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Tech City vs Silicon Valley: An insiders view

We all know about the power of Silicon Valley and it may still hold the upper hand over London's Tech City, but the capital's technology hub is slowly but surely catching up.

Investment in technology continues to rise as more and more companies open up shop in London in an attempt to become the next big thing.

We recently had the chance to speak to Jon Temple, a software veteran of 25 years and HEAT Software CEO, to discuss his experiences heading up a thriving tech company in Silicon Valley as a Brit abroad, as well as the kinds of opportunities available in the US that do not exist here – even in the much hyped Tech City.

The full interview can be found below.

  1. Tell us about your background

I have spent over 25 years in the software industry, both in Tech City and Silicon Valley. I accelerated my career at Business Objects (later acquired by SAP) and, when the dot-com boom hit, I was relocated to California where we helped to establish and define the business intelligence (BI) category.

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Jon Temple HEAT Software CEO

Jon Temple CEO of HEAT Software[/caption]

After 6 years in the Valley I went on to hold CEO and other executive leadership positions with Above All Software, Hyperion (acquired by Oracle for $3.3 billion), and nlyte Software, the leading independent provider of data center infrastructure management solutions.

Three years ago, I joined FrontRange as president and CEO, to rebuild the organisation from the ground up and redefine the market for hybrid service management solutions. We have since merged with the leading endpoint management and security software company, Lumension, thus, creating HEAT Software.

  1. In such a competitive market, what makes for a successful Silicon Valley or Tech City business?

In the technology and software industries, companies either become the leading provider of a desirable product, transition to a niche/regional market or become marginalised and die. It really is that simple. Ultimately, technology companies need to disrupt an existing category or create a new one entirely – there is no thriving tech company that doesn’t meet these requirements. A bit of luck and good timing doesn’t hurt either.

In business, both on an individual and company level, you have to know who/what you are and be very aware of your skill sets if you want to succeed. The number of good ideas in Silicon Valley that never got off the ground is staggering, because the founders were unable to persuade the right people to come on board or lacked the skill sets and clarity of vision required.

When it comes to Tech City businesses, I have known many companies that have simply been crushed by the power of American firms. I’m not saying that a tech company based outside of the US can’t succeed, but they have to be prepared for a tough fight. A lot of the world’s best tech talent is based in the Valley, and that’s who you’re pitting your company against.

  1. Just how much further ahead is Silicon Valley over London's Tech City?

When I was at Business Objects in the early 90s, we very quickly realised that any technology company with global ambitions had to be headquartered in the US. The US is probably 12-18 months ahead of Europe and the UK when it comes to most aspects of tech adoption, the cloud for instance, and 50 per cent of the global tech market is there.

It was the case back then, and I believe it still is to an extent now, which is why the shortlist of global software companies is dominated by American firms.

  1. What does the UK have to do to catch up?

There’s no straightforward answer to that, nor a silver bullet solution, but I will say that Tech City and other non-Silicon Valley tech hubs have already made huge strides in this regard.

Having a global tech company headquartered in the UK is probably the next step. It has some big companies, don’t get me wrong, but a lot of UK tech companies grow to a certain size and are tempted to move their HQ abroad, and the ones that stay in the UK stay fairly small by comparison. If a tech company was to launch in the UK, grow into a global player the size of Twitter say, and actually stay in the UK, that would be a massive boost in terms of its reputation as a tech hub.

This would help attract top talent and convince other tech companies to move to or stay in the UK. This would be a watershed moment for the likes of Tech City, and could play a crucial role in the catch up process.

  1. What sets Silicon Valley apart from other similar communities?

California is a whole lot warmer than East London, that’s for sure, but I digress.

Far from being the instant success it is sometimes portrayed to be, Silicon Valley wasn’t built in a day and has a history that sets it apart from other tech hub communities. Notwithsatnding that the nucleus of tech investing is located in the Valley; Cisco, Apple, Adobe and countless other global tech companies all started there and around these kinds of companies grew a thriving community of talent, which, in turn, created opportunities and connections not available anywhere else on the planet.

  1. Are there any aspects of the tech start-up world that the UK does better than the US?

The UK is an increasingly attractive destination for investors, in part due to the reputation of tech companies based here already, but also due to what’s happening overseas. Recently, because of dwindling returns from some US venture funds, there’s been a bit of a shakeout in Silicon Valley.

There are simply fewer firms to offer early stage investment capital, which isn’t the case here in London, and regions like Tech City can start to pick up the slack.

  1. How do you see Tech City and the UK technology scene in general developing over the next few years?

With the increase in investors capitalising in the UK, we will begin to see a boom in start-up companies. London, specifically, has been presented with an opportunity to pick up momentum, but you cannot discredit the power that resides in the Silicon Valley.

As I have stated, if you don’t utilise potential that resides in the US, you risk becoming an insignificant player in the market. I have known many companies that have simply been crushed by the power of American firms. You have to duel it out.