TL;DR: What London actually built is Europe’s most efficient farm system for US acquirers. The city does the expensive, risky work of finding founders, funding early rounds, and proving product-market fit. American companies wait until the risk is de-risked, then buy the winners at discounts enabled by London’s shrinking public markets.
Yup, London has consistently showing up in geographic hotspots in my job postings data. I think it could be also be due to success of companies like DeepMind.
I wonder who are these people willing to work in London and transfer 60% of their net income directly to landlord. Maybe money doesn't matter because most of the time they spend in work and commuting?
Is this really surprising? London picks up all the advantages of the UK (legal system is sound, eg in contract law, native speakers of English, the lingua franca of business, strong university tradition) and adds in its special sauce: access to the City, global-tier culture, excellent public transport (I know we moan about it, but it really is excellent), and a timezone location that easily serves the US and Asia markets.
The awkwardness for founders in London is that when they want to IPO, London doesnt have nearly as deep a pool of capital as the US, so they are potentially leaving a lot of money on the table.
I am completely biased but I think London is one of the best places to live in the world, everything considered.
There's a guy on Instagram who spins a wheel for a random country and goes to eat that cuisine somewhere in London. There are maybe 1 or 2 places in the world you can do that. It's an incredible feat of human diversity to pack hundreds of global cuisines into a 10 mile radius.
I live in a big continental European city that also has a start-up hub. The companies here are also small, creative, solving problems, but don't necessarily aim for an exit and growth at all costs, many of them want to create a sustainable business solving a need that people have.
I think, to the economist, these are just SMEs and a start-up is about making money, an IPO, an exit, the unicorns. And of course London as one of the largest financial hubs will be a good place to start such a business.
But I've always thought of these "SME"-type start-ups as belonging to the start-up category too; after all they "start up" a company and often have ambitious goals and creative, tech driven approaches to solving problems. This is how I've thought it would work when I was younger, and it is how I still think it'd be good to do today, and how I'd try to build a company if I have a good idea to pursue.
Anyways, the point I want to make re the article is that I think the definition is narrow, leaves out a bunch of interesting companies, and thus skews the picture towards London. There are plenty of innovative places around Europe, it's just a different model of doing start-ups. IMO this overly financially motivated view onto the start-up world is quite a bit less interesting than a the broader (maybe harder to quantify) picture.
Any time you use the word startup you are already ceding ground. Startup as a term solves the problem of the VC: given technology is inherently risky, how do I get good returns? Answer: make sure the winner keeps doubling down. Create a culture around valorizing the few big, big winners and writing off-- financially and mentally-- the losers.
The big disadvantage is wages, and how everything is so...formal and bureaucratic, for lack of better terms.
For example, I couldn't even hope to get employment in tech in the UK or Europe without a degree. Work hours and wages too, less pay given the tradeoffs makes sense, but getting paid more than others for the same role is a big problem, even if you have more skill/talent/experience. Or simply working long hours on salaried jobs, with the understanding that when the spring or whatever hacking cycle is over, you can take it easier, that's hard because of the formalities, laws,etc...
Perhaps the term I'm looking for is "inflexible"?
On the other hand, the reason all of that is not a problem here in the US is "bottom-line oriented" thinking, and that ultimately leads to everything getting enshittified.
It feels like the UK and EU think they're happy with where their society is at, and they mostly want to keep things afloat? The type of thinking that goes with startups involves risk taking and experimentation outside of zones of comfort, or even outright laws sometimes.
Would all these AI companies get away with scraping the internet if they were based in the UK or EU? I'm not saying they should, I'm saying look at the big picture results vs near-term stability and comforts.
If I were British or European, I would want local and/or regional wages to be high, trade surpluses to make sense, foreign dependency to be minimal, military to be strong, so that social welfare subsidies, and all the nice pro-human laws won't require so much sacrifice. The US had been (no longer) in that position, but our deep political divisions and prevalent sub-cultures of cruelty prevented us from going that extra step and having the best of both worlds for everyone.
As a tangent, I'm seeing Lisbon trying to make a lot of buzz, but it seemingly can't crack into the larger ecosystem. What's missing, considering that it should be able to benefit from its EU integration?
I cant speak to all this, but as an American doing a lot of work in London, wow transportation is incredibly great. Shockingly impressive. Traveling to London, and getting around London, and doing a lot of meetings in a small trip, is easier than anywhere in the US now because of how beautifully their transit system works (despite occasional delays which can be expected.)
The rollout of the Elizabeth Line from Heathrow airport is also eye-opening. In NYC we speak about new subways lines with hundred-year plans (recall the 2nd ave subway extension) but in London the smoothly operating Elizabeth Line seemed to be introduced out of thin air.
When I visited London for the first time (from germany) I was impressed by how you can pay for the tube by swiping your credit card at the entry and exit. It's not just a great experience for the rider, but it also gives the transit agency the resources and the incentive to improve. A new line is not a question of politics, it's just profitable.
Surprised London holds this position given the cost of living. Housing alone eats such a massive chunk of salary that I'd expect talent to gravitate toward cities where their equity/salary goes further. How do early-stage startups compete for engineers when rent is £2k+ for a one-bedroom?
Which makes me all the more disappointed that Birmingham (close to me) doesn't have a better startup ecosystem.
It is an ideal place to benefit from London (little over an hour away) without the crazy prices.
Anyone here based around the midlands, say hello / "alright bab"....
31 comments
[ 2.2 ms ] story [ 44.9 ms ] threadTL;DR: What London actually built is Europe’s most efficient farm system for US acquirers. The city does the expensive, risky work of finding founders, funding early rounds, and proving product-market fit. American companies wait until the risk is de-risked, then buy the winners at discounts enabled by London’s shrinking public markets.
They are not the same. The energy/resources in SF/SV are 5x at a minimum - but London has it going on.
https://jobswithgpt.com/blog/global_software-engineering_job...
The awkwardness for founders in London is that when they want to IPO, London doesnt have nearly as deep a pool of capital as the US, so they are potentially leaving a lot of money on the table.
There's a guy on Instagram who spins a wheel for a random country and goes to eat that cuisine somewhere in London. There are maybe 1 or 2 places in the world you can do that. It's an incredible feat of human diversity to pack hundreds of global cuisines into a 10 mile radius.
There aren't any jobs in the UK and most are offshored to other low CoL countries.
Young people, founders are leaving for other places like Dubai, Singapore and even SF for higher paying jobs.
I think, to the economist, these are just SMEs and a start-up is about making money, an IPO, an exit, the unicorns. And of course London as one of the largest financial hubs will be a good place to start such a business.
But I've always thought of these "SME"-type start-ups as belonging to the start-up category too; after all they "start up" a company and often have ambitious goals and creative, tech driven approaches to solving problems. This is how I've thought it would work when I was younger, and it is how I still think it'd be good to do today, and how I'd try to build a company if I have a good idea to pursue.
Anyways, the point I want to make re the article is that I think the definition is narrow, leaves out a bunch of interesting companies, and thus skews the picture towards London. There are plenty of innovative places around Europe, it's just a different model of doing start-ups. IMO this overly financially motivated view onto the start-up world is quite a bit less interesting than a the broader (maybe harder to quantify) picture.
14 years ago now: https://www.paulgraham.com/growth.html
Of course, this culture is less helpful for individuals and cities, who have to live with the volatility.
For example, I couldn't even hope to get employment in tech in the UK or Europe without a degree. Work hours and wages too, less pay given the tradeoffs makes sense, but getting paid more than others for the same role is a big problem, even if you have more skill/talent/experience. Or simply working long hours on salaried jobs, with the understanding that when the spring or whatever hacking cycle is over, you can take it easier, that's hard because of the formalities, laws,etc...
Perhaps the term I'm looking for is "inflexible"?
On the other hand, the reason all of that is not a problem here in the US is "bottom-line oriented" thinking, and that ultimately leads to everything getting enshittified.
It feels like the UK and EU think they're happy with where their society is at, and they mostly want to keep things afloat? The type of thinking that goes with startups involves risk taking and experimentation outside of zones of comfort, or even outright laws sometimes.
Would all these AI companies get away with scraping the internet if they were based in the UK or EU? I'm not saying they should, I'm saying look at the big picture results vs near-term stability and comforts.
If I were British or European, I would want local and/or regional wages to be high, trade surpluses to make sense, foreign dependency to be minimal, military to be strong, so that social welfare subsidies, and all the nice pro-human laws won't require so much sacrifice. The US had been (no longer) in that position, but our deep political divisions and prevalent sub-cultures of cruelty prevented us from going that extra step and having the best of both worlds for everyone.
The rollout of the Elizabeth Line from Heathrow airport is also eye-opening. In NYC we speak about new subways lines with hundred-year plans (recall the 2nd ave subway extension) but in London the smoothly operating Elizabeth Line seemed to be introduced out of thin air.
San Francisco (Bay Area),"18,052",$122.0 Billion,7.7 Million,2.34,$15.84 Million
New York City,"15,000+",$45.0 Billion,19.5 Million,0.77,$2.31 Million
London,"8,900",$26.0 Billion,9.0 Million,0.99,$2.89 Million
Tel Aviv (Area),"2,996",$12.0 Billion,4.2 Million,0.71,$2.86 Million
Beijing,"2,350",$18.0 Billion,21.9 Million,0.11,$0.82 Million
Paris,"3,200",$10.0 Billion,13.1 Million,0.24,$0.76 Million
Bangalore,"3,500",$12.0 Billion,14.0 Million,0.25,$0.86 Million