Tech City East, MiniBar and No 10

Last week, David Cameron announced the government’s new initiative to create a global hub for technology and young businesses in East London. He and his team have been working on this initiative for the past few months, collaborating with young businesses in the area to find out where help is needed and the main problems that start-ups face.

MiniBar’s Christian Ahlert took Steve Hilton, head of the PM’s strategy unit, Rohan Silva, the PM’s senior policy advisor and Timothy Geitner, tech equity research analyst for Barclays Capital, on a tour of the East End start-up scene at the end of last month.

Christian introduced them to some of the people who have worked with MiniBar in the past, including Glenn Shoosmith from BookingBug, Joe Stepniewski from Skimlinks, Alex Halliday from SocialGO, and Simon Lambert from Moo.com. What emerged from the talks was a sense of how the UK lags behind the US as a place where young businesses are supported in their endeavours.

Christian said: “In the UK, there is not the same same culture of risk-taking from investors and former tech entrepreneurs. Technology companies are struggling to find angel investors willing to get on board, and when they go to the bank the loan managers are equally cautious because they don’t understand the new business models.”

One plan discussed by the team which could improve this problem is the provision of tax incentives for investments of under £200, 000.

Skimlinks co-founder Joe Stepniewski identified recruitment as another problem for start-ups: “The main issue we face is how to find top talent, especially developers, and encouraging them to work with us when they are being offered attractive salaries to work at financial institutions.”

“Once people realise startups are often a close-knit, friendly culture giving  broad exposure across the business as a whole, and just plain more fun, it will be much easier to get them on board.”

Stepniewski also called for better access to funding for young businesses, and “community support through events, knowledge sharing and clustered pools of work talent.”

Discussions throughout the day threw up ideas for addressing these problems could include the government – the UK’s biggest buyer of IT equipment and software – cutting costs while supporting UK businesses by working with start-ups on software as a service rather than commissioning custom-made software.

No. 10 hopes to support East End businesses further by transforming the Olympic park broadcasting centre into a hub for start-ups and encouraging larger companies to  work with the web start-ups who are trying to make it big in East London.

Alex Halliday, co-founder of SocialGO, is hopeful that these plans will take off: “The ingredients are all here to create the next Google or Facebook and it was refreshing to hear the team from Number 10 looking at how they could help encourage and support the cultivation of our digital economy.”

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London’s East End has drawn in digital companies and web start-ups since the late ’90s, with businesses such as Last.fm and LShift thriving around Old Street and Hoxton Square and attracting other young hopefuls to the area. It came as no surprise to the businesss participating in the fact-finding tour that the area had been singled out for attention.

Alex Halliday said: “I have been based in the east-end for 6 years now with SocialGO and my last business. It’s an area which has a unique blend of creative talent, exciting small-medium sized startups and a cool factor unlike anywhere else in London.”

“Something special happens when you have multiple creative businesses all within close-proximity of one another. The team chats with other startups down the pub, people meet and learn from each other in co-working spaces like TechHub, and everyone involved benefits massively.”

Joe Stephniewski added: “We decided to base in the East End because it’s an ideal mix for startups – the rents are cheaper than the West End, there’s a surrounding community of tech startups, and Shoreditch itself is creative and feels like a vibrant startup”