The great thing about London’s latest breed of entrepreneurs is that they don’t stand on ceremony. In that respect they have quite a lot in common with politicians “of a certain age”, who are and indeed always were equally unafraid to speak their minds.
The stage was set then on Monday evening at the Collective’s stylish townhouse HQ in Bloomsbury for a political debate that will be remembered as a relatively straightforward victory for the Conservative party, represented by “roustabout” ex-London Mayoral candidate, Tory MP and successful businessman Stephen Norris. The Labour panellist, Lord Adonis, had had to cancel at the last minute, having been asked to return to the House of Commons to discuss recent events in Tunisia, which should give a sense of perspective to an otherwise outspoken, occasionally fiery and occasionally hotly contested debate.
Fortunately John Spindler, Co-founder of the London Co-investment fund, stepped in at the last minute and in fact made a contribution which was quite possibly every bit as illuminating as Lord Adonis’ could have been. We’ll never know for sure, but in his absence it was the man asking the questions, presenter and Tech Crunch Editor-in-Chief Mike Butcher, who took on the role of chief Norris-needler.
Butcher, praised by Spindler for being the driving force behind the “Tech City” start-up phenomenon, opened the debate by describing his experiences of pitching the concept of “the Internet” to John Major’s Conservative government in 1995, of which Norris was an influential member. “We don’t need it, it’s full of criminals and porn”, he was told.
Which was, of course, true, but in a not altogether who,esoteric way hasn’t the porn industry often found itself ahead of the game, and criminals too (Bitcoin anyone?)! When Butcher returned to the commons the following year the government had performed a spectacular volte face: now every British citizen must have access to the Internet! Are politicians always behind the curve when it comes to setting policy?
Not at all! Countered Norris; although admitting he had never had a PC back in those days, governments were duty bound to move with the times. The example he chose to use was to become a theme for the evening; property; today’s government must wake up to a growing need to provide cheap, flexible accommodation, and not just for entrepreneurs. The model everybody should be using was that of Reza Merchant, founder of the Collective. It sounded a teeny bit like sucking up.
Butcher agreed that business rates on property are a serious issue that threaten entrepreneurs and that the government must look at new ways of levying taxes on property as soon as possible. Merchant, standing at the back of the “Den” the co-working space his team are in the process of renovating, could probably have weighed in with a suggestion or two at this point, but wisely chose to keep his counsel.
John Spindler agreed; co-working spaces are struggling to get business relief. Tech Hub, for example are paying exorbitant rates, more than almost anybody else. “Let’s stop talking about property” intoned Butcher, but Norris was not to be denied his rant (another theme of the evening); “property owners must recognise the speed at which the property and tenant occupancy model is changing! The market is behind the 8 ball: nobody wants to rent 50,000 sq. ft. footplates or whole floors of the “Walkie talkie” or “Cheesegrater” skyscrapers. Now that anybody can be connected, anywhere, the flexible working model is key; the office is losing its importance; why join the commuter rush when you can work from home?
That was more like it: a piece of advice for entrepreneurs! But as Spindler pointed out, even start-up Mecca San Francisco has property problems; where you end up leasing your office space could determine whether an investor is going to back you or not. And as for the North of England, as Butcher put it with deliberate bluntness; “there just aren’t any f*ing investors in the North.” Still, there’s always “The Angel of the North”, huh Mike?
Norris was scathing about the chances of business owners making a go of relocating outside of the M25. “A lot of people tried it, went to the North or Northampton to see if they liked it, see if they could make it work and they came straight back!” He reminisced. That was 25 years ago however, Stephen, when HS2 was no more than twinkle in Boris Johnson’s eye.
Apparently the issue was that there was nothing to do in Northampton on a Tuesday night. What, no televisions, no microwave dinners like we have in London? No beans on toast or Tinder? For shame. Keep building in London, that’s the answer, opined Norris, returning to his favourite theme. “10 years ago in Shoreditch you couldn’t give property away, now look at it.” Quite.
It was time for Butcher to steer the conversation away from “the middle-class dinner party topic of property prices in London”. It was time to talk about property prices in Berlin! The local government there are backing rent control; god’s gift to entrepreneurs, surely?
But rent control is not the answer, Norris replied, because it is anti-entrepreneurial and discourages investment into property. Spindler’s view was that start-ups need to find a solution fast before the hipsters and indeed everybody else starts to move out of the capital.
He followed up with another view; not about property, but about data-privacy! Spindler is a libertarian, but believes that the “Snowden effect” has largely passed Britain by; “we’re the world’s biggest data spys!” he declared. Butcher reminded us all that the government had once sold off patient’s health records to insurance companies. “Remember, if you are not buying the product then you are the product”, Spindler added: it’s all getting a bit “Minority Report” when it comes to digital data mining, was the general view, although Norris demurred.
“Could the government be doing more for entrepreneurs by extending the EIS and SEIS tax breaks or making more funding available?” asked Butcher. They could, replied Spindler, but they already do a fair bit. 85% of London’s VCs receive some form of government funding; angel investors are mainly put off tech investing because of the length of time it takes to get their money back; usually around 8 years. They should remember what the economist Adam Smith said: “common investment must be done by groups.”
All of a sudden, Norris, who had been a touch quieter during the non property related part of the discussion (not a criticism, he still made interesting and relevant points) sprang to life. It was at this point that a 3 way discussion effectively became the 1 show. Norris wasn’t taking any prisoners and Butcher and Spindler seemed to have no answers, just more questions for Norris! It was reminiscent of W.G. Grace in his prime. They’ve come here to see me bat not watch you bowl son! Norris was opening up. Take cover! It was occasionally crude, but the crowd loved it and there were few dissenting voices.
Webinars are “boring”, ID cards “worthless”; the magnanimous Norris is prepared to share his data online, because “I’m still getting the better end of that deal”. The French government took a pounding, although they deserved recognition for arresting Uber’s senior management team and putting them in jail. The Brits, the inventors of the world, need to toughen up, rediscover their nasty side, and invade the tax havens!
Of course these were extreme edges of a well intentioned and well-researched rant. The term “disruption” has been redefined, he went on; “in my day to be disruptive had negative connotations, not positive ones”. In his day also everything he said was written down by a young, almost always female secretary. Not sure if that was a dig at bloggers, but if it was: touché!
On driverless cars: “What’s technically possible today may not be practicable tomorrow”, but he’d use one, “and my nine year old son probably would too!” On Visa policy: “we must get our policy right. We refuse to be a part of the Schengen area because we don’t want to accept economic migrants, but the vast majority rarely if ever claim benefits and bring extraordinary and much needed knowledge and expertise into the country.”
Finally, and to sum up perhaps with a non-property related topic. Investors must be incentivised to fund UK based technology companies, not just by the government, but by the companies themselves. They need to be won over. Winning over a crowd. I have a feeling Stephen Norris would have a thing or two to say about that, and he’d probably be right. With a little wrong thrown in, just for effect, you understand.
Entrepreneurship: how can policy keep up? Took place at The Den, The Collective Elevator’s newly refurbished co-working space in Bloomsbury. Desk space is available from just £198 pcm. For more information please visit: http://den.thecollective.co.uk/bedfordsquare