A particularly twattish way of looking at British tech companies

Why hasn’t Britain created a Google or a Facebook? Why are so few British companies dominating the top of the technology tree. Japan, South Korea and China can all do it, but British firms, even with the help of London’s Tech City, have yet to produce a brand to trouble the titans of Silicon Valley.

That’s not because we don’t have the talent – when Facebook set up its first engineering office outside the US, it chose London because it’s a global magnet. There is no shortage of brilliant young minds, whatever the shortcomings of our education system.

So what’s the problem? Many think that the British disease is an aversion to risk, combined with a lack of ambition: a self-effacing quality that makes us doubt whether our companies can really bestride the world like a Facebook or a Google, a Microsoft or an Oracle.

The consequence is that Britons sell out and move on too soon: £10m may be enough never to work again, but it doesn’t allow you to create a world-class company.

Sigh.

ARM, Skyscanner, Rockstar North, the Candy Crush Saga people……anyone want to add to the list?

33 thoughts on “A particularly twattish way of looking at British tech companies”

  1. OK Give you ARM because there’s one of their processors sitting inside the RaspberryPi’s (Brit) streaming my music. (OS Linux – non-Brit, mounting the XBox media app – non-Brit). But I’d hope i was marginally tech aware. So who are the other guys?
    NHoT

  2. If you have no idea what Candy Crush Saga is, consider yourself blessed. Made by King.com. Didn’t know they were British but, in the games industry, just like F1, even more is British than first appears.

    Tim adds: Yep, very British. HQ is in Soho.

  3. Err… we know perfectly well why the UK didn’t create a Facebook; our shitty defamation law and the failure to afford online comms service providers with a common carrier indemnity took care of that one.

    What kind of idiot would set up a large scale open access social media operation based in a country where the law holds them to be liable for user generated content.

  4. So Much For Subtlety

    I am not sure that this is helping the main argument. After all, picking up a few minor tidbits from the Great Table doesn’t prove that Britain is able to sit with the grown ups.

    The A in ARM for instance stands for Acorn. There was a time when Acorn Computers was a very big deal indeed. But Acorn did not become the British Apple. Not even the British Intel. Instead they left that market to the Americans and found a tiny little niche where the competition was not too strong and dominated that.

    Maybe it is twatish to point it out. But something is wrong.

  5. Worth noting that Apple, like Acorn, have always been largely irrelevant to the computing market. Apple ended up getting its big moment (which may now be over) in the tech devices market.

    The computing market of the early 80s in which Acorn were significant was always going to be swept away by a standard platform, which turned out to be the IBM PC (and was pretty obviously inevitably so) since it was professional, boring and business orientated. The consumer computers in placky boxes model- the Apple model, followed by Acorn, Sinclair, Commode, etc- never went anywhere and was never going to.

    On the general issue, there is one other factor. The internet is (at least in the Western World) American. America is the largest economy by far, has 300M people in it, and is always first in tech takeup. So Yankee companies tend to get a first mover advantage; Facebook which was originally predicated on the Ivy League universities being a prime example.

  6. Back in the late 90’s I invented a precursor to Google maps. For sentimental reasons the website is still online. At http://mapzit.com . Now the data is out-of-date but I still look back sometimes to search for bird sanctuaries in Kent (http://mapzit.com/BIRDS/rochesteruponmedway.htm) or one of those interesting blogs in Westminster (http://mapzit.com/BLOGS/westminster.htm).

    Anyway the barriers to success on this product, which pre-dated Google Maps by 5 years, were my ineptitude and being in the wrong place at wrong time.

    Two decades before I had trailed round some venture capitalists and found that, if you wanted a modest £50K to £100K (in old money), they were not interested because whatever percentage rate of return they chose, multiplying that by £100k was not enough to reward their effort. In contrast, Google got $100,000 from Andy Bechtolsheim from Sun but we were not in any Silicon Valley/Fen/Roundabout to meet such investors on a social basis.

    From a global economic viewpoint, it doesn’t matter much that I was in the wrong place at the wrong time, others were and succeeded but there are barriers to innovation in my area of interest concerning the handling of intellectual property in UK public data.

    In the USA much of the mapping data produced by government is free and free means the extra cost in time in understanding the IP and knowing exactly what you can or can’t use. This can be a debilitating burden. Recently more fears are being raised about what the newly sold Royal Mail will do with its ownership of the IP in UK postcode locations. I don’t think there are similar fears in the USA.

    OK, I confess, we applied for patents on my idea but gave up on first refusal. The time and cost for a second round seemed to high.

    P.S. On another note. All but one of companies you mention are software companies: Google, Facebook, Microsoft, Oracle, Skyscanner, Rockstar North, Candy Crush Saga (King.com). They were started buy one or two people as the driving force. I doubt that the software got them going result of an initial detailed specification. They were also started by a very small number of people. Message: the most successful innovations in software have come from small flexible beginnings.

    This is in contrast with the way government software is developed, following the guidelines of the Office of Government Commerce. Government write large specifications to go through exhaustive procurement processes. About a decade ago, I gave up bothering them about why this wouldn’t work. If you are interested, to see what I told them do look at “The Problems of Software development”.
    http://www.beacon-dodsworth.co.uk/uploads/papers/softmethod%20revised%202003.pdf

    I also contacted the NHS to warn them as they were starting their enormous £12 billion pound “Connecting for Health” project – now scrapped.

  7. SMFS,

    Maybe it is twatish to point it out. But something is wrong.

    No, it’s not. The thing with all these companies like Facebook, Twitter and Google is that like other industries before them, they rely on clustering. If you want the sort of staff that have worked on high-reliability, high-volume, consumer websites, the best place to put yourself is the SF Bay Area, because that’s where the experience has congregated. It’s not a USA vs UK thing – Twitter, Yahoo, Google, Facebook, and LinkedIn are all within an hour’s drive of each other. There’s no social media/search action on the east coast either.

    It’s like running a business software startup in the UK. If you start one in Devon, you won’t get the staff. There’s hardly anyone down there. People want to go where if they get made redundant, or fancy a better job, they can walk into another job easily. That’s why Reading has around 4 times as much software work as Birmingham.

    It’s the same with industries in this country like F1, shoe making, racehorse training, electronics (Oxfordshire, Northamptonshire, Lambourn and Cambridge respectively).

  8. Ian B,

    I was just being brief, because I didn’t want to say Northants twice. Red Bull are at Brackley and I think Force India are near there.

    You’re in Jimmy’s End, are you? Is Buller Plastics still there?

  9. My experience of a startups on both sides of the pond is that getting the technology done is easiest in the UK (e.g. lots of very smart people in Cambridge), but taking it to market and making real money has to be done in the US. That’s because the US economy is 10 times bigger (for IT at least), and because more US customers are early adopters who’ll take a risk buying new stuff. In consequence they’re also very demanding, and that’s good when you’re growing a business. UK customers are more cautious and much less demanding.
    I agree with Tim A that the Valley is an outstanding ecosystem for tech businesses, but it’s a bit like the Burgess Shale, with a high rate of innovation matched by a huge attrition rate. A VC there will fund you and maybe four fledgling competitors, take effective control of all 5 companies, then after 18 months pick a winner and kill all the losers.

  10. So Much For Subtlety

    Tim Almond – “The thing with all these companies like Facebook, Twitter and Google is that like other industries before them, they rely on clustering. If you want the sort of staff that have worked on high-reliability, high-volume, consumer websites, the best place to put yourself is the SF Bay Area, because that’s where the experience has congregated.”

    But isn’t that a little cart-before-the-horse? Why do companies cluster in the first place? Something or someone has to attract them there. Someone has to be first. And the UK did have a computing cluster around Cambridge. Still does to some extent. But nothing much grew out of that.

    I am not so sure the clustering effect is the be-all and end-all either. Facebook famously started as a bunch of geeks in their dorm rooms in the North-East. They did not go to San Francisco until later. Microsoft is still in Washington State.

    I think English people have lost the confidence to do start ups and be entrepreneurs. Like Scotland only not as bad. Everyone knows that if you try to be the next Bill Gates, everyone will make your life a living hell. Better to keep your head down and settle for something more modest.

  11. SMFS,

    I am not so sure the clustering effect is the be-all and end-all either. Facebook famously started as a bunch of geeks in their dorm rooms in the North-East. They did not go to San Francisco until later. Microsoft is still in Washington State.

    Why did Facebook go to San Francisco? Why didn’t they stay in the North East? It’s not like San Francisco has cheaper land,

    And clustering doesn’t mean everyone follows. There’s a few F1 teams that aren’t in the Oxon/Northants borders.

  12. I get the feeling that Britons just don’t do competition very well. We’ve had a lot of talent at founding industries, and invention, but are very poor at competing in the marketplace. We’re not really as free market in that sense as America, tending to prefer cosy and stable business relationships. That is, the business culture is more cooperative than competitive.

    As a stereotype, some Company A purchases subassemblies from Company B. It has done this for years; they send each other Christmas cards and are friends with each other. Some Company C who offers cheaper subassemblies finds Company A still won’t buy them, because that wouldn’t be cricket, ditching their friends at Company B just to save a few pennies.

    I’m only suggesting a tendency, and we did “Americanise” in the 1980s. I remember that, the “what, get 3 quotes? Why? We always use Company B…”, but I get the feeling we’re just not as aggressive as they are in business terms. We’re too nice about it.

  13. It would seem UK biz journos are paragons of green journalism since this article (“why can’t Britain do x?) is recycled constantly.

  14. So Much For Subtlety

    Tim Almond – “Why did Facebook go to San Francisco? Why didn’t they stay in the North East? It’s not like San Francisco has cheaper land,”

    That is true about the land. Although chicken and egg again. At some point they felt they had to be in California – although part of that might have been office politics when Zuckerberg wanted to get rid of the partners he acquired after he screwed over his original partners.

    So do British people come up with great ideas but have no San Francisco to move to? Well the BBC was a pretty good computer. There is something that stops that next step. Notice British people aren’t moving to San Francisco either except to work for an American.

    Ian B – “I get the feeling that Britons just don’t do competition very well. We’ve had a lot of talent at founding industries, and invention, but are very poor at competing in the marketplace.”

    I think we don’t like people who get too big. It is the British version of Jante’s law. Americans celebrate Donald Trump. We sneer at Del Boy. I can’t stand Trump myself but in the end it may make a difference.

    “I’m only suggesting a tendency, and we did “Americanise” in the 1980s.”

    There was a generation that was a little more enterprising. But then the paperwork and red tape, the trouble with the Unions and the Greenies, not to mention EU regulations, in the end it adds up.

  15. SMFS,

    So do British people come up with great ideas but have no San Francisco to move to? Well the BBC was a pretty good computer. There is something that stops that next step. Notice British people aren’t moving to San Francisco either except to work for an American.

    What do you think the ARM in ARM Holidays originally stood for? It’s Acorn RISC Machines. Acorn being the creator of the BBC Micro.

  16. Why hasn’t Canada? Why hasn’t Australia? The question as posed suggests something wrong with Britain.

    I suspect a huge, rich home market is the main reason, but all that tax and bureaucracy don’t help.

  17. I’d imagine most of the start-ups are by relatively young university grads. Do wonder if the strong dose of socialism received in the university education process sticks more soundly in UK & other countries. Yanks have always had a history of working through college. The constant exposure to commercial reality’s an effective inoculation.
    Starting up anything is toil & pain. Hard work, long hours, disappointments. Not much different from most low end jobs. If you’ve done one, moving to the other is less of a shock. But not so easy if you’ve been convinced things like that are exploitative inequality.,.

  18. SMFS the difference is that in the US success is celebrated and the successful are looked to for inspiration. In the UK the successful are viewed with suspicion and jealousy and the leftists will always seek to deprive the successful of the fruits of their labour.

  19. So Much For Subtlety

    Tim Almond – “What do you think the ARM in ARM Holidays originally stood for? It’s Acorn RISC Machines. Acorn being the creator of the BBC Micro.”

    Sorry but the reason that I mentioned the BBC Micro was because I started out pointing out exactly what you said here. Was that ironic or didn’t you read what I said?

    Acorn had a chance at being Apple. Or HP. Or God knows who else. Instead they settled for a tiny niche market.

    bloke in spain – “Starting up anything is toil & pain. Hard work, long hours, disappointments. Not much different from most low end jobs.”

    Too many British students, to my eyes, seem to want a nice safe comfy job covered by a Union award. Ideally working for the government. If not a large multinational.

    Henry Crun – “the difference is that in the US success is celebrated and the successful are looked to for inspiration. In the UK the successful are viewed with suspicion and jealousy and the leftists will always seek to deprive the successful of the fruits of their labour.”

    In the end I think it adds up. Jante’s law:

    http://en.wikipedia.org/wiki/Jante%27s_law

    The ten rules state:
    You’re not to think you are anything special.
    You’re not to think you are as good as we are.
    You’re not to think you are smarter than we are.
    You’re not to convince yourself that you are better than we are.
    You’re not to think you know more than we do.
    You’re not to think you are more important than we are.
    You’re not to think you are good at anything.
    You’re not to laugh at us.
    You’re not to think anyone cares about you.
    You’re not to think you can teach us anything.

  20. SMFS,

    Sorry but the reason that I mentioned the BBC Micro was because I started out pointing out exactly what you said here. Was that ironic or didn’t you read what I said?

    Acorn had a chance at being Apple. Or HP. Or God knows who else. Instead they settled for a tiny niche market.

    They didn’t settle for a tiny niche market. They tried to compete making home/school computers and got beaten. Kids wanted Spectrums, not Electrons. And when they released the Archimedes it lasted for a while, but eventually, the Mac and PC drove them out of schools.

    But one thing out of the Archimedes was the low power RISC-based ARM architecture and interested Apple who were developing the Newton (and were originally an investor in ARM Holdings).

  21. The Mac never forced anyone out of anywhere. The Acorn, Sinclair, Commodore, Atari, the host of minor and virtually forgotten UK micros, MSX and indeed Apple all failed because they were not the PC, which was almost from the moment of its launch irrevocably destined to be the de facto industry standard; basically because it was a boring professional quality computer that businesses purchased whereas the others were quirky little placky boxes. Apple invented a small niche market among graphic designers and fanboys (the latter, largely by inventing a “designer” reputation thanks to Jobs’s reality distortion field) which kept the company afloat. But that was it for Apple, until they found success with consumer electronics, a different market sector.

    “Silicon Fen” and the others are those species who you find in the fossil record that flourished for a while, then suddenly die out. A marketplace full of incompatible, each differently limited, machines was never long term sustainable. It was a format war, and the format that won was the PC, and none of the others ever had much of a chance.

    It’s also worth adding that the BBC was a classic example of State distortion of the marketplace. It is utterly baffling why the BBC ever thought they needed to brand a micro, just to accompany a generalised, tepid TV series about “this exciting new computing thing”. They sold to schools because, hey, State supported, we all love the BBC, and so on, but they were (not surprisingly for a State backed product) over specified for the (ultimately doomed anyway) 8 bit plastic box market and were thus never even going to achieve dominance in that; the joke at the time was that anyone who had one must have a mum who is a teacher. It was part of the same weird paradigm as the equally baffling Domesday Project.

  22. Ian B:

    No, the IBM PC was not irrevocably destined to be the de facto industry standard, it became the industry standard because of a mistake which eventually cost IBM its position as the biggest IT company in the world.

    IBM initially had no interest is desktop computing at all – as far they were concerned the future for business computing was dumb terminals hooked up to IBM mainframes and min computers. It was only when they started to see Apple II’s and Commodore PETs and CBMs turning offices that they did a complete u-turn, pulled one of their designers aside and gave him a matter of a few months – can’t recall exactly how long but it was no more than 6 months – to come up with a new product to get them into the desktop market.

    Because of that very tight deadline, the designer had no option but to cobble together the first PC from standard components and use a third-party operating system (MS-DOS) that loaded from disk in order to bring in the project on time, and its that, more than even IBM’s reputation in business markets, that enabled the PC to dominate because it opened the door to the clone market, competition from which drove down prices and eventually made the PC a mass market product.

    It was the PC clone, not the IBM PC, that killed off Atari, Commodore, Acorn and the others. It almost saw off Apple as well, which would have gone under had Microsoft not stepped in to prop the company up in the mid 90s in order to avoid losing the one competitor that was keeping them out of the clutches of US anti-trust laws.

  23. Ian B,

    Was it that, or because the cloners created a market? The early PCs were much more expensive than other home computers because IBM were never cheap.

  24. Unity-

    The story of how the PC was designed is not that relevant (it took about a year, I think, by the way). The thing we now know because we can do history now it’s in the past is that the machine destined to become the industry standard was whatever dominated the business desktop, and as soon as the PC was launched, that was that. The mass computing revolution came down off the business desk, not up out of the bedrooms where Speccies lurked.

    The 8 bit boxes played an importan role in giving a whole generation (talkin’ bout MY generation) a start in computing and programming, but they were all doomed. What ultimately mattered was which machine was doing boring word processing, spreadsheets and shit like that in offices, and that was the PC.

  25. Ian B:

    On the contrary, the origins of the PC are very relevant here.

    Had IBM have built the PC around a proprietary operating system and processor/chipset it might well have gone on to dominate the business desktop market but it would not have made anything like the same inroads into the home computing market, not on the back of IBM’s pricing structures.

    Without the clone market to bring down price the most likely scenario is that a single system would have emerged to dominate the home market the way IBM dominated the business market based on software compatibility and file portability but it wouldn’t have been a PC, it would have been a home system with a business software suite on which you could open and work on files you’d brought home from the office, not least because the game market for the PC would not have emerged in anything like the scale it did once clones became cheap enough to buy for the home.

  26. Unity,

    IBM did build an entirely proprietary machine and operating system – the PS/2 with OS/2, both very good in their own ways – and then invited the world and his dog to license the technology.

    The world declined.

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