Hub cities have existed since ancient times. Ancient Egypt used to have the Wadi al-Jarf on the Red Sea, a fruitful location for maritime trade. Venice is a small city located in Italy, yet it attracted multiple prolific polymaths such as Leonardo da Vinci and Giovanni Bellini. The latter’s paintings were so provocative that historians consider his art as the primary force in an Italian Renaissance painting, influencing more talented artists in his wake.
In modern times, Silicon Valley, located in the San Francisco Bay Area, is the world’s top tech hub. The city is home to both rising technology start-ups and established tech giants. Among those powerhouses are Apple, Google, Adobe, and eBay.
There are good reasons why hub cities attract strong talents. Entrepreneurs looking to create their tech start-up businesses must consider basing it on thriving tech hubs like London and Manchester. Here are a few primary advantages of doing a business in those areas:
Workforce and support
Hub cities have various tech companies clustered in the area. Upstarts who are serious about their career will relocate to these cities in search of high-paying jobs. Because of this, there will be a steady stream of skilled workers. This massive talent pool is a perk for companies to source the right employee for their goals. These skilled workers often leave to create their own company. It is a self-perpetuating cycle wherein the industry is constantly expanding, innovating, and creating new jobs.
Since the area is concentrated with a diverse set of companies offering different services, it is easier to fill in the gaps needed by a business. They can provide a support system with equipment, software compatibility testing, and joint projects. Some services specifically cater to tech companies with offers such as designing their data centre.
Business owners would quickly realise that they can’t succeed with technology professionals alone. Like legal, finance, and advertising, other industries are there to help keep the business running. Legal support is crucial as they safeguard a company’s intellectual property rights, protecting their ideas, applications, etc.
There are many opportunities for growth and education too. A tech hub city is filled to the brim with information about the latest advancements and developments. Supportive mentors tend to offer regular seminars and workshops—for free or at a cost—about the newest innovations in their fields.
Tech start-ups would have an easier time breaking into the industry with the wealth of resources, education, and skilled labour available to them all within the city proper.
Funding and investors
Residing in a dense metropolitan city like London comes at a high cost of living. The closer the location is to the centre, the higher the cost. This is a big hit to a company’s capital and could hinder their development if they fail to make a substantial profit.
Companies can overcome this financial barrier by pitching to investors. And there are no shortages of big-time investors in tech capitals. Despite the pandemic and the UK’s exit from European Union, tech firms in London raised $10.5 billion of venture capital in 2020. That amount is higher than the total amount raised in 2017 (£5.1B) and 2018 (£4.3B) and near 2019 (£7.8B).
Venture capitalists are always eager to grow the new disruptive tech start-up. There are major venture capital firms based in London to keep an eye out for these companies. A few of these VC firms are Lakestar, investor of Spotify; Entrepreneur first, seed investor of Cosmos Video and Omnipresent; and, Localglobe, seed investor of Orbital Witness.
Co-working spaces are a growing trend that’s suitable for new companies. It provides a stable environment for employees without the financial commitment of renting a traditional office space. It also significantly cuts down on rent prices as workers only pay for the space that they need for as long as they need.
Co-working is flexible because start-ups can choose between a fixed desk or a hot desk. Co-working spaces offer a variety of amenities that may be out of budget for a new company. Essential amenities like meeting rooms, break rooms, and event spaces. And, because other start-ups are most likely to share the area, it generates networking opportunities with other companies. Mingling with different brands and freelancers is a significant benefit as it can pave the way to valuable business connections and future partnerships.
Basing a start-up in a tech hub capital is a massive commitment with great benefits. It allows a start-up to gain a myriad of essential advantages for its long-term viability and success.