Today, London's Tech City, in the Old Street neighbourhood affectionately known as Silicon Roundabout, gains space for another dozen or so startups with the expansion of coworking host Techspace London to a total of 10,000 sq feet. Techspace, which has grown 300 percent since it was founded last year, already has 35 startups using its existing space.
Co-founders David Galsworthy and Alex Rabarts told me last week they originally set up the business to meet their own need for flexible accommodation in a startup-friendly warehouse environment and with a robust Internet connection.
Being able to rent each seat on a month-to-month basis gives these companies the flexibility they need at this stage of their development, said Rabarts:
"They're typically in a growth phase of their business; they don't know what their headcount's going to be in six to twelve months' time.
"They don't want to take on too much overhead or end up with an office that's too small for them. They can take as many or as few desks as they want at one months' notice."
Having the right ambience is important too — Techspace is eclectically furnished with leather sofas, Scandinavian office furniture and a ping-pong table, as well as the obligatory bare redbrick walls. Explained Rabarts:
"The key element is having a community of like-minded people that we wouldn't get in a traditional serviced office."
It's not only startups that make use of the space. One tenant is Alessio Broccardo, UK sales director for Italian thin client manufacturer Praim, who told me he values the proximity to London's financial district:
"It's a cost-effective way of having an office in central London, where most of my partners and customers are based."
Another tenant is StartupDirect, the agency responsible for distributing funds to entrepreneurs under the UK government's Start-up Loans Scheme. With over £2 million ($3.3m) already lent to more than 300 startups since the scheme launched in 2012, StartupDirect provides invaluable seed financing and mentoring to help founders prove their business concepts. It's another key ingredient of the tech hub mix.
The other element is networking, including social events such as the weekly Friday night Silicon Drinkabout, which Techspace took its turn to host last weekend. Tapping into this kind of ecosystem activity was one of the reasons StartupDirect chose to base itself in a coworking space, CEO James Pattison told me:
"Being based here has the advantage of being close to the startup community. It just makes sense for us to be based here — it just means we're more on the ground and in the heart of where they're operating."
But while the Silicon Roundabout area may have the biggest concentration of tech startups, it's not the only tech hub in the UK. StartupDirect is also lending to entrepreneurs in other parts of the country, said Pattison: "It's interesting to see what's happening elsewhere in other tech hubs."
Active hubs elsewhere in England include Birmingham, Bristol, Cambridge, Cardiff and Manchester. There's also the London suburb of Croydon, just down the road from where I'm based, which is currently making a pitch as London's other tech city.
The original Tech City has a unique pull, all the same. Real estate marketing network Plentific, still in stealth mode while it preps a launch later this year, moved to Techspace from a digital coworking space in Clapham, south London. Co-founder Cem Savas explained that it made sense to be closer to partners and take advantage of the networking and recruitment opportunities: "It's easier to hire talented individuals around here."
Techspace's Rabarts concurred with that sentiment:
"People come to the Old Street area not for cheap offices but because it's where the talent is. The best software engineers want to be here because of the companies that are here."
Rather than competing, though, the hubs in and around London are close enough to connect up, creating a regional ecosystem similar to that of Silicon Valley. There are already some moves in that direction, said Techspace co-founder David Galsworthy:
"A couple of organizations have already clocked onto that and are looking to build bridges ...
"Looking at Old Street as currently the epicenter of it all, I think that is right. But looking to empower the other clusters is a no-brainer."
With broadband and mobile connectivity making remote working a natural part of business life, it's almost a surprise to find that startups still prefer to congregate in hubs. But the importance of informal face-to-face contact and that feeling of belonging to a like-minded group can't be overlooked.
What's encouraging is that entrepreneurs no longer have to migrate to Silicon Valley to get that feeling of belonging. Hubs are sprouting up worldwide, and while there will doubtless still be many entrepreneurs who'll migrate to San Francisco to get funding or simply pick up valuable contacts and experience, the traffic is no longer only one-way. Entrepreneurial spirit is spreading — and more importantly, being nurtured — around the globe.
The effect can be seen in the results achieved by some of StartupDirect's protégés. As well as loans, the organization also educates the startups it comes into contact with about the opportunities for crowdfunding, angel investment and venture funding. Several of them have successfully used crowdfunding to raise sums in the hundreds of thousands, said Pattison, while one raised venture funding of €3 million ($4 million). His conclusion is encouraging for any British entrepreneur wanting to get a business off the ground:
"At the moment in the UK and London, it's one of the best times, not only to start a business, but to get funding."
Image by @philww