In 2010, two events occurred in London that fueled entrepreneurship. First, the U.K. government founded “Tech City.” The tech hub, also known as Silicon Roundabout, is a publicly funded organization focused on blossoming the tech startup scene in East London. Second, the London Business School (LBS) created the Incubator Program as part of the Deloitte Institute of Innovation and Entrepreneurship.
Five years later, both initiatives are proving there is entrepreneurial life outside of that West Coast Valley everyone speaks of. Some reports argue the London parliament probably doesn’t know much more about IT and tech issues than enterprising middle schoolers updating their Instagrams. Nevertheless, tech and entrepreneurship continue to be an economic driver for the U.K. According to a Forbes report, Tech City accounted for 40% of the U.K.’s job growth from 2009 to 2012.
And the Incubator Program is right in the middle of it all. According to the most recent job reports (2012 and 2013) from LBS’ MBA program, 20 students (about 5%) from each of these classes reported starting their own business three months after graduation. For some context, in 2012 and 2013, Stanford reported 26 (10%) and 39 (14%) students, respectively, started their own businesses three months after graduation. Harvard reported about 16 (7%) in 2012 and three (4%) in 2013.
Only available to LBS graduates, the Incubator Program is the perfect safe space and stepping stone for growth for qualified startups. Every June since 2010, the director of the program has led a committee comprised of the executive director of the Deloitte Institute, an alumni entrepreneur (that has held a space within the incubator), the executive in residence of the program and a successful business angel to review applications.
A ONE-OF-A-KIND INCUBATOR?
For the past two years, Jane Khedair, the entrepreneurship lead for career services at LBS, has directed the selection process. She says the program has consistently received at least 30 applications for about 13 available spaces. But that doesn’t mean they will fill the spaces just to fill them. The startups have to fit a precise profile. They must show consistent growth but not too much. According to Khedair, this means having already secured some funds or a viable plan to secure those funds. And then they must demonstrate the potential to sustain themselves and bloom.
Once the startups are selected, they are conditionally given access to the incubator space starting August 1. The condition? They are each given a growth goal specific to their individual companies to reach by September 15. If they reach that goal and want to stay, they have access to the space until July 31 of the following year. If they don’t reach that goal, they have to leave. In its inaugural year, the incubator had two companies. In the academic year starting in 2011, there were nine, which dropped to six before rising to 13 in 2013. There are currently 11 companies using the spaces.
With office space comes all of the spoils. The startups get access to professional branding services, professional legal services, trademark and copyright guidance, complimentary cloud (the kind you can’t see), and online payment services. Not to mention, a free, centrally located office space that is in a brand new building this year. All in all, the benefits of program amount to an impressive £200,000 to £250,000 ($303,000 to $379,000).
“There are plenty of other incubators out there, but from what I could research, they don’t offer a package to the same extent we do,” says Khedair. “From the legals to the branding to the alumni mentors, we offer a lot. And then all of those relationships are formed.”
AN ENTREPRENEURIAL ACCELERANT
Dan Ziv, recent LBS MBA grad and current incubator user, says creating and building relationships is the most valuable asset of the program—especially for venturing out of the nest. “We always have one eye on leaving and being able to fly on our own,” Ziv says. “You can absolutely build a business without the incubator but not with the same acceleration. It propels the business. One example is how much time it can take to find a lawyer or someone for branding or hiring help. With the incubator, that relationship is already there.”
Ziv didn’t really plan on an MBA until just before applying to LBS. He definitely didn’t plan on following an entrepreneurial path until after being on campus. As a dual British and Israeli citizen, he served his required three years in the Israeli army before pursuing a degree in law. Ziv worked as an attorney in the tech industry because the tech field has always been a passion of his. When he was 29, he decided it was time to switch to the business side of tech.
Enter the MBA. After living in Israel, the U.K. and Switzerland, Ziv knew the value of being experienced with different cultures and people. So he wanted a school with a strong international presence. He looked at LBS, INSEAD and Columbia, among others. A glance at the list of tech companies that had been started at LBS and the tech jobs where alums went to work was enough for Ziv to respectfully withdraw his name from consideration at all other schools after being admitted to LBS.
ONE CANCELLED RESERVATION LEADS TO A BUSINESS
Unbeknownst to Ziv at the time, he ended up meeting his future co-founder Christopher Steinau during the first weekend of orientation. The idea for their startup, Uncover, actually stems from a meeting after the founders spent the summer working at Amazon, Paypal and a small tech startup called WhyPlan. “We all kind of decided we wanted to start our own thing,” Ziv says. “We were going to meet for dinner to discuss that. We didn’t book a restaurant and ended up walking around the city for 45 minutes.”
Ziv says they ended up at one of London’s hottest restaurants not expecting to snag a table but there was a cancellation right before they walked in and they ended up getting a table. “There are cancellations and no-shows all the time,” Ziv says. “There are times when restaurants do have last-minute availability and spontaneous people looking for a place to eat.” Ziv and his colleagues decided to figure out a way to connect restaurants with reservation no-shows to impulsive dinner-goers.
A HAPPY STARTUP FAMILY
Uncover is an app that curates about 300 to 400 London restaurants and, based on the user’s location and preferences, will provide around eight to 10 restaurant suggestions.
“Business school is the best time and opportunity to explore ideas,” Ziv says. “You have time to check out different things. You have professors and mentors and other entrepreneurs. We had a concept at the beginning of the second year and then [took] courses and [sought] help to see if we could really build that concept into a sustainable business.”
The incubator seemed like a natural next step for Ziv and Uncover. The admissions committee agreed, Uncover secured initial seed funding and now they are having their soft launch this week.
“We have a space to come to everyday and monthly meetings with Jane (Khedair) to talk about where we are and how we continue to grow,” Ziv says. “It’s a very chilled out environment. There is no competitive feeling. The startups all follow how each other are doing. It is almost like a large team. Everyone is trying to offer support and chip in and bounce ideas off each other.”
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