Soapbox: Tech entrepreneurs need business acumen to succeed

British technology companies are world leaders in many fields, from product design and manufacturing through to software development. The work of engineers across all sectors contributes significantly to the UK economy, with engineering firms of all sizes employing over 5.4 million people across the UK.

Maintaining this strong global position in the future will rely on a solid stream of promising technology start-ups that, crucially, have the ability to scale-up.

The UK starts more companies per capita than the US but, while we’ve always produced young talent with outstanding technical ability, there is a skills gap when it comes to the commercial knowledge and experience required to start up and grow a business successfully.

Promising technology entrepreneurs need the ideas, skills and opportunities to seed the next international success story, but there appears to be a growing misconception that anyone who can code could be an overnight success.

Stories of ‘bedroom inventors’ like 17-year-old Summly app inventor Nick D’Aloisio - who famously sold his app to Yahoo for around £18m - are undoubtedly inspiring, but they also perpetuate the idea that all you need to be a successful technology entrepreneur are a bright idea and technology know-how. The reality, however, is that in the vast majority of cases you won’t get anywhere without solid business acumen.

With many entrepreneurs using their own or their family’s assets to guarantee the capital needed to start a business, the personal stakes can be very high indeed.

Communication, marketing and team management skills are needed to develop brilliant ideas into successful businesses, and these are usually skills that have to be acquired through experience as well as through further education and training.

Traditional school education alone isn’t likely to prepare a budding young entrepreneur to face a group of hardened and experienced angel investors, for example, which could make or break a business. And by the time you’re running a cash-strapped start-up, investing in business education is often low down on the priority list. In the technology sector particularly, business skills can be significantly underestimated in terms of their impact on the fundamental success of an enterprise, with finances and energy poured instead into technology development and excessive product fine-tuning.

Leading UK business leaders recognise this skills shortfall. Dr Mike Lynch FREng, co-founder of Autonomy, and Sir Robin Saxby FREng, former chief executive and chairman of ARM are among over 100 individuals who volunteer their time to mentor some of the UK’s most promising technology entrepreneurs through the Royal Academy of Engineering’s Enterprise Hub. The Hub also provides funding, formal training and access to networks for a whole range of tech businesses, so I see on a daily basis where early-stage or aspiring technology entrepreneurs need the most support.

Entrepreneurs fresh from academia often find the transition to the business world a difficult one to navigate. From being an acknowledged expert in one specialist area they suddenly have to take a step back and acquire the range of different skills involved in running a business.

While I would argue that quality training programmes are central to the growth of UK SMEs, the costs can undoubtedly seem daunting to fledgling start-ups. There are several possible sources of financial support to help with this investment. The Enterprise Hub has just introduced a new Pathways to Growth scheme, for example, which provides funding for successful applicants to spend on the training they feel will most help their business to grow.

Similarly, entrepreneurs are often time-poor so time spent training in a classroom can be difficult to accommodate, but these days there are countless flexible, online ways of bolstering business knowledge. This is also where business mentoring proves particularly valuable, as a mentor is able to help entrepreneurs learn ‘on the job’ by working through the immediate challenges they are facing, rather than hypothetical scenarios.

It’s imperative that small UK businesses ensure they maximise the potential in their workforce by considering their long-term training strategy. For any business, the workforce is a primary asset and, with national support schemes available to help financially, ambitious technology businesses should be up-skilling as a priority.

Arnoud Jullens is Head of Enterprise at the Royal Academy of Engineering