7 ms·

It’s painful to do a tech startup in London

48 points by mbesto 13y ago

knodi 13y ago
It's painful to start any business, anywhere.
alextingle 13y ago
He's from the US. Perhaps he didn't fit the culture over here.
- Peroni 13y ago
  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.
- awjr 13y ago
  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/ 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.
versk 13y ago
"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
- nickthemagicman 13y ago
  I think this is supposed to be a parody of someone who got into tech because it was trendy and may or may not have a trust fund. "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."
awjr 13y ago
I'm guessing there is a lot more "No because" rather than "Yes if" attitude in London?
- mbesto 13y ago
  Exactly.
topbanana 13y ago
I think the main problem is the big banks are right next door to the Silicon Roundabout area, and they typically pay 3 times as much.
- gnerd 13y ago
  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.
  - dijit 13y ago
    It's not just you.
- sandfox 13y ago
  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.
  - dblacc 13y ago
    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".
lkrubner 13y ago
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.
- robinwarren 13y ago
  Slight nitpick made better by an xkcd link http://what-if.xkcd.com/48/ http://what-if.xkcd.com/48/ Strangely the sun is yet to set on the Empire.
  - mchaver 13y ago
    It might not set on France either, but I am not sure. http://upload.wikimedia.org/wikipedia/commons/2/25/Outre-mer_en_sans_Terre_Adelie.png http://upload.wikimedia.org/wikipedia/commons/2/25/Outre-mer...
  - RafiqM 13y ago
    That's fascinating, thanks! I also didn't know about Pitcairn Island and them being descendants of the HMS Bounty mutineers.
- w1ntermute 13y ago
  > 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.
mattyohe 13y ago
"partnered my company with a team of MBAs for an entrepreneurial project" Good luck with this.
- crusso 13y ago
  Yeah, although I identified with some of what he was trying to say, that line left me struggling to understand how that statement was a positive.
- bhouston 13y ago
  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: http://en.wikipedia.org/wiki/Chinese_whispers http://en.wikipedia.org/wiki/Chinese_whispers
- Major_Grooves 13y ago
  Why can HN never miss an opportunity to bash MBAs? It's so sadly predictable it's almost like parody now.
kione8mm 13y ago
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.
minimax 13y ago
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?
- crusso 13y ago
  There are exciting technology challenges and then there are the painfully frustrating contrived challenges from established forces. 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.
- ForHackernews 13y ago
  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.
- surreal 13y ago
  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.
  - jotm 13y ago
    Why the downvote(s)? He's technically right, startups in London are more of a challenge than in SV... If you can avoid it, why not?
- mbesto 13y ago
  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.
- VLM 13y ago
  The tech people created a startup hub in a hemispherical market leader in finance, but forgot to tell the finance people about it and/or the finance people don't find them interesting. Water, water everywhere but not a drop to drink. It boils down to no one will give the founders money. Lots of talk about a startup hub location needs people, schools, devs, entrepreneurs, out of control rents, coffee shops or whatever, but if you copy everything about SV other than the VCs, don't get too surprised there are no VCs there.
ris 13y ago
Bye!
- codeoclock 13y ago
  (Y) :D
xedarius 13y ago
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.
- liamgooding 13y ago
  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"
Peroni 13y ago
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.
- mbesto 13y ago
  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.
onion2k 13y ago
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.
aidos 13y ago
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.
simonbarker87 13y ago
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.
colinbartlett 13y ago
I really dislike the "do a startup" language that prevails now. Whatever happened to "start a business"?
- elag 13y ago
  'Start a business' and you'll have to go to a bank: 'grow a startup' and you're in the greater idiot economy. Easy choice.
runewell 13y ago
Oh man, prepare for the backlash. These articles are supposed to go the other way or else you're just an arrogant American.
michaelochurch 13y ago
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.
- duncanawoods 13y ago
  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.
valvoja 13y ago
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.
nikon 13y ago
Interesting. 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.
- dijit 13y ago
  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?
- timje1 13y ago
  It seems to be accepted in London that when you join a startup, you take a paycut of 33%. Even if the startup doesn't offer any equity. All risk, no reward...
  - jackgavigan 13y ago
    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.
- michaelt 13y ago
  Is your employer in the city hiring? :)
- jasonkester 13y ago
  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.
bsaul 13y ago
Come to Paris ! Just kidding, but it's very refreshing to hear that things in London look just as bad as in Paris.
Toenex 13y ago
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.
benzguo 13y ago
Typo in your second sentence = I stop reading
CmonDev 13y ago
The biggest problem of London is that the only way to get a decent compensation is by working in financial sector.
jackgavigan 13y ago
It's painful to do a tech startup anywhere! I don't think it'll come as a surprise to anyone that Silicon Valley is the best place in the world to do a tech startup. The eco-system there has had decades to develop and grow, while London's is still in its infancy. Silicon Valley's tradition of the benficiaries of IPOs re-investing their new-found wealth into tech startups stretches back to Mike Markkula's investment in Apple, while there are still relatively few British angels. And the "What's in it for me?" attitude prevalent in London stands in marked contrast to Silicon Valley's collaborative, "Pay-It-Forward" culture. London is also hampered by government attempts to "help" (i.e. take the credit for) the tech industry that is often inept and, at times, cronyistic. But I wouldn't give up on London. It takes time for eco-systems to grow and mature. London's tech startup scene may well be amateurish but it's also incubating world-class companies like Mind Candy, Huddle, King.com and Spotify. Silicon Valley-based startups are coming to London to acqui-hire companies like CrashPadder and Lightbox. London's already the best place in the world to start a company in certain segments (e.g. fin.tech) and it's often the first choice for companies looking to establish their first international office. And it's going to keep getting better because there are people here who want to see it get better. Thanks Michael, your feedback is appreciated. We wish you all the best in Silicon Valley.
georgespencer 13y ago
This is one of the more facile things I've read on the internet. > Dear London, it's not you, it's me Er, except the next 1500 words are a very muddled and occasionally misspelt attack on London, and not you. > I left you for another women. Her first name is Silicon and her last name is Valley. I’m not sure why I believed you for so long, but you lied to me. You told me Tech City is the next Silicon Valley, and it isn’t. You told me you were going to lead the UK out of a slump and you didn’t. I wanted edgy. I wanted mobile. I wanted hip. I wanted cool. You were boring, conservative, and expensive. So what did I do? I left. I left you because my new girlfriend knows how to support me. Ignoring the painful rhetoric here, Tech City is not going to be the next Silicon Valley, and nobody said it would be. You thought the global economic recession's impact on London, the financial capital of the world, would be lessened by the government putting ten people in an office and asking them to talk about startups? I'm not sure what the output was which you were expecting from this input, but it's clear that you were misguided. Maybe you think SVASE is going to help the homeless in San Francisco? London is expensive. A bit cheaper than SF, though. Boring and conservative? Make grand plans and I think you'll find people willing to back you. We did. > When we launched our MVP in march my thoughts were “yes, let’s be part of this tech city revolution”. My thoughts now, “What revolution?” I've run a venture-backed startup in London for nearly 3 years. I also think "what tech city revolution?" because a common hallmark of the successful / venture-backed startups in the UK (you seem to conflate the two) is that they don't really go in for the bullshit: networking, accelerators where you get a communal office and access to a shitty lawyer, ec. The good startups in the UK don't obsess over Tech City News or go to networking events with cold pizza and warm white wine. They work out whether there's an opportunity in a market, raise capital, and build things. > Without sounding completely derogatory – London’s tech startup scene is very amateurish. I've read your article a couple of times and I'm still not clear on what facets strike you as amateurish. > the developer talent isn’t exactly amateur. For example, take a stroll into a TechHub campus or the Innovation Warehouse and it’s buzzing. I'm not sure that the "buzz" of an engineer is the best way to evaluate his or her amateur/pro status. If you want to assess software engineers, you need to meet them and work with them. Also, you're again talking about going into incubators and shared offices to assess the health of companies in a city. A bit weird. > I met a number of young and hungry developers, technical and online savvy who struggled to find good companies to work for. That's odd: I know at least one YC company in addition to us who find it very hard to find great software engineers. We're constantly advertising positions and recruiting through our networks. Whenever I speak to other venture-backed companies the biggest challenge is finding talent. Not all engineers are created equally. For established world class talent the attraction has traditionally been San Francisco, whether you're in Europe or America. But look at people like Nikolaj Nyholm: built a fantastic software company (which now powers facial recognition in most of Apple's products), sold it, and now back in Europe working with startups. > Here in SV, that match is almost nearly always met. I even met a women tech founder, yes one of this “pink” unicorns SV is biting it’s hands off to use as a poster child, who lacked a support network. Trying to decrypt this sentence. You met a female founder in SV, or in the UK? What "support network" was she lacking? > The bottom line is this – the right people aren’t leading the pack. I’m not suggesting a personal nomination, but it was still clear there aren’t enough of the right people in the system. Could have I waited it out and became one of those people? Sure, but one thing you learn in tech is that time is not on your side. This is so muddled. What are you saying, exactly? > One of the foundations of Silicon Valley is its strong angel investing community and large amounts of high net worths. At last, something we can all agree with! > As far as I am concerned this community doesn’t exist in London. Simply put this is wrong. London's major problem is that startups have become more popular and readily accessible due to a stronger proclivity to invest at the seed stage amongst people in the financial services. If you cannot raise £150k for your startup's seed round in London, you're doing something wrong. The big challenge has been at the seed through to Series A stage. Because of a lack of major institutions in the UK with large funds, the institutional backers tend towards later stage deals. A few are actively correcting that and one or two great funds have sprung up to specifically tackle this problem (Profounder, Hoxton Ventures, Passion), but the challenge is the same: because there isn't competition in the funds, only in the startups, there's less likely to be money trickling down to riskier ventures and those who are between seed and Series A. > Are there high net worth individuals in tech investing in companies in London? Yes, but as a whole, it is neither the correct group nor right number of people to become critical mass. There should be some kind of rule against asking yourself easy questions so you can look like a genius in a blog post. There are a great many HNWI and UHNWIs in London. The good point you veer towards making but manage to miss, is that there aren't the high number of $1bn exits in Europe which lead to HNWIs with tech backgrounds investing in companies. I agree with that. But I've also found that there are some, and they're interested in hearing from credible entrepreneurs. I got bored of the rest of this but here's my tl;dr: 1. Yes there are good reasons to found a startup in San Francisco and not in London. 2. There are also good reasons to found a startup in London and not San Francisco (another topic for a different time). 3. I believe that if you truly have a disruptive idea and the capacity to make it happen, you will not have a problem raising capital. But it tends to be at the higher end of the spectrum (£1bn+ idea) that you will have an easier time raising. I wish you well in San Francisco but I don't think London was the problem here. I think you had mismanaged expectations. Feel free to ping me if you want to meet for a coffee next time you're in London so we can compare notes on SF vs. London -- address is in profile.

48 points by mbesto 13y ago

knodi 13y ago

It's painful to start any business, anywhere.

alextingle 13y ago

He's from the US. Perhaps he didn't fit the culture over here.

Peroni 13y ago
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.
awjr 13y ago
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/ 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.

versk 13y ago

"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

nickthemagicman 13y ago
I think this is supposed to be a parody of someone who got into tech because it was trendy and may or may not have a trust fund. "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."

awjr 13y ago

I'm guessing there is a lot more "No because" rather than "Yes if" attitude in London?

mbesto 13y ago
Exactly.

topbanana 13y ago

I think the main problem is the big banks are right next door to the Silicon Roundabout area, and they typically pay 3 times as much.

gnerd 13y ago
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.
- dijit 13y ago
  It's not just you.
sandfox 13y ago
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.
- dblacc 13y ago
  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".

lkrubner 13y ago

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.

robinwarren 13y ago
Slight nitpick made better by an xkcd link http://what-if.xkcd.com/48/ http://what-if.xkcd.com/48/ Strangely the sun is yet to set on the Empire.
- mchaver 13y ago
  It might not set on France either, but I am not sure. http://upload.wikimedia.org/wikipedia/commons/2/25/Outre-mer_en_sans_Terre_Adelie.png http://upload.wikimedia.org/wikipedia/commons/2/25/Outre-mer...
- RafiqM 13y ago
  That's fascinating, thanks! I also didn't know about Pitcairn Island and them being descendants of the HMS Bounty mutineers.
w1ntermute 13y ago
> 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.

mattyohe 13y ago

"partnered my company with a team of MBAs for an entrepreneurial project" Good luck with this.

crusso 13y ago
Yeah, although I identified with some of what he was trying to say, that line left me struggling to understand how that statement was a positive.
bhouston 13y ago
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: http://en.wikipedia.org/wiki/Chinese_whispers http://en.wikipedia.org/wiki/Chinese_whispers
Major_Grooves 13y ago
Why can HN never miss an opportunity to bash MBAs? It's so sadly predictable it's almost like parody now.

kione8mm 13y ago

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.

minimax 13y ago

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?

crusso 13y ago
There are exciting technology challenges and then there are the painfully frustrating contrived challenges from established forces. 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.
ForHackernews 13y ago
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.
surreal 13y ago
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.
- jotm 13y ago
  Why the downvote(s)? He's technically right, startups in London are more of a challenge than in SV... If you can avoid it, why not?
mbesto 13y ago
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.
VLM 13y ago
The tech people created a startup hub in a hemispherical market leader in finance, but forgot to tell the finance people about it and/or the finance people don't find them interesting. Water, water everywhere but not a drop to drink. It boils down to no one will give the founders money. Lots of talk about a startup hub location needs people, schools, devs, entrepreneurs, out of control rents, coffee shops or whatever, but if you copy everything about SV other than the VCs, don't get too surprised there are no VCs there.

ris 13y ago

Bye!

codeoclock 13y ago
(Y) :D

xedarius 13y ago

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.

liamgooding 13y ago
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"

Peroni 13y ago

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.

mbesto 13y ago
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.

onion2k 13y ago

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.

aidos 13y ago

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.

simonbarker87 13y ago

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.

colinbartlett 13y ago

I really dislike the "do a startup" language that prevails now. Whatever happened to "start a business"?

elag 13y ago
'Start a business' and you'll have to go to a bank: 'grow a startup' and you're in the greater idiot economy. Easy choice.

runewell 13y ago

Oh man, prepare for the backlash. These articles are supposed to go the other way or else you're just an arrogant American.

michaelochurch 13y ago

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.

duncanawoods 13y ago
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.

valvoja 13y ago

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.

nikon 13y ago

Interesting. 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.

dijit 13y ago
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?
timje1 13y ago
It seems to be accepted in London that when you join a startup, you take a paycut of 33%. Even if the startup doesn't offer any equity. All risk, no reward...
- jackgavigan 13y ago
  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.
michaelt 13y ago
Is your employer in the city hiring? :)
jasonkester 13y ago
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.

bsaul 13y ago

Come to Paris ! Just kidding, but it's very refreshing to hear that things in London look just as bad as in Paris.

Toenex 13y ago

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.

benzguo 13y ago

Typo in your second sentence = I stop reading

CmonDev 13y ago

The biggest problem of London is that the only way to get a decent compensation is by working in financial sector.

jackgavigan 13y ago

It's painful to do a tech startup anywhere! I don't think it'll come as a surprise to anyone that Silicon Valley is the best place in the world to do a tech startup. The eco-system there has had decades to develop and grow, while London's is still in its infancy. Silicon Valley's tradition of the benficiaries of IPOs re-investing their new-found wealth into tech startups stretches back to Mike Markkula's investment in Apple, while there are still relatively few British angels. And the "What's in it for me?" attitude prevalent in London stands in marked contrast to Silicon Valley's collaborative, "Pay-It-Forward" culture. London is also hampered by government attempts to "help" (i.e. take the credit for) the tech industry that is often inept and, at times, cronyistic. But I wouldn't give up on London. It takes time for eco-systems to grow and mature. London's tech startup scene may well be amateurish but it's also incubating world-class companies like Mind Candy, Huddle, King.com and Spotify. Silicon Valley-based startups are coming to London to acqui-hire companies like CrashPadder and Lightbox. London's already the best place in the world to start a company in certain segments (e.g. fin.tech) and it's often the first choice for companies looking to establish their first international office. And it's going to keep getting better because there are people here who want to see it get better. Thanks Michael, your feedback is appreciated. We wish you all the best in Silicon Valley.

georgespencer 13y ago

This is one of the more facile things I've read on the internet. > Dear London, it's not you, it's me Er, except the next 1500 words are a very muddled and occasionally misspelt attack on London, and not you. > I left you for another women. Her first name is Silicon and her last name is Valley. I’m not sure why I believed you for so long, but you lied to me. You told me Tech City is the next Silicon Valley, and it isn’t. You told me you were going to lead the UK out of a slump and you didn’t. I wanted edgy. I wanted mobile. I wanted hip. I wanted cool. You were boring, conservative, and expensive. So what did I do? I left. I left you because my new girlfriend knows how to support me. Ignoring the painful rhetoric here, Tech City is not going to be the next Silicon Valley, and nobody said it would be. You thought the global economic recession's impact on London, the financial capital of the world, would be lessened by the government putting ten people in an office and asking them to talk about startups? I'm not sure what the output was which you were expecting from this input, but it's clear that you were misguided. Maybe you think SVASE is going to help the homeless in San Francisco? London is expensive. A bit cheaper than SF, though. Boring and conservative? Make grand plans and I think you'll find people willing to back you. We did. > When we launched our MVP in march my thoughts were “yes, let’s be part of this tech city revolution”. My thoughts now, “What revolution?” I've run a venture-backed startup in London for nearly 3 years. I also think "what tech city revolution?" because a common hallmark of the successful / venture-backed startups in the UK (you seem to conflate the two) is that they don't really go in for the bullshit: networking, accelerators where you get a communal office and access to a shitty lawyer, ec. The good startups in the UK don't obsess over Tech City News or go to networking events with cold pizza and warm white wine. They work out whether there's an opportunity in a market, raise capital, and build things. > Without sounding completely derogatory – London’s tech startup scene is very amateurish. I've read your article a couple of times and I'm still not clear on what facets strike you as amateurish. > the developer talent isn’t exactly amateur. For example, take a stroll into a TechHub campus or the Innovation Warehouse and it’s buzzing. I'm not sure that the "buzz" of an engineer is the best way to evaluate his or her amateur/pro status. If you want to assess software engineers, you need to meet them and work with them. Also, you're again talking about going into incubators and shared offices to assess the health of companies in a city. A bit weird. > I met a number of young and hungry developers, technical and online savvy who struggled to find good companies to work for. That's odd: I know at least one YC company in addition to us who find it very hard to find great software engineers. We're constantly advertising positions and recruiting through our networks. Whenever I speak to other venture-backed companies the biggest challenge is finding talent. Not all engineers are created equally. For established world class talent the attraction has traditionally been San Francisco, whether you're in Europe or America. But look at people like Nikolaj Nyholm: built a fantastic software company (which now powers facial recognition in most of Apple's products), sold it, and now back in Europe working with startups. > Here in SV, that match is almost nearly always met. I even met a women tech founder, yes one of this “pink” unicorns SV is biting it’s hands off to use as a poster child, who lacked a support network. Trying to decrypt this sentence. You met a female founder in SV, or in the UK? What "support network" was she lacking? > The bottom line is this – the right people aren’t leading the pack. I’m not suggesting a personal nomination, but it was still clear there aren’t enough of the right people in the system. Could have I waited it out and became one of those people? Sure, but one thing you learn in tech is that time is not on your side. This is so muddled. What are you saying, exactly? > One of the foundations of Silicon Valley is its strong angel investing community and large amounts of high net worths. At last, something we can all agree with! > As far as I am concerned this community doesn’t exist in London. Simply put this is wrong. London's major problem is that startups have become more popular and readily accessible due to a stronger proclivity to invest at the seed stage amongst people in the financial services. If you cannot raise £150k for your startup's seed round in London, you're doing something wrong. The big challenge has been at the seed through to Series A stage. Because of a lack of major institutions in the UK with large funds, the institutional backers tend towards later stage deals. A few are actively correcting that and one or two great funds have sprung up to specifically tackle this problem (Profounder, Hoxton Ventures, Passion), but the challenge is the same: because there isn't competition in the funds, only in the startups, there's less likely to be money trickling down to riskier ventures and those who are between seed and Series A. > Are there high net worth individuals in tech investing in companies in London? Yes, but as a whole, it is neither the correct group nor right number of people to become critical mass. There should be some kind of rule against asking yourself easy questions so you can look like a genius in a blog post. There are a great many HNWI and UHNWIs in London. The good point you veer towards making but manage to miss, is that there aren't the high number of $1bn exits in Europe which lead to HNWIs with tech backgrounds investing in companies. I agree with that. But I've also found that there are some, and they're interested in hearing from credible entrepreneurs. I got bored of the rest of this but here's my tl;dr: 1. Yes there are good reasons to found a startup in San Francisco and not in London. 2. There are also good reasons to found a startup in London and not San Francisco (another topic for a different time). 3. I believe that if you truly have a disruptive idea and the capacity to make it happen, you will not have a problem raising capital. But it tends to be at the higher end of the spectrum (£1bn+ idea) that you will have an easier time raising. I wish you well in San Francisco but I don't think London was the problem here. I think you had mismanaged expectations. Feel free to ping me if you want to meet for a coffee next time you're in London so we can compare notes on SF vs. London -- address is in profile.