This week we speak with Lord Wei, one the judges of the upcoming Future Planet Awards. Launched this year in partnership with Global Corporate Venturing and Tsinghua Holdings Capital, these awards will celebrate the most exciting and innovative new businesses with the potential to address global challenges. "This is not just about scientific innovation - this is about commercial innovation," says Wei.
When Nat Wei was offered a place in the House of Lords at the age of just 33, he knew exactly which region he wanted for his peerage. Shoreditch in East London was already a rising technology hub; today, the so-called "Silicon Roundabout" or "Tech City" is the third largest tech start-up cluster in the world after San Francisco and New York. Equally relevant, it is an area significantly affected by the social impact initiatives that he has founded.
In the UK, Lord Wei - tagged the "Big Society tsar" by the press in 2010 - is perhaps most famous for his involvement with the socioeconomic policies of Prime Minister David Cameron. Yet he is also well known for being the only current UK peer of Chinese ethnic origin.
Indeed, his extensive involvement with UK tech start-ups and incubators has often held a Chinese dimension, including investment and tech transfer. "So much of the world's innovation today takes place in China," he says. "If you go to Shenzhen or Shanghai you will see technological innovations hitting consumer markets that we don't even know about in the UK." Wei seeks to foster further collaboration between East and West in order to drive change.
When it comes to incubating, investing in and implementing new advances, different countries follow very different models. While none is necessarily superior to the others, these distinctions mean that a successful financing and go-to-market strategy will vary immensely depending on location. "In China things are nimbler: you can get from prototype to market in as little as three months, whereas in the UK or the US you might still be debating who has what amount of equity," he explains. "In the west, there’s an immense focus on IP protection, whereas the Chinese model is all about capturing market share."
This relates to the nature of the ecosystem as well as the legal framework. "The US revolves around clusters of start-ups, angel investors, VC firms, corporates, academia, private equity; China has seen the growth of the One Stop Shop and many of the key players are from sectors such as real estate where they’re seeing benefits beyond financial returns. We see cases in China where an entire supply chain will cluster around an innovation, absorb it and adapt as a group. That may be less likely to happen in the UK or US."
These differences have key implications for ownership and investment. "In the US market, you see very clear emphasis on who owns what stake in a firm. The UK is slightly more fluid in that regard. Yet in China you get this quite dramatic splinter effect where stakes get watered down among many stakeholders. … You also see Chinese investors being considerably more generous with valuations and happier with less equity than you would find in the US, although the latter is a more tried-and-tested framework."
For these reasons, judging a high-quality business model for an innovative start-up should be highly dependent on geography. And this commercial aspect, says Wei, often proves far more critical to success than the technological advance itself. "This is not just about scientific innovation – this is about commercial innovation. There are many great inventive ideas. The UK, for instance, has always been a lot better at making scientific advances than at making successful businesses around them, creating a cluster around them."
This – he argues – is one of the key reasons why breakthrough successes tend to be achieved by great teams with skills ranging from legal expertise to industry experience. "There’s a myth of the great entrepreneur," says Wei. "The Steve Jobs. The Mark Zuckerberg. But success doesn’t come from the great leader – it comes from a team. The company needs to have an identity separate from the founder. A strong team also helps to stop the founder from drinking his own Kool-Aid."
Now, Lord Wei is looking forward to seeing the entries for the upcoming Future Planet Awards.
"When judging the Awards entries that’s one thing I’ll be looking for: strong teams with diverse, relevant experience."
The Future Planet Awards 2017 prize includes substantial publicity, potential investment and introductions to investors, mentors and the FP global network.
Click here for more information on The Future Planet Awards.
Friday, 31 March 2017 - Online Applications Close
Tuesday, 2 May 2017 - Category Winners Announced
Tuesday, 23 May 2017 - Finalist Pitches, Overall Winner Announced, Gala Dinner