Please note: The opinions voiced in this article are those of Stuart Bradley (me) or those of the companies alluded to within the article, not those of KashFlow Software Ltd. i.e. plz don’t sue.
The validity of the Tech City Investment Organisation is probably one of the biggest issues currently under scrutiny in the London tech scene. Tech City claims in their Impact Report (a summary of their actions in the past year) that they have had 37 ‘wins’. If this is truly the case, then their £2.1 million expenditure could be broken down as being equivalent to 37 seed investments of £50,000. On the surface, this is pretty reasonable, especially given that this does not include all of the collateral of Tech City’s involvement. However, given that few details about these ‘wins’ have ever been published, it’s difficult to take any of the figures at face value.
It’s difficult to tell whether the voices of the naysayers (the most notable of which is ex-Telegraph journalist Milo Yiannopoulos, who often questions the achievements of TCIO in his online magazine, The Kernel) are more numerous than the…err, yeasayers or if they’re just louder. One might argue that having so many people keeping Tech City on its toes is a good thing for everyone – it encourages both the organisation itself and those who are anti-government involvement and/or fiercely independent to do better. Regardless, it isn’t easy to determine the true opinions of startup founders, entrepreneurs etc given that many of them are likely to keep quiet to keep TCIO on side…just in case.
Somewhere in the middle are the individuals who praise the organisation’s efforts without ever really commenting on its results. Michael Acton Smith, of Mind Candy, recently remarked that ‘it’s far better that they are shining a spotlight on our sector rather than ignoring us.’ Olivia Solon of Wired Magazine recently took a similar standpoint, arguing that opponents should let Tech City get on with its cheerleading.
Tonight, in what I have to admit is a pretty brave step (unless TC has had final say on the guestlist…something I intend to find out), TCIO has agreed to an open house in collaboration with the popular networking event, Digital Sizzle. As the evening goes on, I’ll be attempting to keep up with the Q&A session and document the event in live blog format. As this is a live blog, I’d appreciate a little leniency towards spelling and grammatical errors, all of which will be neatened up later – everything after this paragraph is coming to you as near to live as possible. Tech City, show us what you got.
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Arrived, installed (lol tech) on a seat near the front and I have a nice orange cocktail courtesy of Eventbrite. Have confirmed that TCIO have not ‘censored’ the guestlist – they’ve only added a few people it, not taken anyone off it. Ten pounds says Milo heckles within fifteen seconds of EdvK saying anything. Olivia Solon of Wired Magazine has expressed disbelief at the fact that I’m live blogging this event; I think she suspects I’m just going to talk about the burgers. (I might later.)
There is someone filming the event, but (as far as I’m aware…) they’re not livestreaming so I’ve gone from being really annoyed that he’s here to being really smug that I’m going to be posting everything first #winning.
Cameraman is now stood next to me. He looks annoyed.
Purpose of the evening is, in the words of Ben Southworth (whose beard is growing by the minute), a right of response, something that governments don’t often offer. He hopes we’ll all be respectful. We’ll see.
Eze, manager of Google Campus, calls Campus an ‘open source building’. After ‘renovating the shit’ out of the building, now reliant on others to ‘build the apps’. There are events every day, from meetups to hackathons and launchpads for students. It belongs to all of us. Aww.
Paul, of Kingston Smith, talking about SEIS, tax relief and workshops that are run at Campus. Also sponsors from Yammer (who are recruiting, in case you want to go work for something with a userbase of 5 million…) and Cisco, talking about what they’re doing in the community. Cisco announces a series of pre-seed. funding.
Michael Acton Smith announces that Mind Candy are also hiring – looking to build the best entertainment company in the world. Just in case you want to be a part of that.
Here comes the panel! Charlie of MarketInvoice, Reshma Sohoni of Seedcamp, Dan Crowe of SongKick, Eric Van Der Kleij and Mike of <somewhere that I couldn’t hear>
(Moderated by James Silva.)
E v d K offers up a few words about TCIO, suggesting that it stemmed from demand from some entrepreneurs and startups. Monthly meetings at No. 10 to shape strategy of what exactly is to be done, and hope that at events like this we (startups etc) will share what we want from the government.
Q: Is the government just basking in the glory? Presences from Google etc are just outposts? Why the name?
A (Eric): ‘Love the name Silicon Roundabout, but hard to market internationally as it’s British, in that it’s very humble. Sound economic reason for involvement – all of Europe is somewhat economically challenged, so government looked for threads of growth that could be amplified. For relatively small amounts of capital, very high growth can be achieved; not about showboating.’
Q: How does TCIO support the attraction of international investment?
A (Charlie): TCIO has helped with mentoring (met 33 people in marketing, strategy, tech etc), PR (full page in Sunday Times) which led to 70 companies contacting and wanting to get involved.
A (Reshma): Benefitted a lot from introductions, but don’t always see eye to eye. Still, very excited about some of the VCs who are coming to meet.
A (Dan): Songkick first investment from Sequoia in a British company – went with Valley investor because of their experience, but also because they were the right investors at that time. Interesting that Sequoia changed their mind about investing in British businesses…
A (Mike): Use Tech City as a megaphone and a ‘dating service’, in trying to find people who can help to spread the word. Now onus must be placed on nurturing the cluster, to help it expand further.
Milo Yiannopoulos already venting on Twitter – ‘My understanding of panels is that you’re supposed to choose people who might actually disagree…
Eric now talking about mentoring sessions (in order to make smaller companies a little more ‘investment ready’) and road show in the US to spread the word to investors about the cluster. Attracted five investors to come to the Entrepreneurs Festival, listen to pitches etc. Unsolicited, they wrote about what was happening in London, and the fact that an ecosystem is thriving.
Q: Could the organisation be shut down and rely solely on E v d K instead? Is there a lack of coding talent in the UK?
A (Eric): Has a huge budget, but it’s not a quango. Tech City is a new narrative that we’re able to celebrate internationally. Idea about talent is interesting – by encouraging things like Silicon Milkroundabout, we attempt to foster talent.
A (Dan): Scandalous that we got to 2011 before it was acknowledged that teaching coding is more important that learning to use Microsoft Office. Realistically, teaching 16 year olds coding now won’t improve situation for entrepreneurs for 5-6 years. Already a flow of great people coming through UK comp sci courses, also now seeing a flow of talent from the Valley and elsewhere – good sign that we’re doing something interesting and attractive.
A (Mike): Amplifying stories helps talent realise that there are other viable options besides to going to work in a bank.
Q: Does the attention on Tech City deflect attention from the rest of the UK in a negative way?
A (Eric): Not neglecting the rest of the country, focus on this cluster because of critical mass – spaces for people to meet, chance for companies to network etc. Inward investment has helped other areas beside London.
Q: What does the next 12 months hold for TCIO?
A (Reshma): Focus on scale and improving University track – a lot of product talent dev is missing; business grads aren’t learning the right things (e.g. SEO, Facebook credits etc).
A (Dan): Extremely hard to find good product marketers in the UK; bad legislation like the EU cookie law also has the potential to put us at a huge disadvantage compared to the US. Implores Eric to fight this fight for entrepreneurs.
A (Mike): Connect the talent who has come into the UK to not only encourage growth, but also help the community to become self sustaining.
Questions from audience –
Milo – All panel members benefitting directly from TCIO, has merely ‘assembled a panel of cheerleaders’. The thing that no-one is talking about is the sinister third plank of the strategy – don’t attempt to fill the Stratford Olympic Village to save face with the government…After a recent dinner, Milo’s view of TC has recently been ‘softened’.
A (Eric): Won’t be offering any incentives for people to move to places it is not appropriate for them to be. It also has a very impressive shopping mall.
Brian from Pixel Pin – Recipient of a Tech City launchpad grant; believes in what is going on, sees that there a lot of inroads made. However, that grant only reaches 4% of people. Below 2% when it comes to seed funding. When will the gov’t get down to the grass roots?
A (Eric): Only way to deliver more early stage capital is to start writing cheques, or use tax levers to make it more attractive to encourage seed investors.
A (Reshma): Part of it is ‘waiting for the law to get written’ – plans to put more money into seed funding alongside Seedcamp.
Olivia from Wired – With the exception of the website, which area of expenditure has been least rewarding?
A (Eric): Wants to see more results in terms of VC and early stage investors setting up in Tech City.
A (Mike): Pieces still need connecting together, not so much internal networking building as there should be. Official ‘sanctioning’ and networks at early stages can be beneficial.
A (Reshma): The rest of the team; difficult to determine exactly
what they are all doing.
A (Dan): More mentoring, as much progress with laws as possible. What is being done so far is not enough.
A startup founder – Need low levels of capital, but argues that talent is simply not up to scratch. Open the borders a little more in terms of visas. Impossible hurdles and bureaucracy.
A (Eric): Most difficult problem to address. The cap of ‘talented people’ under startups visas that can be brought into the UK is 20,000 but only half granted. Almost none turned down. Also sources of talent in continental EU where there are no restrictions on travel.
A (Dan): What Eric says is broadly true, though there is the difficult Government of rhetoric that ‘we do not want foreigners coming into our country’, which over-rides the subtle, detailed message sent by things like the entrepreneur visa.
A (Reshma): Faced by whole developed world; not a problem unique to the UK. Great opportunity for the UK to break out, and lead the world.
Jim (KPMG) – Does it matter how many patents filed in cluster?
A (Eric): Is it an important measure? New piece of legislation called patent box – means roughly that UK patents making revenue from that patent will have a corporation tax cap of 10%
A (Dan): Measuring success by number of patents issued is dumb – it’s totally removed from innovation. Measure based on profit, not patents.
Jon Gold – Lots of peer group moving to the Valley; fine to bring talent in, but much of it leaving.
A (Eric): Celebrate the good things here to make TC a magnet, thus we have to be cheerful about our prospects. This may feel unnatural, but it is an essential part of the process to make situation seem attractive.
Alex, startup founder – Not British, created 8 jobs in the country. Can I have a visa please? Also hire 30 guys remotely in Russia, but can’t students at UK institutions who are interested. Comp sci students don’t want to go into business.
A (Dan): Silicon Milkroundabout, a job fair that brings students and startups together, attracted 1,500 people to talk to 100 startups about 500 jobs in October. Another one coming later this month. [Interesting that Dan notes that this is something by startups, for startups, i.e. not government funded].
City University panelist – remarks that only 1% of students are interested in entrepreneurship.
Daniel Steves of Hamilton Bradshaw – Came from Silicon Valley North because ‘it happened’. Mechanisms and capabilities exist here, but visa thing is an issue; only allowed to live here because his wife is a German(!) Doing the right things, but we have to think of England as a tech island; everyone watches the same TV presenters, everything happens at the same time and everything is so close together (Liverpool, Newcastle, Manchester etc). Don’t build so they come, build as they come. Let’s use the phrase Silicon Island.
Question on rising property prices.
A (Eric): Growth is a problem I’d like to have. Rising prices are a consequence of this; we show where clusters are, and encourage bigger companies to develop but be benign towards younger companies.
A (Dan): Need for short term and flexible leases, something Google Campus is great for.
David – Banks should be responsible for funding startups, something the government needs to help with.
A (Charlie): Something that MarketInvoice is doing, effectively taking the role of a shadow bank. Part of a wider movement [e.g. crowdfunding, P2P finance etc]
A (Eric): Not the best qualified to answer, admits that banks probably should be involved with this but it currently is not.
[A (Jack Gavigan, audience member): Banks got into trouble for risky investing, is putting money into high risk ventures like startups really something we want?]
Comments on infrastrcture; severely lacking, no 4G, limited fibre optic broadband.
A (Eric): More work being put into improving networks, but it isn’t enough. Will take the message back.
A (Reshma): Everyone stepping up, except the big comms brands who are not doing enough. Need TCIO to push harder.
Is it ok only to commit 11% (rather than the 61% spent on consultants) to marketing/advertising budget if amplification is the true aim?
A (Eric): Already being criticised for over-marketing, but personally wants to put more into it.
Andrew, Tribesports – It can feel like there’s a startup club (those who raised money, Seedcamp finalists etc, TechHub residents etc), and can feel excluded if you’re not part of this – shouldn’t the help given be more egalitarian?
A (Eric): Entrepreneurs Festival exists, in part, to help with this. Is this really something the government should be doing?
[Should more marketing budget be spent on promoting TC events?]
Milo – Smarter spend on marketing, not more spend. Universities almost actively hostile towards entrepreneurship – need to fix education’s relationship with business.
GigaOm writer – As someone who lives in SF, acknowledges that there is a great tech scene here but need to shout about it more. People are noticing London as a startup hub – c.f. TechCrunch article which acknowledges London as the third biggest after SF and NY.
What of the companies who are going to the States and not returning; need to encourage UK VCs, who aren’t willing to take the risks.
A (Eric): Not enough VCs with the necessary capital to support. Something to work on, but difficult to make happen overnight.
[A (Jack): Plus, not so much competition in the UK, so they can set the bar higher]
A (Mike): If you believe it will happen, it will happen. Just go and do it.
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Ok, that was intense. I’ve definitely earned a burger now. I’ll neaten all of this up tomorrow, promise. Until then, please post your thoughts in the comments! If enough people (yes, that includes the rest of you 600 who couldn’t get tickets) chime in, hopefully this could lead to some very good debate and conversation.