What does the UK have to offer founders of international digital tech companies looking to expand? Quite a lot, as it happens – the UK a hotbed of tech talent, employing 2.9m people (or 9% of the national workforce) in the sector. It is home to 77 ‘unicorn’ companies valued over $1bn with 95 ‘futurecorns’ looking to join them.
So, moving is a no-brainer – and any startup or scaleup that does so will be in good company. There’s still a lot for companies to consider before opening an office here. Our virtual Unlocking Global Tech event, held in partnership with Department for International Trade (DIT), saw founders and stakeholders discuss what the UK offers and what founders should be aware of – from the country’s cultural quirks to its regional strengths. Here are some tip tops that emerged from the discussion.
London is a global centre of tech excellence and a great source of VC. As Pru Ashby, Head of Key Accounts at investment agency London & Partners, said: “In London, you can have breakfast with your lawyer, lunch with the CTO of a big bank and then afternoon tea with a VC. After work, you can meet up with (and get some tips from) an entrepreneur who is six months ahead of you on your journey.”
However, the capital city won’t automatically be the best location for many digital tech companies looking to expand to the UK – partly due to its comparatively higher cost of living.
“You can get a high quality of talent for a lower cost of living outside of London,” said Alice Hu Wagner, MD of Strategy, Economics & Markets at British Business Bank. “For example, if you’re doing offshore renewable energy, which the UK is a great leader in, I would probably go to Glasgow rather than London.”
Liz Scott, Head of Entrepreneur Engagement at Tech Nation, offered further reasons as to why founders should check out what the rest of the UK has to offer. “We have fantastic cities across the UK that are culturally different, at different stages of maturity and have their own specialisms – from agritech to healthtech, retail and ecommerce,” she said. “Do a little bit of exploring to see what fits you as an individual, and what culture you want to explore for your startup or scaleup.”
One way to see what the UK’s various regions have to offer is to attend an online festival, which have grown in number and ambition since Covid-19 put the brakes on physical events.
An online event from a previous Leeds Digital Festival
“As the festivals are now online, you can dip in and out to see what’s happening in a particular city or region, and how it fits in with what you want to build in the UK,” said Liz.
Wherever founders choose, Alice encourages them to develop their networks and check out the financial assistance offered to digital tech companies in the UK. They include grants; tax credits (including EIS and SEIS); and angel networks. “The UK’s VC ecosystem is good, relative to the rest of Europe, and a lot of fund managers here have connections to fund managers over in the US,” she said.
Who to send?
A company needs to decide whether to send an existing employee from HQ or hire locally when opening an office in a new market. Pru has seen companies do both – sometimes at once. She recalled how Twitter chose the former option when it sent an employee from San Francisco to London to set up the company’s European HQ in 2010.
“We worked with Twitter on a professional and personal level by helping that person’s family get settled in London,” she said. “After that, we recommended that they hired locally to bring in connections, networks and an understanding of the market.”
Manchester-based marketing agency Social Chain made a similar move when it made the reverse trip, expanding to the US. The company sent employees from its UK office who understood the company to hire people with both cultural fit and experience, explained Managing Director Katy Leeson.
“Social Chain’s culture makes it special and a great place to work, and we couldn’t have done that without having people on the ground who understood that,” she said. “We had those people go to New York to open our office there, drive its culture and hire the right people.”
Finally, founders coming to the UK need to be aware of its cultural quirks. Liz highlighted the dreaded ‘death by maybe’, a phrase used to describe a tendency for UK people to hold back on what they are really thinking, at the detriment of the other person.
“Culturally, we are a polite people and not all so quick to say, ‘that doesn’t work for me’,” she said. “You might get a ‘maybe’ that’s actually a very long ‘no’, and it can take a lot of energy for a founder to deal with that – so you must sharpen your instinct.”
Pru agreed. “People from the US assume that everything is the same in the UK because they speak the same language, but it’s not,” she said. “The way they do business and build relationships is different – it’s very transactional in New York, whereas in the UK it’s more about getting to know people.”
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