Much is written about London as a start-up hub, most of it comparing us with Silicon Valley. The main difference is that there are no large, independent technology companies in the city. We have outposts of Google, Yahoo and eBay but there are no pure Internet companies which have made it really big.
The only company which comes close is Betfair and though it is a great business it is relatively unknown in the US because of stricter gambling laws. Skype is another one often mentioned but then it was bought by eBay who didn’t seem to know what to do with it once they had it.
From our own point of view, the stage we’re at we can’t move to Silicon Valley so there’s no point crying about it. In all honesty I don’t think even if there was no impediment to moving I would do it. One of our projects in in music and everything we need is here in London, we’d actually be worse off in San Francisco as we’d have less access to the music industry. I don’t think it’s a coincidence that Last.fm came out of London.
I think the main differences are a much smaller pool of angels and VCs who are genuinely interested in the Internet. For example if Google had been based in London there would have been no Andy Bechtolstein to give them their first cheque. Now things have got better over here since then but there simply is not the proliferation of people with the understanding and money that exists in Silicon Valley.
One man trying to change this is Saul Klein of Index Ventures. He is behind both Open Coffee and Seedcamp. I’ve been to Open Coffee a couple of times and it is a very good way to get acquainted with investors and other entrepreneurs in a relaxed environment. We got to go to the Seedcamp day earlier this year which was a really good experience for us. The calibre of people attending was very high, Danny Rimer and Yossi Vardi were two of the speakers, we made some very good contacts with high quality investors who really got what we are doing.
Because my co founders and I are in our thirties it means we have access to the sub £50k funding which a lot of start-ups struggle for. We are lucky compared to web 1.0. I am reading Sarah Lacy’s book and she made the point that in those days it took $20m to launch a product. I had a meeting with our developers yesterday and we can go from spec to launch in months with a little less than $20m. Don’t worry folks, I promise you’ll all get an invite for our Earth-shattering product when we start testing.
