By SUSAN LAHEY
Reporter with Silicon Hills News
Serial entrepreneur Fred Schmidt remembers sitting in his London hotel, getting ready to head to Heathrow and back to Austin with the entourage, including Austin Mayor Lee Leffingwell. They’d concluded an official visit to Tech City in the borough of Hackney, the European Union’s fastest-growing tech hub, and signed a friendship agreement between the two cities. But Schmidt wasn’t ready to leave. In the 30 years he’d spent coming to London, he’d never seen anything like what was happening in Hackney.
“I thought, ‘There’s still more I want to experience,’” he said.
“London is upscale, expensive, it’s like Silicon Valley and New York. Doing business there doesn’t happen organically unless you really know people. You’re not going to meet people in cafes…but in Hackney I found this raw energy….”
“I sent an email to all the cool people I’d met and said ‘I’m going to wander the streets of the community and if any of you have any time to get together and talk, here’s my email and here’s my phone number.’” By the time he’d finished breakfast, he had two full days of appointments.
That official visit was the beginning of relationship between Austin and Hackney that’s on its way to being Austin’s first tech-driven sister city relationship. But while Austin startups may not pay much attention to sister city agreements, Schmidt, co-founder of Portalarium, wants to make sure they pay attention to this one.
The Tech City Explosion
A few years ago, the Borough of Hackney in East London was known for a few things: crime, a large immigrant population, neglect, and a vibrant arts community in the portion known as Shoreditch that emerged—as many arts districts emerge—when artists converged where the real estate is cheap. But then startups also started moving into the area.
In 2008, according to a Tech Crunch article, it was just a small group of startups having barbecues on one another’s roofs. Then one day, at one of these barbecues, Dopplr’s co-founder, Matt Biddulph, decided to tweet:
“Silicon Roundabout”: the ever growing community of fun startups in London’s Old Street area.”
That was the first coinage of the term “Silicon Roundabout” ( a name that reflected a local traffic circle but which the government replaced with Tech City). And within days, local and tech media picked up the story heralding the new tech hub in East London.
Since then, Tech City has exploded. It claims more than 1,300 startups—Schmidt says it’s closer to 3,000 and a recent article in Tech City News puts it at closer to 16,000. The government got involved, of course, both the national government and the Borough of Hackney. Google has established a campus there that’s a co-working space. Cisco is there. Silicon Valley is starting to buy businesses there. So what does that have to do with Austin?
Austin and Hackney: A Growing Relationship
Possibly a lot. With the U.S. and EU entering into free trade talks, opportunities for U.S. entrepreneurs could mushroom. Already, the U.K. has the lowest barriers to entry for entrepreneurs of any country in Europe. With all the talk of globalization, Schmidt said, Austin is still “parochially focused.”
“We call ourselves the live music city of the world. But rarely do we set our sites beyond Travis County. We are happily frolicking in Austin…we lack international connectivity. Tech, as it applies to music and film and the rest of media has gone digital, global. There’s an instant market available to the whole world, whether (an entrepreneur) is aware of it or not. Whether they’ve prepared their product for other markets or not. Everyone in the world has access to it.”
The original trade mission was inspired by Andy Pryce Deputy Consul General at the British Consulate General in Houston, who brought Hackney’s explosive tech growth to the attention of Schmidt and the city. Other participants included Appconomy, Phunware and Spredfast.
Natalie Betts, Acting International Economic Development Program Manager for Austin’s Economic Growth and Redevelopment Services Office, called the relationship with Hackney a wonderful opportunity.
“We would never be partnered with London, it’s too big,” she pointed out. “But London is a city of immense global importance. We’re connected with the part that’s involved in tech and creative, like Austin.” Other advantages, she said, are that there are no language barriers, London is a common choice for companies looking to expand into Europe, and the association raises Austin’s profile internationally as a tech center. With overseas companies, she said, the natural inclination when trading or expanding into the U.S. tech market is to go to Silicon Valley. She hopes the relationship between Hackney and Austin will make Austin more visible.
Austin’s relationship with Hackney was the first for that borough. Andrew Sissons, Interim Head of Regeneration Delivery for Hackney said he’s long had a strategy to bring together 10 or so cities or clusters around the world and Austin was the first one that “landed in our laps.”
Keep Hackney Mental?
“It’s been absolutely brilliant between us and Austin,” Sissons said. “It’s been expanding beyond just a government agreement or business friendship agreement. We’re looking across multiple disciplines, things from education to research to export to arts, to collaborating on Hackney House at SXSW, to Austin doing an Austin House in Hackney. It’s been a broad relationship on many levels and we’ve been building real friendships. There are very many kindred spirits.”
“We love Austin,” he said, “because when we turned up everyone had these t-shirts ‘Keep Austin Weird.’ We want to come up with our own slogan, maybe: ‘Keep Hackney Mental’ or something,” he joked. “No, my managers would kill me. We love the attitude, we love the spirit. We don’t want to be a place that’s like a clone. In so many towns there are the same shops in the high street, same restaurants and hotels. There isn’t any energy. We want to make it interesting and independent with lots of festivals and events. We feel Austin very much operates that way as well.”
SXSW 2014 Hackney House, he promises, will be “epic.” Brandon Schmidt, Fred’s son, was responsible for the first Hackney House in 2013. He was working on his master’s in business administration in digital media at St. Edward’s University when his father went on the original trade mission.
“After that first trip my dad came back and was raving about how amazing the place was and it piqued my interest,” Brandon Schmidt said. He had to do an internship for his degree and had been working to get a position in New York. But then he learned about the Shoreditch Fringe Festival, a seven-week multi-disciplinary, multi-cultural festival that would be running in tandem with the Summer Olympics. And Hackney was one of four boroughs involved in hosting the Olympics.
“It was a once in a lifetime opportunity,” Schmidt said. He fell in love with the area. And a few months after he returned to Austin, his contacts hired him to create Hackney House at SXSW.
“We had a very minimal budget,” he said. “What Google and Spotify would spend on one single party, we had to stretch out to four day event. It was a tremendous success. The Guardian wrote about it. It was a place that the people who came over from the U.K. could come and feel at home, use the wifi during the madness that is SXSW.”
Meanwhile, Fred Schmidt and others are planning their presence at Digital Shoreditch, Hackney’s budding version of Interactive. Last year, Schmidt presented on the relationship between the two cities.
The sister city committee has other plans in mind. Agreements are in the works between Austin and Hackney Community Colleges and Schmidt is working to break down barriers to educational exchanges. More and more colleges and universities, he points out, are making global studies and cultural competency a key component of their programs. And his own son’s international experience, he said, made him that much more valuable as an employee. Schmidt, who also does some mentoring at Capital Factory, is helping local startups think more about global expansion. And when companies expand to the west, they generally start with the U.K.
Brandon Schmidt is partly focused on the creative synergies. “(Hackney) is known for its vibrant art all over the buildings. I want to bring a program to Austin that brings out that artistic vibrancy in the downtown area, have music exchanges…either sponsored by the government or private organizations so the artists could gain additional exposure. There’s a connection that already seems to link the creative energies of both places. We could build something great together.”