The innovation question in the TSB Smart Grants can be very tricky to answer, because it needs to hit a lot of key points in order to be convincing and fully answer TSB’s concerns. It’s easy to get side-tracked and answer just part of the question, or forget an essential point, or make an incomplete case, or even just fail to make strong enough a case for the kind of innovation that TSB is trying to fund.

A step-change impact

TSB’s criteria for software are very explicit and very demanding. The guidance states:

Software projects must involve significant technical development (engineering) that produces at least a step change impact on how computers and other devices are programmed or used.

Only the following types of project will be considered to meet this criterion:

  • The evolution of software methodology to produce a radically new application, contributing important leaps in the performance of the technology or service that will have industry-wide commercial appeal
  • Software engineering projects leading to critically important advances in the state of the art that are capable of widespread industrial application

The degree of innovation and technical risks associated with any software development will need to be viewed within the wider context of the technology development which would occur in this sector by its very nature.

Communications technology projects that involve a significant component of software development of the type outlined above should address the software development criterion in addition to demonstrating innovation in the communications technology aspects of the project.

The scheme is unable to support projects that, in our judgement, lead to incremental development, increased functionality or general improvements in efficiency, no matter how much merit there may be in such work. Standard engineering tasks which include elements of software porting, data gathering/inputting, product enhancements or integration of off-the-shelf components are not considered to be sufficiently innovative to qualify for a grant.

This is a very high bar for most software startups, and in fact, it correctly implies that most software development won’t be suited to TSB funding.

I don’t have statistics about this, but I suspect TSB gets a lot of software grant applications. This makes the field even more competitive, even with this already high starting point.

When it comes to a software project, then, this is the first question that you should ask yourself: will this project lead to something that could reasonably be described as a “step change impact”? You’re going to have to write a large paragraph or two on the topic, so if you can’t figure out an angle, it may be best not to get started at all!

For example, the development of Basecamp, while innovative at the time, and clearly a successful technology, would not qualify as a step change. However, the development of Ruby on Rails would. Sometimes, finding the “step change impact” is a question of digging deep enough into the project to find which part of it is actually providing the technical innovation.

Enabling and underpinning

Another essential element to explain is how the innovation that you’re delivering will apply to multiple industries. One of the characteristics of true step change software innovation is that it will have more than one application, in more than one industry. If you can’t think of any such cross-industry applications, it’s quite possible that you’re pitching the wrong software project.

For example, the development of a novel distributed computing technology like Hadoop would have many applications outside the immediate, concrete and commercial one that you’re proposing in the application (you do have a concrete application, right?).

In the ideal case, the innovation is so useful that, once developed, it will enable all sorts of new products and business models across multiple industries. Obviously that’s not the case for all technology projects, but the closer you can get to that, the higher the points you will get in this section.

Commercial innovation and timeliness

Don’t forget the commercial innovation impact of your project. Here, you can step away from the purely technical angle, and look at what innovative business models might emerge from this technology. For example, eBay could have argued that their platform will enable small retail businesses to reach scale more easily, and home-based businesses to become viable where previously their market would have been too small.

A good application should present both commercial and technical innovation - particularly if it’s software. Remember that the bar is very high for software, so every strong argument you can include to earn the assessors’ points will help.

A final sub-question, which applies also to non-software innovation, but even more so to software, is the timeliness of the innovation. Presumably, the idea you’re pitching is not entirely new. It has been thought of before. Perhaps it has even been attempted before. It’s important to do your best to make the case that your attempt will succeed, where others have failed, because the right pieces are now in place.

TSB wants to invest in “ideas whose time has come”, not in companies that will deliver too early or too late.

This concept is perhaps the most important underlying building block of the Innovation section. If you can make the case that your project will provide a step change impact, on both technology and innovation, by delivering an idea whose time has come, you will probably scoop up a lot of points here.

Obviously, this is a hard case to make - especially for software - but hopefully it is easier to attempt it when you know what you’re aiming for.

 
 

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