The (Other) Reason for starting the Difference Engine

Success has many fathers and some very lucky coincidences.  Before my original suggestion for an accelerator in the North East, the Cloud Foundry (which turned into the Difference Engine), I failed to raise funding for a startup.

Ian Leader (now Product Lead, Calendar at Google) is a very good friend that I met at PaperX – a dotcom business formed only a few months before the meltdown.  Needless to say, it didn’t work out too well for the investors that included Mike Chalfen who went on to be a successful VC at Advent Venture Partners and now Mosaic Ventures.

Ian went on to become my best man at my wedding and godfather to my second child – Angus Bradford.  We had been trying to find an excuse to do a startup together – and after many suggestions we landed on building an online accounting software package known as SoSage (“Son of Sage“).  Fortunately for the world, it failed to get off the drawing board and failed to raise funding from the “Proof of Concept” Fund managed by North Star Ventures (who are investors in Ignite which I founded with Paul Smith as the successor of the Difference Engine).

The primary reason for failing to raise funds from “Proof of Concept” fund was a business called Kashflow which ironically was founded (and successfully exited) by Duane Jackson – who has subsequently become a very good friend and mentor at Springboard and Techstars London.

Whilst we failed to raise funding for SoSage, we agreed to publish our thoughts on ReadWriteWeb called “Online Accounting: The Next Killer App For Google Apps“. Our first blog post also appeared momentarily on Techmeme.

I blame Duane for ensuring that SoSage (what a stupid name) never saw the light of day – and without which the Difference Engine, Springboard and multiple other accelerators would not exist today. Thank you.

The Difference Engine S11

The second Difference Engine was a more sober affair.  The Difference Engine had been publicly funded by One North East (the Regional Development Authority) and in the intervening period between the two programmes there was a change of government – from the Labour party to the Conservatives.  Austerity measures meant that the programme came under threat – but ultimately ended up running but with a much reduced budget – resulting in a cutback of the funding reported in Techcrunch by Steve O’Hear.

The programme was moved to Sunderland Software City and this time there were ten teams:

  • 360 Revelations; Mark Careless, Arden Aspinall & Crombie Collin; based in Leeds, 360 Revelations are no longer operating.
  • ConstruQtive; Thomas Salvini; ConstruQtive was eventually acquired by Clarity3.
  • Evalyou; Kirill TripolskiNikita ShipilovNatalja Sidorenko; Evalyou never hit its stride and struggle to get traction post programme.
  • Fuboo (aka eWowBooks); Emer McCourt; following an investment after the programme, the app was launched but never gained significant traction.
  • ImpressPagesAudrius JankauskasMangirdas SkripkaMindaugas Stankaitis; ImpressPages continues today and is part of the Practica Capital portfolio in Lithuania – making strong steady progress.
  • Love Your Larder; Tristan Watson; Love Your Larder initially progressed well and gained good traction- but ultimately never enough to continue.  However, Tristan is now a key individual in the North East and is now the Programme Director at Ignite that was the successor of the Difference Engine.
  • Party Shouts; Mihkel TikkArgo Leetmaa; Mihkel has gone on to become the Director of Cyber Policy Department at Ministry of Defence in Estonia and Argo is last seen somewhere in Norway.
  • Pinevio; Daumantas DvilinskasMindaugas Krisciunas; Whilst Pinevio eventually came to a quiet end, its founders had no intention of going quietly – Daumantas went on co-found TransferGo and Mindaugas joined XtGem – two of Lithuanian’s best startups today.  The latter subsequently joined Springboard.
  • Suptoo; Sebastian MortelmansJelle Henkens; sadly Suptoo didn’t make it to the end of the programme with the founders going their separate ways.
  • Wedding Tales; Oli Wood & James Rutherford; In their own words “With some regret, we have decided to close Wedding Tales.” Oli went on to work with CANDDi from the first Difference Engine and now works for Sage (boooo).  James can be found at Campus North (home to ignite) helping fellow startup types.

As with the first Difference Engine, a series of videos recorded the second programme, including a retrospective of some of the companies from the original programme.  Below is the final video from the second programme.

The programme quietly slipped away on 31 March 2011 without much fanfare – only being reported in the local press.  In its place Springboard its successor had been launched in Cambridge a few months earlier.

The Difference Engine S10

And a quiet revolution started with the launch of the Difference Engine on 30 November 2009.  It was initially picked up by The Next Web (thank you Martin Bryant), Computer Weekly, and Techcrunch (thank you Mike Butcher).  The original application deadline was just 5 weeks later with a Christmas break in the interim with the programme expected to start in mid February – very ambitious and totally unrealistic.

Nine teams were selected (a tenth team declined an offer to participate – I know who you are) with a start date of 22 February 2010. Ironically, the original programme was planned to be 16 weeks (my theory was that Europeans would take longer to pick up the concepts) but due to delays the programme had to be compressed to 13 weeks – the original length of Techstars. And guess what, Europeans aren’t any slower than Yanks. Thirteen weeks is a perfect balance between having enough time to GSD and creating a real sense of urgency.

So who were these initial nine companies (in alphabetical order).

The original Difference Engine was based at the very awesome Digital City Business in Middlesborough – which on a sunny day was amazing.  A series of videos was prepared which followed the programme over the 13 weeks, culminating with a final video at the London Demo Day. Don’t forget to check out the very embarrassing video of Basti, late one night.

There was also a series of great pictures taken by Basti taken during the programme.

Somehow we managed to persuade some amazing people to come and spent time at that first programme including Iain Gavin, Jeff Barr, Bindi Karia, Stewart Townsend, Mike Butcher, John Lunn, Paul Kinlan, Alex Van Someren and many others who I collected from Darlington station.  We even managed to get Dave McClure to Skype in and do his famous AARRR presentation.

We had two demo days – the first of which was in the North East and the second was at the Microsoft HQ in Victoria – thanks to Bindi Karia – which I vividly remember included Rogan Angelini-HurllAdil Mohammed and Richard Newton; all of whom went on to become very influential in ongoing programmes.

The Demo Day was written up by Mike Butcher from Techcrunch and the presentations were recorded as a single page cartoon shown below.

Difference Engine Cartoon

In the Beginning Cloud Foundry

There are two versions of this story – for now I will go with the simplified version.

Fortunately for the world, a failed interview in September 2008 for a position at North East Finance resulted in the right person getting a job (and me not)¹.  However during the interview, I was asked what would I do differently from the current venture funds being offered in the North East of England, as a new series of funds called JEREMIE was being considered.

I suggested a Techstars/Y Combinator like accelerator programme – which was immediately dismissed. However, over the following months the idea did not seem completely unreasonable and I prepared a draft whitepaper called “A Perfect (Disruptive) Storm” explaining the rationale for an accelerator.  I subsequently published the whitepaper in late 2009 a few days after the Difference Engine was launched (as embedded below).

 

During my research for a potential accelerator I participated in a Techcelerate event organised by Manoj Ranaweera in Manchester (“Cloud Computing Event” on 15 April 2009) that included Ivan Farneti (Doughty Hanson), Bindi Karia (Microsoft) and Simone Brunozzi (AWS) – who all went on to become hugely influential to me over the following 5 years.

Particular thanks goes out to Ivan who spoke about the need for positive role models which I still recall and Bindi who has supported throughout including providing facilities for the first Difference Engine Demo Day in London.

I also received huge support locally in the North East from multiple people including Ross Cooney of SuperMondays, Herb Kim of Thinking Digital, David Dunn of Sunderland Software City and Mark Elliott of Digital City Business. It was one of the residents of Digital City Business in Middlesborough that became instrumental.

Kevin Mann, the founder of Graphic.ly (aka Take Comics) became Techstars’ first overseas participant in Boulder in 2009. It was Kevin who made the introduction which subsequently led to David Cohen agreeing to meet with me on the morning of 31 July 2009. About 10 mins into the discussion David leaned across the table and did what David always does – he asked me “What can I do to help?” #givefirst.

In the following months I returned to Boulder to meet with David to understand the Techstars model better and he then spent a few days in the North East meeting with the key influencers including attending a meetup (“SuperStartup“) which was recorded by SuperMondays (unfortunately the videos have since gone) and some very bad pictures.

During the intervening period, an article written by Mike Butcher for TechCrunch article “Seedcamp data shows the startup trends in Europe” provided the final evidence that highlighted the massive demand that had built up in the ecosystem for support.

So, over the last three years Seedcamp has reviewed 1,500 applications, seen teams from 53 countries, has about 500 mentors in its network, held mini Seedcamp events in 10 countries, mentored 280 companies and invested in 14 startups, 11 of which had have follow on funding in the form of more Angel or Series A 

As we got closer to the launch, the original working title “Cloud Foundry” was scrapped due to potential confusion with the Foundry Group that Brad Feld who was a partner of (as well as a cofounder of Techstars).  After several stressful days we settled on The Difference Engine which quietly launched to the world on 30 November 2009.

Footnotes

¹To provide context at this stage, I was a Business Development Manager at Patricia J Arnold – a small local accounting practice in the Tyne Valley.  My wife and I had just moved into a 300 year old barn that we had converted about 10 miles away; which by this stage was bulging with nappies/diapers from three kids in rapid succession.

How did I get here?

Success has many fathers (and mothers).

As the year passes from 2014 to 2015, we reflect on that which has gone before and what lies before us. However in my instance a single post is not enough. Just over 5 years ago, I launched the Difference Engine, the first Accelerator Bootcamp outside of the US – and since there has been a lot that has gone under the bridge in the interim.

For my personal sanity (and before dementia sets in), I will prepare short “where are they now” blog posts for each of the 9 accelerator programmes which I have run over the last 5 years – spanning the Difference Engine, Springboard and now Techstars. There are many people I who have been hugely influential during the period, including supporters, mentors, investors and most importantly the companies and entrepreneurs that have participated in each – which I will refer to in each of the respective blog posts.

I will apologise in advance, I am sure I will miss multiple people along the way – but I will update along the way.  And to begin with I will start with a short outline of how the Difference Engine came about.

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