A Nonuniform World: Lesson two from building the Work Intelligence Market Analysis

As I mentioned last time, in the course of writing a report of the scope of the recent “Work Intelligence: Market Analysis”, I ended up with a bunch of notes that didn’t end up making it into the analysis of the final report. In addition, there’s some that did make it in some form, that I thought could be expanded, that for reasons of brevity and specificity, were instead reduced in scale. In the first part, I talked about connected markets and how they really add to our understanding of what can help organizations work better.

The world isn’t flat

In order to build the Work Intelligence market analysis (and the preceding introductory report), we spoke to dozens of vendors across the globe. From Australia to the edge of the Arctic Circle, across Asia and North America, we traversed a whole bunch of complex timezone meeting scheduling to try and gather as wide a range of experiences and expertise as we could on which we could base our eventual analysis. 

You can read about some of these parties within the Vendor Vignette section; we try to produce as many of these as we can to provide more detailed narratives about those people gracious enough to share their time with us (honestly, we could do nothing but write VVs and we’d never cover everybody we have spoken to, but there’d be no time to work on anything else or breathe). 

Other than proving that it’s hard to schedule meetings where UK, USA and Australia all need to attend and be wide awake, there are some additional characteristics – not unique to Work Intelligence by any means – that are worth keeping in mind, when building comparisons.

Drop out to Start-up is a period piece rather than a contemporary model

It’s something of a cliche in itself – and perhaps one that is largely based on the Silicon Valley* of the 1970s than that of the 2020s – but the “university dropouts as founders” back story for startups is one that does not travel as well as you might have thought. Aside from the fact that I’ve scarcely heard it cited directly to me during the last decade or so of my work, it doesn’t tend to inspire confidence in stickability for future investors, who would be banking on at least some of their stakes turning into something tangible. 

The important caveat here is that I’m talking about dropping from undergraduate programs.  If we’re talking about postgraduate studies (masters or doctoral programs for example), then turning that into a commercial entity during the course of a program isn’t unusual, if certainly a far more common story to hear in North America than in Europe or beyond. Which brings us neatly on to….

In education vs out of education

Speaking to start-ups that are commercial spin offs from university programs or yet-to-be-actually-spunoff from academic programs is not uncommon in Europe, but is almost unheard of in North America. It’s very common among the European start-ups for their backstory to heavily feature their academic research, indeed it is often one of the concrete selling points of their narrative, that peer reviewed papers can be cited to back the thesis on which their product rests. 

If we were to be speaking to two start-up peers in North America vs Europe, where everything was identical about their product, one would be citing the university program and research papers of the founders, while the other would be citing the prior company logos of the founders. Neither is an arbiteur of which will be the most impressive – or ultimately most successful – but will certainly have a bearing on the way in which that product is marketed and critically, how that marketing is funded. 

Essentially, different incubators produce subtly different offspring.

Venture funding vs administrative funding

The underlying difference here is of course, the money. What might draw someone out of a postgraduate program of a North American university that wouldn’t be available to do the same in Europe? The availability and volume of funding.

It’s not a binary affair; there’s availability of venture funding for start-ups in Europe and many of those we speak to – including those with academic backgrounds – are able to secure it. However it tends to come later in the process and at lower levels than an equivalent North American domiciled peer. Funding tends to be similarly national, just as US funds tend toward US startups, the same is generally true for example of funds in Germany. In European terms that tends towards atomizing cash available across the continent into regional chunks, resulting in entities in southern Europe, with Iberia for example comparing negatively to Scandinavia. 

What is available to some entities in Europe that is distinct is access to regional funds set aside from government bodies or non-governmental, state-funded agencies (what we’ll call here for the sake of confusion “administrative funding”). This is thin in volume compared to what might be available from VC in other geographies, however it tends to come with less payback string attached (if the process of getting it is often no less arduous, and with a bigger overhead of paperwork). In those territories with generally less density of VC, these funds are often the most readily available sources of start-up or expansion capital. 

Plenty of exceptions and no real rules

If all of this sounds like the establishment of neatly demarcated lines that exist somewhere off the Azores, then that is exactly wrong. There are no simple rules and there are plenty of exceptions here, which is in part why each interaction on vendor briefings we have is unique and interesting. US start-up with all their R&D in London? Sure, we wouldn’t have predicted that, but fine; it makes for a fascinating narrative to understand how that came to be.

If you’re reading this and thinking “well, you’ve not spoken to us and we have a fascinating story” and you think we’re missing out not having heard it, get in contact with us and arrange a briefing. It’s a free way to share experiences, regardless of which time zone you’re in.

* I use the term less geographically, than to represent a particular set of entities.

Leave a Comment