Scotland’s scaleups will be real measure of nation’s tech success, by Nick Freer

I sometimes think of tech startups as shiny new things that hold promise for future success and investor returns.  And, as an agency, we’ve spent over a decade working with some of the shiniest and best.  Two Big Ears would be a good example - founded in Edinburgh by two University of Edinburgh PhDs, the immersive audio startup was acquired by Facebook in 2016.

It’s exciting to advise these fledgling technology companies, helmed by young founders with tons of ambition and big dreams. However, when startups become scaleups, arguably things get more interesting as scaleup companies can transform economies.

They create highly skilled jobs, attract international investment, produce and retain talent, and generate tax revenues that fund public services. One Skyscanner has produced scores of founders building their own startups. One FanDuel has produced a generation of engineering talent.  Then just last month, one Wordsmith funding round reminded the world that Scotland can produce globally competitive tech businesses.

An imminent report on scaleups by a former Skyscanner and Current Health executive Richard Lennox will shine more light on the importance of scaleups and provide a blueprint on how we can produce more of them.  It follows previous reports on the subject by fellow Skyscanner royalty in the form of Mark Logan and Shane Corstorphine.

Last November, entrepreneur and investor Ana Stewart, who is also Scotland’s second chief entrepreneurial adviser to the Scottish Government (Mark Logan was the first), outlined her priorities to increase the number of scaleup companies based here - including closer engagement with the startup community, more tailored support for startups, and more consistent reporting to track progress and provide a more transparent picture of Scotland’s entrepreneurial health.

As Sir Tom Hunter commented at the time: “Scotland needs a laser focus on building scaling businesses. Why? If we double the number of scale-ups from the estimated 675 today, we’d create around 75,000 new high value jobs; that drives economic growth.”

Different authorities and reports chart varied projected numbers in terms of jobs and revenue creation, but by whatever yardstick you use, we’re certainly talking about tens of thousands of high value jobs and into double digit billions in terms of annual revenue.

The transition from startup to scaleup is a significant and challenging one.  Building a prototype as an early stage venture is one challenge. Building a business with hundreds of employees, international customers and recurring revenues is another entirely.  This is where leadership, access to capital, international networks and experienced operators become every bit as important as innovation itself.

There are other small nations and regions punching above their weight, so we need to keep examining, reflecting, and iterating how we plot a course for scaleup success.

Scotland has never lacked entrepreneurial ambition or world-class ideas. The real opportunity now is to build more companies capable of commercialising those ideas and intellectual property on a global scale.  Because while startups capture the imagination, scaleups shape entire economies.