Tom Adeyoola, founder of e-commerce fashion platform Metail, explores the future of retail technology in the UK.
The UK’s digital industry is booming; according to the Tech Nation report published earlier this year, it’s growing 32% faster than the rest of the UK economy. This has also enabled the UK to become the home of Europe’s unicorns. London alone has 13 billion-dollar tech firms, according to technology investment bank GP Bullhound.
However, whilst we have created a successful startup ecosystem, London is still yet to produce the next Google, Facebook or Apple, and Brexit threatens to stop the progress of our digital economy in its tracks.
Silicon Valley
Last week, I travelled to Silicon Valley with a group of 14 other European tech businesses that had been selected by Startup Europe for their scaleup potential, and to draw on the expertise of our overseas rivals. This trip crystallised both the challenges we face in London, and the opportunities held by the unique ecosystem we have created.
Put simply, to survive the threat of Brexit, we need to follow the Silicon Valley model and focus on two key areas: ambition and talent.
We must adopt a mindset that prepares for the longer-term growth picture – across the entire ecosystem. In practice, this means that investors must be more willing to place faith in long-term growth potential rather than immediate short-term financial returns. In turn, founders must commit to long-term investment focused on product quality, relentless innovation and the quality of their team. Without this focus, the UK will never create global tech giants, but continue to create companies with world-beating technology that sell-out and export talent too soon to larger and often inferior global competitors.
The US tech scene has long understood this. As Jeff Bezos, founder of Amazon, famously told Wired, “If everything you do needs to work on a three-year time horizon, then you’re competing against a lot of people. But if you’re willing to invest on a seven-year time horizon, you’re now competing against a fraction of those people, because very few companies are willing to do that.”
This is not an alien concept to the UK. Take the retail sector, for example. It has always been innovative, and was one the first sectors to embrace technology. Some of the largest names in business today, such as Amazon and eBay, owe their growth to the essential infrastructure that tech provided.
It is important to bear in mind that these global success stories were built back in the nineties, and have continued to scale for well over a decade. This week, I’ve asked myself what the secret for their success is, and how British startups can adopt a mindset that will ensure they follow the same trajectory.
Talent
Early exits in London’s tech sector will send the wrong message to the international digital economy. London needs to replicate Silicon Valley’s reputation as a tech hub capable of nurturing and producing billion-dollar businesses and globally significant exits. We have the network of investors, regulatory bodies and service providers required; now all we need is to increase the confidence and ambition of our entrepreneurs.
The second point is about talent. Silicon Valley has an unrivaled magnetism that attracts skilled workers who come from all over the US, and, importantly, from overseas. London has similarly always employed the brightest tech minds from across the globe, and post-Brexit, it is going to be important to retain this position.
Whilst the UK has a clear understanding of its tech clusters and digital specialisms, there is more we could do to leverage the talent coming out of our globally recognised academic hubs – and how we can retain them, particularly in London.
The Golden Triangle, academic hubs of Cambridge, Oxford, and London, is a fantastic source of young, bright talent that can help sustain the growth of the UK’s tech sector. After all, Oxbridge is to London what Berkeley and Stanford are to San Francisco.
At Metail, we have 13 PhD graduates from these leading universities. I have seen first-hand the curiosity, creativity, and culture nurtured in these sites of learning. These fundamental qualities can be the fuel for the future growth of world-leading tech companies in the UK.
Retail tech in London
We know that London has the potential to produce the next world-beating digital businesses, and I like to think there has never been a greater opportunity than in the retail tech sector. This has been recognised globally – Eric Schmidt, longstanding chair of Google, claimed that the UK was the global home of e-commerce earlier this year.
While London has been the home of FinTech for many years, it’s now a chance for this proud nation of great shopkeepers to be renowned for retail tech and there’s no reason we couldn’t build the next unicorn in our capital. We have to look outward now more than ever before, and take our expertise global. Our retailers are already facing a challenging domestic economic environment. Earlier this year, the ONS reported the largest fall in clothing and shoe sales in 25 years. They must act now, or risk being consumed by global retail giants.
And London has a unique advantage. Last week, 83 internationally renowned designers took part in London Fashion Week – a celebration that has been running for over three decades. Our new Prime Minister hosted a champagne reception to celebrate the start of London Fashion Week for the likes of Vivienne Westwood and Anya Hindmarch.
It is clear that fashion has never been more closely tied to the UK’s business agenda and the retail sector must capitalise on this.
It is crucial that we learn from businesses across the pond and acknowledge where our strengths lie – particularly in the retail tech industry. Silicon roundabout must strive to be more than just the startup capital of Europe, especially in a post-Brexit world, if it is to rival its counterparts in Silicon Valley and produce one of our future digital giants.