The paucity of intelligent metrics in the TCIO’s Impact Report suggests a lack of smart thinking from a government department with access to some of the brightest minds in Britain, writes Milo Yiannopoulos.
The Tech City Investment Organisation (TCIO)’s first Impact Report makes for depressing reading, not because, as has been the case with previous communiqués from TCIO, it is packed with grandiose and insupportable claims, but because it is so worryingly thin on pertinent detail.
Indeed, the defining feature of this report is what has been left out. Absent the outlandish claims, the misleading statistics, the crazy predictions and the oppressively anodyne cheerfulness – things we have come to know and love from Tech City – there isn’t all that much left to read, think or talk about. In other words, it’s clear that this document has been drafted for a very different audience from the one Tech City babbles merrily away to on Twitter and at networking events – perhaps one TCIO knows it cannot mislead so easily.
The policy problem
On first reading, three structural flaws immediately reveal themselves: Tech City’s strategic objectives are clearly misaligned, the organisation doesn’t know how to talk about itself effectively and it has absolutely no idea how to measure its own success. The language and layout of the report offer the first clue: they’re better suited to a middling trade magazine feature than to a serious assessment of how a publicly-funded, business-focused body is performing.
Perhaps that is because, quite simply, relatively little has been accomplished in the year since TCIO was established. We have always tried to give credit where it is due: bringing LeWeb to London was a great achievement, even if it was achieved via subterfuge, and there is no doubt that a lot of noise in east London has been capitalised on and refracted through the Tech City branding the Government has attempted to enforce on the area. Many start-ups have achieved press coverage as a result.
Yet the mere fact that the Government is excited about start-ups and keen to underscore its own entrepreneurial credentials is not enough. It must, if it wishes to be helpful and ambitious, map out a strategy rooted in deep understanding of what businesses need. In our view, the answer is simple: they need capital, they need low taxes and they need less regulation. These are the sorts of policies TCIO should be lobbying for at No. 10.
If TCIO cannot secure expertise enough to act as a sophisticated policy advocate, it should scale back to low-level, Business Link-style services. Yet policy advocacy, which is the only way to bring about transformative change in the market conditions for British businesses at a national level and which will help start-ups everywhere, isn’t even mentioned in the report. Why isn’t it part of TCIO’s remit? If it is, why has so little been achieved that Tech City can legitimately call its own?
To be trusted and effective, the Government must be transparent and accountable, selecting its success metrics intelligently. Even if we were to accept UKTI’s claim that there are 600 technology businesses in east London, 400 more since November 2010, that is entirely the wrong measure of success when so many of these “businesses” are user experience consultants registering themselves as limited companies and renting a desk at TechHub, or former Accenture employees with PowerPoint solutions in search of problems.
Do we care that 150 people have been frogmarched around the Trampery? And what, precisely, are these 37 “wins”, which we are told, somewhat defensively, are subject to stringent checks, but which are never actually defined? On Tech City’s own figures, £530,000 has been spent on events, which presumably means booze and banners, to entice just five firms to relocate to Shoreditch. Where Tech City’s figures are believable, they are unimpressive. Where they are impressive, they are simply not believable.
Working out how to track and monitor what a quango like Tech City does is difficult, but this is the level of scrutiny an organisation brings upon itself when it makes so many bold claims, and this is what is expected of the public sector in the so-called age of austerity. TCIO has thus far shown no evidence of thoughtfulness, opting instead for sound and fury with a few accompanying vanity metrics that say nothing about the health of the industry, nor about Tech City’s contribution to it.
The lightweight feel to this report – it is full of pop-out “case studies” that tell you nothing useful - is testament to TCIO’s PR-driven view of how business functions. It seems not to understand that getting a founder profiled in the FT does nothing to drive user growth, and that, regardless, any start-up worth his salt can market himself perfectly well to the papers on the basis of the excitement in east London that was already accruing before the Government waded in.
Start-ups don’t need someone to do their PR. They need someone who can fix visa problems, advocate for a favourable regulatory and tax environment and connect them to customers and investors. (That said, I’ve never been convinced that introductions to venture capitalists by civil servants are a prudent use of public money. That’s simply not how companies get funded.)
The awkward truth is that positive feedback from start-ups grateful for the attention Tech City’s spin operation has attracted can safely be disregarded, because these companies are confusing vanity outreach and personality-driven reportage with public relations clamped to strategic business objectives, the only sort of PR that will actually help their business.
The majority of the report consists of unnecessary formatting, platitudinous praise from “case study” companies (not a single of which is a product-focused British technology company) and carefully-worded statements about developments Tech City would like you to believe they were responsible for, but for which they dare not claim outright or explicit credit. Perhaps TCIO has learned, finally, of the dangers of hubris, or perhaps it has lost its rumoured scrap for kudos with Rohan Silva: either way, the bold claims we are used to seeing have been dramatically scaled back in this report.
It makes for dull reading. TCIO no longer claims responsibility for the Entrepreneur Visa or the Seed Enterprise Investment Scheme, instead craftily describing them as “action central Government has taken in response to concerns expressed by Tech City companies”. It has also heavily circumscribed its role for the first time: it is concerned only with supporting entrepreneurs and helping to foster inward investment, we are now told. Once again, a crucial omission is made: the drive to relocate companies to Stratford. But let us return to that later.
One word of advice for Tech City, which may come in handy for the drafting of future reports, is this: if you’re going to refer to a “joint initiative” between your organisation and a high-profile, highly regarded seed investor and accelerator, you really ought to make sure that said initiative consists of more than embedding a few YouTube clips on your moribund blog. When you say that, “In a joint initiative, TCIO recently shared footage from last year’s Seedcamp event on its site, which generated a hugely positive response,” it doesn’t take blistering insight to realise that billing such a run of the mill collaboration as some sort of highfalutin’ commercial arrangement only exposes you to ridicule.
The example above is by no means the only instance in Tech City’s history of a minute’s worth of administration or social networking presented as some sort of spectacular victory or act of strategic brilliance.
For whom the bell tolls
For the first time since TCIO was established, we were in this report given a supposedly full treatment of who is behind the endeavour: the names, email addresses, telephone numbers and photographs of everyone on staff. So far, so good. But there seem to be a lot of people missing from the list. Who, for example, is on TCIO’s list of paid advisors for 2011-12, how much have they been paid, and why do their names not appear in this report?
The Kernel knows of several people in London who are paid or who have been paid to advise TCIO but whose names have never been publicly associated with it. That must be rectified: if these people are prepared to take taxpayers’ money for their consultancy services, the public is entitled to know who they are.
Casting an eye over the staff we do know about, it is clear that Tech City has not showered itself in glory picking team members. Perhaps these hires had to be made quickly. It is difficult, we accept, to persuade credible people to work in government. But so few are the staff with any direct entrepreneurial or investment experience it almost looks like it was done on purpose.
Chief executive Eric van der Kleij is a good thing. He has experience under his belt. But has six years in government robbed him of his financial nous? We only ask because just two years into his role with the Global Entrepreneur Programme, he was rescued from the brink of bankruptcy with an Individual Voluntary Arrangement. His organisation has not shown much understanding of finance either in its own expenditure or in what they say in public about investment. Feedback from entrepreneurs about Mr van der Kleij can be polarised: one founder told us they found him “slippery”, while another said he was “the best civil servant I’ve ever met, someone in Government who actually understands money and business”. Generally, van der Kleij is seen as a positive force in the area.
Were it only Mr van der Kleij representing east London to the rest of the world, there would be no cause for alarm. Alas, the Government has – again, it does seem to have been on purpose – sought out some of the most peculiar characters in London to represent the start-ups of Silicon Roundabout. Figures not considered worthy of a mention in this report include the Prime Minister’s “Ambassador” to Tech City, Ben Hammersley. Mr Hammersley is an embarrassment to the technology industry; you would be hard pressed to find a start-up eager to be represented to the world at large by a man with such little understanding of the private sector and so insatiable an appetite for pseudery and self-promotion.
Tech City has form on this point, as it happens, consistently proving itself incapable of picking credible advisors and regularly aligning itself with oddballs. Thus, when it is not soliciting advice from unknown entrepreneurs yet to prove their mettle rather than seasoned operators, it seconds attention-seeking, insolvent eccentrics to build its digital products and speak at its events. One wonders how the Trampery’s Charles Armstrong, a preposterous exhibitionist, is viewed by the occasionally rather blokey start-up scene as he flounces around the country touting his exaggerated statistics and widely derided Tech City Map.
Needless to say, no space was found in the report either for a thank you to the Koran-shredding extremist lunatics at co-working space TechHub, on which Tech City has lavished praise and favours. Perhaps they were worried about how company secretary and head of international business development Mike Marcus’s “art project”, which consisted of violently destroying Islamic, Jewish and Christian holy books with a shredder at the front desk of TechHub in full view of residents, would go down with central Government. (I wonder if TechHub’s new hosts, Google, permit such things on the premises?)
TCIO appears blissfully untroubled by “contestability”, a popular buzzword in the civil service at the moment, which means getting people in from the outside to thoroughly critique your proposals. In fact, whether or not one is granted favours by Tech City would appear to depend on how willing one is to flatter it in public. This is not, in other words, an organisation that deals with criticism gracefully: it boots journalists with the temerity to ask difficult questions off its press release mailing lists. Ridicule or criticise Tech City in public and you can say good-bye to the invitations to drinks parties at Buckingham Palace and breakfasts at Downing Street. TCIO gives love conditionally, all the while making consistently poor choices of ally.
More troubling than these failures of judgment, however, are two ideological defects, both of which are brought into sharp focus by this report. The first is the utterly wrongheaded attempt, which will come to be observed over the coming twelve to eighteen months, to persuade start-ups to base themselves in Stratford. As I have written before, start-ups must not be used as pawns in the Government’s urban regeneration projects, which is what is about to happen. Strangely, little is made of this important third plank of TCIO’s strategy in any of its documents.
It is important to bear in mind that this relocation drive is not a business-driven proposal or economic imperative: it is social engineering. Because the Government is desperate to avoid the Olympic village becoming a graveyard after the Games, the tech industry, among others, is being tapped up to fill the tens of thousands of empty square footage that will be left empty. It hardly needs to be said that there are very few companies for whom a relocation to Stratford would be a shrewd move. What on earth is the Government playing at?
The second endemic weakness in Tech City is a pathological aversion to valid observations that the lack of care (or awareness) from the organisation that its strategy and execution have been so flawed, or at least poorly thought out. This is true even though Friday’s report pays elaborate lip service to crowdsourcing ideas and assessments as diversionary Polyfilla. From the last page of the report it is clear that the decisions have already been made.
That final page, titled “Looking Forward”, more of the same furious but directionless activity is promised for the coming year, with little sense that feedback has been listened to or that what most businesses want is for TCIO to get out of the way and stick to policy advocacy. With the Prime Minister’s special advisor Rohan Silva on his way out of Downing Street, this will become ever more crucial if Tech City is to be kept alive.
The one thing that does rear its head, in sinister fashion, is the “Olympics and Paralympics” in the preamble to Looking Forward – a grim portent of the strategy, barely acknowledged but always simmering under the surface, of Tech City’s final phase: the coerced colonisation of E20.
Talk of the town
Tech City is an eminently mockable organisation, staffed by persons of – how should we put it? – variable quality. It is comically inept at the one thing it really ought to do well by now, marketing, and it has been, from day one, executed with little control over expenditure. It also has a habit of claiming credit for things for which it is not responsible.
Here’s one example. Few people realise that Google had agreed to set up Campus London long before TCIO existed. It came about not thanks to the lobbying efforts of a valiant branch of UKTI, but because the Prime Minister’s advisor Steve Hilton is married to a senior Google executive. Google Campus isn’t the search giant’s attempts to engage with the start-up community: it is a part of their strategy to lobby the Government in other areas, such as privacy law and internet regulation. Why else would George Osborne show up to the launch? To get budgeting tips from Elizabeth Varley?
Truthfully, this is no laughing matter. We have something precious here. The precise extent to which technology can be an engine of economic recovery is a matter of debate – some critics argue that platform technology businesses contribute little to the economy and don’t create many jobs – but the fire and imagination and determination to change the world for the better and to introduce new ways of doing things and new efficiencies in existing industries is beyond question. It is here, it is in east London, and it must be cherished.
Off the record, entrepreneurs often tell us, and each other, a very different story to the one they tell mainstream news outlets and TCIO itself: that in fact damage may be done to the development of a fragile nascent ecosystem by governmental interference. They are concerned, as we are concerned, about the unintended consequences of too much hype. They worry that the spin machine is out of control. They feel unrealistic expectations are being placed on them about what this cluster can deliver to the economy.
They are increasingly troubled by rising rents, as dozens of low-quality start-ups run by former management consultants eager to cash in on “the buzz” price more sustainable businesses out of the area. And they are often furious about what they see as the appropriation of credit by Tech City of private sector accomplishments.
Tech City may be embarrassingly naïve about economics, but its carpet-bombing of major media outlets with outlandish facts and figures did yield some dividends. It does, after all, have £2.1 million a year with which to market itself. Regrettably, “awareness” cannot be quantified, and we are yet to see any serious financial results from Eric van der Kleij and his team. This report does not provide any.
The return on taxpayers’ investment into TCIO is not uniformly positive, where it is discernible at all. That matters because although the sums of money involved are not huge by Government standards, we are just beginning to see the consequences of over-egging the pudding with hysteria: rising rents, frustrated founders and a widening gap between appearance and reality that will have serious consequences for businesses daft enough to buy into it – like the commercial developer currently planning to open a Ralph Lauren and a Christian Louboutin on Old Street.
That is why the press has begun to critique what the Government is doing in east London more rigorously, not because technology commentators and journalists are pathologically mean-spirited or unhealthily sceptical but because we are ruthless and unapologetic about our devotion to the great ideas and innovations coming out of Europe’s technology industry. There is increasing scepticism about whether Tech City is the right way to support the tech start-ups in east London or the best use of £2.1 million a year. After examining this first Impact Report, my own view has not changed: Tech City must be radically overhauled if it wishes to provide value.
We will allow ourselves the impertinence of making a few recommendations. As it stands, TCIO resembles nothing so much as the rickety Torquay guest house depicted in much-loved BBC sitcom Fawlty Towers, with Mr van der Kleij playing the hapless and accident-prone Basil and Mr Hammersley his incomprehensible and incompetent pet buffoon Manuel. Reform and cuts are needed to focus Tech City on a modest advocacy role, to scale back its hubristic ambitions and to temper its appetite for promoting itself over the start-ups it represents.
We believe that TCIO should remain active. But we are convinced that its operations should now, given that the public relations portion of its mission has been largely executed, be reduced by two thirds, with an equivalent cut in budget and staff numbers. Its remit should be redefined and it should be reimagined as a policy unit with an ear to the ground in Shoreditch and a foot in the door of No. 10. It should publish a full list of advisors, along with the amount they are paid, on its website.
Most importantly, Tech City must be prevented from doing damage to the local economy by having its ability to advocate for relocation to Stratford curtailed. Such blatant social engineering cannot be permitted and will contribute nothing to the economy or to the advancement of British innovation and entrepreneurship. Frankly, it’s a wonder they believe anyone will actually up sticks and move to such a crappy borough without massive bribes.
We’re building something amazing in east London. Yet sometimes it can feel as though we’re doing it in spite of, not thanks to, UKTI.
Browse The Kernel’s full coverage of Tech City’s first impact report.