San Francisco has long won as the place that any entrepreneur with bright ideas, potential funding, and the makings of a team would likely pick to base themselves. Today, it remains the world leader, though Tel Aviv, LA, Stockholm, and Barcelona are developing burgeoning hubs of their own.
London, I hear you sigh - where is the global financial capital in its ambitions of gaining provenance as a tech guru? As a tech professional and a Londoner, of course I have a vested interest in seeing faster progression and more growth. And I'm beginning to see it.
In London, patterns (corporate incubators, peak industries - such as finance tech), hubs (spaces, talks, networking events) and ingrained industry standards (incubators, ways of getting funding, hiring networks) are being formalised and demonstrated, resulting in what I would describe as a much more "chatty" and louder industry on the business scene. But Tech City -- the brainchild of Number 10, built to regenerate the tech scene in London - is to date confused by its purpose and sticks largely to politics. That said, whilst it's still in limbo between rhetoric and execution the team has successfully published pragmatic policy suggestions, they hold excellent events to bring together talent, and have pushed government to deliver on promises, such as £50m of investment for the overhaul of Old Street roundabout. There's hope.
And as a result, there are numerous successful, really exciting corporate incubators popping up - Unilever Ventures, Vodafone Ventures, Siemens Ventures, FinTech (Accenture sponsored programme) -- they're booming. Wayra, arguably the most successful corporate incubator, is housed in London under Telefonica. This is all good news.
So what's the key to success going forward?
Corporates, investors and entrepreneurs continuing to really carve out a new business model for corporate incubators: separate space, separate P&Ls, the most talented of teams, and supporting a culture of failure to achieve innovation.
The B2B scene is more promising in London - there is an impressive amount of innovation in Finance Tech especially - focused on mobile banking and payment systems. Peer-to-peer lending and crowd-funding are revolutionizing and decentralizing the finance industry to fill the gap with consumers where traditional financial institutions cannot.
And what's the problem?
1) There is a massive talent shortage in London -- particularly developers, coders, and usability specialists. There's also a retention issue; many people hired by startups each year are actually brought on to replace lost workers who have skills so in need they're wooed elsewhere.
2) The gap between angel and VC is still substantial, but there's a wider liquidity and funding problem within the market: the UK scene mandates a much stronger revenue model before funding can be secured. New businesses often struggle to publicise properly and gain access to the funding that is available. A more aggressive and available 'dating scene' to match investors with options in London is essential to combat the challenge that money flows less availably and failure is less acceptable.
3) Only 43% of businesses believe the government has been supportive of Tech City's small businesses. I don't personally believe that government and policy can be the true pioneers of innovation, but they can centralize, standardize, and drive consensus-orientated action. Tech City needs to take on the role of decreasing fragmentation and increasing discoverability - if you aren't already connected in the scene, where do you go to start?
As it stands now the Tech City app documents policy updates. What it should really be, in my opinion, is an interactive map of the entrepreneurs in London - so if you're standing on a street you can literally see your nearest hangout, any networking events that week in the vicinity, and other friendly tips.
London has the chance to be a real leader, but we have to think as innovatively about the scene as we do about the products we're engaged in building.Suggest a correction