Archives for the month of: March, 2013

According to this month’s Wired we are set to experience a significant boom in the London tech startup scene. The UK now has the largest percentage of GDP contribution attributable to internet related activity of any of the top 20 developed nations at 8.3 percent. London is the focus of this activity with a rapidly expanding startup eco-system and a large population of smart phone enabled citizens from all over the globe.

silicon roundaboutThe Government has helped to create a regulatory and financial environment that favours investment in startups, with initiatives such as SEIS, Startup Loans, Patent Box and Growth Vouchers.
The TechCity Investment Office, part of BIS, is right to sing the praises of what is happening in London. There is reason to believe that we are on the brink of a revolution. We are about to experience a shift in economic activity from the discredited banking sector into innovative and productive startups with the potential to place the UK at the centre of the new world economy.

If all this seems pie in the sky, then just look at the thriving early stage scene. Each day the capital hosts 2 or 3 startup events, many at Google Campus, acting as a magnet for entrepreneurs. Over 20,000 passed through Campus during it’s first year of operation. The healthy networking scene is an indication that the grass-roots is extremely active. This combined with the underlying strength of the internet sector will ensure an increasing pipeline of startup successes in the future.
London has everything in it’s favour; the most culturally diverse population of any city in the world, strong software engineering and creative sectors and good universities producing a constant stream of potential entrepreneurs.

We need to build confidence in young people to grasp the ‘internet’ opportunity and choose to pursue entrepreneurialism as a route to future success. The Startup Loans scheme is a good stimulus for this. It provides for loans of up to £10K at interest rates of 6.2% with a repayment holiday. This level of funding is enough to set up a simple internet business or to create an MVP for a more complex platform. For follow-up funding the UK has been the first to adopt equity crowd-funding as a viable option. All this means that startup founders no longer need to rely exclusively on friends, family and fools.

In the words of Rohan Silva, senior policy advisor to the Prime Minister, the London startup scene is about to explode. It is incumbent on us all to make sure we maximise this opportunity to create a sustainable model for the future.

Dreamstake www.dreamstake.net is Europe’s fastest growing platform for early stage internet startups. Our objective is to help build robust new businesses by providing access to knowledge, resources and funding. We run weekly Dreamstake Academy workshops as well as larger networking events at Google Campus. We also provide Startup Loans and access to angel investment.

At first the terms bootstrapping and hyper-growth seem at odds with each other. However, they are two sides of the same coin. Bootstrapping is becoming the most popular way of getting to MVP and requires the same ingenuity as in the later high growth stages.

Launching a high growth potential internet startup, using lean techniques, requires the founder to outsource as much of the non-core activities as possible. It is important to tap into resources that can be scaled rapidly as soon as market fit has been established through rigorous testing of the MVP.

growth In other words it is all about matching resources to demand. The cloud has made this much more practical. For example, with Rackspace Startup Programme, even hosting can be obtained completely free for the first year. Startups can then subscribe to scaleable web-based services such as CRM, social media advertising and other applications.

Resourcing is also a big issue for early stage startups. Firstly, the founder must establish the gaps in their own capability. A non-technical founder may need a technical co-founder. Alternatively they may wish to look at flexible resourcing solutions such as elance or people per hour. Technical founders will need to find someone with marketing and business skills.

Then there is the question of where to work or meet. In the early days working from home can be an option. However, it soon becomes necessary to provide a team environment. This can rapidly become costly. However co-working can provide a flexible resource that can be quickly scaled as the startup gets traction. Organisations such as www.neardesk.com are providing an interesting approach to tracking down suitable work places.

To summarise, it is becoming more and more possible to launch and grow a startup with limited financial resources. Technology is disrupting the traditional ways of starting a business by providing the possibility to scale as you go.

Dreamstake is a platform for early stage high growth potential startups. The platform provides support and access to an investor database via a highly sophisticated screening process. We are constantly on the lookout for top-quartile startups to introduce to our advisory board and other investors on our network.