Why is Silicon Valley synonymous with technology innovation rather than the Thames Valley? What is the magic formula for nurturing start-ups and fostering the next generation of wealth creators? What are the carrots that we need to dangle before entrepreneurs to convince them that the UK can be ground zero for the next big thing?
I was present on a panel of business experts convened in London recently to discuss these and many more questions surrounding the UK’s role in the global entrepreneurial scene, together with Bernard Dallé, partner at Index Ventures, and leading UK entrepreneurs Piers Linney, chief executive of Outsourcery and and Justin Bowser, managing director of HTK Horizon.
The discussion focused on how the UK should embrace its entrepreneurial culture and the steps the UK needs to take to place it on the global technology map.
My company, Zuora, is a third-generation start-up, having spun out of salesforce.com, which itself grew out of Oracle. We understand start-ups. I see it as a great time to be a start-up. The current economic climate is a breeding ground for innovation, as businesses look for ways to cut costs and streamline processes.
Money follows ideas and the UK is not short of ideas, that’s for sure. Just look at the number of businesses springing up fuelled by the subscription economy: that is, the notion of paying for things on a demand basis rather than owning them outright.
There was no shortage of debate at the recent panel discussion. Index’s Dallé said the UK shouldn’t beat itself up so much and argued that London was one of the world’s top three centres of innovation. BookingBug’s Glenn Shoosmith argued that the UK lacked venture funding, was guilty of penalising start-ups for success and needed to introduce more incentives such as tax breaks.
Outsourcery’s Linney said there wasn’t enough support for companies seeking to move out of their infant phase and into maturity. HTK’s Bowser said Brits shouldn’t be ashamed to say their aim in business is to make money – and lots of it.
On the back of what was a lively discussion, I have outlined the five ingredients the UK and its entrepreneurs need to bear in mind to achieve the success of their Silicon Valley cousins.
Think big. Silicon Valley became the heart of technological innovation because it drew creative minds that weren’t afraid to dream big. Whether you’re trying to redefine information technology or change the way cell carriers charge customers, you need to have a transformative idea and the willingness to fight for it.
London has it all. There is a lot that London and the UK can offer. London in particular is the mothership of global finance. The media industry is based here along with government and great universities and business schools. Also, English is the native language of the technology industry, so the UK has the advantage over other countries. Entrepreneurs should use this to their advantage, since there aren’t many other cities that can offer all this in one place.
Take risks. In America, if your company goes down you dust yourself off and try again. In many other places there’s a deep sense of inertia and being risk-averse. Closing down a company is no shame, it’s the red badge of courage. Iterate and fail fast.
Money should chase innovation, not the other way around. More often than not, entrepreneurs go looking for money, whereas in the US entrepreneurs act as magnets for money. This has caused many UK businesses to court the VCs on Sand Hill Road and set up camp in the US. But now, VCs are coming to the UK and Europe because they see opportunities.
Money follows ideas, so long as those ideas are likely to generate a better return than the alternatives. And entrepreneurs should not be afraid of staying in the UK and asking the money to come to them.
Yes, the Government can help. The UK Government wants to support start-ups: just look at the investment being made into Tech City. But there is more that can be done, such as increasing the tax breaks to start-ups so that companies are not penalised for fast growth, as well as easing up on immigration so that companies can attract the best talent possible.