Last week I was down in London for a few days working out of a coworking space called Wimbletech and it really got me thinking of the pro's and con's to being a startup based in Scotland vs being a startup based in London. London is one of the largest business hubs in the world and home to an ever growing startup scene but is it better than being based in Scotland?
Access to finance
One of the most obvious benefits to being based in London is access to finance. It's much easier to get investment at an early stage and investors are less risk averse. There's simply more investors, more money and it's easier to access it. But I don't necessarily see that as a bad thing.
In Scotland it might be much harder to raise even a seed round but it just means we need to build different types of tech businesses. If we can't get finance at an early stage then we maybe need to be generating revenue from the outset, have a solid, validated business model and living within our means but that in itself has benefits. It can result in more sustainable businesses where the founders retain ownership.
Even though we might not have the same access to finance doesn't mean we don't have any. There are plenty of startups in Scotland that have raised money and some of the fastest growing companies in Scotland still rely on investment from London based firms.
Access to talent
I'm a strong believer in the power of people. The right people can turn a bad idea into a great product and the wrong people can turn a fantastic idea into a disaster of a product.
The population of London alone is higher than the whole of Scotland and in being one of the largest business hubs/cities in the world it has a draw to it - many of my peers from my Computer Science degree moved to London when they graduated - so startups in theory should have their pick of the bunch. The problem is competition.
There's so much activity in the London tech industry that makes it so competitive finding talent. Scotland has its issue's here too, banks like JP Morgan and HSBC are growing their tech teams here and the likes of FanDuel, Amazon and Skyscanner are hiring like crazy.
But I do feel there is a wealth of talent in Scotland. Glasgow alone has 3 Universities all running good Computer Science courses, with business schools and world renowned design schools all producing thousands of talented graduates every year. Our problem has been in retaining that talent but with more well paying, secure jobs in tech cropping up (even if they are with a bank) it will grow our talent pool, slow down the brain drain to London and make a stronger tech industry in Scotland. Vs London I think Scotland is very well placed for talent.
On any given day of the week and at any time of the month there's going some kind of event on in London. General meetups, niche meetups, language user groups, parties etc etc all happening. It means there's a lot of networking, sharing of knowledge and real vibrancy in the community. Scotland can't compete - that's both an weakness and an opportunity.
It's a lot quieter in comparison (although still a fair amount going on) but that means there's a lot less competition to get something up and running. Take RookieOven for example, we started as a monthly meetup and have grown into an amazing collaborative space and now an Academy. I've seen companies in Scotland startup user groups and meetups with the aim of engaging customers, talent and investors.
So what does your money get you?
So say you do raise a £100,000 seed round. How far would that get you in London versus Glasgow?
Well a mid level software engineer in London could be £60,000+, that same role in Glasgow could be filled for half that. In many cases the same level of talent, as I said many people with the same degree as me took up jobs in London straight out of University.
A fixed desk in TechHub in London can cost as much as £350+vat, a fixed desk in RookieOven is £175+vat. Again half the London price (plus RookieOven has a sweet pool table).
Then there's cost of living. In London you would be hard pushed to get a 2 bedroom flat for anything close to £1000 per month but in Glasgow you would be able to take your pick of city centre penthouses for £1000 per month.
Glasgow is clearly more affordable and you can get more bang for your buck.
A hybrid approach
I don't think in todays world we can afford to just shut ourselves off and make our own home cities their own little island. Going to London last week I left the house at 5 and even with a delayed flight was in London for 9am. There's been times I've went to Edinburgh and its taken me just as long (thanks Scotrail). London is really not that far away. Basing your business in Scotland doesn't mean you can't still be part of the London tech industry and benefit from the advantages of it.
Heck asides from that we're on the same timezone, (just about) speak the same language and with Hangouts/Skype/Slack/Github etc etc it's never been easier to work as a distributed team.
In the view of startups in Scotland looking to London; well get down there, build a presence, get involved with what's happening it's only a short flight away. And for startups in London, get out of the city and come look across the UK there's a lot of benefit to you spreading out and taking advantage of the resources outside London.