Calling all entrepreneurs. What must we learn from the spirit of the States?
After a week in Silicon Valley meeting some of the most fascinating entrepreneurs imaginable, isn't it time we started drawing some lessons from our friends on the West coast?
Recently, George Osborne asked why it was that, as yet, no Facebook or Google or Apple or YouTube had been launched on this side of the Atlantic.
He argued that there was something in our business investing culture that made it difficult to back innovative winners in the digital world and that the Government had failed to create the right culture of risk taking in business.
Although I'm not sure it's the Government's job to develop innovative cultures (the whiff of ill-fated "picking winners" always springs to mind), there is certainly something in the argument that we have much to learn from what happens in that area south of San Francisco that is known as Silicon Valley.
It is no co-incidence that Google, YouTube, Facebook, Yahoo, Apple and Cisco are all headquartered in the area south of San Francisco.
Two major tap roots appear to be essential to allow an innovative tree to flourish.
The first is an entrepreneurial spirit in academia and the second is venture capital funding that is willing to take - and therefore understands - risk. In Silicon Valley, Stanford University has had such a catalytic role it is difficult to over-estimate its importance.
Since the 1890s (yes, that's the 1890s) the University has seen its job as enabling the area to be a centre for economic development and industry - firstly engineering, and then the building of silicon chips and finally the support of a whole technology sector. Many professors have their own capital stakes in young entrepreneurs who were their own students.
The other is the role of funding. One venture capitalist I spoke to said a single fund in Silicon Valley matched the whole VC funding of technology in the UK. He said this was equivalent to about £800m, a figure that I have not had time to verify.
He also argued that traditional VC funding was always "on the back" of the companies it had invested in whereas he "didn't bother the people he invested in more than once a month". "I trust them to get on with it," he said.
One 30 minute meeting was enough for him to make a decision, not 50 meetings with 50 different sets of protocols to sign before releasing a few tens of thousands of pounds.
Now, I'm sure his view is skewed and there is lots of exciting venture capital and angel investing work in the UK, particularly supporting the technology industry. But I also know that if even the Government is saying "we must do more" there is clearly a significant problem.
How, then, do we create the correct culture here in the UK to invent the next Apple or the next YouTube?
I heard from two internet firms already huge in the US that they are planning big launches here because we have so many gaps in the market we are not filling ourselves.
What about traffic in the other direction?
What are the good things going on in the technology sector in the UK which we can showcase to the US and say, well, you might be good, but we are getting better?
Or is the picture here as bleak as some in California would have us believe?
http://www.telegraph.co.uk/finance/comment/kamal-ahmed/7543198/Calling-all-entrepreneurs.-What-must-we-learn-from-the-spirit-of-the-States.html
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