Welcome to the May edition of the European SME Week newsletter!
EEPA 2017 continues to showcase the best of the best, and national winners are being announced all over Europe. In this edition of the newsletter we bring you the latest updates from national competitions, advice from previous winners and a glimpse of what previous winners are up to now!
Last year we wanted to know what the EU should do to encourage youth entrepreneurship, this year the Youth Essay Competition is back…with a different topic! Read on to find out more and check the News Portal for full details.
There are innovators all across Europe, but this year the SME Assembly is playing host to a gathering of some of the best and creative minds Europe has to offer. In today’s newsletter we give you a sneak preview of an exciting part of the programme…
Finally, we want to hear from YOU! We are particularly looking for entrepreneurs that want to share their stories as well as anybody involved in the European start-up scene. For more information please contact firstname.lastname@example.org
Today Promoting Enterprise welcomes back Karen Boers, co-founder & CEO of Startups.be and European Startup Network, for her insights into the taboo of failure in the European startup world and why failure and the lessons learnt from it could actually be the key to future success.
5 years ago Failing Forward was launched as a keynote conference, with big role models testifying about the hardships they had overcome along the way and why the lessons they learned were critical to their success. Because let’s face it, failure is nothing more than a stepping stone in a learning process – and yet we seem to be very ashamed to talk about it. Thankfully, the campaign has been growing across Europe with events, media campaigns and social media stories – breaking through the stigma associated with failure.
European startups have long felt the sting of failed ventures, yet forums to discuss what went wrong are scarce. When we started to invite speakers for a conference on this topic, we really experienced how deeply people – especially entrepreneurs – fear discussing the subject in public.
Yet failure is not something to feel ashamed of. In many areas of life, it is common sense that practice makes perfect, and practice requires – guess what – trial and error, or failure. In the US, investors applaud entrepreneurs with previous experience, good and bad, as long as there are clear take-aways from that experience. In Europe, it’s all or nothing: either you make it the first time around or you might be banned from entrepreneurial life forever.
Why is failure important and what can we learn from it?
The point is not that we should try to avoid failure – that goes against the heart of innovation. The point is that we should embrace the lessons learned from failure. When a kid falls off the bike, you don’t tell them to go figure it out themselves either. You tell them what they’re doing wrong, help them learn and persevere – and become an expert before you know it.
So whenever we take a wrong turn or fall face first on the ground, let’s not be shy about it, help each other stand up again and prevent others from making the same mistakes.
How have you been tackling the ‘failing’ stigma in Belgium and Europe since starting this initiative?
Starting out with the keynote conference, we started gathering more partners around the topic. First we were able to join forces with 15 partners in a two year European project, tackling the subject across the different communities. We did this through local events, panels in big startup events as well as some research into the obstacles leading to failure and countermeasures allowing us to share and recommend best practices.
At present, a four year Flemish project is allowing us to take the campaign to a new level by including local events, a big media campaign every six months and an online platform where people can share their own stories.
What progress have you seen since the last failing forward conference?
It’s been great to see the progress in how easily people talk about the subject. Previously we had a very tough time lining up 10 hot shot speakers for the first editions, now people are knocking on our door, eager to share their stories. Not all people dare to speak about the topic that openly, but the culture is shifting slowly but steadily.
Mainstream press have also picked up on the topic, providing many more two-sided tales of the failed entrepreneur rather than stories focusing exclusively on their failures.
Read more about Karen Boers here on Promoting Enterprise:
What makes an entrepreneur successful? How do entrepreneurs define their success? What are the secrets behind their inspiring journeys? Promoting Enterprise presents the ‘Secrets of Success 2016-2017’ brochure, which answers all of these questions and more. So what is inside? This year the brochure features interviews with 33 successful business owners from across Europe, under the themes of: Concept/Idea, Drive, Leadership/Team, Success and finally Europe.
From Albania to the United Kingdom, tourism to medical innovation, the entrepreneurs and businesses featured in this brochure offer something for everyone. Each entrepreneur provides details of their personal success, as well as encouraging and inspiring words for other entrepreneurs to learn from and reflect upon. Each profile is also available in the native language of the entrepreneurs, so why not browse through and discover the some of the inspiring minds of Europe in the field of SMEs, startups and scaleups.
Read the brochure here.
Today at Promoting Enterprise we are presenting an exciting interactive tool, ‘The European Digital City Index’, which gives glimpses into what is going on in the European world of entrepreneurship.
The European Digital City Index (EDCi) describes how well different European cities support digital entrepreneurship.
It was produced by Nesta as part of the European Digital Forum, which exists to support digital entrepreneurship and digital startups across Europe. The European Digital Forum is run in collaboration with the European Commission’s Startup Europe initiative.
For startups and scale-ups, it provides information about the strengths and weaknesses of local ecosystems, allowing them to plan accordingly and consider where they may need to devote more resources. For policy makers aiming to encourage digital entrepreneurship in their own city, the Index helps to identify existing and promising hubs of activity, in order to learn from their practices. Additionally, it allows benchmarking of performance against other European hubs, and helps identify which policy areas to prioritise.
For more information: https://digitalcityindex.eu/
The SME Assembly is over, but the conversation continues
This month the focus is on the SME Assembly 2016, which took place from 23-25 November in Bratislava, Slovakia. With over 600 delegates and speakers from all over Europe and beyond, this year’s assembly was a great success and brought together a diverse audience committed to building an SME friendly Europe and sharing views on entrepreneurship, scale ups and startups.
The assembly played host to policy sessions, interactive open spaces, high-level roundtables, lectures, masterclasses and much more. The event also saw the crowning of this year’s prize-winning projects at the EEPA ceremony and gala dinner which took place on 24 November. Read the EEPA news section for more.
During the assembly we brought you live coverage from the event on Twitter, Facebook and Instagram! Daily roundup posts from the three days (1, 2 and 3) are also available for you to read on Promoting Enterprise.
Now that SME Assembly 2016 in Bratislava has come to an end, we can begin to look forward to the SME Assembly 2017 which will take us to Tallinn in Estonia. The preparations are already under way, we hope to see you there! Read more >>
That’s a wrap! The SME Assembly 2016 has come to an end after 3 days of networking, events, speeches, awards, masterclasses and most importantly bringing together people who value entrepreneurship and the creation of an SME friendly Europe.
A look at where the world of entrepreneurship would be ‘Ten Years On’ was the opener for Friday, with delegates imagining what kind of world entrepreneurs, startups, scaleups and all those in between would encounter in 2026. The panelists included a range of experts from across Europe and industries, including: Michael Mellinghoff (TechFluence), Cristina Fernandez (Global Entrepreneurship Network), Ladislav Ambrovics (MINIT Slovakia) and Kenneth Ryan (KPMG Slovakia). They all shared their visions of entrepreneurship in 2026, with a common theme being a shift in entrepreneurial focus from solving an existing problem, to enhancing the customer experience. As part of the opening, Youth Essay Competition winner Andri Pandoura presented her winning entry and implored the audience to “Don’t only work for youth, but work with them. Ask them for their opinion and show you care”.
The fast paced and high energy programme from Days 1 and 2 continued on Day 3 with an array of masterclasses and policy sessions, covering topics from social enterprise to crowdfunding, from sustainable clothing to virtual reality. There was also the Scale Up Lab organised by Ideas From Europe, which challenged participants to form clusters on issues affecting scaleups. For pictures of these sessions have a look at the albums on Flickr!
Then it was finally time for the SME Assembly 2016 to draw to a close. Costas Andropoulos, from DG Internal Market, Industry, Entrepreneurship and SMEs, along with Sabine Soeder the Founder of CoCreative Flow, presented the conclusions and highlights of the Assembly. We were then treated to a sneak preview of what to expect next year, as the Estonian SME Envoy Viljar Lubi took the stage to get us ready and excited for the 2017 SME Assembly set to take place in Tallinn!
Thank you to everyone that joined us this year in Bratislava, and to all who couldn’t be there but followed our coverage, we hope you enjoyed it all and we look forward to seeing you in Estonia in 2017!
In this week’s column from June’s Entrepreneur in Residence (EiR), we go head-to-head with Kenny Ewan of WeFarm to find out why he decided to step out on his own, whether he had that ‘lightbulb moment’ and how he secured the funding to finance his start up.
Why did you set up your company?
I spent many years working with isolated, indigenous communities in Peru and saw first-hand the grassroots innovation and ideas they were creating to solve challenges. However, I also saw that there was a huge discrepancy in the way this knowledge was shared, and information in general was accessed, in the developing world compared to the massive trend towards decentralization of knowledge and peer to peer sharing in the Western world driven by the internet. In 2009 I was offered the chance to be part of the Cafedirect Producers’ Foundation (CPF – A UK registered charity working with small-scale farmers around the world) start-up team with Claire Rhodes. We put our ideas and experiences together to design the first version of what would become WeFarm.
When did you set up your business, and how long did it take?
WeFarm launched as a social enterprise in January 2015, and we launched the product one month later in Kenya. We had previously been piloting and developing WeFarm as a CPF project for several years before taking the step to launch and scale as a social business – we felt this was a much more scalable and sustainable model.
We developed the product with farming communities in Peru, Kenya and Tanzania which I think was unbelievably beneficial – it meant that we developed something that people on the ground find useful and actually want to use!
Did you have a ‘lightbulb moment’ that led to you starting your business, or which triggered a change in the way you did things?
I think the path to WeFarm being launched was more of a gradual coming together of ideas, experiences and pilots than a single lightbulb moment. However, there have a few special moments along the way. I would pick out the first international test we did with farmers in Peru and Kenya as a great WeFarm moment… I was with a group of rural farmers in Peru as the first messages came in from Kenya, and it was amazing to see people’s reaction to receiving key information from the other side of the world, all in their own language and without internet. That was the moment I knew we had something of huge potential on our hands.
Where did you source funding to set up your business?
WeFarm initially was developed and tested under the UK charity Cafedirect Producers’ Foundation (CPF) and received grant funding from Nominet Trust and Knight Foundation. Then, in 2014 we won the Google Impact Challenge Award. The prize money enabled us to put our plans to launch WeFarm at scale as a social enterprise into action.
In 2015 we were part of the Wayra accelerator programme in London, which included investment into WeFarm.
Were there any EU, national, regional or local business support services, programmes or funding initiatives that helped you set up or grow?
The Wayra accelerator programme was very valuable in getting business support, coaching, mentoring, and certainly a lot of practice in how to pitch! We have also been part of the Ideas From Europe initiative run by the European Commission over the last few months. This has helped us gain a bit of exposure on the European stage, and culminated in a talk at TEDxBinnenhof, which was very exciting.
With hindsight, which would have been the single most valuable skill to have before setting up your business?
I’d say pitching and public speaking. It’s not necessarily fair that startup businesses are judged on a two or three minute ‘pitch’, but that is the reality. There is no doubt that the startups who can tell a great story and capture people’s imagination in a pitch find themselves with lots more opportunities across PR, funding and entry into different events.
Ultimately you obviously need to have substance behind it to succeed, but I’d certainly advise startup founders to practice, practice and practice their pitch. Or be brave enough to know it’s not your thing, and find a partner who can.
Kenny is CEO of WeFarm, a pioneering social enterprise, scaling a unique peer-to-peer knowledge-sharing platform for the 450 million small-scale farmers around the world with no access to the internet. After graduating from the University of Dundee, Kenny went to Peru in 2002 to work on sustainable development projects with indigenous communities. He loved the country so much that he decided to stay. In 2007, he became Peru’s Country Director for ProWorld Service Corps. This international development NGO specialises in projects for isolated, indigenous communities. He returned to the UK in 2009 to join the Cafedirect Producers Foundation (CPF) start-up team. He designed and managed all of CPF’s international projects across East Africa and Latin America.
Garage48, a tech hub and coworking space, and innovation centre, Innokas are the winners of this year’s Estonian national EEPA competition, beating seven other projects that were in the running for this year’s contest.
After winning the competition, Head of Innokas, Angela Leppik said, “This kind of competition is necessary as it helps entrants to see their organisation’s performance through the eyes of an outsider. It allows you to see more clearly what your business needs are so that you can focus on those activities in the future. It also helps you to understand even more how important it is to work at the county level, nationally, and to find partners outside Estonia.” Leppik also acknowledged the need to involve county development centres in the competition process since they are familiar with various activities at the local level.
Garage48 board member, Maarika Susi said that she was pleased that the national EEPA process recognised entrepreneurial thinking and good ideas. “We are happy to win this competition, and for the acknowledgment. Our organisation supports entrepreneurship promotion and this recognition motivates us even more to contribute to the development of the start-up community and entrepreneurial awareness. We’re also happy to see that both female entrepreneurship and increasing opportunities in the IT sector were important to the jury, who supported our efforts and urged us to continue our activities,” said Susi.
The jury had a difficult decision to make from a strong field, according to Deputy Secretary General of Economic Development, Viljar Lubi, who acted as Chair. “It was a pleasure to have so many strong candidates from organisations dealing with business promotion activities on different levels and in different areas. In the end, the jury decided to select an organisation with a strong international dimension and the originality of the Garage48 idea that expedites the move from idea to first prototype stood out. Innokas has achieved a remarkable qualitative leap at the local level, and their close cooperation with other private enterprise networks is exemplary.”
You’re not on your own: Business Incubators and Accelerators are there to help you develop a sustainable model that will help your business not only survive, but thrive.
Castles built on sand have the tendency to find their foundations washed away and the same applies to companies.
A quick look at the stats shows that 46% of business failures in the first three years are due to incompetence, and a further 30% are a result of unbalanced or lack of managerial experience. This suggests that obtaining management training and good advice should be at the top of an entrepreneur’s ‘to do’ list. There are many who have a great idea and then rush into production, start hiring lots of people, pay themselves a large salary and then find themselves with a failed company. But this decline and fall is entirely avoidable if the business is built on strong foundations.
Business incubators could be the answer. Incubators and accelerators are organisations established to provide space, training and business services to startups to ensure that they’re properly run, adhere to relevant regulations and have access to experienced management advice. So successful have these incubators been that just about every country in the EU has them, often associated with universities or funded by local authorities. The incubator success rate is impressive: around 87% of businesses that have been incubated survive the difficult first three years and go on to scale-up successfully.
A recent University Business Incubator conference revealed the top ranking European incubators and reported that “Europe’s business incubators have attracted a total of $2,4b in investment, meaning each of the 117 incubators has received an average of $20m each. With regard to deal flow, Europe as a whole receives 15.3k applications per year, equating to an average of 131 per incubator. In the last five years Europe’s business incubators have created 40,500 jobs (346 jobs per incubator) and over the same time period generated $5.6b in sales, equating to an average of $47m in sales per incubator.”
The vast majority of startups that survive the first three or four years then scale up, often still with the help of an Incubator or Accelerator, while others set their sights on becoming a publicly owned company trading on a stock exchange.
However, as Eric Forest, Chairman and CEO of EnterNext, a subsidiary of the EuroNext markets dedicated to SMEs, says:
“An IPO is a very important step for any company, large or small, and has to be meticulously prepared. The listing process brings the opportunity for the management to step back and formalise the company’s perspectives. It requires a re-examination and a clarification of the company’s business and strategy. Communication and reporting obligations also imply structuring efforts that are extremely valuable for the company’s management. It is, moreover, key to unify the internal teams around the project and to sharpen the equity story to convince investors about the company potential.
At EnterNext, we decided to provide the means to help companies entering the market in the best possible ways. For instance, in 2015, we designed the programme TechShare, which is a unique one-year pan-European course to familiarise non-listed innovative businesses with capital markets and gives them the information they need to take their companies to market. Although the listing obligations are often considered as “constraints”, they actually help entrepreneurs to build their castles on the rock.”
Going public is definitely not a step to be taken lightly since one of the first things that happens is the entrepreneur has to give way to the professional business manager, which effectively means losing control of the company, or at least, the spirit of the company. If the scale-up has been successful, then this may not be a problem but recognising when to hand over the reins is always difficult. Again, this is where Incubators and Accelerators have a major role to play: they are not just for start-ups but generally have expertise in scaling up businesses and can guide the entrepreneur towards making the right decision before putting them in touch with the appropriate professionals.
Tips for finding the right incubator
- Ask around. Talk to your startup and industry peers and ask for recommendations of incubators and accelerators.
- Do your research – especially on the internet. Try these
- Top Start-up Incubators in Europe
- Five ways to Vet and Incubator
- Start-Up Accelerators
- University Business Incubators
- Read widely, and well. Keep your eyes open and your ear to the ground for the latest tech news on websites and magazines dedicated to entrepreneurship. Look out for incubator and accelerator programmes and news of companies that have recently been incubated and/or invested in.
The concept of the “State Startup” (Start-up d’Etat) was developed by the French SGMAP (Secrétariat Général pour la Modernisation de l’Action Publique) to improve digital services offered to citizens by the state. State Startups use agile methodologies to develop and improve administrative web services so as to bring them closer to citizens. Users, product teams and ministries collaborate to improve online public services.
- In December 2012, CIMAP (the Comité Interministériel pour la Modernisation de l’Action Publique ordered French ministries to collect information on citizens’ needs so as to simplify administrative procedures.
- In 2013, the French President officially announced measures (in a program called “le choc de simplification”) to simplify the relations between citizens, private companies and public administration. A first wave of 170 measures were initiated in July 2013. In January 2014, the Council of Simplification was put in place. In February 2016, French Prime Minister Manuel Valls announced 170 new measures.
- In November 2013 a new French law (2013–1005) empowered the government to simplify its relationships with citizens. The “Faire-Simple” project is an example of an implementation of this law.
- The State Startup concept was officially launched during Public Innovation Week in October 2015, after two years of experimentation.
Description of the way to implement the initiative
After two years of experimentation, the concept of a State Startup (Start-up d’Etat in French) was officially introduced in October 2015, during France’s Public Innovation Week. “We develop Web applications created with and for administrations”, explains Hela Ghariani, project owner at SGMAP, which is part of DINSIC. The Direction interministérielle du numérique et du système d’information et de communication (DINSIC) is the new French government IT organisation, the 2015 merger between the predecessor DISIC and Etalab, the government’s open data hub. Ms Ghariani runs Mes-Aides.gouv.fr, which is an example of a State Startup.
15 startups are now being incubated by DINSIC, including :
- Marché Public Simplifié (MPS – Simplified Public Market), which facilitates the tendering process by requiring only a company ID number (SIRET);
- Le.Taxi, a mobile application for ordering taxis through a nation-wide geolocalised database;
- La Bonne Boîte (“the right employer”), connecting job-seekers to companies who are recruiting; and
- Mes Aides, a simulator for state benefits (see below).
Identify & fix real problems
The goal of State Startups is to identify real problems, quickly develop applications and web services to solve them, and ultimately help to modernise public services in France. To accelerate the development process and build applications close to the needs of citizens, State Startups rely on modern management methods (agile methods) like those generally used in private startup companies.
“In developing a web application that solves a user problem, it is quite difficult to follow the traditional processes used by the French administration,” said Hela Ghariani.
So with State Startups the development of public digital services is moving away from the traditional approach and instead relies on small teams. These teams focus on identifying a problem and solving it via a digital solution. “This is how we prototype better public services online” Hela Ghariani says.
The small teams in the DINSIC Incubator are usually made of:
- Developer: understands the technical and the users’ issues;
- Product Owner: defines how the project will solve the problems it has identified;
- Coach: coordinates the project as a whole and helps the team to stay focus on making the best product.
Lean startup methodology
“These teams rely on the working methods used by startups,” Hela Ghariani says. To adapt to the limited financial resources, each State Startup comprises just two people: “These limited resources force us to be creative in finding solutions. We are trying to eliminate constraints that exist today in the administrative world when it comes to producing a web service,” she says. With the new approach, the first prototypes are ready for production within six months.
State Startups use a methodology known as Lean Startup. “This identifies a public service that needs to be improved to meet citizens’ expectations,” Hela Ghariani says. “We try to understand the user’s problem, and identify how they interact with the administration.” Once the problem is well defined, the team starts to prototype a product. The teams use agile methods like Scrum, tailoring them according to the project, the ecosystem and the external partners.
Users are at the heart of the process of identifying the problem and developing a solution. “Tests are carried out with users according to the nature of the project,” explains Hela Ghariani.
An interministerial mission
Government ministries are also committed to the process, and serve as business experts. “State Startups have an interministerial mission because most of the time they involve services that cross the boundaries between several administrations,” says Hela Ghariani.
The source code of the final Web application is open and available under several open licenses. The source code is available on GitHub.
Main results, benefits and impacts
The example of Mes-aides.gouv.fr, a simulator for state benefits
Hela Ghariani manages a State Startup called Mes-aides.gouv.fr, which shows French citizens the state benefits they are entitled to. “Problems with state benefits were identified in a study conducted by SGMAP in 2013,” she says. “One of the questions was: ‘Why do some people never ask for the benefits they are eligible for?’. Indeed, some of the social benefits were poorly designed and that information about benefits was not reaching the right people. The eligibility criteria were really complex, so a typical person may not know whether he or she is eligible for one or more benefits,” says Hela Ghariani.
The first draft of Mes Aides was posted less than six months after the project began. A beta was online on October 2014, after four months of development.
According to the dashboard of digital services published by SGMAP in 2015, 26% of French people used online services in 2015. They recorded a satisfaction rate of 89%, which is very high. 20 out of 27 administrative procedures recorded an increase in the share of digital applications, reveals the barometer.
- The chronological evolution of “Le choc de simplication” (PDF in French)
- The governmental portal dedicated to the modernisation of public action
Source: European Commision, Joinup portal