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Scaling Up Is Hard To Do -- What Can The UK Learn From Silicon Valley?

(AP Photo/Marcio Jose Sanchez)

According to figures published today London and Partners, the UK has seen a 44% increase in digital businesses over the last ten years, feeding through to a 17% rise in jobs within the sector. Focus in on the capital and the figures are even more impressive. Between 2006 and 2016, digital jobs in London grew by 77%, reflecting a 90% rise in new companies.

This is undoubtedly good news, confirming the UK's status as a hub for innovative technology-led companies. But in the longer term, the health and resilience of the UK's digital economy is likely to be measured not simply by figures indicating an accelerating groundswell of new business, but by the number of startups who succeed in scaling up and attracting series 'A' and 'B' funding.

The Scale Up Struggle

And it is here that the UK's technology clusters lag behind their counterparts in the US. Thanks in no small part to an increased availability of seed capital, Britain has no shortage of innovative startups, but the (often) young entrepreneurs who put together small teams to develop and launch products, often struggle to manage the process of 'scaling up' nationally and internationally.

So what can be done to help?

Well one approach is to expose ambitious British startups to experienced mentors, both from the UK and from the US.

Trevor Clawson , CONTRIBUTOR I am a UK business journalist, specializing in fast-growth companies.

Opinions expressed by Forbes Contributors are their own.

(AP Photo/Marcio Jose Sanchez)

According to figures published today London and Partners, the UK has seen a 44% increase in digital businesses over the last ten years, feeding through to a 17% rise in jobs within the sector. Focus in on the capital and the figures are even more impressive. Between 2006 and 2016, digital jobs in London grew by 77%, reflecting a 90% rise in new companies.

This is undoubtedly good news, confirming the UK's status as a hub for innovative technology-led companies. But in the longer term, the health and resilience of the UK's digital economy is likely to be measured not simply by figures indicating an accelerating groundswell of new business, but by the number of startups who succeed in scaling up and attracting series 'A' and 'B' funding.

Gallery Silicon Valley Venture Capital Style Launch Gallery 8 images

The Scale Up Struggle

And it is here that the UK's technology clusters lag behind their counterparts in the US. Thanks in no small part to an increased availability of seed capital, Britain has no shortage of innovative startups, but the (often) young entrepreneurs who put together small teams to develop and launch products, often struggle to manage the process of 'scaling up' nationally and internationally.

So what can be done to help?

Well one approach is to expose ambitious British startups to experienced mentors, both from the UK and from the US.

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And that,in no small part, is the mission of Silicon Valley Comes to the UK (SVC2UK), an annual event taking place in London, Cambridge and Manchester this week, bringing together successful entrepreneurs, investors, policy makers and emerging businesses to share insights. Now in its tenth year, the initiative is coordinated by London and Partners, the promotional agency for the UK capital.

The Scale Up Club

And as Janet Coyle, director of SVC2UK at London & Partners explains, the focus of the event is on providing rapid-growth, early-stage companies with support and mentoring to help them address the very real challenges of scaling up. To that end, the organisation has selected 50 business – dubbed the Scale-up Club – to attend a special 'CEO Summit.'

“We are selective,” she says. “In order to be considered for the Scale up Club, companies have to demonstrate at least 20% year-on-year growth over the past three years and employ 10 people or more.”

The format of the CEO summit sees groups of six entrepreneurs sitting at each table, working with selected mentors. “We ask them what are the barriers to growing their business,” says Coyle. “And we'll be addressing subjects such as how to grow internationally, how to attract talent, and how to raise finance.”

Mentors include successful founders from the UK and - as the title of the event suggests – business leaders who have started and grown businesses in the Bay Area and elsewhere in the US. VCs are also represented. Coyle says the input of 'Silicon Valley' as a hugely important aspect of the event.

The Scale Up Mindset

“One of the biggest insights relates to mindset,” she says. “For instance, VCs in the US are thinking about scale up right from the beginning and are much less concerned initially with profit and revenue.” As Coyle sees it, this emphasis on long term goals is an inspiration to the UK CEOs. “We want our CEOs to be more ambitious,” she says.

Coyle does however, stress that the event is about more than UK companies learning from their US counterparts. Speakers at this year's SVC2UK include US Chief Technology Officer Megan Smith and Corinna Zarek, Deputy Chief Technology Office at the White House. Coyle says their presence reflects strong interest in the technology coming out of the UK. This interest, she adds, is increasingly shared by American VCs.

So does that mean that the cream of Britain's technology companies will be lured to the Bay Area by VC money? Not necessarily. According to Coyle, US investors are content that UK companies remain headquartered on this side of the Atlantic as long as they establish a presence in North America.”

Over its 10 year history SVC2UK has helped around 400 early stage companies and played host to more than 170 entrepreneurs and VCs from Silicon Valley. Some genuine success stories have taken advantage of the initiative. Coyle cites Scale up Club alumni TransferWise, SkyScanner, both valued at over $1bn. This year's members include hybrid crowdfunding venture, the Syndicate Room, e-commerce personalisation company, Dressepi and app commerce business, Poq.

For participants it represents a chance not only to take advantage of mentoring opportunities but,perhaps more importantly. to do some heavy duty networking with some of the global digital economy's most prominent movers and shakers.

Source: (http://www.forbes.com/sites/trevorclawson/2016/11/03/scaling-up-is-hard-to-do-what-can-the-uk-learn-from-silicon-valley/#37521da64c1b)