Commercial Street, once home to marginal retail stores, is now populated with designer sneakers shops. My old local East End boozer is now a fancy restaurant where you are more likely to order a martini than a pint. Girls on bicycles with wicker baskets and men on skateboards with beards and tweed jackets roll around the streets. A café has just opened in the nearby Indian restaurant strip of Brick Lane that serves nothing except breakfast cereals from around the world.
Networking is crucial in the start-up industry and the sticky-floored bars, poky art galleries and ping-pong halls are the playgrounds for the legions of 20- and 30-something entrepreneurs to let off steam when they are not hunkered down writing code or pitching to venture capitalists.
They include the so-called “hackers, hipsters and hustlers” – respectively, IT geeks who can code, the designers who know what people want and the marketers who can hustle, hustle, hustle and raise the finance from angel investors and venture capitalists. Together, these three breeds make up the ingredients necessary for a digital start-up.
I meet two of the Australians who fit into the hustler and hipster categories at Shoreditch House, a lavish member’s-only club that is a reflection of the money now pouring into this part of town.
Melbourne-raised Bryce Keane seems to know all the Australians in the London start-up scene and tells me how he fell in with a web designer and a coder over Sambuca and formed “the 3beards” – a promotions company that organises events such as the Silicon Drinkabout, a Friday happy-hour for start-ups.
Keane, who also works for agency Albion Drive, introduces his colleague, Nick Darken, as the “Don Draper” of the European start-up scene. Darken is more modest than the fictional Draper from cult TV series Mad Men but his work is known world-wide: he created Skype’s distinctive ringtone as well as the video-calling software’s branding.
“That’s my claim to fame. I’m the guy that made Skype blue,” jokes Darken, who left Melbourne for London in the 1990s.
Darken, 43, who has also worked on major campaigns for eBay and mobile phone giant 02, says technology allowing people to make phone calls over the web had been around for several decades. But it had never taken off. Skype’s success was being the first to find a way to make talking to your computer seem natural. “They [Skype] were savvy enough to invest in the brand from the very early stage, he says. “It felt weird to be shouting at your laptop. We wanted to bring that speech bubble to life and the sound became synonymous with that.”
Deeper talent pool
In the early 20th century it was artists and writers who moved to London to try their luck. In the 1960s, it was intellectuals. The path taken by Nick Darken, Bryce Keane, James Clark, Julia Fowler and Geoff Watts – little known in Australia but all making waves in Britain – is well trodden. What makes them different from earlier Australians who’ve sought success in the Mother Country is that they’re relocating in the internet age, when national boundaries and geography should be less significant and the tyranny of distance less troublesome. It’s easy to understand why the likes of painters such as Arthur Streeton or George Lambert were drawn to London’s bustle, salons and art galleries in the early 20th century. But why are web programmers making the same move at the start of the 21st?
Pip Jamieson, a former MTV executive, is well known in Australia where she co-founded The Loop, a kind of LinkedIn for creatives used to help people working in fashion, media or the arts find new jobs or staff. But she swapped Sydney for a houseboat on London’s Regent Canal last year and has launched a new company called The Dots, which, she says, has grown to the same size as her old firm in just five months. “I am four and a half months old here and I’m making more money than after two years in Australia. The market here is 10 times the size we could get there,” she says.
Scale appears to be one of London’s key attractions. But having access to a wider talent pool, which can range from language skills as well as old-fashioned coding, is also crucial.
“London is this great Goldilocks zone of a rich heritage of console development, a financial sector you can pull good server engineers [from],” says Simon Hade, the Australian co-founder of Space Ape Games.
“The talent pool is great. It is really easy to scale up to a few hundred people without sacrificing quality,” he says.
I’ve come to visit Hade in the company’s blindingly orange foyer, which is dominated by a logo of a monkey wearing a space helmet. His office is not in east London but in the city’s more established creative hub of Soho.
Hade is one of three founders of the company, which makes smartphone and tablet games. It is best known for Samurai Siege, which has been played by 11 million people, and is about to launch a new game called Rival Kingdoms. The company has raised US$11 million in financing and earns about US$20 million in revenue a year.
Brisbane-raised Hade was a lawyer for 10 years, moving to London to work for Skype and games maker Playfish before he teamed up with two colleagues to launch their venture two-and-a-half years ago. His mother was a computer programmer in the 1960s and his family had a home computer earlier than most. But he wasn’t allowed to play games unless he wrote the programs himself. Perhaps it was Hade’s mum who US President Barack Obama had in mind when he last year urged America’s youth to “don’t just play on your phone, program it”.
“I didn’t play a game for 10 years,” says Hade. “I missed a whole generation but I’m a big gamer now. I’m in this demographic that is very valuable. We call them lapsed hard-core gamers, 25-40-year-old males who used to play on PCs or consoles but now have job and kids and want to play in two-three-minute bursts [on a smartphone or tablet].”
Space Ape Games’ first product was an app that allowed players to simulate betting on sport. Hade says it was a flop and burnt through half its venture capital funding at the time. They decided to take a proven formula and played it safe with Samurai Siege – a game built for smartphones and tablets for those who want to build villages and train armies of Samurai and Ninja warriors while on the go. Its success pays their company’s bills. The next product will create a stable of commercially savvy games, which he hopes will enable them to take more risks after that.
“There is a lot of great creativity and exciting stuff coming out of Australia but I just don’t know how I could make a 200-person game studio there. The talent pool isn’t big enough,” Hade says.
Superior tax breaks
Other Australians working in London point to the more generous tax incentives in Britain, designed to encourage start-ups not to abandon the country for Silicon Valley.
“The tax system here for entrepreneurs is fantastic,” says James Swanston, who is trying to revolutionise the transport industry through smartphone apps.
“There is a huge amount of tax relief. There is a challenge in Australia around the tax system for the entrepreneurial system. The tech guys are very expensive in Australia at the moment.”
Staff will get cheaper now that the Abbott government has changed tax rules to make it easier for start-ups to pay their employees with stock options. The Coalition has signalled further support for the sector and now faces calls to give investors in Australian start-ups more generous discounts against capital gains tax. Tax breaks are the most frequently mentioned policy when it comes to government support for tech in Britain. They are certainly cited more regularly than other features of Cameron’s Tech City – such as government-funded collaborative worksites and accelerator programs – and attract controversy as to whether the region has become a tech tax haven. Regardless of how critical tax breaks have truly been to Tech City, it’s clear that Australia still lacks the big-vision government policy plan that Cameron launched in Britain in 2010.
Swanston does not fit the usual mould of a start-up entrepreneur. He is an officer in the British Army and former Australian Army captain who served in East Timor, Malaysia and Iraq, where he worked in high-level intelligence roles. He says it was this work that taught him about information gathering. His company, Voyage Control, uses software to help businesses track their freight deliveries and manage vehicles at transport hubs.
“You have trucks driving around empty a lot of the time, it is not an efficient market. You didn’t have any understanding of what the hell is going on. Cities are getting more crowded as well and air pollution is going up,” he says.
His idea was to implement a scheduling system for trucks at big transport hubs such as a port or exhibition centre, not unlike an air traffic control system for aircraft. This means at a big show, where 1000 trucks might turn up, introducing a self-service facility to book a vehicle in, so the drivers do not have to queue. It also eliminates the need for large holding areas.
He says 18,000 businesses use the platform and he is rolling out an app to be used at inner-city construction sites which use spreadsheets to manage traffic flow.
Like many other Australians succeeding in London’s tech hub, he credits Britain’s education system and the quality of its universities as providing a source of talented staff.
Swanston is on the board of St Paul’s Way Trust School in London, which is fronted by physicist and television presenter Professor Brian Cox to help encourage science and physics uptake in young students from disadvantaged backgrounds. He has taken former governor-general Quentin Bryce and other Australian officials to the school.
Pull of home
Despite London’s advantages and in contrast to the feelings of earlier Australian émigrés, none of the Australians finding success in Britain I speak to have given up on their homeland. The country is not without its natural advantages.
“The fundamentals are there,” says Watts, looking away from his laptop with its pie charts of jeans colours. “Australia has ridiculously well-funded pension funds. There is so much capital there and they probably deploy more in Silicon Valley. Now that there have been some successful exits, there is the beginning of a start-up scene in Australia.”
They take heart that Australia has three technology start-ups – Carsales.com, REA Group and SEEK – worth more than $1 billion listed on the Australian Securities Exchange. Freelancer – an online marketplace for graphic designers and programmers – listed with a lot of fanfare in Australia in 2013, while email marketing firm Campaign Monitor has shot up from a single office in Sydney’s beachside area of Sutherland Shire to now have 200 staff, and is expanding in San Francisco. Still, Australia’s biggest tech success story, $3.5 billion software firm Atlassian, last year moved its headquarters from Sydney to London. It’s expected to list in New York, rather than in Sydney.
It’s difficult to gauge the true success of David Cameron’s Tech City vision. The Australians who moved to London were perhaps just as drawn to the city’s pulsing energy and crowds of creatives, its sticky-floored pubs where people can bounce business ideas around like billiard balls while sinking a few pints.
But attracting the volume of talent lured to a global hub such as London, where part of the magic is created by having networks of like-minded people feeding off the city’s energy, is a challenge.
“When you are around people who have experienced some amount of success and ambition, it becomes infectious,” says another London-based Australian, George Berkowski, who has published a book, How to Create a Billion Dollar App, and hopes to do just that with a camera app called IceCream.
But even those who’ve succeeded in London have a fondness and certain longing to see their home find its own silicon success.
“I doubt we could have built this business in Australia. I would like to think that in five years’ time you could,” Watts says.
“There are definitely a few Aussies here and on the West Coast that wouldn’t mind returning home.”
Michael Smith spent two weeks in London courtesy of UK Trade and Investment, and British Airways.
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