Our Experience With KTP

Cyclr has benefited from funding via Innovate UK worth about £100,000 (about $150,000). We are 14 months into our Knowledge Transfer Partnership and are happy to share the results so far. Both good, and, in some cases, not so good.

What is a KTP?

A KTP is not a straight cash injection, rather it takes the following form:

  • Three way partnership: a company, a recent graduate, and a university
  • Recruitment help for a recent graduate
  • Grant structure, no equity taken
  • Not an upfront payment, ~50% match funding for a new employee's salary (known as the Associate)
  • Academic partnership with a university (ours is with the University of Brighton)
  • Training and equipment budget for the Associate
  • Funding

Aside from the time required to fill out the forms, a KTP fairly light on paperwork. On those grounds alone, there's a lot to recommend it. Despite the fact we are spending public funds, the form filling was not too onerous. It took a few days work to pull everything together. If you're less organised, I can imagine this could take significantly longer.

Our Associate is an employee of the University of Brighton for the duration of the KTP, but embedded within our company. We pay a monthly invoice to the University for our part of the match funding. Other funds, e.g. for training, are made available if signed off by the Local Management Committee (LMC).

Our LMC has been very flexible and responsive to how we spend the budget.

Recruitment and training

Through Brighton University's graduate recruitment network, I believe we were able to find and secure a developer of higher standard than would have otherwise have been within our reach in Cyclr's early days.

Some of the KTP's compulsory training, including two residential courses, have been of varied quality and usefulness. The £2,000 budget for domain specific training has been great, with us being given the freedom to book courses suitable to our Associate's job. These have included ScrumMaster training and advanced technical courses, including database scaling and load balancing.

Academic support

Our academic support from Brighton University has been valuable to the development of Cyclr's visual language and scaling our infrastructure. Without question, we have been driven to higher standards of rigor. Being challenged by academic experts, who do not report to our management team, gives us great independent council.

The academic support budget allows for one half day per week of our academics' time and I wish we had made more use of this earlier on. It's only now, over a year into the KTP, that we have started to lean more heavily on our academics. To other companies considering a KTP, I would strongly advise that you engage early and often with your academics. Plan for and use their time regularly beyond the fixed meetings.

Meetings

Along with a KTP come meetings.

Monthly Management Meeting (MMC): held monthly, about one hour
Local Management Committee (LMC): held every three months, a few hours
Being a very drilled Agile/Scrum team, our own meetings tend to be efficient, time-boxed, and incredibly focused on reporting and problem solving. KTP meetings are not setup like this at all: instead it's a couple of hours of box ticking and bureaucratic process. We're spending public money and I understand the need for inspection and reporting, but I dislike the LMCs in particular and I don't think they do the job they're intended to.

What frustrates me about these meetings is that we often have four or five PhDs sitting at a table, each with deep domain expertise. I feel that everyone's time could be better applied. Most of what we discuss would be dealt with in Slack without a meeting. We're almost exclusively just ticking boxes.

Perhaps if our KTP had problems, these meetings would feel more useful. Although, I don't believe that alone justifies their existence. If our KTP was encountering problems, we would be calling meetings as required rather than waiting as long as three months for an LMC.

Reporting

We report and measure our progress internally by Agile and Lean metrics, but his kind of innovation accounting, so common in our industry, has not penetrated KTP's processes. It's as silly as transposing sprints, burndown charts, and velocity into flat non-actionable reports.

Looking at reports without intent of action is a toxic waste of time. The Benefits Log is a good example. It measures the impact of certain activities to the company (we already know), the academic partner (with no meaningful follow-up), and Associate (they already know). The report is prepared by our Associate and (I'm fairly sure) never looked at again.

Missing processes to handle success

Cyclr is a spinout company: a result of a KTP rather than a direct beneficiary. To me, this is a measure of a highly successful KTP and a desirable outcome. With Cyclr, we made something so good we decided to build a new company around it. Our new company is growing and pursuing investment. We're going places, but the KTP very nearly derailed us at the first hurdle.

In order for Cyclr to become a viable investment, we needed to purchase the intellectual property from the originating company. A straight forward commercial transaction, but it seemed to cause all manner of problems and confusion for Innovate UK and the KTP. Ultimately we were able to do what we needed, but Innovate UK were seemingly unprepared for this commercial outcome. In fact, they would not allow the KTP itself to be transferred, even though the project, the people, the IP, and the cash, now resided wholly inside the new company.

In going through Financial Conduct Authority due diligence for our Seedrs funding round, this actually gave us a lot of problems. Trying to explain the situation to lawyers was not straight-forward. In not having an acceptable process in place for this kind of commercial outcome, I believe Innovate UK find themselves out-of-step with the modern business ecosystem.

How KTP can catch up

As entrepreneurs we create innovation and growth, and the vehicle -- invariably these days -- is a venture-backed startup.

Startups are the defacto engine of transformative growth and innovation in our economy. However, KTP cannot support them directly (due to their rules on staff numbers and the age of the business) nor can it easily deal with them when it creates them.

Whilst overall I think our KTP has been net positive, I believe that the scheme is hamstrung by a focus on only incremental growth for later-stage companies that have little need for the cash. That mitigates risk (to taxpayers' money and the Associate), but reduces KTP's impact significantly.

All of that said, other grants are available and KTPs have served their niche for 40 years. But times change and I hope some of the things I have highlighted can be taken in the spirit they are offered and help inform a business considering a KTP and perhaps Innovate UK themselves.