London's Tech City: Building Bridges, Not Valleys
By Rustin Crandall
Tech City in East London is the fastest growing tech cluster in Europe, beginning with 15 tech companies in 2008 and now boasting now more than 1300 startups as well as leading global firms including Amazon, Facebook, Google, and Intel.
On October 30, 2013, the Silicon Valley Project of Stanford Graduate School of Business hosted a seminar on London as a hub of innovation featuring Eze Vidra, Head of Campus London and Google for Entrepreneurs European Outreach, and Samantha Evans, Vice Consul for Software of UK Trade and Investment (UKTI).
Vidra spoke about London from the perspective of Campus London, Google's first physical startup hub worldwide, which launched in March of 2012 with the mission statement “let’s fill this town with startups!” Campus London sees itself as an “open source” building, working with many partners, and offering the benefits that come with a dedicated working space to as many potential entrepreneurs as possible. Since its opening, over 1,000 startups have benefited from programs and more than 200,000 people have attended over 1,500 events. Perhaps the most unexpected statistic offered by Vidra was the number of cups of coffee sold in the basement of Campus London, which is a co-working space that anyone can register to use. “I believe there’s a correlation between innovation and coffee, and we have pretty damn good coffee,” Vidra exclaimed. They sold more than 90,000 cups of coffee in their first year of operation.
Vidra said that Google also “noticed that there was an organic cluster forming in East London.” The company, he said, is trying to provide some of the necessary infrastructure and helping to foster growth and to build up the community. “What we’re trying to do is not to build a new Silicon Valley or try to create something artificially,” said Vidra, “we should build bridges, not valleys.”
Google, with all its resources, couldn’t create something out of nothing, Vidra recognized. He pointed out that “in London everything is encapsulated in one city … every brand, every bank, every organization you can think of.” Vidra argued that London represents an ideal confluence of talent, capital, and ideas, so Google is attempting to act in an enabling role. “We don’t replace universities, we don’t replace accelerators. We actually work with all of these partners and set up a discussion and the environment for them to be active and help entrepreneurs.”
Vidra admits that London still has a ways to go in terms of competing with other innovation hubs like Silicon Valley, New York, and Israel, particularly when it comes to liquidity and exits, but is optimistic about London’s future. He says that London is an “underserved market by startups,” with lower costs, less competition for talent, and much less competition between startups.
The government’s involvement in promoting Tech City has met with some positive feedback on policy measures. “There’s two policies that have really changed the game in London,” Vidra said about the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS). These government programs have “unlocked unprecedented amounts of capital” for early stage startups. He also praised the government’s Tech City Investment Organization (TCIO) for championing the tech sector through offering grants, bringing in investments from international companies, helping international VCs to set up offices, promoting startups, and assisting companies in going public.
“You can debate what’s the role of government to create entrepreneurship or foster innovation, but we need all the help we can get.” These government policies don’t result in “fake growth,” insists Vidra, “it’s not going to make or break their businesses … but if there’s actually something there it’s going to be much easier for them to grow.”