Startup Scotland: The Next Web delves into digital life north of the border

The Next Web has written a lot about the UK startup scene over the past few years and, well, it’s fair to say that London has received a pretty big look-in. But we have also covered many fantastic startups based outside the UK capital – for example Screenreach (Newcastle), Datasift (Reading), Buffer (Birmingham), VideoBee (Sheffield), App55 (Manchester) Free Agent (Edinburgh)…and many others.

But at times it may seem as though ‘UK’ and ‘London’ are used almost synonymously when discussing the country’s startup scene. As a major metropolis, so much activity naturally gravitates towards London and this is why so much is written about startups based in or around that city. You may have read about London’s Tech City, an area which the UK government is trying to transform into the UK’s version of Silicon Valley.

However, we don’t want to be inward-looking. We want to look out across the country and dig deep into every nook and cranny and see what’s happening away from the Big Smoke. The UK is in a fairly unique position in that it has four capital cities across its four constituent countries – London (England), Cardiff (Wales), Belfast (Northern Ireland) and Edinburgh (Scotland).

Today, we’re going to look at the latter of these countries. With a population of just over five million people, Scotland isn’t massive – in fact, London alone has almost three million more residents than the entire Scottish region. But Scotland has produced more than its fair share of innovators over the centuries.

John Logie Baird developed the world’s first practical, publicly demonstrated television system, whilst Alexander Graham Bell is credited as inventing the first practical telephone. And all this before we consider Alexander Fleming (penicillin), Robert Watson-Watt (RADAR), Charles Macintosh (waterproofing), John Shepherd-Barron (ATM), John Loudon McAdam (tarmac) and the countless other Scottish innovators who have helped make the world what it is today.

But as a 21st century economy with its own devolved parliament, Scotland can’t rest on its past glories. And from our perspective, we’re keen to delve a little deeper into the Scottish startup scene and look at what’s happening in tech north of the border.

So…what is happening?

Skyscanner: Europe’s largest flight search engine

Any discussion about the Scottish digital scene has to involve Skyscanner, and that’s our first port of call. It’s not a startup per se in that it has been around for years, but it is Europe’s largest flight search engine and the world’s second biggest after Kayak. Skyscanner is headquartered in Edinburgh, and it’s a good starting point as we look at the Scottish startup scene.

Skyscanner was founded initially in London back in 2002 by three IT professionals – Gareth Williams, Barry Smith and Bonamy Grimes. External circumstances meant that Williams, the company’s CEO, moved to Edinburgh in late 2003 and the first physical office space was opened there in 2004, thus the Scottish capital became Skyscanner’s global HQ. We caught up with Gareth Williams to get his take on the Scottish tech scene then and now.

“When we first got a serviced office space in Edinburgh, it felt like there wasn’t anyone else doing Web stuff”, said Williams. “And that perhaps has been one of the biggest challenges for Scottish tech firms in recent years. There has been a lack of Web-based startups, meaning that there has been a bigger learning curve as locals didn’t have Web company experience”.

That’s not to say there was a lack of technical talent in Scotland, far from it. Scotland has always had fantastic technical minds emerging from the country’s universities in Edinburgh, Glasgow, Dundee, Stirling, St. Andrews and Aberdeen. Moreover, Scotland is a major hub for financial institutions, with the Royal Bank of Scotland – which was only recently the world’s biggest bank in terms of assets and market value – and Standard Life both headquartered in Edinburgh.

But this meant that many Web startups looking to recruit were faced with two choices. Recruit people from big corporate institutions who may not fit into the culture of a young startup (Williams: “You can’t have a corporate mindset if you want to innovate.”), or nab young graduates fresh out of university without the experience a tech startup may need. However, a lack of experience doesn’t have to be prohibitive.

“We’ve recruited quite a few people direct from Computer Science degrees”, says Williams. “And the quality of people has been a big plus for Skyscanner. We now have about 120 people in Edinburgh, and we have 25 different nationalities in the company.”

One of the reasons for so many nationalities is so that staff can ‘own’ a particular website for their native language – Skyscanner exists in 23 languages and another three will be added shortly.

But one of the issues Williams identified was that IT development departments typically weren’t integrated into organizations, and the type of culture characterized in Channel 4 comedy The IT Crowd was prevalent. Geeks locked in basements and kept away from the rest of the company.

Of course, this isn’t something that was unique to Scotland, but it is something that Williams was acutely aware of and understood wasn’t conducive to a healthy Web-based startup. This is why he has sought to ensure that IT development was fully integrated within the company. Skyscanner has a roughly 50/50 split between tech and non-tech staff, and integration has been vital given that the company’s raison d’être is its website.

But what are the benefits of being a startup in Scotland over, say, London? “For us, there’s a real sense of pride and visibility of profile related to our success so far”, says Williams. “There’s been a lot of good will in Scotland, and from across the Edinburgh community”.

So Scotland doesn’t have the same wealth of high profile tech startups as London, but when a company does succeed it stands out more, which has been great for Skyscanner. But is Skyscanner a good benchmark for the startup scene in Scotland? Moreover, is it even a startup?

“I can understand someone not regarding us a startup”, says Williams. “But in my mind we are – in cultural and aspirational terms, at least. We want to get much, much bigger”.

Today, Skycanner has over 10m unique visitors a month, and over 15m visitors a month in total. “We’re growing pretty fast”, says Williams. “73% of our traffic is from outside of the UK and we’re expanding into Asian markets too, we’re opening an office in Singapore next week.”

Can Skyscanner’s success help kick-start something bigger in the Scottish startup scene? Possibly, but it could do with a little help from elsewhere.

“Whilst we are seeing some incubator type activity going on now, this has been lacking in the past and we definitely need more places for startups to flourish”, says Williams. “I’d also like to see some tax benefits introduced for small companies based outside of London which would provide an incentive to help balance things out a little. And I’d like to see an increase in investment in the School of Informatics at Edinburgh university”.

We’ll look at the School of Informatics later. But first, Williams let slip that two former Skyscanner employees have left to work on their own startup projects, and the implications of this could lead to something bigger further down the line.