Welcome to my Throwback Thursday series of posts. For this series I searched back through my archives and I have selected 5 posts that are relevant to the Land & Expand mission – to provide you with tips and insights for launching and growing in London (and UK) tech. I’ll post a #TBT article once a month taking us through to summer.
For this months #TBT post, we jump in the time machine and head back to July 2013 to revisit the article I wrote for the Guardian.
The original post is here if you want to check it out directly.
Data shows that 15,720 new companies launched in Tech City, London last year but what’s next for the UK startup scene?
The moniker Silicon Roundabout originated as a tweet by Matt Biddulph. The phrase quickly took on a life of its own, and has come to represent the thriving tech community clustered in London’s EC1V. The area – which nominally spans Old Street, Shoreditch and Hoxton, but in truth spreads beyond these boundaries – has rapidly become a hub for tech startups and digital businesses to call home.
There are always questions asked about how a startup is defined for the purposes of research, but that withstanding, the latest data shows 15,720 new companies launched there last year alone, which is more than any other area in the country.
In addition to the tech giants such as Google, Amazon, Microsoft, and Facebook, London has become a first choice for high-growth US companies looking to open a European HQ such as Twitter, Foursquare, AirBnB and Uber.
From our perspective at Twilio, London was a natural choice for our first office outside of the US. Language, accessibility to rest of Europe, a vibrant startup ecosystem, the financial market, talent and flexible business conditions were all contributing factors. Also, and importantly, a number of our existing US customers wanted to launch in the UK and take Twilio with them.
But it’s not all rosy. One of the original reasons for companies basing themselves in areas such as Shoreditch was the affordable rents, but there are those arguing that these have been obliterated by the hype drummed up around the area. There are properties that were snapped up for £15 to £18 per square foot in 2011, which are being passed on at as much as £42.50 per square metre only two years later. This could be forcing smaller companies to move or start up elsewhere.
It’s also important to highlight that the tech industry has exploded all across the UK, and not just in east London. In fact, the National Institute of Economic and Social Research’s recent report told us that there are at least 270,000 digital companies across the country. If you pull together the digital and creative industries in the UK, these accounted for 6% of British GDP, which is 2.8% up from 2008, according to government figures.
Now compare that to the financial services industry – the UK’s economic backbone for decades – which dropped from more than 10% of British GDP in 2008 to 9.4% in 2011. Put in that context, it makes for interesting reading.
Tech clusters can be found in cities all over the country, including Bath, Brighton, Birmingham, Bristol, Edinburgh, Leeds, Manchester and Newcastle. Paul Smith, director at ignite100, a 13-week accelerator programme for early stage startups in Newcastle, told me that the most exciting development in the Newcastle startup scene is seeing teams co-locate between the city and London.
He said the cost base of any startup basing development and design in Newcastle is far lower, and a team’s runway can easily be doubled. Plenty of founders are then travelling to London two or three times a month, so don’t feel like they’re missing out on the London scene either.
But what we can’t do as an industry is pat ourselves on the back and rest on our laurels. Tom Hopkins, director of MMC Ventures recently wrote a piece highlighting that the job is only half done, and without further funding the wave of new startups will not grow into the world dominating companies the UK craves.
In addition, it’s vital we support the next generation of young entrepreneurs, and it’s encouraging to see that government is starting to take action. Education secretary Michael Gove recently added computer programming to the national curriculum, meaning primary schoolchildren across the UK will be exposed to coding from a young age.
There are also organisations such as Code Club, Skills Matter, General Assembly and others that are helping develop the new breed of tech entrepreneurs by teaching them the skills they need to pursue a career in the industry.
It’s an intriguing time to be sitting by the roundabout in east London. New companies are starting every day, growing fast and building products left, right and centre. This is the era of “doing” and collectively we’re building something exciting which is attracting the attention of the world and putting not only east London, but the whole of the UK on the tech map.