EcoMachines Incubator Ecosummit London 2014
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Transcript of EcoMachines Incubator Ecosummit London 2014
©2014 EcoMachines Incubator Ltd. All rights reserved
Investing in advanced engineering
start-ups: avoiding the bear
ILIAN ILIEV
CEO, EcoMachines Incubator
8th October 2014 EcoSummit, London
©2014 EcoMachines Incubator Ltd. All rights reserved
Focused on startups in advanced engineering
and high-value manufacturing
A hybrid business model:
a seed Accelerator + early-stage VC fund
About EcoMachines Incubator
Accelerator programmeincludes equity finance, mentorship, and other
services
©2014 EcoMachines Incubator Ltd. All rights reserved
Power Generation Transport Water
Energy Efficiency Materials Smart City
Sectors of Interest
Waste
Industrials
©2014 EcoMachines Incubator Ltd. All rights reserved
Accelerator Programme
We help entrepreneurs transform their businesses from a startup with a proof-of-
concept technology into a high-growth, investable company.
Stage 1
Startup
Stage 3
Follow On
Result
Our 9-month one-on-one Accelerator programme is specifically designed for hardware &
advanced engineering startups.
©2014 EcoMachines Incubator Ltd. All rights reserved
Our London location enables access to world leading universities,
investors, corporate HQs, trade exhibitions, industry experts...
...proximity to other UK high-tech cluster...
...connectivity to EU, US and key emerging economies
Operating out of Central London...
©2014 EcoMachines Incubator Ltd. All rights reserved
EcoMachines Team
Management Team
Advisory Board
Chris NiehausEx-head of Industrials at UBS
©2014 EcoMachines Incubator Ltd. All rights reserved
Accele
rato
r Mento
rs
EcoMachines Team
©2014 EcoMachines Incubator Ltd. All rights reserved
EcoMachines Portfolio
Since early 2013 we have backed the following companies:
©2014 EcoMachines Incubator Ltd. All rights reserved
Why are we bullish on the opportunities in
energy & cleantech?
Source: http://www.ritholtz.com/blog/wp-content/uploads/2009/07/cartoon-spin-bull-vs-bear.jpg
©2014 EcoMachines Incubator Ltd. All rights reserved
VC in energy and cleantech: is the model keeping up?
The VC environment has been broadly
positive in the last few years
...while cleantech investment has
moved in the opposite direction
©2014 EcoMachines Incubator Ltd. All rights reserved
...yet within sub-sectors, investment trends differ
Source: Cleantech Group i3 database
©2014 EcoMachines Incubator Ltd. All rights reserved
Why are we bullish about hardware in
energy and cleantech?
• The ‘bubble’ in Cleantech has already burst – look elsewhere for bubble conditions
• Move towards specific, real solutions for mature industrial sectors – with real bottom-line benefits to specific users/clients
• Much easier to have investment discussions firmly focused on real world outcomes – where real cash flows come from
Bubble inoculation?
• Improved CAD design & simulation, 3D printing/rapid prototyping, and more executive experience can lead to leaner, faster start-ups
• Impact is lower capex and faster time-to-market
Lean hardware start-ups?
• Opportunities for energy/cleantech application areas from well-developed platform technologies in materials science, robotics, IoT hardware
• The application of these to industrial problems can lead to significant value release/capture – and novel business models
Horizontal technologies
impact?
©2014 EcoMachines Incubator Ltd. All rights reserved
The EcoMachines approach 2
What is the Lean Startup method ?The Lean Startup approach of ‘validated learning’ and iterative product releases has been
tremendously influential as an entrepreneurial approach for Web/software companies...
....Which has seen the bulk of VC investment in recent years...
...So hardware companies should be curious!
Key elements of Lean Startup : • Minimum Viable Product
• Continuous deployment
• Split testing
• Actionable metrics
• Pivot
©2014 EcoMachines Incubator Ltd. All rights reserved
The EcoMachines approach 2
Lean Startup – key elements
Hardware implications Solutions
Minimum Viable Product It takes more investment and time to build an MVP for hardware
•Virtual prototyping•Rapid prototyping & additive manufacturing•Scenario testing with clients•Industry partnerships•Low-cost prototyping
Continuous deployment It takes more time and ££ to do iterations on hardware prototypes
Split testing Its more expensive to build hardware prototypes
Actionable metrics Different type of metrics for hardware and B2B
Use deep sector expertise to identify relevant metrics
Pivot More expensive Do market-product fit testing earlier on
But... Is Lean Startup appropriate for Hardware?
©2014 EcoMachines Incubator Ltd. All rights reserved
Some lessons…
The promise: if you get it right, investments in ‘hardware’ businesses can be
highly scalable at relatively low capex, and can ‘plug-in’ into existing industrial
infrastructure (metallurgy, oil&gas, automotive, water…)
Promising companies:
• Hyperfocused on a specific easy to reach market applications
• Close to an MVP
• Ability to articulate pivots on current business model
• Deliver real and significant benefits to a real client… at the same or lower price
• Team with experience specific to the market application
• Find the low-capex model for growing the business
• Investors with relevant experience
• Business model supporting early cash flows
©2014 EcoMachines Incubator Ltd. All rights reserved
What we want to avoid in start-ups!
Ilian Iliev (CEO)London, United Kingdom (m) +44 77863 73965(e) [email protected]
Contact UsTo find out more about EcoMachines Incubator,
please contact us.
ECOMACHINES INCUBATOR LTD.Rainmaking Loft, International House, 1 St Katharine’s Way, London, E1W 1UN, United Kingdom
www.ecomachinesincubator.com @EcoMachinesUK