
Guide to the London Startup Ecosystem - Ozzie-D
https://startupsoflondon.com/london-startup-ecosystem-ultimate-report-2020/
======
threeseed
I can't imagine why anyone would bother starting a new company in UK.

Brexit is looming and it is an almost certainty that a no-deal will happen.
(UK wants it and EU won't be able to get unanimous agreement from all member
states' and their parliaments).

And in a no-deal Brexit companies will have to ensure EU data sovereignty
which means duplicating infrastructure in the EU anyway. Not to mention all of
the complexity around tariffs and digital/internet taxes. Being in the UK you
get all of the negatives of the EU without any of the benefits.

~~~
thefounder
UK will get a deal from Trump and will compete with Silicon Valley. Not to
mention it can expand within the old colonies(i.e India, Africa, HK) maybe
even get a great deal from China. EU is obsolete just like NATO!

PS: I don't really believe this stuff but this seems to be the plan.

~~~
marcinzm
The UK is negotiating from a weak position since it's about to lose a lot in a
no-deal brexit. The UK politicians at the same time need to show some kind of
post-brexit win. That's pretty much a guaranteed way to get a horrible deal
with someone that can be just barely spun to make enough voters not notice how
bad it is (ie: like brexit itself).

edit: Although China is plausible, as in China spending 10 years draining the
UK of any worth it can before discarding the husk that remains.

~~~
tim333
Also because rather than negotiating with a single entity it's really still
mostly a club of 27 countries, any of which can raise objections.

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Qasaur
Having some experience in the London startup ecosystem, I think London is a
great place for founders and investors, but I really doubt the value
proposition for startup employees.

London I think is one of those cities that crystallises how bad the general
economic state of the world is, and this has been dramatically more pronounced
in recent years due to extremely loose monetary policy and quantitative easing
among global central banks which funnels money directly into the financial,
insurance, and indeed technology (through VC) industries. Broadly speaking, I
think there are three categories of hidden, but segregated nonetheless,
socioeconomic groups in London, and this has a dramatic effect on quality-of-
life and also general conditions within startups.

\- The wealthy owners and marshallers of capital: these are your VCs and
investors, as well as everyone else that isn't in tech but are closely related
including foreign oligarchs. Some startup founders could probably be
categorised in the lower-end of this group, as well as staff at financial
service firms (investment banks, private equity funds, hedge funds etc.)
including investment bankers and others. Quality-of-life is stellar due to
very high compensation and/or acquired wealth.

\- Support staff to the above: software engineers including many CTOs fall
under this category, as well as people on the lower-rungs of the financial and
insurance industries. Quality-of-life is generally good, but you are basically
detained under golden handcuffs, and you will never earn the same kind of
compensation as the marshallers of capital. Software engineer salaries are
generally capped at around £150k if you're a lucky, with very few exceptions
(HFT firms etc.). Entry-level salaries start at £30-40k, which is atrocious
for a _very_ expensive city like London and you will probably have to
flatshare with others to make ends meet.

\- Everyone else.

What is important to note here is that there is a very implicit status-ranking
in these groups, and software engineers particularly are not respected any
where close to the level they are in the United States as they are not
considered members of the first group. This, as you can imagine, has very
severe effects on the level of compensation and the general working conditions
that you can expect as an engineer as you are not deemed deserving of more
compensation since you are after all "just an engineer". This is also why
stock options and other equity compensation schemes are not as popular in
London as they are in the Bay Area. Software engineers are considered support
staff rather than integral contributors to the success of a technology
business.

This social segregation, as you can imagine, also has effects on the social
cohesion of the city, and I think the recent increase of crime in London is a
direct consequence of the alienation of the third category of people due to
the flood of liquidity from the first category, which drives up salaries for
the second group of people (and thereby cost of living in London), and prices
everyone else out.

Most of Europe suffers under this kind of segregation, and I presume it is
partly a consequence of antiquated social structures that were more prevalent
during the 20th century but haven't really modernised to align with the
interconnected and meritocratic reality of today. I believe this is the
primary reason why compensation for software professionals is so low in Europe
compared to the meritocracy of America (but even this is changing with
implicit filters such as Ivy League degrees etc.).

Most global cities have elements of this as well, but I feel the divide and
indeed social inequality is very pronounced in London and is becoming worse by
the year, which is among the reasons as to why I left the city for greener
pastures.

~~~
rezeroed
Great comment. Only thing I'd add is a bit of clarity on "Software engineer
salaries are generally capped at around £150k if you're a lucky" \-- in 20
years I've never met a software engineer on that figure. They exist, but I'd
call that extremely lucky, and suggest a more realistic cap is not even half
that. I welcome stats.

~~~
timruffles
Definitely higher than half that. SWEs at FB, Google etc will get >100k. Even
aside from that I regularly see higher than half that - e.g random example
from a quick Google at 85k [https://www.glassdoor.co.uk/Salary/Travelex-
Backend-Engineer...](https://www.glassdoor.co.uk/Salary/Travelex-Backend-
Engineer-Salaries-E23898_D_KO9,25.htm) \- 90th percentile of Java roles are
over 100k -
[https://www.itjobswatch.co.uk/jobs/uk/java.do](https://www.itjobswatch.co.uk/jobs/uk/java.do).

Secondly a pretty average contractor day rate is 500pd, which is over 100k,
and there are a lot of contractors. I think it makes eng salaries in the UK
seem lower than they are. Many of my friends went contract and would never go
back. The senior market is therefore hard to hire for, outside trendy/exciting
companies, unless you pay for contractors.

That said, we should all be asking for raises <3! By all I mean everyone apart
from the C suites of public companies

~~~
rezeroed
That itjobswatch java London: London median annual salary £75,000

I'm not sure big tech and finance are representative of London.

~~~
timruffles
Sure, but since that’s a median not a cap, doesn’t that point to ‘a more
realistic cap is not even half that’ (75k) being a bit pessimistic?

There are a lot of people in finance in London, also a lot of big tech (seen
the current, and new, Google buildings at KGX?), quite aside from a lot of
contractors :)

~~~
user5994461
Please. 75k is the package good people can get 1-2 years after moving to
London, basically when leaving their first company -whatever job they could
get really- to move to an actual company that doesn't screw them over.

It's true that there are startups that try to get away with hiring people out
of school for peanuts, from all across Europe. They often have a turnover of
half the staff leaving within a year and it's no coincidence.

~~~
twic
That hasn't been my experience. 75k is not earth-shaking, but also not
something that i would expect someone with 2 years of experience to get in
London. What companies do you think would pay that to such a person?

~~~
user5994461
How about every single company? The better ones give 10% or 20% bonus
annually, so really easy to get there, even while unaware of it.

I worked in startups. I've seen first hands employees being abused and leaving
in drove after 1-2 years to get significantly more, literally anywhere else.
Name any company in London, probably have some ex colleagues there.

That being said, I am talking about developers who can handle a HackerRank
test and a coding interview on the whiteboard. It's not a high bar by any
means but it is something.

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brm
Random aside but this seems like a decent place to ask it...

Does anyone know what's going on with the Startup and Innovator Visas? Most of
the endorsing bodies don't even have a process set up yet and the ones that do
only endorse their incubatees or make you subscribe to their accounting
services.

Anyone have any insight? Are any endorsing bodies actively approving Startup
and Innovator visas? If I'm an entrepreneur with £50,000+ to invest in my
internet startup and I want to locate it in London and I don't want to go
through Techstars, what is supposed to happen? Because as far as I can tell,
the process of bringing a startup to London is currently very broken. /endrant

But seriously? Anyone have any success or advice?

~~~
kmlx
yes. here's an overview: [https://www.gov.uk/start-up-
visa](https://www.gov.uk/start-up-visa)

you can go through the steps and find out more.

here are the bodies that are endorsed for this type of visa:
[https://www.gov.uk/government/publications/endorsing-
bodies-...](https://www.gov.uk/government/publications/endorsing-bodies-start-
up/start-up)

this might change after leaving the EU, but the requirements will most likely
be reduced if anything.

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twic
Has anyone heard of any of those "good / reliable consultants, experts,
mentors"?

~~~
jamedjo
One of the founders listed elsewhere on that page was a mentor on an
accelerator I took part in. We went over our business in depth, he eventually
became a supplier to us, then we became his largest customer. One day he
abruptly stopped providing the service, and then relaunched his business
trying to copy us instead.

We out executed, but I'd advise caution with mentors. Some were great help,
this one was malicious.

~~~
Ozzie-D
Would you be comfortable sharing the name?

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Gys
> Last updated on 16 July 2019. Startups of London is currently in beta and
> all details are subject to change. © 2019 Startups of London

No changes in the past 6 months, must be a sign of being a very mature
ecosystem ;-)

~~~
Ozzie-D
Hey, thanks for pointing that out. The post was actually published today. I
had to Google search to find where that was written. It was updated later but
must have been put there manually when first written. Fixed. Thanks.

