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Beyond Tech City: why UK startups should look outside of East London

StartupsFeatures
by Desire Athow
, 18 Jul 2013Features
Beyond Tech City: why UK startups should look outside of East London

Keen observers of the UK's thriving startup scene are no doubt familiar with London's Silicon Roundabout cluster, but Britain boasts numerous innovation hubs that are helping to firmly implant the Isles on the global technology map. To find out more about the advantages and disadvantages of basing your budding business out of East London, we recently chat to David Gildeh, director of cloud services at Alfresco. Prior to joining Alfresco, David was founding CEO of cloud collaboration startup SambaStream, which was acquired by Alfresco in 2011. Without further ado, let's hear what this industry insider has to say about life beyond Tech City.

The government is investing heavily in Tech City. As a company that isn't based in Tech City, how do you feel about this?

Any investment is good news; however, the focus of the government, media and investors should not be limited to what is happening in East London. A lot of exciting projects come from areas outside of Shoreditch and London. For example, Maidenhead is a good source of engineering talent for anyone in the B2B space and has been a great place for Alfresco's global headquarters. When thinking of Tech City, we should be talking about a much wider and vibrant tech community across the UK.

Do you think this investment is beneficial for the entire UK tech industry?

Government investment in Tech City can only be a positive for the entire tech community, inside and outside of London. It puts a focus on the sector as a whole, promoting the importance of UK tech companies in the wider business landscape and the investment opportunities available in the sector.

What do you feel are the advantages and disadvantages of being in Maidenhead?

There are both advantages and disadvantages to being based in Maidenhead. For one, it's easier to hire more senior enterprise engineers due to the cluster of older enterprise companies like Oracle, Microsoft and others. On the other hand, there aren't as many opportunities to attend networking events, unlike London which has millions of events and meetups.

What are your thoughts on what the other tech hubs in the UK have to offer startups?

In my opinion, the pre-eminent tech hubs are London's Tech City and Cambridge Science Park. Cambridge is a great location for research intensive companies that are related to, or work closely with, the University. There are similar companies near other universities in the country and they provide a lot of value by working on the harder, longer-term problems such as energy, materials, and semi-conductors. To date, university startups have become some of UK's most valuable tech companies.

Recently, a high growth tech company I know well in London told me it was relocating their R&D to Exeter, claiming a new hub is rapidly forming down there with some big companies moving into the area and hiring from the university talent there, so that may be an interesting area to watch for development.

Tech City and the hubs closer to London mainly focus on digital technologies such as web and software, which makes them more like the Silicon Valley companies that people know.  In these sectors, Tech City is miles ahead of the other UK hubs, which are a lot smaller and still struggle to find the talent and funding they need to build high-growth companies.

What should the government be doing to ensure that all tech hubs within the UK are connected and supported?

To be honest, I'm not sure it's entirely possible for the government to try to support all of the tech hubs in the UK. The smaller hubs need talent and funding and most of that is concentrated in London or research hubs like universities. With the opportunities available in these areas it is going to be difficult for the government to convince industry talent to move to places like Hull or Liverpool.

Do you think Tech City will ever be able to rival the Silicon Valley?

The UK tech scene is still quite far behind Silicon Valley. We need homegrown giants of our own akin to Google, Yahoo or Facebook to spin off new teams of entrepreneurs, or acquire startups at scale. Otherwise, the UK will struggle to build the same ecosystem as the Valley. It's not surprising that the UK remains quite a distance behind the Valley; our ecosystem is far more immature and steps need to be taken to provide a decent IPO exit path for high growth tech companies. That said, the progress London and the UK has made over just the past few years has been amazing to watch which makes me very hopeful.

As the founder of your own startup, what benefits do you think entrepreneurs are seeing from Tech City compared to when you started?

I started SambaStream in 2008 before Tech City really existed. At this time most of startup events were full of 'wannabe' entrepreneurs. Now that some truly successful startups have arrived on the scene, going to a startup event is so much more useful because you can learn from others, form support networks and find investors. It's really great to see that the community is far more mature than it was four or five years ago and now provides opportunities on par with the Valley in terms of valuable networking events.

If you were launching a startup again where would you base the company?

It really depends on what type of company I was starting. If I was launching a consumer company I'd probably lean towards the Valley as it has huge advantages in terms of talent with the right experience, investment and attention. If it was an enterprise company I was launching, I would consider here in the UK. The UK is home for me and the market is improving for enterprise startups. London continues to have an edge in the financial services market, specifically when it comes to data scientists. Because of our investment in this vertical, these skills become invaluable for the next generation of innovative technology startups.

The other option, and one preferred by many of UK's startups, is to start a company in the UK and as it expands internationally and prepares for an exit, relocate a lot of the operation to the US. It is the path that quite a few companies have taken. It's not just Alfresco, but also Huddle, DataSift and quite a few others.

What would you like to see Tech City doing next?

While it's all very well for the government to voice its support for high tech growth, what's really required is public investment in UK companies. The government also needs to rethink engrained regulations and labour employment laws, and do more to strengthen the venture capital investment to make it easier for companies to grow faster locally, rather than pushing capital elsewhere.

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