The Mancunian Candidate

Global tech advisory firm GP Bullhound stopped in Edinburgh last week on the latest leg of a whistle-stop tour to promote its Titans of Tech report. Looking at Europe as a whole, GP Bullhound noted that with more billion-dollar tech companies than ever before and a record twelve months of fundraising, Europe can rival the US and Asia as a hub for the best tech companies on the planet. 

Fast forward a week and Faang stocks in the US - Facebook, Apple, Amazon, Netflix and Google - had $1 trillion wiped off their market value (around half the value of the entire FTSE 100) from yearly highs, spreading a chill over stock markets worldwide and turning bull markets bearish overnight. The European ecosystem has yet to produce tech titans of Faang stature, although Sweden’s music streaming platform Spotify is showing signs of closing the gap with a valuation close to $30 billion. 

The Scottish tech reality is probably best put into the context of what is happening elsewhere in the UK - rather than against the rest of Europe, never mind the States or Asia - and if you believe in the corporate mantra that “only the paranoid survive”, perhaps it’s time we admit to a bit of anxiety that we could be falling behind other tech hubs in the British Isles.  

Most venture capitalists with a trained eye on the UK ecosystem admit that Manchester has overtaken Edinburgh in unicorn-creating potential. Not only has the capital of the Northern Powerhouse produced more unicorns - think boohoo, The Hut Group and Onthebeach.com - but, perhaps more importantly, it has a much more extensive hotbed of pre-unicorn quality startups primed to prance towards sky-high valuations. 

So, how is it that Manchester is socking it to us in Scotland on the tech front? Population is definitely a factor, with Greater Manchester boasting a population close to 3 million. In geographic terms, travel time from Manchester to London is around 2 hours, considerably closer than Edinburgh and Glasgow and nearer to London’s critical mass of tech investors and their prized chequebooks.  

Former senior Skyscanner executive Richard Lennox wrote in this column a fortnight ago that we shouldn’t measure tech success by unicorns, rather we should concentrate on creating “small giants” - “companies who focus on being great over big, have found a product-market fit and are looking to to create sustainable, profitable, medium-sized enterprises”. Of course, if you produce more small giants you improve your chances of producing billion dollar companies like SkyscannerFanDuel or Rockstar North.  

Mark Logan, Skyscanner’s former COO, is now sharing his scale-up wisdom as an adviser and non-executive with a number of Scotland’s most promising early stage tech companies. Much fancied healthtech startup Care Sourcer, up for three awards at this week’s inaugural Scottish Startup Awards, is one of Logan’s growing NXD portfolio. With investor backing from Accelerated Digital Ventures (ADV), who made Care Sourcer its first ever startup investment in Scotland, close observers view the healthtech startup as a soon-to-be small giant and a very probable unicorn contender.  

Back at GP Bullhound’s Titans of Tech event, hosted by Informatics Ventures at the Bayes Centre, other Scottish tech stories of recent times - including AIM-listed Craneware (now with a valuation within touching distance of £1 billion) and wealth management platform FNZ (sold earlier this year to Generation Investment Management for £1.6 billion) - were discussed during a Q&A with key players from the Scottish ecosystem.

They included Glasgow-headquartered Scottish Equity Partners (SEP) - original backers of Craneware and Skyscanner - and, giving a view from the top recently, the venture capital firm’s Managing Director Calum Paterson (Paterson is also the current chair of the British Private Equity & Venture Capital Association) said: “The UK is now home to a third of all technology unicorns in Europe and accounts for 30% of all European venture capital investment. We have a supportive ecosystem for technological innovation and the emergence of an increasingly large and impressive pool of dynamic and agile technology companies right across the country - not just in London, but in regional hubs such as Cambridge, Manchester, Belfast and Edinburgh.”

Can startups teach big companies a lesson around mental health?

Earlier this month, the press and social media were awash with coverage and posts around World Mental Health Day. I was so busy with clients on the day that I didn't manage to read as much as I wanted so, up in the Highlands for our annual autumn break I’ve taken a bit of time out alongside the R&R to scratch the surface on a pervasive issue that touches most of us in some way.  

A Mental Health Foundation study this year found that almost three quarters of people in the UK have felt so stressed that they have been “overwhelmed or unable to cope.”  If you’ve been in that kind of spot, I know I have, it can be a horrible place to be.  When I reached out to a few contacts on Scotland’s startup scene, it was encouraging to hear that what many of them are doing to address mental health in an open way could help turn the historical stigma surrounding mental health a thing of the past.

One social media post had stuck with me, from MadeBrave founding director Andrew Dobbie, who said “Mental health issues don't just affect the people with them but also those around them who support them, and it’s okay to talk about it. If friends of mine are struggling and ever need to talk - just say the word.” 

Edinburgh startup Cultivate, who support tech companies like Deliveroo and Care Sourcer around software development, is ahead of the curve in terms of how it handles one of the 21st century’s gravest ills.  Andy Robinson, Cultivate’s Commercial Director, says: “We want to create an environment that supports people and allows them to do their best work.  Emotional wellbeing plays a key role in this and so we have been providing optional, confidential cognitive behavioural therapy for a few years now.  This gives our people a tool which which they can proactively develop behaviours that help them both personally and professionally.”

Francisca Morton, a cognitive behavioural psychotherapist who works with Cultivate employees on a weekly basis at CodeBase, crystallises the importance of mental health awareness for employees and employers alike: “Mental and emotional health is invaluable and, for employees, working for a company that knows that and actively participates can count for a lot. The inclusion of a corporate wellness scheme has proved an attractive proposition for prospective employees entering the company, showing that it has a commitment to staff wellbeing. It is my belief that even if one employee is assisted towards their wellbeing, there is a knock on effect within the company as a whole.”

Lisa Thomson of Purpose HR agrees and says forward thinking employers recognise that their employees are human with personal issues that “can’t be taken off like a coat” when they leave the office.  Thomson adds: “It’s really important for founders and managing teams in startups to be open, practice self-care and look after their own mental and physical health as running a business is incredibly demanding.  Leading from the front and being open and transparent can be really powerful and helpful for the team.”

Administrate CEO John Peebles underscores Thomson’s point: “Mental health affects young people and entrepreneurs more than the general population.  When you’re building a fast-growing startup, this means that up to half of your team may be struggling at any given time.  In a software company like Administrate, people are our most important asset and in order to help with mental health issues, we have a licensed therapist come in every other week to help our team with any issues they’re facing.  It’s free, completely confidential, close to our offices and safe and we’ve seen incredible results over the last few years.”

Paul Reid, who sold his first startup to a FTSE 100 company and whose latest venture Trickle is developing a software tool to track corporate culture so that organisations can engender bottom-up improvement, is well informed on the subject.  He tells me that when colleagues suffer from mental health issues such as stress or depression, they may not be fully aware until the symptoms reach breaking point.  

Reid says that while the startup sector can be an exciting space, the flip side is how much of a toll it can take on individuals.  Reid says companies need to be prepared to rapidly spot mental health issues in the team and then support people through recovery.  “The last thing you want”, says Reid, “is a situation where a person doesn’t feel they can flag that they’re having problems.”

The upshot appears to be that the startup community in Scotland is, excuse the pun, extremely mindful when it comes to mental health in the workplace, so much so that perhaps larger, more established corporates can learn lessons from its practices.

Finding headspace away from the comfort zone

One thing I’ve always been pretty good at is running. As a teenage middle-distance runner, I could have gone for a scholarship at a university in the US but opted for a law degree at the University of Dundee instead and soon gave up competitive racing. 

In hindsight, the law degree wasn’t a bad thing to have in my back pocket and since I’ve got back into my running after a 25-year break, I’ve enjoyed it even more than the first time around. I can also buy lots of nice running gear - I think there is a term for this, “running shoe porn” - but, more importantly, it’s made a big difference to work-life balance and made me leaner and meaner for the day job. 

Since starting back, I’ve put in the hard work and this has paid dividends as I’ve broken into the top-20 for my age group in the UK at 5 and 3 kilometres and the metric mile. Increasingly though, out and about on Scotland’s business scene I’m meeting people who put my relatively modest sporting achievements in the shade. 

Anneli Ritari-Stewart, Managing Director at digital performance agency iProspect in Edinburgh, is a great example. Not content with winning a national cup at ice hockey in her native Sweden, playing semi-professional football or storming the 105-mile Nokia Coast to Coast race via bike, foot and kayak, Ritari-Stewart has taken up powerlifting since relocating to Scotland where she has gone on to break a series of Scottish records and picking up three medals at last year’s Commonwealth Powerlifting Championships.  

Anneli says, “It’s all about getting those small incremental gains over time. Also, something I’ve learnt in business is that if you want to drive fundamental change it takes time but the small gains soon mount up to real progress.” I couldn’t agree more with Ritari-Stewart’s view that getting stronger physically also helps you to feel stronger mentally and can become very empowering. 

Earlier this month, Rettie & Co director Nick Watson undertook the inaugural For Rangers Ultra, a 5-day long-distance race through some of Kenya’s under pressure game reserves. As a fellow runner, Nick has talked to me about his pure love of running and it wasn’t lost on us both that Kenya is not only thought of as the birthplace of distance running, it has arguably also produced the finest distance running athletes the world has ever seen. 

Watson says, “long distance running is a very personal activity for me and is more about exploring new places and appreciating landscapes and nature than the race itself. Ultra running allows a high level of exploring to be squeezed into a relatively small amount of time. I got started on ultras through a love of mountaineering and being in wild places alongside the realisation that family, work and other commitments mean time is increasingly limited.”

When it comes to modern day Scottish adventurers, they don’t get much more impressive than world record shattering cyclist Mark Beaumont. I heard Mark talk to over one thousand people at the EICC on his glorious return to Scotland after his Around the World in 80 Days herculean feat, then at a more intimate dinner with Adam & Company earlier this year. 

When I bumped into Mark recently, we discussed the motivations behind business executives taking on high performance and endurance sports. I mentioned Callum Murray, CEO and founder of Amiqus, who rowed from Barcelona to Ibiza last year as one of the people who have impressed me most with their spartan-like dedication to an endurance event. 

Beaumont says, “there are definitely more executives taking on adventure travel, races and expeditions. I’m pretty sure you’ll find that many of them talk about creating a different headspace, balancing the pressures of work and having a major physical target to train towards, particularly around a busy work schedule and also being something that is important for their wellbeing. The challenges are mental, logistical and, often, about stepping well outside of their comfort zones.”  

 

Sketches from Spain: getting away from it all...

The annual summer vacation is here, time to relax and unwind in a Mediterranean breeze and put the trials and tribulations of 21st century life behind me for a couple of weeks. But wait a minute, getting up at 4am in the morning, struggling through the airport for a delayed flight then picking up a hire car in the searing heat dazed and confused suddenly doesn’t seem like a passport to a holiday chill-out.  

Fast forward a couple of days and things are settling down towards something approaching relaxation. We’ve found a nice beach nearby, the pool in the complex is pretty decent and in spite of being at the extreme end of the dermatological disadvantage spectrum on the pigment front, I’ve managed to escape serious sunburn so far.  

Having set my out of office with what I thought was a fairly robust instruction that I was most definitely planning to get away from things for a while, when I do check the inbox my pulse level rises rapidly when I see that more than one client has been in touch to request some action or another.  

I reflect on what a friend Gib Bulloch said to me recently: “Too many of us in the corporate world are operating in a state of semi-distraction, always online, acting, reacting 24/7. We’re so focussed on what we’re doing that we seldom stop to think about where we’re going.” 

Bulloch’s recently published book The Intrapreneur: Confessions of a corporate insurgent charts his own experience of burnout, while a more recent post-publication chapter in his life has seen the former Accenture social entrepreneur invest in a derelict farm on the Isle of Bute with plans to renovate the site into a “business decelerator” for executives in search of a greater meaning outside the daily grind.  

Zoi Kantounatou, the FutureX co-founder who is helping to organise an entrepreneur’s retreat to Nepal later this year following October’s annual Startup Summit in Edinburgh agrees: “Unwinding is such an important part of the journey as it helps you to stay focused and find the energy you need to run the business.”

Creative brand agency founder Andrew Dobbie of MadeBrave, who recently announced one of its largest ever contracts and its first acquisition says: “When you run a business, especially a fast-paced one, it can be easy to get carried away with work and forget to keep the balance right with family time and looking after yourself. After the first couple of years running my business I was feeling stressed with the balance being too focused on work so I made a rule that I wouldn’t answer work calls or read emails after I got home or at the weekends. Once I did this, I found other people’s habits started to change around me.” 

Liza Sutherland, a former startup founder who is now works at the University of Edinburgh helping to support promising early stage spin-out companies says: “Many of the startup founders I know only take time away from work when they are close to burnout when this kind of time should really be taken to reconnect with oneself and the people around us. As founders continuously strive to innovate and make the world a better place, you could argue that finding headspace and achieving enlightenment of the mind is the most important thing.”  

In the Art of Travel by modern day philosopher and author Alain de Botton, de Botton is excited by the prospect of going on holiday to Barbados until the reality sets in that he will have to take his complicated self to an otherwise alluring Caribbean destination. 

For the moment, I seem to have found some equilibrium of my own if only fleeting. The kids are in bed and out on the veranda I can see the distant Atlas Mountains in Morocco fade in the dying sun. I pour a glass of Ribero del Duero and settle down to a bit of Miles Davis masterpiece the Sketches of Spain… breathe in, breathe out.  

 

Scotland's report card on digital skills

I wrote recently about one of this country’s top venture capitalists and his view that in order to succeed in in all things tech, we need an increasing pool of local digital and IT talent together with more senior managers experienced in global growth.

This stacks up with ScotlandIS’s annual survey which found that the local marketplace is anticipated to provide the bulk of new people talent, with 70 per cent of respondent companies expecting to recruit from within Scotland in 2018.  No huge surprises here and a more interesting finding was around a marked increase in company demand for modern apprentices, with almost half of respondents saying they would recruit in this way.  

Peter Proud, CEO and founder of Cortex Worldwide whose cloud-based technology platform includes Microsoft as a key client, says the group's graduate apprenticeship scheme is "the second best thing we've done after founding the company."  Proud praises the work of ecosystem players like Skills Development Scotland (SDS) and Edinburgh Napier University to support further learning and employers, the overall engagement of the Scottish Government and says that the performance of Cortex's graduate apprentices have "at least matched, in some cases exceeded" that of traditional university graduates.  Cortex's CEO, who will shortly take up a board position with ScotlandIS, also says his team is actively looking to hire from digital skills academy CodeClan over the next few weeks.  

CodeClan deserves a special mention here, with around 600 people set to have graduated from its 16-week Professional Software Development Course by the end of the year.  Key to CodeClan’s longterm success will be expanding the network of commercial and public sector employers who take on its graduates. 

George Elliott, Craneware’s chairman and a former Wolfson Microelectronics finance chief, reminded me last week not to forget about other skill sets: “It’s not just digital skills that we need but also commercial skills and knowledge of how to scale, market and sell the technology.”  Elliott, whose track record of selling into the North American market during his time at Wolfson is nothing short of legendary, says we are better at this in Scotland than we were but we have to do more to compete effectively.   

The CEO of one of Scotland’s most highly rated scale-ups, John Peebles of Administrate, says there is “a massive skills gap within the industry for people who are not engineers but have worked at large, scaling global tech startups.  The local ecosystem is still extremely embryonic, with most founders and management being first-timers.  The skills shortage will become an acute choke point for the local tech industry within the next three years as local startups begin to mature.”

Kelli Buchan, a highly rated technology recruitment specialist who has helped to build teams for fast-growth companies like Adminisrate, FanDuel, snap40 and pureLiFi, says, "Without a doubt Scotland, especially Edinburgh, has a thriving tech scene.  The opportunities in the digital sector are excellent and varied, for those who live here or those who move to work here.  However, the biggest challenge in this sector is the fact that the competition between employers looking for talent is huge.  There are simply not enough great candidates to fill the open roles which exist, especially in the startup scene.  From my experience with startups, recruitment is one of the last things they think about as they are so focused on building a product and securing funding.  When both are achieved, they then need to hire fast and the talent is so hard to find.  The advice I always give to CEOs is to think and have your hiring plan in place at the very beginning so you do not lose out to competitors”.

Susanne Mitschke, CEO and founder of MindMate, who develop apps to manage dementia from a headquarters in Glasgow with an investor base of US VCs, thinks Scotland has a very good standing when it comes to digital talent.  Mitschke says, “We use the University fo Glasgow’s recruitment system to find graduates and the quality has been fantastic.  I see many other companies, in places like London, Berlin and the US who have trouble finding software developers, particularly affordable ones.”  Mitschke thinks we could look to the US to replicate some of their most successful initiatives, like the General Assembly which teaches digital skills in marketing, design, data and coding.    

In big news in Scotland’s informatics circles, David Richardson, currently Director of Partnerships at the University of Edinburgh’s soon to be opened Bayes Centre is set to move to Heriot-Watt later this year to take up the position of Chief Entrepreneurial Executive at the university’s new Discovery and Innovation Centre.  

Richardson says, “We have fantastic initiatives in Scotland focused on addressing the digital skills gap.  Data science and cyber security are two of the hot areas right now and we need to continually work across industry, government and academia to help people upskill and retrain for the future.” 

Overall, Richardson thinks Scotland’s report card reads well but says we could be doing more at primary and secondary level in order to start the “digital journey” even earlier.

Eh, really PwC?! *

Most working weeks bring a few surprises and one last week was an email from global accounting firm PwC to confirm my nomination for the journalist of the year category at their annual tech awards.  I’ll admit to spitting out a few cornflakes reading the email over breakfast as I’m no bona fide journalist and only write a regular column in The Scotsman which tends to flit around Scotland’s startup scene.  

In addition to not being a journalist, neither am I an expert on tech so a firm of PwC’s standing could have done a better job on the due diligence front.  At the same time, I’ve never had a sniff at too many awards so, unless it was the early morning double espresso kicking in, I did feel a small surge of pride as I read about the grand awards ceremony at a top London hotel later this year.  

When I started to write about the tech scene a few years’ back, there weren’t any dedicated tech reporters in Scotland. At that time, we received occasional visits from London-based tech press and as an external PR adviser to Skyscanner, CodeBase and the University of Edinburgh’s School of Informatics - who I usually dubbed as Scotland’s “Holy Trinity of Tech” - I had a good degree of success in bringing some of the heavyweights of the tech reporting world north of the border.  

Trips by the Financial Times and The Next Web were two significant “wins” after a fair amount of agitation on my part and the resulting coverage helped to bring some of the exciting stuff happening on Scotland’s digital landscape to an international readership.  

As well as the so-called “Holy Trinity”, highly innovative ventures like pureLiFi, at that stage like many early stage spin-outs or startups still in something of a fledgling state, piqued the interest of the London press corps and the tech press also took to founders like Mike Welch at Blackcircles.com, an e-commerce pioneer who made good print with his straight-from-the-hip commentary on scaling a startup from a Scottish base. 

Today, we now have critical mass in terms of Scotland-based journalists covering tech stories - the Future Scotland section of The Scotsman’s site and Leith-based digital news outlet DIGIT are just two examples - and reporting the ecosystem’s narrative to growing readerships in Scotland and beyond. 

Scotland’s tech world continues to produce compelling storylines, not least Ctrip’s acquisition of Skyscanner and FanDuel’s rollercoaster unicorn ride.  But there are also less well known and reported stories and, for me, these would include VR audio startup Two Big Ears and wearable tech scale-up mLED both being acquired by Silicon Valley juggernaut Facebook in 2016.

To help fuel our wannabe startup rockets, we have a sophisticated angel investor community, supportive enterprise agencies and world class universities to help provide human capital.  In Scottish Equity Partners (SEP) and Pentech, we have indigenous venture capitalists who can write the kind of checks that equate to rocket fuel for the companies with real scale-up potential.  All that said, the general consensus in VC circles is that Manchester is producing far more of these near-unicorn potential scale-ups than Scotland so that is something of a concern.  

At the British Private Equity and Venture Capital Association (BVCA) annual Scotland dinner at The Balmoral Hotel a fortnight ago, SEP managing partner Calum Paterson delivered one of his first keynote addresses since becoming BVCA chair.  On the eve of the World Cup kicking off in Russia, Paterson peppered his speech with a bit of gentle ribbing of the English contingent and the performance of their national team at recent tournaments.     

Joking aside, as Skyscanner’s first institutional investor few get the workings of Scotland’s tech ecosystem better than Paterson.  In a press interview earlier this year, Paterson acknowledged that some of SEP’s most successful investments have been based in Scotland.  On the flip side, he went on to say that increasing the pool of people talent remains a challenge and that we must ensure our young people have fair and proper access to education and learning.

* I am of course very grateful to have been nominated for PwC's annual UK tech awards.

 

Sunshine on Leith

If you go down to Leith today you’re in for a big surprise. Teddy bear picnics aside, there is a fast-growing ecosystem of tech startups that have abandoned Edinburgh’s city centre for a work life on the shore. While lower rents and rates are part of the story, as one prominent tech investor told me recently, “there’s more grit about Leith, it’s more like Glasgow than Edinburgh and that suits some people better.”  

Well, we know grit and grind are essential for every startup so there’s undoubtedly something in this. Neither should it be forgotten that two of our most successful digital success stories of recent times - Skyscanner and Bigmouthmedia - began their corporate lives in Leith, on Timber Bush. Less well known is how some of the search engine optimisation (SEO) specialists Skyscanner hired from Bigmouthmedia helped the flight search specialist to really take off.  

Going even further back, Leith Agency co-founder John Denholm says, “back in 1984 when we decided that Leith would be a great place to start an ad agency, it was the sense of bohemian dereliction that appealed to us, to give us a creative edge in contrast to agencies in Edinburgh’s West End that looked like accountants. The Malmaison was a hostel for the homeless, Commercial Quay was still a whisky bond and there was only one eating place, the Waterfront.”  

The executive search and headhunting agency that John Denholm now runs with his wife Nicki, Denholm Associates, recently struck up a partnership with a Leith-based tech startup who many see as having the form to be one of Scotland’s next big tech stars. Amiqus, whose compliance software product Amiqus ID is making waves across the legal and professional services sectors, has an equally fancied CEO at its helm in the form of Callum Murray and Sir Sandy Crombie as its chair.  

One of Scotland’s first bona fide tech accelerators, Seed Haus, was partly born out of iZettle acquiring Intelligent POS and its founder Robin Knox going on to launch what is already one the most important fixtures on Scotland’s tech map. Entrepreneurial leadership group FutureX is also key to Leith’s growing tech credentials and the team shares office space with film production company, Campfire, on Constitution Street.  

Kate McKay, a former Saltire Fellow and associate partner at angel firm Galvanise Capital, who are based in the Round the World studios in Leith, identifies the strong focus on creative industries and a new generation of entrepreneurs who reflect the changing nature of work. McKay says, “there’s nothing too flashy going on but it does feel like there is a growing population of like-minded people who have their heads down and are getting on with interesting work.” Some of that interesting work includes recently launched peer-to-peer, blockchain enabled sports betting platform, mungoparc, a prime example of the innovation taking place in EH6. 

At the top of Leith Walk, Edinburgh Greenside, formerly known as Blenheim House is winning awards with 50 per cent of the space pre-let to Scottish fintech player Nucleus Financial and other tech businesses expected to follow. While the site is arguably more city centre than Leith, there is a growing swell of optimism that stronger links between Edinburgh and Leith are in the making and will be for the greater good.  

Nick White of property consultants Cuthbert White, who were involved in the sale of Greenside, is seeing a lot of commercial activity in the city going east, a trend he thinks will markedly increase with the extension of the tram line. White says, “Leith is still seen as dislocated from the city but the tram will be a catalyst for change and its new spine should see a significant ripple of development.”

Edinburgh architectural firm 7N produced a white paper last year titled “What If?” that reimagines Leith Walk as Barcelona’s Las Ramblas, although admittedly with a cafe culture more akin to Copenhagen than Catalonia. What seems certain is that Leith Walk is an underrated boulevard that has still to punch above its weight. Champs-Elysees? What about Champs Eh Leithie? Perhaps the next few years will help to cement its revival and, with it, that of Edinburgh’s twin city on the shore. 

 

Character is the tree, reputation is the shadow

In 2018, corporate social responsibility, or CSR, is seen by an increasing number of commentators as a near dirty term, widely perceived more as a box-ticking exercise than a movement for good.   In the case of Volkswagen’s disastrous CSR performance in 2015, “dirt” was the operative word as the “deiselgate” scandal cost the German car manufacturer billions and the head of its CEO.  

A fortnight ago, Facebook’s moral position was called into question over the Cambridge Analytica debacle and although Mark Zuckerberg and media analysts alike do not appear unduly concerned over the #deletefacebook campaign, what is clear in today’s business world is that it’s as important to have your house in order on ethics as it is around finance, operations or sales and marketing.    

A former Zuckerberg mentor came out in the media last week to suggest that Facebook may be treating Cambridge Analytica like a public relations problem, not a business problem.  This brings an Abraham Lincoln gem - “character is the tree, reputation is the shadow” - to mind and there are scores of narratives around businesses that spend more time manipulating the shadow as opposed to tending to the tree. 

A number of factors - including the growing influence of Generation Y and all-seeing 24/7 social media - mean companies who ignore their ethics do so at their peril.  In a similar way to thinking global from day one, today’s founders need to address their corporate values from an early stage.  Values drive culture and problem children of the digital economy like Uber illustrate that a faulty moral compass can lead to dangerous waters.

Some of these issues were discussed at a fireside chat between FutureX’s Bruce Walker and Galvanise Capital’s co-managing partners, Devina Paul and Nick Jones, at Whitespace in Edinburgh last week, with Jones opining that there is a strong case for the core team of early stage companies being involved in both developing values and attaining some level of ownership.   

FutureX, populated by young forces of nature like Walker, Adam Puris, Zoi Kantounatou and Laura Westring, is an increasingly influential force in Scotland’s entrepreneurial ecosystem and a beacon for the “business for good” agenda that is ripping through the established corporate order from San Fransisco to Singapore. In Bruce Walker’s own words: “we're one of the leading advocates of purpose-driven business and work internationally to establish platforms, programmes and partnerships to prove that you can build a better world through business.”

What is perhaps most impressive about FutureX - born out of its previous incarnations as WeAreTheFuture and Power of Youth - is the fact that this relatively small team is able to make such a significant impact on a nation’s business scene.  It is less surprising when you see Walker, Purvis and Kantounatou use international networks to produce world class events - as I experienced first hand at last year’s Berlin Impact Retreat.

This month, the team take Scottish startup founders on a Silicon Valley accelerator programme that takes in some of the most innovative technology companies on the planet, venture capitalists who have backed the likes of Twitter and Tesla and campuses that have incubated tech stars like Airbnb and Spotify.  Startup success stories like Snap40, StoriiCare and TickX are some of the names that have benefited from previous trips.  

At the end of the month, FutureX stages the inaugural Virtuous Economy Leaders forum alongside The Hunter Foundation, where a select group of Scottish and international business leaders gather to explore emerging trends around the “the next enlightenment and a virtuous economy”.  

In May, a larger collective - described by Walker as “a refreshingly diverse gathering of over 300 students, teachers, entrepreneurs, politicians, refugees and enterprising citizens” - descend on the Barras in Glasgow to reimagine what the global economy of tomorrow could look like.

Those in the know say corporate values must be regularly reinforced and it doesn’t take long to find the following on FutureX’s site around “questions we ask ourselves every day”: curiosity, compassion, vision, insight and authenticity.  Excuse the pun, but Walker and team really are “walking the talk” when it comes to value-driven business.

EIE is a fine vintage in 2018

Now in its 10th year, EIE’s annual investor showcase moves to the University of Edinburgh’s McEwan Hall in 2018, a fitting venue when you consider the university’s contribution to the research and commercialisation of computer science. Edinburgh’s School of Informatics is rated among the top informatics centres globally and excitement builds ahead of the opening of the adjoining Bayes Centre, a hub for data-driven innovation, later this year.  

In Edinburgh’s rise to become one one of Europe’s leading tech capitals, the city’s universities are an important piece of the jigsaw. Scotland’s sophisticated angel investment scene, strong support from the nation’s enterprise agencies, the incredible scale-up stories of Skyscanner and FanDuel, prominent VCs like SEP and Pentech, the UK’s largest incubator, CodeBase, and the UK’s first digital skills academy, CodeClan, are other key pieces that make up a picture of growing tech success.  

The highlight for Scotland’s tech nation in 2016 was unquestionably Chinese online travel giant Ctrip acquiring Skyscanner but two other lesser known acquisitions of EIE-supported startups by a Silicon Valley juggernaut in the same year also caught the eye when, in the space of a few months, Facebook snapped up audio virtual reality specialist Two Big Ears and University of Strathclyde spin-out mLED.  

Last year, EIE17 pitch winner Amiqus secured its latest external funding round with investors from Scotland and San Francisco, with the US-based investor having watched the award-winning pitch by CEO and founder, Callum Murray. There is a pattern emerging around Scottish tech, with increasing numbers of investors from outside the country backing our most promising startups and founders.  

Q1 of 2018 was a very good quarter for a number of EIE alumni, with pureLiFi wowing Mobile World Congress in Barcelona with its latest technology, TickX being backed by BGF Ventures and Alzheimer’s app MindMate lining up a series of US VC investors as it tackles one of the greatest health challenges facing society in the 21st century. 

In overall terms, EIE has been a springboard to over £600 million of investment into alumni companies. Perhaps the greatest story is around FanDuel and it will be fascinating to hear first hand from co-founders Nigel Eccles, Lesley Eccles and Rob Jones on the 19th of April as they recount the meteoric rise of the fantasy sports site in the US. Many of us will also be looking forward to an update from Nigel and Rob on their newest venture, eSports social streaming platform Flick.   

Informatics Ventures’ second Scottish Startup Survey went out onto the startup coalface in recent weeks and this year’s early findings reveal an optimistic sentiment running through the tech community in Scotland, although founders and CEOs see ongoing challenges around investment, skills, sales and Brexit.  

What is not in doubt is Edinburgh’s rising star in all things digital. As global business news heavyweight Forbes reported after its trip to EIE last year, “Edinburgh is a sleeping giant that investors will be keeping an eye on, a city of beauty and the past that looks like it is also becoming a city of the future.” 

Building a winning culture

Alongside the collective sadness over the passing of Sir Roger Bannister last weekend - quite poignantly on the occasion of the World Indoor Athletics Championships in Birmingham - there were some fantastic tributes to the man who became the first to break the four-minute barrier for the mile.  

One recollection centred on the team that made the 3.59.4 run at Iffley Road, Oxford in May of 1954 possible. Chris Brasher and Sir Chris Chataway were the pacemakers who helped Bannister stay on track for his pioneering run into the record books, a tight knit group who built their own culture of success - Chris Brasher, for example, went on to win Olympic gold in the steeplechase in 1956 - both on and away from the training ground. Brasher’s son recounts a time when the three men, struggling to improve their times, escaped the university cloisters to walk the hills of north Wales. On their return, they had found the extra seconds they had been searching for.   

As a schoolboy in the late eighties, I was fortunate enough to be part of Scotland’s top middle distance running club at that time. The team, based in Clydebank, couldn’t afford tracksuits like a lot of the other running clubs we competed against. I remember a nemesis of mine who ran for the Johnnie Walker-sponsored Kilmarnock athletics club taunting us about it ahead of a race. One of my club mates, Glen Stewart, son of Lachie Stewart, the 1979 Commonwealth Games gold medalist at the 10,000 metres, turned to us and said, “spin round boys.” We might have been a raggle-taggle lot but when we turned our backs most of us were wearing Scotland or GB tops.

Our camaraderie at Clydebank AC was a big part of our success and our achievement of individual and collective excellence came down to process - we trained hard and targeted the races on the calendar where we wanted to reach peak performance. It was important to have a great leader and we had one in the form of our coach, Alan Marshall, a former middle distance international himself and a bank manager by day. 

We also had leaders within the group - an older guy we all looked up to, the comedian of the group whose sense of humour made the training on cold, dark evenings more bearable and the “big man”, a guy who doubled as security when we were out for a few drinks on a Saturday night. 

I next experienced a winning culture with one of Europe’s top corporate communications agencies, Maitland, in London. Working alongside PR consultants who were former FT and Economist editors and reporters and highly rated investment analysts and fund managers from the City, a collegiate-type commitment to process, in a not dissimilar way to my time with Clydebank AC, translated to business success for the firm. 

In 2018, company culture and related areas like brand, including employer brand, have never been more important and there is a lot of buzz around corporate values and how they translate to business outcomes. Last week saw the announcement of the inaugural Impact Summit in Glasgow in May that sees The Hunter Foundation backing FutureX and its mission around business as a force for good and, on a personal level, I’m honoured to have been asked to get involved with proceedings. 

Over the last couple of years, through working with agency clients like WhitespaceMadeBraveH&A and Denholm’s Inside Out and seeing first hand the great work they have done with other clients like Anderson StrathernRettie & CoGraham + SibbaldSharkeyand the EICC, I’ve got a further feel for how thorough brand examination and repositioning can be. Like the running analogy, you don’t always need a brand new tracksuit but how you look and feel to your stakeholders and customers is hugely important. 

Perhaps the most exciting corporate cultures on the Scottish scene are those growing by something akin to osmosis, seemingly without too much by way of design, in our startup community where names like AmiqusSeed HausCodeBase (who celebrated its 4th birthday last week), Care SourcerMindMateLendingCrowd and Administrate are leading the charge.

Life's a strAIght pitch

There’s a great movie from a couple of years’ back called Ex Machina, an Oscar-winning flick that that will likely go on to become more famous for its subject matter - the advance of artificial intelligence (AI) in the early 21st century - than its various awards. 

At a talk at the University of Edinburgh’s School of Informatics last month organised by entrepreneurial support group Informatics VenturesBill Joos, former VP of Sales at Apple, engaged the gathering on how AI is heading for the mainstream in the years ahead and around other tech trends that are here to stay. As Joos observed, while there is a good dose of trepidation around AI, we most definitely need to appreciate its inevitable progress. 

Bill Joos has a touch of the cinematic about him - you could easily picture him in a Hollywood sci-fi blockbuster as a professor or father figure type - and he is able to get to the point and explain complex products, models and systems in near layman’s terms. No surprise then that Joos has advised hundreds of Silicon Valley startups in recent years on how to get their key messages across to investors - a process and way of thinking he has packaged up with the moniker “Life’s a Pitch”.

Joos says there are five types of pitch an entrepreneur has to master - the “handshake intro”, the “one minute pitch”, the “napkin pitch” and the “investor” and “customer” pitches. The self-confessed “pitch doctor” went on to say that “long pitches are lazy” and “brief pitches are hard”. According to Joos, an old Gaelic proverb puts it best, “say but little and say it well.”  

In a valuable takeaway for me, as a PR person who helps companies craft their own messaging, Joos says he favours the ability of a business to describe its activities in under thirty seconds and to also have an even shorter descriptor in seven words or less.  

Referring to his old boss at Apple, Steve Jobs, and an address Jobs made at Stanford University in 2005, Joos expounded the importance of networks to “connect the dots” in terms of populating your entrepreneurial idea with the people that can make a difference to your chances of success. 

Last week, Informatics Ventures announced the sixty early stage tech companies who will pitch to UK and international investors at McEwan Hall in Edinburgh in April. Unsurprisingly, AI is increasingly to the fore in the EIE18 cohort and other emerging trends include HealthTech and what is now commonly described as “business for good”. We hope to draw out more trends and founder sentiment when we launch the second Scottish Startup Survey with Informatics Ventures and the University of Edinburgh Business Schoolthis month.

A major news story this year has been around gender balance - in the boardroom and in the tech world - and approximately 12 per cent of the startup founders pitching at EIE18 are women. That compares to a global average of something in the region of 15 per cent in 2017 so we’re in pretty good shape in Scotland with a bit of room for improvement. 

Former EIE alumnus Leah Hutcheon of scheduling software startup Appointedd won a UK-wide entrepreneurial award in January and another female entrepreneur from the EIE programme, Susanne Mitschke of mobile health app MindMate, herself a recent pitch winner at EIE, is leading a team that are not only positioned for success with a strong base of international venture capitalists, but are also tackling one of society’s greatest destroyers - Alzheimer’s, dementia and other forms of cognitive decline. 

Bill Joos’ tech trends on the rise, in addition to AI, include the spread of Blockchain, the advent of 5G, augmented and virtual realities, autonomous vehicles and omnipresent voice user interface.

Irrespective of developing tech trends, I hope our nation’s daughters gets the same opportunities as our sons when they decide to follow a career in tech. Of course, only if robots have not taken over by then and, as the film Ex Machina hints, brought about the end of the world as we know it. 

The rise of the Chief Storyteller

I remember the first time I met someone who had the title ‘Chief Storyteller’ on their business card. I was a bit cynical and imagined a senior executive sitting around on cushions in the corner of the boardroom reading books to some of the company’s younger employees.

It was a couple of years’ later when I was at a talk by Steve Clayton, Microsoft’s own Chief Storyteller, that I started to get a feel for how the function fitted into the the corporate communications structure and the overall hierarchy of an organisation. 

Building a narrative for your brand is essential. It helps drive sales in the good times when the graphs are heading north and is also there to back up your brand when the chips are down. More so in the States, but increasingly in the UK, Chief Storytellers are on the payroll and are front and centre of developing a company’s story and guiding its dissemination inside and outside of the business.    

Best practice says the CEO should be integral to the development of the company’s narrative, along with the CMO and relevant retained advisers. Arguably, the PR team is the most important cog in the wheel; it is the company’s gatekeeper and the filter for what comes in and what goes out. 

I’ve always thought PR should be something that is done on the front foot, in tandem with having a well-oiled reactive system in place, and that strategy should drive communication. Abraham Lincoln said “character is the tree, reputation is the shadow” and too many companies still spend more time manipulating the shadow than tending to the tree.

Duncan Logan, CEO and founder of RocketSpace in San Francisco, told me on one of his last visits to Scotland that good PR can make the difference between success and failure for a company and that it should be embedded in a startup from the early days. Logan is well qualified on the subject when you consider that Airbnb and Uber are two of the technology companies that went from fledgling to global at RocketSpace. 

We have had the chance to work with an exciting bunch of early stage companies in recent times. Some founders have a strong vision of the company’s brand and how they want the story to be told, others seem to be more in the "make it up as we go along" camp, many more still are somewhere in between. 

PlayerData, a sports wearable tech startup founded by two computer sciences graduates from the University of Edinburgh and backed by an impressive collective of investors including former Tesco chief Sir Terry Leahy and now chaired by Blackcircles.com founder Mike Welch, is a great startup story in the making. CEO Roy Hotrabhvanon is an international archer who has represented Thailand and only narrowly missed out on the Rio Olympics in 2016. Roy mastered the bow and arrow while studying computer sciences at the University of Edinburgh's School of Informatics, developing an early version of wearable tech to monitor and enhance his performance. By targeting (excuse the pun) the global wearables market, the PlayerData team could be on to a winner with the sector expected to grow to over £15 billion by 2021. 

At a Heriots rugby lunch in December hosted by LendingCrowd, Scotland’s only alternative finance provider to SMEs, I had the pleasure of meeting a Scottish tech founder whose company flies somewhat under the radar in terms of media profile while achieving notable success in spite of it. Cortex CEO and founder Peter Proud has just completed a buy-out from advertising giant WPP and, when it comes to good stories, Peter and Cortex’s back catalogue is something of an embarrassment of riches. 

Peter worked for Microsoft for over a decade and there is a story about Bill Gates putting Peter on his private jet so he would not miss one of his children’s birthdays. Another good one saw Cortex being brought in to stop the Seattle Seahawks' website crashing due to an unprecedented amount of visitors to the site around the 2014 Super Bowl.  I get the feeling we’ll be hearing a lot more about Peter and Cortex’s story in 2018. 

A very good year for Scottish tech

2017? As the Frank Sinatra song goes, ‘it was a very good year’, in this case for Scotland’s entrepreneurial world. Sure, we didn’t have barnstorming exits a la Skyscanner in 2016 but enough good things took place to suggest our fast-growing corporate scene moved up a gear. 

On the subject of Skyscanner, it was noteworthy to see the travel search site’s former CTO, Alistair Hann, pop up at a new travel tech startup. TravelNest, founded by 23-year old Doug Stephenson and positioned to maximise holiday rental income, grabbed some headlines around the largest ever seed round raise by a Scottish startup. More impressive still was the quality of the venture capitalists who came in on the round - Luxembourg headquartered Mangrove, London-based Frontline and Pentech

Former advertising supremo John Denholm, a co-founder at The Leith Agency and currently chairman of eponymously named headhunter Denholm Associates, called me up around this time last year to say he wanted to put me in touch with a startup who could be, as John put it, “Scotland’s next Skyscanner.” 

After I coughed up a few cornflakes in response to a fairly bold prediction, John explained that he was going to his niece’s wedding that weekend and that Andrew McGinley was the founder, and groom to be, in question. A week or so later I met Andrew, Care Sourcer’sCEO and co-founder, and came away from the meeting thinking that maybe John was not too wide of the mark. 

John’s hunch was confirmed earlier this year when two high calibre UK venture capitalists - BGF Ventures and ADV - each made Care Sourcer their first ever investment in a Scottish startup. When former ‘FanDuel-er’ Dr Graham Jones joined the team as COO - Jones is the guy who, during his time at Kotikan, built the team that helped build both Skyscanner and FanDuel’s wildly successful apps - and when the team won a major contract with a NHS Trust, more of the right type of writing appeared on the wall.  

The fact that more VCs, including from outside the UK, are investing in our startup talent is a big move in the right direction for our tech scene. More exciting still, we are very likely to see our most promising tech startups benefit from even larger funding rounds in 2018. 

The shining light of our own venture capital community in Scotland, Scottish Equity Partners, announced the first investments from its recently launched SEP V fund in 2017, a £260 million fund that invests in technology companies across the UK and SEP is now a powerhouse not only on our own tech patch in Scotland but also in European terms.   

Fresh from a partnership with global accountancy giant PwC, Edinburgh-headquartered CodeBase announced an alliance with Barclays last month that puts the UK’s largest incubator in an even stronger position heading into 2018 and beyond. Still to reach its 3rd birthday, take a look at CodeBase’s website if you need a refresher on the incredible amount of software stars in the building. 

One of these companies, Cultivate HQ, is helping to power the web development of one of Europe’s fastest growing technology companies, Deliveroo. Another, Aquilia Insight, was acquired by US marketing agency Merkle in the summer. GP Bullhound advised on the deal and next March the global investment advisory firm brings the Northern Tech Awards to Scotland for the first time along with the CEOs of one hundred of the UK’s fastest growing tech companies. I’m pretty sure they will be impressed with what they see.   

The University of Edinburgh’s Bayes Centre opens its doors in 2018 and its very creation will, in itself, cement Edinburgh’s position as a global leader in the field of data science and analytics. Some of the industry and international partnerships in the pipeline for Bayes will take the reputation of the university’s School of Informatics even further up the world order. 

Along with Informatics Ventures and the University of Edinburgh Business School, we launched the inaugural Scottish Startup Survey this year. Confidence is important in every sector of industry and the hope is that our startups, in the most fledgling of sectors, remain cautiously optimistic about what 2018 holds. 

Scaleups, Edinburgh style

Scaleups, Edinburgh style

If you visit PwC’s website and happen to be one of the few people from a business community on Planet Earth who don’t have an idea of what they do, you could be hard pressed to work out what their main activities are.  You don’t immediately pick up the kind of terminology traditionally associated with a Big Four firm - accounting, auditing and consulting - on the homepage and language like “innovation” and “digital” is much more to the fore.

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Turing Fest, self-described as "Scotland's tech gathering", was at its biggest and best in August at the EICC in Edinburgh.  Like the city's own tech community, Turing is still relatively small compared to international equivalents like Berlin or Amsterdam but the 2-day tech binge - predominantly around product, strategy and marketing in startup world - is important, not least because great tech hubs need great tech festivals. 

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I was at a lunch with The Data Lab's chairman, Neil Logan, recently in Glasgow. Neil is an interesting character, not least because he became a chairman before he was ever a CEO.  

Neil co-founded Incremental Group last year, around three years after he was appointed chairman of The Data Lab, one of Scotland's Scottish Government-funded Innovation Centres.  Previous to that, he was in the senior team at technology services business Amor Group in the run up to its 2013 acquisition by NYSE-listed aerospace and defence group Lockheed Martin.  

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It was two days since we had spoken to a reporter from the world's leading tech news outlet, over a week since we had pitched the story but as I scanned the site on the morning school drop there was still no sign of it.  My heart sunk and so, just several minutes later, I was surprised to see Administrate CEO, John Peebles, standing in the school playground with a big smile on his face on a cold, dreich December morning.

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