East London is not some Edenic entrepreneurial paradise with money raining down from the skies upon every ex-McKinsey consultant with a shit idea for an iPhone app. But to hear some of the start-ups in Silicon Roundabout talk, you might be forgiven for thinking that the place is awash with cash, mentorship and affordable developer talent.
It isn’t. At least, not for the majority of the entrepreneurial wannabes flocking to the area, signing up for drop-in TechHub memberships and getting riotously drunk at Silicon Drinkabout. The reality of launching a compelling web service or social product – indeed, the reality of launching any company today – is gritty, at times miserable, and above all bloody hard work.
This fact appears to have escaped the newest generation of founders, an alarming proportion of whom are ex-graphic designers or ex-management consultants with little grasp of what it takes to build a profitable internet company that might one day achieve an exit. To see co-working spaces deserted after 6 p.m. tells me all I need to know about how earnest European entrepreneurs really are about becoming the next Mark Pincus.
“Why aren’t we getting funding?” they whine, apparently unaware of the intergalactic distance between the quality of their ideas, execution ability and dedication compared to a previous generation of east London entrepreneurs that produced the likes of Huddle and Mind Candy. This isn’t a popular thing to say, but, based on what I’ve seen in the last six months, the quality of early-stage businesses in east London is exceedingly poor.
I try hard to discover truly compelling new businesses: I want to discover something compelling going on around Old Street. But I struggle to locate the sort of world-beating ambition – and even the charisma, if that matters – of the previous generation of London internet entrepreneurs, whose businesses are now extending their tendrils elsewhere across the globe. Where is the new Brainient? Where is the new Conversocial?
Today’s founders are not entirely to blame. They have, after all, emerged from a milieu in which government presence – and largesse – is the norm. Not only are many of the new and best-known venture funds part-publicly funded, such as Passion Capital and Notion Capital, but there is also an inescapable quango looming large over the entire geographic area. This breeds a sense of entitlement that is practically dripping down the walls at Google Campus.
It remains to be seen whether putting public money into venture capital is a sensible thing to do. My suspicion is that it is not: like bailing out the banks, investing in such a high-risk asset class is probably not something public bodies ought to be doing with taxpayer cash. Supporting failing asset classes like venture capital, which in Europe some would say has proven itself a mug’s game, creates market distortions and will ultimately result in damaging crashes when the public money runs out.
It is anti-capitalistic and bad for the business ecosystem: a further engorgement of the plutocratic power concentration between politicians and big business, as evidenced by the private companies moving in on the area, hoping to scoop up talent. Google Campus, as we now know, has nothing to do with “Tech City”: it was coming long before UKTI started crowing about Shoreditch after a deal was struck between David Cameron and Google. And then there’s Wayra UK, Telefónica’s attempt to invent the future on the cheap.
Publicly-backed venture funds also mean more bad ideas and a lower quality of entrepreneur now have access to capital. That may not be a good thing in the long run. We can lay much of the blame for the glut of new technology start-ups at the feet of the Tech City Investment Organisation, which appears to have successfully convinced every skinny-jeaned twentysomething with a laptop that they, too, can be the new Mark Zuckerberg.
But it’s absurd. And the complacency and entitlement culture of the European Union is filtering down into those industries it is now artificially propping up, hence the insufferable whining one now hears from early-stage east London companies who wonder why no one is showering them with cash. They don’t seem to realise that, publicly funded or not, VCs aren’t stupid: they know that most of the ideas floating around Shoreditch simply aren’t very good.
Service providers, such as public relations companies, accountants and lawyers have recognised this too. It’s why so many of them are repositioning themselves as “high-growth” service providers – a polite way of telling the two laptops and a prototype crowd that they should probably concentrate on building a killer product before squealing about the paucity of support on offer.
The sociopolitical environment is not helping either. Look around. There are endless “women in tech” events at which you can be subjected to soporific grievance-mongering from mediocre marketing executives, but by comparison there are very few useful workshops on how to build a company. Plugging that gap, to a degree, is General Assembly, but its classes come with a price tag commensurate with the quality of the teaching on offer.
The European technology industry needs a good kick in the nuts if it is ever to move away from laughably derivative products that failed five years ago in Silicon Valley. It’s no good stroppily demanding cash, services and attention if you’re not building a product people might actually want to use.
I write this because I want Europe to succeed. I want London to truly realise its promise as a commercial rival to the West Coast in digital technology. But that will not happen so long as we are classifying UX consultants as “start-ups”, while we fool entrepreneurs into thinking they can work eight-hour days and while we refuse to be honest with them about the reality of getting a start-up off the ground.
There are no hand-outs. There are no leg-ups. There is only grit, determination and superhuman force of will. If you can’t muster those things, find another job. If you can, for the love of God stop whining about not getting enough “support”, hunker down and do what the Americans do: beg, borrow or steal to finance however many sleepless nights you need to take over the world.
“At Google Campus the other week,” tweeted BBC reporter Dave Lee to me this morning, “How many ‘no-one will give us money’ comments were there? Get in the real world.”
Couldn’t have put it better myself.