Over the past few weeks, we have seen several heavyweights from politics and business from Boris Johnson to Nicola Sturgeon, and from Micheal O’Leary to John Mills, all declare whether they are for or against a Brexit. While much of the talk has been around the future of London as a financial centre, as the founder and CEO of Europe’s leading referral marketing platform, the impact on London’s tech scene is closer to my heart.
The EU is a huge potential market for Buyapowa’s referral marketing software and, so while it is perhaps ironic that as the UK debates whether to stay in the EU, we as a London based tech marketing company are investing to increase our client base across Germany, France, Italy, Spain and Sweden. So a key concern for me is our continued ability to develop and serve that market from the UK and whether a Brexit could impact that.
Firstly, I don’t think a Brexit would impact our ability to sell to European clients simply because there are no real borders for software. We all already buy best in class software from companies located in the USA, Switzerland, Russia or Israel often without paying much attention to where the software was originally created. And much of that software is already hosted outside the EU, particularly if it is hosted on the cloud. In fact, with the cloud few people even know where their software is hosted. Also given that the nearest competing enterprise level solutions we have are all based in North America, I don’t think being physically located outside the EU would be much of a problem.
However, that is not to say that a Brexit could not cause issues for tech businesses, particularly if the freedom of movement was restricted and this affected the ability to attract and retain the best talent. At Buyapowa, while we are very lucky to have a first-class tech and product team that enables us to build all our software in-house, we know just how difficult it is to create and keep top notch coders. If a Brexit made it harder to attract talent from, say, Italy and Spain, then that might disadvantage London compared to other European cities such as Berlin.
But, it is not just top quality tech staff that fast growing London based start-ups need to attract. In common with many other fast growing UK tech businesses, we typically start the process of building up our overseas presence from our London HQ and do not open an office abroad until we have enough local clients for that to make economic sense. Of course that requires that we can find top quality native speakers for client support and business development roles in the UK. If a Brexit affected our ability to do that, we might need open overseas offices sooner than we would have done so otherwise, which could increase our operating costs.
At the moment, perhaps London’s only serious rival as the destination of choice for Europe’s leading tech start-ups is Berlin. One reason for that is the large number of venture capital firms and business angels in London, willing and ready to invest in new tech businesses. In the short term, until we have a Brexit or no Brexit decision, the surrounding uncertainty may delay some investment decisions in London based tech. In the long run, however, the money should follow the talent, for an example of this just look at the success of Israel as the ‘Start-Up Nation’ despite being outside the EU. So I think London will continue to be an attractive destination for tech investors whether in or out of the EU, but it will be even more attractive if start-ups can access the best talent.
For more stories like this please view the latest magazine http://www.finance-monthly.com/magazine/