Recently announced as Scotland's first Chief Entrepreneurship Officer, former Skyscanner COO Mark Logan explores the complex topic of how to go about building entrepreneurial ecosystems in conversation with TechCrunch's Mike Butcher - no stranger himself to ecosystem building, and someone who has both observed and participated in ecosystem development all over Europe.
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Hi everybody, Mike Butcher, editor at large TechCrunch and an enthusiastic contributor to the fantastic tiering fest. Thanks very much to Brian for asking me back after a small hiatus called a pandemic. Thanks very much for joining us everybody. Mark Logan, you are an interesting guy because you're obviously slightly famous because of your Skyscanner involvement.
But I was also looking back into your history, having gone to Glasgow University, studied electronic systems, micro processing, and actually getting into a start up back in the day, which ended up being bought by Atlantech. I wasn't responsible for the name. Atlantech. I know it's a bit of a mouthful.
But anyway, that went all the way up to being bought by, sold to Cisco for one hundred and eighty million dollars And then you joined Skyscanner as well. And that's a very famous exit to trip dot com or ctrip for one point four billion back in the day.
But now fast forward to the modern era and I'd like, I'd be interested in, let's weave in how the journey has brought you here. But back up to the modern era, you're now Scotland's chief entrepreneur or entrepreneurship officer? It depends who's seeing it, to be honest.
All the news reports seem to be a bit confused. Do you want to put us right? Well, I would prefer entrepreneurial adviser, to be honest. But I think it's meant to be chief entrepreneur, which makes me slightly Entrepreneur officer. Just entrepreneur, full stop.
Which makes me slightly wince, but, you know You're a very humble man. You should embrace it, embrace this new found stardom. But the What do you think this means? And why do You're one of first to do this. So what's going on? What's happened inside the government to make people jump on this opportunity?
Well, I think what's happened is that in Scotland, the government is realising that every job any of us do here your job, my job, government jobs, any job exists because someone started something. And we need to be starting things for people to have careers.
That seems obvious, especially if you are a starter or someone who works in start ups, but it's not always obvious to governments. And I think what's happening in Scotland is that the government is really embracing the idea that if government can support the sort of things that people in this room here are doing, then the country can flourish and individuals can have fulfilling careers and lives.
I think that's great that that's happening. It will never be perfect and will make mistakes and it could be more efficient, etc, etc, but the fact that the government is using the term, the fact that senior ministers are talking about it is extremely positive because it creates the conditions in which we can start to do things that are useful and helpful to building the ecosystem.
Now, I read that you basically picked up some of your first earliest jobs in or you know founding opportunities in tech. You know from a job ad, you know, of old fashioned newspaper. And obviously with Skyscanner you met Gareth the CEO and founder kind of in the Scottish ecosystem, tech ecosystem which is very nascent back in the day.
But these are all sorts of more sort of random serendipitous events. And certainly from my perspective, I found looking at the technology entrepreneurship ecosystem over the many years I've been involved in as an observer and as a journalist is that often these things aren't very codified.
They are a little bit random. But you've written a very comprehensive report which I found quite fascinating and trying to codify things, trying to look at things like infrastructure, funding, education and talent and really sort of put down these sort of big bullet points and unpack what happens underneath tech startup ecosystems.
What's some of the sort of general themes that you thought really jumped out at you? And why do you think you feel that there's this sort of codification or policy opportunity here? Yeah, that's a great question. You mentioned the serendipity of people meeting.
Like, for example, today there are meetings that are going to happen that will result in successful scale ups a few years down the line, but none of us know that right now. But that's how it works. And I think that that serendipity becomes routine when you get to a critical mass in an ecosystem, a tipping point where there's enough people, enough start ups, enough scale ups, enough talent and funding in the ecosystem that those kind of collisions happen all the time.
You see that in the very mature ecosystems like the Silicon Valley, etcetera. And I'd say that Scotland's ecosystem, although it's very exciting and you can feel the energy here today and whenever people come together from the community. Although that excitement is there, we're still pre tipping point.
We haven't got that critical mass of start ups and scale ups that cause virtuous network effects to become established. You've had a unicorn. Yeah, and I would say the unicorn term, an aside, to me isn't a goal in itself. It's a proxy for successful startups coming through.
But we haven't had enough of those, and I think where you can help with policy or with government intervention Governments can't run ecosystems. Don't want to be there. But governments can improve the conditions by which that critical mass tipping point can be reached.
And I think there's kind of three areas where government can be useful. One of those is in supplying the talent pool. So we don't do a great job of, for example, computing science education in Scottish schools, so that's an area where you can improve that.
Another one is in immigration policy. Another is in converting people from other industries into becoming software engineers, for example, so the work that CodeClan does very well. So, there's an education or there's a talent pipeline that the government can influence. There's an infrastructure part to that.
So, you probably have seen in the last couple of weeks, we've announced that we're going to be creating seven what we call tech scaler environments around the country, where start ups can have long term incubation, they get exposed to world class training from resources around the world.
So there's an infrastructure component, both physical and social, and there's also a funding component. Now, governments aren't skilled enough to replace private funding, but they can stimulate that funding. We see the same things happen at different stages in history in all ecosystems. The Silicon Valley didn't just start because lots of private sector people decided to.
It was heavily supported by government, and to some extent, still is. Tesla has received four hundred million dollars of funding from the US government. People often forget that. And that's just one example. So I think government can enable, and by enabling I mean help to accelerate the ecosystem to its tipping point, after which governments can, to some extent, relax that intervention.
Governments can also strangle if you're trying to control the ecosystem. So it's a balancing act. If I was sitting here, if I was taking on the role of, say, a Silicon Valley VC, you know, this sort of archetypal individual. You know, people that to some extent ad nauseam TechCrunch is slightly obsessed with unhealthily, I dare say.
They might be saying something like, you know, it's just about getting everybody to have shares and options in the startup. You know, you're gonna even the receptionist becomes a millionaire, you know, becomes an angel investor. To them, their interpretation of an of a of an ecosystem is much more about the money, basically.
The fact that the chief engineer becomes an angel investor or starts their own VC fund or goes off and bootstraps their own startup because now that they're wealthy enough to do it. They think in those kinds of terms a lot more. Here in Europe we tend to think in terms of regulation and you know are there enough you know educational institutions and those kinds of things.
How do you balance those two sort of slightly jarring viewpoints? Well, think what you're seeing there, Mike, is every participant in the ecosystem has its own, you know, hisher, own selfish reason for participating. That might be because you see it as a black box and you put money in, you get more money out.
So, that's maybe how some or many VCs might see that. I don't mean to say that pejoratively. Or it might be that I have a really fulfilling career and get to challenge myself and grow. That's if you're an employee of a start up.
Most of the most exciting moments of my life were in the harem, scarem environment of start ups. That was my selfish reason for participating. So we all have those selfish reasons. I think the trick though is then to stand a little bit back from that and say, whatever reason people have for participating, are there higher level or foundational things we can do to make that participation more successful for those people?
So, having a systems view of this is really important and by systems view I mean that although there's an awful lot of human endeavour, you know, joy, sorrow, tragedy and triumph in an ecosystem, its outputs and its inputs are where we need to concentrate.
So its inputs are talent and money and its outputs are start ups at different levels of scale. And then you have to ask yourself, what system interventions could improve the rate of outputs and the success of those outputs? And I think that's a useful perspective to take because what you're doing is you're improving all the participants' myopic outcomes and that's fine.
I think it's very important that we don't get sucked to one side or the other of these debates. A VC has a certain set of criteria that are important to them. You couldn't build an ecosystem purely on those, just like you couldn't build an ecosystem purely on the sentiment of, you know, let's all experience personal growth.
You need to recognise there's multiple different selfish or myopic views. I use the term selfish neutrally there. But you've got to look at, is the system as a whole, with all those represented, is it working? And that's where the model comes in. And the idea of tipping points and interventions to get there becomes very important.
Yeah. I noticed in your report, which I commend to the audience, by the way. I think it's actually one of the best things I've read on how you build an ecosystem. But we have another speaker here today, Stephen Drost of Code Base. He's talking about, has been talking about building tech ecosystems, almost like a graphic equalizer where, you know, you turn up the volume on the bass or the drums or whatever.
And I was reading your report, you were talking about how it wouldn't be enough to just say, let's amp up, you know, STEM education in schools or let's, you know, incentivize angels or whatever. You're almost like pushing all the knobs up of the graphic equalizer all at the same time.
It's like a fire everything approach. I thought that was quite interesting. Have I characterized it incorrectly? What would you say? I think that's an interesting characterization. I never understand Stephen's analogy, so I'll have to ask him for that later. I'm not the only one, obviously.
I hope Stephen's not here. Oh, yes. I always understand Steven's In all seriousness, I think that both of those models are really saying, Steven's equalizer are probably my interventions, if we were mapping our models. Obviously, we're all bound by the economics of time and money, so you can't actually do everything at once.
My sort of model was that to maximize ecosystems performance, all these things need to get done. In an ideal world, you do many of them at the same time. But if you have to choose an order on them, I was very clear that it's I don't want to sound like Tony Blair in nineteen ninety seven, but it's education first, it's infrastructure second, and it's funding third.
Now, that might sound the opposite of what conventional wisdom might say, but the reason I say that is that in Scotland today, someone turned up with two hundred million dollars and said, Okay, we're going to spend that on start ups, there is a reality that it'd be quite hard to get that money away on enough start ups that you could be sure we're going to have the fighting chance of giving you the ten times return that you want.
And that's because the ecosystem's still a little bit sparse. There's not quite enough start ups and some failing, some succeeding, people learning, rebooting themselves. There's not quite enough of that. I think it's really So it's sort of pre tipping point, as you Yes, exactly.
Pre tipping point. I think that when I talk about education, I don't just mean do we have enough children interested in programming computers? I don't just mean do we have enough tech undergraduates learning about startups. I also mean, does our founder base and our founding team base have the same level of technique that the Silicon Valley founders routinely have because of the nature of that environment?
Average averages are dangerous things, but on average, we don't. There's still a gap there. So my thesis is that, if we're going to slide one of the sliders up, that it's very important that we put in place world class founder and founding team education and give people access to the experience of founders who've gone through those processes so they can learn more quickly and get that technique.
So we're more likely to have more investable companies. So it's not that we don't want any investment, of course we do, but I want to put emphasis on that education piece. And where does that education happen? It happens in infrastructure, physical and social.
It happens in incubators, it happens at this conference, It happens in the discussions around it. So I've got a strong sense that the reason Renaissance cities exist in history is because of their market squares. Leonardo was out into the market square and he bumps into a whole bunch of other polymaths, and they share it.
Literally, they share knowledge with each other. And suddenly, you've got this incredibly creative environment. So by infrastructure, I really mean, let's create market squares where people can learn from each other and learn from people outside the ecosystem. It's great to have people coming into Scotland today for this event, for example.
And when we get those things really firing, then we won't have any trouble attracting a lot more investment, because we'll have enough investable, exciting start ups and scale ups to attract investors. And once we attract those investors in greater numbers, and once we attract talent into the ecosystem because these start ups are interesting, both of those things strengthen those start ups, which attracts more talent because there's more success and we get a virtuous cycle going.
But, I mean, not to be sound obtuse, but how do you sort of actually manufacture that or how you engineer it? Is it founders going into schools or universities? Is it angel investors talking at business clubs? How does it operate on a practical level?
Education is a funnel. So at school level, it's, let's make computing science not such a boring subject. It's currently taught mainly by non specialists, so this curriculum is dumbed down so it can be taught by non specialists. And children find it boring and it turns them off.
So that's a short version of a longer issue, but that's got to get fixed. At university level, it's about taking our tech graduates and introducing them to startup growth techniques and also normalizing the idea that not joining a bank is also a valid career path.
Sorry, if that's a sensitive point. But there an issue there. It's much better than it was when I graduated. If you joined a startup, you'd be kind of Well, famously didn't you got out of BT, didn't you, too? Yeah, I was in BT's research Which corporate environment?
Yeah. And I saw this you mentioned earlier, this really badly formatted ad in the newspaper. And I was a great environment. Everyone was the same age as me. We're all going out. It was very social. I joined a startup. There was five of us.
And the company had a policy where, because very intelligent people are often a bit odd, if you're a bit odd, you must be very intelligent. That was their hiring philosophy, so there's lot of very odd people there. And of course, they assured me that when they hired me, they'd stop that policy.
It was a very difficult environment, and we were in a tin shed in Cumbernauld, but we sold that company for one hundred and eighty million dollars five years later. So that got me hooked and I had amazing experiences there. But we've got to think of the education piece as a funnel, and at every stage meet their intervention.
So at founder level, that's about exposing people to, for example, reforge dot com or similar internationally world class training programs for founders. If we do that when I was my first startup, I had no clue what I was doing. None of us did.
We made so many mistakes. If you can short circuit that, we can accelerate our companies towards that tipping point. We've got a painfully short amount of time left. Let me just ask you one thing about how I think there's clearly You're doing it at a government level, policy level.
You're going to be making those recommendations. There's obviously some big levers you can push, like the railway crossing where you can redirect the trains. Are there other policy issues or even sort of fiscal issues which you might be able to pull such as incentivizing angels or you know, can you do things like sort of EIS or SEIS style instruments to flood the money with more, with more sort of like, you know, cash to, people can literally throw start up ideas against the wall and see what sticks?
There's a lot of things like that already happening in Scotland, for example. So we have Scottish Enterprises co investment model, to name but one. We now have the Scottish National Investment Bank. We have a great angel syndicate network. So we have a lot of things that are pretty powerful.
I think that the additional ingredient we want to work on is belief. And in Skyscanner, I used to always feel that our job was to make sure, as a team on the spectrum of belief, we were neither complacent we're the biggest meta search in Edinburgh.
That's not a prize. Nor were we paralyzed by the fear that Google was trying to kill us. You have to be in the middle of that, and you have to believe that you can, person for person, beat your competition and you can compete on the market.
Now, we take that and scale it up to the ecosystem, events like this create belief. Human energy, unlike other energy forms, can be created and destroyed. So I think the things we need to work on is our belief. Don't accept mediocrity, but believe that we can be as impactful and successful as any other ecosystem out there.
I think that's something worth having. I think our job is sometimes in Scotland, it's easier to throw rocks at each other because we've done it for forty years after the economy went away with heavy industry and we've fallen into that habit. But what we have in the room today, for example, are people who take those rocks and build with them.
And we need more of that. You're the ecosystem builders, the mentors, the people who are giving their time to each other, founder to founder, etcetera, etcetera, because you can feel the belief rising in ecosystem. And I think that, as much as anything we've said in this discussion here, Mike, is what it's going to take us to that tipping point.
So it's great to see it, and we'll make it continue. Thinking about, in the closing seconds we've got, thinking about your own personal journey and if you had a time machine or you could run the clock back to the earliest days of Skyscanner, do you think that Skyscanner would have got to its of tipping point as it were earlier if there had been all the knobs on the dial turned up on the Scottish ecosystem in the way that you would like them now?
Or would there be multiple Skyscanner skyscanners? Or are you hoping that that's what's going to happen now if you can amp up the system in the way that you want to? All of those things would be true. We'd have got there quicker. Would there be more of those companies?
And now what we're seeing with companies that are reaching a certain level of maturity Skyscanner, FanDuel, Current Health, just to name a few. There's many, many others. The people from those companies are leaving and joining start ups, and that's when we really start to get some virtuous loops running.
So yeah, we'd have got there quicker. Obviously, none of us would change much in our lives, really, if we're honest, because the combinatorial explosion of choices after that is too hard to contemplate. But we would have got there faster. There'd be more skyscanners if we'd done these things ten years ago, I think.
Well, certainly, let's hope that's the case in the next few years. But for now, thank you very much. Scotland's first chief entrepreneur, Officer, Mark Logan. Thank you. Thank you very much and my name is Mike Glitcher. Have a nice day everybody.
