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How to ignite the tech startup scene in Manchester

I’m here at the latest instalment of Techcelerate’s series of events for tech and digital startups in the Manchester and NW area.

Martin Bryant, Managing Editor of ReadWriteWeb, kicked off the evening with an extension to his recent TEDx Manchester talk on getting traction in the tech scene in Manchester. Having visited various tech hubs across the UK and the vibrant European start up scene, Martin was left wondering:

“With the strong sense of industrial history in Manchester, why don’t we have a vibrant startup tech scene here?”

Martyn set up a Facebook group to glean views and followed up with a blog post to further stoke interest. Feedback affirmed his initial prognosis – support networks are fragmented and disparate. Lots of startups want help but don’t know where to go.

A lively debate ensued with much consensus around the view that there are plenty of success stories that have emanated from Manchester e.g Laterooms. Its just that new and more established tech businesses circulating at the moment get very little air time (than they might in say London or across the European startup scene).

My own view is that we need a hub. In fact I think we need two. One physical and one virtual.

First, we need a physical venue where startups can congregate, work, collaborate, share ideas, whine, celebrate and work through all the pleasure and pains that go into building a business. Manoj Ranaweera has done a great job in setting up Techcelerate and the Tech centre in Manchester city centre (where I am right now for this event). Madlab is also a great initiative too.

A question I am grappling with is whether it should really be for startups to lead in terms of establishing where they want to congregate. I don’t think this can be led (although Daresbury, the Sharp Project and perhaps the Tech centre may disprove this!). To me, a hub needs to grow organically to have a real chance of success. An example might be where a business grows fast, becoming successful and then opens its doors to new fledging startups who wish to congregate around the buzz. From there a hub can grow.

Secondly, I think we need much more online air-time to sing the praises of our early stage startups and growing businesses. To profile them. Highlight events. Provide a platform for the businesses to showcase their products, ideas and solutions. I suppose a Techcrunch but specially targeted at Manchester and the NW. (I would be happy to toss my hat into the ring to assist with this).

As Martyn noted, it feels like we are on the brink of something exciting that is about to explode in Manchester. What are your views on what needs to happen to support tomorrow’s businesses in Manchester?

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Earning (accountancy) Bucks in the Digital Age

In collaboration with Pro:ManchesterManchester Digital brought accountancy professionals and digital creative businesses together this evening in Manchester to explore opportunities for us to work together and support each other more effectively.

Shaun Fensom kicked off the session by outlining the key to many Manchester digital businesses’ success i.e. speedy collaboration plus a willingness to share ideas and intellectual property, before Mike Taylor (NW Business Insider) took over in leading the panel discussions in his consistently entertaining and energetic style. I was a representative for Team Accountancy on the panel, initially fearing a bashing similar to that received earlier this year by the lawyers in Earning a Buck in the Digital Age Round 1.

We covered plenty of ground including:

  • differing financial needs of digital and creative businesses – some are lifestyle businesses that are more keen on creating interesting work and developing their people than profit; others grow at a ballistic rate (per Mike Ryan) – I find these businesses normally need help to cover all compliance bases and avoid overtrading (aka running out of cash); others die.
  • is the limited company the right vehicle for creative businesses given that intellectual property is often created almost like bridges between them? A great question by Shaun Fensom that led to much head-scratching from the lawyers in the audience. My own view is that the blind pursuit of intellectual property protection is futile; instead this effort and financial focus is far better directed toward harnessing the free flow of intellectual property. This applies to accountancy firm’s intellectual property as much as digital businesses. A question was raised whether 80-90% of intellectual property could be released into the public (open source / creative commons) and 10-20% retained for profit? Good suggestion. Is intellectual property still the right definition? Who owns it? Not enough time to dig further – I welcome your views in the comments section below.
  • how can accountancy professionals and digital businesses work together more effectively? There was common ground that scary accountancy fee structures, uninviting shiny city centre offices and power suits are not the way to court relationships with small fledging (yet often fast growth) digital businesses. Us accountants need to invest more time in mixing with digital creatives to better understand what makes them tick and build relationships on their turf e.g. tech office clusters, coffee shops and emerging north west initiatives like MediaCityUK and The Sharp Project. We also need to match this with a fee structure that invests in these companies for the future – we for example already hold meetings (for £nil cost) and then offer reduced rates. This is our investment. Please drop me a line for a coffee to discuss further by emailing me or contacting me on Twitter: @stevelivingston.
  • will Manchester ever have a Facebook? Why not?!

Discussions like this fill me with excitement for the future of the accountancy profession. Left as it is, the accountancy profession is staring into the abyss. Yet for those who embrace change, there are huge mutual benefits for both digital and tech entrepreneurs plus forward thinking accountants. A win-win. So change it is.

Please leave your comments for the changes you would like to see implemented for accountants to earn a buck in the digital age.

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Techcelerate event: Tech IPOs 8 November, Manchester

We’ll be hosting the next Techcelerate event aimed at supporting North West technology companies tomorrow evening in Manchester.

It promises to be a great evening including talks by:

  • Marcus Stuttard, CEO, London Stock Exchange – Alternative Investment Market (AIM)
  • Anish Kapoor – ex CFO Telecity and CEO Yuuguu.com
  • John McGuire, CEO, FreshT
  • Simon Elms – Warthog and Image Metrics

Get your tickets here – be quick as we’re almost full.

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CBI provides blueprint for building a Creative Britain

Creating growth – A blueprint for the creative industries is a recently released paper by the CBI aimed at focusing the UK coalition government on doing more to support UK creative and digital industries. Although I think this report provides a good overarching vision of what our UK creatives need from the government to flourish, in my view it is lacking on the specifics in terms of laying out a clearly defined roadmap for achievement.

Here are my initial thoughts on what’s there:

  • Ensure regulation and competition is fit for purpose. Easy to say, harder to achieve given that our successive governments have added 1,000s of pages of tax legislation over the past 10 years (three Finance Acts will be issued this year alone!). The Office of Tax Simplification has recently been launched to help tackle the minefield of tax reliefs and bureaucracy encountered by small businesses and they will report their findings early next year. Don’t hold your breath though in the short-medium term!
  • Ensure the ability to derive value from intellectual property is a subject dear to my heart. In a world where the number one driver of value is increasingly intellectual property (IP) – something that we are darn good at creating in the UK – it is vital that we have a commercial, legal and tax framework that supports its protection and successful exploitation. I am not a lawyer so can’t comment on the UK legal ins-and-outs, however, from a UK taxation standpoint I spend much time advising companies on maximising the value derived and I can say that our tax regime is getting more supportive e.g. we have the popular R&D tax credit regime plus a review this Autumn on the taxation of intellectual property (including consultation on a likely lower rate of taxation on patent income) but there is much farther to go – a video games tax break for example?!
  • Deliver a competitive framework. This mirrors the stated aim of George Osborne in his inaugural Budget speech to make the UK tax regime the most competitive in the G20. The phased reduction in the main UK rate of corporation tax from 28% today to 24% by 2015 is encouraging. Note that small companies (broadly those stand-alone companies with taxable profits less than £300,000 – which will cover most UK creative companies) will pay tax at only 20% from next April (from 21% today). However, it is the PAYE, VAT and the myriad of other ongoing compliance and year end forms that add to the red-tape for small businesses. There is also the vast array of available tax reliefs to claim which is great – but only if your accountant or business advisor tells you about them! :)

What are your thoughts on this report? What does this mean for creative and digital businesses in Manchester, Liverpool and the North West? Does this go far enough?

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Techcelerate – The Difference Engine for tech startups

Techcelerate – Difference Engine from Business N2K on Vimeo.

The Difference Engine is a really exciting initiative aimed at tech startups across the UK (and Europe) to provide seed capital and support for promising tech entrepreneurs and businesses.

The proposition is simple: a one-page online entry form is assessed and if accepted you will be given £20,000 plus 13 weeks intensive support, development and mentoring (a “boot-camp”) to help you grow and prove your business model in return for 8% of the share capital or equity.

Inspired by the Y Combinator in the US and Seedcamp here, Jon Bradford set up the Difference Engine in the North East of England and has just put its initial in-take of 9 startups through its intensive mentoring and development programme – see feedback from this first phase of startups on “What its really like to take part in the Difference Engine?” videos below.

Helping businesses “do more in 13 weeks than they might otherwise do in 1-3 years” Bradford explained how many of the teams have managed to build connections and networks with key influencers, decision-makers and successful entrepreneurs in their respective fields; people who they might never otherwise have had the opportunity to connect with (almost certainly not within 13 weeks!). Some of the fledgling businesses even managed to add these individuals to their management team e.g. as Chairman, Non-exec directors etc.

This is a superb initiative which, although open to early stage technology businesses across the UK, I would love to see (and assist in) replicating here in the North West.

Here is feedback from two North West based entrepreneurs who took part in The Difference Engine:

First off here’s ScreenReach:

The Difference Engine – What is it really like? from Business N2K on Vimeo.

And next we have Canddi:

The Difference Engine – What is it really like? Part 2 from Business N2K on Vimeo.

Another great session held by Techcelerate in Manchester.

Manchester – Next Generation Digital City

A packed auditorium at Manchester’s Bridgewater Hall on Friday 15 January 2010 was greeted by an enthusiastic launch by Insider of Manchester – Next Generation Digital City.

An initiative that aims to put Manchester at the forefront of UK business competitiveness by laying the foundations for exciting, innovative digital and technology-based businesses to flourish.  This will be achieved by leading the pack (well, a close second behind North Wales) in laying state-of-the-art fibre networks to deliver blistering broadband speed for businesses (and residential users).  To put things in perspective, the example was given by Geo, Chief Executive, Chris Smedley (the company that will lay the cables) of a residential user seeking to download a typical 4GB movie  – today this would practically take all day to download whereas this could be downloaded in just 46 seconds once the new networks are laid!

Dave Carter (Head of Manchester Digital Development Agency) in particular roused the audience with an impassioned plea for Manchester to lead the charge, citing frustration over push-backs and retorts such as:

  1. “There is no market for this otherwise the market would have invested in and built it themselves” – how about the importance of the Manchester Ship Canal to Manchester’s economic prominence in the early industrial age as a counter to this….?
  2. “This is too fast for most existing applications – why do we want this now?” – because businesses will find ways to utilise it to its full potential once it is there to be used – the burgeoning Manchester creative and film industry needs this now as explained by Dave Mousley of Red Vision
  3. “Let’s wait and see how other cities get on before we invest” – Dave Carter likened this to sitting out the next Olympics to see how other countries fared in the hope that we could steal a march next time – it just doesn’t work this way!

References to “iPhone to iManc” and the quest to follow the likes of Stockholm and Amsterdam to become Smart Cities were also crowd-pleasers.

I sensed that the excitement was mixed with a little frustration when the test-bed area was shown as a disappointingly small pocket of North Manchester – before being extended across Manchester in due course.  Equally, the innovative idea of using existing sewerage and tram line systems to lay the networks rather than causing the disruption of digging up roads etc was tinged with concern when a throw-away comment was made by Chris Smedley that they still needed to reach agreement with United Utilities plc who own the sewerage systems …. a point that was picked up by a member of the audience during the Q&A.

Brendan Dawes (Creative Director of Magnetic North) made the poigniant point that he looked forward to the day when he could move on from living in what sometimes appears to be a Victorian Age and enjoy the advancements of living in a digital 21st Century  e.g. he currently wakes up in a Victorian town to travel to work on a Victorian tramline to admire the Victorian Manchester architechture  – “if only the wireless 3G network would allow Spotify to work properly whilst sitting on the tram!”

Another discussion which sparked interest was the notion that truly opening up to the potential of the digital age could allow individuals (young and old) to make game-changing products and services.  Digital business is a leveller in providing a level playing field for both small and BIG corporate businesses.   Reference was made by Brendan to a young guy who he met at SXSW who said he was leaving Apple to set up a new business with Jack Dorsey (co-founder of Twitter).  This business turns out to be the recently launched Square – a game-changing business that is set to blow credit card providers and potentially even cash into the dark ages:

“and this was created by a kid and NOT some corporate team in suits working for one of the major banking institutions.”

A great point well made.

If you’ve yet to see the potential of Square – here’s a taster:

I had to leave the event promptly for a client meeting so I was unable to hang around to chat, however, I couldn’t help but feel that this was the right sentiment and that things are going in the right direction but we need to see the test-bed site rolled out as soon as possible before a) there is the risk of loss of momentum and / or b) the nay-sayers sense weakness and put the brakes on.  There is also a potential change in government that could derail this ambitious project given public and fiscal tightening.

Let’s hope that the first fibre networks are laid as soon as possible as I believe that what might seem like a bold move now is likely to be viewed as one of the best things that Manchester ever did in years to come (like the Manchester Ship Canal).

Please share your views.

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