Starting a business in Tech City
Tech City aka Silicon Roundabout has gained a reputation as the UK’s technology nucleus but should you start your business there? We take a look
Where is Tech City? Hackney and Islington
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Why should you start a business in Tech City?
Encompassing Shoreditch, Hoxton and the surrounding areas in the boroughs of Hackney and Islington, Tech City is a central point for the UK’s technology and digital start-ups. Said to be the largest technology hub in the world after San Francisco and New York, Tech City, or Silicon Roundabout as it’s commonly referred, was originally an initiative led by government in 2010 to put Britain’s tech start-ups on the map. However the Tech City of today is evidence of just how far the area’s tech community has evolved.
In 2008 there was said to be only 15 tech start-ups in the area but Tech City is now home to an exhaustive list of over a thousand emerging and established technology businesses including Songkick, Mixcloud, Huddle, Transferwise, Duedil, MarketInvoice, Mind Candy, and even Candy Crush creators King. Superfast broadband complaints aside (admittedly a critical issue for a tech hub), the area’s appeal seems to show no signs of diminishing. And this appeal extends to other industries outside of tech too such as food and drink – take Brick Lane start-ups The Cereal Café and Lady Dinah's Cat Emporium for instance.
|Number of new start-ups (2014):||6,960||– see how this compares|
As well as an impressive resident portfolio, Tech City’s location makes it ideal for business travel. At its locus Tech City is well served by a number of London buses, London underground stations including Shoreditch High Street, Highbury and Islington and Old Street, as well as London Overground stations. Thameslink services run thorough Old Street, and Hackney station is served by the London underground with routes to North and East London.
Despite the popularity of Tech City, many have argued that its success is nothing more than media hype. In an interview with Startups.co.uk, Stefan Siegel, founder of Not Just A Label, claimed that Tech City was't working and said businesses were being priced out of the area: “It's hard for us to hire developers that don't live in London as they can't afford [to move here] and most of our designers can't afford to be in East London anymore. We had a couple of designers who couldn't pay their lease anymore because Google moved in here.”
A recent report from UHY Hacker Young echoed these findings and claimed that Tech City “had become a victim of its own success”
|Number of new start-ups per sq km:||210||– see how this compares|
That being said, there are a range of new co-working offices and flexible workspaces cropping up in the area on a regular basis to provide a solution to rental problems with more affordable office premises. Siegel's mention, for instance, is in relation to the Google Campus – the tech giant's Shoreditch co-working space which now has over 10,000 members and runs over 850 events a year. Google is joined by several other trendy and hip workspaces including Central Working, Tech Hub Shoreditch, Shoreditch Works and The Trampery, while a new office block is also under development next to Old Street Roundabout; the White Collar Factory. For more details on commercial premises, Hackney Council lists its available office stock here.
Talent in Tech City
|55.95%: Working age population with NVQ Level 4 and above (2015)
£637.10: Average full-time weekly earnings (2015)
Given its esteemed reputation you would imagine that tech specialists flock to the area so it's not surprising that Tech City boasts a skilled workforce with 55.95% of the local population possessing qualifications NVQ Level 4 and above.
However these skilled workers come at a cost – average weekly salaries are higher than than the London average (£621.10) at £637 and you'll need to bear this in mind particularly if you're looking to employ web developers, coders and the like as you'll have to compete against high demand.
There are initiatives in place that can help you tap into talent in Tech City though through apprentice schemes such as BEST Islington which has a track record of fulfilling apprenticeships in the area; over 200 to date. It's also worth noting the WOW Agency, part of the faculty of life sciences and computing at London Met University, which places its top students in digital, multimedia and IT into projects for local start-ups and businesses.
Business support in Tech City
There's no shortage of accelerators and incubators in Tech City. Some of the most well known include aptly-named Accelerator in Shoreditch which offers business incubation for early stage, start-up and pre-start-up, and Hoxton-based Launch22 which provides workspace alongside mentoring and finance. Sector-specific accelerators are becoming more common in the area too – property entrepreneurs for instance can access proptech accelerator Pi Labs which launched in Shoreditch co-working space Second Home last year.
|Survival rates (2009-2014):||41.75%|
One of the highlights of starting a business in Tech City is the sheer number of networking and social events that take place on regular basis. Event organisers 3Beards are well known for their series of networking events which includes Silicon Drinkabout, Chew the Fat and Digital Sizzle which all look to connect start-ups and encourage collaboration. Tech City newcomers can also go on a guided tour of the area through Tech City Tours which takes you on a trip of places to work, network, socialise and so on.
Rather ironically, when it comes to infrastructure, Tech City has been known to have broadband connections that don't cater to the needs of businesses in the area. Although most of Tech City is supplied by 4G internet, faster speeds and fibre glass broadband is difficult to come across – Siegel has said his business was denied fibre glass broadband connectivity because the council claimed it was “too expensive” to install. However these issues could soon become a thing of the past following Virgin Media's recent announcement that it's going “transform” internet in the area by bringing faster, high speed internet to Tech City under the SuperConnected Cities initiative.
Quality of life in Tech City
|23.6mbps:Average broadband speed (2014)
£706,933:Average house prices (Apr 2016)
Average house prices for Hackney and Islington are quite steep at £706,933, almost double that of house prices of South London boroughs such as Croydon and Sutton, which echoes Siegel's point of entrepreneurs being priced out of the area.
In terms of population, crime levels are quite high for Tech City with over 51,562 crimes committed in the area in 2015. The most common offences in Tech City are violence against a person and domestic crimes, on a positive note commercial burglaries are very low in the area which is surprising given the number of highly-equipped technology businesses.
Shoreditch and Hoxton areas are the focal point of social activity within Tech City with their range of bars, clubs, markets and restaurants. Brick Lane Market, Hoxton Street Market, and Broadway Market are just a few of the local favourites to visit while the Queen of Hoxton and XOYO offer a nightclub alternative when you want to unwind from entrepreneurial pursuits. It's impossible to discuss Shoreditch without mentioning its other niche venues such as jazz club Vortex, open air cinema The Screen and The Green, student-ran restaurant Open Kitchen and it's range of cool, hipster cafes such as Loveshake; an alcoholic milkshake cafe. Dinerama, Shoreditch's pop-up street food mecca, is another must-visit.