Why Policy Should Matter To Start-Ups — Informilo

by James Silver,
April 2nd 2013.

The Coalition for a Digital Economy (Coadec) is an independent non-profit lobbying group which represents tech start-ups and entrepreneurs to government on policy and regulatory issues. It was formed in response to the 2010 Digital Economy Act’s passage through parliament to give start-ups a voice alongside of corporate giants in key policy discussions. Today Coadec, which works out of Campus London, keeps start-ups abreast with evolving UK and European Commission digital policy, while ensuring politicians and civil servants are kept up to date with developments in Britain’s fast-growing tech ecosystem. Informilo’s James Silver recently met Sara Kelly, Coadec’s 26-year old executive director, to talk about why policy and politics matter.

Q: Why should policy and politics matter to a young business? Surely they’ve got other things to worry about when they’re just getting started?

A: They really matter because policy influences how you’re able to set up your business. Also investors, who might consider investing in your business, know their stuff, so they’re going to look at the policy and business environment that your business is operating in. Start-ups doing things around copyrighted material is just one example. Investors are going to look at what the government’s position is on copyright — whether they’re looking to reform it or make it stricter, which might make it more difficult for (a start-up) to use copyrighted material. That’s going to be important to the future of a start-up’s business, which is why we keep an eye on it.

Q: Which are the hottest policy areas you are engaged with at the moment?

A: We deal a lot with policy around Internet regulation. We do work around access to finance and ensuring start-ups are aware of government initiatives like the SEIS (Seed Enterprise Investment Scheme), R&D tax credits and any other sort of assistance that’s available. Other policies we’ve been working on are things like the broadband delivery program — getting superfast broadband around the UK and into super-connected cities.

Q: Is broadband an area where there is still some frustration among entrepreneurs?

A: We think the government’s aim to introduce better speeds and connections is obviously a very good one. But we are concerned about the lack of competitors for the procurement process — BT are [currently] the only bidder in the broadband delivery program. We also know there are lots of issues around how quickly start-ups can get connections when they move to new offices. We’ve had stories where start-ups have been waiting between three and six months before their new offices can have broadband connection. So that’s something we are working with BT on — and trying to hold them to account to make sure they improve those connection speeds.

Q: How does data regulation impact start-ups?

A: There have been issues around the EU implementing the cookie directives — how websites use cookies to store information on users’ computers or other devices. We’re keeping an eye on that to make sure it doesn’t disproportionately affect tech start-ups. Cookie regulation has been around since 2009, so we’ve been monitoring the impact of that and communicating with the Information Commissioner’s Office and doing lots of work at EU-level. A lot of what the EU proposes is coming from the consumer perspective, they’re targeting it at a lot of the big companies and try to change how the big companies behave with consumer data. But they’re not taking into account that a lot of the stuff they’re doing impacts start-ups as well. Some of the most recent proposals have included things like you need to have a full-time individual to act as a data controller. As a start-up that’s not going to be feasible for you.

Q: What about copyright?

A: One of the areas we’ve been monitoring is what’s going on with the [Professor Ian] Hargreaves [Review of Intellectual Property and Growth] Proposals, which is to do with not just how copyrighted content like film, music and photographs is handled, but also with things like format-shifting, which can be really relevant for any start-up developing products involving cloud computing and anybody generating anything with UGC [user-generated content].

Q: Tell me about some of the events you’ve held on Campus?

A: We co-ran one event with Google [in June] called Musical Campus. The idea was to get the music industry and start-up industry working together. A lot of the arguments are painted as being tech vs. the music industry, but it isn’t really the case. Tech can really add a lot to the music industry and the music industry obviously provides the content for tech start-ups. We did a day-long conference where we got a lot of music start-ups together — people who can add to the music industry, along with members of the Music Managers Forum, as well as some artists and bands.

Q: From your perspective what is the value of Campus?

A: For me it’s to be able to get that real-time feedback on what policy can do to impact start-ups. Also it means I’m able to more quickly disseminate what’s going on. One time, someone overheard me talking when I was in the corridor and said, “Do you know anything about IP because I’ve got an issue I’m trying to sort out, and I’m trying to decide whether I need patent protection or copyright protection?” I was able to help point them towards something they needed to know. People can get into a habit on Campus of listening in to each other’s conversations — but it’s not [considered] rude. It’s because you’re trying to make connections with people. I think there’s just this vibe of openness here.

EXAMPLES OF HOW ENTREPRENEURS USE COADEC

To Have A Voice in Government Legislation

“Being an Internet radio platform, Mixcloud deals with talk radio shows but also with some shows which contain music, including copyrighted music,” says Nico Perez, the company’s co-founder. “From the very beginning we wanted to build a legal platform, which meant we had to navigate the minefield of the licensing world in digital music and that involved working with a very expensive lawyer and months of lobbying some of the collecting societies who administer royalty payments. That whole process was difficult. So we’ve been working with Coadec to try to improve the situation and to try to update the copyright framework to make it fit for the digital age. We’ve participated in some of the events they organize. For example, Baroness [Judith] Wilcox [who was then at the Department for Business Innovation and Skills] came down to the Campus and Sara asked me if I wanted to meet her on behalf of Coadec. If you’re a large tech company like a Google or Microsoft, you’ll have a team of people who work for you just doing lobbying. But being a small start-up, we don’t have the resources to be able to do that. So the fact that Coadec exists — and that it can bring our voice to government — is a really good thing.”

To Boost Business With Government

“While we were waiting for a meeting at a Seedcamp event on Campus we got to talking to Sara about the work we were doing,” says Dan Vahdat, co-founder of Medopad, a mobile health platform. “We are a platform company in the healthcare sector and work with both NHS hospitals and in the private sector. When an innovative company interacts with a huge organization like Government, it can be very slow. Coadec is all about connecting entrepreneurs to Government and our meeting helped us speed up Medopad’s deployment. Sara introduced us to Healthbox [a health accelerator program], which we joined, and also invited us to showcase our technology at the Hack4Health event. Healthcare is a very tough market and the only way you can succeed is by having the right partnerships in place in different areas. It’s not just about technology. You also need to work with other companies and government, which is why Coadec is a very important partnership for us. Through it, we are trying to bring more entrepreneurs into the healthcare market and support them, so that they can benefit from our platform. I think more good news will emerge from our collaboration. We’ve been in dialogue with them for a year now and this is just the start.”

To Arm Themselves For Negotiations On Copyright and Licensing

“I’d already heard about Coadec when I bumped into Sara at a TechHub event on Campus, says Danny Jeremiah, director of Kinopto. “We had a quick chat about copyright and licensing which are a big problem for a start-up to try to face on their own. Kinopto is a Netflix-type [cinema on demand] service for theatrical and independent cinema screenings and it’s a new technology, which is something the very top end of the film world are very wary of. We’re a start-up so we don’t have tons of money to force their arm and buy licenses. So we need to negotiate and look at what they’re compelled to offer, what Government has suggested they offer, and some of the relevant policy. There had been a lot of discussions around copyright and licensing which, before meeting Coadec, I wasn’t aware of. We don’t have too many problems with independent film licensing, as they just want to increase their market, but it’s the premium content which we’re interested in — but there’s quite a lot of resistance to working with start-ups. We’re meeting with the Film Distributors’ Association soon and in the interim, Coadec have opened my eyes to some of the things I can try to use to leverage our position, when we meet en masse.”

To Make Key Industry Connections

“I was [a part of accelerator program] Springboard at Campus and because of being in the building you get to meet people on every floor, says Jody Orsborn, co-founder of The Backscratchers. “So Sara approached us because she was organizing Musical Campus. Essentially what we are — a platform which connects innovative companies with creative talent for short-term projects — can be really useful to managers, artists and the music industry generally. I really liked Coadec’s philosophy for the event, which was all about putting technology into the hands of artists, managers and the [music] labels. They had a whole clinic on self-releasing and the tools artists can use to take the industry into their own hands. There’s so much tech out there and so many things you can be doing so that you don’t have to rely on the old school music industry. I was mostly involved in the pitching part of the event, but to be honest the most interesting part was the networking and drinks afterwards. Essentially I got to talk to everyone ranging from music labels to managers and artists and get direct feedback on what we are doing. For example, we met the Music Managers Forum and had a couple of meetings with them since. It looks like we’re going to work with them this year.”

This article was first published in Informilo’s Google Campus edition.