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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A friend and business contact who is a lot wiser than I, talks about the success of tech ecosystems coming down to what he describes as the 'three Ps' - if you want to build a great tech hub, the three key elements are product, people and place.  

In the last week, I've met a few people, the second of the three Ps, who suggest that Edinburgh and Scotland will go on to great things when it comes to tech...

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