Chair Andrew Clark, deputy business editor of the Times, introduced the event by saying it would try to discover how more small businesses and enterprises could come out of the UK’s colleges and universities.
The first question came from a young entrepreneur, who asked what business and enterprise skills were needed to succeed in the real world.
Sherry Coutu, an angel investor and board member for companies, charities and universities, said the most important thing was to have a problem you wanted to solve. She advised getting a good team of people around to solve it together.
Nadhim Zahawi MP, Stratford-on-Avon introduced himself by explaining that he and a friend founded the research company YouGov as a start-up. He said if someone started a business to make money, they would probably fail. But if they started it because they had a passion they would succeed.
He explained that he and co-founder Stephan Shakespeare thought they could do research differently, but had no clue how they would make any money. “We struggled, but when you do that you can do something amazing,” he said.
He added that execution was the differentiator between people who succeeded and failed, because there were thousands of good ideas, but they had to be turned into reality.
Stephen Dury, managing director, SME markets & business development, Santander UK explained that he focused on growing Santander’s SME business and offered support functions for young people through schools and universities.
He said people should consider if they were multi-skilled, identify what they were not good at, and then bring in others to help.
Johnny Luk, CEO of NACUE, began by explaining his organisation had a network of 200 entrepreneurs’ societies in universities and colleges. He said soft-skills, such as multi-personal skills were most important. He said young people needed to develop skills such as leadership and team-work.
Skills minister Nick Boles explained to the audience he was grumpy to be on the panel, because he had set up a business with a friend who had risen to become chief executive of Dixons Carphone Warehouse, but he himself had not made a success of being an entrepreneur.
“Though I love my job, nothing in life is as exciting as setting up your own business,” he said. He went on to explain he had three entrepreneurial experiences. The first two failed because Boles did not “really love” what they did. However, the third business was Policy Exchange. This was successful, though did not make any money, but Boles “really loved” it.
He advised the room that being in love with what you try to achieve is “really really really important.” Finally he told the room to embrace failure otherwise they would be too cautious.
Coutu picked up on the point about failure and said failure was really “trying”. She said that the only the way to move forward is by testing hypotheses, “so it’s not failure”.
On the subject of failure, Zahawi said the problem was cultural and other countries did not have the same attitude to failure. He said in Singapore there was a Phoenix Prize which celebrated people who had tried and failed.
Clark asked if a bank was likely to reward failure. Dury said as long as an entrepreneur could show change in their business concept, so the bank was not being asked to back something that had previously failed, there was no reason why a bank would not invest again in someone whose business had failed.
An entrepreneur in the audience commented that there was a difficult balance to achieve between passion and sustaining yourself when setting up a business.
Boles replied with a practical option. He said when he and his partner were setting up a business one worked to bring in a salary that they shared, and the other focused on the start-up.
Coutu said she had started one business by gaining orders and buy-in from customers ahead of making the product, then taking those expressions of interest to an investor who backed her.
The president of Plymouth Entrepreneurs Society, Francesco D’Alessio asked how young people could be rewarded for taking entrepreneurial risks whilst at university.
Luk said this was challenging as students needed to both get good grades as well as pursue entrepreneurial interests. He said young people had to build up their CVs with other skills such as volunteering.
Boles described an idea recently raised by Lord David Young who suggested extra-curricular activities could be credited via an online ‘enterprise passport.’ He said relevant activities could be added to an online profile similar to LinkedIn.
Coutu said she was a board member of LinkedIn, and the company had recently lowered its age range to 13. She said students were using it to put in their extracurricular activities, such as a video of doing a music exam. She said that demographic was the company’s fastest-growing across the world.
Dury suggested there should be an element of flexibility in studies to allow students to scale their businesses quickly. He said if a business idea took hold, it was difficult to balance that with studies.
Clark asked the panel whether universities could give some benefits to entrepreneurs if a good idea came out of a university lab. He suggested some money could come back to them. Zahawi said there was much more that could be done in this area. He noted the government had protected the research budget at universities.
Zahawi added that there were two challenges. He said the government was good at providing start-up funding but fell down on second or third-round funding. Secondly he said there were difficulties around innovation. Things could happen in a lab, he said, but to be scaled-up and become profitable required additional funding.
Boles asked the audience if they felt “push-back” from their colleges if they were working on a business idea. A graduate from Loughborough University said he had not experienced this. He said institutions were supportive, but were sometimes held back by red tape, or they were misguided and had the wrong information.
Another student in the audience said he had negotiated a placement year so he could set up a business. He said this had been complicated and he wanted more flexibility at universities. He said he was doing the minimum on his course to pass as he was very focused on his business. He argued his placement would be recognised partly by his university through a personal journal.
Another audience member said he had trained at the Peter Jones Enterprise Academy. He said this was great because there, you had to start a business and it had to trade in order to pass. He said schools and colleges should do something similar.
A training and coaching business owner said, after graduating many students did not have the soft-skills they needed. He said his company delivered this training, but he found it difficult to create links with universities. He asked what could be done to improve the relationship between smaller businesses and universities.
Dury agreed that if it was possible to create closer-working relationships between SMEs and universities this would break the mould of people not being about to get jobs after graduating.
Zahawi said the Business Select Committee had found universities were good at building relationships with big companies. He said trying to create a “dynamic” that allowed universities to collaborate with SMEs was an interesting idea.
Coutu suggested students should set up an app with which to rate how well universities interacted with businesses and the kind of opportunities they offered.
Clark suggested the relationship between students and universities had changed now because the fees were higher. Luk said this was the case and young people now had more power. He said universities had to adapt to a more customer-led model, one where students might want a more pragmatic approach.
Boles said the enterprise allowance was only for people on Jobseeker’s Allowance. He said the current financial climate and the government’s austerity drive agenda would mean there would not be a similar benefit for people in work.
Zahawi mentioned that the government had launched the Business Bank which had money available for start-up businesses. Dury advised the audience to crowd-fund through Kickstarter.
Finally, a member of the audience asked what the government could do to challenge attitudes to failure. Luk recommended the room to “fail early and fail fast”. He said it was best to make mistakes whilst still at college or university and learn from them.
Clark concluded with a quote from television show The Office character David Brent: “If at first you don’t succeed, destroy all evidence you ever tried.”