By Martin Kelly
Partner, IBM Venture Capital Group
Editor’s note: Startup entrepreneurs, venture capitalists and business leaders will gather in San Francisco for the IBM SmartCamp competition world finals next week (Jan. 31, Feb. 1 and 2.) To follow the event virtually, return to A Smarter Planet for liveblogging, view livestreaming video and follow the Twitter hashtags #IBM SmartCamp and #startups.
How do you create something from nothing? It seems like magic to take an idea and turn it into a growing enterprise. Yet this is what entrepreneurs do every day. And that’s also what we did when we created IBM SmartCamp.
Our journey started almost 3 years ago. I was traveling to conferences and events around Europe. As I met entrepreneurs, it became clear that very few had heard about what we think is the biggest technology opportunity over the next decade: making the planet smarter by putting intelligence into things no one would recognize as computers, including cars, appliances, roadways, power grids, buildings, farms, waterways and clothing.
It became clear: We needed to do something to get the startup community focused on making a smarter planet- and help the ones who do so become successful.
IBM doesn’t invest directly in startups, but we’re heavily involved in the startup community. We acquire 15-20 companies a year. We are investors in the funds of many of the leading VC firms. We believed we could help passionate entrepreneurs succeed by connecting them with individuals who had built or invested in great companies.
SmartCamp started life as an internal startup. It was a night and weekend activity for a small group of us. We had no resources and no budget. However it’s amazing how many people wanted to help these early stage companies grow.
We piloted the program in Dublin in Oct 2009. We sought out like minded individuals and organisations who were excited by the idea of working with startups. We hoped we’d find the funds and resources to make our vision a reality. ’This is too important to let lack of funds stop you – this is a great idea you’ll find a way to fund it’ was how one of the exec team put it. Immediately we discovered how infectious the passion of entrepreneurs is–how exciting it is to be surrounded by individuals who believe they can change the world. We were amazed at how some of the best and most experienced investors and mentors were willing to give up their time to be part of this for nothing material in return.
After a lot of work and a great event, we figured that this could be exported to other cities and regions. We sought out the best partners and mentors we could find and ended up being overwhelmed by support in Austin, Boston, Barcelona, Bangalore, Istanbul, London, New York, Rio, Silicon Valley, Stockholm, Shanghai and Tel Aviv. The program scaled much quicker than we thought thanks to our amazing mentor network and the hard work of lots of local team who took on this additional responsibility because they too were infected by the entrepreneurs passion.
Now we are approaching our 2nd world finals. The teams from last year have done very well. A number of them raised significant investment rounds including Carecloud ($20.1m), Panoramic Power ($4.5m), Sproxil ($1.8m) and Streetline ($15m). We also signed a global partnership with Streetline, a company that provides sensor-based street parking systems, to roll out a Smarter Parking Starter Kit.
From parking in the US to validating medicines in Africa these companies show it is possible to bring combine sensors, interconnectivity and analytics to bear on complex problems. The SmartCamp mentors have proven how they can help accelerate these teams by sharing their wealth of experience and contacts.
Sometime I have to pinch myself to believe it is real. I recall listening to Jim Breyer from Accel (Forbes Midas List #1 tech investor) at SmartCamp Rio talk with these early stage entrepreneurs about the amazing opportunities open to them. And I remember being pleasantly surprised when I turned on a television in a hotel room there and saw a BBC World Service feature on Sproxil’s progress in Africa. These confirm for me how well the SmartCamp program can support early stage entrepreneurs.
Overall, the past couple of years have taught me you can’t predict the future. At our global finals event last year, we never imagined that our keynote speaker (then-Irish Prime Minister Brian Cowen) would be busy negotiating a financial bailout package with IMF. He delivered a great presentation at our event that in the face of an international crisis.
My takeaway message from all of this is that many things are out of your control. This is especially true for start-ups—with their very limited resources. However, the best entrepreneurs have belief and passion. It helps them to have investors and mentors lending a hand. But what matters most is their ability to respond to the daily cycle of opportunity and crisis.