It’s been described as one of London’s most exciting business districts, but the Old Street tech community has been around for some time. GrowthBusiness asks Silicon Roundabout businesses whether the recent government exposure is welcome and how the increased notoriety will affect its staunch culture.
‘If you’re a start-up and you can be anywhere in London, why wouldn’t you be here? You need a very good reason not to be.’ So says Richard Moross, founder and chief executive of Shoreditch web-based printing business Moo.
‘There is the social aspect, business connections and the attraction of the area itself. There are people here who you want to do deals with and others who you might want to hire. It’s a nucleus.’
The spotlight is currently shining brightly over London’s East End. Long a creative and design hub, the renovated warehouses and former factories of Shoreditch and Hoxton have been filling for the better half of a decade with entrepreneurs and internet-based start-ups wanting to make their mark.
Over 100 new media and design businesses now inhabit the area surrounding the junction of Old Street and City Road, dubbed Silicon Roundabout. Many more are expected to join the throng following David Cameron’s campaign to promote start-ups and entrepreneurship.
In November last year, Cameron announced he wanted the area to rival California’s Silicon Valley and become one of the ‘world’s great technology centres’. His plan is to create an ‘East London Tech City’.
It is with a certain irony then that the term, Silicon Roundabout, which has been strongly adopted by the government and supporters of the ‘Tech City’ vision, was jokingly coined during a bit of office banter in July 2008.
Matt Biddulph, co-founder of online travel service Dopplr, says the term sprang to mind as he was talking to colleagues about the high number of neighbouring tech businesses. Minutes later he tweeted: ‘“Silicon Roundabout”: the ever-growing community of fun startups in London’s Old Street.’
Biddulph, who now works in product strategy for Nokia in Berlin, recalls, ‘Most of us who worked on Dopplr had really strong links to San Francisco. We were aware of the vibe from Silicon Valley and the Bay area, and so the joke, such as it was, “well this area is turning into our own Silicon Valley”.’
Burgeoning Tech Cluster
There is a definite buzz in the air when you walk the streets and meet the businesses of Shoreditch. Many talk of the ‘organic community’ and ‘ecosystem’ that has developed. The optimism is infectious, they say.
Matt Webb, chief executive and principal of design consultancy BERG, explains, ‘What is happening now is something that is a bit new. I would make a division between the creative industries with their 15-year legacy and this kind of web/start-up/entrepreneur/consumer product theme that is now emerging. It’s almost impossible to put your finger on it.’
Webb moved to Shoreditch three years ago so the business he co-founded in 2005 could have its own office. A regular speaker on design and technology, and a member of the Prime Minister’s trade mission to India last year, Webb describes the government’s ‘Tech City’ campaign as ‘terrific’.
‘There is a real benefit to like-minded people being together. Given that there’s a cluster already here and it was happening without government help, it would be really good to see how much we can get this cluster to grow.’
Another entrepreneur keen for the light to continue to shine is Elizabeth Varley, who co-founded TechHub with journalist Mike Butcher. TechHub is a members’ club, which aims to help grow the ‘product-oriented tech community’. It opened its first office space next to the roundabout in July last year.
Varley says the ‘ecosystem’ that has developed should be nurtured because despite an increasing mobile world where people interact online, physical connections are still needed for business relationships and to promote success.
‘Virtual connection is incredibly important and amazingly useful, but sometimes it’s really a facilitator rather than an end in itself. People still want to be serendipitous. We often say we can’t manufacture serendipity, but we can create a space where it is more able to happen.’
Varley welcomes Number 10’s backing of Old Street because, she says, what the government can do is ‘plug any gaps and support the area to allow it to flourish’.
‘Having the government say how important they think the industry is to the UK is very significant because it’s easy to focus on the financial sector as the be-all-end-end all of business in the UK,’ she continues.
‘There are some concerns from people that there may come large companies who will buy up property and push prices up, but I don’t think an area changes because there is suddenly a government spotlight on it.’
However, the shift east may have already begun. Mind Candy, the develop of children’s social network Moshi Monsters, has moved to Shoreditch from south London, and technology investor Index Ventures has opened a second London office next door to Moo.
Saul Klein, a partner at Index who has specialised in e-commerce, digital media and internet service investment for more than a decade, comments, ‘the Old Street phenomenon has been around for a while, but it is definitely gathering momentum’.
Klein says the decision to open an office in the area, which he describes as an ‘outpost’ to the firm’s West End headquarters, is a continuation of a focus on very early-stage tech companies following the launch of Index Seed in April last year. He says the move will enable the investors to be closer to current and perspective portfolio companies.
‘Clusters have been shown to be highly effective catalysts for building new business and supporting creative industries in that people meet informally and formally, and exchange ideas,’ Klein explains. ‘People become inspired by others – every industry needs its heroes.’
In general, Old Street companies doesn’t begrudge the support or lament the increasingly notoriety of the area. But there are rumbles of annoyance with the constant comparisons to the Californian “super-area” home to the tech giants Google, Facebook and Apple.
With Moo, Moross declares he wasn’t aware of the ‘community’ when he first shifted the business from north to east London in 2004. The move was simply to be closer to his printer.
Moross, who himself has fostered the scene by sub-letting unused space in his rented buildings to fellow tech companies, including Tweetdeck, SoundCloud and GroupSpaces, comments that there is ‘real logic in co-locating’ although Old Street ‘is clearly not Silicon Valley.’
‘If you’ve been to Silicon Valley it’s very flat and very sunny, and quite sterilised, it is nothing like Old Street,’ he adds. ‘When Biddulph said it he was joking, but it has become a real thing. Or at least it is being talked about being a real thing now.’
Entrepreneur Simon Prockter agrees. ‘Comparing here to Silicon Valley – it’s never going to be the same. This is a cluster that has started something totally different.’
Prockter is the CEO and co-founder of Housebites, a peer-to-peer social dining platform that secured seed funding in January. He previously founded SpeedDater, which was sold in 2008, and he now rents space for his new business at TechHub.
Prockter continues, ‘It’s it not even about size and scale, although that is a big part of it, it’s about the ecosystem in Silicon Valley. There have been so many big exits and those guys then put back in, either by starting a new business or becoming angels. So there is this massive cycle that we don’t have here.’
Looking to the future, Biddulph says he does fear factions could be drawn between the area’s established companies and the arrival of start-ups and businesses hoping to join the government-sponsored wave of enthusiasm.
He explains, ‘As with any transition, when a village grows into a town, there is a chance of losing some of those close ties, or of there being, perhaps, an old school and a new school in the area, and maybe we are already seeing that happen.’
‘Like any community, it’s long standing ties that matter, and just like anyone who shows up in a new town without any connections, people are going to have to work in it to make friends.’
Varley also has concerns about possible change. ‘I would hope that we don’t end up having a load of massive companies moving in because they think it is politically astute.’
‘Having a presence in the area, doing more in the area, or connecting better with start-ups, is good, but I wouldn’t want to see Old Street turned into Reading where there are massive campuses of big technology firms.
‘I’d like to see this remain an area of innovation – it’s really what it comes down to, that this is seen as the place to go if you want to innovate.’