For some years, in the not-so-distant past, startups had a difficult time in the UK. The fallout from the dot.com crash in 2001 did for many new online businesses, before you even consider the impacts of high corporation tax rates. Then came the global economic downturn in 2008-09, which saw the markets contract and applied greater pressure on businesses across the UK.
But although the recession put some companies out of business, it created opportunities for new ones to take their place. Encouraged by technology innovation, a pro-business coalition government and apparent gaps in the market left by failed firms, the UK saw a new, exciting wave of entrepreneurialism. Some of the startup founders may have been forced into self-employment due to redundancy, while others made a more active choice. Either way, this army of new company owners set about transforming UK business – and the look of the high street – from the bottom up. A few years on, they have had a real impact on the business landscape.
Nowhere is this the case more than in London, which has proved to be a magnet for creative, ambitious startup founders over the past few years. Areas such as Shoreditch and Kings Cross have, in a relatively short space of time, become vibrant areas for people with ideas and motivation – those who want to be their own boss and make waves in business. As London’s startup scene has gained profile, the government has taken greater interest, encouraging more ambitious individuals to get in on the action. With innovative tech companies leading the way, Startup London is going from strength to strength.
The rise of Shoreditch
For many years, London’s tech sector has been something of an ‘also-ran’ – in a global context at least. Talented programmers, designers et al would head to Silicon Valley, New York or perhaps Berlin to join forward-thinking companies, or set up their own business. They wouldn’t necessarily think about setting up base in the UK capital – not least because of the high overheads involved. London was seen as being a centre for finance, more than cutting-edge technology.
Yet something has changed in the capital, and quite drastically too. Back in 2008, there were only about 15 technology companies operating in Shoreditch and the area around Old Street Station, but now there are more than 300. Until recently, this was a run down, defunct part of the capital – hence its appeal to new business founders. With cheaper rents available, it was an ideal place to establish a London base. The techies moved in – the programmers, designers and developers – and before long, the area was being referred to as ‘Tech City’ or ‘Silicon Roundabout’. Without any initial government assistance, this part of the city came to life.
Naturally, politicians were quick to recognise the potential of this new creative hub, as it started to grow and expand in the direction of Stratford. Although Tech City grew organically at first, financial support from local and national government added further impetus, helping to attract more established businesses such as Cisco, Intel and Facebook to the area. Today, startup businesses brush shoulders with some of the largest technology companies in the world, in a melting pot of huge ambition, big ideas and can-do thinkers.
King’s Cross comes to the fore
It isn’t just Shoreditch where the action is; King’s Cross is also on the march. Up in the north of the capital – a tube ride away from Tech City – there has been a similar flurry of startup activity. The area now has many of the same hallmarks: the independent shops, the coworking spaces, and the sense that something positive is happening in an area that has seen its fair share of tough times.
Google’s decision to move into the heart of King’s Cross is a huge seal of approval for the area. The search engine giant will house its European headquarters there, a decision that will surely draw other technology firms in. Leading minds will come to this part of the capital to work and some may be inclined to strike out on their own and set up a new company.
The success of London startups
Hype alone isn’t enough to encourage serious business people to found new enterprises in the capital. It is the proven success of many of the startups originating there in recent years that is drawing in the brightest and boldest from around the UK – and indeed the world. Entrepreneurs from across the globe are choosing to up sticks and move to London, knowing that there are high potential rewards if they can get their offering right.
Companies such as Betfair, Tweetdeck, Hailo and MOO have come from nowhere to become well-known names – firms that have either been sold for huge sums or have listed on the stock exchange in their own right. Of course, not every startup is so successful – far from it – but the support available to new businesses in London, and the market conditions in 2015, mean that well thought-out idea-driven enterprises with unique selling proposition have at least got a fighting chance. Many have got every opportunity to thrive.
Of course, London has always been a great place to do business, for companies large and small, and this remains the case today. It has strong transport links – both domestically and internationally – and a sizeable market within its own borders. The capital also has super-fast connectivity, a communications infrastructure fit for the 21st century. Then there’s the profile factor. Companies based in London have a natural prestige that cannot be replicated in many countries and cities around the globe. It is a really selling point to be a company registered in the UK capital, particularly in the age of 24/7 global commerce.
Starting a business in London
For startups, there is much to be said for being part of a vibrant, creative community – one where like-minded individuals are striving for similar goals. In areas such as Shoreditch and Kings Cross, the artsy, free-spirited vibe is infectious and inspiring. These places push entrepreneurial people to go that extra yard – to take the chance that might just make them their fortune.
The fact that government support is available for new companies is an extra motivation to start a business in the capital. Buoyed by the success of London’s tech sector in recent years – particularly the emergence of financial technology firms, which support activity in the City – ministers are eager to see further growth and development around Silicon Roundabout and Kings Cross, plus other parts of the capital which are in need of gentrification. Startups underpin the economy as a whole, creating jobs, optimism and a sense of community in local areas which can never really be achieved through big business. They offer significant social value, as well as economic.
As a cosmopolitan, multicultural city, London is very welcoming to new people – particularly those with ideas and ambition. No wonder then that so many people are moving to the capital – whether from other parts of the UK or overseas – eager for their company to be the next startup success story. They come from the airport, to their hotel, and then on to the heart of the London startup scene to chase their dreams. In 2015, the capital is the place to be.