WHEN I met David Richards – the British founder of Silicon Valley success story WANDisco – last year, I asked him whether he thought London’s Silicon Roundabout could compete with its San Francisco equivalent. Richards replied: “It would be ridiculous to contrast the two.” Richards – who recently brought his product development team from the US to Britain – was not dismissing London as incapable of fostering tech entrepreneurs. Rather, he thinks poor access to capital here means the two are simply not on a level playing field.
But funding aside, the obstacles to starting up in the UK are shrinking thanks to tech innovation. “Online resources – including collaboration tools like Skype, cloud-computing platforms like Amazon Web Services, and project hosting services like GitHub – coupled with access to on-demand talent via online workplaces, enable entrepreneurs to grow their business regardless of location,” says Matt Cooper of online workplace oDesk.
And Taavet Hinrikus, founder of peer-to-peer platform for transferring money TransferWise thinks that, in certain respects, London has the edge. “Temporally, it has a significant advantage. From here, you can speak to San Francisco and Tokyo in the same day”. According to StartUp Britain, 319,110 startups have been created in the UK in 2013; and a 2012 Boston Consulting Group report found the internet economy’s contribution to UK GDP is now 8.3 per cent – higher than any other G20 country.
Undoubtedly, Silicon Valley has a far more established ecosystem. Created in the 1960s, it has a mass of people, money, and ideas in constant flow. But entrepreneurs should see London as a valuable alternative. “What you get in both cities is the serendipity that comes from piling into a coffee shop or workspace and rattling around with other entrepreneurs. Brownian motion drives a lot of innovation,” says Cooper. And big companies are starting to take note. Facebook has now opened its first engineering office outside America – in London’s West End. And Google launched Campus, a co-working space in East London, last spring.
Crucially, the British government is cultivating its startup ecosystem. Entrepreneur visas allow foreigners to create a company and later be fast-tracked to UK citizenship. The UK Trade and Industry’s Tech City initiative is supporting and offering advice to burgeoning companies. Its project Future Fifty, for example, connects startups with tailored information and expertise – with a view to accelerating their growth. And the government is giving credibility and visibility to this new and upcoming sector. “David Cameron regularly holds meetings with startups to hear how to best support the industry,” says Hinrikus. “I have been inside Number 10 three times in the past three months.” As the first employee at Skype, Hinrikus has followed the entrepreneurial world for many years. “This is London’s moment,” he says.
Annabel Palmer is business features writer at City A.M.