Why tech start-ups (and giants) should leave London (and move to Newcastle)

I think tech start-ups (and giants) should leave London and move to other parts of the UK. I also think the UK Government should stop putting all their eggs in one basket (i.e. Tech City / Silicon Roundabout) and give greater support (media attention, funding and financial incentives) to other tech clusters around the country to help spread the economic and social benefits more evenly.

Geographical location really shouldn’t matter if you’re a UK tech start-up. In fact, I’d go so far as to say that you are greatly reducing your chances of survival as a start-up if you base yourself in London. Yes, I know that’s where all the money and investors are, but the rents and living expenses down there are too high, competition for resources, attention and talent is intense (not to mention expensive) and you’ll burn through what little money you do have much faster than if you run your operation from elsewhere.

Living and working in Gateshead and Newcastle upon Tyne (in the North East of England for those that don’t know) for Shell LiveWIRE (one of the UK’s biggest and longest running youth enterprise schemes), means I can speak with some authority when I say that you don’t need to be based in London to run a successful national operation. Our overheads and staff salaries are much lower than if we were based in London so the money goes much further – providing better value for money to our sponsor (Shell) and allowing us to give away more start-up funding to the young entrepreneurs that we serve (48 x £1,000 start-up awards throughout the year and a further £10,000 in November). Furthermore, with a wife who once worked in London and many other friends who are still down there (or who have ‘escaped’ back home) I can tell you that unless you are making a ton of money in London, the quality of life up here is much higher with shorter commutes into work, bigger houses than you could afford in the capital, all the shops, bars, restaurants and cultural activities you need, plus all the beautiful beaches and countryside on our doorstep.

Running a national enterprise scheme means we do need to be in London a lot as that’s where many of the key decision-makers, events and meetings are but we are primarily an online service with clients/website users/award winners from across the UK which means we could really be based anywhere in the country. However, an office in the North East means that we’re well-placed to attend regional events across the UK and are able to understand and empathise with start-ups, wherever they are based and aren’t at all biased towards London. Many of our partner organisations also seem to like the fact that we’re not based in London too. If you’re a tech start-up founder, I see no reason why your office, developers and core team can’t be based somewhere like Newcastle (or anywhere other than London really), with you spending time in London only when you really need to be there for meetings and networking.

Transport infrastructure

When it comes to transport, Newcastle has great bus, Metro and train networks. London is just a 3hr train ride away so you can feasibly be there and back in a day (I can be sat working at TechHub, Google Campus or Central in around 31/2hrs door to door) although I tend to make an overnight stay and plan my meetings across the two days when I’m there. Living on a small island like Britain means people often have a distorted sense of distance (especially Londoners) which is silly really when you talk to people from the US who regularly commute 5-6hrs from one side of the county to the other.

Being on the East Coast Mainline means that it’s easy to get to large parts of the country (main destinations include London, Peterborough, Doncaster, Leeds, York, Newcastle, Edinburgh and Glasgow with various stops in-between. Meanwhile, the Transpennine Express has regular departures to the West of the country calling at major cities Manchester and Liverpool. Road links in all directions are pretty good too (although could the main roads into Scotland could still be improved), Newcastle International Airport has direct routes throughout Europe, Egypt and Tunisia and connecting flights to London Heathrow and Gatwick. The nearby, award-winning Port of Tyne is also one of the UK’s busiest handling a huge amount of imports and exports not to mention regular cruises and ferries to Scandinavia, Netherlands, Germany and France.

City living

Ok, but what’s it actually like to live in Newcastle? Well, I’d describe it as a ‘big, small city’. Large enough to keep you interested and discovering new things all the time but small enough that you can walk around it and feel like it’s somewhere you can really belong and make a difference. There’s something to suit most tastes and interests with all the major high street brands, high-end fashion outlets and local independent fashion retailers. There’s also a vibrant nightlife of pubs, bars and clubs, great arts and culture scene and some of the British Isles’ most beautiful wildlife, countryside and beaches just a short drive away, not to mention the abundance of castles and cathedrals and Roman-built Hadrian’s Wall (a World Heritage Site don’t you know)! The Geordies (and nearby Mackems of Sunderland) are renowned for their friendly, hospitable nature and if you’re into your football you won’t find anywhere more passionate than the North East which is home to 3 hugely supported clubs Newcastle United, Sunderland AFC and Middlebrough FC.

Local tech community

There’s a thriving grass-roots community of tech start-up founders, developers and designers all working together to support each other and build great things in the region. It’s very easy to get involved through weekly, after-work get togethers like the PHPNE, Ruby North East, Design Interest and Javascript North East events that occur at the PostOffice (opposite Central Station) every Tuesday night and numerous others in Newcastle, Sunderland and Middlesbrough. In fact, the block of buildings on Pink Lane in which the PostOffice is housed is owned by local enterprise agency PNE Group (formerly known as Project North East) who have won European awards for their low-cost incubator workspace for start-ups since the early 80s, and was one of the first places in the country that offered high-speed internet access, earning it the nickname ‘Silicon Alley’.

Over the years, this part of town and PNE has attracted and supported 100s of first-class digital and creative start-ups, precisely because of these lower rents, higher internet speeds and clustering effect of similar like-minded businesses. Current tenants include innovative m-commerce app MobiCart and exciting new private sharing app Cupple. Just around the corner, on the other side of the block is PNE’s Adamson House where ignite100, ‘Europe’s first £1m tech accelerator programme’ is based (current crop of fantastic cohorts = Blooie, Usable, Odimax, Blink Collective, Givey, CrowdIPR, RentMama, ArtSpotter and PinorPeg) and whose loft space office also currently houses online artisan food market Loveyourlarder.com and Little Riot (makers of ‘Pillow Talk’) amongst others.

Indeed this ‘Tech Quarter’ is positively buzzing with tech start-up activity right now, and the nearby pubs The Town Wall, The Forth and BrewDog Bar are where many of the local movers and shakers can be found, alongside great little coffee shops like Pink Lane Coffee, Flat Caps Coffee and 9 Bar. In the East of the city, Hoults Yard, Ouseburn Valley and The Toffee Factory provide fantastic facilities for a wide range of digital, creative and media companies with Screenreach (on the verge of global greatness) being the most notable start-up of recent years.

On the Gateshead side of the River Tyne, we have the Sage Gateshead music and conference centre and Baltic centre for contemporary art which are the venues for the internationally renowned Thinking Digital Conference (my personal highlight event of the year), which is organised by digital events and membership organisation Codeworks. The awesome new Northern Design Centre is situated just around the corner and is home to leading local digital businesses like Ayo Media and New York-based mobile design and development agency Fueled. There’s a wide range of affordable workspace available there and throughout the city for businesses to move into right now which offer much, much more than you could dream of in London for far less money.

But it’s not just Newcastle. Organisations like Sunderland Software City and pioneering companies like The Leighton Group and SaleCycle are showing that the city is one of the best places in the country for a digital business to be based, whilst Spotify music resource Sharemyplaylists.com are rocking it with 2 million users of their website and app per month! Furthermore, the great work of organisations like Digital City at Boho One, plus grassroots events from Refresh Teesside and North East New Tech are all adding to the mix of what gives the North East such a vibrant tech community.

Sage

Then of course there is the awesome Sage. Founded in 1981, Sage has grown to be a world-renowned, FTSE100 company, providing desktop and cloud-based software for over 800,000 businesses in the UK, 6.3 million businesses worldwide and employing more than 13,000 people. Their headquarters are proudly still in Newcastle, on the outskirts of the city in a custom-built office which is arguably one of the best and most impressive in the world and as a former Sage employee (my first job after University between 1998-2000), I can vouch for them as being a fantastic place to work with founders who remain loyal and passionate about the North East.

Investors

There’s serious money available up here too. We have a range of proactive, Newcastle-based investors and angels like Northstar Ventures, Rivers Capital Partners, IP Group and more all looking to fund exciting and innovative businesses that create growth and jobs in the region. Newcastle City Council and Gateshead are also two of the most forward-thinking in the county and the local Universities, hospitals and science community are world-renowned for the pioneering work that they do.

Talent, opportunity and ambition

There is no shortage of talent, opportunity and ambition in Newcastle, Sunderland and Middlesbrough and the North East right now, with the region exporting more than any other in the UK and an exciting new renewable energy sector growing by the day.

As a region, we just need a little bit more belief in our abilities to compete on a global scale (although there’s no shortage of that amongst the tech start-up founders), and collective cooperation from everyone in the area to do their bit to push things forward. Personally, I’d like to invite more outside investment from London, European and US-based VCs into the area and see the local and national Government doing more to encourage large tech companies to open offices up here (British Airways have some of their core developer teams in Newcastle) to help create jobs, reduce unemployment and provide stimulus to the local economy.

The ambition of North East industrial pioneers like George Stephenson, Joseph Swan, William Armstrong and George Burton Hunter are what made Tyneside and in turn Britain great and we now need a new breed of ‘Tyneside Tech Titans’ to follow in their footsteps!

If you’re a tech start-up or tech giant and would like to know more about the opportunities for you and your business in Newcastle and the surrounding area, please email me at plandigital@live.co.uk or give me a call on +44(0)7734 722716 so I can put you in touch with the relevant people or help coordinate a visit.

Interview with Michael Acton Smith (Mind Candy / Moshi Monsters)

On 15th April 2011, I interviewed Michael Acton Smith, founder of Firebox.com and now Mind Candy – home of the phenomenally successful Moshi Monsters (almost 40m registered users worldwide)!

During this fantastic interview Michael confirmed that the working environment was crucial to getting the best out of his team and making them feel valued, expressing dismay at how many businesses continue to work in boring, drab and soulless offices. If only more companies would take heed and put more effort into their place of work then perhaps we would have more success stories like Mind Candy throughout the UK? (see my earlier blog Start-Ups: Know Your Place).

Other topics discussed include how Michael gets ideas and inspiration, the importance of surrounding yourself with positive and creative people, awards and recognition and his future plans for Moshi Monsters in the coming months and years!