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.
The London scene is a huge mix of people from across Europe and Oceania. I think at a grass roots level it's very exciting mix (as an example see http://3-beards.com/ ).
I think the OPs issue was more to do with where the source of the money. Bankers should probably be investing in the 'safer' property market than dabbling in the London Tech VC market.
There are some amazingly hungry developers in London. What is nice is that the incubator scene seems to be growing in the London. Unfortunately less so outside of London.
"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
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.
The banks have nothing to do with the cost of commercial rent around old street roundabout and the shoreditch triangle. It's expensive because all the silly startups now think they need to be here to sound credible / look cool / etc etc so landlords can charge these prices and people will pay. Infrastructure wise, the area is a mess. Fibre coverage is spotty at best. ADSL seems to be pretty crap. Most buildings are poorly converted from storage/etc into office space.
On the plus side we have nice places to eat, drink and get coffee so it's not all bad I suppose. Also the commute is pretty good for east london folk.
Also side rant. To all non-londerners, Tech City / Silicon Roundabout is an abstract concept that doesn't actually exist in any concrete form. Unless someone told you, you wouldn't even notice you were passing through it. Infact the only remotely "tech looking" building is satellite company Immarsat's HQ office, and IIRC they were around long before "tech city" had been dreamed up.
I think they meant "next door" in the sense that, someone consider where to work would probably go to the big banks as opposed to the lower paid startup "next door".
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.
> Many of them would prefer to go to the USA but the USA's strict immigration policies keep them out.
Given the political untenability of the various other policy changes Obama could push through before the end of his second term (such as gun control or marijuana legalization), I think it's quite likely that he will focus on immigration reform. It's the least controversial, and big business will lobby the GOP to support it.
A large part of the attraction of Europe for tech workers from other parts of the world is the relative ease of immigration. It will be interesting to see what happens to that if immigration reform is actually realized in America.
The Russians and Saudis and so on generally (not exclusively) invest far more in football clubs and property than they do in software. When you make your money by the means they did maybe software is too intangible.
London is not bigger than New York. According to the last estimates, NYC is slightly bigger. The number is so close, I would call them even. However, when it comes to the overall metro population, not just the population of the official cities, NYC is far bigger.
I did this once and they required a lot of time from me and the results were not worth it. A times, it felt like I was playing a game of telephone (AKA Chinese whispers) with the MBA students:
tl;dr: Abrasive yank who speaks bullshit as a mother tongue is surprised when no-one wants to invest in a "world changing" cloud-centric evangelist-powered online business.
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?
I assume startup founders are like most people: we love to claim credit for what hardcore badasses we are, but we'd prefer it to not actually be hard, thanks.
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.
I totally agree and it's the reason I stuck it out for so long. But even someone who is as motivated as I am, I'm modest enough to know that even I need help.
He's not complaining about how challenging starting a business is. He's complaining about how London is not actually a good environment to start it in. And he did something about it - he packed his bags and headed for the healthier environment of Silicon Valley. He did what's good for him and his business.
The problem isn't him, it's London. If it's so unhelpful to good founders that they feel a need to pack up and leave, then London has a cultural problem.
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.
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"
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.
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.
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.
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.
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.
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.
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.
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.
well, it happens, I'm a pretty senior sysadmin and I'm on 45k and only one of my colleagues earns the same as me.
the other dev earns 30k- they're both very, very good.
I don't know who qualifies for rockstar status, but both the dev's here have small companies brewing (a games one and a heroku style deployment system one).
I think perhaps you're better at negotiating salary?
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.
The key word is "Offer". So long as neither you nor your countrymen are foolish enough to accept such an offer, nothing is lost.
Every six weeks I get the same email from the same recruiter trying to sell me on a "Senior Developer" position in Southern California that pays $70k/year. That mail has come in like clockwork for the last half dozen years now, and still seemingly nobody has been foolish enough to take it, since the position is still open.
Sadly, there seems to be a group of developers in London who actually take those crazy lowball offers, thus making it more difficult for the good ones to explain why they're four times as expensive.
You're right though. It's not acceptable. Good on you for not accepting it.
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.
What if the finance people in this hypothetical country didn't find it interesting because their research showed them it was a poor investment and that investors in the other hemisphere were often just billionaires playing in semi-retirement?
70 comments
[ 3.4 ms ] story [ 136 ms ] threadI think the OPs issue was more to do with where the source of the money. Bankers should probably be investing in the 'safer' property market than dabbling in the London Tech VC market.
There are some amazingly hungry developers in London. What is nice is that the incubator scene seems to be growing in the London. Unfortunately less so outside of London.
"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
"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."
Also side rant. To all non-londerners, Tech City / Silicon Roundabout is an abstract concept that doesn't actually exist in any concrete form. Unless someone told you, you wouldn't even notice you were passing through it. Infact the only remotely "tech looking" building is satellite company Immarsat's HQ office, and IIRC they were around long before "tech city" had been dreamed up.
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.
http://what-if.xkcd.com/48/
Strangely the sun is yet to set on the Empire.
Given the political untenability of the various other policy changes Obama could push through before the end of his second term (such as gun control or marijuana legalization), I think it's quite likely that he will focus on immigration reform. It's the least controversial, and big business will lobby the GOP to support it.
A large part of the attraction of Europe for tech workers from other parts of the world is the relative ease of immigration. It will be interesting to see what happens to that if immigration reform is actually realized in America.
Good luck with this.
http://en.wikipedia.org/wiki/Chinese_whispers
If startup founders were just looking for anything that could be called a challenge, they could poke their own eyes out and go mountain climbing.
The problem isn't him, it's London. If it's so unhelpful to good founders that they feel a need to pack up and leave, then London has a cultural problem.
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.
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"
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.
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.
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.
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.
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.
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.
the other dev earns 30k- they're both very, very good.
I don't know who qualifies for rockstar status, but both the dev's here have small companies brewing (a games one and a heroku style deployment system one).
I think perhaps you're better at negotiating salary?
Even if the startup doesn't offer any equity. All risk, no reward...
I've actually felt embarrassed at some of the stories I've heard.
Every six weeks I get the same email from the same recruiter trying to sell me on a "Senior Developer" position in Southern California that pays $70k/year. That mail has come in like clockwork for the last half dozen years now, and still seemingly nobody has been foolish enough to take it, since the position is still open.
Sadly, there seems to be a group of developers in London who actually take those crazy lowball offers, thus making it more difficult for the good ones to explain why they're four times as expensive.
You're right though. It's not acceptable. Good on you for not accepting it.
Just kidding, but it's very refreshing to hear that things in London look just as bad as in Paris.
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.