Once upon a time … a story for SMEs

The funding programme aims to accelerate SME development and help them bridge the financial valley of death. With up to €5m in funding available and no need for the usual EU consortium, this is a tempting opportunity.

Plenty of SMEs applied, and a select few made it into the €50,000 feasibility stage. However plenty did not and there was some strong feedback from the European Commission on why not, which was unusually direct ("just trying their luck, it’s not a lottery"). This could be seen as a critical review of European SMEs in general, as Europe still strives to make viable business from science.

One of the key feedbacks was that SMEs focused too much on the science and not enough on the business, and we have all been around long enough in this sector to know that this is the case in many small companies. Fresh-faced from the lab and secure in the knowledge that their science is amazing, there is often much less attention paid to how you are actually going to sell that science, when it will earn its money, and who will pay for it. And this despite original business plans so big they could stop an elephant. This aspect was further reinforced by evaluator feedback on a lack of knowledge about competitors and just proposing a scientific idea without a pathway mapped out for its commercialisation.

The proposal guide-
lines were clear – they asked for specific business information. And applicants would have been wise to recognise the significance of what was requested. The bigger question is, does this reflect the business capability of European biotech SMEs? In building original business plans to gain seed funding, SME founders frequently get professional support, particularly first time CEOs, but are they actually able to implement a plan and turn it into reality? Or do they revert to being awestruck by the science itself, pointing and exclaiming “just look at that, who wouldn’t buy that?” Has the European SME sector managed to mature from its early days in the 1990s, when it really started to blossom as a business platform and suck up money? These are questions that may not bring comfortable thought processes to many, myself included. 

However, the SME Instrument, inspired by the SBIR programme in the US, could be a critical tool in forcing the business evolution of SMEs, particularly those piloted by CEOs new to the game. Nothing focuses the mind like chasing money, and if the SME Instrument makes people actually implement the business behind science, then the SMEs that triumph in the much sought-after project applications can only help Europe in its quest for business maturity.