Where London’s beautiful business babies are brought to life
A decade ago business incubators were almost unheard of. The government was trying to get a few started through its UK Business Incubator vehicle but that was about that.
Today, they’re a vital driving force behind the economy. And it’s precisely these entrepreneurial start-ups that are expected to deliver us to economic salvation.
But where are the best incubators in London? And what new ones can we look forward to?
Future Bransons, search in vain no longer. Here is our guide to the best incubators in London.
The newest incubators
Whether you want cheap and cheerful, or to lord it like Gordon Gekko, the latest venues offer something for everyone.
Level39, Canary Wharf
Banks love start-ups. And they want the best and brightest to be located on their doorstep.
Enter Level39. Announced this month, the king of all incubators is set to open in January 2013 when it will sneer down on all other incubators from its One Canada Square headquarters.
Situated in a 29,000 square foot high-tech palace on the 39th floor of Canary Wharf’s most famous buildling, Level39 will offer cutting-edge contemporary design, a 200-seat event space and an express direct elevator. Serious start-ups only here. No time wasting allowed.
Designed by Gensler, the architects behind Facebook and Google’s notorious offices, Level39 will be the biggest incubator in not just London, nor the UK, but the whole of Europe. A megabator, reserved for the best of the best of start-ups, striving on innovate the hell out of the financial services sector.
Boris loves it. The banks love it. And parent company Canary Wharf Holdings think that businesses will love it so much that it is subsidising rents, even if fees and fates are still to be hammered out. The worry is that it will be ridiculously expensive, even after the subsidy.
“Level39 will be a place for industry experts to come together, share knowledge and develop up-and-coming talent with a view to bringing new products and services to the market,” says Eric Van Der Kleij, a technology entrepreneur working on making Level39 look that extra bit more attractive. Not that it sounds like Level39 needs the help. Applications have already been pouring in.
If you worry that One Canada Square’s Level39 sounds destined to inspire the opening chapter of Michael Lewis’ next book about how the world flirted with financial catastrophe yet again, fret not. Incubators come in all shapes and sizes.
Enter Fred and Ed.
Fed Ryder and Ed Hughes are the pair striving to give incubators a “friendlier” face.
They started their Bathtub2Boardroom charity incubator back in January 2011 when the landlord of a disused office in King’s Cross let them make it their home, free of charge.
“There are just hundreds of buildings like this sitting idle and countless small businesses that need affordable space,” says Ryder. “It works out for everyone, landlords get security, and businesses get a base.
“We hope to eventually roll the concept out all across the UK.”
If you’re thinking post-squat, rat-infested rescue mission you would be dead wrong. The 10 story, 10,000 square foot complex was state-of-the-art. All the wannabe philantrophers had to do was to bring furniture and spread the word through social media.
Soon enough they had some 30 like-minded start-ups working alongside them. They have since grown the likes of alternative recruiters Escape The City and Goals for Giving, which revolutionises the principle of charitable fundraising.
Alongside offering all the usual incubator services like mentoring and training, Bathtub2Boardroom also reaches out to local schools and teaches kids about the joys of start-ups.
But goodwill doesn’t exactly pay the bills. When Bathtub2Boardroom moved to its new Shoreditch location this summer, it had to start charging. It doesn’t request a share of investment or a stake in your company but membership is now £200 p/m. However, with applications pending to various government and corporate funds, Fred and Ed think this will soon fall to a friendlier £50.
They might be helping businesses but incubators originated as an academic concept. Now that students fees are pouring in, these academic incubators are set to expand.
Accelerator, London Met’s Shoreditch growth house
Started as an experiment in 2003 the London Metropolitan Accelerator ate up other less successful university departments housed in the East London location and in a few years took over the whole building. It quickly blossomed into a tech sanctuary equipped with a hatchery for very early stage businesses, largely run by student and alumnis.
With scores of EU and regional development funding, Accelerator then opened a special programme to support local business, and later rolled out an online incubator for those that don’t qualify.
To date, London Met has helped about 10% of its start-ups exit their firms successfully. And in a few cases their student start-ups scored millions within a few short years. Almost everyone is a winner here and the vast majority of participants get at least some funding.
Fact file: The rate of UK start-ups
In his pre-party conference interview, David Cameron said that “last year, more businesses were set up than in any year in history.” And he’s right, although “in history” might be a stretch, as the figures go back to 1997. But according to a Companies House report, 450,000 incorporations were made in the UK in 2011/12. This is a 14% increase from 2010/2011. Some 7.6% of UK adults now say they are setting up a business.
The long list of mentors and retired business personalities who wander the halls when they’re not working on their handicaps is a key ingredient, explains Accelerator manager Richard Celm.
Accelerator’s various successes have left it on the brink of self-sustainability and the incubator soon hopes to function independent of outside grants. When it does, it will still charge around £200 p/m for a large two-person desk, but will provide even more incubator-backed facilities and schemes.
Don’t let these low prices fool you, though. Accelerator has produced some stonking firms. Recently Fitness2Live paid out investors 27-fold.
“People don’t realise how hard it is,” warns Accelerator manager Richard Celm, who weeds out admissions applications. “If you have a business it is the first thing you think of when you wake up in the morning and the last thing you think of when you go to sleep at night. It consumes your life.”
The home of bioscience
London’s BioScience Innovation Centre in Camden is leading the bio-charge. Owned by the Royal Veterinary College, it opened with government money back in 2001. For years it was London’s first and only bio-incubator. And while there are now 20 nationwide, and a handful at other London university campuses, it remains one of the best.
For over a decade, the incubator nurtured successful start-ups working on drug trials and increasi
ngly provides facilities to clean energy firms. It offers much-needed lab space, plus expertise and advice about where to get funding.
Its London location means it is at the top end of the price bracket, but the industry as always remains high-risk, high-reward. And there is plenty of opportunity around.
Since the recession kicked in, the big pharmaceutical companies have increasingly outsourced drug development and manufacturing processes to smaller firms, explains the centre’s CEO Dr. Ken Larkin.
The government has also pledged for splash the cash on research. George Osborne recently announced a £1bn boost, although it now seems only some £300m will come from the government.
Starving artist no more
Breaking into business is pretty damn hard. But breaking into the illustrious world of fashion is basically outright impossible. Unless your dad is Paul McCartney and having Kate Moss as a bezzie comes as standard.
Since the Centre for Fashion Enterprise (CFE) launched in 2007, however, the rise to stardom has become that little bit easier and not just for the Stella’s of the world.
Seen as London’s pioneer business fashion incubator, CFE is part of the London College of Fashion. It is run by a handful of iconic London names, like Peter Pilotto, Wendy Malem and Marios Schwab who use their connections and business know-how to inspire designers and then help them to become more business savvy in a competitive market.
The centre runs a two-year venture programme for designers who have started to get a whiff of press and society fame. But it also has a one-season pioneer scheme for labels that have secured a London Fashion Week showcase but are still stitching together business plans and wider visions of how to grow.
“We know how to work with creative people, how to develop survival strategies for innovative businesses and provide confidence, not only to the designers themselves, but also to buyer, the finance community, manufacturers and the wider fashion industry,”says CFE director Wendy Malem.
“People recognise that the Centre for Fashion Enterprise really makes a difference.”