Speaking at Tech Invest North earlier this month, representatives from the region’s tech scene expressed their colourful views on the scope for growth, venture capital funding, and collaboration for start-ups beyond the M25.
Here we round up their opinions.
How much of what comes out of the North is actually “disruptive”? Is the term used too loosely now?
Mark Varley: There’s plenty of ‘t*rd-polishing’ that goes on, and a lot of it tends to be from the established players who are trying to look like they’re innovative and doing things differently. Ultimately, most things that are labelled as ‘disruptive’ aren’t actually.
All they are is answering consumer demand. What’s new, and seen as disruptive is probably not that much, in reality. At the same time, executing it well and understanding what motivates people–there’s lots of money that gets spent, especially in North American, London on pretty wasteful projects. In the North particularly, those levels of funding would not be chucked at some projects that get thrown in other parts of the country. I don’t see as much “faux” disruption here, as people are more driven by selling products and services based on their merits rather than dressing it up.
Why Manchester? Is there a particular reason you decided to set up and grow in this part of the country?
Amman Ahmed: For me, personally, the investment scene in Manchester is a lot more realistic, but everyone told us to move out of here, that we’d die in Manchester. It turned out to be true for rormix only because ours is a business that needed to consistently grow and generate revenue later on.
Luckily, going back to my other business, roundwaves, it was self-funded with £1000 from my student loan five years ago. Every year we’ve seen slow growth year-on-year, and now I can put that money back into the business to continue growing.
Paul Haydock: To Mark’s point, I think he raises some benefits to being here. People get stuff done, you don’t get too many of the distractions you get in London, so that’s the good part. Some of the bad parts for me is that often people don’t think big enough. People can be a little constrained in their thinking a little bit up here. I spent some time in San Francisco and people there do think big. A lot of it is cr*p, but at least they’re going for it!
We’re trying to get the best of both worlds. We’re trying to think big but we’re trying to stay grounded in reality to make sure we actually deliver on what we say we will. In Manchester, we get access to a great talent pool. We’re two hours from London, the capital. Manchester is a great place to be. It’s on the up, whereas London has plateaued a bit.
Mark Varley: I think, in my sector, like it or not, London is the hub. Therefore, if you want to see a load of people, it requires a trip down to London. I find it quite strange in my industry that the concept of using Skype or FaceTime is met with looks of shock an awe. It’s a bit of a weird one. It’s getting better, but it’s always a challenge. You can collaborate really well, but it’s hard to do business without being face-to-face. That’s one thing that’s slow to change.
Aaron McGrath: The reason we have a team here is that we follow the customers. We haven’t come here specifically for a talent or cost strategy. When we took the business back a year and half ago from Yahoo, we saw the amount of business in this part of England. The reason why we have a team here is specifically for that face-to-face interaction, which we won’t get if we were in London.
Mark Varley: There’s loads going on in technology here. There’s a lot of talent coming out of the universities here. Longer term, this is the right place to be to develop talent and grow the market.
What about the entrepreneurial mindset? Do you think it’s a personality thing up North?
Jeremy Ambrose: It’s definitely all about the entrepreneurial mindset and thinking. For example, we’ve all been talking about how London’s only two hours away. Hang on! Why are we even talking about the distance? If you go to America, what’s two hours away from San Francisco? San Francisco is two hours away from San Francisco! It’s completely a mindset thing, thinking that London is completely different from Manchester, which is completely different to Leeds, which is completely different to Newcastle, but…why aren’t we all one? Why aren’t we all coming together?
We’re seeing a lot more investors from London coming to Manchester, to Leeds, so we have to stop thinking that London is somewhere really far away down there.
Mark Varley: One of the advantages for the Northern market is that people are more pragmatic, and rooted in the knowledge that they’ll have to work a lot harder for investment up here. I’m biased, of course, but that’s a personality trait that works for entrepreneurs.
Is the UK’s business landscape as fragmented as it sounds, then?
Aaron McGrath: If you look at the idea of the “Northern Powerhouse”–it’s a construct. Many companies receive investment from London, and if you’re just going to say ‘I’m a Northern business and I’m only going to focus on the Northern customers, Northern culture, or Northern investors,’ I’d say you’re denying yourself opportunities.
The good thing about what’s happening in the tech industry is that it’s global. There’s no reason someone can’t buy your product in El Salvador than they can in Milton Keynes. I think as someone who’s been here for a good many years, there’s a true opportunity to cut through the bullsh*t, but that’s a “competency”, as we say in Microsoft language. Tech is tech. I work with people in Seattle who may be more aligned with my mindset than someone next door.
One thing I’ve noticed is that there’s a much stronger community here than in London. The support network is stronger, with Tech North, Prolific North, this forum, Tech Invest. These are all opportunities to come together and it’s all much more grounded and genuine.
Beyond that, we have a real opportunity here to take what is good from London, New York, Seattle–wherever.
What would be at the top of your wish list for the region?
Amman Ahmed: There’s definitely a lot of fragmentation here, by which I mean in Manchester itself. We have so many of these mini-communities. I’d like it to be a bit more integrated. Hopefully that’d be more helpful for entrepreneurs.
Paul Haydock: I agree with Amman. There’s a lot going on, but if everyone just got together and focussed that energy, we’d get a lot more done! And to Aaron’s point, he hit the nail on the head. Being strategic about it is the only way forward. You don’t have to stick it out here if there are opportunities elsewhere. Go to London and get what you need from there, go to San Francisco and get what you need from there. Think bigger and be strategic about it. The best way for Northern tech businesses to succeed is by leveraging opportunities that are naturally in other places.
Aaron McGrath: The top of my wish list?The train prices! £200 to go to London–that’s ridiculous. Beyond that, I don’t see as many training and apprenticeship schemes here as in London. I think Manchester can invest more in training youth who may be doing their A levels, make them realise the opportunities in technology early on. That’s the way to prevent a talent drain. Otherwise young people here will just follow the money, assuming it’s in London.
Manchester doesn’t have a problem with retention, it’s the attraction that needs help. Everyone’s locked into very long notice periods, so rather than locking people in with contracts, we need to build that attractiveness that will bring and keep talent here.
Jeremy Ambrose: To that point, I think we need to shout a bit louder about what we do. We have some great start-ups and growth businesses coming out of the North. Leeds is a great example, actually. When (Entrepreneurial Spark) announced that we were in Leeds initially there were no applications, or interest. But then when we made a bit of noise, we suddenly had 250 entrepreneurs clamouring for spaces. As soon as you make some noise, it happens.
Another thing I’d like is connectivity in the accelerator space. I’m sat here with NatWest on my arm (on the Entrepreneurial Spark shirt), and Barclays are at the back. Why aren’t we connected more closely? We need to tap into this huge network of opportunities for entrepreneurs.
Mark Varley: Working in advertising and marketing, there’s a high demand and low supply of people. I think there’s a lot more going on that’s hidden away. There are select pockets of activity, but it doesn’t lather up into a bigger framework.
The panel, in their own words
Amman Ahmed, founder, roundwaves
“I was the founder of a company called rormix, which was basically like Vevo but for independent musicians. Artists would upload music videos onto our platform and we’d distribute that content. We raised £350,000 in VC money, and as the business grew and we were getting a lot of press coverage, it got to the point where we struggled to raise the next round even though we had deals in place, including NDA. It just became a little difficult. I lost control as a leader, and I went back to my side project, roundwaves.
“We basically make music for pets. We’re a youtube network that collaborates with artists in El Salvador to make music. Learning from ‘failure’, we grew roundwaves from 70 per cent in revenue this year. We now get about 7 million hits a month on Youtube and a million plays a month on Spotify.
“We just launched on Roku and we get a watch time of 1.2 million minutes a month. So it’s all going in the right direction.”
Paul Haydock, founder, DueCourse
“We allow small and medium businesses to access the funds for the unpaid invoices wherever they like with just a few clicks. It’s a cashflow product for small businesses. We’re Manchester based. We just raised £6.25 million, primarily from London, from the guys who founded Zoopla, LoveFILM, and backed LinkedIn in the early days.”
Aaron McGrath, sales director, Microsoft Bing Ads
“I’m from a small start-up in Seattle…Microsoft.”
Jeremy Ambrose, excellence engineer for the north of England, Entrepreneurial Spark
“We look after start-ups and growth businesses throughout the UK. We have over a thousand entrepreneurs based outside of London. We work on mindsets and behaviours to really grow and scale businesses with people. As the excellence engineer for the north of England, my areas are Manchester, Newcastle, Leeds and Milton Keynes.”
Mark Varley, managing director, Havas Media Manchester
“I joined a year ago to set up the Havas media operations in Manchester. Over the years, back from the early days of the first wave of dot-coms onwards, I have worked with tech companies and the traditional big bricks-and-mortar businesses as well.
“My role, as a proud Mancunian, is supporting the technology sector in Manchester. We have a global programme called 18 Hubs, which we’re launching into Manchester, which will bring together a variety of organisations, from MIDAS and Tech North, through to MMU. It’s really about trying to find and help support businesses in the North, in particular, those who will be the next disruptors in the market.”