KIC InnoEnergy Highway: a unique concept for Business Creation
KIC InnoEnergy is a European company fostering the integration of education, technology and business, strengthening the culture of innovation. The KIC’s strategic objective is to become the leading engine of innovation and entrepreneurship in the field of sustainable energy.
One of the three key cornerstones of this ambitious objective is the implementation of a new European incubator that will offer entrepreneurs added value services which cannot be found in today’s existing incubators. They will support them in bridging the ‘Valley of Death’ (gap between venture capital and project finance) and in starting their commercial businesses.
This managed process of added value services, called the KIC InnoEnergy Highway™ was developed in detail during the first half of 2011 and was launched commercially in June 2011. During the first five months of activity, 82 entrepreneurs with business ideas in the field of energy have requested to be nurtured in the Highway™. Out of them, 27 have fulfilled the minimum criteria and are currently in their path towards starting their own commercial business.
The new european energy incubator
The four dimensions of the Highway™ concept
After a preliminary assessment in which KIC InnoEnergy evaluates the soundness and maturity of the business idea presented, the entrepreneurs sign up for a managed process. During this process, they work on improving four dimensions of the business idea, together with KIC InnoEnergy.
1. The technological dimension
In this dimension the following elements are checked in depth:
- the soundness and maturity of the product or service idea
- whether there are competitive solutions in the market
- what really differentiates it
- which features need to be added or eliminated for success
- which proof of concept needs to be done
These services are delivered through our outstanding network of partners (research centres, industry) that are best placed for assessing and improving the features. The output of the works performed under this technological dimension is a solid scientific and technological product or service, proven in a pilot operation in a real-life demonstrator, with a customer.
2. The market dimension
In this dimension the following elements are checked and enhanced:
- the market definition of the product
- the targeted customer
- the value proposition that will make the product or service a suc- cess vis-à-vis existing competitive offerings
- the business case in financial terms
- the business model
- the right strategy and channels to access the market
Again, these added value services are rendered by KIC InnoEnergy’s impressive network of partners (business schools, industry...). The output of this dimension is a solid and sound business case, the strategic decisions to approach the market and a viable business plan to make it possible.
3. The human dimension
Many times, the entrepreneurs are specialists of their area but in most of the cases, their entrepreneurial and management skills need to be strengthened (e.g. regarding endurance, soft skills, understanding of other profiles needed) and complemented by other profiles in order to launch a commercial business successfully.
Indeed, many ventures fail because of a weak ‘people‘ dimension or because of unbalanced teams driving the different phases of a new business. The output of this dimension is a solid organisation, with the right profiles (either internal or external) for each phase of the business. So far, all the added value services are delivered by KIC InnoEnergy partners and no financial contribution to the entrepreneur has taken place yet.
4. The financial dimension
Any venture requires financial means for a set of needs:
investments for the lab tests
filling for patents
investments for industrialization of prototypes, first series
living support for the entrepreneur
KIC InnoEnergy is developing a network of investors (business angels, venture capitalists, investors) for these needs that will be the counterparts of our entrepreneurs when investment is needed. This selected network of investors is knowledgeable of the Highway™ process, and therefore the ’time to market’ of their investment will be short, which is key for any venture.
The Highway™ is a compelling managed process that actively supports the entrepreneurs to bridge the ‘Valley of Death’ and fosters the creation of a real business team. KIC InnoEnergy goes for a business model based on a unique set of added value services delivered by the best players rather than pumping money into the ventures Elena Bou, Innovation Director of KIC InnoEnergy
Positive response from the market
The Highway™ needed to ‘find’ its place among the already existing hundreds of incubators in Europe. The promotion started in June 2011, and already today, five months down the road, we can claim that 82 entrepreneurs, coming from intra and mostly extra KIC sources, have requested to enter our incubator.
Since KIC InnoEnergy is driven by excellence, only 27 out of these 82 business idea have been deemed to be of adequate quality and maturity to enter the Highway™.
Diego Pavía, KIC InnoEnergy’s CEO, is very pleased with the high market response, mainly among entrepreneurs that are not already involved in KIC activities. “This shows that our business creation offering is highly attractive, and has its positioning in the world of energy specialised incubators,” he says.
Why entrepreneurs choose the KIC InnoEnergy Highway?
An operational enquiry among the retained 27 entrepreneurs shows that they have chosen the Highway™ rather than other competitive offerings because of five reasons:
1. It gives access to a European network
2. It specialises in sustainable energy
3. It commits itself to find the first customer
4. It delivers added value services rather than just
5. Its European investors network is highly specialised.
Anders Malmquist is one of the entrepreneurs that have presented two new candidate cases for incubation in the Highway™. Anders is a serial entrepreneur (pretty rare in the European landscape) and is in his fourth venture today.
“With KIC InnoEnergy you have access to the best of the best. They can check your idea very thoroughly, improve it extremely and with a market perspective, since they have the possible prospects on board. KIC InnoEnergy together with its partners understands everything that an entrepreneur needs, and engages on a long term partnership with the entrepreneur. You do not feel alone along the way”, says Anders when questioned about the differential factors of the KIC. “With KIC InnoEnergy, I have access to other markets that will be inaccessible through the national incubators,” adds Anders, since his business idea is targeted towards emerging markets.
European coverage: The KIC InnoEnergy Highway™ is one single incubator with six entry points (one per CC). No matter whether the entrepreneur has an idea in renewables or in clean coal, he can enter the incubator by any of the 6 CCs and can benefit from the services of the total network.