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Engine Shed’s Let’s Chat series shines the spotlight on our all-important stakeholders that form a vital part of Engine Shed. This month we sat down to chat with angel investor, and non-executive Director, Sherry Coutu, to get her take on the current environment for entrepreneurs, her launching of the ScaleUp Institute, and the main challenges faced by scaling businesses in the current climate.
For those that don’t know much about you, what are you doing at the moment and what is your background?
I’m working on a portfolio of things ranging from philanthropic funding organisations such as Founders 4 Schools (F4S) and chairing the ScaleUp Institute (SUI) to sitting on the boards of the London Stock Exchange plc. and Zoopla. I’m really involved in a breadth of activities from charities to deep financial services and real estate. I’m a serial entrepreneur having started up, run and floated a number of organisations, plus I’ve had a stint as an Angel investor.
You’ve achieved many things so far, what are you most proud of and why?
I think both the Founders 4 Schools and ScaleUp Institute: SUI because the originating report which was a collaborative process has had such wide ranging impact in so many countries and it’s really captured imaginations, creating movement. F4S picks all the things I am passionate about – preparing for the future of work, which solves the biggest problem for scale-up companies, that is, the source of talent to fulfil production requests. We’ve got 115,000 students who have been through our Founders 4 Schools programme which isn’t bad for a tiny charity that is only two years old.
How has the entrepreneur environment evolved over the past ten or so years, in the UK?
The UK is coming of age. 30 years ago with my first company, it was unusual to be an entrepreneur which was not seen as a good thing and the environment was not as welcoming. In the last 10 years, the Government has focused on welcoming entrepreneurs as engines of growth and encouraged those around it. The support systems have grown and matured significantly; there are better venture capitalists, an increased number of Angel investors and it isn’t impossible to find fellow entrepreneurs who want to make a difference. Brexit is making it harder but it can’t turn back the very supportive tide making the UK a leading and welcoming place.
Tell me about the ScaleUp Institute, what is its purpose?
The ScaleUp Institute is singular in purpose: to increase the proportion of companies that scale-up in the UK. The way we do that is by acting as their voice in five ways: by putting them on the map so that it is easier for others to find them, by making sure it easier for them to find people to work for them, easier for them to find customers, easier to find finance and easier to find location/space/infrastructure. SUI works closely with local ecosystems across the private, public and education sectors, to ensure that every local area of the country is ‘scale-up fit’ and addressing the needs of their local scale-up community.
What has the ScaleUp Institute achieved?
In our new report, you will see that the SUI has made a good start on all those five elements. Long term ‘patient capital’ is high on the agenda with the British Business Bank and there is a good number of new funds emerging to help scale-ups get the investment they need as well as a large number of Universities like Bristol focused on education for scale-up leaders, including peer to peer networks – which all adds to getting the right talent into the local scale-up community. We’ve really created a movement and with the Government establishment in 2017 of the scale-up taskforce as part of the industrial strategy we have ministers heavily engaged with the scale-up mission who can create policies to help them. If you look at the budget, we’ve started, grown and expanded in UK which is a real accomplishment with scale-ups contributing £225bn.
What are its future ambitions?
In 2011, the UK surpassed the US as the best place for startups; we want to do the same for scale-ups. It’s the Institute’s ambition to surpass the US (currently No 1 for scale-ups) between 2020-2025. And we are closing the ground and we will pass them per hundred thousand population in UK. It’s not unrealistic as the UK has specific benefits such provision of information that allows us to identify private companies and target them, to sweep barriers away. In the US, you can’t find them as they do not have a business register or data collection.
What inspired you to start the ScaleUp Institute?
I had written a report for Government at their request on how to stimulate economic growth. There were many people who worked with me on that and shared the passion for addressing the issues at hand and were determined to collectively act to make change and make the UK a ScaleUp Nation.
These individuals, and companies including, Goldman Sachs, BGF, Google, Smith & Williamson, and the London Stock Exchange worked together, with other colleagues from the world of finance and business, to form the ScaleUp Institute as we all felt it crucial to form an independent entity to catalyse the changes needed.
We’ve created real momentum and have been joined by many others in this journey including Innovate UK , BT, Sage, finnCapp, Rockspring, Vistage, to name but a few.
A key area of what we do is educate on what it takes to form a scale-up ecosystem, study and exemplify what works and on a yearly basis issue our annual review on where we are to reflect on progress as well as remaining challenges.
In terms of businesses scaling up, what do they need to do, how should they prepare?
Well you need fab product that customers want! After that, you need the right talent to hire so they can create their products and ship these out. There is a barrier in UK because you don’t control the quality of talent that comes to you. Government and Universities have a part to play in getting them ready: getting talented people ready to hire.
What are the challenges in scaling up? What are the most entrenched or hardest to overcome?
First and foremost getting the right Talent and skills into the company. The second is their own ability as leaders to grow themselves at the rate they need to grow. But if needed who do the entrepreneurs turn to? This support is not usually close by, so we can match- make scale-up leaders to other scale-up leaders and create peer to peer networks.
The entrenched challenge lies with access to large corporates to collaborate with or sell into; processes around procurement practices can be complicated, lack transparency and hard to navigate, then payment terms can be onerous or subject to delay. Board Directors should insist on policies of working with scaling businesses to bring innovation into the company and also making sure SMEs in their supply chain get paid on time.
How did you get to hear about Engine Shed?
I heard about Engine Shed before I met anyone from it. The Vice Chancellor, Hugh Brady chatted to me about Engine Shed and how it was doing interesting things. Nick Sturge brought a team to the ScaleUp Institute’s inaugural ‘Driving Local Economic Growth through ScaleUp Ecosystems’ course . This enabled Engine Shed to meet other similar organisations in the UK to learn from each other, get international perspectives; and share best practice.
How would you describe Engine Shed?
It’s fantastic, fabulous, innovative and ambitious, and definitely an accelerator not an incubator. It is unusual in terms of the impact in Bristol and Bath, what they are doing with teachers, meeting companies to incubate and accelerate. Engine Shed is helping teachers understand new job roles which will help young people think through their future. The reach is truly extended to educators. It’s also terrific to see the ecosystem in one place from business, to university, to local business associations and the Enterprise Partnership. The scale-up enabler role the Engine Shed has introduced since our course is also a leading example of championing local scaling businesses and harnessing resources your fast growing businesses.
What excites you about the Bristol & Bath cluster?
Ooh, let’s see: semi-conductors, software and gaming, I’m a techie at heart and I like a little bit of hardware and software. The University is choosing hard subjects with world-class research, actively seeking out ‘the city’ in which it can be a part rather than just being raw academia. Every university should have an Engine Shed to make economics work, making the investment in the cluster you are part of. It’s been grasped with open arms and now seen to be paying off with a dramatic growth in scale-ups and clusters growing faster than others. All this is pointed back to Engine Shed and the University focusing on the key things required and also harnessing the business and finance community in that journey.
What can entities, like Engine Shed, do to facilitate scaling up progression?
Engine Shed is doing what’s doing important; connecting peers to each other; putting them on the map, helping others to find them so they are not lonely and isolated, and to learn tricks from others’ fast growth. Engine Shed is far-sighted in extending the talent pipeline to teachers.
What about the role of collaboration in scaling up?
When I researched the scale-up report, it was interesting to see what the cost of job creation with and without collaboration and the results are interesting. With low collaboration it costs £32k; in a collaborative ecosystem it costs £500, that’s 90 times cheaper. Additionally, collaboration means you can solve a problem in two days not three months, and that connectivity costs nothing. What scale-ups do is not written in books therefore it has got to be from the ecosystem supporting it. This creates a win win benefaction for all in the community.
Achieving inclusive economic growth is not easy or quick and Engine Shed recognises that creating a ‘Diverse Workforce for the Future’ is important, particularly for Bristol, in helping this; why do you think diversity in our workforce is important for the future? Are there things you think we should be doing to encourage this?
Diversity and gender are really important. The role model effect is critical. In the classroom, you should be able to meet the founders of business. Also we should put researchers from universities into classrooms to explain the importance of research and what it does.
Engine Shed is about launch its “Engine Shed on Tour” Bus that will tour schools and youth centres in the city region to take what we currently deliver, for youngsters, at Engine Shed out into the community. What are the main challenges facing youngsters today and how can they become inspired?
By and large, they don’t have access to people who start up companies so what Engine Shed is doing in touring schools is brilliant. Schools are tight on time and if we can show up for a day for pupils to meet some innovators and job creators, that’s amazing. Every single day, pupils and students are challenged by ‘what are you going do’, ‘what GCSEs’, ‘what A-Levels’ – no one knows and it is unsettling. If you meet entrepreneurs who didn’t know what they wanted to do when they grow up but who can show ‘this is what I’ve done’, is empowering and illuminating. When you examine it, there are a multitude of pathways for an entrepreneur which is different from professions. The vast majority of people don’t choose a single path.
Have you seen any good examples of this?
I have to cite Founders 4 schools! We’ve had 115,000 school children through our programme with 96% inspired to think differently. It can transform people’s lives four-fold. We went into a SW London school for girls, the majority of whom chose to study economics resulting in the school needing to recruit economics teachers such was the interest.
And finally, we hear that you are shortly to receive an honorary doctorate from University of Bristol – what does this mean to you?
I was so thrilled when I heard, I almost fell off my chair! It’s incredible as I don’t have a doctorate and to think that it was inspired by what I wrote in the scale-up report and other things is brilliant. It’s fantastic to get recognition for doing something because it is right particularly from a university like Bristol. It means an enormous amount and makes me want to do more.