many offer their members dedicated, low-rent office facilities in purpose-built innovation hubs, shared by other technologically-minded organisations. The sustainability agenda is a major driver for RDA investment, so green products or technologies that show strong market potential are particularly popular with incubators.
The quality of ideas incubators are approached with varies, says Charles Meynell, senior innovation adviser at East Midlands-based Sustainable Construction innovation Network (iNet). “We get good ideas, indifferent ideas and downright mad ideas! One guy was convinced he had a magnetic device that could generate a force field to insulate buildings, I don’t see how that could possibly work outside of Star Trek,” says Meynell.
But the incubators’ rejects are matched by a long list of successfully-nurtured construction innovations, including: bespoke street furniture designed for the elderly, a high-tech biometric fingerprint scanner, a free construction waste-sharing website, and a pedestal-based house designed for flood plains (see panels).
Incubators can expose companies to new ideas and offer the chance of collaboration with partner organisations, which frequently include universities or higher education institutions, specialist consultants like the Building Research Establishment and well-established businesses. For instance, Sunderland-based Design Network North runs a monthly networking event to encourage the cross-fertilisation of design ideas.
Also popular is DNN’s weekly email bulletin, Boomerang, which allows members to email a business question to the entire membership. DNN director Mike Dowson quotes some recent examples. “Do you know a supplier who can…..? Has anyone had this problem with trademarks? These are the kind of questions being asked. Members love it because there’s always someone who can provide them with an answer.”
Sometimes, introductions can lead to major deals. Liverpool-based waste recycling website BuilderScrap met Constructing Excellence Wales at an event organised by The North West Construction Knowledge Hub (NWCKH), an incubator linked to the University of Salford with funding from the ERDF and the Northwest Development Association. BuilderScrap and CE Wales have now signed a contract to develop a Welsh version of the website.
For individuals developing a product, advice from an experienced third party is often vital to help cross-examine and refine the idea. Most incubators have an in-house team of designers and technology experts who can provide a fresh viewpoint, or pull a concept apart and highlight its benefits and shortcomings. “Entrepreneurs often get so obsessed with an idea they forget everything around it, the customer’s needs, or functionality, so it really does need challenging,” says Dowson.
An incubator’s first step will often be to pay for an adviser to work with an entrepreneur. Or, if further external expertise is required, they can refer members to partner organisations with the relevant background — for example, certification body the BRE can help with product development. Alternatively, SMEs can apply to incubators for additional government grant funding to pay for an external specialist like a product designer, a website designer, an architect or a manufacturer.
iNet offers financial support through two grant schemes. The Innovation Support Grant offers companies a maximum £10,000 of matched funding and larger grants are available through the Collaborative R&D Fund, which is offered through local higher education institutions. In 2009/2010 iNet supported 26 construction companies and it is hoping to fill 30 spaces on the 2010/2011 programme. DNN runs a funding scheme that’s open to up to 30 companies that can each receive £16,000.
The NWCKH doesn’t offer cash grants as such, but it has a free advice service and its experts can help members identify other sources of funding and help them bid for it, says Tim Whitehill, project manager at Salford University’s Centre for Construction Innovation: “There’s definitely funding out there, available through the Technology Strategy Board. Also the RDAs offer £3,000 and £10,000 innovation vouchers, provided through the government’s Solutions For Business scheme, which can be spent on work with many universities.”
In the current tough economic climate, Whitehill says many companies are seeing the slow-down as a chance to rethink their business along innovative and sustainable lines. “At exhibitions over the last couple of years, you get a feeling that people are spending their time trying to think of new ideas, rather than just closing shop and hoping the storm blows over. Also, many people see it as an opportunity to focus on the sustainability agenda, with the reduction of carbon emissions as the main driver.”
The recession also means that raising development funding will always be harder than in times of economic plenty, but Charles Meynell at iNet believes that’s looking at the problem from the wrong angle. He prefers to believe that recessions provide a great environment for fostering innovation and ideas.
“The inventors of the Thrust SCC rocket car, which has held the world land speed record since 1997, said too much money is a hindrance because it doesn’t make you think hard enough.
A lack of money makes you focus on the resources you have at hand. Setting up a company now will be hard as hell, but if you can survive the next three years, the only way is up!”
Business: FACIT
Innovation: Printed buildings
Entrepreneurs: Architect Nick Willson and product designer Bruce Bell
“We print houses” is the mantra of UK-based architecture, design and construction company FACIT, which has developed a digital method of fabricating buildings using computer-controlled machines.
Inspired by the factory assembly lines in car manufacturing, designs for all a building’s components are input into a computer, including all the services, every bolt hole and screw. This information is then fed into a cutting machine, which makes engineered timber elements that create individual lightweight blocks. Much like Lego, the blocks can then be slotted together quickly by just two people, without the need for cranes.
By offering a combined design and manufacturing service, FACIT aims to speed up projects, while offering a high degree of flexibility, explains Bruce Bell: “The digital fabrication technologies we use can produce bespoke items cost effectively and very accurately. The timber elements fit together like a car chassis, assembled simply from a detailed and intricate kit system.”
Business incubator Knowledge Connect, funded by the London Development Agency with EU funds, provided the company with funding for a feasibility study and a proof of concept project, and the system is now being tested with the construction of several domestic houses before an official launch next year.
Business: BuilderScrap.com, a free building materials exchange website
Innovation: Online carbon calculator
Entrepreneur: Les Owens, managing director of building contractor Trustland
BuilderScrap is a free website that allows users to post details of unwanted or unused building materials, as well as locate low-cost or free materials in their area. The site is now being expanded to include a carbon calculator, developed in collaboration with Salford University and the North West Construction Knowledge Hub, that will allow users to quantify the total amount of carbon being saved and the amount of material being diverted from landfill by using the site.
Users are asked to input the weight and dimensions of their surplus materials, based on which the carbon calculator works out the weight of carbon saved in tonnes and the weight of material diverted from landfill.
BuilderScrap is trialling the idea of using the calculator to draw up carbon reports that will be sold to larger contractors, says marketing manager Rebecca Owens: “The reports could be sold on a project by project, quarterly or annual basis, allowing companies to include the figures in tenders and other documents to demonstrate their commitment to the environment. BuilderScrap is a currently a free-of-charge website, so this will provide us with a valuable revenue stream.”
Business: XXtracter
Innovation: Device for removing damaged car park bollards
Entrepreneur: Kevin Lee, Tesco car park maintenance engineer from Darlington
XXtracter is a corkscrew-like device that allows damaged car park bollards to be removed and replaced in minutes by lifting them straight from the ground without damage to surrounding surfaces. Simple enough to use by a single handyman, the device avoids the health and safety risks associated with using heavy machinery in public areas, and it doesn’t require large areas to be fenced off to carry out excavation work.
In true entrepreneurial spirit, Kevin Lee developed a wooden prototype in his garage to help speed up his job, which required many hours of laborious digging. “It’s a hell of a job that can take two men two to three hours using skill saws and breakers to lever each post out of the ground,” he says.
After contacting business incubator Design Network North, Lee received £16,000 of funding to pay for R&D and employ a professional designer. Currently at design stage, the product is likely to cost £700-£1,000 when finished. Tesco is interested in the potential health and safety benefits, and a local post distributor is also keen, says Lee.
“There are millions of these bollards all over the country. Tesco employs about 70 operatives across the UK who do this job, using XXtracter would save them around £250,000 a year,” he concludes.
Business: SmartBuilder Software
Innovation: Site Clean Up iphone application
Entrepreneurs: Richard Mulcahy and Peter Daly, serial entrepreneurs behind various start-up companies
Dublin-based company SmartBuilder Software was launched early this year to develop mobile software for use on construction sites. Its first iphone application, Site Clean Up, is designed to help main contractors ensure sub-contractors meet their obligation to clean up waste, a problem that main contractors often end up paying for.
The app allows the site manager to send warning notices to sub-contractors asking them to clean up by a set date or face penalties, while a report function helps benchmark sub-contractor performance over time. The app can be downloaded from the App Store for £11.99 and a version for Android-based phones and other smartphones is planned for later in the year.
“Site Clean Up is our response to a need many builders are complaining about, which will generate real savings from day one,” says co-director Peter Daly. “In today’s environment no contractor can afford this wastage and inefficiency.”
The company is based at the University College Dublin’s innovation centre NovaUCD. Its main product, a set of applications to help builders complete projects faster, cheaper and with zero defects, will be announced in the near future.
Business: iEvo
Innovation: Biometric fingerprint access control
Entrepreneurs: Managing director Shaun Oakes and operations director Stuart Ging, whose background is security systems
iEvo overcomes the problems associated with conventional fingerprint access control readers, which rely on unobstructed contact between the fingerprint and the sensor, a particular problem on building sites where water, dirt or grease can get on workers’ hands.
The patent-pending device uses multi-spectral imaging technology to extract unique fingerprint characteristics from both the surface and the subsurface of the skin. The system is so effective, says entrepreneur Shaun Oakes, it can obtain a fingerprint through thin gloves or from fingers without a surface layer of skin, by measuring the underlying layout of collagen and capillaries.
The reader can be internally or externally mounted, while a built-in heater allows it to give accurate readings in outside temperatures as low as -20°C, unlike many biometric readers that begin to malfunction at 0°C, making them unreliable in winter.
The firm secured a £16,000 grant from business incubator Design Network North to develop the product’s exterior plastic casing. “I had no design experience, so DNN helped us find a local design house, a mould manufacturer and provided advice through the whole process,” explains Oakes. The finished product launched to market in July and has already been installed on a trial basis at three Willmott Dixon sites.
Business: Pivotal Construction
Innovation: Pedestal-based buildings for development on flood plains, eco-sensitive and sloping plots
Entrepreneurs: Co-directors Neil Cumming and Nick Barnett, who have a background in disaster response civil engineering
Pivotal homes are octagonal-shaped dwellings raised one to three metres above ground level on a central pedestal foundation. They are suitable for erection on flood plains or marginal land such as sloping, rocky or wooded terrain.
The unique pedestal design — eight support spurs rising vertically from a central foundation — circumvents the Environment Agency’s current aversion to stilt-based buildings, which typically have a rectangular void underneath where owners are often tempted to build extra living space, says Pivotal. And because marginal land is a fraction of the cost of typical housing development land, the company hopes local authorities will adopt the design, perhaps channelling savings into sustainable technologies or passing savings on to the customer.
Pivotal received a £10,000 grant from iNet to set up the company and pay an architect to draw up designs. Now it’s looking for investors to help build a prototype. “Since studying disaster response engineering I’ve been interested in finding simple, effective solutions to flooding and the Pivotal design avoids complicated flood defence works typically required before development on endangered land can begin,” concludes Neil Cumming.
