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London, along with many other small communities across the globe are now fast competing with the largest and most influential start-up ecosystem in the world - Silicon Valley. Over the last 30+ years Silicon Valley has produced the biggest tech Goliaths we know today, but the rest of the world is catching up. Figures published in the Tech City Third Anniversary Report show the number of technology companies in London increased 76% from 2009 to 2012. In the same period, the tech sector in the capital grew by nearly 17% and was responsible for 27% of London's job growth. Entrepreneurs have also been flourishing in Berlin, Tel Aviv and Sao Paulo. Whilst it is clear the Valley isn't the only entrepreneurial destination, do entrepreneurs still need to be there in order to guarantee success?
YES
Giles Palmer, CEO of BrandwatchIf you are running a B2B business, then your market in the US is going to be about 20 times bigger than that in the UK. B2B companies need to position their sales and marketing teams accordingly i.e. near to where their customers are. For two companies operating in these markets with identical products, the macro economics of the US are arguably more compelling. It might be more expensive there but it is certainly not 20 times more so and once that larger market size starts to take effect the US business will out grow, out market and out develop its UK counterpart. The most likely scenario for the UK company is that it gets bought as the long-term independent outlook isn't good.
For B2C companies, it's a different picture. The internet has become the primary sales and marketing channel, so in that respect it doesn't matter where the company is based. One advantage of not being in the US, and in particular Silicon Valley, is that great developers are paid a lot of money in San Francisco so seed funding doesn't go far. But, and these factors are considerable, access to finance is much easier in the US, there is a very receptive environment to great ideas and start-ups, and the number and network of people doing similar things is huge which adds both energy and serendipity.
On balance, my view is that being in Silicon Valley helps to be successful and is very important in order to become extremely successful.
NO
Will Moore, Communications Director, Clarity PRSilicon Valley was once the only place in the world technology startups could launch, however now Europe is as good a place to start as the valley. London is seeing huge investment, both in the supporting infrastructure from UKTI as well as in startups themselves. VC's such as Forward Partners, Balderton Capital and Index Ventures have all picked Europe as their home.
One particular success story to illustrate Europe's success would be Nutmeg (www.nutmeg.com) a company that launched in SF but actively moved to London to scale. They have just closed a $35 million round.
