A new snapshot report of the Scottish tech ecosystem has pointed to a ‘fragmented’ network of support for early stage founders that is often hard to navigate and lacks coordination.
Founders repeatedly described it as ‘overwhelming, confusing, and opaque’, according to a report compiled by a former senior executive at CodeBase, the technology ecosystem builder headquartered in Edinburgh.
Barry McDonald, who was VP of Community at CodeBase until being made redundant in March, has since launched the ‘100 Coffees’ initiative, where he sought to meet and have 100 conversations with 100 people across the Scottish startup scene.
Although not commissioned to do the work, McDonald, who also previously ran the Stirling outlet for CodeBase, decided to gather up the feedback into a formal document, in the hope the reflections from those conversations, which took place between March and July, can steer better outcomes for founders.
McDonald met with First Minister John Swinney this week where he discussed his findings, which were published as a 22-page report yesterday.
Describing the meeting in Perth as “very constructive”, McDonald is sanguine about the prospects for Scottish tech founders, despite some ‘uncomfortable’ findings.
He says in the report: “Over the course of 100 conversations with founders, funders, ecosystem builders, and change-makers across Scotland, one message came through loud and clear: Scotland has the talent, ideas, and ambition, but our startup ecosystem is too fragmented, too complicated, and too inward-looking to reach its full potential.
“What emerged wasn’t a single, unified diagnosis, but a chorus of frustrations, observations, hopes, and lived experiences. A desire for deeper trust, stronger connections, and bolder collaboration. A hunger for more support during the earliest stages of company building. A plea to cut through the noise, tribalism, and red tape. And a consistent call to stop looking inward, and start looking outward, especially to Europe and beyond.”
The report describes Scotland’s startup ecosystem as ‘full of well-intentioned support, but structurally disconnected and often difficult to navigate’.
It adds: ‘Founders consistently spoke of fragmentation, duplication, misaligned incentives, and missed opportunities. While the country has the raw ingredients – talent, creativity, and a strong global brand – it too often fails to convert this into meaningful startup success at scale.’
Isolation was another issue. Founders, especially in rural areas, struggle to connect, as do new arrivals from overseas – whilst early-stage builders find it difficult to find a ‘clear community’.
McDonald is clear that his report is not scientific. He held conversations with those who responded to his 100 Coffees initiative via LinkedIn. However, it quickly took off on the social media platform and he generated significant interest. Most conversations were held in person, although some were online; some involved people from outside Scotland, which provided useful external perspectives. All, however, were anonymous, even though some contributors were happy to reveal the meetings via their own social media.
Full disclosure: I was among the many people who met with Barry, and valued the opportunity to feedback my own thoughts on the tech sector in Scotland, and where it could be doing better.
One of McDonald’s key observations – based on the conversations he had – was that Scotland has created a ‘system that feels increasingly built around itself rather than the entrepreneurs it claims to support’. He reports people often feel excluded from that system: whether through regional isolation, or for those wanting support to develop their businesses according to ‘non-traditional growth models’. In-person only events are sometimes a barrier to those with disabilities, and underrepresented groups are affected by digital exclusion.
Accelerators often overlap or duplicate work, there are regional disparities to entrepreneurial and business support, for example Business Gateway, and there is no central map guiding people to what is available. In terms of investment, angel and venture capital (VC) investors are seen as risk-averse and back startups too late in their journeys.
Corporate and government competitions also exclude the companies they are seeking to support through rigid eligibility criteria, and funding ‘myths’ prevail about VC investors, often to the exclusion of alternative or sustainable finance routes.
In terms of culture, there is often a ‘fear of failure’ mindset, too much humility and a lack of international ambition or reluctance to leverage the national brand in Scotland, according to McDonald. He also comments on a ‘pay your dues mentality’, which constrains new founders through unnecessary obligations. And in terms of community, peer support has eroded, there are too many silos, a lack of space to test ideas, there are not enough experienced operators and successfully exited founders to bring the new generation on, and there is no cohesive online community.
Patchy support, a culture of grant dependency, ‘accelerator hopping’ and institutional duplication often rewards those who can navigate the system, rather than real innovation. And a focus on established companies by the likes of Scottish Enterprise risks missing promising early stage founders whose ideas have greater long-term potential.
As a result, McDonald observes, Scotland ‘lacks a shared, coherent vision for what kind of startup nation it wants to be’.
He says: “This absence of strategic direction has resulted in a patchwork of initiatives and support organisations – many well-meaning, but few aligned. There’s no clear answer to the question: What are we trying to build? More unicorns? More sustainable SMEs? More successful exits? More locally-rooted, regenerative businesses?”
The report is not a counsel of despair. McDonald provides hope for the future with a section at the end focused on the opportunities. He says the ecosystem has ‘remarkable potential, if we listen, adapt, and focus on the right people at the right time.’ He is clear that the challenge is ‘not invention, it’s growth’, and that if the right funding models can be found that are creative and more strategic in outlook, this could be a harbinger for change. There is a rich talent pool, and with the right bridges to help them connect, more meaningfully and in ‘deeper’ ways, it would inspire more collaboration and business creation.
Similarly, universities are fertile ground for startups, but are under-leveraged when it comes to commercialisation of good ideas. Young people, too, are more able to access summer sports than they are entrepreneurship activities, which, if remedied, could normalise the entrepreneurial mindset and help future generations succeed.
He concludes: “This isn’t a roadmap, or a blueprint. It’s a snapshot. But I hope it sparks deeper thinking, more honest conversations, and a little more urgency. The solutions are not beyond us – they’re already being whispered in cafes, trialled in side-projects, and built by people who care more about impact than credit.
“If this report does anything, let it remind us of this: the ecosystem is us. If we want it to be better, more inclusive, more connected, more ambitious, we each have a role to play in making that happen.”
The 100 Conversations: Challenges & Opportunities in the Scottish Startup Ecosystem report is available in full via Barry’s LinkedIn page HERE
