Land of Hope and Technology February 2016 - Page 12

ISSUE 1 Timing, comedians and entrepreneurs In a talk he gave at Ted, the founder of the Idealab incubator, Bill Gross (not to be confused with the famous bond investor) said that the one characteristic that seemed to separate the successful start-up from others, was timing. He said this mattered more than the idea, team, business model, and funding. He looked at companies that Idealab had supported, including companies that went on to be very successful and those that failed, despite appearing to have all the key ingredients for exceptional success. He then applied the same examination to companies outside of Idealab. He said timing accounted for 42 per cent of the difference between success and failure. So for example, if a company with an identical business model to Uber had been launched five years ahead of Uber, the chances are high that it would have failed. The UK was lucky in its timing. Maybe the reason why it was the UK that enjoyed an economic boom after the colonisation of the New World was that it coincided with the beginnings of the industrial revolution. By contrast, Spain and Portugal’s colonisation began earlier and they suffered severe hyperinflation after gold was imported from the Americas. Britain may have beaten France to the Industrial revolution because at the key moment France was in the midst of a revolution. Research shows that age matters. According to research from the Kauffman Foundation, the peak age for setting up new companies is 40. At this age, entrepreneurs have the necessary experience and contacts to startout on their own, but also the energy. Both the UK and US saw a mini baby-boom during the so called millennial period, that is to say children born between 1981 and 1997. In a few years’ time the oldest of these millennials will be hitting 40. But there is something a tad different about the millennial generation. They do appear to be more entrepreneurially minded. Research from DueDil and Enterprise Nation found that, between 2006 and 2013, the number of businesses set up by people under 35 increased by 76 per cent, jumping to 247,049. Right now, no less than 80,000 university students across the UK run a business. The millennial generation are in any case more entrepreneurially minded. By the time they reach 40, expect fireworks. At the same time we have the disaster that is the UK pension industry, and the lousy returns on pension portfolios held by baby boomers which they diligently saved into. Once this generation retire, they have the option of putting their pension money into annuities offering a guaranteed income, but, thanks to exceptionally low interest rates, it is likely they will be disappointed with their income. As they reach the age of retirement, many baby boomers will feel they have no choice but to supplement their income. Some may use their meagre pensions, and remember they can now tap into all the savings not just 25 per cent, to fund investment into property. Others may choose to enter the brave world of entrepreneurial endeavour, funding their efforts from their pension savings. The combination of changing demographics, disastrous returns on pensions and a change in attitude amongst the millennial generation means we are set to enter a time when being an entrepreneur becomes normal, rather than unusual. Right now the world is going through a rare period of technology upheaval. We are seeing the emergence of the internet of things which may make industry, retail, energy use and how we manage our daily lives incredibly efficient. We are seeing a revolution in robotics, and 3D printing, which will transform manufacturing. Wearable technologies in combination with genome sequencing, big data and artificial intelligence will transform, shifting the emphasis from being disease centric to preventive centric. We are seeing the rise of virtual reality, augmented reality, self-driving cars, the sharing economy and technologies that will transform the way we grow and create food, fresh water and energy. A new technology revolution is on the way, and now is perfect timing to nurture entrepreneurs.