Carmaker’s Tech Incubator is tapping into the burgeoning start-up ecosystem in the ‘Great Northwest’, discovers Robert Gray. [Auto.Gray.2017.01.30]
Jaguar Land Rover (JLR) is tapping into the tech talent of the so-called “Silicon Forest” area around Portland, Oregon. The carmaker’s Tech Incubator marked its first anniversary in January and has worked with 15 companies to develop different products and types of tech that may soon find its way into JLR vehicles, or interestingly, the nascent technologies may wind up aboard a rival’s new model.
“We get stakeholders with problems to solve involved to ask questions. We’re lining up companies where we feel there’s a real need for solutions they might be looking to provide both for us and for other OEMs,” says Rupert Poole, senior collaborations manager for future technology at the JLR Tech Centre and the JLR Tech Incubator. Poole’s colleague, Danielle Alexander, general manager at the incubator, adds: “We encourage all of our companies to work with other OEMs to insure their company’s success.”
As far as the programme’s focus, Alexander notes: “We do a lot in infotainment and the connected car. We’re focused on a few key areas but we’ll look at anything where there can be advantageous tech for JLR that may not fit within our programme scope – something pure hardware, that doesn’t have any software component… we’re primarily software engineers here. Our five main focuses are on autonomy/autonomous car, connectivity, computing, smart interfaces and third-party services with a little mobility mixed in there.”
JLR heavily invested in Portlandia
The incubator is an outgrowth of the automaker’s commitment to the region and is an offshoot of its burgeoning Great Northwest outpost. The organisation set up shop in 2012 and launched its Open Software Technology Centre in 2014. The company has already expanded twice and currently occupies some 32,000 square feet (roughly one-and-a-half city blocks). It’s expanding to add a 25,000 square-foot collaboration laboratory due to open its doors in April.
JLR executives say the complex is the carmaker’s first international engineering centre based outside of the UK. They are working on infotainment, the connected car while collaborating on other areas of the business and that’s where the incubator comes in.
Seeding tech firms in the City of Roses
The programme was announced in the spring of 2015 with the first cohort of three companies entering in January 2016. Three more companies have been added every three months since then. The investment terms vary by incubator firm, according to Alexander: “On average the deal is a combination of capital and services around $250,000 (£201,000). The typical range (of ownership stake) is somewhere between three percent and 10% that we take in the companies. We’ve taken some companies that are purely concepts and taken some other that have revenue and have raised their seed round.”
So how are the companies selected? In an interview with TU-Automotive, JLR’s Alexander explains: “80% (of the incubator companies) are handpicked. Usually it takes a good chunk of time when we see a technology or great team, we reach out to them and mentor them before they’re ever accepted into the programme. To help guide them and get them to a place where they could be in the programme.” She adds that they have actually passed on some companies with something “amazing” that was too big for the programme; passed along to the mothership at JLR in the UK, that is.
While there are other incubators and accelerators working on similar problems and products, Alexander contends JLR’s offers something Tech Stars and Y Combinator can’t offer, hands-on with the product and the chance to work with the carmaker’s engineers. “We find a lot of them come for very different reasons but the thread linking them all is the engineering support we offer,” Alexander says, adding, “Not many other programmes will allow you to get in with the product as much as we do. That’s a big draw and the feedback we’ve gotten is they don’t get this much access at other programmes to the actual product.”
During the interview, Poole chimes in to reiterate: “The unique selling point we have is, we genuinely put these guys in touch with engineers.” He adds: “They are attracted by the opportunity to work with not one, but two premium brands as well.”
The veteran JLR executive notes: “I’ve worked in and around Jaguar since pre-millennium days and people are very busy and focused and driven and time is at a premium in their work. The biggest surprise to me is they want to, and do find the time to put their energy and feedback and expertise into these (incubator) companies.”
JLR executives note that the first few rounds of the incubator saw most of the interest and applications coming from the Portland area but since then the word has spread. “When we started, two of the three were Portland companies but now we’re getting more national exposure and interaction with these groups. The last batch had one firm from Portland, one from Chicago, and the other from Kansas City, Missouri,” notes Alexander.
Lifestyle and talent pool quality, check
Both Alexander and Poole say they keep an eye on their bigger and better-known tech hubs to the south (Silicon Valley) and the north (Seattle) for incubator candidates but some firms are finding them given Portland’s growing tech hub, lower cost of living than those peers, and the city’s growing reputation as a good place to live and work.
“We are originally from the (San Francisco) Bay Area but we moved the company up here (to Portland) for the incubator and are staying here after it,” says Richard Baverstock, founder of the nascent predictive vehicle guidance firm Mogol. “When we saw the quality of life was a lot better and we had considered moving up here with my family prior to being invited to the incubator, so it was a good fit. Operating the company here our capital goes a lot further, salaries (are lower) and physical building space is cheaper.”
Mogol entered the incubator programme in November and Baverstock says his firm has greatly benefited already. “One of the most amazing things so far is the connections we’ve built because of JLR as well as the understanding of how to work with automotive companies, how to pitch them, and how we fit into the development cycle; as well as the other opportunities in the ecosystem from mobility applications to government involvement to transportation and how that’s going to move forward with connected vehicles.’
Mogol had raised $160,000 in seed funding prior to the JLR programme but needed connections to get its technology in front of government bodies. Baverstock says there are pilots in the pipeline in Oregon and Washington state but “those connections came through the incubator.”
Tov Arneson, co-founder/CEO, of mobility app developer Validated gives the incubator experience, “overall, two thumbs way up!” Arneson notes: “We had made many mistakes before coming in to the programme and it helped us focus on what we needed to do to make a lot of progress in the six months we had. I think the Jaguar land rover name lends its name to accelerating yourself quicker than you could through other programmes. It was a great experience.”
He says the entire Validated team has now consolidated in Portland. Prior to the incubator, half the employees sat in Seattle. He adds: “The best part of the programme is long enough to where you have time to get work done. I think a lot of other programmes are great for some companies but if you want to make real progress and be noticed by real investors you need time to actually develop your company and develop your business and the best part is we’ve had time to do that.”
Poole says the nascent programme’s mandate allows for time to make progress down the long road it’s embarked upon:“At the start of this we laid out a 10-year plan and we’re on course with that plan. We’re in this for the long haul and our plans at the moment are around continually improving that programme rather than how do we grow it or reproduce it.”
07 Jun 2017 - 08 Jun 2017, NOVI, USA
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