Attention, please, for UK startups
bbc.co.uk
bbc.co.uk
Flipboard, Quora raised $10M. You think they could have done that based in the UK? No.
You think Twitter could have raised $200M from European investors? Not only is there not that kind of capital around, no one would go near it due to the lack of revenues.
I think a lot of this stuff goes back to two things: serial entrepreneurs becoming cautious angel investors rather than aspiring to build something huge and the lack of large LP (eg: Harvard) that tip money into VC.
What are some noteworthy - big - startups? Skype. Spotify. Who else?
There are some folks who suggest that raising money can actually be bad for some start ups. Ramen profatibility and all that...So, in this day and age of cheap infrastructure lack of VC money shouldn't really be a huge problem.It's more of a culture thing.
I beleve one big difference over here is that the startups aren't aiming to be the next facebook, they want to be successful enough for the founders and angels to make a particulaly comfortable living from it.
Perhaps I'm just jaded or out of touch, but I'm pretty sure something like Flipboard wouldn't get Google-big even if they were given 100 million dollars rather than 10.
Huge investments might be necessary to become gigantic, but they certainly aren't sufficient, nor are they necessary to create an actually viable business.
There are tons of European startups. But the have 'revenue' and 'profits'. Which means no one bothers reporting on them.
Don't you think $10M for some strange social news reader app seems a little over the top? or $200M for twitter? They're insane investmensts. The only reason SV investors invest is in the hope that someone even more drugged up on SV koolaid will buy the company. Bubbles upon bubbles. It's unsustainable.
I'm really happy that we're more risk averse in Europe.
Get real. Get revenue and good solid business models.
i can think of very few.
Of course you haven't heard of most of these start-ups. They probably operate in specialist fields that are of no personal or professional interest to you. So do most businesses in the world, start-up or otherwise. But many of these organisations grow into successful businesses, often without taking much if any external funding.
I don't know what it is about HN recently, but it seems like some people believe your business is only a success if it becomes the next MicroGoogleApple with a multi-billion exit for the founders, and the only path to doing that is getting lots of rounds of increasingly silly money from angels/VCs and then selling out to a major corporation for what we seem to be calling "FU money" these days. The ideal way to do this is apparently believed to be starting a Internet-based, mass-market company providing a trivial service and running it on a web site with a silly name formed by taking a normal word and adding the ending "ly".
In other news, hardly any companies will ever pull off this combination (I can count exactly none so far), while there are countless tech companies working on all kinds of applications that make plenty of profit by actually doing something useful in a certain market, which would probably provide an eight or nine figure exit for their founders if they chose to leave. These don't necessarily hit the headlines, because not everyone cares about specialist software or services, and not every founder wants to run up a company to a paper value of billions in two years and then exit making a good deal for their VCs.
there are many small businesses in the UK: http://www.bytestart.co.uk/content/news/statistics/small-bus... but i cannot find any statistics on the area of business.
Another obvious search ("Cambridge business park companies") would find you places like this: http://www.stjohns.co.uk/tenants/
but some people want to build billion dollar companies - it's a matter of taste - but if you want to do that, especially if you want to do that in the consumer space - you often need to defer revenues for user growth.
and doing that in Europe is very hard.
I'm really not sure this is even up for debate - who are the startups you're thinking of?
again, different approaches to different companies with different aims.
I don't think $10M for a social news reader app is insane, nor do I think Twitter raising $200M is insane. Some people thought Facebook raising so much was insane - that they'd never make money - and look at them now, almost $1Bn in revenues.
You're not looking at bubbles, you're looking at investors placing very specific bets on industries or trends in the hope that in five years from now they'll have another Facebook.
>> "but some people want to build billion dollar companies"
How many of the big SV startups actually make a profit though? Sure, maybe on paper they're 'worth' millions since people invested at a certain level, but I don't think that's healthy. Isn't it the least bit worrying when Reddit starts asking users to donate money? After it was sold for millions?
You can't compare Facebook + Twitter. Facebook is a destination. Their website gets a massive amount of eyeballs and is a big gaming platform. It was always obvious that they'd make good money from that. Twitter however so far is a backend message passing system, which lots of apps use. I'm really skeptical twitter will ever pull off monetization. Twitter don't get the mindshare or eyeballs. Apps that use twitter do.
At the end of the day though, I think it's a matter of taste, and what you're most comfortable. As you say, different aims. I'm very much more comfortable with the European way of building companies.
Not a game I'm remotely interested in playing
With That said it is a very nice app.
Agreed though. There is no way on earth you need $10m to build a simple app these days.
I really don't see any negativity in the UK. Whenever I spend time in the US it just gets a bit much for me. The hype and endless over enthusiasm is a little sickly after a while. And at the end of the day, why do you need that sort of thing? It's absolutely no help whatsoever to be told you're awesome and that your idea is great all the time. I'd much prefer to be told that it sucks and won't work, but perhaps that is a difference in culture.
In the UK we as a culture are built on self deprecating humour, witty put downs. Sarcasm is extremely important to us. This is how we work. Perhaps some see it as negativity, but that's not the case.
Not to get into a war here, but there are lots of things the UK does far better than the US - telco, communication, transport, as well as (IMHO, subjective) quality of life.
I dread to imagine how dull the modern Web would be if America hadn't gotten on board. Britain's contributions to the social Web have been paltry (taking the population difference into account), and even leading lights like Last.fm and Nick Denton buggered off to the US. Anyone I know who was doing good work and got the opportunity to go to the US, did.
The hype and endless over enthusiasm is a little sickly after a while. And at the end of the day, why do you need that sort of thing? It's absolutely no help whatsoever to be told you're awesome and that your idea is great all the time. I'd much prefer to be told that it sucks and won't work, but perhaps that is a difference in culture.
It's entirely a cultural difference. It's the good old British "tall poppy syndrome" - http://en.wikipedia.org/wiki/Tall_poppy_syndrome
I'll err on the side of preferring over-enthusiasm and undeserved hype to British under-enthusiasm and undeserved snarking and putting other people down any day of the week.
That's absolutely wrong. It's nothing of the sort. We could argue about this all day though. The biggest motivator for me is to be told something sucks. People telling me something is great is no help whatsoever.
You think telling a start-up with no revenue, no plans for generating revenue, and no obvious link from their offering to a revenue generation model that they aren't worth a multi-million investment is merely resentment of others' success? That's not so much a cultural difference as living on a different planet. :-)
Twitter was given as an example by the GP poster. Are we still talking about them? If so, it might not be resentment but it'd be a flat out lie. If Twitter were not worth investing in, they would not have been invested in. Several of the world's biggest VCs have not gone collectively crazy.
Twitter are NOT worth investing from if you take them in isolation. If you're investing in companies because you believe they will become big profitable companies then Twitter as an investment is quite absurd.
The only reason they ARE worth investing in is because collectively investors and would be acquirers believe they are.
Definitely investing in Twitter is a good bet because they'll likely get bought by some silly bigco.
I am intrigued by your views and would like to subscribe to your newsletter. I would be particularly interested in any issues that discuss the dot com bubble circa 2000-2001, or anything with a sidebar on trying to destroy the entire global economy by lending money to people who had no realistic chance of paying it back circa 2007-2010.
That's a mighty bold claim. The US tends to be a significant market for a lot of products just because of its scale, but not every start-up is aimed at a culture or market that is big in the US. Even for mass-market products, Europe's combined population is well over double that of the US. There are things like Asian markets and developing economies to consider as well, where the population is huge and/or relatively wealthy and/or more interested in certain kinds of product.
However, that's not for everyone if you are targeting Asian markets you need to at least visit there.
I respectfully suggest that you are vastly overestimating the importance of "influential bloggers".
Personally I've had the majority of my traffic from bloggers, though I haven't yet travelled to the U.S. to get more. Several of the successful U.K. businesses travel to U.S. regularly, though I'm not sure if that is cause or effect.
YMMV
I think the London startup scene is a vibrant from some angles, and extremely dull from others - it's a strange place.