During what has been a difficult year for many, looking ahead to the coming decade with a renewed sense of optimism and vitality may seem forced.
Colin Hewitt, CEO and founder of Edinburgh-based cashflow management startup, Float, believes that startups, entrepreneurs and the Scottish tech ecosystem should embrace the opportunities that the ‘Roaring Twenties’ will likely offer – and it’s a mindset that Float has subscribed to.
“This is the most excited I’ve ever been about Float. We’ve started the year very well and we’re looking forward to the challenges ahead,” says Hewitt.
Indeed Float has cleared several hurdles during 2020 and continues to expand as we move deeper into 2021.
In January of 2020, the cashflow forecasting business secured £1.5 million in seed funding. The round enabled the company to expand its team and open a new office in Australia – all amidst (and despite) the disruption of the coronavirus pandemic.
Finding itself in a sure-footed position during a period where many businesses struggled was, Hewitt recalls, a blessing.
“I’m really proud of how the team rallied during everything and proud that it’s been a really good time for us as a team,” he says. “Things really took off for us in Q2 and we’ve seen a massive surge in demand from new customers.”
While future prospects for Float are positive, Hewitt also believes the months ahead will be critical for the Scottish tech sector and could herald a bustling new era for the ecosystem.
“Scotland is a really exciting place to be at the moment. We’ve got some great companies emerging like Amiqus, Appointedd or SageCity and some really great stories that we’ve been so heads-down it’s easy to miss what’s going on in the bigger picture,” he says,
Hewitt hails the influx of companies to Scotland and its capital as a positive sign of things to come. UserTesting and Modulr are among two of the notable organisations that have operations in Edinburgh, while Trustpilot established a base in the capital last summer.
“These companies can see the opportunities that Scotland offers. Especially now with the remote working situation – people see all the benefits and much less of the cons.”
In recent years concerns have been raised over the talent pipeline feeding Scotland’s technology sector, and this is an issue the startup ecosystem has been forced to deal with.
Although the Scottish Government and educators across the country grapple with how to encourage more people to consider careers in tech, Hewitt believes that the pandemic could present the sector with an opportunity to tap into a fresh flow of talent.
“I think Scotland can hopefully start hiring beyond the ecosystem as well. That’s always been a big challenge for Scottish companies.
“I think there’s a huge opportunity to capitalise on as Float grows and the ecosystem develops,” he adds.
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The term ‘Roaring Twenties’ elicits thoughts of extravagance, cultural development, economic prosperity and the inevitable malaise which followed.
This, Hewitt warns, is an issue Scotland’s technology sector must be wary of. For a number of years now, the sector has wrestled with questions on high-growth, the scaling of businesses and its place in a global ecosystem.
Scotland is producing great tech startups, of that there is no doubt, but few are reaching the elusive ‘unicorn status’ – a company which surpasses a value of $1 billion.
The first Scottish company to have achieved this is Skyscanner in 2016. And while this remains a source of pride for the country’s startup ecosystem, Hewitt suggests we have to look forward, not back.
Published in August 2020, Mark Logan’s Scottish Technology Ecosystem Review explored concerns over Scotland’s continued inability to produce the next tech unicorn. However, it did acknowledge that perhaps the focus should be placed on companies which are strong, profitable and command amicable revenue streams.
Hewitt believes the focus should be placed firmly on the latter. By nurturing the talents of founders and supporting dynamic young startups, Scotland can cultivate an even stronger ecosystem. After all, the past year has showcased the resilience of the tech landscape.
Right now it can be hard to predict what money is going to come into your business & when.
Using a #cashflowforecast you can clearly see what cash is incoming so you can make smart decisions about outgoing payments like wages or bills.
— Float Cash Flow (@FloatApp) January 29, 2021
With short-sighted ideas on innovation and sector growth during the coming decade, we could risk falling into a dust bowl situation.
“We’re still thinking about this idea of how we get unicorns when you could focus more on developing and building successful companies. From there, they could go on to become those billion-dollar firms,” he says.
Hewitt believes many entrepreneurs and aspiring startup founders place a misguided focus on the longer-term goals – big funding deals and the glamour of securing hefty venture capital investment.
In Hewitt’s experience, however, the organic growth route with a firm focus on the fundamentals has proven to be a wise decision.
“You should really be thinking, first and foremost, about product-market fit. You should be thinking about early customer traction and early revenues,” he explains.
“That’s the key there. If we really doubled down on how to build great products, how to nail marketing and build sales teams or focus on customer discovery, eventually it will all fall into place and you’ll see the outcome.
“Trying to get people thinking about building the next Google when they’ve never even built a product, or they’re just building the first product, is crazy to me,” Hewitt adds.
The rapid-fire scaling route that many pursue and embrace elsewhere might work for some founders and could be better suited to larger tech ecosystems, Hewitt notes. During his own journey with Float, he has maintained a consistent idea based on the advice of peers and those who’ve been there and done it all.
“I remember Gareth Williams saying to me ‘don’t rush the 20-40 people stage of your growth’.
“We’re right in the middle of that just now so it’s always been in the back of my mind. Being at this stage it changes the way we operate, the way I communicate and forces you to consider how our leadership development programme is going, among other things,” he explains.
“There’s a huge amount to learn with this and so it’s difficult to do that at the blitz pace that people kind of talk about now.”
In recent years the ecosystem has begun to mature and the various community events and conferences on the tech sector calendar have played a crucial role in this development and focus, he says.
Turing Fest, for example, has connected Scottish startups and founders with a global audience in recent years and done wonders to raise the sector’s international profile. As do events such as EIE, which offer startups the chance to compete for investment ranging from seed to Series A level.
DIGIT’S 2021 #virtualevents calendar:
📅 #MarTech Summit https://t.co/JkViHnOzbF Wed 24 Feb
📅 ScotSecure #CyberSecurity Summit https://t.co/JaD886wGh9 24/ 25 Mar
📅 #DigitalEnergy Summit https://t.co/thGSfrBqlM 22 Apr
📅 DIGIT #Leader Summit https://t.co/alC1xjRvtW 26 May pic.twitter.com/XXGqh5Braw
— DIGIT (@digitfyi) January 18, 2021
A key factor in the current success and future prospects is community, however. One might be hard pressed to find a more open and supportive environment for entrepreneurs and founders, Hewitt insists.
“When you’re starting off and going to various events there’s always a peer group of other founders that will just naturally be in the same position or at the same stage as you.
“I’m in a group with other CEOs at the moment, and we meet every two weeks on Zoom. It’s great to be able to check-in and talk about what they’re learning and then have them share their experiences with you,” he explains.
Scotland’s tech scene “is a bit like a village” in some ways, he believes. No matter where he turns, he has friends that he can lean on and confide in and talk to other founders or CEOs going through a similar experience.
Simply put, one cannot put a price on that type of community – and the pandemic has certainly highlighted this for many. Pre-pandemic, Float operated out of Codebase in the beating heart of Edinburgh’s startup scene.
While remote working has been a necessity, Hewitt says he can’t wait to return to some semblance of normality. It’s the fleeting interactions and off-the-cuff discussions that spark inspiration for many.
“I don’t know how many other communities have the same setup as we do in Edinburgh. There will definitely be some, but it’s great to have that at your disposal, especially at the moment.
“The pandemic has changed things a little. You know, I’m not at Codebase anymore and I’m not bumping into people in the same way that I would before, so those organic experiences aren’t there as much,” Hewitt says.
“I do think that has suffered to an extent, even though we can do things over Zoom I do miss the co-working environment and that community feel.”