

Attention, please, for UK startups - gaius
http://www.bbc.co.uk/blogs/thereporters/rorycellanjones/2010/07/uk_tech_is_anyone_listening.html

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pclark
Everything about European startups is against them. Europe is so risk averse
it's a joke. They (VCs and therefore startups) are under capitalized compared
to US startups and have to try so much harder to get visibility of the "big 5"
acquirers. VCs almost always favour revenue over customer growth.

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?

~~~
axod
BS.

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.

~~~
pclark
axod, you've built an awesome lifestyle company and you should be proud of
that.

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.

~~~
axod
You're right - I'd rather play a much longer term game - build a business that
sustains itself rather than saddle myself with investment.

>> "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.

------
axod
There is so much bubble hype in SV though. iPad? Yeah most people don't have
one, won't get one. Flipboard? what? why would anyone use that? They won't.
But investors will invest in it, journalists will lap it up, and some silly
media company desperate not to die will probably buy it. Few years on they'll
figure it doesn't make any money, and sell it back to the founders for 1/10th
what they paid for it... The circle of life in SV. Everyone is too drunk on
the bubble koolaid to notice anything is amiss.

Not a game I'm remotely interested in playing

~~~
samwillis
Exactly, Flipboard should be three mates in a loft. I realy can't see how they
need $10 million investment.

With That said it is a very nice app.

~~~
axod
They probably need $10m investment to hype them up, fuel the koolaid so that
someone else will invest more or buy them.

Agreed though. There is no way on earth you need $10m to build a simple app
these days.

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petercooper
When it comes to change or innovation, the British are characteristically
skeptical and morose. A BBC reporter even wrote about the issue last week:
<http://www.bbc.co.uk/news/magazine-10665372> \- The negative spirit in the UK
is palpable after spending an extended period of time in the US.

~~~
axod
We're realists. Yes totally - UK investors wouldn't plough millions into
twitter but IMHO that's a very good thing.

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.

~~~
petercooper
_We're realists. Yes totally - UK investors wouldn't plough millions into
twitter but IMHO that's a very good thing._

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.

~~~
Silhouette
> It's entirely a cultural difference. It's the good old British "tall poppy
> syndrome"

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. :-)

~~~
petercooper
_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?_

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.

~~~
axod
You're missing the point here.

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.

~~~
Silhouette
Exactly. It's mostly just a glorified pyramid scheme.

------
rythie
U.K. Enterpreneurs need to travel to the U.S. to promote their products. I'm
not sure how valid the comparison to flipboard is, since founder sold his last
business for $800m which is some advantage in it's self.

~~~
Silhouette
> U.K. Enterpreneurs need to travel to the U.S. to promote their products.

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.

~~~
rythie
Yes, the reason I was saying that is that many of influential bloggers and
companies are in the states and meeting them in person is best way to get
their attention. In Europe, since there are so many different languages it
seems many people read the English language blogs. I would say the natural
other market for U.K. companies would be the U.S. to similar the culture and
language.

However, that's not for everyone if you are targeting Asian markets you need
to at least visit there.

~~~
Silhouette
> Yes, the reason I was saying that is that many of influential bloggers and
> companies are in the states and meeting them in person is best way to get
> their attention.

I respectfully suggest that you are _vastly_ overestimating the importance of
"influential bloggers".

~~~
rythie
Probably, though original story was about an application that got a lot of
press from those people.

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

------
revorad
Is anyone here a member of TechHub that's mentioned in the article? -
<http://www.techhub.com/about.html>. Is it any good?

~~~
gstar
Techhub has the backing (and involvement) of Mike Butcher, who is the local
techcrunch editor - so it's getting a bit of press. Venues like that are great
start for the ecosystem, but it's just a for-profit coworking space.

I think the London startup scene is a vibrant from some angles, and extremely
dull from others - it's a strange place.

