Brits and Americans

Stowe Boyd Has a post on the difference between the UK and the US when it comes to entrepreneurialism. He was responding to a post by Tom Coates called “Where are all the UK startups?”.

Boyd ends with a point that entirely fits with my experience:

Coates suggests there is an antipathy in Britain between engineers and business people, and that this leads to a disconnect in their dealings. Personally, I believe there is a complete mismatch between risk-averse banker-types and risk-seeking hypomanic types. The crash-and-maybe-burn-or-maybe-strike-it-rich attitude of many entrepreneurs just runs counter to the mindset of the traditional business sort.

I came to the US in 1997 after having founded or co-founded several UK based startups. in 1983, although it wasn’t always called that (now part of NetB2B2); CYBERIA (the first CyberCafe in the world, in 1994); EasyNet, now the EasyNet Group plc, also in 1994. I also seed funded and chaired NetNames, the world’s first domain name registrar, founded by Ivan Pope and Anthony Van Couvering (now part of the Group NBT plc).

What is amazing about all of these companies is that (with the exception of CYBERIA – which Maurice Saatchi and Jean Pigottzi invested in) they were built from revenue and never took venture capital. In the case of EasyNet we attempted to raise Venture funding but never got to a deal with 3i and Rothschilds Ventures. They came in late and wanted too much. Very risk averse.

The UK at that time was certainly a place where an entreprenuer had to go it alone if they were going to be successful. I do think things have improved. Look at Saul Klein’s experience with Video Island for example. And there are many more. However this is largely driven by the globalization of US venture capital. Skypes main investors are US based despite the fact that Niklas Zennstrom was a fugitive in the US and lived in London. Amazing.

Since moving to the US I have only done one startup (I’m about to launch more through Archimedes Ventures). RealNames raised more than $130m of funding. It was mainly pre-bubble (1998-99) and post bubble (Nov 2000) funding. It was achieved because RealNames was a big idea and one that only got bigger as it was executed. US venture capitalists understand that big ideas with high risk- high reward characteristics are the foundation of success. Failure is not feared but considered inevitable some of the time. The failures do not stop the successes. This culture is very different to Europe, and particularly to the UK.

Personally I love London but I would never start a company there unless it was backed by US Venture investors with a stomach for risk. There are exceptions (Herman Hauser comes to mind and on occasion 3i) but they are rare and can’t possibly create an entreprenuerial culture alone when everything else about the society pushes in the opposite direction.