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Posted on November 11th, 2011 by Nicole Kobie

Tech City: are there really 600 new tech firms?

Tech City Map

The Prime Minister has said Tech City is well and truly established in East London, with the Government claiming 400 new tech firms have set up in the so-called Silicon Roundabout area since last year, bringing the total to 600.

Now that would indeed be an accomplishment, if it were true. However, the new Tech City Map – launched to mark the one-year anniversary of the plan — doesn’t support that claim.

It maps 819 companies — 219 more than the Government’s claims — and is supposed to allow users to “analyse the tech ecosystem in East London”. Scroll down the list, and it’s clear a fair few aren’t really so much tech start-ups as marketing agencies, lawyers, architects, photographers, PR firms, art galleries, financial services and dance studios, as well as festival organisers, clothing shops, and the singer Mary J Blige. It even includes Fabric Live, as though the famous club having a website meets the criteria for inclusion as “tech”.

We — myself and my poor work experience assistant Oliver — looked into the first hundred companies (if anyone wants to look into the next 719, I applaud you). About half are tech related, and that’s pretty generously including digital marketing and designers who looked vaguely techy.

Even if you stretched a bit and included designers, photographers and “creatives”, it would be tough going to get to 600 out of the list — a point financial data company Duedil and startup support firm TechHub agree with, saying in a blog post that they’ve identified only “200 high-growth, technology-oriented companies” in central London.

A spokesperson for Tech City said the data came from two sources; it included 250 software businesses gathered by business agency Gateway to London and 550 more “broadly defined digital businesses” put together in a door-to-door survey by the team at Digital Shoreditch. That full list includes 1,000 businesses, which Tech City whittled down to “550 more-broadly defined digital businesses, which included those who were part of the digital movement, so may include fashion houses, architectures, etc, who are doing interesting things with software, etc”.

The objective with the map was to compile a good rich dataset to launch the site, then let the startup community fill in the gaps and get as close as possible to a comprehensive picture.

“As such, some of the businesses that came in as part of the Digital Shoreditch dataset are not tech firms, but they are still part of the startup ecosystem,” the spokesperson said, so the team “worked through a random set of a hundred companies and found 25 that weren’t tech related. That suggests 200 or so non-tech businesses in the whole dataset”.

Startups or settled firms?

It’s also unclear how many of the listed firms are actually newly founded. To get a sense, I took a very unscientific look — although clearly scientific enough for Tech City and the Government — at the first ten firms listed (this is out of 819, so it’s very much a snapshot):

1. RedMonk is a developer-focused analyst firm, founded in 2002.

2. Ruby Pseudo is a consulting firm. I don’t really understand what they do, but they started in 2008.

3. Indigo makes customised T-shirts, and has done so since 2002, moving to the area in 2007.

4. Mark Smith appears to be a graphic designer, and has been since 2005.

5. Mind Candy is a successful app developer that makes Moshi Monsters. It was started in 2003.

6. Dopplr is another UK tech start-up success, and has been since its launch in 2007.

7. Rapid Eye has offered darkrooms to photographers since 1996.

8. Last.FM is another darling of the start-up scene, and deservedly so. The music streaming service has been kicking around since 2002.

9. Darq is an IT support firm — and apparently the commercial side of hacking group It’s been going since 2001.

10. SoundCloud is a sound sharing system, started in 2007.

Not one has been founded in the past year. Surely some of the remaining 809 firms listed sprung up in the past 12 months, but it’s rather hard to tell, so we’ve asked Tech City for more detail.

Time for a curator?

Rather than release a confusing, padded-out list,  Tech City should curate it carefully and highlight the real tech start-ups — the next Last.FM or TweetDeck, not the next Nathan Barley.

I realise the Tech City folks are trying to create excitement around the project, and big numbers help that (and the buzz must be working, as the BBC reports that some firms say rents are already going up). But it’s hard enough for tech startups to get their names out without having the very body created to help them adding to the noise.

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10 Responses to “ Tech City: are there really 600 new tech firms? ”

  1. Tudor Rickards Says:
    November 11th, 2011 at 9:39 am

    There’s quite a bit of this ‘creative geography’ going on at present. I think a lot has been influenced by Richard florida’s work tying to pinpoint the rise of the creative organization.

    Claims need to be challenged as you have done by people using their critical faculties.

    Best wishes

  2. Adi Says:
    November 11th, 2011 at 10:01 am

    Did you get an answer from TechCity on the number of startups in the past 12 months?

  3. Mike Laye Says:
    November 11th, 2011 at 10:23 am

    The clue is in the first five words “The Prime Minister has said” – this is just more political spin.

    The word goes out: Be positive about hi-tech start-ups (we don’t know what they are exactly, but everybody says you’ve got to have them). Be negative about students (We’ve got to have them, but we can’t afford them). Be positive about the bankers (They’re ruining us, but we’re scared of them – besides we all went to school together).

    It’s all political spin and claptrap – don’t waste your time looking for any truth in any of it.

    If you want to criticise it – as you should – just bounce it back. After my extended research, out of the 600 companies, only 39 were found to be both ‘tech firms’ and ‘new’ (started within the last 18 months) – thus exposing the Government’s claims as a complete sham.

    Is that true? Dunno, I just made it up – but, then, so did they …

  4. JohnAHind Says:
    November 11th, 2011 at 10:27 am

    It is also worth noting that they have seriously stretched their geographical area as well as their definition of “tech”. The area shown barely grazes what is usually understood as “East London”, instead taking in a large chunk of the City “square mile” and also displaying a significant “mission creep” in a generally western direction.

  5. Eze Vidra Says:
    November 11th, 2011 at 11:15 am

    You bring up a good point – there’s no good way of tracking startups in Europe, let alone in tech city.

    The curation needs to be a crowdsourced effort, coming from the startups themselves!

    To bring a bit of transparency, I created a public spreadsheet (link below) with all the Tech City companies – please feel free to add yours!

  6. Tim Says:
    November 11th, 2011 at 11:19 am

    The companies house website will assist in your checks as to when the companies were set up. However as these schemes tend to be far to expensive for start ups, I would be shocked if there were any.

  7. Stu H Says:
    November 11th, 2011 at 11:58 am

    It looks to me from the screen grab as ‘Tech City’s’ criteria is based on whether the company can Tweet, like or +1 ;-)

  8. Stu Says:
    November 11th, 2011 at 12:06 pm

    I liked the Nathan Barley reference.

  9. james governor Says:
    November 12th, 2011 at 3:29 pm

    I consider myself part of the community. I was listed on Matt biddulphs original silicon roundabout map, used in the evening standard, which helped kick off some of the current buzz. Is my company high growth? No. But are we innovative, and part of the ecosystem? Yes. I shared an office with dopplr and later lanyrd. I put us on the list because I feel part of something, not because I wanted to make any false claims.

  10. Steve Cassidy Says:
    November 14th, 2011 at 12:19 pm

    Ahem. As a resident (not quite on that map, about one square over and one square down, I feel I should point out that this area does not now, and never has, faced “The Square Mile”, as Mr Hind blankly asserts it does. There’s some leak-over in the ghetto north of Finsbury Sq and SE of the Old St Roundabout but it’s not a revenue source – it’s things like BT, Reuters & Bloomberg buildings. Lots of other businesses in that area, if anything, represent the East End coming to the City, not the other way around.

    Oh and smile sweetly when you mention Fabric. The owners are the only people – ever – to face down the Smithfield Market Porters. Whatever they want to do is absolutely fine by me…!


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