Guest post: My startup journey to the capital and what to make of East London TechCity

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This is a guest post by Scott Allison, Founder & CEO of Teamly, a productivity and people management tool which launched in beta in July 2010.

I’m in that end-of-year mood, looking back and assessing how the last year has been for me, and one of the big decisions I’m reflecting on was my relocation in March of this year from Glasgow to London because of its promise as a startup hub. So what’s the reality? Was it worth it? And what does the future hold with the East London Tech City initiative?

After exiting my last business, abica, in October 2009, I took some time out and attended some inspirational events like the awesome Startup Bootcamp at MIT, and spent a couple of days with Zappos in Las Vegas. These experiences reinforced my goal to do something I’m passionate about, change the world for the better and create a global brand and business. I was also clear this new business was going to be a SaaS product, scalable and profitable. But where would I do it?

I hadn’t experienced what was going on in London for myself, but could see from where I was, just 400 miles north in Glasgow that London already had much of what Silicon Valley had. An ecosystem of ambitious entrepreneurs, startups and even some venture capitalists. So it was a no-brainer and I moved to London in March of this year. London has more than met my expectations, the ecosystem definitely exists, and through my membership of TechHub and attendance of events like OpenCoffee, Bootlaw, ProductTank, Drinktank, Minibar, Launch48, Leancamp, Geeknrolla and Silicon Valley comes to London/Cambridge/Oxford I’ve learnt from entrepreneurs and investors, and made good friends.

I was surprised and delighted when the Government announced their plans last month for East London Tech City, finally there is external validation of my move to London, and proof to show to friends, family and business colleagues back home who wonder why I moved “so far away” in London! What the Government has recognised, and what critics don’t get, is that it’s far better to build on an existing cluster, and make that stronger rather than try and start something new from scratch elsewhere for the sake of beefing up regional economies. Silicon Valley succeeds because of the critical mass there, but in Europe our tech scene is fragmented, and in a small country like the UK the temptation is to fragment even more. It’s appealing because we’re typically reluctant to relocate and successive Governments have often, quite sensibly sought to encourage economic development out of the South East. However, the reality is that yes, we may be developing products and services that can be consumed globally from any browser, but building this and making it happen, like any other type of business, relies on face-to-face contact and the bigger the ecosystem, the better. I wouldn’t have the friends I’ve got, and the support network I have if it weren’t for being here in London physically. Yes, you can build a great tech business anywhere in the world, but it’s just a lot harder if you’re isolated and on your own.

Being around other people leads to serendipitous things happening, like last week when I was invited to Number 10 to take part in a breakfast discussion about East London Tech City. This was the real-deal, the Government is working hard to listen and understand the issues and opportunities. Along with a handful of entrepreneurs like myself invited there were also representatives from corporates like Google and Vodafone, the investor community and even Facebook. We were split into groups and given some points to discuss and the management consultants McKinsey will present their findings along with their recommendations to Number 10 next month.

But London is not going to replace Silicon Valley, and I was glad to see the Prime Minister acknowledge that when he said, “Right now, Silicon Valley is the leading place in the world for high-tech growth and innovation. But there’s no reason why it has to be so predominant. Our ambition… is to help make East London one of the world’s great technology centres.”

The attention and focus on London’s technology businesses is sincere, and with the right Government help things should continue to accelerate. With the rising interest in entrepreneurship amongst young people, partially as a result of TV programmes like Dragons’ Den and The Apprentice, coupled recently with the buzz around the film, The Social Network, we’re hopefully building a stronger pipeline of entrepreneurs for the future.

One of the things that’s striking to me is that the entrepreneurs I’ve met here in London are from all over the world, (but not necessarily from all over the UK), and with visa-free access to London from 27 European Union member states this seems to me to be the quick-win; bring startups from across Europe to London. I know many awesome entrepreneurs from Eastern Europe who are here in London having fled the old Eastern Bloc for the brights lights in London. The opportunities have been every bit as transformational for them as a move to Silicon Valley might be for someone from the UK already building their company in London.

Recognising this inward migration, one of the main announcements at the Tech City launch was a new class of entrepreneur visa, so people can come from outside the EU. A great idea, but an example of how mixed up this Government is with immigration issues; it’s going to be easier for entrepreneurs to come here and start companies, but harder than ever for British companies to employ well qualified developers who need work visas to stay in the country. One of the biggest challenges in the UK is finding developer talent, but our Universities are full of smart non-EU students, who now are much more likely to return home.

But will a UK entrepreneur visa make any difference if the US Senate passes into law next month the Startup Visa bill? Given a choice won’t entrepreneurs choose to go to Silicon Valley? I think so, yes. You have to do what’s right for your business, not your country. In the last month or so I have been spending much of my time working on raising a seed round here in London, and I’ve heard time and again, from investors, advisors, and other entrepreneurs, “Why aren’t you in Silicon Valley?” These are people who are committed to London and live and work here but all of them hold the belief London is in a distant second place.

Let’s be honest, the challenges of living and working in either London or the bay area are similar, albeit for different reasons. It’s difficult in both locations to find developers and product marketers, and the bay area is just as expensive to live in as the South East of England. But Silicon Valley still wins in the sheer size of the ecosystem and the access to capital, especially for early stage investment. London investors counter that there is a shortage of fundable companies here and point to a bubble in seed stage investing in the Valley.

But what I’ve found is that people outside of Silicon Valley spend a lot of time talking and trying to justify why they are not there, while people in Silicon Valley just get on with it. We’re worrying about going there or not going there, meanwhile they’re getting on with building their businesses.

Building London’s startup ecosystem is not a quick fix, there are some structural issues, many of which will take years to fix, but it’s going to keep getting better and better in the years to come. If you’re a tech startup in the UK or somewhere else in Europe you should be in London, no question. But startups will still often need to head west to take things to the next level, so what can the Government do to ensure that the talent that’s left the UK for Silicon Valley stays connected to London, and comes back in the future?

My suggestion is that the Government tries to think more about making London the European campus of Silicon Valley, encouraging as many connections and inter-dependancies as possible between both places. Let’s aim to make the brain-drain a temporary rather than permanent thing.

In closing I just want to thank all my new London friends who’ve helped me in the last 9 months as I launched Teamly. Merry Christmas and Happy New Year!

  • Aly

    Great post Scott and couldn’t agree more. Some joined up government thinking and we could become the powerhouse for European startups!

  • Nick Stuart

    Several excellent points from a genuine entrepreneur. Worth noting that the govt through UKTI helps companies expand into the the US and the offices in the main cities are very savvy about the opportunities available.

    It would be interesting to know what the structural issues in London are.
    When you look at London you can see several possibilities for improvement. Firstly the lack of a real Science Park or two where companies can develop and grow. Incubators are limited enough but they can only provide support for very early stage companies. The recent announcement about the Olympics park sounded promising but the detail suggests that it is a partial solution only.
    The next point is that the academic and research capabilities in London need to be more joined up and linked into the real London economy.

    The most interesting issue raised is that around clusters and in many ways the different area in the UK offer different strengths. If you look at Glasgow with its various Universities and major industries and impotently heritage of industry you could see where that part of Scotland can build on its capability.

    There is an enormous focus on Silicon Valley without the recognition that the economy is based on more than silicon and software. The most interesting areas are where various sectors cross fertilise eg in low energy technology melded with design and creative arts and fashion. London is a centre for the design world way ahead of anything in the US.

    So to end on a note of a disagreement we don’t want the East End to end up as a satellite of Silicon Valley but to continue to develop its own London ecosystem. And if the pension funds and city financial institutions could be persuaded to consider a more venturesome approach to start ups we provide the US and the rest of the EU with a different type of business magnet.

    • Scott Allison

      Stuart, I agree with you. The bay area’s industry is all about software and technology, so it’s very strong in these areas but also a bit of a bubble. London on the other hand is a very diverse and world leading city, but the downside is the tech cluster doesn’t have the same awareness or strength as in the valley. That’s why tech city is great, because it shines a light on what we’re doing here.

      Where London is strong is as you said, design, music, arts, advertising, media and of course, finance.

  • Greg

    Access to talent is a critical issue for startups. On the bright side, hubs like London suffer from less competition for talent, in my opinion, than Silicon Valley. Imagine trying to recruit for your startup in direct competition with Facebook, Google, Twitter, as well as all of the hot young things like Quora, FourSquare, and so on.

    • Scott Allison

      While that may be true, the pool of talent is, I think, far smaller here. One of the things we discussed at Downing Street was that graduates here are all in the mindset of wanting to get a safe corporate job on graduation, rather than work for, or do their own startup. It was also raised by David Willetts MP at a recent TechHub event that computer science is not taught in a way that is producing graduates suitable for the needs of industry.

      Basically, the competition for talent is hard everywhere.

  • Lee Bandoni

    I enjoyed reading your post and fully understand why you felt the need to move to London but I think a lot of people are missing out on some amazing talent & benefit’s of developing in Scotland.

    I am based in Glasgow and have put together a great team of engineers I hand picked from local universities all of whom were more than helpful getting the right talent on board.

    Our product is in the B2B sector and makes involve’s the integration of a stable desktop app, web based management, smart phone technology & the use many APIs etc. I have no fear that I will ever hit a stumbling block when it comes to lack of staff with technical ability in Glasgow.

    I have always believed that if the product is right and making the right noises then access to VC’s is pretty simple no mater where you are located.

    • Mike Butcher

      I agree you can be anywhere, however the harsh reality is that VCs like to be highly ‘efficient’. They’d much rather step out of their front door into a cab to go to a board meeting than go through airport customs or a five hour train journey. Why do you think non-US startups are told, when a US VC invests, that part of the deal is that the company moves over there?

  • David Caldwell

    Scott- an excellent overview of the challenges in our space and the advantages of being in an organically grown cluster. I have to comment on one of your points though-
    “it’s going to be easier for entrepreneurs to come here and start companies, but harder than ever for British companies to employ well qualified developers who need work visas to stay in the country”

    Introducing the mooted entrepreneur visa is not about making it easier, it is about making it possible. People like myself (and I have met several) who have invested time and their own after-tax income in boot-strapping technology startups in the UK have been faced with a succession of unexpected administrative crack-downs and rapid legislative/ visa law changes.

    When I embarked on our UK startup two years ago there was a clear “highly skilled” (Tier 1) visa path for me. After that avenue was blocked, we spent over £3,000 attempting to comply with Tier 2 “start-up” visa licensing requirements only to be blocked on discretionary grounds with no appeal. As lawyers could identify no other routes, I am now unable to get a visa. A precarious position to be in after investing all the savings of your professional career.

    Migrant entrepreneurs venture the risk of dealing with unknowns in a foreign land, not being able to fall-back on professional income (due to visa restrictions) or welfare as locals can, in addition to the normal costs you know well (opportunity cost, investing own after-tax savings). I can assure you there is no risk of an entrepreneur’s visa making it too easy.

    • Scott Allison

      David – What a nightmare! I hope one day countries compete with each other to attract entrepreneurs. The type of person who wants to uproot themselves and move to a foreign country to set up a business is exactly what we need more of.

  • nick


    UKTI have a couple of teams that might help. The Investor support team who have been putting in industry opinions on visa requriements to UKBI and the Global Entrepreneur team.

    Suggest you talk to Michael White through BIS switchboard and use my name

    • David Caldwell

      cheers Nick, Michael White was very helpful last year and has continued to provide advice and support, ultimately the Home Office/ UKBA is a brick wall.

  • Wrapping up 2010 « Scott Allison's Blog

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  • Nick Pelling

    Hi Scott – if you have money in the bank, London is an exceptionally productive place to live & work. But it’s a lousy place to be running a cash-negative startup, however good your previous exit was.

    You may well find that London angels’, ummm, ‘investment latency’ turns out to be your biggest culture shock. If you’ve got your pitch properly together, your first month will be great… but budget on at least 11 more of the same before you get any funding. Good luck & Happy New Year!

    Cheers, ….Nick Pelling….

  • Admin

    helpful information
    thank you so much

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