In Shakespearian times a start-up was a person who had risen to prosperity and power: "That young start-up hath all the glory of my overthrow" (Don Jon, Much Ado About Nothing, 1.3). In the 1970s, it re-surfaced as a business-term, and during the ‘dot-com bubble’ of 1997-2000, it caught on in the mainstream. In one sense, today it does still signify the achievement of prosperity when founders bring new businesses and ideas to life, but now start-ups also aim to provide creative and innovative products to advance society and culture.
Since the creation of the UK’s Silicon Valley equivalent around the Old Street Roundabout in EC1, often referred to as Silicon Roundabout, the huge growth of tech companies surrounding the area means that start-ups and tech companies are now inherently interlinked. Julian Carter, co-founder of EC1 Capital, the web and mobile technology investment fund that supports founders, describes how a start-up is made up of "founders who are aligned in creating a service or product to investigate and test a market hypothesis". Profitable companies tend to have a repeatable and scalable business model, managing the risk/reward potential; Carter believes this is a "high risk proposition because everything is new and nothing is proven". However, as start-ups tend to be more scalable than established companies because of their greater potential for rapid growth with smaller investment, successful start-ups are those that are growing as they tend to decline in risk as they mature and become more established.
Silicon Roundabout began to develop around fifteen years ago when start-ups were able to accumulate organically due to cheap rent prices. When the recession hit, the start-up world thrived, helped along by the declining set-up costs and the release of seed capital from angels thanks to government backed tax breaks. Initiatives such as the Seed Enterprise Investment Scheme (SEIS) which provides 50% income tax relief for UK taxpayers who invest in start-ups for the first £100,000 seed investment, and the Enterprise Investment Scheme (EIS) which offers 30% income tax relief for private investors. Now Silicon Roundabout is the third largest tech cluster in the world (and the largest outside the USA), it also will be central to European innovation. EC1’s Mind Candy, which created the colorful social kids game, Moshi Monsters, is currently celebrating 10 years of business. Its first project, Perplex City, was not commercially successful, but its founder Michael Acton-Smith persuaded investors to support the business, and after inventing Moshi Monsters, his start-up developed into a multi-product business, creating products and apps, with wide investment in new brands.
Young founders create the majority of start-ups, partly thanks to a tough jobs market in times of recession, and their natural prowess with digital technology. Certainly within London’s tech hub, it’s first-time entrepreneurs in their twenties that are causing a stir. Amelia Humfress, 24-year-old founder of Steer, a course that teaches coding. She worked on the marketing team at Jimmy Choo before deciding to start-up a coding school, spotting a gap in the market for in-depth courses that offered to teach fundamentals quickly. In another example, Bar Segal, Daniel Kaplansky and Zifeng Wei, are the 24-year-old founders of ‘Eatro’, a site that allow amateur home-cooks to sell their recipes from home. They were inspired to start their company out of frustration at tasteless takeaways while they were students. A new culture is now in motion, spurred on by young pioneers. We have advanced a long way since 1942, when Joseph Schumpeter described ‘creative destruction’ a process ‘where larger firms with ‘routinised’ regimes had limited innovative potential as they were reluctant to depart from what was ‘safe’. In this environment, it was individual inventors and creative thinkers who took radical revolutionary steps to invent the most groundbreaking technologies. Looking back at Schumpeter’s ideas about creativity, it becomes clear that the free-coffee-and-snacks and bring-your-dog-along trends within today’s start-up culture are outward indicators of a deeper development; promoting wellbeing to encourage efficiency is the foundation underpinning the start-up world, revealing a fresh set of business values that rely upon creative freedom and individuality.
Start-ups thrive in localized, geographical clusters where creative talent and information can be pooled, and where this innovation can be cultivated. EC1 offers a unique backdrop for creative innovation and a stark contrast to the air-conditioned newness of Silicon Valley. The area has a legacy of being a stylish social hub, the perfect location to attract young creatives, housing some of London’s best bars and eateries alongside trendy co-working and accelerator spaces. The creative community of EC1 plays a vital part in supporting and collaborating with many start-ups, and the two industries are closely interconnected. For example, EC1 located start-up, YPlan, launched its mobile app for spontaneous booking of events in London in 2012, works with an array of arts organisations in the area, such as the Royal Court Theatre, to secure the best deals for customers. The Barbican has become closely collaborative with many EC1 start-ups, bringing together old and new by launching the Fish Island Labs which provide mentoring for upcoming artists, adopting the incubation model used in the technology world, and hosting ‘Hack the Barbican,’ an open invite to the community for a festival of art and technology. In EC1, the social dynamics are unique, and creative ideas can be shared to benefit everyone.
The ideology behind start-ups is one that has developed throughout their existence over the last fifteen years, and continues to do so with original developments and ideas quickly accumulating within expanding start-up hubs. Silicon Roundabout is worlds apart from Silicon Valley, where a culture of collaboration and social development we see in EC1 seems to be overshadowed by its notoriety for lavish parties, personal privileges and general isolation from the ‘real world’. The fascinating thing about EC1’s success is that the area’s rich history and vibrant culture is helping Londoners forge a bright new technological future.