Facebook, on the other side of the pond, may or may not be worth $100bn, but either way it doesn\’t matter. Eye instead the company\’s S-1 filing with the US securities and exchange commission, and the key figures that stand out are that it took seven years to create a company with $3.7bn in revenues and $1bn in profit. No wonder, then, that from nothing Mark Zuckerberg may have amassed a fortune that, give or take, is worth $1bn for each of his 27 years of age. The growth may, or may not continue but, in an era where the media business is supposedly in decline, out comes one man to create an online environment that is so popular that it is becoming the make-or-break environment for other media brands, whether it is the games company Zynga or the all-you-listen-to Spotify.
Then ask, why does nothing like this happen in Britain: why is this country unable to create a globally significant disruptive media or internet business?
Err, both Bebo and Friends Reunited were home grown weren\’t they?
It\’s true that neither went on to multi-billion flotation but they were indeed globally significant and disruptive (the latter of more than one marriage so I\’m told).
And that is only to look at the social media world, without even considering the rest of the internet or computing world.
So I think we can dismiss the \”Brits don\’t create anything\” part. However, there still might be a problem in the financing stage: and I wouldn\’t be hard to convince that this is so. The US has a vast industry of venture capitalists desperately searching for exactly this next adventure that can be financed through the growth phase. They\’ll happily pump in billions upon billions to grow a company to size. Our own home grown such funds just aren\’t of comparable size. Millions, yes, tens of millions even, but that\’s not sufficient to grow to global size. Might get you a nice local positions, a UK one, but not global.
We need, in short, more and larger venture capital funds.
Not a new analysis of what ails the UK economy of course: been done to death over the years in fact. It\’s just that it\’s not exactly a politically acceptable answer, is it?
“,i>It’s just that it’s not exactly a politically acceptable answer, is it?”
Well, not in the Guardian, certainly. Lots of other places, it is fine.
True.
If you are an entrepreneur or a venture capitalist and happen to read the Guardian, you would give up.
Wealth creators are hated. If you do, they hate you (greedy bas**rd) and if you don’t, they do as well (not doing your job).
Very keen on the redistribution (morally superior) but not the creation bit are our friends over at CIF.
Shame you can’t have one without the other.
Whether and to what extent you should have the other is, of course, currently under discussion with a few pirouettes being executed after the BBC beer and ciggies circus.
It isn’t just the size of the funds, but the attitude and a larger context.
Many of the US tech VC funds include as investors people who made a lot of money from their own tech ventures, much of which wasn’t grabbed by the taxman. Important funds are also run by universities such as Stanford and MIT, and those often take stakes in ventures launched by previous or even current(!) academics. Several of the investors in Google were people who had done well out of Sun Microsystems. At least in technology there is a thriving investment ecosystem.
There isn’t the same environment here, at all. VCs are almost always institutional, and they do not take risks. Not at all. (Conversely, with that attitude, the gains are typically mediocre too.)
“At least in technology …”, and I should add that I meant something a little broader than pure technology, which often doesn’t produce huge returns. Like Facebook, Google is a new media company, but shares a technical advantage.
Tim Berners-Lee
I’m not seeing a great deal of reasons to invest in the UK, it’s been a few years since I checked but the education side of things was appalling for computing so most of us are at a disadvantage from the very start if we’re comparing to America. Perhaps I’m being overly negative as I think our achievements have been pretty good despite that but I can’t see any reason for things as they are to grow well or into something significant for the UK. Look at how prevalent we were around 20 years ago yet if you asked most people who were interested they’d no doubt look to America or Japan before anywhere else despite this being something a lot of people in the UK can and do excel at.
The last such project I was involved with was QXL, they were an auction site just like eBay yet the UK operations were shut down a few years ago and all that remains are the other European sites they bought out during the boom years. They made a lot of mistakes but I’d be willing to bet the cost of operating from the UK probably helped them rush to their demise.
SimonB,
I’m not seeing a great deal of reasons to invest in the UK, it’s been a few years since I checked but the education side of things was appalling for computing so most of us are at a disadvantage from the very start if we’re comparing to America.
But it has little to do with the people. The best companies in the US have lots of people from around the world. I’ve worked for twoAmerican companies and they had some really good people, but I wouldn’t say they were any smarter than the team in the UK.
They probably have a better work ethic, though.