
London's high-tech start-ups: Silicon Roundabout - revorad
http://www.economist.com/node/17581635?story_id=17581635&fsrc=rss
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ig1
One of the annoying things about articles like this is they ignore the fact
that ten minutes down the road from the Silicon Roundabout (and I mean
literally if you walk from Old Street Tube Station down City Road) you'll walk
into London's financial tech hub which is one of the most successful tech-hubs
in the world.

Reuters, ICAP, Markit to name just a few have all built multi-billion dollar
tech business out of London. There are literally hundreds of financial sector
tech startups in the area.

Web startups are only a tiny part of the startup ecosystem and we shouldn't
forget that.

~~~
rodp
I wonder how many people start tech companies in the financial sector these
days. The market there is saturated, the competition is strong and the clients
are much more conservative. OTOH, web startups can be launched with very
little cash and new markets emerge every other day (social, mobile, location,
etc.). Most of them fail but the ones that succeed can have potential to earn
billions. Web startups are indeed a tiny part of the ecosystem but I think
that's exactly the problem. We need more of them, at least in Europe.

~~~
ig1
There are lots and lots, retail finance is conservative but investment banks
are often much more willing to take a risk as are smaller hedge funds, prop
shops etc.

There are thousands of unexplored opportunities in the financial sector that
are begging to be taken by startups. If you have a clear value proposition,
then selling into the financial market is easy. This is especially true if the
product you're building helps your customers make money.

Every major investment bank has thousands of developers on payroll building
internal systems, they'd love to just be able to buy off-the-shelf solutions
that solve their problems instead.

If your product is good than your customers aren't going to be worried about
you going out of business, because they know someone will acquire you before
that happens. They're more likely to be worried that one of their competitors
will buy you.

Sure you need to be more active in doing sales, but because the financial
community is relatively tight-knit this is relatively easy. A lot of the time
it's basically calling your old colleagues and getting them to make an
introduction for you.

When I left the last investment bank I was working for to start my startup,
the head of the trading desk pulled me aside and said "if you're building
something in our space, come and pitch us first". That's the nature of the
sector, everyone wants to get the cool new tech that's going to give them the
edge on the market.

Banks and Financial tech firms also tend to be very active when it comes to
acquisitions. It's considered a standard way to get exclusive use of a
technology or to expand your firm.

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_grrr
We used to rent desk space near the Old St roundabout, which is the place the
article discusses. In the winter I used to have to wear gloves at work because
it was so cold and draughty in the office (warehouse) we were in. They were
running gloves, so I could still type, just about. Happy days.

~~~
tomjen3
Well that is European winter for you.

~~~
eru
No, just British houses. I moved to Britain last year from eastern Germany. It
gets much colder on the continent.

The British just don't understand the concept of insulating their houses, and
like to complain about their actually rather mild weather.

`Extreme weather conditions' is British English for `snow'.

~~~
Nemo999
I second that. Having moved from northern Poland where -20C is nothing
extraordinary in winter I was quite surprised by the amounts of energy used to
heat typical British homes. I guess that is what you end up with if the
majority of houses are >50 years old and zoning laws prevent you from changing
the outside appearance of the building by for example installing extra
insulation.

~~~
_grrr
That's exactly what the problem was, the building was an old Victorian
printing press, with some desks and an internet connection thrown in. Half the
windows weren't flush when closed, and there was a big steel door entrance
which conducted away the heat with ease. It was cheap though, if I remember
correctly we used to pay 65pounds per week for two desks. Normal rates were
probably double that. There was a good crowd of people there too.

------
kierank
Silicon Roundabout doesn't have the range of startups from "soft tech" to
"hard tech" like Silicon Valley has. Most of the startups in Old Street are
startups with links to the creative industry.

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theoneill
"McKinsey, a consultancy, will share management expertise."

God help them.

~~~
sdrinf
Worry not, for sharing expertise does not oblige listening :)

~~~
notahacker
McKinsey's "expertise" is most likely to benefit the BigCorps who conduct
studies into the strategic benefit of moving their IT departments into the
area (a few blocks north in some cases). The impact of that happening on the
creatives and their reasonably-priced shared offices might not be neutral...

------
zeemonkee
I'm not sure London is the best place in the UK for a startup. Office and
accomodation rent is among the highest in Europe. And in just about every
other respect it's an insanely expensive place to live.

Unless your clientiele requires you to be in London (e.g. you do work for the
city, or one of the big media companies) you'd be better off elsewhere in the
UK if you want a decent runway.

~~~
dotBen
Yeah but by the same logic you could argue the following, yet you would be
wrong:

 _"I'm not sure San Francisco is the best place in North America for a
startup. Office and accommodation rent is amongst the highest in North
America. And just about every other respect it's an insanely expensive place
to live.

Unless your clientiele requires you to be in San Francisco you'd be better off
elsewhere in the US if you want a decent runway."_

~~~
prodigal_erik
There's a reason HP started in a garage in Palo Alto, not in San Francisco.
The city is markedly more expensive yet draws on largely the same talent pool
as the valley—there's no shortage of people who commute either direction
(including me). I don't think the city makes sense for a startup unless you're
planning to interact heavily with Big Media, and there it's hard to argue
against a branch in New York instead.

~~~
dotBen
The City vs Silicon Valley is an on-going and frequent debate here on HN so I
won't reopen it.

However while you may not think it makes sense for a startup to be here in SF,
so many of them are.

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seddona123
I worked in a hardware startup just off the old street roundabout for a year
or two and have lived in Shoreditch for the last 5 years. I'm glad there is a
rising tech industry but much like NYC I doubt tech will ever take hold like
in the Valley or Oxford and Cambridge simply because there is too much else
going on, mostly in the finance sector.

~~~
iloveponies
That really depends on how much the government pumps into the roundabout as
they recently showed.

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cal5k
I think this begs this question: How on EARTH has Apture convinced so many
companies that yes, cluttering up your site with a useless bar is a great
idea?

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DJN
* McKinsey, a consultancy, will share management expertise. *

Noooo..you've got to be kidding me. What, in a startup?

~~~
stuaxo
Money to burn...

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stuaxo
Theres a small place down the road which has fuckloads of web companies,
called Brighton...

~~~
JonnieCache
Yep. Can't move for them down here. And we've got a beach.

~~~
StrawberryFrog
By UK standard, I suppose you could call that a beach.

~~~
JonnieCache
It's a better beach than london that's for sure. And people smile here.

