The London startup scene: Too much funding, boozing and not enough collaboration and execution

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This is a guest-post from Ben Colclough, founder of travel start-up Tourdust.com. Tourdust is an online travel agent specialising in adventure travel and local tours for independent travellers.

The London start-up scene is seemingly a great success, it buzzes with events and most are packed with entrepreneurs and assorted hangers-on. Beer and investment advice usually flow in generous quantities. But is this hive of activity actually helping London’s budding startups succeed?

Like many others, I threw myself into start-up events in the early days. I went to DrinkTank, MiniBar, InnovateEurope, Sun Startup Essentials and OpenCoffee – In fact, it was all too easy to spend half my working week at these events. Then one day I stopped going, and to be honest, I realised I wasn’t missing out on anything. My startup didn’t suffer, on the contrary it benefited from increased attention. I’ll be the first to accept that I’m not the most gregarious individual in the world, but I have to question if the scene is really as good as it is cracked up to be?

Here is how I summed up the situation whilst sullenly cradling my pint in the corner:

  • Cynical investors (I know, I know, they have every right to be cynical)
  • Over-loud venues (Wasn’t loud music in bars designed for dancing and courting, not networking?)
  • A glut of people trying to serve the start-up community. (I’m not Warren Buffet, but I’m pretty sure this isn’t what you’d call a particularly lucrative market?)
  • Irrelevant pitches from other start-ups (unfair perhaps, but do we really want to hear other startup’s pitches?)
  • Supposedly helpful advice on getting investment, which ultimately always boils down to using your contacts

To be fair, I’ve met some lovely people on the scene who would have gone out of their way to help me, I’ve had my fair share of free beers and even had the good fortune to be introduced to our blindingly good Ruby on Rails coder at one otherwise uneventful meetup. There are also, of course, the exceptions to the rule; Sun Essentials, Bootlaw and SeedCamp all practice everything I argue for and TechCrunch put on some superb pitch training.

But, the root problem with the scene as I see it, is that the topic du jour and social currency (and trust me there is one – this ain’t no egalitarian community) is investment. It seems getting funding has become the end rather than the means of a start-up.

Surely, only a teeny proportion of the startups attending will ever get funding and most would have a far greater chance of success if they focused on bootstrapping and execution rather than wasting their time flirting with investors? The reality is, building a successful web startup is all about sales and marketing. It’s about the daily grind of getting links and writing reams of content. It’s about slogging around mid-sized companies in suburban Britain trying to make some sales and of course it’s about the eternal quest to raise your shockingly low conversion rates.

So why do I never hear these topics talked about at an event? When I speak to developer and UX friends they rave about the collaborative spirit in their meetups. They tell how, if you rock-up to a meetup with one of those brain-fuzzing barriers that you just can’t surmount, some Joe will roll up their sleeves and help you through it – give you the benefit of their experience. It all sounds wonderfully appealing. And come to think of it, the same is true of professional sports, the best in a field take the time to pass their experience on to the newcomers and it simply raises the bar of performance for everyone in the community.

My belief is that we need to see more advice on marketing and sales execution, more collaboration and less insanely loud events and investment talk. Until we do, there will be more startups with woefully naive marketing plans that amount to little more than the eternally hopeful “word of mouth marketing”. I appreciate that if you want something to happen you should just go and make it happen (and not just whinge on the sidelines), but hey-ho, I’m a cynical Brit and have my hands full grinding away at the nuts and bolts of a startup. This is my reality.

Photo credit: ©BitchBuzz

  • http://magazero.net Ivan Pope

    Excellent post and about time it was said. I could never be accused of spending too much time boozing and schmoozing, but since I moved to out of town I never missed it (apart from the occasional nostalgic visit).

  • http://londonstartups.co.uk/ Janos P Toth / londonstartups.co.uk

    Couldn’t agree more with the over-loud venues part.

  • http://www.stewarttownsend.com Stewart Townsend

    Good comments Ben and thanks for the praise, I always tried to talk or focus when engaging with startups that its about marketing, sales, channel and that networking is fab but you need to execute on those intros, be harsh, meet people who can help you, understand that and then meet the next person. You can attend the events to do that, or kick back and have a few beers with friends, hard to do both as networking to build pipeline takes effort. (my god an equation there :-))

    Didnt realise you were in manchester, drop me a line, grab a coffee as I live now on Pendle hill so not that far away.

  • John

    Couldn’t agree more. As a marketer in the start-up world i find the “scene” almost sees marketing as an afterthought. You go to these events and you’re an outcast. There’s no discussion about sales & marketing. Shame, as a company is nothing but product plus marketing.

  • http://www.dilettantemusic.com Juliana Farha

    I’m with Ben on this. I’ve been to lots of these events, and invariably end up talking to two groups of people:

    1. consultants who are trying to sell me their services, and
    2. other start-up owners who feverishly launch into their own elevator pitch and have zero interest in anyone else’s business and its challenges.

    Also, I’m totally with Ben on the need to roll up your sleeves and solve problems rather than wasting time ‘flirting with investors.’ In fact, I attended one of these events where bebo’s Michael Birch was a speaker, and he made the astute point that start-ups sometimes see attracting VC cash as a goal unto itself. (I’d add that Birch’s comment was the only piece of information worth taking home from the entire evening.)

    As for the cynicism of investors, perhaps it is justified in some ways. But in my experience, there seems to be an inverse relationship between their shockingly low success rates at picking winners, and their astonishing arrogance in the face of business ideas that don’t fit whatever trendy prototype has them queueing to write a cheque.

    I follow Vivek Wadhwa on Twitter and he often writes for Tech Crunch. He’s very prolific on the subject of who gets money and – more interestingly – who doesn’t. It makes for depressing reading, though.

  • http://www.shutl.co.uk Tom Allason

    hear, hear.

  • http://www.matchik.com Joana Picq

    Agree with most of it, but I’d say there is a reason why the topic is always investment – it is quite easy for any entrepreneur to find people with experience in marketing and sales willing to help, they can read and experience loads of it online or for themselves, but investment requires introductions and building relationships, and has become very hard since european investors have become extremely risk averse. So entrepreneurs end up having to move to events.
    It took me 2 drink tanks and a few other events to find my way around the london startup scene and figure out where to find the investors and entrepreneurs I needed to connect with.
    I’d say anyone can drop the boozing and focus on the best events for networking when they can take a break from execution: seedcamp, leweb, bizspark, nextwomen and the other usual suspects.
    But we all know lifestyle entrepreneurs will continue to fill the crowded loud boozing events…

    • http://www.tourdust.com Ben Colclough

      @Joana, What you say makes sense. You can’t do investment without getting out and meeting people, but you can arguably do marketing. I’d still argue that there is a whole world of benefit to be had from sitting down with other start-ups and sharing what you’ve learnt about linkbuilding for instance?

      Maybe the problem is down to a lack of willingness in entrepreneurs to open up and collaborate on ‘core’ business functions (sales & marketing), but a willingness to collaborate on things like technology development processes and investment, where they see less potential competitive threat?

  • azeem

    Nice observation!

    “It seems getting funding has become the end rather than the means of a start-up.”

    • http://www.affenstunde.com James Barnes

      Spot on comment. Ripple of applause for the OP.

      London is full of people ‘playing’ at start-up. They love the breakfasts, the lunches, the dinners and the drinks, but they rarely do a stroke of work.

  • http://wizewerx.com Mike Sutton

    Ben – thank you for such a great account of you impression of the London startup scene.

    Entrepreneurs and I would guess, most of the ones who populate the scene are first time ones – are by their very nature, dreamers. Any scene with mostly dreamers is a lot of fun and fluff. The content is optimism (it has to be).

    Investors need to see through the fluff and the more fluff there is, the more cynical they tend to become.

    A friend of mine is involved heavily in creating a startup community in Birmingham and he is really trying to keep it collaborative and fluff free – so far he his succeeding, so it can be done. Perhaps its also an element of it being London!

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  • Kieran O'Neill

    The most valuable thing other entrepreneurs can do for you is share candidly their experiences and make introductions.

    People only really do this for their friends – that’s just how humans work. When you build a group of genuine friends out of the scene that goes behind the occasional stilted conversation over free beer into meaningful relationships you start to experience the real value of the community.

    That’s just my experience anyway.

  • http://blog.kashflow.com Duane Jackson

    The first comment on hear – “Excellent post and about time it was said” – is spot on.

    As a London-based tech startup, these “gatherings” aren’t for me because

    1) I’m not looking for funding

    2) I’m too busy to spend valuable time getting pissed rather than having useful conversations

    3) I’m turned of by what, from the outside at least, looks like a very cliquey scene orbiting around a handful of individuals.

    Having said that, if these events work for those that attend – then good luck to them.

    But I know I’m not the only one turned off by the party scene. I know other CEOs of tech startups that have dipped into this scene and promptly got the hell out of there. Which is a loss to any would-be entrepreneur on that circuit as these are people with valuable insight, experience and contacts.

    I think beyond the more high profile events, there are other more civilised and useful gatherings going on in London, they’re just harder to find and are perhaps a little more exclusive.

    • http://www.anglotopia.net jonathanwthomas

      I could not agree with you more, good sir.

  • http://www.scred.com/ Kristoffer Lawson

    This was something I touched on when writing about the importance of geek culture to the long-term success of technology entrepreneurship. In London I did get the feeling that, while there were many startups and a lot of vibe, there was an almost complete lack of geek culture — quite the opposite to what I assume Silicon Valley would be like.

    I’m not saying London isn’t a great place. There are obviously many investors there and a lot of business going on, but I wonder if I would miss being amidst the actual creative process.

    Anyway, for the interested:

    http://travellingsalesman.mobi/entry/geek-culture-and-the-demoscene-as-an-incubator/

    • http://hauntingthunder.wordpress.com/ maurice

      re lack of geek culture – that is because the status of “Engineers” and any technical profession is very very low in the UK.

      the wife of the no2 guy at BT Labs (the descendant of the place where they invented colossus) onece got the response when she said that her husband was an engineer

      “oh thats nice dear what sort of cars does he work on”

  • Pete Cunningham

    While I agree with the comments about the music often being too loud or often that the room acoustics are so poor you can’t hear the speakers, I don’t agree with the overall tone. I think there is a lot of merit in the London networking scene.

    There are a wealth of networking events in London (maybe even too many) that allow you to meet all the advisers, funders, developers, marketers and others you could ever need. Its part of a vibrant ecosystem that I have seen help companies rise from ‘a single entrepreneur with an idea walking around Open Coffee’ to being VC funded with 50 staff in less than a year or so.

    Many of the companies or firms funding or organising these events seem to be doing so out of nothing more than altruism. For example the Bootlaw guys – I asked them what they get out of it and the honest answer was ‘nothing yet really’ but they enjoyed doing it.

    What you need to do is work out the ones that are relevant to you and quickly ditch the rest. Some provide excellent free or cheap education for entrepreneurs from everything from getting funding, choice of technology, marketing techniques, funding etc. I would generally advise looking for those that have round tables or a moderated discussion as opposed to just free beer in a loud bar! They tend to get a better audience mix as well.

    There are many ‘dreamers’ but there are also many damn good entrepreneurs among the people you meet. Often first time entrepreneurs attend to get the courage to go ahead with their convictions, others get a ‘sense check’ and feedback on their ideas with plenty are willing to give free advice, make an introduction or recommend another networking event. Sometimes the advice is ‘your idea will never get funded because your have a nice little SMB’.

    The ‘pitch to everyone’ in sight mentality seems to be only the novices – those at their first networking events. From my experience they soon drop that.

    I would argue that networking is essential to any business and more so to a start up – not every entrepreneur has come from a London agency and already has a big network of contacts to draw from. Some are really starting from scratch. My advice would be to spend at least one evening a week getting away from staring at your PC screen should not only be good for your business, eyesight and spirits. Just make sure you attend events that are relevant to you and you think you are learning something!

    • http://www.bootlaw.com Danvers (from Bootlaw)

      Thanks for the name check, Pete.

      I wouldn’t say we get nothing out of running Bootlaw – we’ve built a reputation and met far more people – and many of them are now our clients – than we could hope to meet just by attending other people’s events. However, we are in the business of providing a service to companies so our motivation for networking is slightly different (i.e. it is all about the sales mentioned by Ben).

      On the flip side, we set up Bootlaw because we thought there might be a need for an event where useful content (in our case legal help) is given away for free and the networking can be done in a more civilised and relaxed environment than a bar or nightclub (not that I have anything against those which are). Turns out we were right.

      On the whole it is a good thing that the “scene” exists – it is a resource that entrepreneurs can plug into if they want to do so – and if you think events should be organised differently, then it is a free world and you should just get on with it!

  • http://www.arekskuza.com Arek Skuza

    Great post. I like it – sales and marketing is so important. On the other side I think “nothing interesting happens in office” so networking is part of sales and marketing.

  • http://myfriendshotel.com Peter Kindness

    I attended a few of these start-up events but not for long.

    What I did take away, that has been invaluable, is that people have struggled, failed, given up, started again and even a few have succeeded. Working day and night for years is tough and without these events, even in abesentia, my entrepreneurial experience would be that much lonelier.

    Regarding sales an marketing. The journey from idea to product is a long one and maybe a lot of these people are selling ideas rather than products. Or, without the investment, the marketing options are limited to online marketing techniques rather than paid ones.

    Collaboration is one area that could really help everyone. Maybe a system to arrange mini-meetings beforehand would help move things forward rather than spending all night trying to find the person you don’t know you needed to talk to. There’s an idea for someone!

    • http://www.scred.com/ Kristoffer Lawson

      Agreed, there is real value in the networking and the events, so it’s wrong to criticise that — as long as the people are also working hard to create things. I know there are people out there who are more talk than do, which is what this article is referring to.

      Still, yes, being an entrepreneur can sometimes be a lonely place, so sometimes you need to go to a few events, just to keep your sanity, and to be inspired by others who are still going for it.

  • Pete Cunningham

    @Peter Kindness
    ‘Collaboration is one area that could really help everyone. Maybe a system to arrange mini-meetings beforehand would help move things forward rather than spending all night trying to find the person you don’t know you needed to talk to. There’s an idea for someone!’

    I agree but many of the events do have a MeetUp (or similar) page where you can check profiles and contact another person to say ‘hey like your profile and would like to catch up for 5 mins at the event’. Although not everyone fills out their profile and not all that say they will attend do.

    Regarding the collaboration point it is easy to find the person you want to talk with, take a Moo card and say I will call you and arrange a coffee to swap experience/discuss in a couple of days. If you do that you will get more from networking and you can also discuss things without worrying about the passive audience.

    [Wish they let you edit your posts – just seen the number of gramatical faults in my first post!!!]

    • http://myfriendshotel.com Peter Kindness

      @Pete – thanks for the reply. I do have a nice business card but finding the right folk to give it to is not always easy. I think as someone said above, it’s more a matter of quickly passing over those who are not ‘relevant’ so that you can find those that are, without feeling rude. Also, I now have a product so that’s will set me apart from some :o)

  • http://www.tripinquiry.com Shane Hayes

    Ben

    I am curious as to what the Manchester (and other “provinicial” city) Start Up scene is like. Is there one? Do you travel from Manchester to London for events.

    I am based in Dublin and I would say there is a distinct lack of scene here and think I would enjoy getting out once a quarter. Free beer would be nice too.

    S

    • http://twitter.com/mikebutcher Mike Butcher

      Dublin Web Summit?

      • http://www.tripinquiry.com shane hayes

        I would regard the Dublin Web Summit as a conference (and one of the best) rather than a less formal “scene” event.

        It is a six monthly thing and maybe Ben’s point is that a high quality conference once every six months is better than a non stop stream of get togethers.

        By the way. I could not recommend the Dublin Web Summit more highly. I have been to a few similar events and it has been by far and away the best. The original format was a tightly focussed five hour evening event with 10 to 20 minute slots. This worked really well in that the presenters got to their nuggets quickly and then the next person came on with more nuggets.

        I left the last one feeling like I would have preferred a longer event so I am glad that the next one has been extended in duration.

        S

      • http://techme2.eu bcurdy

        What about PubStandards ? It’s a nice place to meet designers and developers informally. http://pubstandards.ie/

        There’s also a nice ruby and python community in Dublin, the latter having monthly meeting. Or next week-end for instance, there’s a new edition of Startup Weekend. And that’s just from the top of my hat. So there’s definitely a lot more than Dublin Web Summit alone in Dublin :)

  • http://www.psonar.com/ benkt

    I totally agree with the general sentiment here.
    At these events you get a lot of folk who want to work on their idea at someone else’s expense and not enough who want to roll up their sleeves and get started.

    We’re Cambridge-based and there’s some great practical advice and help available around town at the minute. I’ve just got in from a really useful evening organised by the ‘Pitch and Mix’ meetup group, this session was on Social Media; October’s session will be on Patent/IP law/Trademark issues.
    We still need more stuff like this though – getting experienced and successful entrepreneurs back in to pass on advice still happens far to infrequently.

  • http://www.huddle.com Martin Eriksson

    I have to agree with Joana – as much as I can share the frustration with elements of “the scene” there’s a reason the focus is on funding and networking – not only is that what most entrepreneurs have the least knowledge of and experience of but there are other events where the nuts and bolts are talked about – from product to development to marketing:

    Seedcamp – whether as a pitcher or a mentor you learn a lot and network with the nuts and bolts people at other start-ups.

    (Excuse the plug) My own ProductTank event, spun out of DrinkTank, is focused on Product Management with a few speakers and a great atmosphere of learning and sharing insights. Likewise DevTank – run by our CTO and focused on development.

    ProductTank, DevTank, ProductCamp London, BarCamp London, Silicon Stilettos, the list goes on. There are probably dozens if not hundreds of other smaller events where the nuts and bolts are discussed.

    You simply have to dig a little deeper – and know what it is you’re looking for from an event. And if the events aren’t up to scratch – why not start your own?

    /Martin

    • http://aftnn.org/ Ben Godfrey

      GrowthTank would be a really welcome addition to the Tank events roster!

  • http://www.angelsden.co.uk Angels Den

    I couldn’t agree more about the mad desire people have to attend these shindigs. But its all about context.

    The idea is to mix and match the type of events you attend. Turn up to the loud party type ones just to get your face out, network and make connections. But if you’re serious about raising finance then the paid SpeedFunding events (or similar) we run don’t have loud music or hanger’s on.

    And for those that want help and advice about products, marketing, the nuts and buts then we run free funding clinics too.

    These loud “parties” are no real way to get deals done, they may be great for talking about your doing but not for getting what you need.

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  • http://www.telesperience.com Teresa Cottam

    The worst thing for me was people trying to give me “special help” because I was a woman. I found the “women in XXX” events the most depressing. In all my years working in tech no-one had ever made me feel like a special needs person before. To be told I faced even more barriers than if I was a man yardy-ya was frankly unhelpful and depressing. There was nothing solutions-oriented about it either just lots of endless discussion and navel gazing. Often centred on how your husband doesn’t help with the childcare… (But no solution to that!)

    The other thing I would say is that bootstrapping is really tough in the UK. A lot of UK banks seem to be actively hostile to start-ups – especially in the current clime. That’s why people are obsessed with VC, because unless you’re a secret millionaire or your friends/parents are, bootstrapping in the UK is really tough. The environment is actively malign… There’s far too much focus on starting up and not enough on sustaining firms through the first three years. Much of the help that’s offered is only relevant to a small sub-set of firms as well. eg there’s a scheme round here to help with IT costs. My advisor from Business Link confessed that most of these go to no-hopers who don’t have any idea about running a business but are mainly just out to get freebies. There are training schemes galore – don’t need training thanks. So I think it would be better for gov to have a more flexible approach to business support – reduce tax on young businesses, offer help to £ value but flexed to the needs of the business. We’re all different and we all need to be nurtured in different ways.

    Less red tape, more helpful pro-SME banks, less tax – it’s not rocket science… Then govt would see more £££ in tax in five years time and more people off the dole and happily working in the technoverse.

  • http://www.gigjunkie.net Marc Bridgen

    I really couldn’t agree more! Great post.

  • Scott Worley

    Nice post, only just found it.

    I have actually never attended the so-called startup scene… infact first event I went to was the BizSpark Summit yesterday.

    Which I personally found the morning and the networking aspect of the afternoon (not the workshops) quite good value…

    It was one of the few times I actually met other people that were actually doing the work…

    Rather than wanna-be’s with dreams…

    I also strongly agree not many are boot-strapping, which to me is arguable on of the most rewarding and hard pparts of running a real startup.

    nice post!

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