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Quick question: Do people think the rising cost of living in a place like London will have a negative effect on start ups? Currently it doesn't look like it fr

Quick question: Do people think the rising cost of living in a place like London will have a negative effect on start ups? Currently it doesn't look like it from that report but I'm currently on an intern's wage and have struggled to live here, I can only imagine how hard it is to potentially work for a small wage maybe even just equity whilst being a bit older than I am and potentially more responsibilities.

jmcdowell 13y ago
N.B. I have heard the cost of living in other European cities is a lot lower which is why I thought they would be in a similar shape to London before reading that article.
- Kurtz79 13y ago
  I have been living for a substantial amount of time (years) in London and Madrid, a short while in Berlin, and the latter two are definitely cheaper, offering a similar quality of life (personally I would say better, but it's a matter of taste, it has also to do with the sheer size of London). In London I was living in a shared flat in Zone 3, and I was paying more of what I pay now for a decent studio in the middle of Madrid's city center. Public transport is cheaper and more efficient both in Berlin and Madrid, just as well, and eating/going out too. Then again London has a better start-up scene, more availability of jobs and better paid ones, so as with everything, it's a matter of trade-offs. BTW, the EU it's not really popular these days, but I always found the fact that you can decide where to work and live with no legal barriers among dozens of different countries absolutely amazing, also considering that those countries were waging war between themselves for centuries up to about 70 years ago...
- troels 13y ago
  Yes, but for legal/tax reasons, UK is much more attractive than most other EU countries.
  - corford 13y ago
    Good point. I've come across quite a few Berlin based startups that are actually incorporated in the UK e.g. Soundcloud. Someone said to me that one of the reasons for this is share capital requirements. You only need £100 to incorporate an ltd in the UK whereas in Germany it's apparently in the thousands.
    - ValentineC 13y ago
      There's actually no minimum capital requirement for the UK. You can incorporate a company with £1 in capital, if you wanted to.
      - corford 13y ago
        Ah yep you're right. Don't know why I had £100 in my head.
    - troels 13y ago
      Yes, that's one way of doing it. I guess it's not different from the US, where most companies are incorporated in Delaware.
nicholassmith 13y ago
Possibly, I live in the North and our rent and general life cost is significantly lower, however the start up scene is still slowly coming into life. It seems at the moment London is the place to be, but because there's significantly less funding the likelihood of survival drops accordingly, but the primary investors are there so being based outside could potentially go against you.
bornhuetter 13y ago
I'm planning a startup in the next couple of years, and the high cost of living in London is making me lean toward Cambridge over London.
- cdavid 13y ago
  Cambridge is very expensive as well. While it is not as expensive as London, I don't think it makes much difference, unless you want to hire people with families (Cambridge is much more affordable if you want a garden, things like that). For younger people, I think they would be willing to spend a bit more for a bit less space in a vibrant city compared to a city which is not very exciting to say the least.
  - bornhuetter 13y ago
    Yes, it is still expensive, but I can get somewhere cheaper and nicer than where I am currently living in London NW3. As someone who is married and planning to have children in the next few years, I think you hit the nail on the head. If I were 20 and single I would be living on Old Street.
  - adamt 13y ago
    In my experience Cambridge is a lot cheaper than London. Both in terms of both living costs, and costs of employing people. It depends also on the skill-sets you're looking for. London tends to be trendier and have people with who are into the latest-trendy tools.
    - bornhuetter 13y ago
      Interesting profile. Do you have a blog or twitter I could follow?
    - cdavid 13y ago
      I guess it depends on the reference, but I was shocked how expensive Cambridge was. Having a decent 2-3 bedrooms house at walking distance of the 'center' can easily reach 1500 pounds a month. I myself have a flat which while near the center is in a shitty building, and it already costs > 1000 pounds a month. I would have something obviously smaller and not in Z1/Z2 in London for that price, but at least there would be something to do the WE that does not involve drinking. Unless you're really into outdoor activities, it is hard for me to see Cambridge as very appealing. I was actually expecting more hacker related meetup and co, especially given the academic background of the university, but there is not much going on.
freyfogle 13y ago
Yes. In London it is possible, though perhaps not enjoyable, to live on a low wage. Many people from around the world do it for a few years. They come to London and learn a lot. If you are trying to throw something together quickly with a few people that's very doable in London. The problem comes when your company needs to hire and retain senior people - ie people who have families, mortgages, etc. The cost and pain of living in London makes it very hard to keep and motivate those people for extended periods. The infrastructure means they either need to suffer a difficult expensive commute (or work remotely, at which point you have to ask why your business is in London) or be paid massively to live in the center.
slgeorge 13y ago
To some degree the answer depends on what you need from a physical location. Some of the benefits you get with London: * Density of people with expertise - easy to hire or find people with specialist skills * Variety of talent levels - getting people at the right level if you're building an extended team * Availability of people with similar experiences - support groups; shared space * Availability of support services - legal, financial, VC * Supportive employment and tax region - UK rather than London specific * Large market for testing and product validation - UK is both a gateway to Europe and has similarities to the US if you're moving your product from Europe * Language and time zone advantageous if you are multi-region If you're a light-weight start-up with a small team that has all the skills to create and bring the product to market then it may be less important. If you're likely to grow into a small company (say you're VC backed) and need lots of different skills then London has advantages - these are the same advantages any large city or Silicon Valley has and they vary to degrees. Note that in that scenario direct cost of salary is only one element in the total cost of running the business.
antninja 13y ago
I'm pretty sure that when they give the name of a city, they include the suburbs as well. Paris is a huge metropolis with some cheap areas but it's small and overpriced if you exclude the suburbs.

jmcdowell 13y ago

N.B. I have heard the cost of living in other European cities is a lot lower which is why I thought they would be in a similar shape to London before reading that article.

Kurtz79 13y ago
I have been living for a substantial amount of time (years) in London and Madrid, a short while in Berlin, and the latter two are definitely cheaper, offering a similar quality of life (personally I would say better, but it's a matter of taste, it has also to do with the sheer size of London). In London I was living in a shared flat in Zone 3, and I was paying more of what I pay now for a decent studio in the middle of Madrid's city center. Public transport is cheaper and more efficient both in Berlin and Madrid, just as well, and eating/going out too. Then again London has a better start-up scene, more availability of jobs and better paid ones, so as with everything, it's a matter of trade-offs. BTW, the EU it's not really popular these days, but I always found the fact that you can decide where to work and live with no legal barriers among dozens of different countries absolutely amazing, also considering that those countries were waging war between themselves for centuries up to about 70 years ago...
troels 13y ago
Yes, but for legal/tax reasons, UK is much more attractive than most other EU countries.
- corford 13y ago
  Good point. I've come across quite a few Berlin based startups that are actually incorporated in the UK e.g. Soundcloud. Someone said to me that one of the reasons for this is share capital requirements. You only need £100 to incorporate an ltd in the UK whereas in Germany it's apparently in the thousands.
  - ValentineC 13y ago
    There's actually no minimum capital requirement for the UK. You can incorporate a company with £1 in capital, if you wanted to.
    - corford 13y ago
      Ah yep you're right. Don't know why I had £100 in my head.
  - troels 13y ago
    Yes, that's one way of doing it. I guess it's not different from the US, where most companies are incorporated in Delaware.

nicholassmith 13y ago

Possibly, I live in the North and our rent and general life cost is significantly lower, however the start up scene is still slowly coming into life. It seems at the moment London is the place to be, but because there's significantly less funding the likelihood of survival drops accordingly, but the primary investors are there so being based outside could potentially go against you.

bornhuetter 13y ago

I'm planning a startup in the next couple of years, and the high cost of living in London is making me lean toward Cambridge over London.

cdavid 13y ago
Cambridge is very expensive as well. While it is not as expensive as London, I don't think it makes much difference, unless you want to hire people with families (Cambridge is much more affordable if you want a garden, things like that). For younger people, I think they would be willing to spend a bit more for a bit less space in a vibrant city compared to a city which is not very exciting to say the least.
- bornhuetter 13y ago
  Yes, it is still expensive, but I can get somewhere cheaper and nicer than where I am currently living in London NW3. As someone who is married and planning to have children in the next few years, I think you hit the nail on the head. If I were 20 and single I would be living on Old Street.
- adamt 13y ago
  In my experience Cambridge is a lot cheaper than London. Both in terms of both living costs, and costs of employing people. It depends also on the skill-sets you're looking for. London tends to be trendier and have people with who are into the latest-trendy tools.
  - bornhuetter 13y ago
    Interesting profile. Do you have a blog or twitter I could follow?
  - cdavid 13y ago
    I guess it depends on the reference, but I was shocked how expensive Cambridge was. Having a decent 2-3 bedrooms house at walking distance of the 'center' can easily reach 1500 pounds a month. I myself have a flat which while near the center is in a shitty building, and it already costs > 1000 pounds a month. I would have something obviously smaller and not in Z1/Z2 in London for that price, but at least there would be something to do the WE that does not involve drinking. Unless you're really into outdoor activities, it is hard for me to see Cambridge as very appealing. I was actually expecting more hacker related meetup and co, especially given the academic background of the university, but there is not much going on.

freyfogle 13y ago

Yes. In London it is possible, though perhaps not enjoyable, to live on a low wage. Many people from around the world do it for a few years. They come to London and learn a lot. If you are trying to throw something together quickly with a few people that's very doable in London. The problem comes when your company needs to hire and retain senior people - ie people who have families, mortgages, etc. The cost and pain of living in London makes it very hard to keep and motivate those people for extended periods. The infrastructure means they either need to suffer a difficult expensive commute (or work remotely, at which point you have to ask why your business is in London) or be paid massively to live in the center.

slgeorge 13y ago

To some degree the answer depends on what you need from a physical location. Some of the benefits you get with London: * Density of people with expertise - easy to hire or find people with specialist skills * Variety of talent levels - getting people at the right level if you're building an extended team * Availability of people with similar experiences - support groups; shared space * Availability of support services - legal, financial, VC * Supportive employment and tax region - UK rather than London specific * Large market for testing and product validation - UK is both a gateway to Europe and has similarities to the US if you're moving your product from Europe * Language and time zone advantageous if you are multi-region If you're a light-weight start-up with a small team that has all the skills to create and bring the product to market then it may be less important. If you're likely to grow into a small company (say you're VC backed) and need lots of different skills then London has advantages - these are the same advantages any large city or Silicon Valley has and they vary to degrees. Note that in that scenario direct cost of salary is only one element in the total cost of running the business.

antninja 13y ago

I'm pretty sure that when they give the name of a city, they include the suburbs as well. Paris is a huge metropolis with some cheap areas but it's small and overpriced if you exclude the suburbs.