The Triple Chasm's CEO Uday Phadke recently sat down to talk to Mike Scialom from the Cambridge Independent to discuss The Triple Chasm Model.
The original interview can be found here.
Could the incredibly high rate of start-up failures – a strike rate of 92 per cent globally after three years – be reduced?
If it was halved that would deliver an economic transformation – and Triple Chasm believes that could be achieved thanks to its SME platform. Along the way, of course, it aims to ensure it’s one of the prospering 8 per cent as it boosts viability in the unnecessarily brutal economic cull which deprives people of services and products which could and perhaps should be economically viable.
The start-up, which was incorporated in April 2020, is the brainchild of Uday Phadke, and co-founders Sam Dods, COO, Tony Hart, CRO, Shai Vyakarnam (‘chief evangelist’), Arun Muthirulan, CSO, and James Parton, CMO.
“The common link between all of us is that we’ve all been part of the Cambridge eco-system of innovation for the last 10 years, and Tony Hart has been doing the same thing in Oxford,” says Uday, speaking from his base in Thriplow.
“My focus has mainly been on healthcare and wellbeing, agrifood and biotech... I set up a research company in Cambridge in 2010 looking at how innovation companies start and grow – I published two books, as co-author [Camels, Tigers & Unicorns with Shailendra Vyakarnam, and The Scale-Up Manual]. The idea is to turn these research insights into tools.”
The triple chasm, by the way, is a reference to a mechanism identified by Cartezia, which Uday founded in 1998. The model was developed on the basis of real world data from more than 3,000 global companies. It identifies three crucial stages where start-ups are most likely to fail – the transition from concept to demonstrator, demonstrator to early product, and early products to volume products.
“In our experience,” say the researchers, “most market failures do not occur because of problems with technology, management or funding, but arise from the failure of companies to recognise where they are in this development cycle and understanding the different skills and resources required to cross each chasm.”
Uday adds: “These three plateaus or hurdles are all crossed by companies on their growth journey, although the time frame for each sector might be different – for pharma it might be five to 15 years.”
When it came to designing a service to enable companies to successfully hurdle the challenges, Triple Chasm has identified three customer sectors.
“The tools and platforms we provide services to are firstly companies, secondly some of the innovation agencies and thirdly investors.”
Innovation agencies include organisations like Innovate UK, which invests in promising high-growth scale-ups.
Triple Chasm already has partnerships with EIT Food and EAHSN (Eastern Academic Health Science Network).
“We build strategic partnerships for the long term,” Uday continues. “We’ve also worked with high-tech companies in Finland and in Austria, where Hermann Hauser runs a set of intervention programmes to bring the Tyrol into the global market. And we work with a federal government agency and investment agencies across India, plus we have a partnership with Cambridge Cleantech – we’ve extended the Triple Chasm model to include sustainability. We do a lot of work on EV charging and EV design.
“We’re trying to turn the seed corns essential to transform the world, so they don’t die and are useful for the planet and the people of the planet, that’s our mindset.”
So why do so many businesses fail as they try to scale?
“They fail because they can’t figure out their business model, how they’re going to make money,” replies Uday. “The UK has a very strong science space which is not being supported by commercialisation except in a few sectors.
“The economic value generation system is broken globally. Sure, there’s lots of arm-waving, but if you just look at how the industrial strategy for the UK has been reinvented three or four times [this century], you can see we can do better.
“The failure rate [92 per cent] is global, it’s the same in Silicon Valley. Our data is global and includes China, India, Europe, South America, Cuba…
“If we could halve the failure rate, that would be incredible. Even a 10 or 20 per cent reduction would be a huge achievement – that’s an aspiration; we’ve no evidence for that at this stage, it’s going to take seven to 10 years.
“In that time our company will grow: we have lots of deep expertise and experience.”