In 2010, David Cameron announced his ambition to put London alongside Silicon Valley and Bangalore as a world centre for digital innovation, says The Sunday Telegraph. Why, he asked rather plaintively, is there no British equivalent of Google?
Three years and two giant tech flotations later, that question still hangs in the air. As Twitter shares popped into the stratosphere last week, Joanna Shields could be forgiven for feeling the pressure.
Critics charge that “the First Lady of London’s Tech City” risks missing the boat on the best initial public offering climate for technology companies in over a decade (see below).
It’s easy to see why Downing Street went out of its way to woo Shields, 51, away from Facebook last year to take up the role of Britain’s digital ambassador, says The Independent.
Over the course of a career stretching back to the pre-internet ages, “hurricane Joanna” has carved out a reputation as a “fast-moving deal machine”. Her youthful looks and mellifluous voice belie a combination of business experience and cunning that few others in tech management can match.
She is perhaps best-known for “masterminding one of the shrewdest deals in new-media history”, says GQ. In 2008, while president of the UK-based social networking site Bebo, she got AOL to hand over more than £420m for the site – “then coolly looked on” as the US giant was forced to offload its acquisition two years later for “a pitiful” £6.7m.
From AOL’s perspective it was one of the worst deals in the history of the internet. “Why should Joanna care? She made hundreds of millions for her bosses, Bebo founder Michael Birch and his wife Xochi, and a hefty chunk for herself.”
Although she has lived in Britain since 2000 and took citizenship in 2008, Shields was born and raised in Pennsylvania, says Management Today. She has always viewed her father, a metallurgist who started his own factory, as her main business mentor.
Her first job was working in Deloitte’s national affairs office in Washington. In the mid-1980s she joined National Digital, an agency that enabled war photographers to send digital imagery to newspapers from the frontline in real-time – arriving in Silicon Valley just as “the world was going from analogue to digital”.
By the dotcom era, Shields was running her own business, Veon, compressing video files for the net. “We saw the downturn coming and were wise enough to start looking for a buyer.” She sold Veon to Philips just before Armageddon struck and moved to London with her young son.
“I left the Valley just in time. And then George Bush was elected, so I called myself both a digital and political refugee. I was like, phew! Just safe and sound in London.”
Given that record of jumping off sinking ships, it’s probably a good omen for the London tech scene that she shows no sign of quitting yet.
Can she turn the buzz into profits?
“When you’ve been through the roller-coaster ride that is the short history of the internet and survived, you tend to recognise a breakthrough moment,” says The Guardian. So is Shields right to argue that the hot action now lies not in California, but in London?
The postcode EC1V (the tech hotspot around Old Street and Shoreditch, which the government calls Tech City, but everyone else calls Silicon Roundabout) is humming. It was home to more start-ups than any other area in Britain in the year to March: some 15,720 in all – a testament to the pulling power of the internet and app industries that have colonised the area.
The “ecosystem” is unique, says Stephen Caddick of UCL in the Huffington Post. No other tech hub in the world rubs shoulders so closely with the worlds of design, architecture, fashion and the arts – not to mention the financial powerhouse of the City.
True enough, says David Rowan on Wired, and there have been some remarkable successes. Last.fm, bought by CBS for $280m and TweetDeck, which was sold to Twitter (now rumoured to be sniffing round another Roundabout stalwart, the live performance tracking site Songkick). “Still, Shoreditch is no Palo Alto.”
We don’t yet have the scale of available investment, nor “the entrepreneurial confidence” that creates multi-billion-pound companies. Although seed-funding for start-ups is now much easier to source locally, the conduits dry up when it comes to crucial “middle-stage” funding.
Shields has been doing her ambassadorial bit to entice big Valley backers, such as Vallar and Sequoia, into the vacuum. But the litmus test for many is a big initial public offering.
The most likely first candidate, says The Sunday Times, is King, the firm behind smartphone game Candy Crush Saga, which, unlike Twitter, is already generating profits.
King is expected to float in America next year for $5bn-$7bn. It would be the ultimate coup for Shields if she could persuade it to choose London instead.