In this first exclusive extract from a challenging new book, the co-founder of Entrepreneurial Spark, Jim Duffy explains how his plan almost came unstuck from the beginning…
I had a dream that was Entrepreneurial Spark: a business that would enable entrepreneurs in a completely different way.
I had been pitching my baby for some time before I got anywhere. Seven long months of research, meetings and coffees. I met with hundreds of people, had lots of interesting conversations, and was made many promises. I got knocked back. I had doors closed in my face. I kissed a lot of frogs.
In the end I raised private investment to build Entrepreneurial Spark as a pretty stereotypical tech-style business accelerator to just get started.
In essence, a tech accelerator takes in about 10–15 pretty decent tech-oriented start-ups. The accelerator invests a little capital – say, £20,000. This is essentially beer and pizza money for the start- up teams, while they build and code.
The accelerator then helps the start-ups to, well, accelerate in order to get the attention of angel investors. (Angel investors are usually a bunch of folks who have got together in a syndicate. They pool their money and invest together in businesses. It’s a numbers game but they won’t tell you that.)
Having raised significant private investment, I was ready to open my premises and get started. I was about to sign the lease on a big property in Glasgow and had prepared my launch date with some PR ready to go. I had a squad of guys ready with vans to buy thousands of pounds worth of furniture from IKEA and build it all over a week.
But life is never what it seems…I had to give all the money I had raised back to my investors!
Why?
I visited what for me is the mecca of entrepreneurship – Babson College in Wellesley, near Boston.
A brilliant guy called Brian McGuire came with me on the trip. He had invested his hard-earned cash in Entrepreneurial Spark as a generic tech accelerator.
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‘I felt sick to my stomach’
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But while at Babson things changed. The professors to whom we pitched our tech accelerator flipped the whole model and suggested that we switch from for-profit to social enterprise. At the time I wanted to kill them. I felt sick to my stomach. They had trampled all over my dreams.
I had been building Entrepreneurial Spark as a profit-making venture that could attract investment and provide me and my investors a return on that investment some time in the future. This is how the majority of businesses are structured.
Now I was being asked to switch this to a non-profit model. This would mean no investors, no shareholders and no profit. In short, I would be operating like a charity for entrepreneurs: enabling them for free with nothing in return. After all my efforts, that wasn’t something I wanted at all.
But something magical happened. During that three-day trip, Brian switched his significant investment to a gift to me.
Having come out of the meeting with the Babson professors, Brian and I went outside to a terrace that overlooked a forested area. The sun was strong for that time of year. I sat down with my head spinning.
Brian was adamant that we needed to listen to the professors’ advice. I was adamant that I was not for changing. He could tell that I was hurting and struggling to change my mindset.
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‘You need to switch the model’
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We had a heated conversation. Brian tried hard to convince me that if I stayed on our current course of action and started a for-profit, we would be dead in six months. He then did something that is the reason I can write this book.
He said: “Keep my money. It’s no longer an investment. I’m giving it to you. You need to switch the model.”
That one act of faith was amazing. I came home on the plane with him the next evening and refunded all the other monies to the original investors. That was a tough time. But the outcome of this one trip to Boston led to the most amazing chain of events.
Within 12 months, I had three hatcheries – co-working spaces where start-up businesses and entrepreneurs give it a go – open across Scotland, with three terrific entrepreneurs-in-residence mentoring me and giving their time, expertise and networks. And it didn’t cost me a penny.
More importantly, we had 75 new businesses on the Entrepreneurial Spark programme and working in our co-working spaces. Entrepreneurial Spark was alive and well. We were delivering to the start-ups at no cost to them. It felt great – the right thing to do.
How far we had come…
Tomorrow: Jim offers advice on ‘white noise’, ‘being blindsided’ and defragging your mind’
* Create Special, Think and act like an entrepreneur to change your life by Jim Duffy MBE is published by Harriman House on 15 May (click on advert above right to order)
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