While some basement-dwelling pessimists may be lingering over the lamentable news the British economy has shown a 'sharp contraction' in the first quarter of this year, here at Smarta, the sun is shining and we’ve decided to concentrate on cheerier news: notably, news the government is to launch a £150m VC fund for hi-tech businesses.

The fund was announced by the Department for Business, Innovation and Skills (BIS) and the Prime Minister yesterday. Business secretary Peter Mandelson said the government had identified access to venture capital as one of the ‘critical factors in developing innovative new companies’.

The announcement follows on from plans laid out during the Budget, when the Chancellor promised to create a £750m ‘Strategic Investment Fund’ which would focus on emerging technologies and, as the Chancellor eruditely put it, ‘regionally important sectors’ such as digital and biotechnology.

While £150m isn’t quite the £750m the government had promised, the government said it expected the fund to be matched by private investment and eventually build up a fund of up to £1bn over the next 10 years.

Simon Walker, chief executive of the British Venture Capital Association (BVCA), said he was ‘immensely encouraged’ by the initiative.

“It offers an exciting economic incentive for more than a thousand young venture-backed companies and the ideas and jobs which they represent,” he added.

Well, as long as he’s happy, we’re happy. So why can’t we shake the sneaking suspicion that this may be a slightly cynical attempt to get small businesses on-side?

Amid the sore reminders today that Madoff made off with the money of many and that the UK economy shrunk by a shocking 2.4% in the first quarter of this year - the greatest contraction in more than half a century – comes some altogether more inspiring news.

For today the regional winners of the Young Enterprise Awards have been announced – and there are more than a couple of very bright ideas.

Over the past academic year, 15- to 19-year-olds in partaking schools across the nation have been clubbing together to take part in the Young Enterprise Company Programme, which sees them conceiving a product, registering a company, raising share capital, marketing it, managing company finances and holding weekly board meetings.

Which, as everyone here knows, is no mean series of feats – particularly when you’re trying to squeeze them in around GCSEs and A-levels.

Highlighting the more socially and environmentally aware approach of many of the younger generation of our society, many regional winners created companies that either encouraged a positive approach to multiculturalism (workshops, books) or created eco-friendly products.

Other product ideas that really stand out include South West winner Affintity’s book Prambles, an ingenious idea for a book detailing country walks suitable for parents pushing prams and buggies (which has so far outsold Obama and Stephen Fry in the local Waterstones with sales of 1,150); Farr Woodcraft, whose garden chairs are really quite beautiful and who have capitalised on revenue streams by selling through www.farrwoodcraft.com, so expanding their reach further than just their Scottish base; and Whose Life Is it Anyway, a long overdue book by teenagers in the North East telling parents of teenagers how they should talk to them about sex without making everyone in the room want to fall through the floor in burning embarrassment.

These are some really quite stunning concepts, and it’s incredible to see people of such a young age grabbing the initiative with such verve and having the motivation to follow through on runing a business while still juggling their schoolwork.

And the regional winners are only the very tip of the iceberg – 35,000 young people take part in Young Enterprise programmes in the UK.

Many go on to continue working on their businesses and growing them into very competitive enterprises – some even reach the multimillion pound mark and make very healthy exits. To find out who achieved that, and more about the benefits as well as challenges involved in starting a business young, read our special report on young entrepreneurs.  

We all enjoy a good bit of confrontational radio, particularly at quarter to eight in the morning, but this morning’s all-out fight between business secretary Peter Mandelson and Today programme presenter Evan Davis had a note of vehemence in it the likes of which even professional angry man Jeremy Paxman fails to summon on a regular basis.

The fight, which took place on this morning’s edition of Today, was over public spending reviews. According to Mandelson, one can’t take place until ‘after the general election’. “It will be based on entirely speculative projections of what economic growth will be,” he added by way of explanation.

After that comment, Davis could barely contain himself. ‘But they always were!’ he cried. Smarta is inclined to agree: surely all reviews of that sort are conducted speculatively? The last comprehensive public spending review, usually held once every two years, was held in 2007. We think we smell a rat.

Mandelson’s comments provided further fuel for criticism started over the weekend, when Tory shadow chief secretary Philip Hammond told Sky News the lack of review ‘suggests [the government] has got something to hide’.

We think it’s now time for the government to be transparent. Hiding facts will achieve nothing: as Simon Nixon, founder of MoneySupermarket told us during our interview with him last week, being as transparent as possible is one of the best ways to shore up customer loyalty, even if the business isn’t doing well. Customers forgive weakness, but they don’t forgive lies: perhaps it’s time the government thought of that.

Image: Flickr

The most high-achieving women under 35 in the private and public sectors have been named in Management Today’s 35 under 35 list – and 11 of them are entrepreneurs. (Incidentally, it's a list we particularly like here at Smarta as our very own founder Shaa Wasmund has made it in before.)

The youngest ever entrant to the list, Ruth Amos, is just 19. She founded StairSteady in 2007 from a concept she came up with for her GCSE coursework – a device to help people climb stairs. Despite every major bank turning her down for finance, the business is now showing such success she’s planning on taking three years out before starting university to develop it.

“My age is not only my biggest help but my biggest hindrance,” Amos said. (Read more the problems  young entrepreneurs face.)

The list also features 22-year-old inventor and innovators Emily Cummins, whose solar powered fridge is helping people store food for longer all around Africa. She was previously Leeds University’s Enterprise Scholar 2008.

Other inspirational business starters include: Kate Craig-Wood, who founded web and IT hosting provider Memset (now turning over £2m annually); Elspeth Finch, founder of pedestrian modelling consultancy Intelligent Space (she started it age 24); Sophie Howarth, founding director of social enterprise, philosophy school and workshop School of Life; Daily Mail Enterprising Young Brit winner Priya Lakhani, who started curry sauce company and social enterprise Masala Masala (each pot sold provides a meal for a homeless person in India); PR agency Man Bites Dog founder Claire Mason, 34; Savannah Miller, co-founder of fashion label Twenty8Twelve; SEO company Verve Search founder Lisa Myers; and Azita Qadri, who founded Eat Your Cake, helping startups to recruit high-calibre professionals who need to work on flexi-time.

The industry-straddling selection just goes to show how many hugely different paths there are out there for wannabe business starters. From curry to consultancy, invention to internet, in the words of Miller: “If you want something bad enough, you can get it – no matter what.”
 

Well. While we’re on the subject of heart attacks, here’s about the best example of turning a sales negative into a piece of marketing gold you’ll see this month (Marmite’s long-running love it/hate it campaign is another one in the ouvre).

This ad for the Heart Attack Grill is not the newest video on the block, but as we’ve just discovered it, we thought we’d share it. Because it really is quite magnificent.

It proves that with a highly creative approach, you can very cleverly twist the biggest turn-off aspect of a product into its greatest, tongue-in-cheek, astonishingly effective marketing concept. Or ‘anti-marketing’ concept, as it’s known in the trade.

When founder Jon Basso was interviewed by Entrepreneur.com in 2007 (two years after opening the Arizona-based grill), he hadn’t spent a single dollar on advertising. Instead, he said: "We purposely try to generate controversy, there's no question about that."

He came up with the idea when researching a marketing thesis on fitness. He was originally planning to open a string of health clubs, but after hearing consumer after consumer relishing the guilty details of their ‘diet cheat days’ with gluttonous glee, he realised the Heart Attack Grill could attracte far more attention.

And that it has – gaining international exposure with no advertising budget is no mean feat.

We particularly like the attention to detail of the brand - the way the idea has been expanded and rolled out into all the uniforms and names of products. Staff are ‘doctors’ or ‘nurses’ (ready to tend to your palpitations), burgers come as varying degrees of severity ‘bypasses’ (quadruple bypass being the most ambitious). And the website http://www.heartattackgrill.com/ boasts ‘No filter cigarettes!’

Basso’s advice to wannabe entrepreneurs, Entrepreneur.com reports, is to ‘create controversy’. Of course, you need an idea as well-executed as this to support the debates that will rage over your business. But if you can pull all that off, a little anti-marketing can go a very, very long way.
 

Pop singer Michael Jackson has died in Los Angeles after suffering a cardiac arrest.

Jackson was allegedly rushed to the UCLA medical centre by paramedics around 12.30pm PDT. According to various news sources, Jackson family members are flocking to the hospital near Jackson’s Bel Air home.

Jackson was, says the BBC, the greatest recording artist of the past 30 years, selling more than quarter of a billion albums.

Since he announced his 50-date 'This Is It' tour at London's O2 Arena, there have been question marks over the star's health, with some gossip sites reporting the star was planning to cancel many of the dates - rumours which were fuelled after Jackson cancelled the first four dates of the tour.

Magician Uri Geller, who had Jackson as his best man when he renewed his wedding vows, told the BBC Jackson "loved being a star and entertainer and I’m sure he was practicing and training and rehearsing with passion rather than the dollar figure in his eyes."

But even without the dollar signs, the tour had been expected to raise the singer, said to be in severe financial trouble after a series of court battles, an estimated £200m.

Jackson was one of the few stars who, even after a series of seriously damaging allegations, could surround himself with such an air of mystique and excitement he was guaranteed to sell out as many dates as he could provide in seconds. He was known as the King of Pop, but to a lesser extent, he was a PR expert as well.

Smarta's thoughts and best wishes are with his family.

After Christmas’s dirty, drawn-out process of administration that left a gaping £385m debt chasm, Woolworths is making a come-back – but this time, you’ll only be able to find it online.

In a deft move to side-step the crushing rental prices of the 807 larger-than-your-average stores nationwide, the power of the Woolies brand lives on but without the expense of staff, rent, business rates et al. Whose clever idea was this? None other than Littlewoods owners and power-brothers of the financial world Sir David and Sir Frederick Barclay, who own Shop Direct. The firm reportedly bought the brand name for somewhere between £5m and £10m. And with the strategic thinking of Littlewoods Online behind it, one of the UK’s largest online retailers, Woolies future should be looking bright.

But is it? We’ve had a look around the new Woolworths.co.uk, and we’re not so sure.

The site gets big ticks for being super-easy to navigate, and for the marketing concept of having a ‘Very Important Family’ club, where users can register to get special offers while getting the warm brand-affinity feeling they’re ‘joining the family’ (nicely playing on the nostalgia so many people still feel for the Woolworths name). Apparently 20,000 people registered on the site within a few hours of the announcement it was making a return.

And there’s a nice bit of CGI animation for the kids as well as an interesting (although slightly pointless and token) map of what other people are buying around the UK in real time.
 

The shop is split into three parts – main shop (kids focusing on kidswear, outdoorsy stuff, electronics and gadgetry), entertainment shop and pic’n’mix shop.

And herein lie the problems. Firstly, who wants to buy pic’n’mix online? It’s an instant buy, a treat, and on-the-spot novelty. And it’s not like the majority of supermarket stores don’t offer it anyway – it’s something to keep the kids happy while you drag them around the shops, not something to order and wait days for when you could nip to the corner shop and back in ten minutes. After the initial novelty value of it being Woolies pic’n’mix, we suspect this little concept is going to fall flat on its face.

But Woolies’ bigger issue, and the spectre that haunted it relentlessly before it folded, other than its poisoning running costs, was that it simply couldn’t compete with the newer and ever-more popular online sellers of books, DVDs, CDs, games, electronics and electrical equipment  - Amazon, Play, and those flashy young upstarts.

They more than often undercut Woolies on price, they were far easier and more enjoyable to use than traipsing up and down soulless neon-lit aisles infested with tantrum-throwing toddlers and bleached-out zombie checkout staff who looked like they wanted to fall through the ground and die, and they could provide a wide range of user reviews – not to mention ranges of different sellers who could offer second-hand versions of products for even lower prices.

But what do we see on the online Woolies? Books, DVDs, CDs, games, electronics and electrical equipment. And mobile phones and computers too, as if it was really going to stand a chance against the Carphone Warehouse, or PC World, who can offer price plans and network provider bundles on top of very competitive prices.

Woolies’ USPs are really floundering here – not only is it falling short on price competitiveness, its delivery dates are looking comparatively sloppy too. Three to five working days delivery for entertainment is just not up there with Play, who can do it in three to four working days (although that depends on the seller), and Amazon, whose sellers can often offer more like one or two working days.

The BBC reported the site's boss, Matthew Hardcastle, said that the online market was competitive - especially for books, CDs and DVDs, and admitted that many of Woolworths' traditional customers may not be regular online shoppers. We suspect he should’ve taken his own advice.

Yes, it’s nice to see a great, longstanding British brand restored. But we really do wonder what the strategic thinking behind all this is. We can only hope that the sales of kidswear and other items in the online shop are prolific enough to keep things going, and that the leeway online selling allows with not having to fill up shelves and stockrooms with forward-thinking huge orders in from suppliers will mean Woolies hasn't spent too much already on buying up items it may well not sell.

But, sadly, we won't be holding our breath.

Smarta is excited – nay – elated to have been nominated for not one, but two categories in the TechCrunch Europe Awards.

And while we always appreciate any opportunity to get a bit razzed up for an awards ceremony, we would like to give ourselves a good chance of winning – which, dear reader, is where you come in.

Smarta is up for two categories: Best Enterprise/B2B Startup, where we are up against, among others, the dangerously effective PR machine that is online collaboration tool Huddle; and Best Startup Founder(s), where our vivacious and great leader Shaa Wasmund is up against, among others – errm, the boys from Huddle again.

Get voting now, Smartans – we know you’ll see us through!

• Vote for Smarta in the Best Enterprise/B2B Startup category
• Vote for Shaa in the Best Startup Founder category

Smarta has 15 tickets to give away to the next in a series of invite-only entrepreneurial talks entitled ‘One Big Idea’ at London’s top private business members’ club One Alfred Place.

The second event, on Tuesday 30 June, will feature Big Issue founder John Bird, who will talk about how he started his business and what’s it’s like to run one of the UK’s most well-known philanthropic businesses.

The talk will kick off at the stylish One Alfred Place at 6.30pm with a glass of wine courtesy of sponsors Microsoft before John takes to the floor at 7pm. He’ll speak for approximately 45 minutes and take questions to be followed by an hour of informal networking with more vino and canapés.

The event is strictly invite-only and limited to just 40 attendees to ensure an intimate setting for quality entrepreneurial networking.

Smarta will be filming the event and has 15 tickets to give away on a first-come-first-served basis. If you’d like to attend, email editor@smarta.com. Please only apply for a ticket if you know you can definitely attend.

• Watch our video of the last event with Channel 4 chairman Luke Johnson

There’s an interesting piece in the business section of this morning’s Telegraph, which highlights new signs bank lending to businesses may be on the increase.

“After a slow start at the beginning of the year,” Federation of Small Businesses (FSB) spokesperson Stephen Alambritis explains in the article, “the high-street banks are at last moving on releasing much-needed credit to Britain’s 4.7 million small businesses.”

We’re going to stop you there, Stephen. While Smarta is genuinely very excited there’s a chance it might finally be able to start adding to its vast and diverse credit card collection again, it does wish to impress upon its readers that unless you are a landowning tycoon with no mortgage and no criminal convictions, it’s probably not worth getting too excited.

Alambritis points out that ‘this encouraging growth in lending... is coupled with demands for an arm and a leg in the way of security and high charges for facilities’ – which essentially means unless you can underwrite your loan with property, a hedge fund or a controlling share in a South African diamond mine, there’s a good chance your application will be turned down.

Even the much-vaunted Enterprise Finance Guarantee (EFG) scheme, touted by the government as the answer to all business’ cashflow prayers, proved to be too much for many struggling entrepreneurs: even though the government pledged to guarantee 75% of the loan many banks still require the full amount to be underwritten by the borrower. Given that loans under the EFG can be up to £1m, that’s a lot of businesses which won’t qualify under the scheme.

Forgive Smarta for its bleak outlook, but the evidence appears distinctly shaky to us. We don’t think we’ll ring our bank manager just yet.