We moved the business into new digs recently, kindly provided by one of our investors on a good deal. The office move made me think about the difference between running our business now and what it would have been like even 10-15 years ago. Our team is made up of 5 people in London and 7 developers in New Delhi. The London move involved shifting a few Apple macs and a few bodies. A single London taxi was sufficient to move home from Shoreditch to Bloomsbury. The move took about an hour, including packing. We plugged our Macs in at Gresse street, typed in WIFI access codes, installed a printer driver and the business was back to work. The last bit wasn't even necessary.
The assets of our business were instantaneously accessible in the cloud - the Amazon web servers that host our databases that our developers work with are probably located somewhere near the Arctic circle amongst the polar bears to take advantage of the natural cooling. They are certainly physically a long way away from London or New Delhi. The communication between the London team and the New Delhi team runs via daily Google hangout or Slack "stand-ups" and a several cloud based project management and messaging apps, accessible anywhere with an internet connection. We store our knowledge in a cloud based Wiki, and use Dropbox and Google Drive to share and store simple information. We run the management accounts in Xero, where paperless invoices are stored and are callable to generate reports in a few clicks. All of our business systems are off-the-shelf software as a service applications that we pay a few hundred pounds a month for in total.
In fact, the only key physical assets beyond the humans (the computer hardware itself isn't critical), are the Nespresso coffee machine and our fridge that holds the Thursday team beers. If Warren Buffett was looking at us (which I don't believe has happened yet) on the face of it he might be hard pressed to identify what our "moat" is; what's the protective insulating layer that keeps our competitors at bay.
15 years ago when Brent Hoberman and Martha Lane Fox were setting up lastminute.com, they needed £6m of investment to get their platform to a point of reasonable viability. Much of the cost was driven by the need to build each piece of the product from scratch - there were limited off-the-shelf bolt-on features that could be employed. Not knowing what user traffic they would get they had to physically install substantial server capacity in their office to protect against a situation where they were popular. The office was probably quite warm as a result. The entry ticket was the £6m of venture investment. That in itself was a sufficient "moat" to keep many would-be competitors at bay. Today the same platform technology could be put together from a number of generic pieces of SaaS (Software-as-a-Service) technologies, at a fraction of the cost for lastminute. Their "moat" is their partnerships, their database and their customer loyalty, not their technology.
So the barriers to starting have all but disappeared. What's critical to our success is the speed at which we can unlock key relationships with customers, investors and data providers, our ability to interpret their needs and to turn them into "product" that solve big problems quickly. Last week I wrote about the difference between fostering entrepreneurship and fostering entrepreneurship in a particular place. As an Irish founder, based in London, could we run our office from Dublin and pay our taxes there? Of course - the plug sockets are the same - and our Macs would be WIFI connected just as quickly.
So what's key about being in London?
We're building a media tech business. London is a global leader in digital and creative media. The key relationships for our business are all within 25mins walk. Like it or not, the financial services industry has created a lot of discretionary wealth that allows money to flow towards early stage ventures. The enterprise investment scheme tax advantages make the money flow with less risk. Serendipitous meetings can happen because we are close-by. London is a melting-pot of people - our London team is made up of 5 people with 5 different nationalities; French, US, British, New Zealand, Irish. It's ironic that our business truly could be anywhere with an internet connection, but the importance of having a physical presence at the center of the ecosystem that allows us to join the dots quickly is critical.