Digital offshoots and the Scottish startup ecosystem
Sometimes all it takes is a seed for an entire ecosystem to flourish. In this case, Skyscanner is a hugely successful company in its own right, but by giving people the chance to learn and gain experience in a Web-based, entrepreneurial environment this could benefit the wider economy in the longer term.
Eilidh Donaldson joined Skyscanner in March 2007 at a time when the company had 15 employees. Beginning in a data management role, Eilidh progressed through different positions before ending up doing a sort of hybrid project management/product design role. She left in February this year, citing the company’s period of rapid growth as one of the reasons for leaving. She said: “The 12 hour days took their toll, I was burnt out”.
Now, Eilidh has launched her own startup, Tweetsport, which she calls a “360 degree real time sports news service, available online and as an app, which takes users to the heart of the action by mixing articles, videos, pictures and Tweets.”
The iOS app was released last week, and using verified Twitter accounts it offers access to instant reactions of sports people and leading pundits in one stream. And what role did Skyscanner play in Eilidh’s decision to launch her own startup?
“At Skyscanner, I had experience in all areas of the business. Now, every day I use something from my time at the company which helps me save time or avoid a mistake. My biggest lesson was to keep it simple and get the job done.”
But the direction that Skyscanner went was also instrumental in Eilidh’s decision to go it alone with Tweetsports. She said:
“I loved it when Skyscanner was a startup in the early days. Every company has its growing pains and the rapid expansion it has gone through has not been without its problems. I’m more a small business, ‘everyone pitches in and gets their hands dirty’ kind of gal.”
Then there’s David Hilditch, who left Skyscanner in January this year to focus on his own startup. He’s now Director of Matiogi Ltd, a ‘career zen’ tool that aims to help people succeed in their careers through giving free personality tests and in-depth explanations of what companies are looking for with specific interview questions. The personality and aptitude tests are also available for use by companies in their recruitment or coaching tasks. It makes money mostly from adverts and advanced coaching materials.
David joined Skyscanner in February 2006 as a database developer, but eventually he became ‘Head of Search Technology’. He left after five years at the company. He said:
“I loved the entrepreneurial spirit at Skyscanner and wanted to create that in my own business. The biggest thing I learned that has helped me with Matiogi is to fail as fast as you can. If you’re doing something and it’s turning out not to be as great as you thought it might be, learn to fail as fast as you can so you can get onto working on what really will make a difference.”
Whilst it is still early doors, there is some indications that by having successful Web companies, a new generation of entrepreneurs could be born. What I’m talking about is the snowball effect that the success of a handful of companies could create within the Scottish startup ecosystem.
But what happens if that snowball strays south of the border? Read on.
London: A brain drain?
Meet Sam Collins
Sam Collins is from Ireland, but moved to Edinburgh to study engineering at Edinburgh University in 2004. He founded a startup called Bloop not long after graduating in 2009, though he had worked for several startups throughout his degree.
Sam also co-founded TechMeetup back in 2008, an initiative to get people in the local tech scene to network and see what everyone else is working on, be it Web apps, software, mobile apps, hardware or games. It was launched initially for Edinburgh, but it has now branched out to cover Glasgow and Aberdeen too.
It was with his initial endeavors at TechMeetup that eventually led to Sam founding Bloop, a tool to help networking at events. Sam said:
“At the time, smartphones were getting popular and social networking profiles were already mainstream. So it made sense to combine the two to solve a business problem: meeting contacts in real life. Bloop worked well, but would never be profitable. We raised a small angel round and pivoted like a bunch of determined idiots to find scalable revenue. Having spent months getting rejected from our target customers, we eventually learned what their real problems are and how the solution needed to look in order for them to pay for it. We stopped supporting Bloop and started on Eventasaurus.”
Sam moved to London in October 2010, and in March this year Eventasaurus was launched. Eventasaurus is a dashboard for event managers which connects Facebook, LinkedIn, Eventbrite, Plancast and others. It provides a single point of control to existing tools. Here’s a video describing a little more about Eventasaurus:
But why did Sam move to London?
“Scotland has no early adopter customer base. I’ve tried selling all sorts of tech around Scotland to be met by people who think LinkedIn is a type of clothes peg. The type of products I make need early adopters and it helps if you live amongst them. London is better than Scotland for that, but still not as good as the US, so that’s my next stop.”
So, it’s this lack of ‘early adopter’ customers that Sam says forces many local companies into adopting a service/agency model. He says: “It seems like your products aren’t getting traction, but in fact, it’s just a skewed customer base.” Sam also highlighted the lack of investment angels for tech startups, a common theme with many of the people I talked to from the Scottish startup scene.
Without an early adopter customer base, how can Scotland produce innovative companies? “You can’t change the customer mentality, just accept it”, says Sam. “The government could provide cheaper travel for fledgling startups to get to London, maybe call it the entrepreneurs’ train ticket. Maybe hold a competition for the top 20 startups and give them half-price travel for a year. This will also help on the receiving end, you’ll get meetings easier in London with this behind you.”
That’s an interesting proposition, in that it doesn’t attempt to change something that’s inherently difficult to change. Instead, it embraces and acknowledges London as a major metropolis and hub for digital business. Why fight against that?
The lack of investment angels is another issue altogether though. How can Scotland start attracting early stage investment? Given that Scotland doesn’t really have much of a track record in terms of producing consumer Web companies, the country isn’t on investors’ hit list. Sam suggested that Scotland should start an accelerator project that’s open to applicants from all over the world, maybe something like Springboard. He said:
“The various angel syndicates and VC firms in Scotland aren’t structured for small investments, but they could fund a new vehicle which funds startups based on team and traction, with fast, small investments to get them started. £20,000 x 100. Don’t fund service businesses, fund product businesses. Expect to lose it all first time around. In doing this, you are not only taking a punt at making a return, you are fast-tracking the development of entrepreneurs, funding the development of product managers, developers and sales guys to understand how to run successful modern web companies. In time, this will come back to benefit the next generation of companies. Scotland needs to invest in itself before it’ll be a position to make money back on its investments. This isn’t a 5 year thing, it’s a 20 year thing.”
As a slight aside, in response to a venture capitalist who, following a visit to an event in Scotland, commented that there was no innovation happening in the local startup scene, Sam posted this blog post which is well worth a read: A letter to a depressed VC.
But it’s not all bad. Sam pinpointed some positive aspects to the Scottish startup scene, for example it’s a very tight-knit community and the incredible support network amongst developers and startups is particularly notable. And he also pointed to the tech talent Scotland has, which he believes is higher than average thanks to the work going on at Edinburgh University, and with companies such as Skyscanner in the area.
Another positive Sam gleaned from operating in Scotland was that you can pretty much do your private beta completely publicly. “Whatever you do in Scotland never leaks out”, says Sam. “And weirdly, this can be an advantage. Bigger companies should be testing products there.”
Meet Abdel Saleh
The Next Web covered a great little startup called Said.fm back in February. It was a platform for discovering “spoken-word podcasts that tell great stories”, as we described it at the time.
Said.fm was co-founded by Abdel Saleh, an Edinburgh resident and graduate from the city’s Napier University. I touched base with Abdel to check on the company’s progress, and it transpires that the company has pivoted – and moved to London too. Saleh said:
“Edinburgh is a small ecosystem for both talent and general opportunities and for what we needed to do with Said.fm we felt that we have outgrown the city. Also, after listening to our users, we’re pivoting the product to SuperOwl, and it’s now a predominantly mobile experience.”
Abdel Saleh was born in Derby, moved to the UAE with his parents and moved back to the UK to study Software Engineering at Napier University in Edinburgh in 1998. Abdel was quick to highlight the role TechMeetup played in bringing a startup culture into Edinburgh.
“Before that, if you were into, say, extreme programming you would go to one event. And if you were into Ruby you’d go to a meetup specifically for that. There wasn’t one event that everybody would go to.”
At the meetups, they would often get people along from places such as Edinburgh University to talk about areas of research and other projects they were working on. Edinburgh University also had the Stanford Link, a £6 million research, training and commercialization project funded by Scottish Enterprise which was designed to help build relationships with Standford University in California. This led to a series of startup business lectures in Edinburgh University, which brought over people such as Reddit founder Alexis Ohanian.
The investment problems encountered by Sam were reiterated by Abdel too, saying: “When we talked to investors in Edinburgh, they wouldn’t really get what we were doing”. And Aisha Yusaf, the company’s other co-founder, went to a lot of the non-tech meetups in Scotland, ones that centered on things like funding, investment, business and marketing. Aisha said:
“In Edinburgh there was a very big drive for government funding. There was one programme where if you managed to get some angel investment, the government would match that figure, this was through Scottish Enterprise. They actually seemed very active in terms of trying to help businesses grow.”
Helping businesses grow is one thing, but the same issue keeps rearing its head. Aisha pointed to the lack of actual seed funding at the bottom to help startups get their foot on the ladder. On top of this, Aisha noted that many of the potential investment avenues were for companies that had some sort of patentable technology, which isn’t too useful for most Web startups. “That may have worked really well from an Edinburgh University research/science department perspective, where there may have been more patentable technology”, says Aisha. “Investors would often be at the meetups trying to meet tech startups, so they were interested – but the seed funding just never really happened.”
