East Anglia: Eastern Enterprise Hub is aiming for the next level
SINCE its launch nearly three years ago, the Eastern Enterprise Hub, based on the Ipswich Waterfront, has made a substantial impact in encouraging social entrepreneurship and business start-ups by young people. Now, says hub chairman Harry Berry, it is time for the organisation to fill a void in the provision of business support by extending its reach into the wider economy. DUNCAN BRODIE reports
“I CANNOT remember how I first become involved,” says Eastern Enterprise Hub chairman Harry Berry.
“But the story I have told is that I was walking past the University Campus Suffolk building when someone stuck out the handle of an umbrella and pulled me inside.”
Whatever the reality behind the metaphor, Mr Berry could hardly have been a better “find” for a project linking the worlds of enterprise and academia.
During time with the Brightstar business incubator at BT’s Adastral Park, he was taken aback at how often people behind technologies offering clear market potential struggled with key aspects of launching and running a business, such as articulating a business plan.
Recognising that there was a lot more to building a successful technology company than just technology, a Brightstar Academy was set up to provide specific training for incubator company leaders at time of need.
The technology crash around the time of the Millennium took Harry in a different direction, as European partner with New Venture Partners, a global venture capital firm specialising in the technology sector.
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So when the “umbrella moment” happened, he had no shortage of relevant experience or opinion. “I said that I had some clear ideas on entrepreneurship training, and it would not work without mentoring,” he says. “To learn to ride a bike, you need to have someone holding on at the back.
“I have invested in lots of companies, some of them fantastically successful and some which have failed, and I have probably learned more from the failures than the successes.
“The question of how to engage with entrepreneurs is not just about delivering a course but matching them with a mentor so that a bond is built.”
This philosophy is now reflected in the enterprise hub’s 5th Floor Club which, taking its name from the hub’s location on the top storey of the James Hehir Building, consists of around 150 members drawn from the local business community who provide one-to-one mentoring to its students.
At present, the hub has two main strands of activity. One is the Enterprise Academy (E-Academy) which provides BTEC enterprise training for 16 to 19-year-old students from Suffolk One. They spend four days a week on their studies at the college and one day a week at the hub, focusing on their own business ideas.
The second strand is a regional School for Social Entrepreneurs (SSE) franchise which assists the launch of social enterprises. This typically involves rather older people and has included a number involved in the transfer to the private sector of services traditionally delivered by the public sector.
The SSE is now on hits third cohort of students and the E-Academy is on its second. “The hub is here to create something transformational,” says Harry.
“We said we wanted people to be hugely different at the end of their year and if they were not we would have failed. Well, they are hugely different, with a confidence which makes them stand out. Confidence is an amazing thing and our job is to build it. They need someone to ‘hold on the bike’.”
However, he adds: “While we have proved the case for enterprise-based intervention into academia – and you will see much more of that taking place – I see this as only the end of the beginning. We need to move to the next stage.
“We are getting more young people to think about starting up a business but there are other people out there starting and running business who also need support.”
As a result, Harry wants the hub to extend its reach to support early start-up and early stage entrepreneurs in the wider economy - not only to help older people who the hub is current not reaching but also to ensure continuity of support for young people as they graduate from the hub’s current activity.
“I don’t want young people who have created a business to drop off a cliff,” he says. “We need an incubation/innovation area where businesses can form a cluster and continue, with their mentors, in the post-start-up phase.
“In three years’ time would could have 20, 30, 40 businesses which will have come through that process – that would be fantastic to see.”
In the case of technology companies, Adastral Park or the Framlingham Technology Centre might be an appropriate base but other businesses could also benefit from being part of an incubation cluster, Harry believes. “I also think there are enough empty buildings about to make it a reality,” he adds.
Alongside the creation of a physical centre, he says the extension of the hub’s activity needs to include advice and support.
The disappearance of support previously provided by Business Link has left a void in terms of help for start-ups but something similar could be provided through from the hub’s mentors, he believes.
A third issue is funding. “With New Venture Partners, I have seen a lot of the culture in the US and it is different,” says Harry. “They don’t have quite the confidence issue we have here – possibly the reverse.”
However, he says that while venture capital funds traditionally invested £1million to £2m in early stage ventures – something the banks never did even when they were lending more freely than they are now – the global economic downturn of recent years has seen a big shrinkage in venture capital funds, with Europe bottom of the table.
“Today, investors do not just want to see a product, they also want to see a customer, so their investment has moved to a later stage because of the risk,” he says. “The Government’s accelerator programme focuses on companies with turnover of £2m to £10m, again not focused on start-ups.”
A solution, he believes, lies in “angel” funding – investments by high net-worth individuals willing to “take a punt” in the hope of achieving a higher return than they would by putting their money somewhere safer.
In a low interest rate environment, and with attractive tax relief available, he believes this is a realistic prospect and says progress is already being made. In some cases, he hopes mentors will end up becoming investors as well.
The incubation centre and business support, meanwhile, will require sponsorship from companies – perhaps including sponsorship in kind from the within the property sector.
“I want the hub to provide training courses, an incubation centre and a means of funding through a vibrant angel community,” says Harry.
“None of them exist at the moment but that is the challenge we are setting for ourselves. If we can demonstrate results then I believe the funding will flow, but it will have to be that way around.”