New recipes for smart city innovation

IRIS project insights lead to a different approach in ideation and incubation

Since October 2017, Utrecht University and startup incubator UtrechtInc, together with a broad consortium of local and European partners, have joined hands in the IRIS project (Integrated and Replicable solutions for co-creation In Sustainable cities). Currently, the project is halfway. One of the main insights so far: generating business models within the smart city domain requires collecting a lot of ideas.

In the IRIS project, seven European cities are working together to turn urban areas into healthy, affordable, and enjoyable places, for residents and for the planet: so-called smart cities. Within smart cities, there is a strong focus on mobility and making the generating, storing, and using of energy more sustainable – using data and involving local residents.

Within IRIS, Mark Sanders and colleagues at the Utrecht University School of Economics are researching new business models for smart cities. Living labs are the Utrecht district of Kanaleneiland-Zuid, the Eco Valley in Nice (France) and the campus of Chalmers University of Technology in Gothenburg (Sweden).

"Utrecht University is investigating both the type of activities needed to generate ideas for smart city challenges that lie ahead, and how to best develop potential business models that stem from these activities," says Sanders. "Simultaneously with our research, incubator UtrechtInc provides practical support and coaching to further develop these ideas into businesses."

As many ideas as possible

Sanders: "Initially, the focus was on incubation: guiding ideas to a first customer, so a company emerges from the idea. It soon became clear that not every idea is suitable for this, so you need a lot of ideas: if you find hundred ideas, maybe five to ten of those are interesting for an incubation trajectory. In the end, that leaves one starting company that can grow into a healthy, sustainable company." 

For this reason, the focus of the research shifted to ideation: generating ideas and solutions that can serve as input for an incubation trajectory. "If we want to innovate in the field of smart cities, we need to generate and collect as many ideas as possible. Previously, we were looking for a pin in a haystack - now we are trying to pull the pin out of the haystack with a ‘magnet’: a set of targeted activities and challenges."

In order to come up with as many ideas as possible, challenges and events are now being tracked or organized. Sanders: "We evaluate these activities and then write them down as a 'recipe'. This way, other cities within and outside the IRIS project can use these activities to drive innovation in the smart city domain." Examples include Design Thinking sessions with local residents in the field of smart street lighting, a competition to get ideas that help residents get a better grip on their energy bills and the Municipality of Utrecht challenging startups to come up with innovative solutions to social challenges.

If we want to innovate in the field of smart cities, we need to generate and collect as many ideas as possible. Previously, we were looking for a pin in a haystack - now we are trying to pull the pin out of the haystack with a 'magnet': a set of targeted activities and challenges.

Role of business incubation in startup success

The creators of promising ideas are then guided by Stefan Braam of UtrechtInc, to develop the earning models - is the idea profitable? - to validate. Braam: “We facilitate starting teams with entrepreneurial skills, office facilities, access to talent and to an extensive network of mentors." In addition to these important facilities, the three- to ten-month programme consists of various workshops and trainings.

Research by Chris Eveleens has shown that going through such an incubation trajectory leads to better business performance in the long term. An incubator accommodates a learning process that benefits the entrepreneur. "We also see that informal meetings are very important. The insights entrepreneurs in the making gain from these meetings that happen by chance lead to small, but crucial, adjustments to the original business idea," says Braam.

New insights lead to customized programmes

Research conducted within the IRIS project made UtrechtInc understand that the needs differ per type of team."Therefore, we have chosen to split our original validation program into three separate programs. One for students, one for scientists, and one for teams with a strong focus on technology,” explains Braam. "Our experience is that the needs are mainly determined by the composition and qualities of the team, less by the type of product or service."

The change to customized programmes seems to yield results: in 2017 and 2018 a total of 24 startups was guided by UtrechtInc, while the incubator's new programmes had over forty applications in 2019. Twenty-four of them were admitted. Braam: "More importantly, the quality of the programme goes up: this way we better meet the needs of the participants."