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War on Error

Scotland's Internet startups still firing on one cylinder

Now that Silicon Glen is a memory Scotland needs more than worthy aspirations

Internet startups can look effortless. Google surfaced like an information leviathan from the genius factory of Stanford University, Facebook came out of a dorm room full of geeks, and the Twitter legend booted up on San Francisco's Mission Street.

In not much longer than it takes some people to complete an MBA, three US startups turned themselves into household names that are worth nearly half a trillion dollars-worth of stock thanks to a Californian formula for success that is still coveted for its seeming mysteriousness.

Impressive, staggering even and there isn't a city or country on earth that wouldn't like a little of the same. In the UK, there are a few smaller success stories, starting with the journalist’s favourite London’s Silicon Roundabout while Cambridge has had Silicon Fen for so long it has managed to outgrow the label. Will it ever be Scotland’s turn?

Granted Scotland is small but anyone attending the 'Industrial Revolution 3.0' Virgin Media Pioneers event in Edinburgh this week would leave with the feeling that the country is about as near to emulating even London’s modest buzz as it is of bottling and selling good weather.

TechCube Summerhall.jpg

Paradoxically, the problem isn’t a lack of startups. For a while the country had a small but feisty cottage industry in games development and it’s a well-kept secret that its top-notch universities have turned out around 500 startups of one sort or another in the last decade, a rate of tech transfer hugely out of proportion to the education sector's size.

But Scotland doesn’t create Facebooks, Twitters or Googles and probably never will and that irks the people who believe entrepreneurs and Internet firms are essential for a 21st century economy. Indeed it barely creates any online or software businesses at all and when it does they tend not to be well known or associated with Scotland. Instead it creates a swarm of small startups that stay small.

The Virgin Pioneers event aired the usual despondent problems people believe lie at the heart of this qualified failure. The entrepreneur community is small and fragmented, funding beyond angel stage is like panning for gold, and the publically-funded Scottish Enterprise is too general-purpose an agency to solve the complex staffing, partner and technological problems faced by an Internet startup.

The lucky few that do get off the ground find themselves compelled to follow a boring revenue rather than growth-led business model that slows innovation to the point where they look like (whisper it) real businesses.

All valid concerns but to an outsider the root issues can look more fundamental still, starting with the lack of an affordable physical hub for businesses and entrepreneurs to gravitate towards. Scotland and Edinburgh’s tech scene just has no single centre of gravity or if it does (The Summerhall TechCube for instance) not enough people see it as a serendipitous place to hang out.

Why couldn’t Silicon Roundabout have been in Edinburgh? Because where entrepreneurs are located is sometimes still seen as secondary to what they do, just a place to put a desk and a laptop, when it’s anything but. Hubs aren't enough on their own but they are a necessary cornerstone, a place to start.

There’s more; the fuel of startups is people and Scotland needs to find a way to attract far more who fall into the ‘experienced’ category than it is doing right now. Frankly, who cares whether these people are Scots. Make an Edinburgh tech hub so attractive and tax efficient that clever people will flock here from all over the UK, EU and possibly beyond. The fact that some will arrive from London, Manchester or Berlin makes no odds. If the business in in Edinburgh it’ll be hiring locals.

As for talent nurtured in Scotland ask some of them to leave, for everyone’s sake. That sounds loopy but if the country is ever to create a self-sustaining startup culture it needs people with experience of working and making contacts across the globe. Don’t worry about losing people for a while; focus on how to make them come back later on. Build it but let some run.

The bravest startups should get out and generate some PR too, not because anyone honestly cares what journalists write a day after they’ve read it but because publicity helps interest people with money, ideas, skills and even money. Good PR won’t sell a single service or product but it might help a startup hire someone who will.

You’d bet that if Virgin Media holds a similar event in 2014 attendees will line up with most of the same moans as this year. But here’s hoping that as Edinburgh and Scotland's tech and Internet scene gets older it also gets wiser.

Tags: edinburgh, london, san francisco, scotland, silicon fen, silicon glen, stanford university, virgin media pioneers

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