What do tech start-ups need? Coffee, power, wifi and each other…and maybe a loo! That was the starting point in the creation of TechHub according to its co-founders Elizabeth Varley and Mike Butcher.
Transforming the traditional workplace with TechHub
When they came up with the idea in 2009 they knew that people would sit on the floor if needed, although luckily it didn’t come to that. They were inspired by co-working spaces that they’d seen in the US and the value that came from a cluster. The cluster, in part, was already there; a whole bunch of meet-ups were already happening in East London but they had nowhere to go. The irony being that the tech community needed to get-together in real-life. It was good meeting at conferences but this interaction needed to move to the day-to-day. On top of this, start-ups elsewhere in Europe wanted to find a way to get started in London.
TechHub started with a viral campaign, asking people to create 60 second YouTube videos explaining why they needed TechHub. Their founder memberships were oversubscribed before the space even opened, and Elizabeth was mobbed when the idea was announced in a pitch at a TechCrunch event. But right from the start the principle was to keep it as affordable as possible – with a no-frills approach to the space so that the real value was in companies coming together. To keep costs down, Mike built the chairs for the first space and Elizabeth welded the desks.
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So why is co-working so valuable?
What is the benefit of bringing people together?
According to Elizabeth, TechHub’s benefit is “we don’t sell you a desk, we sell you the person you’re sat next to.” This network effect is powerful, and something that has implications bar beyond just the start-up community. On a day-to-day basis everyone is working on their own project. But people naturally cluster with each other and share ideas. Very often at TechHub you’ll see people who don’t know each other working together, clustered around a laptop screen, offering to share their expertise and help each other out.
This process also shares the experience, so you can learn from others who are six months further down the line than you and avoid falling into the same pitfalls. There is also an inherent benefit in being surrounded by people who have already taken the plunge, making the leap you have taken in founding your own company that bit more acceptable.
Why did all this happen in East London?
The area was already full of designers, artists and independent restaurants. What they have in common with entrepreneurs is that they all want to do their own thing and they are inherently creative. Once a few tech entrepreneurs arrived, they created a network effect and more followed. TechHub was able to get started because of the place and time, being part of the Tech City zeitgeist. The democritisation of technology also played a part. In the past tech start-ups would have needed lots of kit, for example managing their own servers. Now, the internet is the platform and you can start a company in your bedroom for next to nothing. TechHub wanted a location in every city so that you could build a business everywhere. Members are coming to access the member network and going global from London.
Entrepreneurship is now a global movement with clusters appearing everywhere – even Beirut. TechHub’s vision is already global domination, with spaces in Riga, Berlin and soon in Bangalore. Even before launch, people were contacting saying they wanted to do TechHub Oslo or Mumbai, and there is currently a list of 80 locations interested. There is a need for more space all the time.
Co-location networking and mutual advantage
TechHub provides an interface for start-ups to big companies, such as Google, through their partnership in Campus London and with BT, through a scheme that gives members access to mentoring and BT’s customer base. TechHub also offers a light-touch filter for investors, since they know that if they’re talking to a TechHub member then a small amount of due diligence will have already been done. And since TechHub doesn’t invest in start-ups, they know that they are neutral, instead generating their value from growing the membership.
TechHub has stuck to its roots, being open to product-orientated tech companies in general rather than specialising in certain sectors or niches.
What about confidentiality when companies are working collaboratively in an open space? Whatever your start-up idea, in Elizabeth’s experience a thousand people will have already had it. The reason why anyone believes in their own idea is the skills that they can bring to make it happen. Of course sometimes ‘stealth mode’ is required, but most start-ups have the opposite problem – wanting to be noticed and have people talking about their idea. TechHub wants to be inclusive, so if another member is working on something similar then it is up to you if you consider that a problem. Speed to market and getting traction with users are generally higher priorities, and it may be better in the long run to team up with your rivals. Investors often prefer it.
People tend to join TechHub when they become serious, it’s like taking a leap. A lot of people join in January as a New Year’s resolution – “Don’t join the gym, start a start-up!” A lot of new members will have already been working with someone remotely and they take the decision to co-locate. Then they accelerate hugely.
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About the series
Thomson Reuters Labs™ partners with Cass Business School to bring you EntrepreneursTalk@Cass in London. These interview-based evening events feature founders of successful start-ups from London and take place at Cass Business School. EntrepreneursTalk@Cass are designed to inspire students, entrepreneurs and anyone interested in tech.
The talks are hosted by Axel Threlfall, Editor-at-Large, Reuters. Prior correspondent experiences include: Reuters TV, Wired UK, CTV News, and CBC Undercurrents.