December 2, 2013
By now, you’re probably tired of reading about startup scenes that are the “next Silicon Valley.” And London should get credit here – in my three months there, I didn’t once hear any Londoners calling themselves the “Silicon Valley of Europe,” even though they could probably aspire to that title. No, London has a different problem – they’re too quick to insist why they’re not Silicon Valley. In other words, in stereotypical British fashion, they are too humble.
“London is always being compared to what Silicon Valley’s like . . . it’s the typical British thing of being a bit harsh on itself,” says Alex Vaidya, founder of StoryStream. And he falls into that manner of speaking himself: “There hasn’t been as many large exits as you’d get in Silicon Valley,” he says. “The deal flow is a lot more fluid in Silicon Valley.”
“Nobody is willing to give you the ‘money gamble’ you hear about in New York and the Valley,” says Thomas Hatton, founder of ReferenceME. This is one of the reasons he says he’s moving to the US in January, along with London’s lack of disruptive products and IPOs.
KickIt With cofounder Jemiah Douglin sees many startups moving out to the Valley, and laments that attitude – the idea that “London’s only good for so much, and if you really want to go big time you have to go to the Valley,” he explains. He hopes to grow his startup into an anchor company for London.
London does have its Silicon Roundabout – a startup area in the eastern part of the city – but at the center of it is one of the Valley’s biggest institutions: a Google campus, complete with coworking space. London entrepreneurs seem to love Google Campus – and it’s no wonder, given their reverence for the Valley.
Yet London has tons to be proud of in its own right. The Kauffman Foundation’s recent survey ranked the UK the 9th top startup scene in the world, trailing only two spots behind the US. And London ranked 7th in the Startup Genome’s ranking, where Silicon Valley was #1. “In recent years London has burst onto the scene and has become the most successful startup ecosystem in Europe, producing the largest output of startups in the European Union by far. . . London looks to be well positioned for continued growth as the leading startup ecosystem in Europe, and first choice for fast-growing US startups to establish their European headquarters,” the report said. London was ranked 2nd in the world for entrepreneurial support, 3rd for mindset, and 5th for funding.
Silicon Roundabout or Tech City was launched in 2010 and now houses over 1,000 companies, explains British consul general (New York) Danny Lopez. Lots of coworking spaces have opened up there and in the Farringdon area, where TechStars London is headquartered.
Lopez also emphasizes the government’s commitment to promoting entrepreneurship. “This is something that is very close to the prime minister and to the overall government’s agenda,” he says. The UK government offers a 50 percent tax break for angels investing in startups (under the Seed Enterprise Investment Scheme), R&D tax credits for small businesses, and a three-year entrepreneur visa. The government’s Start Up Loans program has lent over $85 million to small businesses.
So why the disconnect? It’s true that the London startup scene still has things to improve on: it could use some smarter, less risk-averse capital and more been-there-done-that mentors. But this is probably true of many startup scenes in the US – startup scenes who are claiming to be the next Silicon Valley. Right now, London may simply have a confidence problem.
“At times, we perhaps don’t dream big enough, and that’s something that the US and US culture is fantastic at doing – the idea that you can build whatever you want to build and become whoever you want to be seems to me enshrined in the values of American society,” says Katy Turner, a mentor at TechStars London and the vice president of marketing at Videoplaza. “I think there’s a natural reticence in UK culture, or a natural desire to undersell yourself.”
“Our style is quite different from the US – doing the same type of self-promotion would come across as arrogant due to cultural differences (the ‘American salesman’ cliche),” says Octave Auger, cofounder of Cutility.
“Over in the US, people must have more self-belief,” says Douglin.
Maybe the media would be less critical of the London startup scene if entrepreneurs themselves were less critical. Maybe more foreign entrepreneurs would choose London as their destination, and London could finally win the battle with Berlin for the crown of Europe’s best startup scene. And the attitude doesn’t have to be American-style and brash – “turning up the volume and talking very fast,” as nCube founder Phil Steele described it. It means understanding where London excels, backing up your assertions with facts, and admitting the shortcomings without obsessing over comparisons to Silicon Valley. No one wants to hear that you’re the next Silicon Valley, but no one wants to hear that you aren’t, either.
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