‘Each time someone comes back to the cycle having done a start-up they have a bit more money in their pocket, and will be up for taking a bit more of a risk,’ Pete Smith reveals to me as we chat about the progress of London’s tech scene.
The entrepreneur was part of the three-person team who set up Songkick, an online database of music gigs, back in 2007. Having gone on to build the business to a state where it is the de facto source for tour date information and attracted venture capital funding from the illustrious Sequoia Capital, Smith knows a thing or two about building a successful team.
Songkick was one of the pioneers of the London start-up scene, and more specifically Tech City in East London, so has been privy to the ecosystem’s development over the last six years.
‘One of the struggles has been publicising the ecosystem, as working for a start-up is a relatively new category of job in the UK,’ Smith explains.
‘If you are coming out of university with a pure maths degree and you want to be making £80,000 a year then go to the city, but there are lots of benefits to working for start-ups.’
Giving something back
One of Smith’s more recent initiatives has been his Silicon Milkroundabout programme – a recruitment event for tech start-ups.
To coincide with the event’s sixth outing, Silicon Milkroundabout and classified ads service Adzuna have looked at the market to find out what kind of trends have emerged during the last couple of years.
The two headline figures are that tech start-ups’ hiring is up 44 per cent year-on-year and that those same businesses are offering pay packets worth up to 17 per cent more than industry averages.
Leading the way are marketing experts, who are 31 per cent more in demand than 12 months ago – perhaps reflecting the evolution of start-ups which have moved beyond the product innovation stage and are now looking to take it to a global market. Also sought after are software developers (up 31 per cent) and product heads (up 8 per cent).
Having made the conscious decision to build their business in London rather than Silicon Valley, Smith and Songkick are all to aware of the challenges that face fledgling entrepreneurs when it comes to hiring the right kind of people.
‘If you were in a traditional corporate company, it would be a lot further down the line before you were involved with hiring at the rate that some start-ups do,’ Smith believes.
‘Managing people is another area where entrepreneurs have to adapt quickly – you will make mistakes but then learn how to property deal with a team.’
Smith believes that it is these kind of skill sets which will begin to emerge when the London cycle truly gets going and second, third and fourth stage entrepreneurs exit and re-emerge into the market with a new idea.
‘The cycle fuels itself in Silicon Valley and that is what London needs to achieve – but it will take a few generations.
‘If you see what is going on from our perspective there are 100s of start-ups with small teams, but there isn’t necessarily the critical mass of second, third or fourth stage entrepreneurs – but that will start.’
More on building a start-up:
- Seedcamp for European entrepreneurial start-ups
- The need for seed
- Recruitment and funding flagged as issues for start-ups
As the rise of London’s Tech City continues, and an increasing number of young and talented workers are attracted to working for start-ups, salaries are also seeing steady progress.
Those walking into a software developer role can now expect to command an average return of £45,088, a figure that is 17 per cent higher than the industry average. Those wanting to work as a designer are taking home an average of £38,692, 5 per cent more than if they were in the same role at a larger firm.
The arrival of the likes of Facebook, Google and Amazon may be sucking up some of the creative talent that descends on the capital city, but is a development that Smith believes has, and will, be beneficial.
‘The whole Tech City initiative has been really positive, and from my perspective it has been great to have the big endorsement from the government and others alike.
‘Google Campus has been great at being a hub for start-up entrepreneurs, and we are only really starting to see the fruits of that now. There will probably be 100 start-ups which will come out of Campus.’
Smith’s Silicon Milkroundabout is also giving start-ups a platform to be a collectively more powerful force. Rather than going up against the likes of Goldman Sachs, who might be looking for 50 new hires, with a paltry 2-3 openings, the event can present nearly a thousand over the course of a weekend.
With the likes of Lovespace, Secret Escapes, onefinestay and notonthehighstreet.com set to line up at the job fair, Smith’s tech start-up hiring initiative is proving a strong advocate for the sector.