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Summary:

In the run-up to Thinking Digital, one of Britain’s top technology conferences, the entrepreneur behind the event says it is time for local startups to stop thinking that innovation and success can only happen in Silicon Valley. Herb Kim explains how to go beyond basic boosterism.

Herb Kim

Herb KimHerb Kim has a problem. The American CEO of British company Codeworks thinks there are a few things that people tend to get wrong about his adopted homeland. The biggest?

“The obvious thing I disagree with is that trying to do a tech startup in the U.K. is hopeless — that you should move to Silicon Valley if you want to have any hope at all,” he says. “Trying to do a tech startup anywhere in the world is bloody hard work, as we all know. To say that successful startups can only happen between San Jose and San Francisco is a bit of a joke: It’s lazy journalism and almost antithetical to the very nature of creativity and innovation.”

He should know. As the head of a business that focuses on development and investment in England’s North East, he’s seen plenty of growth despite being far removed from the West Coast bubble. This week, his Thinking Digital conference, for example, will start having doubled in size since 2008, with more than 700 delegates in attendance. He’s also helped push investment in local companies, whether from nearby angels like the founders of software company Sage, or from broader sources such as the European Development Fund or British government.

The primacy of Silicon Valley is hard to get away from. It’s a view thrown around regularly by many people, from Y Combinator founder Paul Graham to the legion of foreign entrepreneurs who shift to California to try for the big time. And Kim’s got a vested interest in opposing them. Although he’s a native New Yorker and former IBM manager, he moved to the U.K. more than 15 years ago. Since then, he has tried to help build up the local tech culture, particularly the area of England where Codeworks is based. It’s been a tough job, not least because the area is traditionally pretty deprived.

That isn’t to suggest there are no benefits to Silicon Valley’s startup-friendly culture, of course. Let’s be honest; the area benefits from decades of corporate technology investment and a huge venture capital base which together mean the tech and startup industry has, in some ways at least, become the region’s governing body. By comparison, other areas, including the U.K., have governments that are sometimes too desperate to try to fill the gap. Kim recognizes the problem.

“I do think countries and regions [that] want to compete in this space need to get their act together on facilitation and support of a digital or creative economy,” he points out. “But I emphasize ‘facilitate’ and ‘support’ as opposed to intervening with shiny new buildings and large wads of public money. Those things might be PR-friendly, but they often cause as much negative distortion as they do positive results.”

Indeed, Codeworks knows better than most that government support can be fickle. It started off as part of a regional development agency, but when a change of management changed the investment priorities soon afterwards, the cash ran out and the business span out on its own. Instead of turning tail, heading off to better climes, or simply shutting down, Kim stuck in there… with serious benefits.

“If something is a good idea, or answers a genuine need, you can find a way to do it — even if traditional sources of investment are pulling out,” he says. “Our credibility with local industry has gone way up because of it. We didn’t just pack our bags and chase the money somewhere else. We’ve stayed true to our original purpose and mission, and that’s been well-received.”

It’s now a few years down the line, and things are starting to turn around locally.The development business is run as a non-profit, and Kim says the pump is primed in terms of angel money and venture capital, which is starting to flow in the North East. But he also wants to point out another misconception that lots of people make: the idea that local investment and Silicon Valley are diametrically opposed. While launching outside the technology industry’s traditional center of gravity is possible, the fact that you’re outside Silicon Valley doesn’t mean you have to pretend it doesn’t exist. In fact, it works best when one can connect the two threads together.

“It’s easy to either be completely inwardly or outwardly focused, but in our case, it was really important that we both did good work within the North East,” he says. “But made sure we were relevant and connected to good people outside the North East.”

  1. The term “Silicon Valley” in my opinion is coming to mean something much more than the physical location. It’s more a way of thinking and a network of people that share this way of thinking with a large center of gravity in Northern California. However, as the author points out, there’s a ton of potential for taking that way of thinking of the world to other corners of the globe. A recent article in Inc Magazine makes this case in their article about “South American Silicon Valley” http://ow.ly/50DId

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  2. Here’s the first problem: Referring to startups as an “industry.” Please. The tech press lives in the bubble, and that bubble is reinforced by the notion that the valley is where it’s at. Real life is that there are countless companies doing interesting things wherever the Internet exists (everywhere), many do not have interest in acquiring any kind of external funding, and, wait for it, many even make money up front. The obsession with finding the next Google or Facebook story is boring.

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  3. I recently toured the “Silicon Roundabout” area of East London and was pleasantly surprised by what I saw. There’s already a growing ecosystem of engaged public an private organizations that are working together to develop momentum in this marketplace.

    Granted, when armed with broadband access you can launch a new start-up venture from just about anywhere in the world. That said, I wouldn’t underestimate the inherent value of being able to tap into a local peer group of entrepreneurs that can collaborate on project of mutual benefit.

    The UK, and East London Tech City area in particular, seem to have a head-start in this regard — it’s got the strategic assets in place. Of course, they have a long road ahead to attain anything close to the recognition that Silicon Valley has achieved.

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