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It's mirrored in how tech firms are valued. In the valley, you can have a so-so idea, land a huge investment, sell the product to other businesses for crazy mo
by madaxe_again 11y ago
It's mirrored in how tech firms are valued.
In the valley, you can have a so-so idea, land a huge investment, sell the product to other businesses for crazy money, and pay staff high wages.
In the UK, technology is this weird nerdy flash in the pan that "serious businesspeople" want nothing to do with, and investment and customers who value tech are in similarly short supply.
I write this as the employer of 50 people who'd love to pay everyone more but can't because our end customers undervalue our product, and investors are non-existent.
We saw this first hand when one of our clients sold our "worthless technology" for over $100m - yet in the UK £10k was the best valuation we could find at the time.
I sit in meetings with prospective customers who honest to God think that this system they'll be using to drive their entire £50m business through should be free because "it's just software". Simultaneously they'll happily pay a lawyer £200k to argue about the contract they're going to spend £20k with you through, because lawyers are real actual people, and we nerds are just soulless computer child-people. SEO agencies need paying well too because they have a marketing background, and marketing is also real.
Tech is seen as a utility like water over here. The people who provide it are viewed like sewer technicians.
So - it's not that employers are stingier, it's rather more that there's a lot less money in the ecosystem.
Finally, you're comparing to Google, who are a company who think nothing of putting a liberal arts grad with no experience on $600k to lead the spin fight against taxation in the UK - they pay crazy money, particularly to well connected people.
Oh, and fwiw, I'm cto/co-founder and I earn considerably less than you, so count your blessings.
I might have a small chip on my shoulder regarding this.
- noir_lord 11y agoAbsolutely this, wrote a scheduling system a while back for an engineering firm, after three years they came back and said it was slow (in that time they'd filed two bugs, quadrupled in size). I quoted them a 900 quid (solution is about 10 hours work, 10 hours testing). "Why should we pay, we paid already?". Lovely people, haven't got a clue. As it stands they have 6 staff members using a scheduling system all day that has a couple of screens that take 10 seconds to load, one of which is the primary dash... For the sake of 900 quid.
- zeemonkee3 11y agoHold on... you built a system for a customer that takes 10 seconds to load for 6 users, and want to charge them more for fixing it? I can see their point.
- madaxe_again 11y agoNot wanting to pay £900 for something which is critical to the operation of your business is bloody daft in my mind. You'd pay this because the roof leaked - you wouldn't go after the tile maker while sitting under a dripping ceiling for ever more.
- ryanlol 11y agoYeah, but at that point you might want to pay someone else...
- noir_lord 11y agoSystem beat every spec they set, they asked for it to manage a max of 40 unscheduled jobs, I designed it to handle 250, last time I looked it was sat at 5600 odd, given the nature of the system the interactions are vast.
- ryanlol 11y agoI never claimed that they had to be rational, just pointed out that if the software didn't function as expected the customer might have lost confidence in you and felt that they'd be better served by putting their money elsewhere.
- noir_lord 11y agoLove this place sometimes, they build a set of assumptions and then attack them :).
- noir_lord 11y agoWay to give an opinion on a set of constraints you know nothing about. I wrote a system for the constraints they supplied and it turned out what they asked for wasn't what they ended up doing, instead of 30-40 jobs unscheduled at any one time they have 4 to 6 thousand. Given that the original system was designed for 40 and I assumed a worst case of 250 they blew through that limit, also since you know nothing about the system I find your comment hilarious, there is a lot of difference between 6 users posting a tweet and 6 users using a system them polls out to dozens of services and has to do a large amount of processing for each task.
- bobcostas55 11y agoThis raises the question: why don't more reasonable VCs move to London? If valuations really are that low, there's incredible money to be made.
- madaxe_again 11y agoThe valuations are low because tech spending in the UK is comparatively low, so only if you can pivot a UK firm into the US market would you find yourself a bargain.
- hga 11y agoBut based on what madaxe_again says, such VCs would not make their money back on sales, at least in the U.K. market.
- sjclemmy 11y agoTotally agree. I was chatting over drinks with a finance director at a firm I was working with and he couldn't understand 'why the IT cost so much', implying that he couldn't see any value in it. Similarly the sales guys at the firm were selling a solution to a large FTSE 100 company and they couldn't work out how to price it. They sold it for a fifth of what the customer later said they would have paid. If they are admitting to being willing to pay 5 times more, imagine how much they would have paid had the sales guys known the true value of the software. No wonder the finance director thought IT cost too much. I've often tried to explain the utility vs strategically important nature of IT - it scares the shit out of some business people as they've been happily blundering along thinking IT is just a cost centre and serially underinvesting and seriously damaging their company's bottom line. </rant>