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

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!