Eric Van Der Kleij is head of the government’s Tech City Investment Organisation (TCIO), the body responsible for stimulating growth in Tech City – the area of East London between Shoreditch and Stratford which has become home to a swarm of tech start-ups.
An experienced entrepreneur himself, Van Der Kleij chatted to Startups about the work of the TCIO, and why he believes Britain will soon have a company as big as Facebook…
Some might say TCIO’s remit seems a little vague. What specific role do you play in developing Tech City?
Some people think that the Tech City Investment Organisation is a funding organisation, but it’s not; we facilitate investment rather than providing it directly. We’re part of UK Trade and Investment, and our role is to attract large corporates, entrepreneurs, venture capitals and start-up talent to the Tech City area. We also input into policy, so that government creates the right start-up environment.
But you have provided some funding through the Tech City Launchpad, haven’t you…
Tech City Launchpad was a £1m grant, available for 10 companies, but that money had to be match-funded. I’m a little against grants myself; they need to come on commercial terms. Giving a £100,000 grant for a good idea, with match funding, was a very healthy approach.
The reason for this early funding intervention was to encourage some of these young businesses to be audacious and try something new – something that hadn’t been tried before. In the end, the number of applications we got was so high – over 200 – that the Technology Strategy Board doubled the money to £2m.
Will you be taking a similarly direct role in future?
We don’t want to intervene any more as a government. For us, we believe that what we should be doing is creating a policy environment, an economic environment, whereby private enterprise, private investors, angel investors, venture capitalists and start-ups can all mix and create wealth without our intervention.
We want to continue organising mentoring and networking events, as well as the Entrepreneurs’ Festival, which attracted over 250 entrepreneurs to Tech City in November.
Can you talk us through some of your other recent achievements?
We went to the US last summer, showcasing Tech City to the venture capital community over there, and invited them to come to London. We had some terrific investors come over through that link-up, such as Jeff Clavier, who’s invested in over 100 of Silicon Valley’s top start-ups. He left with a terrific impression of the entrepreneurial eco-system.
We also recently secured Le Web’s attendance in London this June, which is a huge coup for the city and the startup ecosystem overall, and are looking forward to welcoming visitors to London to Hackney House, a temporary visitors’ centre in the heart of East London which will showcase the best of what Tech City has to offer.
Can you give us a little insight into The Startup Games, taking place this summer?
With The Startup Games we want to invite some of the world’s best start-ups, from many countries, in parallel with the Olympics. These can be companies with the highest potential, or the best recent progress – there will be different categories of start-up.
The idea is that these start-ups come to Tech City, we’ll encourage them to present their businesses to each other and also to some very capable investors and potential partners. The goal is international recognition – when you think about the Olympics, you’ve got 20,000 journalists looking at London during that time, so we’re keen to showcase the companies that are here.
Will your Games be focused solely on tech companies?
No it won’t be solely tech, because the Olympics is about embracing everything. We’re currently thinking of widening it to at least five priority sectors; each of the sectors will be selected for their growth potential, across all the countries participating.
Of the companies launched in Tech City recently, can you pinpoint any personal favourites?
If I can have a Bruce Forsyth moment, all the start-ups are my favourites! But I would like to point out some of our perhaps more grown-up businesses, which have been start-ups and have flourished within Tech City. They’re becoming inspirations and icons for our companies.
Look at Mind Candy for example – that’s quite a young company, but some experts have predicted it will become Tech City’s first billion-dollar business. Success like that is fantastic, and it sends a signal to all the other start-ups that they can do that as well.
There are loads of other successful firms out there – companies like Last.fm for example, Tweetdeck, which sold to Twitter, and Badoo – an amazing business.
With so many great companies emerging from the start-up ecosystem, what chance does Tech City have of producing a company as big as Google or Facebook?
Is it possible? Well, answering that question isn’t even necessary. I can tell you, right now, within Tech City, there is one already there. It’s just on the journey. Within the next couple of years, it’ll start to emerge.
But does it worry you that Spotify is apparently switching its focus from London to New York? Doesn’t this demonstrate that America is still the place for tech companies?
No, it’s a natural progression as far as we’re concerned. We see companies using London to grow, and then moving out to the US for expansion. It’s really good actually that they do it.
We want to show European start-ups that we’re a very good place to do that growth phase, especially if you’ve proven your business model in your own country and want to grow. We should be the next stop you come to as you execute your growth strategy because the market is so big here.
We also see the same thing coming back the other way – strong venture capital-funded businesses coming from the US to the UK, companies like Yammer, Mozilla, Twilio… all looking to expand, all looking to use London. These great companies are using London as a springboard for our own market, and also for expansion into Europe. It’s nice to see the flow working in both directions.
I also think that investors will realise the potential of the UK, and allow their investees to keep their headquarters here. Shazam, for example, took an investment from Kleiner Perkins a few months ago but was able to remain in London, because the investor acknowledged the company is better in London.