
It’s painful to do a tech startup in London - mbesto
http://www.techdisruptive.com/2014/01/21/painful-tech-startup-london/
======
lkrubner
I can think of a counter-argument to all this. I live in New York, but I have
worked briefly in London. I could make a case for London that would go like
this:

There are brilliant programmers in places like Italy and Poland and they feel
stifled in their home countries, so they escape to London. Many of them would
prefer to go to the USA but the USA's strict immigration policies keep them
out. As EU citizens they have a right to move to London, so that is where they
go. London is bigger than San Francisco and it is also bigger than New York.
London is also much more international than just about anywhere: this place
used to be the capital of an empire that held 25% of humanity. The phrase "The
sun never sets on the British Empire" used to be literally true. London is
nowadays the favored playground for Russian investors and Saudi princes and
Brazilian entrepreneurs. The amount of money in the city, waiting to be
invested, is beyond imagining. And also the amount of programming talent,
drawn from all over Europe, is of the highest caliber imaginable. At some
point these 2 things, the vast pool of investors and the vast pool of talent,
must inevitably spark something, and when that happens the results will be
great.

~~~
robinwarren
Slight nitpick made better by an xkcd link

[http://what-if.xkcd.com/48/](http://what-if.xkcd.com/48/)

Strangely the sun is yet to set on the Empire.

~~~
mchaver
It might not set on France either, but I am not sure.
[http://upload.wikimedia.org/wikipedia/commons/2/25/Outre-
mer...](http://upload.wikimedia.org/wikipedia/commons/2/25/Outre-
mer_en_sans_Terre_Adelie.png)

------
versk
"I wanted edgy. I wanted mobile. I wanted hip. I wanted cool."

"Actually I continue to fight with myself not to expose two individuals in
particular who have been completely toxic to the very infant ecosystem which
needs the exact opposite."

"I’ve been in San Francisco for 23 days now. In these 23 days I’ve been here,
I’ve met with some of the brightest names in technology angel investing,
signed customers, partnered my company with a team of MBAs for an
entrepreneurial project, and have had more productive business development
meetings than in 10 months in London."

This reads like parody but it seems to be serious. Please be careful mbesto

~~~
nickthemagicman
I think this is supposed to be a parody of someone who got into tech because
it was trendy and may or may not have a trust fund.

"Disruptive Technologies and Forces in Business Technology"

"We use the Business Model Canvas to help our clients provide clarity around
many of the challenging aspects that every business must endeavour."

------
Toenex
I think what Mike is lamenting is that London isn't succeeding in mimicking
the West Coast US (or indeed _anywhere_ US) startup scene which I think is a
very valid observation. I think the UK has to learn to create an
entrepreneurial style of our own and not attempt to transplant something from
another culture - two countries separated by a common language etc. There was
a post recently on how codified the startup process appears to be getting
(sorry couldn't find it) which I think also hints at the problem.

Whilst the UK has had it's moments - remember when Acorn and Sinclair ruled
the bedroom? - we often revert to the enthusiastic amateur, responsible for
the breakthrough but never quite capitalising on it. Indeed Mike uses the word
_amateurish_ in describing the scene himself. Also I get the impression that
both for cultural and legal reasons the hire-and-fire approach to staffing
doesn't happen in the UK which might be a necessary component in establishing
an available pool of talent with the right risk mindset. We are also a
terribly cynical bunch here in the UK which isn't the ideal frame of mind.

For the record, I'm a UK developer working for tech startups in Manchester
which is 200 miles north of London (that's regarded as a long way in England)
and all of the above is personal conjecture based on 45 years of being a
cynical, amateur Londoner who got lost in The North and never went home.

------
Peroni
The crux of the issue is the inherent reluctance towards investing in tech
companies here in London. Believe me, the community is willing and working
bloody hard towards creating 'the next big thing' but getting investment in
London is painfully difficult.

The London Hacker News meetup is a SV investors wet dream. 500 like-minded
people turning up every month to discuss amazing ideas and woefully struggling
to get investment to fund their passion.

~~~
mbesto
Steve, as a regular (and speaker) to HNLondon meetups, totally agree. You are
one of those people who _has_ made an impact through your efforts on HNLondon
and HackerJobs. I applaud you for doing something I couldn't.

------
onion2k
My experience in the UK startup scene is the opposite - people are
ridiculously optimistic about _everything_ without giving much apparent
thought to how stupid the idea is. Someone down the road from me is making a
social network for pets. Not pet owners, but for people _pretending to post as
their pets_. For &!%$s sake.

------
aidos
Hmmm. I'm in London but not closely involved with the "startup scene" (though
I have a fledgling company that's doing ok). I suspect there's a certain
amount of cultural mismatch going on here. I moved here from nz over a decade
ago and it took _years_ before I understood the culture well enough to be
credible in conversation. Arguably the culture I came from is closer to the uk
than the states is.

No doubt, some things are a bit rubbish - for example my old agency moved to
"silicon roundabout" then had to pay an absolute fortune to get bespoke fibre
put in - because it's not even available there.

Maybe your experiences are genuinely indicative of the differences in
possibilities but I don't hold it against people for not jumping on your idea
with absolute enthusiasm. The onus is on you to prove that your idea has legs.
Given some of the things that have been funds over the last few years, I think
a little bit more scepticism might be healthy.

------
minimax
There's a certain amount of irony in startup founders who claim they relish
the challenge of starting their own business and then turn around and complain
about how challenging it is. Is it supposed to be hard or isn't it?

~~~
surreal
There are challenges, and there are avoidable challenges. If a given challenge
(e.g., for this author, being in London) can be avoided then the right thing
to do is to avoid it. I'm sure there will be more than enough challenges left
for him to relish.

~~~
jotm
Why the downvote(s)? He's technically right, startups in London are more of a
challenge than in SV... If you can avoid it, why not?

------
mattyohe
"partnered my company with a team of MBAs for an entrepreneurial project"

Good luck with this.

~~~
Major_Grooves
Why can HN never miss an opportunity to bash MBAs? It's so sadly predictable
it's almost like parody now.

------
colinbartlett
I really dislike the "do a startup" language that prevails now. Whatever
happened to "start a business"?

~~~
elag
'Start a business' and you'll have to go to a bank: 'grow a startup' and
you're in the greater idiot economy. Easy choice.

------
topbanana
I think the main problem is the big banks are right next door to the Silicon
Roundabout area, and they typically pay 3 times as much.

~~~
gnerd
Are people still trying to push the phrase "Silicon Roundabout" for Old Street
roundabout and the Shoreditch triangle? It is probably just me, but nothing
makes me cringe harder.

~~~
dijit
It's not just you.

------
nikon
Interesting.

Side note:

How can London startups hiring "rockstar" devs offer 40k? Have they seen the
rent prices here?

I can earn at least x2 in the City and x3 contracting. It's just not
acceptable.

~~~
timje1
It seems to be accepted in London that when you join a startup, you take a
paycut of 33%.

 _Even if the startup doesn 't offer any equity_. All risk, no reward...

~~~
jackgavigan
Yeah, one thing that startups in London need to get through their think skulls
is that, if they can't match the salaries on offer in the City or the
media/marketing/advertising companies in the West End, they need to offer
equity stakes to early employees.

I've actually felt embarrassed at some of the stories I've heard.

------
knodi
It's painful to start any business, anywhere.

------
awjr
I'm guessing there is a lot more "No because" rather than "Yes if" attitude in
London?

~~~
mbesto
Exactly.

------
jackgavigan
It's painful to do a tech startup anywhere! I don't think it'll come as a
surprise to anyone that Silicon Valley is the best place in the world to do a
tech startup. The eco-system there has had decades to develop and grow, while
London's is still in its infancy. Silicon Valley's tradition of the
benficiaries of IPOs re-investing their new-found wealth into tech startups
stretches back to Mike Markkula's investment in Apple, while there are still
relatively few British angels. And the "What's in it for me?" attitude
prevalent in London stands in marked contrast to Silicon Valley's
collaborative, "Pay-It-Forward" culture. London is also hampered by government
attempts to "help" (i.e. take the credit for) the tech industry that is often
inept and, at times, cronyistic.

But I wouldn't give up on London. It takes time for eco-systems to grow and
mature. London's tech startup scene may well be amateurish but it's also
incubating world-class companies like Mind Candy, Huddle, King.com and
Spotify. Silicon Valley-based startups are coming to London to acqui-hire
companies like CrashPadder and Lightbox.

London's already the best place in the world to start a company in certain
segments (e.g. fin.tech) and it's often the first choice for companies looking
to establish their first international office.

And it's going to keep getting better because there are people here who want
to see it get better.

Thanks Michael, your feedback is appreciated. We wish you all the best in
Silicon Valley.

------
xedarius
This guy hits a lot of nails on their respective heads, and yes granted there
is a culture difference between here and the US.

I think the biggest difference between here and the US is there is no stigma
attached to having a failed start-up. It's almost the natural run of events in
the US. You simply dust yourself off and on with the next idea.

In the UK we seem to attach a stigma to failure and this runs the full
spectrum from start-up entrepreneurs to investors. It's a tricky mindset to
break.

~~~
liamgooding
I think this stems back to the fact that those with a failed startup, lost
investors hundreds if not millions of pounds. As a culture I think we're FAR
more risk averse.

So someone standing and saying "Yeah, I lost some a bunch of money that some
old guys shouldn't have invested if they weren't prepared to write it off" is
a huge stigma over here.

In the states, you have way more professional tech investors so the "bad vibe"
about losing that money isn't as bad.

I think US founders carry it almost as a badge of honour, a symbol of a war
fought bravely to the end. Here it;s just like, "Oh, you fucked up last
time.... I'm going to stand over here now"

------
valvoja
It's painful to do a tech startup anywhere but in my experience, what London
suffers the most from is the cost of living.

I spent the last 3 years working in Shoreditch and most of the startup
founders I came across were either bootstrapping to the extreme (spending
_nothing_ but sweat capital on their project) or freelancing at least 2-3 days
a week to cover costs. I think in practice this makes a lot of the work look
more amateurish in comparison to seed/angel funded teams in the US. In
practice, you would see a technically very talented founder without the right
UI/design, a visually polished MVP with no user traction, a businessy founder
outsourcing technical work to East Asia etc.

------
simonbarker87
It seems like the author is surprised that the fledgling tech scene in London
(and the UK) isn't as well developed as that of the place with the most VC
dollars invested per sqare mile in the world, it's taken silicon valley 50
years to get where it is now so give it time. Also, and I am in a minority
here, I don't think London has the geography or incumbent mindset to rival SV
in the future - there are other places in the UK more favourable to setting up
the UK's tech hub with a greater history of innovation and prospect of
nurturing a startup epicentre BUT capital is even more stretched in those
areas.

------
georgespencer
This is one of the more facile things I've read on the internet.

> Dear London, it's not you, it's me

Er, except the next 1500 words are a very muddled and occasionally misspelt
attack on London, and not you.

> I left you for another women. Her first name is Silicon and her last name is
> Valley. I’m not sure why I believed you for so long, but you lied to me. You
> told me Tech City is the next Silicon Valley, and it isn’t. You told me you
> were going to lead the UK out of a slump and you didn’t. I wanted edgy. I
> wanted mobile. I wanted hip. I wanted cool. You were boring, conservative,
> and expensive. So what did I do? I left. I left you because my new
> girlfriend knows how to support me.

Ignoring the painful rhetoric here, Tech City is not going to be the next
Silicon Valley, and nobody said it would be. You thought the global economic
recession's impact on London, the financial capital of the world, would be
lessened by the government putting ten people in an office and asking them to
talk about startups? I'm not sure what the output was which you were expecting
from this input, but it's clear that you were misguided. Maybe you think SVASE
is going to help the homeless in San Francisco?

London is expensive. A bit cheaper than SF, though. Boring and conservative?
Make grand plans and I think you'll find people willing to back you. We did.

> When we launched our MVP in march my thoughts were “yes, let’s be part of
> this tech city revolution”. My thoughts now, “What revolution?”

I've run a venture-backed startup in London for nearly 3 years. I also think
"what tech city revolution?" because a common hallmark of the successful /
venture-backed startups in the UK (you seem to conflate the two) is that they
don't really go in for the bullshit: networking, accelerators where you get a
communal office and access to a shitty lawyer, ec. The good startups in the UK
don't obsess over Tech City News or go to networking events with cold pizza
and warm white wine. They work out whether there's an opportunity in a market,
raise capital, and build things.

> Without sounding completely derogatory – London’s tech startup scene is very
> amateurish.

I've read your article a couple of times and I'm still not clear on what
facets strike you as amateurish.

> the developer talent isn’t exactly amateur. For example, take a stroll into
> a TechHub campus or the Innovation Warehouse and it’s buzzing.

I'm not sure that the "buzz" of an engineer is the best way to evaluate his or
her amateur/pro status. If you want to assess software engineers, you need to
meet them and work with them. Also, you're again talking about going into
incubators and shared offices to assess the health of companies in a city. A
bit weird.

> I met a number of young and hungry developers, technical and online savvy
> who struggled to find good companies to work for.

That's odd: I know at least one YC company in addition to us who find it very
hard to find great software engineers. We're constantly advertising positions
and recruiting through our networks. _Whenever_ I speak to other venture-
backed companies the biggest challenge is finding talent. Not all engineers
are created equally.

For established world class talent the attraction has traditionally been San
Francisco, whether you're in Europe or America. But look at people like
Nikolaj Nyholm: built a fantastic software company (which now powers facial
recognition in most of Apple's products), sold it, and now back in Europe
working with startups.

> Here in SV, that match is almost nearly always met. I even met a women tech
> founder, yes one of this “pink” unicorns SV is biting it’s hands off to use
> as a poster child, who lacked a support network.

Trying to decrypt this sentence. You met a female founder in SV, or in the UK?
What "support network" was she lacking?

    
    
      > The bottom line is this – the right people aren’t leading the pack. I’m not suggesting a personal nomination, but it was still clear there aren’t enough of the right people in the system. Could have I waited it out and became one of those people? Sure, but one thing you learn in tech is that time is not on your side.
    
       This is so muddled. What are you saying, exactly?
    

> One of the foundations of Silicon Valley is its strong angel investing
> community and large amounts of high net worths.

At last, something we can all agree with!

> As far as I am concerned this community doesn’t exist in London.

Simply put this is wrong. London's major problem is that startups have become
more popular and readily accessible due to a stronger proclivity to invest at
the seed stage amongst people in the financial services. If you cannot raise
£150k for your startup's seed round in London, you're doing something wrong.

The big challenge has been at the seed through to Series A stage. Because of a
lack of major institutions in the UK with large funds, the institutional
backers tend towards later stage deals. A few are actively correcting that and
one or two great funds have sprung up to specifically tackle this problem
(Profounder, Hoxton Ventures, Passion), but the challenge is the same: because
there isn't competition in the funds, only in the startups, there's less
likely to be money trickling down to riskier ventures and those who are
between seed and Series A.

> Are there high net worth individuals in tech investing in companies in
> London? Yes, but as a whole, it is neither the correct group nor right
> number of people to become critical mass.

There should be some kind of rule against asking yourself easy questions so
you can look like a genius in a blog post. There are a great many HNWI and
UHNWIs in London.

The good point you veer towards making but manage to miss, is that there
aren't the high number of $1bn exits in Europe which lead to HNWIs with tech
backgrounds investing in companies. I agree with that. But I've also found
that there are some, and they're interested in hearing from credible
entrepreneurs.

I got bored of the rest of this but here's my tl;dr:

1\. Yes there are good reasons to found a startup in San Francisco and not in
London. 2\. There are also good reasons to found a startup in London and not
San Francisco (another topic for a different time). 3\. I believe that if you
truly have a disruptive idea and the capacity to make it happen, you will not
have a problem raising capital. But it tends to be at the higher end of the
spectrum (£1bn+ idea) that you will have an easier time raising.

I wish you well in San Francisco but I don't think London was the problem
here. I think you had mismanaged expectations. Feel free to ping me if you
want to meet for a coffee next time you're in London so we can compare notes
on SF vs. London -- address is in profile.

~~~
m0a0t0
>because a common hallmark of the successful / venture-backed startups in the
UK (you seem to conflate the two) is that they don't really go in for the
bullshit: networking, accelerators where you get a communal office and access
to a shitty lawyer, ec. The good startups in the UK don't obsess over Tech
City News or go to networking events with cold pizza and warm white wine. They
work out whether there's an opportunity in a market, raise capital, and build
things.

So do you think that there's more of an emphasis on getting the product make
or the job done than the start up/hacker culture side of things?

~~~
georgespencer
> So do you think that there's more of an emphasis on getting the product make
> or the job done than the start up/hacker culture side of things?

Sort of.

I think there are fewer professional / institutional investors in the UK. It
feels like there are more early stage startups in fewer spaces, too. So
there's a really big "scene": Drinkabout, meetups, the various L*UGs (e.g.
London Ruby User Group), the incubators (WAYRA, TechStars, Seedcamp), the
offices (Tech Hub, Google Campus, Innovation Warehouse). Fuck, I went to an
event at Bloomberg last year (probably the last wank networking thing I went
to) where whoever the most recent government stooge told to gas about startups
(without any credibility) was speaking authoritatively.

In my experience, venture-backed startups mix in with other venture-backed
startups. E.g. Smarkets/GoCardless/Rentify used to share a single floor at
Royal London House (somehow!). Now Rentify is moving into WAYN's office as
we're approaching 40 desks. So whereas when we were younger we were in
environments where networking was forced on us because, fuck, it's a communal
space and everyone is doing it, now we're not beholden to someone else's
schedule.

Whereas I phrased the point about good startups not doing networking events
very poorly, I believe very strongly that the successful startups in London
(and probably across the rest of the world) focus maniacally on one of growth,
revenue, or raising capital. If you have two of those three you will get the
third. I think people in the early stages of their startup can mistake hustle
and networking as routes to all three, and it's usually bullshit.

~~~
m0a0t0
Ok, thanks very much for expanding.

------
runewell
Oh man, prepare for the backlash. These articles are supposed to go the other
way or else you're just an arrogant American.

------
benzguo
Typo in your second sentence = I stop reading

------
CmonDev
The biggest problem of London is that the only way to get a decent
compensation is by working in financial sector.

------
bsaul
Come to Paris !

Just kidding, but it's very refreshing to hear that things in London look just
as bad as in Paris.

------
alextingle
He's from the US. Perhaps he didn't fit the culture over here.

~~~
Peroni
I've had the pleasure of meeting Mike a few times and I promise you, he's
painfully accurate in his description of the tech scene in London. London's
loss is SF's gain.

------
ris
Bye!

~~~
codeoclock
(Y) :D

------
michaelochurch
_The market dynamic in London is to recycle money in the banker’s boys club,
whereas SV recycles it in tech. In SV, this is all based on the value of a Pay
it Forward™ economy. London is based on a forecasting spreadsheet. NYC has
caught on, what gives London?_

 _I’ve been in San Francisco for 23 days now. [...]_

The California niceness is superficial. Europeans tell you, point-blank, that
they think your idea sucks. Californians say "Let's keep in touch" or "If you
can find a co-lead, we're definitely in". They kick the rejection can down the
road and it can cost you months. New Yorkers are between the two on that
spectrum: not as blunt and harsh as Europeans, but closer to it than
Californians.

For example, if you're not from Harvard, Stanford, or MIT, you're a second-
class citizen in the Valley. Here's the thing, though. Unlike European-style
snobbery, which is overt but actually relatively harmless, you're never told
that and unless you're unusually attuned, you'll have no idea what's going on.
You just aren't as likely to get good projects, promotions, or introductions
that make your career what it should be.

The VC-funded, Silicon Valley game is also a Good Ol' Boy network. Don't let
the fact that they dress poorly fool you.

~~~
duncanawoods
Interesting. I have always found how different cultures "say no" to be one of
the biggest acclimatisation factors when working on an international project.

I've worked with Japanese clients where they won't disagree or discuss
problems explicitly. You might have your attention subtly directed at
something for you to discover the problem yourself but no-one will tell you
you are wrong.

I compare that to some German engineers who are breathtakingly blunt and have
no problem saying "You are wrong. That won't work. We will not do that." no
matter how sensitive the client situation.

On the scale of things, I see us Brits as fairly sensible. Put a German and
Japanese person in a room and you sometimes needs a Brit to translate between
the extremes. We sometimes flannel around too much in an effort to be polite
but IMHO we take the effort to balance clarity and politeness.

