Start-up Psychology: Silicon Roundabout versus Silicon Valley

The image of sun-drenched Silicon Valley has dominated both pop culture and the business world for the past decade,

but the UK’s Silicon Roundabout is catching up with its American cousin, despite a very different psychology in terms of culture and development. Although the end result—an abundance of successful tech start-ups—has been much the same, the key differences in the processes that created them and continue shape them are examined here:

Origins: Academic vs. Creative

Silicon Valley has its roots in Stanford University and very much grew up around academia and the technology-based disciplines at the institution as far back as the 1930s. It can predominantly be described as a technology cluster and its outlook and psychology have been shaped accordingly.

“A remarkable thing about the Silicon Valley culture is that its status structure is so based on technical accomplishment and prowess” – Jaron Lanier

Silicon Roundabout, on the other hand, was very much organic in its conception and developed in an area that had become a hub for artists and creatives rather than tech and science academics. This is crucial when considering the psychology of the two areas, as the UK scene does not have a purely technological underpinning. The fact that UK start-ups tend to transcend a number of disciplines- many of which are about creative rather than technical innovation- is testament to this.

“You have to look at your assets. Tech City is more of a creative cluster than a technology cluster. We’re doing music tech, fashion tech, film tech, etc. Where you have an advantage is you have key industries and you see the problems and the needs technology can address.” – Tony Hughes

 

Geography: California vs. London

Let’s not forget how geography effects the mechanics of a new movement- California was the ideal location for start-ups to begin in back garden garages and dorm rooms due to the ever-present influence of Stanford and the sprawling, suburban, green geography of northern California. The whole machine grew up around the Stanford Industrial Park in the 1950s where groundbreaking technological and scientific discoveries were taking place.

“I think that’s exactly what Silicon Valley was all about in those days. Let’s do a startup in our parents’ garage and try to create a business.” – Walter Isaacson

Silicon Roundabout, on the other hand, developed in east London largely due to the abundance of cheap-to-rent warehouse space in Shoreditch and around that was perfect for exhibitions and work space. The economic advantages of the area saw the continuing arrival of young people with creative ideas and the sharing of space encouraged a collaborative work process- both central features of the UK’s startup psychology today.

“Around this shabby, hip neighbourhood, hundreds of small technology companies have started up this year alone, thumbing their noses at the economic gloom around them and hoping to build tech companies to compete with the world’s best.” – Mike Wendling, BBC

 

Collaboration: Self contained vs. International

Silicon Valley has never needed to focus on its neighbours. It is one of the largest start-up ecosystems in the world, and is, in a sense, self-perpetuating. Large companies in Silicon Valley have the means to fund start-ups themselves, and have never needed access to their neighbours as a selling point. Silicon Valley has managed to be both self-contained and totally global which as shaped its psychology as a largely independent entity.

The Roundabout needs to remain connected to survive and is thus much more of an internationally dependant network that Silicon Valley with talent coming in from all over Europe and branches of well establish start-ups coming in from the US. Tony Hughes, founder of Focus Innovation and development leader of Tech City, says that the reason that the UK is thriving is because “you can use the UK for a launch pad across the European market.” Many American start-ups have now come to Britain, which can be seen, for example, in Google’s 2011 acquisition of a seven-storey building in the centre of Silicon Roundabout.

“The UK has all the ingredients to grow successful start-ups. A can-do attitude and better team-playing have the potential to make all the difference, particularly by turning Silicon Roundabout into a truly vibrant, serendipitous hub.” – Eze Vidra, Head of Google Campus

Venture Capital vs. Government Backing

Most of the tech companies in Silicon Roundabout are British, and are being founded against a backdrop of increased interest in stimulating this sector from the government. Whilst venture capitalism still has a huge part to play, government and media support are endowing the UK startup scene with a sense of confidence as doting articles and government speeches on the success of the area permeate mainstream media and political dialogue. The Prime Minister wants to focus in particular on Silicon Roundabout, and says that he wants to “help it become one of the world’s great technology centres.” A 50 million pound facelift for the area has been announced by the government and this support and enthusiasm from official channels must surely have influenced the psychology of the fledgling UK startup scene in a positive way.

Comparatively, American support for start-ups was relatively internal in the beginning through university, private and venture capitalist funding. is now quite similar but was once the area of academic institutions and venture capitalists only. Now there are a number of government led initiatives such as the StartUp America scheme– but governmental support matches the ecosystems that they are backing—Silicon Valley has become reasonably self-sustainable once the ball has started rolling, whereas British start-ups, as their ecosystem has thus far been smaller, require a little more help.

A Psychology for the Future

Growth in Silicon Roundabout seems almost inevitable. Competition in Europe to be the ‘next’ Silicon Valley is hotting up – London’s greatest competitors in this area are probably going to be Berlin and Moscow. In a sense, Silicon Roundabout is Silicon Valley ten years ago—its approach needs to be different because its climate is so different. Hopefully, Silicon Roundabout’s future looks a lot like Silicon Valley—a self-perpetuating ecosystem of start-ups which have long-term futures.

“The infrastructure is there, you know, Silicon Valley has been around for decades, they’ve got a big, big lead on us, and there are some amazing companies over there, but we’re starting to see them bubbling up from London and now with the Olympics… I think we’re going to create the next Googles and Facebooks and LinkedIns and Twitters right here in London.” – Michael Acton Smith, Mind Candy