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European start-up scene

A belated post about the European Start-Up Scene panel at FoWA and my thoughts on the start-up scene in London having just spent a week there…

Although I wasn’t officially at the Future of Web Apps conference, I did attend the “Can the European start-up scene become like Silicon Valley?” lunchtime debate.

There’s been plenty of blog posts about the debate, including insights from Saul Klein and Max Jenning – both of whom are investors and were on the panel.

Despite an hour of interesting and insightful comment and questioning, I left the debate with the same frustrations about the UK start-up scene that originally led me off to San Francisco and The Valley last year.

Creating the explosion needs spark and fuel

For me, there are two overall aspects to this: creating an interest in startup culture (the spark) and then ensuring the financial backing and support network is there (the fuel).

I can see the spark slowly igniting – people are suddenly a lot more interested then they were 18 months ago. But everyone in UK/Europe still seems very risk averse – perhaps because of the social stigma ‘failure’ attracts here, not to mention the financial penalties.

I also think many people aren’t prepared for the commitment of working 25 hour days to get your start-up going. That’s not a bad thing, it’s not for everyone, but I think it’s why we see so much talent locked up in the BBC and Yahoo! where one can roll in at a leisurely 10am and roll out at 6pm, off to the bar for a night of fun and entertainment. I know, I’ve been there and done that!

My contribution to the debate was that having seen people with the same skills sets working in both London and San Francisco I had been surprised at how much harder people worked in San Francisco, and how much more hungry they were for success.

However I do think the lack of fuel is perhaps the more pressing issue. It was great to see Saul from Index Ventures on the panel, however the state of the European VC scene (for internet startups) is generally very poor. He was the only VC on the panel, along with Max Jenning who (as I understand it) offers smaller angel-level seed funding.

Despite members of the panel inferring otherwise, there is still only a tiny VC scene here in the UK and even those such as Index Partners make a lot/most of their investments abroad – especially in Silicon Valley.

One of the things that needs to happen is for the creation of a better support network. And like any good network it needs good nodes (people, companies) and good connections (events, community, etc). Geek Dinners, largely spurred on by Ian Forrester, has been a great start but we need to move things up a notch.

I’m please to read about the OpenCoffee Club idea from Saul – this for me takes this to another level – perhaps a little bit more business orientated etc then Geek Dinners. These are the connections in the network, we still need good nodes to step up too.

As Philip Wilkinson wrote in a blog comment on Saul’s blog, people in San Francisco and The Valley are happy to meet over a coffee to chat about things openly. I know there’s people in San Francisco I can turn to for advice about VC money, potential hires, etc (all free, no-obligation, etc) and in turn I too give out advice to others to put something back. In the 7 years I really worked at a professional level in the London Internet scene, I cannot think of many people who I knew who would be so available (bar personal friends, etc).

We all need to open up a little here in London, folks!

It’s not about building ecosystem silos

But overall bugbear is this silo-like mentality about the two ecosystems – that we (Europeans) somehow need to emulate and duplicate everything there is on the West Coast in order to create our own little start-up habitat.

Considering this is about the Internet – a global phenomenon which tears down geographic boundaries – it seems very strange.

The one argument that is always touted is that VC’s and Angels liked to invest in companies that were physically close to them. Yeah, and it’s true – I’m sure they do. But that’s not the investment dynamic we’re current in right now – at least not in Silicon Valley.

It’s a sellers market with VC firms being pushed by those who provide the money to keep the momentum of buying into good investment opportunities. Not only that, they’re competing with their rival firms to sign up the best companies. These days it’s not just how much money you’re going to get for handing over your percentage, it’s what else the VC firm can do for you that counts.

I also know a number of friends with start-ups in San Francisco and The Valley who have Japanese backing, for example. And as mentioned above, London-based Index Ventures regularly invests in Silicon Valley companies.

I have some ideas on how to improve things on this front, and with that an announcement on this front in my next post.

Michael Arrington on the BBC

In closing I want to pick up on Michael Arrington’s remark that the BBC is ‘hindering UK innovation’ and should be ‘dissolved’. Mohamed Nanabhay and others have been asking me for my views on this!

So I spoke to Michael afterwards and he was pretty off-hand about the whole thing and mentioned that he was in part playing the controversial card. I’m not sure whether he really believes the BBC should be dissolved or not.

But I do have my own views on this – which I’ll give with the usual disclosure/health warning that I was a long-serving BBC employee and continue to have ongoing ties to the organization.

An example that was given by the panel was startup innovation around education – saying that any startup looking to offer a UK education based proposition would find it difficult to compete with the BBC… I would agree to a point but then would also suggest that the BBC only offers material in line with the UK schools syllabus and I don’t believe that such material should be commercialized in the first place. In fact the BBC should be commended for ensuring that this material is available to everyone without the barrier of a subscription, shelf-price or even advertisement aimed towards children. Technically you don’t even need a TV license to view the BBC website either. Start-ups who wish to offer educative material outside of the UK schools syllabus would probably not find themselves competing with the BBC.

I actually think the BBC trail-blazes a lot of new markets, way before the commercial sector has been prepared to invest. It’s ability to establish new consumer behaviors and trends without the need to make an immediate profit leads to new market opportunities that can then be exploited commercially.

We’re all disappointed with the BBC’s missed opportunity around the iPlayer – particularly it’s heavy use of DRM. But I’m not sure if the BBC decided not to participate in this space whether we would see anything as bold or as innovative from the commercial sector. It’s no coincidence that rival broadcasters like Channel 4 and Sky are now brining out their own on-demand services in response to the BBC’s announcement 18 months ago that it was working on the iPlayer.

Published in Thoughts and Rants


  1. Hi Ben, hope your trip to London was nice.

    you have some really good points here. I see that the european start-up scene is really differentiated from the american. and yeah, maybe big companies like BBC kills start ups or ideas – but most of the people I know working on something are doing it besides work because it’s really hard to let go of a steady income, especially if the financial backing from the VC’s ain’t there.
    So I guess what I want to say is that we’re coming around, it might just takes us a bit longer, and be a bit harder to find financial backing..

  2. Andrew Andrew

    Hi Ben, what are your thoughts on the BBC’s commisioning model/system for digital? Do you think that the way the BBC commissions external work hinders innovation by third parties and it’s ability to ‘play nice’ with others?

  3. Ben Ben

    Hi Henriette

    I fear this approach often doesn’t work – for a number of reasons.

    Firstly if you work somewhere like the BBC, Yahoo, Google or practically any of the large companies (and even the smaller ones) you usually sign away your rights to IP and thus you are on shaky ground as to who has ultimate control of the business. I know at least one VC deal that fell through because during the due diligence it transpired that the startup had begun whilst the founder was working at a ‘Big Name’ and it wasn’t clear cut whether under his employment contract the Big Name could claim ownership of the idea and the implementation if things became a success.

    Also, it’s very hard to loose that steady income – I know from personal experience. And the more you earn over time, the harder it is to pull away – especially if your life style also improves with the greater money coming in.

    I think if you have an existing steady job, it’s wreckless to quit everything and then do a start-up – sure, do a prototype in your own time etc.

    But it’s hard to scale a business you’re only running in your own time. Many entrepreneurs I meet find it hard to run their startup given all hours of the day (thus the nod to the ’25 hr day’).

    And VC’s are going to look for full-time commitment if they are going to back you. You’ll need to quit your job way before they’ll look at investment in you.

  4. Ben Ben


    Not really, in fact I think the BBC is doing some wonderful things right now with projects such as the Innovation Labs – where the BBC (in partnership with bodies such as NESTA, I believe) pays small companies to attend week long residential workshops to hone their idea and pitch it to the BBC commissioners at the end of the week.

    I helped on one of these last year when I was at the BBC, and Ian Forrester (current head of is currently in Scotland doing another. There is a great push on this project to do these outside of the South-East.

    I think overall BBC commissioning model could be improved – it’s currently a long drawn out process to become an approved supplier although one could argue this is protecting license fee payers by ensuring the BBC only deals with companies that can deliver projects to the scale and quality the BBC requires.

    Clearly we’re also talking about agencies here (who would potentially supply the BBC) and I’m currently more thinking about start-ups (who want to run their own projects). One could argue that an agency pitching a project to the BBC (or anyone else) should consider it’s commercial viability, and if there’s something there, consider running the project themselves rather than for the BBC or another party.

    Andrew – was there a specific aspect of the process you were specifically thinking about as your question was particularly open-ended.

  5. Hi Ben,

    Great points about the European scene – definitely agree.

    On the BBC front – I’m actually a bit annoyed that they are going to post content on YouTube as what does that mean to the UK taxpayer where everyone else in the world will now get to see the content for free…?

  6. Ben Ben

    Philip – see my other post about this!

    Actually, it’s only promo tv content (which kinda disappoints me) so I don’t see it as much of an issue. But then also I’m not a TV license payer anymore!

  7. Greg Greg

    Interesting perspective. Just for the record, though, Index Ventures has made the large majority of its investments in European start-ups, with the UK the most common EU country. While the firm also invests in US businesses, that is only a minority of the capital under management.

  8. >I also think many people aren’t prepared for the commitment of working 25 hour days to get your start-up going. That’s not a bad thing, it’s not for everyone, but I think it’s why we see so much talent locked up in the BBC and Yahoo! where one can roll in at a leisurely 10am and roll out at 6pm, off to the bar for a night of fun and entertainment. I know, I’ve been there and done that!

    Hey thats a little unfair – there are lots of skilled people working some extreamly long and hard hours, generally for the consultancy companies.

    Why? Because they are too scared to leave. The chance to make serious money in a start up comes with a serios risk, and so they stick with making their money in a low-risk environment.

  9. the BBC only offers material in line with the UK schools syllabus and I don’t believe that such material should be commercialized in the first place

    You are kidding? So, you don’t approve of books, then? The publisher of a Jane Austen, or an annotated Coleridge – no reward for their work?

    Listen, sunshine. Your work at the BBC and the BBC’s involvement in the education marketplace does not come at no cost. It’s funded by a mandatory licence fee, which is the most regressive form of taxation you could imagine, should you ever, ever bother to think about the reasons why your job at the BBC should have been funded by a tax that put people in prison.

    You really are a thoughtless, bratty, arse, aren’t you. Absence of question maek intentional.

  10. Rob Rob

    “I also think many people aren’t prepared for the commitment of working 25 hour days to get your start-up going.”

    I my experience of both US & UK companies I find the US ethos is far more rewarding in terms of stock/options and compensation. Even with some small UK startups I find the mentatility is still for the senior management to protect their interests and as such there’s really no advantage for general staff. Each type of employment should have its benefits and downsides, but working for low pay for a startup or VC with no hope of progressing can be pretty soul destroying. It’s maybe a very British thing that the desire to make heaps of cash should go unspoken.

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