Finn Lagun, co-founder of Startups 100 three-time member Pasta Evangelists, has been announced as guest judge for the Startups 100 Index 2024 Marketing Award.

The luxury pasta entrepreneur is the second guest judge to be announced for this year’s list, which reopened for entries in April. In collaboration with the Startups’ panel of experts, Lagun will meticulously select the winner of the new Marketing Award from the list of the top 100.

The recipient of the award will be a UK startup with a sharp eye for robust but inventive marketing strategies and with a flair for compelling storytelling that sways customers.

Championing the startups community, Lagun reveals “I said yes to being a Startups 100 guest judge so that I can help say ‘well done’ to other startups, and their founding teams, who are pushing the boat out and driving some of the biggest developments on the British SME scene.”

Who is Finn Lagun?

Pasta Evangelists began as a three-man job in 2017 and is the classic rags to riches story. After being branded as ‘pasta la disaster’ on Dragons Den, Lagun’s luxury pasta subscription box service went on to grow to a $26 million revenue idea in 2021. The meteoric success of the startup also led to opening a restaurant in London and an acquisition by Barilla for a reported £40m, the world’s largest pasta maker.

Whether it’s for romantic date nights, family meal times, or solo sofa suppers, Pasta Evangelists has made its way into homes across the nation. The brand sells high quality fresh recipe kits that are rebranding pasta as an artisanal, immersive culinary experience.

Lagun’s pasta renaissance and entrepreneurial vision earned him a spot in Forbes 30 under 30 in 2022. Pasta Evangelists has also ranked on the Startups 100 three times, snatching the 11th position in the latest ranking.

For Lagun, innovative and imaginative marketing has been key. “At Pasta Evangelists our brand is underpinned by storytelling.” he shares.

“From the very beginning, we recognised that it would be important to spirit our customers away to Italy. We focused a lot on the provenance of different dishes; of age-old recipes that people may never have heard of before, creating magic and romance around our products.”

Al dente marketing: what does it look like?

Pasta Evangelists are proof of how correlated compelling storytelling is with business triumph. Whether a sound social media strategy or search-optimised online presence, marketing is make-or-break for startups who are trying to scale.

Yet Lagun highlights how it’s an ongoing, evolving task that doesn’t get taken seriously enough.

“Too many businesses see ‘branding’ as a one-off exercise that happens at the outset of a business and is then confined to a ‘brand book’ and otherwise forgotten,” warns Lagun. “A brand is not the sum of a brand book, or a logo, but rather the sum of every single action that takes place within a company every single day.”

Recognising the small details of how a brand is perceived in the market – and calibrating strategy accordingly – is the secret ingredient that can elevate marketing from meh to mamma mia!

“When a company does not recognise this, they do not afford ample attention to the ‘small details’,” emphasises Lagun. “When these are overlooked, a brand is unable to attain the ‘magic’ it requires to really shine; to be more than the ordinary.”

Changing marketing recipes

As our Marketing Award guest judge, Lagun is excited about the ebb and flow of marketing trends and all the innovative tools brands currently have at their disposal.

“TikTok is presenting lots of exciting challenges for marketers, mainly because many of us don’t use, or therefore fully understand, the platforms in a personal capacity,” notes Lagun.

“From what I’ve observed, TikTok advertising requires a completely different approach to, say, Meta advertising: it is not simply a case of one-creative-fills-all. Equally, TikTok Shop provides exciting opportunities for brands to rapidly reach consumers and sell in real time.”

However, despite other innovations like AI entering the digital marketing space, Lagun still thinks the core ingredients of a sound marketing strategy have remained unchanged.

“Truth be told, though, [AI] is not quite there yet, and creating magic will always, ultimately, require a human touch,” stresses Lagun. “It does seem clear to me that AI is going to be deployed to create more effective digital ads, though: there are already tools out there that create paid social ads, for instance, though these tools still need to be refined.”

Could you be the next Startups 100 marketing champion?

Like the Romans before them, Pasta Evangelists have built a luxury pasta empire.

When asked what Lagun will be looking for to find this year’s marketing champion, Lagun wants to pivot from big marketing budgets and focus on the hard work that the basics of marketing require.

“I will be particularly excited to see evidence of real growth hacking: building a brand not by spending a fortune, but through hard work, creativity and sheer chutzpah,” outlines Lagun.

Are you an entrepreneur with a blossoming business and a keen eye for marketing? Apply to the Startups 100 for a chance to be named the UK startup with the best marketing strategy for 2024.

Read more:

• Startups 100 Index welcomes Ian Wallis as guest judge

The total amount raised by UK fintech firms reached £2.9 billion in the first six months according to recent data from Innovate Finance, marking a 37% decrease compared to the latter half of the previous year.

The decline in funding has been accompanied by a decrease in venture capital investments overall. 

According to the research, out of the 199 deals that took place in the first quarter of the year, only £2 billion worth of deals were made.

These trends reflect a challenging period for global fintech funding, as investors have become more cautious about supporting high-growth start-ups with a history of losses, especially given the turbulent market conditions.

Building investor confidence

Wayne Johnson, CEO & co-founder of Encompass Corporation, emphasised: “It is important to build investor confidence in fintech given the necessity of innovative solutions, and at a time when the technology behind these is evolving rapidly. 

We must continue to drive game changing efficiencies for banks, with automation technology, for example, improving processes and output, while ultimately contributing to the UK’s wider aim of becoming a science and technology superpower.”

Steven Mooney, CEO of FundMyPitch, also stressed: 

“Funding for small and medium sized enterprises (SMEs) is absolutely vital if the nation wishes to reach economic stability and future growth, especially in the fintech sector that drives innovation and attracts international investment. 

The UK has always been seen as an international financial hub and retaining this position will only be possible if funding into SMEs that support its developments is provided. The lack of financial backing will hold back SMEs that offer huge potential. 

We must get ahead of the game and prioritise making finance accessible to businesses and offering tools and platforms that support this, ultimately allowing our nation to grow; and building sectors, such as the fintech sector, that will promote international relations.”

Looking ahead for fintech funding

There’s no sugar-coating the stats – the decline in funding for UK fintech companies in the first half of 2023 has been significant. Of course, this isn’t isolated to fintech but reflects a broader decrease in venture capital investments overall. 

The cautious approach of investors can readily be attributed to the economy’s current volatility.

While this presents challenges, regaining investor confidence and support for SMEs is crucial in order to maintain and strengthen the UK’s position in the global fintech landscape. 

By addressing these concerns and actively investing in the sector, the UK can ensure continued growth and success in the world of finance and technology.

Last week, the government announced it would redirect £75bn from pension funds to support ‘the tech giants of tomorrow’.

The agreement, known as the Mansion House Compact, has participation from nine UK pension funds – Aviva, Scottish Widows, L&G, Aegon, Phoenix, Nest, Smart Pension, M&G and Mercer. 

The funds have committed to invest at least 5% of their default funds into the UK’s startups and other fast-growing companies by 2030. The providers represent over £400bn in assets.

This alone could unlock up to £50bn of investment in high growth companies. For the Local Government Pension Schemes, a consultation will be launched to set a goal of doubling existing investments in private equity to 10%, which could potentially unlock a further £25bn by 2030. 

Good news for growth

This is huge news for UK startups who have been hit hard by the tech downturn  that has rumbled on since 2022.

“I welcome the Chancellor’s plan for pension funds to invest in high growth tech companies,” Haakon Overli, general partner at VC Dawn Capital, told Startups. 

“For too long, British pension holders have been missing out on impressive returns because their pension funds haven’t invested in the tech giants of tomorrow. It is great to see leading existing venture capital investors like Phoenix and Legal & General Group Plc participating in the scheme.

“Pension funds in other countries have been significant investors in venture capital funds for decades to the benefit of millions of retired workers, while the UK has lagged behind in its approach. 

“And it is not only British pensioners who have lost out – not investing even a fraction of the trillions managed by UK pension funds into the startup sector has penalised the UK economy. The evidence shows that innovation creates value: when a country’s tech sector thrives, its entire economy benefits.”

Pension innovation

Overli notes that in order to avoid distortions in the market, pension fund assets should only be allocated by experts to top performing managers through processes governed by rules that ensure investments deliver for both pensioners and the wider UK economy.

“Britain has been at the forefront of innovation for centuries, but it has to keep that momentum going and the reforms offer a clear opportunity,” adds Overli. 

“They will not only allow innovative UK startups to access the capital they need to grow into global companies, but will provide a much-needed boost to our stagnant economy and help to deliver the well-paid, skilled job opportunities pensioners’ children and grandchildren will need.”

The UK has the largest pension market in Europe, with a worth of over £2.5tn. Over the past ten years, automatic enrolment has helped an extra ten million people save for their futures, with £115bn saved in 2021 alone.

To ensure the funding created by these reforms is invested quickly and effectively, the Chancellor has asked the British Business Bank to explore the case for the government to play a greater role in establishing investment vehicles.

Read more about how SMEs are reacting to the pension fund reforms.

Kirstie Pickering - business journalist

Kirstie is a freelance journalist writing in the tech, startup and business spaces for publications including Sifted, TNW, UKTN, The Business Magazine and Maddyness UK. She also works closely with agencies such as CEW Communications to develop content for their startup and scaleup clients.

Nested in a corner of Old Spitalfields market, next to other protagonists of London’s bustling food scene, stands Humble Crumble. Aside from the line of people waiting expectantly for their order, dessert lovers will also notice the sweet and the buttery scent of the crumble waiting to fill the shop’s pink tubs.

The world’s first crumble bakery has taken what is a British culinary tradition and turned it viral on social media. Between user generated content (UGC) and Humble Crumble’s own accounts, the crumble maker has gathered millions of views and nearly 200,000 followers across Instagram and TikTok.

From tapping into Londoner’s sense of childhood nostalgia through hearty classic crumbles to catching foodies’ eyes (and tastebuds) through innovative inventions like the Crumbrûlée, Humble Crumble has scooped its way into success.

The recipe for social media success

To understand the ingredients of its innovative marketing strategy, Startups spoke with Kim Innes, founder and chef.

After receiving personalised crumble suggestions for the Startups team (Nectarine and Sour Cherry Crumble), Kim reveals how instrumental a sense of novelty and intrigue is.

“I think the fact that we are the first crumble bakery gives us this newness and this excitement and so I think our business is inherently shareable because of that,” outlines Kim. “Our products are also, one, delicious, but two, they also look delicious, they picture well, they video well, and so it is kind of geared towards social media and being quite shareable.”

Besides just looking good on an Instagram feed, there also is something inherent about the product that makes people feel good. As Kim highlights, it’s a classic British dessert that helps bring friends and families together.

“For me, I had crumble at school, at home and at friend’s houses, and the pub. I’d have it in so many different places that it was just such a staple of my childhood and I think so many people see it have that same association so when they see a place that’s dedicated to crumble, those nostalgic feelings come running back,” shares Kim.

The warmth of the crumble invoking nostalgia and the chic and cosmopolitan concept of having a modern dessert bar make it a viral hit on social media. One sugary lesson to take away is that appealing to people’s emotions can be the key to selling your brand effectively.

Baking in engagement

Kim is keen to stress that social media isn’t simply a glass storefront wherein customers are passive observers – the key is to engage with those users.

“Community is the core of what we do,” shares Kim. “We always try to make sure that everyone who follows us is engaging with us.”

This is not necessarily an inside secret for social media gurus. After all, engagement is a key factor of social media algorithms. However, the key difference for Humble Crumble is being plugged into a 24/7 engagement cycle.

“Our social media manager, she’s from New Zealand and she lives in London, but she has people in New Zealand who help us so actually, we’re pretty much 24/7,” she explains. “You’ll have someone who can respond to you from Humble Crumble because of the time zone differences.”

Balancing the flavours of organic search and content creation

The dream of any social media manager is that a brand sells itself so well that the majority of people find it through authentic user generated content (UGC), rather than original content published on the brand’s main profile.

For Humble Crumble, the reach of UGC has transformed its social media success. “I can only speak for us, but anytime we’ve done anything like professional photos or videos, they do not share as well as user generated content,” confesses Kim.

“And I think it’s just more personable and a nice relatable thing for our followers, that they feel ‘I could take this video and post it on my Instagram or TikTok and it will look great.”

Measuring successful influencer outreach is also key to generating the right type of organic interactions with a brand, beyond its main profile.

“I would say find influencers that are within your market, so for us it’s food influencers,” recommends Kim. “We’ve actually had experiences where celebrities will post about our crumbles and it’s just not the right demographic.”

“It doesn’t really move the needle in the same way that a micro influencer with 2,000 followers who’s interested in the food because their engagement is so much higher as it’s just the right audience.”

It can be tempting to reach out to influencers simply based on their following or popularity. However, Kim stresses the importance of considering micro influencers as a way to foster social media success.

“Working with micro influencers is really powerful because their audiences tend to be more engaged and often they won’t ask for any financial contribution. They want to produce content and they’re happy with the exchange of you giving them the product and them giving you content – it’s like a win-win situation.”

Starting from humble beginnings and trusting the process

Whether it is thanks to micro influencers or other UGC, Humble Crumble’s success was not always guaranteed.

“I think it’s worth noting that I could have easily not been successful,” confesses Kim. “For the first two years, it really wasn’t a success. And one of the challenges that I faced was because we were the world’s first crumble bakery, no one knew what we were doing.”

“If you were to go into a food market, you would probably expect to see burgers or pizza or pancakes but back in 2018, people would come up and ask me ‘What are you selling? Are you selling soup’ and I was always baffled that they would not get it.”

Social media then entered the scene and changed the tide for Humble Crumble. “Social media was amazing at educating people that we existed and the virality of videos on TikTok and Instagram really helped spread that word that a place where you could go get crumble existed.”

In lots of ways, having a successful business that triumphs on social media is a process of trial and error. “I actually started Humble Crumble as an alcohol infused crumble place, because I was like, amazing, British people love alcohol and they love crumble, so why don’t I mix them together.”

As Kim admits, it was not a popular idea and it ended up creating more confusion. However, the key lesson for any small business in the food industry is to get exposure and get feedback.

“Being able to go into this food market, this very small food market, and just put something out there and get the feedback was amazing because that meant I could tweak what my business was doing,” says Kim.

“I would say fundamentally success doesn’t happen unless you try, so you need to go out there and try and just see what happens.”

Grant Shapps has met with supermarket bosses to discuss their consistently high fuel prices despite the wholesale cost of fuel falling.

The meeting comes following the publication of a report by the Competition and Markets Authority (CMA), which found that from 2019-2022, average annual supermarket margins increased by 6p per litre. Increased margins on diesel across all retailers have cost drivers an extra 13p per litre from January 2023 to the end of May 2023.

Asda’s fuel margin target in 2023 was also found to be more than three times what it had been for 2019 – and Morrisons doubled their margin target over the same time period. 

The report states that other retailers, including Sainsbury’s and Tesco, did not respond in the expected manner in a competitive market and instead raised their prices in line with these changes.

Asda has even received two fines from the CMA, each valued at £30,000, for failing to respond to a compulsory written request for information and for sending a representative to a CMA meeting who was not equipped to provide appropriate evidence. Asda has now provided the CMA with the required information.

New fuel finder scheme

To help consumers budget better as the cost of living crisis rages on, the CMA has recommended a new fuel finder scheme be introduced to give drivers access to live, station-by-station fuel prices on their phones or sat navs.

The proposals are the key recommendations by the CMA to the UK government following its in-depth study into the road fuel market. Shapps is expected to tell the fuel retailers he intends to pass legislation to enforce the scheme – and if imposed, this could mean big savings for SMEs with commercial vehicles and fleets.

“High fuel prices are adding cost pressure during an already difficult economic environment,” Martin McTague, national chair for the Federation of Small Businesses (FSB) told Startups. 

“Thanks to our successful lobbying campaign earlier this year, a fuel duty freeze was extended to allow SMEs to prioritise growth. However, the apparent failure of supermarkets to pass on wholesale price reductions is a letdown to their small business customers.

“Our latest Small Business Index (SBI) shows that a total of 92% of small businesses have grappled with escalating costs over the last year, with fuel prices affecting a hefty 40% of them. If prices at the pump remain high, businesses such as florists, tradespeople and taxi drivers that are dependent on fuel can feel the brunt of the impact.

“Bringing it down wouldn’t just lighten the load for these businesses, but also put more money back into consumers’ pockets, and avoid making inflation worse. This surge in spending power would be a lifeline for businesses striving to stay afloat amidst the tide of rising inflation and interest rates.”

Further reading:

• What is a fuel card?
• Fuel card prices: how much do fuel cards cost in 2023?
• The best fuel cards for small businesses

Kirstie Pickering - business journalist

Kirstie is a freelance journalist writing in the tech, startup and business spaces for publications including Sifted, TNW, UKTN, The Business Magazine and Maddyness UK. She also works closely with agencies such as CEW Communications to develop content for their startup and scaleup clients.

Employers confronting hiked business rates should think twice before snubbing hybrid working, as a new report finds employees would rather quit their job than return to the office.

The British Business Expert awards polled over 2,000 workers to examine UK employment trends. The results show, of the workers who are considering looking for a new role, 64% are doing so after being told to come into the office full-time.

Talent shortages have made recruitment and retention two of the biggest challenges currently facing SMEs. In light of the findings, and amid mounting staff turnover rates, bosses should tread carefully on the issue of hybrid work policies.

While sending workers back to their desks would mean more cost-efficient use of the workplace, the research suggests the resulting fallout could cancel out these savings as staff react by jumping ship.

The rise (and fall?) of hybrid working

Hybrid working underwent a meteoric rise during the pandemic, as organisations alternated between open and closed throughout various spikes in COVID infection rates.

The perk has since remained in favour as one of the most popular flexible working arrangements. Workers seem keen to hold onto the health and wellbeing advantages it brings, such as greater work-life balance.

Nonetheless, company owners have been growing impatient with the slow progress, adding fuel to the already fiery return-to-office debate.

The dispute is being spurred by rising business rates and rent costs. High-profile employers like Elon Musk have hit the headlines after pressuring their employees to work at least 40 hours a week in the office, or resign.

Official figures show that a quarter of UK today’s workers are now hybrid, compared to over 40% in 2022.

Overall, however, workers are still winning the fight. Senior leaders at Google and JP Morgan are amongst those who have made multiple unsuccessful efforts to coax employees back to their desks – prompting worker chagrin.

Such case studies should act as a warning to small business owners. The threat of mass quittings over a policy change is far from empty: a poll of 2,000 workers found 37% have already looked for a new role in preparation for anything going wrong in their current job.

Ben Marks is the founder and executive director of the #WorkAnywhere Campaign. Marks comments: “As the world continues to adapt to new ways of working, we need to recognise that a dogmatic back to the office approach is a huge step backwards in our life-work relationship.

“The benefits of hybrid work are not just economic – studies show that it also improves employee productivity. A comprehensive study of 16,000 workers by Stanford University, indicates that remote workers tend to be more productive than their in-office counterparts.”

Youth must be served

That hybrid work has become a resigning issue for UK workers reflects the shifting dynamics in today’s employment landscape.

Office for National Statistics (ONS) data show that a record number of people have stopped working as a result of stress and burnout. The latest UK labour market figures show that vacant job roles currently sit at 1,034,000.

Job seekers are actively seeking meaningful work with an employer who cares about the wellbeing and needs of their employees. For many SMEs, hybrid working has therefore formed an important part of the benefits and perks package to attract staff.

Driving this trend is the new generation of employees, who have entered the workforce during a period of change post-COVID. Gen Z staff members have ushered in a more relaxed approach to organisational culture, putting an emphasis on roles that accommodate both personal and professional commitments.

Their preference for remote or hybrid working is even helping to boost the UK’s side hustle economy. 92% of Gen Z company founders started their business while working full-time.

We’ve written extensively about the labour shortages currently plaguing small businesses. As today’s job seekers call for remote work, firms that promote hybrid work in job ads and employee packages will have a much easier time attracting top talent.

Sarah Austin, director at the British Business Expert awards, comments: “Organisations should meet the evolving expectations of the modern workforce.

“Companies that prioritise work-life balance will be well-positioned to attract and retain top talent, drive innovation and achieve long-term success in the dynamic and competitive business landscape.”

Could coworking be the answer?

An alternative solution to slamming the brakes on hybrid working could be to invest in a more flexible workplace provision, such as coworking space.

Searches for coworking spaces shot up in April, as SMEs began hunting for cheaper office locations to navigate the cost of living crisis.

It is likely no coincidence that the pique in interest came in the week after business rates were raised. The change saw the average rateable value of a UK office increase by 10%, on average.

Many coworking providers have added flexible payment plans to their pricing tiers, to provide a more affordable option specifically for hybrid businesses. Teams can come into the office on set days, and avoid paying for a space they aren’t using.

Startups recently spoke to one small business owner who had switched to a coworking space last year to mitigate rising overheads. They reported huge savings worth £1,200 per month (or £14,400 per year).

This is not to mention the money made back on avoiding hiring costs, as hybrid coworking also means staff members can have full control over the number of days they want to spend in the office.

Research is the best way to gauge the financial savings that coworking spaces can bring – and evaluate whether they are worth the time and resources spent on relocating or downsizing office space.

The below guides have more information on the shared office options available in the three largest UK cities:

• Best cheap coworking spaces in London
• Best coworking spaces in Birmingham
• Best coworking spaces in Manchester

More young people are choosing the school of life over higher education, as a new report records a rapid increase in the number of student entrepreneurs starting a side hustle.

Student accommodation provider Fresh analysed Companies House data to find that a total of 4,093 businesses were registered by students in 2022. The vast majority of these were launched by Gen Zers (those aged between 18-25).

The figures represent an astonishing rise year-on-year since 2019, suggesting they could be a legacy of the COVID pandemic. In 2021, just 847 companies were created by students, signalling an uplift of 400%.

The pandemic has severely disrupted the jobs market and school careers of young people. The Fresh data suggests that many are now taking matters into their own hands by turning their side interests into a new business opportunity.

Students excel in dropshipping and ecommerce industries

The Fresh research revealed that 16-25-year-old entrepreneurs are overwhelmingly in favour of starting an ecommerce business.

The online retail industry boomed during COVID. Office for National Statistics (ONS) data shows that in May 2022, internet sales accounted for 26.6% of all official retail sales, compared with 19.7% in February 2020.

But young people are also more attuned to the digital technologies required to run an online firm. Dubbed the ‘iGeneration’, this age group has grown up with the internet and is well-poised to reign supreme in the world wide web.

One recent GoDaddy survey shows that 92% of young people place great importance on online channels, compared to 88% of all other age brackets. They also consider having a website and using social media marketing to be important for their business.

Another draw for this industry could also be the cheap starting costs of running an online business, such as starting a dropshipping firm.

Other popular areas for young entrepreneurs include advertising agencies, as well as hairdressing and beauty treatment businesses.

Dissatisfaction with higher education could trigger side hustle boom

The rise in the number of young entrepreneurs is likely a result of growing dissatisfaction with higher education degrees amongst students.

Post-COVID, many universities have switched to a remote learning model, with courses being run online. Academic tutors have also been striking throughout the year, leading to many hours of learning time lost.

Alongside the cost of living crisis, which has seen accommodation fees skyrocket, many undergraduates are now questioning the return on investment for their tuition fees.

Startups research shows that university students expect around £5,000 more from a starting salary that the average employer offers. As a result, employers are turning away from hiring graduates, as higher pay stipulations become unaffordable for cash-strapped businesses.

Starting a business is a natural solution to the issue, as a way to boost income while also gaining important skills and experience for a graduate career or venture.

Entrepreneurial uplift set to continue

The upward trend for entrepreneurship looks likely to continue. According to research from freelance marketplace Fiverr, 36% of Generation Z employees say their ultimate work goal is to run their own company.

Shifting work norms – such as the advent of flexible and remote working – mean young people are increasingly starting a side job, taking advantage of shortened commute time and great work-life balance to freelance.

Their reasoning is sound. Side hustle entrepreneurs can earn more than the annual living wage – without even leaving your full-time job.

Sam Scott, managing director of Fresh, said: “The spike in numbers following the pandemic shows a desire for increasing numbers of students to carve their own path.

“The ambition and talent displayed by the student population as they pursue their own businesses is hugely impressive. Starting any kind of business, whether it’s to pursue a hobby or grow it into a larger company, requires digging deep for determination and focus.”

Relating reading:

• How to start a business in 11 steps
• Cheap small business ideas
• Business ideas and trends in 2023
• Recession-proof business ideas

Average office rental costs in the UK are nearing £3,000 per month, as evidence grows that more companies are switching to a coworking model to reduce overheads.

Business comparison website, Bionic analysed the average cost of renting a commercial office across the UK. It found that the average cost of renting an office in the UK is now £2,969 pcm. For firms based in London, the figure rises to a huge £11,936 pcm.

Earlier this year, the government raised business rates. The resulting price increase caused a surge in online searches for ‘coworking space’ as businesses looked for ways to adjust to the rate rise and reduce pressure on balance sheets.

Below, Startups hears from businesses who have moved into shared office space this year about the benefits of a flexible payment model; both financial and functional.

How coworking is catching up with business needs

Before this year, the coworking industry was going through a turbulent period. During COVID, various stop-start lockdowns put the brakes on business activities, with the majority of office employees shifting to at-home working.

That legacy has continued into 2023. Labour market figures show that around 40% of working adults reported working from home at some point in the past seven days.

But in today’s weakened economy, managers are struggling to reconcile the flexible working trend with sky-high business rates.

Coworking is the solution many have turned to,causing the market to undergo a complete 180. According to research by Mintel, the number of serviced offices in the UK is forecast to reach 6,218 in 2027, representing cumulative growth of 52% compared to 2022.

Tobias Batkin is co-founder of Work + Play, a coworking provider based in North London. As a serial entrepreneur, Batkin says he’s seen for himself the limited bang that business owners get for their buck when it comes to office space.

“Industrial units and basements are the reality for most SME owners,” he says. “Typically, coworking spaces operate like real estate firms. But today’s remote workers don’t want full-time or private offices. They don’t even necessarily want to visit the office every day.”

Hybrid coworking or: how to stop spending and love the office

Leaning on copious experience as a business owner, Batkin has shaped Work + Play’s USP to offer small businesses affordable pricing plans that reflect flexible work arrangements. Like many providers, this has involved the introduction of hybrid memberships.

“Business owners who only use our offices twice a week, only pay to use it twice a week,” he states simply.

Prices depend on contract length. For example, based on attendance of ten days in the office, a member would pay £150 + VAT pm on a 12 month contract. At that price, a firm with nine employees would spend £16,200 pa.

Based on the Bionic research, that represents a total saving of just under £20,000 pa for the business, or the annual salary of a full-time employee. That’s not to mention the amount of money saved on energy bills and maintenance fees, which the provider takes care of.

Alongside, the company provides a concierge booking system to give members a real-time view of what the space’s occupancy looks like. They can then book desks in advance to ensure that large teams can work together.

Because of this, what was previously the haunt of microbusinesses and freelancers is now an affordable alternative for small businesses.

“We’ve attracted ten different SMEs at Work + Play,” says Batkin, “some of whom have abandoned their offices altogether in order to embrace the flexible options that we provide.”

Of course, not every industry can afford to move into an office space. Artistic industries, and those with specialist studios as a workspace. Nonetheless, Batkin tells me about one Work + Play member who is a full-time florist.

“She already has a space to put together all of her flowers, but she needs somewhere outside of all of that in order to come and do her admin,” he explains. “Many of our members have never used coworking before and see this as an alternative to working from home.”

Coworking gives small companies access to capital

According to the Bionic research, there is a definite North-South divide when it comes to office rental costs.

While there are still affordable coworking options to be found in cities like Manchester and Birmingham, the most expensive locations for rent contracts were found to be London and the South East.

In London, it is nearly impossible to find cheap coworking space. Firms based in the capital can expect to spend around £143,000 pa on their office rent. In comparison, a company based in Aberdeen will spend, on average, a significantly lower £88 pm.

That statistic makes the kind of hybrid contracts that Work + Play is offering all the more enticing.

Companies which might previously have been unable to afford an office space in the Big Smoke can spend a fraction of the cost to access the UK’s largest business community; positioning themselves for advantageous partnerships and a bigger customer base.

And, because of the prime real estate that London offers, competing providers have given businesses lots of coworking options. In fact, London was voted the best city for coworking in the world earlier this year.

Leila Baetiong is Operations Manager of UP Projects, an arts organisation and coworking user. Baetiong says the UP Projects team currently works two days in Work + Play’s London office, after switching from full-time office use earlier this year.

According to Baetiong, the company used to spend £2,800 pm on a full-time office. Now, the team spends just £1,600 pm.

“We used to have an office Monday to Friday,” she tells Startups, “but due to COVID we moved to a hybrid mode of working. We have continued to work in this way as it provides a more flexible solution for the way we work, for example with childcare needs.”

Employee perks and benefits complete coworking package

Another bonus that coworking spaces bring to business users is improved staff morale. Most providers host social events, such as free yoga classes. These are designed to promote positive company culture, and should be sold as an incentive for new hires.

Such add-ons are becoming increasingly expected by employees, as businesses compete to attract the best talent.

Charlie Cudworth is managing director of FigFlex Offices, a coworking provider. Cudworth says the workforce is increasingly asking for a more accommodating employee experience post-COVID.

“We are seeing demand for FigFlex desks from a much wider range of businesses,” he reports, “with many realising traditional offices with onerous lease agreements are no longer fit for purpose.”

Hybrid coworking also represents an opportunity to promote good teamwork for predominantly remote-based teams. In fact, one survey by DeskLounge found that 37% of businesses which use coworking do so for the collaboration opportunities.

In a shared office, workers from multiple companies can meet and interact with each other for strengthened employee engagement.

As a result, firms that switch to coworking won’t just save money by reducing fees. They’ll save money indirectly via an improved recruitment strategy, and lowered staff attrition rate.

That said, the benefits and perks offered by some coworking providers, such as WeWork’s controversial perk of free beer on tap, can create a distracting environment – something workers aim to avoid by working from the office instead of home.

In Batkin’s opinion, this is too far down the ‘quirky, fun, loungey’ type. “Ultimately, a coworking space still needs to be a space that’s productive,” he says.

Still, it’s clear the shift towards coworking is not just being driven by cheap deals, providers are genuinely answering the changing demands of today’s workforce. The sector’s scale-up – somewhat triggered by the current downturn – is at the beginning of a larger growth journey.

“Coworking will inevitably trickle its way through the economy,” Batkin argues. “Whether that leads to more members or more sites, I think the industry is really in a period of rebirth.”

Read more: where to find cheap coworking space in London as a small business.

Online payment fraud has increased by 59% in the last month, according to a study conducted by a fraud prevention platform.

Account takeover (51%), promotion abuse (52%), refund abuse (53%) and customer or friendly fraud (40%) have similarly become more frequent, ringing alarm bells for online merchants.

Ravelin conducted a survey with over 1900 global fraud professionals to find that ecommerce fraud is fast becoming a crisis for ecommerce businesses.

As a result, 58% of UK-based online businesses plan to grow their fraud teams in the next 12 months.

What does online shoplifting look like?

The most common ecommerce crimes are related to transactions made with stolen credit card numbers.

To scam an online business, a fraudster first acquires a credit card number and uses it to pay for something online. The store then processes the payment and the real cardholder – noticing an unusual transaction – initiates a chargeback.

The chargeback is completed but responsibility falls on the online store, meaning they lose the money.

Nevertheless, there are other more complex types of frauds that are targeting small businesses. Namely, this includes triangulation fraud.

In a nutshell, this occurs when a customer makes a genuine purchase on a third-party marketplace like Amazon or eBay. In this scenario, the fraudulent merchant has a digital storefront and accepts orders. However, they’re using stolen cardholder data to purchase goods from a third party and ship them to the buyer.

Because of all the parties and processes involved, it is difficult to trace the wrongdoers. For instance, platforms like Shopify or payment gateways like Stripe do offer built-in ecommerce fraud detection and prevention but their tools are not advanced enough to flag triangulation fraud.

Investing in new and advanced technology is therefore paramount.

Building a virtual shield against ecommerce fraud

Ravlin predicts that global losses to ecommerce fraud could exceed $48 million in 2023. Accordingly, the global fraud detection and prevention market is set to exceed $190 billion in 2030 as businesses seek ways to protect their operations from scammers.

In order to safeguard their account books, ecommerce businesses find themselves looking for new approaches to prevent fraud.

Martin Sweeney, Ravlin CEO, explains, “Over the years, merchants have built up fraud investigation teams which they’re justifiably proud of. But fraud continues to grow and mutate: simply throwing more people and money at the problem won’t make it go away.”

Staying one step ahead against fraudsters equires pragmatism and adoption of new technologies.

In fact, machine learning and two-factor authentication are being adopted more regularly by ecommerce businesses to help with the issue. 48% of UK businesses say machine learning is one of the most effective tools in their arsenal. 75% say two-factor authentication is crucial.

Sweeney notes that adopting new technologies is key. “Businesses need to get on the front foot managing fraud: using automation to nop fraudulent transitions in the bud,” he says.

“Better automation helps teams scale and frees up fraud investigators from mundane tasks, enabling them to focus on informing product development, identifying other sources of profit erosion, and other more important strategic tasks that drive growth.”

Training the machines to prevent fraud

When it comes to tackling fraud, 78% of businesses opt for in-house solutions. However, if this solution is to be sustainable, businesses should consider upskilling their workforce rather than blindly embracing automation.

Although the trend for workplace automation is growing, only one in ten global workers have the necessary artificial intelligence know-how to implement it.

In fact, a study by Virgin Media O2 found this digital skills gap is costing the UK economy £12.8bn.

Businesses willing to invest in upskilling their in-house teams will be better positioned to use the technology across all its operations, including in preventing fraud.

As Sweeney points out, “With the economy in an uncertain place, enabling growth must become the priority.”

In a sign that the UK’s employee engagement crisis might be coming to a head, the originator of the ‘quiet quitting’ buzzword has found his voice, and recently quit out loud.

The term quiet quitting took the working world by storm last year. Employees from across the globe admitted to playing part in the trend. The idea is essentially the modern version of phoning it in: employees do the work they are paid for – no more, no less.

Zaid Khan originally coined the phrase in protest at the stress that his tech job was causing. But, speaking to Business Insider earlier this week, he announced he had left his corporate job in January after growing disillusioned with his own invention.

Now, Khan is encouraging more people to find work in an industry they feel excited by. “It wasn’t until I made the decision to actually leave my job that I felt this enormous weight lifted off my shoulders,” he told Insider. “It’s a decision that I wish more people could make.”

Quiet quitting signals breaking point for burned out workers

Quiet quitting hit the headlines last year, as employees took to social media websites to announce they had essentially mentally checked out of their jobs.

Across various talking heads, UK workers told of how they planned to draw boundaries between work and personal commitments. They would not quit their job, but would instead quit the ‘rat race’.

No longer going above and beyond in their career, they argued a job is simply a way to pay the bills, not for professional or personal development.

Managers naturally panicked about the loss in productivity and output the quiet quitting trend might cause. However, the craze is reflective of a much larger engagement crisis that has been threatening UK offices for the past three years.

An employee survey carried out in May found that UK workplaces ranked as some of the worst globally for employee engagement and enthusiasm. Company employees increasingly report feeling stressed out and overwhelmed by their current workload.

Four in five workers say workplace burnout has had an impact on their health and wellbeing – a figure that has contributed towards the record numbers of staff leaving the workforce due to poor health.

Generational divide

Rather than blaming the business world in general for the quiet quitting phenomenon, Khan is instead pointing the finger at another source: managers.

“Poor management is truly to blame for disengaged employees,” he told Business Insider. “If you don’t feel like you’re part of a team or in some sense connected to your work, of course you’re gonna be alienated.”

Khan’s comments are reflective of the current disconnect between managers and their younger reports. One recent survey of UK managers found that 37% think younger employees lack effort and motivation.

Gen Z staff members, who were also the first cohort to enter the workplace post-COVID, have driven a shift towards greater work-life balance over the past two years. But their differing opinions on ideas like flexible working has seen them lock horns with bosses.

The disagreement seems to be values-based. Having contemplated what they truly want out of a career, this new group now wants to find work in a career they are truly passionate about. Many have begun freelancing on the side to explore alternative career options.

This behavioural change is now testing workers’ ability to teamwork, as a generational divide towards attitudes to working stirs up workplace conflict. Khan told Business Insider that he decided to leave his job after coworkers expressed frustration with his lack of productivity.

According to him, many Gen Z employees now feel at odds with colleagues who, in their view, must be working a job they hate.

“Maybe they got a cool title,” he told Business Insider. “Maybe they got the house and the car that they wanted, but do they actually feel like they lived? That self-awareness seems to be more and more common in my generation.”

Could meaningful work be the next trend?

It seems the quiet quitting phase, then, is drawing to a close. Young workers like Khan are instead pivoting towards a new trend: that of meaningful work.

The concept refers to a focus on finding a purposeful job, where the worker feels fulfilled and valuable, and their day-to-day role is working towards a goal that they are personally motivated to reach.

While tempting to dismiss this group as a minority in the workforce, its impact has already been substantial. Company values are increasingly being used by employees, customers, and partners to judge how meaningful an organisation is.

In fact, LinkedIn reported a 154% increase in values-related terms on entry-level job posts between 2020 and 2022. In response, it unveiled its own values-based job search tool for candidates.

This technique of hiring people who share similar beliefs to the business, known as values-based recruitment (VBR), could be the answer. It helps companies to find workers who are motivated and passionate about their jobs, as well as being qualified for the role.

For the business, it means adding a brand’s personality and characteristics – like mission statements and information on company culture – to internal and external messaging, to make clear what its leadership stands for.

Employers need to prepare for the next wave of ‘loud quitters’. Those leaving the quiet quitting era have likely spent the last few months searching for a Plan B job in the background. Now, it seems they are ready to leave, setting employers up for a spike in staff turnover.

Answering their demands by repositioning your company as a meaningful, purpose-led workplace could be the best way to resolve the divide.

Doing so will help you to find workers who are willing to go above and beyond to grow the company and reach a shared objective. And, it tells your current workforce that, unlike staff, the business won’t go quietly.

Related reading: learn about 50+ employee benefits and perks you can use to boost your company offering and improve staff morale.

52% of SMEs say they are in favour of opening the UK’s doors to welcome more workers from overseas, as mounting talent shortages threaten growth plans.

Small business lender iwoca, surveyed 500 business owners to get their opinions on attitudes to migrant working. Results indicate that the majority of business owners think hiring more from abroad would be good for the economy given the current hiring crisis.

Office for National Statistics (ONS) data paints a bleak picture when it comes to the UK labour market. Even microbusinesses (defined as companies with employees of 10 or fewer) have been hit hard by labour shortages, reporting 143,000 vacancies last month.

The results stand in stark contrast to the government’s ambitious ‘stop the boats’ strategy of curbing net migration. Last week, Whitehall’s Illegal Migration Bill, aimed at deterring refugees and economic migrants from entering the UK, was defeated by the House of Lords.

Skills shortages stall SME scale-up

Small businesses are becoming increasingly desperate to attract, and retain, new talent.  Official figures report a total of 459,000 vacancies in May 2023 – an increase of a quarter compared to the same period in 2019.

Digital skills, such as software development, are particularly in-demand. The adoption of new technologies is crucial for growth. But uncertainty around visa endorsement programmes, like the Global Talent scheme, appears to have led to a lack of job-ready tech workers.

No tech know-how is not the only blocker for companies. A shortage of soft skills amongst new recruits was identified as the main reason why today’s company owners are experiencing hiring regret.

This has been exacerbated by the post-COVID shift to online working, which has made working as a team more difficult for those interacting virtually.

In this context, iwoca’s findings are hardly surprising. Broadening the hunt for talent to a global scale would increase the number of qualified candidates for a role tenfold. Plus, with remote technology enabling businesses to communicate directly with potential employees, there’s no reason to limit hiring to local areas.

Commenting on the findings, Christoph Rieche, CEO and co-founder at iwoca, said: “SMEs up and down the country are facing huge pressures right now.

“Soaring vacancies, the inability to raise wages, mixed with staff shortages all mean one of the most important parts of the economy is battling against huge headwinds.”

The most common route for employers to sponsor a foreign worker is the ‘Skilled Worker visa’. In January, searches for Skilled Worker visas hit a record high in the UK as hiring managers reacted to the labour shortage.

Another option is the Scale-up Worker visa; a temporary licence specifically designed for those coming to work for a fast-growing UK startup. The charge for employers is around £364 for the first 12 months, plus £182 for each additional six months.

Business owners blame Brexit for staffing blow

According to iwoca, 48% of small business respondents blame Brexit for the sharp decline in available staff in the UK.

Between 2019 and 2022, the number of EU immigrants coming to the UK annually dropped by 54% to 151,000. These numbers have reached their lowest levels since before 2018 when EU migrants to the UK totalled 426,000 – nearly three times as much as 2022 levels.

Visa challenges for European migrants have introduced both time and cost burdens to the visa system. In particular, salary restrictions and curbs on student visa routes have made it difficult for young people to find work.

These deterrents have drastically restricted access to the continent’s international talent market, with both managers and workers put off by sponsorship fees, legal fees, and lengthy admin time to process applications.

The problem is also affecting British business travellers. UK nationals must now obtain a work permit if they are going to be doing productive work when visiting the EU (which could refer to any activity between attending a meeting and opening an international branch).

Non-EU immigration levels have softened the blow, with 130,000 extra workers compared to 2019 levels.

However, it seems business owners think reforms to the EU visa system would go furthest to alleviate the hiring pressure on UK small businesses.

Rieche adds: “SME owners believe that opening up the UK’s borders and expanding work visas are key for helping them to attract staff, and doing this will ease significant pressures on their businesses.”

Are you looking abroad to plug hiring gaps? Find out more about the legal process of hiring foreign workers in our employer’s guide to Right to Work checks.

UK startups have faced challenges in securing adequate funding compared to their US counterparts in the current economic climate, resulting in limited early-stage growth opportunities.

In response to this issue, Chancellor Jeremy Hunt has announced a groundbreaking plan to merge workplace pension schemes and unleash up to £75 billion of retirement funds to fuel fast-growing startups. 

The pension reform

The move has the potential to accelerate the UK’s ambition to become the next Silicon Valley, Hunt argues.

The proposal, aimed at mobilising investment from the UK’s £2.5 trillion pensions sector, was unveiled during Hunt’s speech at the lord mayor’s annual Mansion House dinner in central London on Monday evening.

There’s a suggested upside for those investing in their pensions, too, with Hunt promising a £1,000 boost to the average annual pension pot.

We’ve gathered some initial responses to this new pension reform announcement, below.

Pension fund investments into growing businesses “needs to be handled with care”

The Chancellor has some big ideas for small companies. His efforts to improve access to later-stage funding for UK start-ups are very welcome. The success of the SEIS, EIS and VCT schemes means the UK is now the startup capital of Europe, but we’re still struggling to support companies in transitioning from plucky, disruptive start-up to global tech giant. 

A lot of that is down to the difficulty of raising later-stage capital in the UK. Entrepreneurs either have to look abroad or sell up to an established global player – and that means the UK economy is missing out on the benefits of having its own Apple or Nvidia. However, there are no easy fixes and reforms need to be handled carefully if they’re to deliver the hoped-for benefits without inadvertently damaging the UK’s already impressive investment ecosystem.

UK pension funds have been winding down allocations to UK companies for years, if not decades, turning away from risky equity bets in favour of reliable government bonds that can be matched up with future pension payments. There are lots of perfectly sensible reasons for that.

Increased interest from pension funds would also be welcome news for existing investors in smaller companies through schemes like EIS, SEIS and VCTs – providing the next stage of funding to already successful start ups and potentially creating a new route to exit.

If pension funds can be encouraged to invest in UK startups, where they see genuinely attractive opportunities, that would be good news for everyone – pensioners, investors and entrepreneurs alike.

Excitement and potential for UK startup growth

This is a really exciting move. 

Opening up pensions to invest in high-growth UK startups, VCs and PEs could be a total game-changer. 

If up to £50bn is unlocked by 2030 as the government promises, our homegrown founders will get the fuel they need to build world-beating companies. 

As the US has shown, when pension funds flow into the venture capital industry, it creates a virtuous circle of innovation. This could transform the UK into a major tech powerhouse properly competing on the world stage with the likes of the US and China. Kudos to the Government for taking bold action to back British ingenuity and entrepreneurship.

The potential for transformation: proposals hold promise for UK economy

By making this crucial announcement, the Chancellor is shining a spotlight on the importance of fast-growth technology companies to the UK’s economic health. 

Although it is clear that there is a lot of work to do, with the right commitments, the proposals have the potential to stimulate a huge boost in investment that will help to transform the UK economy. 

However, for these reforms to truly work and deliver genuinely long-term capital, they must be ring-fenced from the shifting short-term objectives of investor groups or the ever-changing political landscape.

Conclusion

These initiatives have the potential to reshape the investment landscape in the UK, providing a significant boost to startups and positioning the country as a vibrant hub for entrepreneurial activity.

As Chancellor Jeremy Hunt outlines his pension fund reform plan at the Mansion House, all eyes will be on the potential impact of these measures in supporting UK startups, attracting business investment, and stimulating economic growth.

Industry players have largely welcomed the proposed reforms but have expressed a desire for further details.