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Tag: engineering

Golden Opportunities in Space Supply Chain

Space is a great business, as well as fun for the kids.  Last week, I was invited to Astrium in Portsmouth to give a talk about the opportunities for non-space companies to sell into the space sector. Readers of Qi3 Accelerator Insight will know that I’m passionate about promoting the space sector to wider communities. Of course, I like to think that I’m a reasonably interesting person, but it was clear that on that day my talk wasn’t the most interesting as far as useful facts were concerned.

Chris Ward, Head of UK R&D at Astrium, provided a noteworthy presentation with insightful statistics. I’ll focus here on some key figures:

  • Astrium has €1B sales annually of which 53% accounted for manufacturing and 47% accounted for services (an increase from almost nothing over the past decade).
  • In manufacturing, 70% (approx. €385m) of business was subcontracted of which €100m was spent with 400 UK companies.
  • In services, 35% (approx. €176m) of business was subcontracted of which €100m was spent with other UK companies.

In such a gloomy business environment, this undoubtedly represents €200m of golden opportunities for companies who wish to sell into the space supply chain.

My talk emphasised what’s available for companies in this sector, with specific focus on technological and service opportunities for suppliers.  Mail me to request a copy.

Let’s start manufacturing – new TSB strategy announced

At last the Technology Strategy Board has published its new strategy for High Value Manufacturing.

Their definition of HVM is very much allied with ours:

High value manufacturing is the application of leading edge technical knowledge and expertise to the creation of products, production processes, and associated services which have strong potential to bring sustainable growth and high economic value to the UK. Activities may stretch from R&D at one end to recycling at the other. Such potential is characterised by a combination of high R&D intensity and high growth.

And they focus on 22 competences, grouped into 5 strategic themes:

  • resource efficiency
  • manufacturing processes
  • materials integration
  • manufacturing systems
  • business models

Reading through this document and the accompanying Cambridge Institute for Manufacturing study, there is a lot of sense here, but I’d argue also a number of important omissions and (dare I say it) fashionable hobbyhorses.  For example, I feel that the UK has world class competences in metrology, measurement systems and analytical instrumentation.  These competences can enable leaner, more resource efficient and less costly manufacture.  This doesn’t undermine the overall thrust of the IfM’s argument, but I hope that the TSB will be open to a healthy debate and ongoing refresh of these 22 competences.

At Qi3 Accelerator, we use the phrase High Value Manufacturing to encompass the ‘real world’ of engineered products and associated services, including those destined for sectors such as aerospace, security, defence, space, medical and environmental.

Let’s see how this new strategy for HVM is backed up by actions that will make a material difference to the rebalancing of the UK economy towards making things.

 

Bootcamp heats up debate on British manufacturing

The Qi3 Accelerator HVM Bootcamp is heating up.  Quite a few people are asking us what constitutes ‘manufacturing’ in our context.

I’m not going to give a pat definition here, but suffice it to say that we’re looking for companies outside of the ‘wet biotech’ and ‘pure internet’ spaces, where engineering disciplines bring together core physics, engineering, biology or chemistry into an engineered product based up0n electronics, software, sensing, instrumentation and services.  Pure software is fine if it relates to engineering.

And what’s the ‘High Value’ in High Value Manufacturing?  I see it as:

  • High value added, through a high knowledge content and the deployment of skilled labour
  • Broad in lifecycle, through the recognition that ‘cradle to cradle’ lifecycle creates opportunities in the value chain not just the manufacturing process
  • Comprehensive in scope; considering societal and environmental benefits, not just the tangible product

Try us – to get 3 days of intensive support for your business acceleration, apply by 30th May.

Why we’re passionate about High Value Manufacturing

After this week’s announcement of the Qi3 Accelerator Bootcamp, friends are asking me why we’re doing it.  Are we mad? How will we make money? And, above all, why High Value Manufacturing (HVM)?

The simple answer is that we’re doing it because we see the need!  After reviewing nearly 400 prospects, we see a common set of areas in which businesses need to improve if they wish to attract investment.  Let’s be clear here, I’m not just talking about seed stage ideas.  I’m expecting that the bootcamp will be most attractive to young established businesses looking for early or expansion stage capital.  We’ll be helping on all aspects of engineering businesses, from managing technology and product development, go to market strategy, finances and Intellectual Property.

When I attended the NESTA Startup Factories conference  last summer, it became obvious to me that, whilst Accelerator Programmes were flourishing in the software and Internet space, few people had tried them in ‘harder tech’.  When we set up the partnership with Cambridge’s ideaSpace, it seemed natural to run a bootcamp as a one-off pilot to test our evaluation process and the concept of such a programme.  We aim to support 8 businesses with tough love through an intensive 3-day process, and we’ve attracted a range of top notch coaches and mentors to get the best out of this short, sharp shock.

But above all, it’s about having fun working with ambitious people in the field I love.  I grew up at Oxford Instruments, a mid-sized engineering company where the customer was king and the love of technology and manufacturing was deeply ingrained.  I’ve spent my life selling and marketing other people’s technical inventions around the world.  For me, HVM means making real engineered products, be they destined for environmental sustainability, healthcare, industry or defence.  My pleasure as an investor is seeing engineering and commercial jobs created here in the UK, and products exported across the globe.

We’ve been fortunate to attract partnership from ideaSpace, sponsorship from Harrison Clark, Williams Powell, Synergy Energy and Wren Capital, and support from NESTA and the Technology Strategy Board.  Bootcamp participants will have to contribute a token amount towards their accommodation in Cambridge’s lovely Madingley Hall, and we’ll make up the balance of the costs ourselves.  We are not seeking equity stakes in the companies that participate, although we’ll naturally be keen to see if they are attractive investments at the end of the process.

So are we just do-gooders?  Well perhaps.  I see it as a superb experiment, an opportunity to help some great businesses, committed entrepreneurs, and work with experienced mentors whilst having great fun.

To join the bootcamp apply here.  It’s a one-off; entries close on 4th May and the bootcamp will be held on 23rd – 25th July.

My next posting will be the one about the aubergine…

Is your product really ready for the market?

I’ve been reflecting on the state of product maturity at the time entrepreneurs seek external investment. I tend to use Technology Readiness Level (TRL) as a starting point for discussion with entrepreneurs.

It’s relatively easy to distinguish between ‘concepts’ (TRL2-4) and ‘development projects’ (TRL4-6) which may be suitable for pre-seed, seed or early stage investment, but it’s the stages nearer to market (TRL7-8) that have been exercising me recently. We’ve been presented with several opportunities recently, each having made first sales, and claims that investment will accelerate the company up the ‘J’-curve to substantial sales revenue.

I suggest that four questions should be posed:

  1. Are the installed systems the final production version?  If not, can they be upgraded to this standard to provide a solid customer reference base?
  2. Can the first 2 years of sales post investment be fulfilled with exactly today’s products?  If not, what proportion of sales over this period is contingent on further R&D, and is this provided for in the business plan?
  3. What ‘cost-down’ programme is envisaged to reduce manufacturing cost as volume increases? Is this already specified, or a vague statement?
  4. What proportion of the funds will be applied to sales & marketing versus R&D?

One opportunity seemed less attractive when we realised that the experience of 20 installations had shown that a complete product redesign was required. So the next year would be spent in development before sales could recommence. The company had reached what it saw as the finish post, but to me felt like a new starting line.

Another entrepreneur told us his product was ready for manufacture of a batch of pre-production prototypes. Further discussion revealed that at least two further design iterations were required.

A third company has placed 3 ‘beta’ units, now has 10 ‘v1’ units sold, and has demonstrated that it can sell the next 2 years’ forecast based on the current platform.

So are these companies at TRL 7, 8 or 9?  Do they understand TRL or are they kidding themselves?

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