What’s Holding Up the Internet Startups In Scotland?

13Jun08

I think Scotland has a sensational amount of creative talent. Of course there are other creative city hubs such as New York, London, Paris, Berlin and Silicon Valley in San Francisco, but Scotland has created a lot and commercialized little of their creations (An Incredible List Here). It is now a major frustration for me that our great country is such a slouch when it comes to Internet Startups, something that should play into Scottish creative strengths.

Well, I finally figured out the problem. It’s called the “developed financial industry”.

Sure, Scotland thrives through its financial industry and partially helps make Scotland great, or at least rich. So why is it the problem? Two reasons. First, The industry absorbs too much of the potential talent. Second, the banking firms offer a comfortable living and bonuses, it’s a academically based mindset that is favoured by skeptics – Scottish people are traditionally skeptical. Here is what I think – Our schools are educating the creativity out of us and ushering us into routine jobs. – See Here For A Video By Sir Ken Robinson

Before looking at the hurdles, here are three reasons why New York should be the center of tech/media startup scene:

  1. Scotland has the creativity.
  2. Scotland has global love.
  3. Scotland has the money.

Lets look at why these three things matter, and in particular, why they matter to the next phase of web technology.

Scotland Advantage 1 – Creativity. Il mention just a few creative things we created before the industrial revolution. The steam engine, the flush toilet, the bicycle, tarmacadam roads, the telephone, the television, the motion picture, penicillin, electromagnetics, radar, insulin and calculus.

Scotland Advantage 2 – Global Love. Web 2.0 is a consumer wave. The web really is replacing, surrounding and extending all traditional forms of entertainment. And to make it in entertainment, you have to be loved by everyone. We have the charm.

Our country has been admired, visited and loved for a long time. It is as cool today as it was when we created the TV or more recently when we cloned Dolly the Sheep.

So cool that when I speak abroad about Scotland, there is always a talking point, our castles, our countryside, our inventions, our whisky, our famous football supporters the Tartan Army or our great warriors like William Wallace, but not internet startups, yet.

Scotland Advantage 3 – Money. We have some of the biggest and most profitable banks in the world, all we need is for them to embrace high tech startups better and they might realize that they could make a killing from just one success. Think of it like a cycle, some of these banks have clients who are investors. If these investors invested in an Internet Startup that was a success this is what would happen:

Startup founders make money on profits or through a sale

Investor makes money through increased value by selling their share

The banks make money by having wealthier clients

What’s the problem?

  1. Tech Talent. Corporate companies suck it in with a great salary and bonuses, with no risk. The big finance firms just pay too much.
  2. Patient Capital. Scot’s love the cash. Scottish investors just love liquidity. They ask:

“What’s your exit route?”

“Could I sell today?”

That’s not going develop a Google – You Tube – Facebook is it? Infact if value is ignored it wont get Internet Startups anywhere, anytime soon.

But il do it!

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