Coding bootcamps, investment initiatives and national infrastructure projects are just a few reasons to be excited if you’re a tech startup in Birmingham, which boasts a digital workforce as diverse as its thriving local economy.
However, as delegates at Tech Nation on Tour heard, for every 5G trial and HS2 promise there’s a pressing business challenge waiting in the wings.
The insights came from a panel of local experts who were invited to the stunning Fazeley Studios creative space to discuss just what is revving up the ‘Midlands Engine’ when it comes to digital tech.
The event also saw the launch of Rising Stars, the UK’s newest national pitching competition for innovative, early-stage tech startups. Free to enter, you could win a prize package that includes introductions to investors, bootcamp training and a press campaign – so apply today.
Mission of ambition
Birmingham has long contested the title of one of England’s so-called ‘second cities’, and according to the Centre of Entrepreneurs, 12,108 businesses were started there in 2017 – more than any local authority outside of London. It’s perhaps unsurprising, then, that the city has a lower digital density than average.
So, does this place Birmingham’s startup ecosystem under pressure to perform? When asked if the city’s entrepreneurs lack ambition, one panelist disagreed and said to talk to members of networking group Silicon Canal for evidence of the contrary. At the same time, they noted how the city’s brand is “growing and changing rapidly – especially compared to two years ago”.
How the city’s startups promote themselves and their offerings was a hot topic, especially when it comes to accessing finance. One company, who had recently secured investment and was approached by more than 25 private equity firms, encouraged entrepreneurs to “believe in and demonstrate their growth story”.
Chiming in, another panelist said that today’s “global marketing and PR” opportunities, in addition to the variety of funding sources available today – from crowdfunding to private equity – means that there is “no disadvantage” to being based in Birmingham.
Julia Hawkins, Partner at Local Globe, said:
At early stage it’s important to have angel investors. When we spend time in Cambridge and Oxford hubs, angel networks are prominent in those places. They’re great sources of feeders for us as investors, so it would be good to locate them in Birmingham.
Tong Gu, Investment Lead at ADV, said:
Any investment has to be right for the entrepreneur – they have to find the right investor who agrees to their vision. The entrepreneur could be with the company for 10 years, which we like to see, or they could be with it for two and then sell it, which is also fine.
The diversity advantage
Birmingham boasts one of the most diverse digital tech workforces, with 26% of workers having a BAME (British, Black, Asian, and minority ethnic) background, compared to the UK tech workforce average of 15%.
One panelist said that they were proud of their company’s diverse make-up (pegged at 60%), which features a female leadership team. Notably, however, this isn’t reflected in the company’s software engineering team which they conceded “falls short of the average”.
The panelist said that this was partly a pipeline issue – the company received just one female application for an engineering role in 2017. However, they also admitted that more could do more to ensure that the company’s workforce culture is suited to everyone, giving the example of having more family-oriented benefits rather than the usual ‘tech bro’ beer-in-fridge, pool-table ones.
Julia Hawkins said:
Our leadership team is 50:50 female. It’s an advantage to have a diverse team as it leads to different points of view and values shared. When we’re bringing new people into the team, one of the interviews we do involves asking questions relating to situations and values. It’s something we think about a lot. We know that female-led companies tend to outperform and so we also want to back more female founders. We have seen an initiative that allows female founders to get in front of female decision makers at VC level. It’s a quarterly event but more needs to be done.
Will to skill
The panel agreed that recruiting people with the right talent and skills – a common problem facing tech clusters in the UK – is a tough barrier to growth for startups in the region.
Delegates in the room were encouraged by one panelist, whose company hired its lead engineer in Edinburgh, to look beyond the West Midlands in search of skilled workers.
When it comes to scaling globally, one scaleup on the panel, that has just set out a 10-year growth plan, said that they found it useful to listen to horror stories and pick up tips from companies who had faced similar difficulties.
They also placed importance on picking the right time to scale, which they said should come after companies have got everything out of the ‘massive’ UK market first. Picking a country most similar to your home country to expand to first was also recommended.
Finally, we heard how Birmingham’s five universities can provide important resources for their skilled workers and research capabilities.
Ross Spencer, Head of Marketing at Click Travel, said:
Recruitment is a major challenge to scaling. In Birmingham we don’t have the same pool as London. At Click Travel we solved that with flexible working – we have workers in Bulgaria, Edinburgh and other places. We embrace UK talent but don’t restrict our outreach.
I’m a big fan of our universities and went to Aston. It is important to engage with them. We look toward recruiting from local universities in addition to national – three of our last hires have been from Birmingham-based ones. They present an opportunity to get free help and thinking into your organisation, so I would definitely encourage you to engage with them.
Melissa Snover, Chief Magician and CEO at Magic Candy Factory, said:
We based ourselves in Birmingham for the skilled workers here – there’s more 3D printing degrees here than in Europe. We have an amazing academic community in The Midlands and Birmingham specifically. We engage with universities and give graduates or undergraduates a chance to tackle problems; we also have internship programmes for students and constantly look at utilising the different capabilities they have in their labs. We’ve been able to thrive and grow at speed but would never have been able to do that without their support.