The University of California Berkeley released a study last month, based on two decades of records from the University of California system, which supports a viewpoint that’s been reiterated by this magazine for some time now – collaboration between smaller universities will generate the critical mass necessary to enhance bargaining power and conduct effective technology transfer.

One organisation that personifies this message is SetSquared (styled SETsquared), the incubator representing the UK universities of Bath, Bristol, Surrey, Southampton, and Exeter. While each university still retains a technology transfer unit, SetSquared has become the de facto standard incubator for much of the spin-outs coming out from the five universities, as well as supporting student-led startups and other new businesses.

That partnership recently hit a major milestone in its decade long history. SetSquared over the past decade has incubated over 1,000 companies with a survival rate of 90%, and has helped those firms raise over £1bn  ($1.66bn) in external fundraising. By way of comparison, Cambridge Enterprise, the technology transfer office of Cambridge University, has also raised over £1bn for its firms, but took twice as long to do it.

Much of the driving force behind SetSquared, which is ranked as the joint number one university incubator in Europe (and fourth in the world) by the University Business Incubator (UBI) Index, comes from numerous benefits stemming from its collaborative spirit. The inter-university collaboration grants SetSquared access to 7,400 academics, which between them receive up to 10% of the UK’s higher education research budget and generate roughly the same share of the country’s total university patents.

The incubator has also successfully developed links with industry, with a large chunk of its incubated companies coming from outside of the university base. This has led to SetSquared having a more flexible approach to incubation, with each startup treated individually. Dhruv Bhatli, one of UBI Index’s co-founders, recently slammed UK university incubators as becoming sausage factories, but singled SetSquared out for praise. He said: “SetSquared is different – it adapts its offer to fit the entrepreneurs, which is unique and the only way to avoid the “one-size-fits-all” approach.”

The links to industry have also led to the SetSquared Open Innovation Programme, which looks to marry large corporates and organisations to some of the smaller firms and innovative ideas passing through the incubator. The programme is still in its early days, but has so far attracted BAE Systems, Barclays, CGI, Freescale, Johnson & Johnson, Philips Innovation Services, Sony, South West Water, Ericsson, Westpac Bank, and several others.

In other news coming from the incubator recently, Simon Bond, a ten-year SetSquared veteran who previously filled the position of director at the incubators innovation centre in the University of Bath, will be taking the reins of SetSquared as its Innovation Director. Simon, who replaces Graham Harrison who is expanding his role at the National Composites Centre, sat down with Global University Venturing to discuss the history of SetSquared, and what the UK’s top ranked incubator has planned for the future.

 

Where do you see SetSquared now, and what’s your vision for the future as its new innovation director?

This is SetSquared’s time. I look at what my colleagues have achieved over the last decade – it is extraordinary economic impact. Now 1,000 companies supported by the SetSquared system, and a £1bn raised in investments into those companies. We think that this impact strong, but we can do even more than that.

Moving forward, we will build around four core activities, and seeing how we can amplify those to multiply that billion pounds worth of impact.

The four areas are:

–          Acquisition of new members

–          Incubation or acceleration of more companies

–          Opening up more access to finance for those companies

–          Longer on-going business development.

Inevitably, that means we’re going to be looking to work with more companies from more locations. That means growth, that means working with more partners from within the UK, and absolutely that means reaching out to find strategic overseas partners.

It’s a critical mass game. With Horizon 2020 kicking off the largest research and development programme funded on the planet, we need to find our peers in Europe in order to do best by our companies and clients.

In terms of the acquisition of new members, I am proposing to roll out entrepreneur programmes to attract fresh entrepreneurs and provide them with guidance on how to develop their business plans while offering an easy point-of-access into the SetSquared system.

An expansion to our activities on top of our startup programmes will be the SetSquared Open Innovation Programme. Initially funded by the UK’s Intellectual Property Office, the programme is for smaller companies who want to be part of an ecosystem with big corporates. We’ve picked over a dozen partner organisations with open innovation strategies, looked at those briefs, and are matching and are matching SetSquared companies to the larger corporates. These include Sony, Astrium, CGI National Health Service innovation teams, Airbus and others.

 

1,000 companies incubated, £1bn in external fundraising completed, how has SETsquared done it?

There are two secrets in the sauce. One is critical mass through collaboration. Collaboration is not easy, and all the partners have worked hard to build that collaboration with each other. Universities compete in so many ways, so to work together on the enterprise and growth agenda is a conscious decision. In doing that, it meant that instead of one university offering the market a few tens of investment and innovation opportunities, together, we can now offer the market hundreds. That critical mass has bread success and more investment coming back to us.

The second factor is longevity. Ten years is a long standing partnership in the business, and SetSquared has established that presence which allows serial entrepreneurs and investors to come back to us following good deals. That’s helped us build our reputation as a permanence in the market place when so much else is quite temporary.

One of our recent proud moments comes from social media company SecondSync – which came through the SetSquared centre in Bristol – after it was acquired by Twitter. They specifically mentioned the support we gave them in their early days, and our longevity allows our entrepreneurs and success stories to give credit back and thank us for supporting them.

 

What challenges has SETsquared faced in fostering collaboration?

The challenges have been really profound changes to the environment in which we occupy. They include extraordinary changes to the university sector, a changing financial relationship with students, the research environment in the UK with the introduction of the research excellence framework, one hell of a financial meltdown, and the internationalisation of universities.

The real challenge, however, is to have an organisation that is flexible enough to respond to these issues, and resilient enough to continue building reputation. SetSquared was able to re-orientate its offer to startups towards grant funding and access to other of sources of financing when equity markets were shutting down in 2009. And now, SetSquared is able to scale up its offer again as the business
angel market kicks in and is creating a new wave of investment throughout the business.