I'm just thinking out loud

What is wrong with the UK Startup scene?

05 October 2009 by Oo

Where is the HUB?This post was initially  titled “Where should the startup hub in UK be? Hint: NOT London!” of which the central theme was; although London is the hub of internet technology in UK, it should not be because of the high cost of living which eliminates startups between idea and Y Combinatior graduation stage (product fitness). I also stated that because of the importance of a living community tied to Universities like that which exists in the Valley (Stanford and Berkley), London is NOT conducive, as the Universities there are deep inside the city. I tried to propose a hub location by comparing Cambridge, Oxford, London, and Warwick (my University). While researching for my write up, I realized that there are greater challenges to the UK start-up scene than having a main hub .

Before going on, it is important to note why I am in a great position to write this post.

  • I am a foreigner (Yes, I am Nigerian), therefore I have no bias.
  • I have followed the ‘UK start-up scene’ quite closely for a while (1 year)
  • I have just begun my startup OnePage so I have firsthand experience of what is like creating a startup in the UK

I will itemize the factors working against the UK startup community thereafter suggest my solutions to the challenges I have listed.

The problems:

1. Absence of co-operation/a unified front: Of recent, there have been lots of activities in the UK startup community with the SeedCamp and Red-Gate’s springboard applications and events. Looking at the feedback and outcome, it seems quite a lot of people are ‘against SeedCamp’.  SeedCamp has a little hand in this by pitching itself as a benevolent institution that helps young startup’s rather than a strategic investment vehicle for them that benefits all who participate. This has resulted in situations like this. That said, I find it discouraging that people who are trying to create their ‘incubator like’ vehicles are pitching “my own is better than their own”, very eager to highlight differences (job of politicians). I am talking about RedGate and BootCycle. I am very certain that these all parties have the best of intentions but I am saying it the way I see it. (I am neutral remember?).

2. Defying Pareto: The same group of people (cough..Mike Butcher/TC UK) run virtually all events…..IN LONDON! I must commend him for doing a great job! But there is the much one man can do. The UK startup community has defied Pareto analysis because 3% of the people are in charge of 97% of all startup activities /events in UK (that I know of). This of course is not the best since the same stuff ends up being recycled.

3. Language: It should be realized that the English people speak only English. The fact that English is becoming the language of the world should frighten the British. Put simply, the rest of the world learns English in ADDITION to their languages. The Chinese/French dudes can create start ups that target their countries and English speaking countries. While the British are still trying to aim for the US (like the rest of the world), so there is no competitive advantage of localization like most of the world does.  The UK simply put does not have the numbers to sustain itself. Nigeria has more mobile phone lines than you guys have people. India, China, Japan and the US can sustain large scale web ventures located within their borders. Can the UK do same?

5. The weather: I need not say more!

As always, when I highlight challenges, I recommend solutions. If the British want to remain relevant in the scheme of things, they had better step up.

1. There is a place for more SeedCamps, Springboards, and Booth cycles. What this country is in dire need of its support for entrepreneurs that are pre- product market fit (before YCombinator graduation). It is a no-brainer that the most fragile and important part of a startup is getting the product right. I think BootCycle is looking more like what is needed, but more has to be done. It is my firm belief that these supports are best built around universities where there is FREE/CHEAP access to research and advice from experts/professors, while having a sweet population (university students) to test ideas on. Additionally, there is less pressure as the startup founders are students who already have living expenses taken care of (as they are already in school). In London, you better have good money rolling in from day one or else…. Such pressure is not needed if you are supposed to be patiently building a good product. At Warwick University, we hope to try to create an Internet hub (NOT university society) beginning this year. I hope other Universities take do the same.

2. Co-opetitiveness: UK startup community should cooperate while competing. No matter what people say about the success of the Valley, I will put it down to simply the willingness of startups to help each other and collaborate. I have a deep feeling that Bebo would have had a stronger foothold if there was greater co operation with other UK based startups. The co operative  attitude and atmosphere must be why, FriendFeed must have been able to stroll down to Twitter HQ and get access to the hose.

3. The need for advisers is deeply and grossly underestimated in the early days of a startup. There is a great difference to having the business card of the CEO’s of the big companies/‘access’ to a thousand mentors, and having someone spending almost two hours going through your SeedCamp application and taking out time to listen and thoughtfully reply all mails. Thanks Iqbal! (I still wish I could walk down the road and meet up with at that favourite Starbucks)

4. Good events that young entrepreneurs have FREE access to. One of the most useful events I have attended since I arrived in this country is Launch48. What makes it so lovely is that you are not screened from attending. Last year it was free. This year (16-18th Oct), it is only 10 quid (which I believe is to minimize no shows). Launch48 is where I got to make my MAJOR contacts in the Startup world. I cannot say enough of how useful it has been to me. Nice one Adil!. I should also state the UKTI and TC pitching event held every month

5. Everything cannot happen in London! So what happens to those living in the north of England/Scotland/Wales? For Joel and I to meet up with founders like us, we have to travel down to London to attend an event, this costs almost 80 quid in transportation alone (Mike Butcher thinks that’s cheap). But you see, that is only one event to meet a few founders formally for a few hours. People in the valley have that all day and all year long.

6. Encourage foreigners: First of all, it is obvious that the UK is fast becoming a service economy therefore it is important to attract the best brains, which means encouraging foreigners to come around. There are other strategic reasons why UK should support foreigners and Prof. Wadhwa understands this. If British Person creates a startup in with a Chinese, Nigerian or Indian man, it would be the easier route to their home markets and takes care of your number issues.

If issues pointed out above are not taken care of, Spain would be a much more attractive location than UK for Europe based startups. Two basic reasons for this would be language and weather. The Spanish would have access to the 800 million Spanish speakers in addition to the English market (everybody speaks English). Pau Gay would be willing to receive me

For now, I will do my best to create that valley environment here in the UK. But with the way things are now, the Founders visa is looking quite attractive.

*Disclosure: OnePage applied to both SeedCamp and Red-Gate’s Springboard and did not make either one. And I am yet to get feedback on why we did not make either. I would count feedback as benefit  for spending hours to apply  for those events.

PS: The main aim of this post is to begin an open discussion and think of ways to improve the UK startup scene as a whole.

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