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- 12/19/15--07:02: _NEW UNICORNS: The 4...
- 12/20/15--05:22: _A successful startu...
- 12/20/15--08:00: _4 unconventional ti...
- 12/20/15--12:08: _Meet the startup th...
- 12/21/15--02:57: _KPMG says a new tec...
- 12/21/15--07:00: _The 50 coolest new ...
- 12/21/15--07:32: _A London startup's ...
- 12/22/15--00:44: _A startup founder i...
- 12/23/15--02:07: _Skyscanner is about...
- 12/23/15--02:29: _14 last-minute Chri...
- 12/23/15--06:10: _A 'Periodic Table o...
- 12/23/15--08:51: _Why the North of En...
- 12/24/15--00:30: _A former Uber exec ...
- 12/24/15--08:43: _How to get rich in ...
- 12/25/15--02:40: _The 32 best people ...
- 12/25/15--05:04: _The 53 startups tha...
- 12/26/15--13:22: _Tech startups will ...
- 12/27/15--01:10: _This British startu...
- 12/27/15--05:52: _The party's over in...
- 12/28/15--02:00: _This $2 billion sta...
- 12/19/15--07:02: NEW UNICORNS: The 42 startups that grew to be worth billions in 2015
- 12/20/15--08:00: 4 unconventional tips on starting a business from Peter Thiel
- 12/21/15--02:57: KPMG says a new tech company is born in Britain every hour
- 12/21/15--07:00: The 50 coolest new businesses in America
- 12/23/15--02:29: 14 last-minute Christmas presents to buy the millennial entrepreneur
- 12/23/15--08:51: Why the North of England's tech scene hasn't taken off
- 12/24/15--08:43: How to get rich in tech, guaranteed
- 12/25/15--02:40: The 32 best people in UK tech to follow on Twitter
- 12/26/15--13:22: Tech startups will never leave Silicon Valley — here's why
- 12/27/15--05:52: The party's over in startup land
2015 was a big year for private market tech companies and their valuations.
Uber, already the most valuable private tech company in the world, is rumored to be raising a new round of funding that would value the company around $60 billion.
And this year alone, 70 startups became members of the "unicorn club," meaning new rounds of funding valued these companies at $1 billion or higher.
42 of those companies are US based, according to research analytics firm CB Insights. We've rounded those companies up and ranked them from least to most valuable.
Valuation: $1 billion
What it does: Datto helps small and medium-sized businesses get back to work after natural disasters that could eradicate their computers, offices, and servers.
Valuation: $1 billion
What it does: Kabbage is a fintech startup that lends money to smaller merchants on eBay, Amazon, and Etsy.
Valuation: $1 billion
What it does: AppDirect is a sort of middleman for the cloud. Its business is rooted in acting as kind of an App Store for the enterprise software buyer.
See the rest of the story at Business Insider
Alex Depledge, founder of recently acquired on-demand cleaning service Hassle.com, has attacked the Conservative party for failing to acknowledge the UK tech sector's overwhelming need to bring in highly-skilled technology workers from overseas.
Following the general election, the Tory government revealed that it planned to "significantly reduce" the number of skilled workers coming to Britain from outside the EU. Prime Minister David Cameron said this was necessary as net migration levels were at record levels.
But Depledge — who is also chair of the Coalition for a Digital Economy [Coadec] organisation, board member of the Sharing Economy UK trade body, and board member of Tech North — argues that the UK technology sector needs more workers from outside the EU, not less.
"What I’m about to say next is why I’ll never be a politician or favoured by government," Depledge told Business Insider at a sharing economy event in London last week. "I think inside the Conservative party, they know that this is b-------, they know we need highly skilled immigration, but they can’t say it because they’re too afraid of upsetting the right wing and all that ugliness that sits right on the far right."
This month the government’s Migration Advisory Committee (MAC) will submit its review on how the UK can further tighten rules around the entrepreneur visa, which allows those outside the EU to come to Britain and start a business, and the Tier 2 visa, which enables UK technology companies to hire 20,700 skilled workers from outside the EU and bridge skills gaps.
Companies like Google and Facebook rely on the Tier 2 visa to bring staff from their US offices to their London offices.
The government is exploring whether it should raise the minimum salary threshold on the Tier 2 visa so that it only applies to people working at director-level roles.
"I don’t think for a second David Cameron really believes that shutting Tier 2 immigration or reducing it is the right thing but he’s stuck in a political rock and a hard place," said Depledge. "I think they’ll do the right thing in the end because I don’t think they want to see businesses crippled because they can’t find the right talent."
Coadec, the pro-startup organisation that Depledge chairs, has launched a campaign called Save Skilled Migration in a bid to raise awareness of the issue and put pressure on politicians in the Home Office, including Home Secretary Theresa May.
A decision will be made on the proposals in the MAC report next year.
This might be a brave new world of enterprise, but traditional business smarts still matter. This is why it is worth listening to advice from successful founders and entrepreneurs.
Certainly, one of the most successful entrepreneurs of our time is Peter Thiel, a co-founder of PayPal and now a prominent venture capitalist. He was the first outsider to invest in Facebook, and he manages Founders Fund's $2 billion in assets.
We read Thiel's bestselling book, "Zero to One," and pulled out its most important tips for new startup founders.
1. Dare to think about the future differently
When we talk about the future, we don't talk about the passage of time, but rather the progress made during that time. This progress, i.e., the differences from the present, is what really defines the future.
But often progress is not incremental. Instead, it comes from the creation of something entirely new that has not existed before, like a new technology or method for doing something.
Predicting progress is hard because you have to imagine something that doesn't exist yet. That's why you can only predict future progress if you're able to see the present differently. If you want to imagine what the future holds, you must be able to view the present critically.
Thiel believes that this is such a crucial ability that in job interviews he asks candidates to cite a popular belief they disagree with. Why? Because only a person who can think outside established conventions can see and change the future.
You can only see the future by thinking outside of established conventions. Most people only expand on existing ideas and innovations, but this is only enough for incremental improvement. Real progress is made only when existing ideas are thrown out and new paradigms are embraced.
2. At first, you can't be the best at everything. Start your business small by becoming the best at one thing.
A startup can only be successful under very specific conditions. There's only one best time to launch your startup and there's only one best market for the company's product.
At first, you don't need to be the very best in every business, just your business. Start out by defining your market as narrowly and specifically as possible. That'll make it easier for you to become the dominant player in it.
You can't expect to be top dog in your business right from the start. You need to be prepared to stick around for the long run. After you've obtained a strong position in a specific niche, you can move on to the next, broader market.
This is tried and true. From the beginning, Amazon founder Jeff Bezos had the ultimate goal of becoming the world's greatest online retailer. However, he started much more narrowly, selling nothing but books. Only after Amazon conquered the book market did it expand to other categories like CDs and videos, and from there to other products. So, contrary to what many think, Amazon's success hardly happened overnight. Rather it came by dominating one niche at a time.
Don't go too broad too quickly. Find a small niche where you can do something better than any of your competitors. Once you've established your company there, you can expand to other markets later.
3. Chase the secrets that others cannot copy
The world is full of little secrets. Your grandmother may keep her secret how to bake the best apple cake there is, and the bakery nearby may have its secret formula how to make the perfect bread. In fact, every business needs its secrets — a unique stash of information, technologies, or professional experience that create a competitive advantage. So what are your company's secrets to success?
For example, for tech companies, the best secret is to have better technology than their competitors, because it can make their position as market leaders unassailable. To be truly revolutionary you need to find and chase these kinds of secrets. Otherwise, you'll be just another provider of conventional products in an already competitive market.
The case of Hewlett-Packard demonstrates the importance of having better technology. In the 1990s, the company had the best technology and used it to bring out one innovative product after the other, such as an affordable color printer and an all-in-one printer, copier and fax machine, which was a truly wild idea at the time.
But when the company stopped chasing secrets and inventing new products in the 2000s it ultimately lost half its market value.
4. Give employees a stake in the company by only hiring full-time positions
Typically, startups are so small that every single person on the team plays an important role. So the first key component in the founding process is finding the right people — people who have a stake in the company's future.
To strengthen personal ties, try to avoid part-time employees and remote work. According to Thiel, "everyone you involve with your company should be involved full-time… anyone who doesn't own stock options or draw a regular salary from your company is fundamentally misaligned. At the margin, they'll be biased to claim value in the near term, not help you create more in the future. That's why hiring consultants doesn't work. Part-time employees don't work."
Get that? Ensure every employee has a stake in the company by only hiring people willing to commit to your company and only your company. They don't have other obligations, they're committed to your company, and will be there through the thick and thin. Part-time employees, however skillful, are loyal to themselves before they are loyal to your company.
Even working remotely should be avoided, because misalignment can creep in whenever colleagues aren't together full-time, in the same place, every day. If you're deciding whether to bring someone on board, the decision is binary. Ken Kesey was right: You're either on the bus or off the bus.
They don't call them startups for nothing
The founding process and the first year of a company is often the most crucial period in a company's life. It's make or break here. Much like when you're building a building, ensuring that you have a solid foundation on which to construct your edifice gives you the best chance of success.
Hungry for more startup tips? Blinkist has dozens of titles about Startups, Small Business, and Entrepreneurship available right now. Check them out! It only takes 10 minutes.
Selling tickets to Adele's concert was never going to be a problem. As predicted, her shows in the UK and the US sold out in minutes.
The harder problem for artists like Adele is making sure the people who buy the tickets are the true fans who want to see the concert and not the scalpers looking to make a profit off one of the hottest music tours of 2016.
To do that, Adele turned to a tiny British startup called Songkick.
The startup, which connects bands to fans, has learned how true fans behave and has built up a list of identifiable scalpers in its system.
The company actively tracks and maintains a listing of known scalpers who have used the site before. Artists also work with the company to provide their own methods of weeding out resellers, said Ian Hogarth, cofounder and co-CEO of Songkick.
Even with only a pool of 235,000 tickets sold through the site, the company identified more than 53,000 scalpers who were trying to get tickets and blocked them from the sale. The company now claims less than 2% of those sold-out tickets ended up back on the market.
"By selling the highest number of tickets we were able to through our own channels, and working with Songkick and their technology, we have done everything within our power to get as many tickets as possible in the hands of the fans who have waited for years to see her live," said Adele's manager Jonathan Dickinson in a press release.
It's a technological challenge to identify a true fan from a scalper, and, in the end, the artist and fans both want the same thing: the tickets to be in the hands of the fans who want them most.
But when Songkick first launched, it didn't even have a ticket component at all.
Before Adele, it was not always about tickets
For the past eight years, the startup tracked bands, at first by manually uploading their concert schedules, and then alerted fans when their favorite band was playing near them.
The goal was to give fans easy access to the concerts they wanted to know about, hopefully then increasing ticket sales to the concerts themselves.
The average concert is actually 40% to 50% unsold, Hogarth said. Artists who sell out instantly, like Adele and Paul McCartney, are really a very small minority.
The other 99.9% of artists are still struggling to sell out at all, Hogarth says. Since artists rely on concert money for the majority of their income, they have to then raise the ticket prices to account for not filling the room.
"Because no has solved the problem of getting everyone in the building, the net effect is that the prices just keep going up and up every year. We're trying to get to a world where every show sells out, and the event-goer is paying a reasonable price," Hogarth said.
Songkick wasn't the one selling the tickets, but Hogarth hoped that by making fans more knowledgeable that some of their favorites were in town, it would fill the concert halls.
That business grew, eventually leading to partnerships with Spotify and Apple Music, but the startup was still missing the other half of the coin, Hogarth told Business Insider.
It was only in June, after eight years of building the fan-side of Songkick, that the startup merged with ticketing site CrowdSurge.
"We're now the largest independent ticketing company in the world," Hogarth said. "We're at pretty meaningful scale. We've grown over 50% in the last year."
The growth has put some strains on the company. During the Adele ticket sales, some fans claimed they could see other people's information on their screen once they went to the checkout carts.
"Songkick was responsible for selling 40% of tickets directly to fans, a portion of whom were unfortunately able to preview other users' shopping carts for brief periods due to extreme load. At no time was anyone able to access another person's password, nor their payment or credit card details (which are not retained by Songkick)," the company said in a statement at the time.
Why artists love them
One big benefit of merging with CrowdSurge was learning what the artists needed. That helped the company make small tweaks. For instance, the company started talking to artists about "selling out shows" rather than "doubling the size of the ticketing industry." That made a difference when they're approaching artists — selling out a show sounds like you're emotionally invested. Doubling profits sounds like you're a manager.
"It tends to be the case that you're really good at understanding at artists, like a company like Bandcamp. Or you really understand consumers, like Pandora," Hogarth said. "I think what we're trying to pull off with our company is really unique because we're trying to be a company that understands artists and fans equally."
After all, musicians have spent the last decade getting steamrolled and pummeled by online music, pirating, and streaming services. Some, like Taylor Swift, have openly challenged companies like Apple and forced them to change their ways.
Adele, an artist who is decidedly "meh" on streaming services like Spotify, has embraced Songkick because it puts her in charge of selling the tickets to fans rather than the venues. Coldplay and other artists recently published a letter deploring the rise of scalpers and asking for government intervention in stopping it.
"I want to see a world in which artists dictate more of the agenda of how music works on the internet, and it's a great thing that artists are finally standing up and doing that," Hogarth said. "I can't imagine a world 10 years from now won't control their tickets."
Britain has created 45,000 technology companies in the last five years, equivalent to one every hour, according to a KPMG report.
The latest Tech Monitor UK Survey, which is carried out by KMPG in conjunction with financial information provider Markit, shows that the number of tech-related businesses in Britain's private sector has risen by 31% since 2010.
By contrast, the total number of UK manufacturing enterprises has risen by only +2.2% since 2010, while for construction the figure stands at +3.7%, the number of retailers has increased by +2.2%.
Many of the UK's technology companies are being founded in London, with particular clustering happening around East London's Shoreditch are, which is home to wearable technology firm Vinaya, money transfer service TransferWise and mobile gaming company Mind Candy, amongst others.
While London has the largest number of tech firms, all regions of the UK have experienced growth, with 63 of the UK’s 326 local authorities experiencing over 10% growth in the number of tech businesses they're home to. This is likely to please the government and the Tech City UK organisation that is looking to replicate London's success across the rest of the UK.
Despite an overall increase in new business levels, the survey indicated a slight deterioration in profitability across the sector. Survey respondents said competitive pressures and the need to offer price discounts to secure new work had weighed on profitability in Q3 2015. In some cases, tech firms noted that higher salary costs had also contributed to pressure on operating margins.
“It is important for the UK to have a strong Tech sector and it is therefore hugely encouraging to see that not only has the UK Tech sector delivered six years of continued growth, but that this has happened throughout the country with some 63 local authorities experiencing double digit growth in the last year alone," said Tudor Aw, partner and head of KPMG’s Technology Sector.
"We are also seeing increased specialisation within local technology clusters such as Biotech in South Cambridgeshire, AutoTech in the West Midlands and FinTech in London. This creation of tech centres of excellence will create a virtuous circle of attracting global investment and acting as a magnet to the best tech talent."
Dozens of cool, innovative businesses pop up across the US every day, bringing new technologies, entertainment options, and services to their local communities.
Throughout the year, we've highlighted several of these small, independent businesses that have opened over the past five years or so in New York City, San Francisco, Houston, Portland, Boston, New Orleans, Los Angeles, and Chicago, and now we've scoured the rest of the country for inventive new ventures.
From a pizza oven on wheels to a boutique where everything's free — with a catch, of course — there are plenty of smart places to check out. Read on to see our top 50.
Editing by Alex Morrell. Additional reporting by Lauren Browning.
5 Rabbit Cervecería
What it is: A Latin-influenced craft brewery that bases its beers on Aztec culture.
Why it's cool: Located just outside Chicago, the first Latin microbrewery, or cervecería, in the US infuses its brews with ancho chili, piloncillo cane sugar, and other Latin flavors. Inspired by an Aztec myth, 5 Rabbit names all of its beers to coincide with the Aztec calendar.
Angela & Roi
What it is: A handbag company that has a unique charity-donation policy.
Why it's cool: Angela & Roi handbags come in all sorts of colors, but when choosing, most customers don't just think about the color they like; they also think about the "color" they're donating to. A portion of each bag sale goes to the charity whose color coordinates with the bag — red is for HIV/AIDS, pink is for breast cancer, and so forth. Angela & Roi bags are also eco-conscious, made without animal products or sweatshop labor.
What it is: A brand that believes in ethically produced clothing and dressing up every day.
Why it's cool: This online retailer based in Denver claims to make it easier to get dressed in the morning, whether you’re running errands, heading to work, or grabbing coffee with a friend. This fair-trade fashion label was created by E.A. Lepine, a designer intent on trading lazy-day yoga pants for casual, comfortable, and trendy dresses.
All items sold at Arrowroot are sewn by a group of seven women in Tegucigalpa, Honduras. The women earn fair wages — about $10 to $12 an hour, enough to support a family — and healthcare benefits.
See the rest of the story at Business Insider
London startup Blaze hit an important milestone today as it announced its Laserlight will be integrated into 11,500 Boris bikes across the English capital.
Blaze's Laserlight is designed to improve rider safety by projecting a green laser image five to six metres in front of the cyclist, thereby making them more visible to drivers, pedestrians, and other cyclists.
The company — which graduated from the Entrepreneur First company building programme and is backed by US heavyweight investor Index Ventures— said the partnership with sponsor Santander and operator Transport for London will allow it to "take things to the next level".
An "integrated version" of the Blaze Laserlight will be fitted to the Santander bikes, which can be hired from docking stations across London from as little as £2.
Independent research from the the Transport Research Laboratory showed a Laserlight decreases the blind spot around a heavy goods vehicle (HGV) by over 25%. HGVs have been involved in several cyclist fatalities on London roads, with drivers of such vehicles often saying they can't see cyclists.
But at £125, the Blaze Laserlight is considerably more expensive than your average bike light and it's not clear how many units have been sold by the company to date.
According to technology news website Alphr Santander is paying £768,000 of the £860,000 needed to fit the lights across the entire Boris bike fleet, with TfL making up the remainder.
Cofounded by Emily Brooke and Philip Ellis in 2012, Blaze wrote on its blog today: "We are thrilled to share with you our biggest news of the year.
"For us, this is a really important day. Although we have been shipping the consumer version of the Laserlight for nearly two years, and now to 52 countries from our site, integrating the technology into the entire fleet of Santander Cycles immediately takes things to the next level and will make thousands of cyclists more visible and safer on our roads."
To mark the announcement, Blaze and Santander produced a Star Wars-themed YouTube video featuring Olympic medal winner Jessica Ennis and Formula 1 racing driver Jenson Button. The duo, representing the Light Side and the Dark Side, encounter each other in the street before setting off on their Santander cycles, equipped with the Blaze Laserlight, to watch the new Star Wars movie. When they arrive at the cinema they buy their tickets from professional golfer Rory McIlroy.
The Mayor of London, Boris Johnson, said: "It’s fantastic that our Santander Cycles will be able to bring light to the dark side of the street with these nifty Blaze Laserlights.
"We’re always looking to develop new and innovative ways to help people cycle around the capital more safely and these green lights will help all our cycle hire users to stay seen at night. I’m delighted that through this great partnership, we’re able to help improve safety and support the enterprise of another brilliant London startup."
The implementation, expected to take place early next year, comes after a successful Laserlight trial on 250 Santander cycles in September.
"We have received positive feedback throughout the trial and are confident that the new addition will encourage more cyclists, new or experienced, to use the bikes for commuting or leisure," said James Mead, TfL’s general manager of Santander Cycles.
Madeline Parra, founder and CEO of the London-based recommendation app Twizoo, is launching her app in 12 US cities over the next 84 days as part of a "digital road trip".
Twizoo draws on Twitter's feed of real time data to serve up suggestions on the best places to eat and drink.
The app is currently only available in London and San Francisco but Parra claims people all over the world can benefit from Twizoo's service.
"Some may call this [digital road trip] sheer madness," wrote Parra on the company blog. "Crazy talk. And yes, we do have a knack for living on the wild side… but this expansion is common sense.
"Since March 2014, Twizoo has crunched almost 46 million tweets about restaurants and bars across London and San Francisco. But, millions of diners and sippers around the world are sharing their opinions on Twitter, not just in London and San Francisco."
The company, which wants to become the "intelligence layer" on top of Twitter, claims launching in each of the new cities is as easy as flicking on a switch.
Every Monday over the next 12 weeks Twizoo will launch in a new American city. A full list of the launch dates can be found below.
In April this year Twizoo raised $1.7 million (£1.2 million) from investors at the likes of Downing Ventures and EC1 Capital to advance its technology.
Ultimately, the startup wants to use its algorithm — which pulls data from Twitter to gauge people's opinions on a localised basis — across a range of categories in which people might need to take an instant opinion poll. Restaurants, hotels, movies, politics — you name it, Twizoo wants to be able to tell you what people are thinking right now, and make live recommendations about it.
Twizoo launch dates
Las Vegas: 28-Dec
New York: 11-Jan
San Diego: 15-Feb
Los Angeles: 29-Feb
Stuart Paterson, a founding partner at venture capital firm Scottish Equity Partners, is expecting to win big on travel booking website Skyscanner in the near future.
Scottish Equity Partners backed Skyscanner with £2.5 million in 2007 for a 40% stake in the Edinburgh-based company. At the time, the company's annual revenues were less than £1 million, according to Paterson. Today they're around £100 million.
The Sunday Times reports that Scottish Equity Partners will sell off 5% of its stake in exchange for a huge profit as part of a new £65 million funding round that would value the company at over $1 billion (£660 million). Skyscanner is reported to be working with advisers Goldman Sachs and Numis Securities on the sale of new shares.
"We have a lot of emerging companies that are doing extremely well but the one that has had the most impressive performance to date has been Skyscanner," Paterson told Business Insider in London last week. "That business is doing north of 10 billion [pounds] of ticket sales for flights. It’s over 700 employees. It’s making tens of millions [of pounds] of profit. It’s a very viable business. What’s interesting is even at the scale it’s at now, the growth rate is accelerating.
"In terms of great hopes, Skyscanner's one that’s certainly been impressive from a return on capital. There’s many unicorns out there that have raised hundreds of millions [of pounds] but this hasn’t," said Paterson. "Many are losing money substantially, this isn’t. It’s current valuation is largely based on profits. I think the aim now is an IPO [initial public offering] in 2017. That's what the company is planning for."
Silicon Valley venture capital giant Sequoia — a firm that has backed Google, Apple, and Facebook — has also invested in Skyscanner. The firm invested an undisclosed amount in 2013 at a $800 million (£529 million) valuation. Sequoia chairman Sir Michael Moritz sits on the board.
"We’ve invested in search related businesses in America for a long time and we’ve invested in travel businesses so it was fairly natural that Skyscanner hit our radar screen a few years ago," Moritz told Business Insider at the opening of Skyscanner's new London office last month, where he praised the company's operations in China, a region is he particularly bullish about.
At the time, former Amazon exec Bryan Dove, now head of Skyscanner's new London engineering hub and SVP of engineering at Skyscanner, said: "If you look at the metrics, Skyscanner has been consistently growing from a revenue perspective and an EBITA [earnings before interest, taxes, and amortisation]. I know there are some rumours out there, we certainly don’t comment on rumours. From a company perspective, we continue to be focused on our users and our products."
Becoming a young tech entrepreneur has arguably never been more appealing, with an increasing number of successful role models to look up to, including Facebook's Mark Zuckerberg, Box's Aaron Levie, and Snapchat's Evan Spiegel.
But taking the leap isn't always easy and every successful entrepreneur will tell you there are some things they couldn't have lived without on their way to success, be it their beloved iMac or simply a good cup of coffee.
Here we've rounded up some of the things that we think millennial entrepreneurs (those born between 1982 and 2000) might appreciate.
A Cambridge Satchel
The 15-inch classic Cambridge Satchel is a safe bet for entrepreneurs looking for a mix of style and practicality.
Turn up to an investor meeting with one of these on your shoulder instead of a scruffy backpack and you'll instantly be taken more seriously.
The satchels were originally intended for students but today they're seen as fashionable items for people of all ages.
"Zero to One" by Peter Thiel
Peter Thiel is the Silicon Valley billionaire that cofounded PayPal and became the first outside investor in Facebook.
His book "Zero to One" tells entrepreneurs "how to build the future." In the book he argues that tomorrow's champions will not win by competing in today's marketplace. Instead, they will escape competition altogether, because their companies will be unique.
The Apple iMac with retina 5K display
MacBooks are great but sometimes you just need a bigger screen and a bit more power.
Fortunately Apple's desktop machine, the 27-inch iMac, is on hand and the latest model comes with an impressive 5K retina display.
It also boasts a 3.3GHz Quad-core i5 chip, 8GB RAM, and a 2TB internal hard drive.
See the rest of the story at Business Insider
Analysts at research firm CB Insights have produced a customised periodic table that aims to map the UK tech scene.
While the traditional periodic table groups chemical elements based on their properties, the "Periodic Table of UK Tech" groups 146 technology companies and investors alongside others in their field.
The table, published on the CB Insights blog yesterday, is based on CB Insights data around funding, company momentum, and recent investments in the space. It includes UK success stories like overseas money transfer service Transferwise, music identification app Shazam, and fashion retailer Farfetch, as well as VCs like Index Ventures, Accel Partners, and Balderton.
If you can't make out the names of the companies in the table then try here.
The quirky table has been shared on Twitter by many supporters of the UK tech scene, including Gerard Grech, CEO of government-funded quango Tech City UK, Boris Johnson's promo agency London & Partners, and TechCrunch editor-at-large, Mike Butcher. As you might expect, many companies featured on the list have also shared the table through their social media accounts.
However, the graph hasn't been welcomed by everyone, with sceptics criticising CB Insights for failing to include some of the most prominent UK technology companies.
Hazel Moore, cofounder of investment bank First Capital, said there were some surprising omissions.
Nic Fildes, technology reporter at The Times, said the table was a "waste of time" as it does not include chip architect ARM, enterprise software firm Sage, big data firm WANDisco, and engineering software firm Aveva.
The "periodic table of UK tech" doing the rounds does not include ARM, Sage, Aveva, WANdisco...what a waste of time https://t.co/X64GTXjjlz— Nic Fildes (@NicFildes) December 23, 2015
"To visualise the depth and breadth of the UK’s tech scene, we used CB Insights data and analytics to create a periodic table of tech in the United Kingdom," CB Insights wrote on its blog. "The table covers venture capital investors, accelerators, and angel investors. It also lists funded companies in select industry categories that are particularly prominent in the UK, along with notable exits of UK-based companies.
"We expect that this list of 146 companies will change over time as new entrants emerge and gain prominence and others falter, exit, and are removed. If you believe someone should be added, please leave a comment with your rationale."
It's no secret that the UK economy is heavily dependent on London, which accounts for approximately 17% of UK GDP.
Chancellor George Osborne is well aware of London's dominance and has pledged to create a Northern Powerhouse to help offset the UK's reliance on its capital.
Part of the plan includes expanding the success of the Tech City cluster in East London to the North of England.
Specifically, the government wants to join up the existing tech ecosystems Manchester, Leeds, Sheffield, Liverpool, Newcastle and Sunderland into one giant tech cluster.
To do this, Deputy Prime Minister Nick Clegg announced in 2014 that the government was setting up a new agency called Tech North and funding it with several million pounds.
Tech North will "bring the pockets of excellence in tech industries from across the North together to form an internationally renowned virtual hub," the government said at the time of the announcement.
Obviously this will take time and it won't happen overnight. But over a year has passed since Tech North was announced and yet nearly all of the UK's largest technology companies, particularly the new generation, are still located in London.
According to data released in June by research firm GP Bullhound, there is only a single billion dollar technology company in the North of England: ao.com. It's a website that sells fridges and washing machines, so although it's a successful business, it's not exactly revolutionary. There's also enterprise software firm, Sage, in Newcastle, but that's been around since 1981. London, on the other hand, is home to thirteen tech "unicorns" developing everything from music identification services like Shazam to fintech apps like Transferwise.
There's no denying that there are exciting technology companies setting up across the North. Peak, for example, is a clever Manchester-based company with a brain-training app that's underpinned by neuroscience.
But the reality is the majority of companies aren't scaling to the same size as their London counterparts.
Essentially, London's tech ecosystem still seems to be miles ahead of that in the North of England.
But according to Claire Braithwaite, head of the Tech North initiative, the "North’s digital economy is booming".
She wrote an article for London business newspaper City A.M on Wednesday, titled "Forget London: This is the UK's real Silicon City," where she argued that the North will rival the South if it gets the infrastructure investment that it requires, without spelling out exactly what infrastructure is needed.
North vs South
So why are Northern tech companies failing to scale to the size of those in the South?
"Network effects" and "access to talent" are key reasons, according to Thomas Forth, founder of digital story telling firm Imactivate and associate at the Open Data Institute in Leeds.
Forth added that "weak institutions and poor infrastructure makes the North's effective size too small."
Tim Dempsey, a Manchester-based venture capitalist at Epiphany Capital, implied on Twitter that tech startups in the North of England are just as big as those in London, pointing to Skyscanner, RentalCars.com, and LateRooms. However, Skyscanner is in Scotland, not the North of England, and the other two, while respectable, aren't billion dollar businesses.
Defending the North of England tech scene, Alex Depledge, a Tech North board member, said: "If you circled back three or four years ago in London we had the exact same thing. You had a couple of maybes like Shazam and Spotify. We were in exactly the same position. Now we look out from this window [at the top of Heron Tower] and I can tell you that six or seven offices of tech companies that are really, really booming.
"Ecosystems take a while to build. Are we going to see results in the next year? We’ll see some grass roots. But it’s going to take two to three years to really take off.
"There is absolutely no geographic reason why the [UK tech] sector needs to be in London. It can be spread throughout the UK and help rebalance the economy."
Update: Following the publication of this piece, Dempsey said he misread the tweet that he responded to on Twitter.
He provided the following comment by email:
"The North's infrastructure lags behind London, but we've built some pretty big success stories quietly like On The Beach (now floated), RentalCars.com (now part of Priceline), The Hut Group (backed by Balderton, Artemis), GB Group (now floated), NCC Group, Laterooms.com… and some serious contenders in the pipeline. We've suffered from a lack of institutional capital - but now that's starting to arrive in the region, I just did a deal with three of Europe's high tier VCs for a Manchester-based Series A. It's an exciting space."
It's no secret that European startup founders often relocate to Silicon Valley as they look to grow their businesses. The vast amounts of venture capital funding on offer and the huge North American market make it a sensible place to try and expand.
But the exodus of Europe's best entrepreneurs to the US comes at a potential cost. Namely, there's no one good left to build (or support those building), world-class technology companies on the same scale as Google, Apple, and Facebook.
However, former Uber exec Lars Fjeldsoe-Nielsen believes things are starting to change.
Fjeldsoe-Nielsen — who was VP of mobile at Uber before joining London-headquartered Balderton Capital as an investor earlier this year — told Business Insider that an increasing number of European founders are returning from Silicon Valley to launch a startup in Europe or invest in other European businesses they like the look of.
Since becoming a VC, Fjeldsoe-Nielsen has been travelling around Europe, which is where Balderton invests its billions, to try and get a "lay of the land" and see what people are talking about.
"A lot of people are coming back," he said at Balderton's office in up-and-coming tech hub King's Cross. "The exits seem to happen in the US right now but the founders come back. I see that everywhere: Paris, Stockholm, Copenhagen."
One of the first engineers at Box (IPO'd), the cofounders of Edomondo (bought by Under Armour), and the cofounder of JustEat (IPO'd), are among the many entrepreneurs that have returned to Europe after successful exits, he continued.
While Fjeldsoe-Nielsen is happy to see European entrepreneurs returning to their home countries, he maintains that Silicon Valley is one of the best places in the world for founders to gain experience.
"I think it’s good for Europeans to go to the Valley and see what happens out there. It absolutely is. It’s almost like you get an education in starting up and networking and hiring and all this stuff."
But why are all the exists (stock market listings and acquisitions) happening in the US?
"The reality is when you look at the big five they’re in the US and they’re acquiring a lot of companies," said Fjeldsoe-Nielsen. Founders have also suggested that they can raise more money on US stock markets like NASDAQ and the NYSE than they can in Europe. However Marcus Stuttard, head of the UK Primary Markets and the Alternative Investment Market (AIM) at the London Stock Exchange, claims this isn't the case.
Fjeldsoe-Nielsen added that we will start to see big companies coming out of Europe in the next five to 10 years. "There’s no doubt about it," he said. "And they will start to acquire."
Startup L. Jackson is an anonymous blogger who writes about startups and Silicon Valley. This post originally appeared on his blog and is republished here with permission.
This week's NYT article on how employees sometimes lose out is a great read. Employees who like that might also like [Homebrew venture capital partner Hunter Walk's] article from last week on (not) getting rich at startups. This is the follow-up I intended to write for the latter.
I talk to people looking for their next gig on a regular basis. It’s fun to match awesome people who don’t want to found companies up with companies who need awesome people. One question I get asked over and over again in various forms is, do you think I’ll get rich from startup X?
My first piece of advice for startup job seekers is that equity, all things equal, you can’t pick ‘em. On a risk-adjusted basis, startups are likely to be about the same. If there is information that a company has significantly de-risked, it will be priced in. Despite the market often being very wrong, you are unlikely to outsmart it.
If you want to get rich, your best bet on a risk-adjusted basis is to join a profitable and growing public company. Google for short. Make $200-500k all-in a year, work hard and move up a level every 3-5 years, sell options as they vest (in case you joined Enron), and retire at 60, rich. This plan works every time.
Beyond the sub-market salary you’ll receive for joining a startup, there are no financial guarantees. Your equity is probably worthless. The whole d--- thing might fall apart any time. The hours are long. A lot of stuff won’t work right. Etc.
But, as far as I know, startups are the only way to get 20 years of experience in five. The reason to join a startup is because you are awesome, you’re willing to work hard, and you don’t want to wait 20 years to be making decisions that impact the business.
And if you go in with this mentality, even when startups fail, you succeed. If you put five years into building a company and team, you will end up with a great network of talented and motivated people, lots of first-hand experience, and often some management experience as well.
Worst case, your next step could be going into Google at the VP level it would’ve taken you 15 years to get to joining out of college to “inject some startup DNA,” and catch up on salary within a few years. Unless this internet thing is a fad, that job will always be there for you.
But for all that is good and holy, don’t join a startup for the money.
Sundry advice on picking a startup:
Be clear on what you want. Do you want to join pre product-market fit, or post? Do you need a salary, if so, how much? Do you care about vertical or role? Location? Travel? Etc. Most people that end up in the wrong job didn’t think through what their ideal job was before looking.
Run a process. Most people fail at this. Startups are interviewing you, but you’re interviewing them too. Write down your criteria. Look at 200 startups, contact 50, do first interviews with 20, move forward with 5, pick between 2-3 good options. If you’re passive, or only talk to a few companies, you’ll be choosing between limited options. You can get 200 plausible startups in a couple hours.
Focus on good people/culture. Above all else, my observation is that when you find good people (high-integrity, smart, hard working, etc) and a compatible culture, you end up happy, even if the company fails. When you ignore suboptimal people fit because you think the product is sexy or you’ll make money, you end up sad.
Accept fair comp. Many people are unrealistic on comp. They want an early-stage experience with Google salaries. It doesn’t work that way, and startups often suck at explaining that. Talk openly with startups about what they can pay you, what they’ve raised, what your needs are, and what milestones will lead to higher salary. Keep in mind, you might be the first person to take a salary and the founders might have been working for two years. Sure, it’s a 50% haircut for you, but for them it’s a big chunk of their first round.
Expect to earn it. Some startups will hire a dev and call them CTO. That doesn’t make them a CTO. If you want to be a CXO, say so up front, but expect to earn it. Entering a startup is a lateral move with unlimited upside. Tell the startup where you want to be, and set milestones that give you what you want that make the company successful. Now you’re a CXO.
Discount the vertical. With a few role exceptions, what you’re actually making isn’t that important. Assuming the company is making something people want and you’re delivering a ton of value, most people can be as happy making enterprise cloud infrastructure as social networking tools. Business development is business development. Do it with/for people who do not suck.
Understand the basics of the business. You shouldn’t try to become an expert, but you can ask some basic questions. What is the valuation of the company, and what’s the valuation for your purposes? How much has the company raised to date? How much money does the company have in the bank, and what is the net burn rate? What milestones does the company need to hit to get to the next round?
This is good to know so you can roughly assess the business. But it’s also a great way to understand how you fit in. Can you help with the core problems the company needs to solve?
Bias towards transparency. Companies can’t be expected to share every single detail with employees, especially potential hires. But, in general bias towards companies that give employees info to make informed decisions You should, for example, know what percent of the company you own. Trust is a two way street, and if the company lies to its employees, it’s hard to maintain that trust. Life is too short to watch your back inside the building.
Sure, you get your tech news from Twitter, but who do you follow for insight, analysis, and jokes?
We rounded up some of the UK's most interesting Twitter users for tech news and analysis.
We've sorted Twitter users according to how much they tweet, how much they engage with other users, and how useful their tweets are.
32. Tess Alps
Occupation: CEO of Thinkbox
Why: Want to know what the future of TV will be? Alps is someone you should follow.
A fantastic read from someone with knowledge, intelligence - and sanity. https://t.co/DNrluUjfAY
31. Taavet Hinrikus
Occupation: CEO of TransferWise
Why: Hinrikus is the CEO of TransferWise, one of London's most well-known technology startups. He's clued into startup news, and also shares updates from his company.
Self driving cars will have IMPACT -- How Autonomous Cars Will Destroy 10M Jobs and Reshape the Economy by '25 https://t.co/uSZwrcNkKM
30. Bruce Daisley
Occupation: Vice president of direct sales for Europe, Twitter
Why: Daisley is one of Twitter's most senior employees in Europe, and his tweets are all about either tech or music.
See the rest of the story at Business Insider
2016 is just around the corner and it's time to predict which startups will take the tech industry by storm.
Who better to ask than the startup experts, the VCs that watch them, guide them, hear their pitches, and fund them?
So we reached out to a handful of top VCs and asked them which of their young or growth-stage startups did they think were going to boom in 2016.
We also asked them which startups outside their portfolios they expected to boom in 2016.
They sent us this list of startups from every corner of the tech market: from consumer to enterprise, from big data to men's clothing.
Vulcun: Fantasy leagues for eSports pro video games
VC: Sequoia's Aaref Hilaly
Relationship: VC is an investor.
Funding: $13.3 million
What it does: Vulcun is a fantasy league for eSports (aka pro video games).
Reason:"If you are not a teenager, you may not have heard of 'e-sports,' meaning competitive multi-player video gaming where teams compete against each other for prizes,"says Hilaly.
"But it's become a phenomenon: more people watch the finals of tournaments for League of Legends or Counter-Strike, than any sporting event other than the Super Bowl. Vulcun is capitalizing on this trend by enabling e-sports participants to trade skins (digital goods)," Hilaly says.
Confluent: A new leader among open-source software companies
VC: Sequoia's Aaref Hilaly and Lightspeed Venture Partners' Arif Janmohamed
Relationship: No relation. These VCs just think it's cool.
What it does: Confluent offers a commercial version of an open-source project called Kafka, a computer "messaging" system that handles bits of data computers send to each other.
Reason:"Ask any developer, and they will wax lyrical about Kafka, the open source distributed messaging system. The team behind Kafka left LinkedIn and created Confluent, an open core company built around Kafka which, along with others like Docker and MongoDB, are becoming the leaders among a new generation of open source companies," Hilaly says.
"The team invented Kafka, the leading streaming data platform and is commercializing it for the enterprise," adds Janmohamed.
VarageSale: a virtual garage sale with your neighbors
VC: Sequoia's Bryan Schreier
Relationship: VC is an investor.
Funding: $68 million
What it does: Take eBay and make it local. That's what VarageSale does: let's people buy, sell and connect with others in their neighborhoods.
Reason:"VarageSale unlocks local person-to-person transactions so anyone can buy and sell low cost items without friction. VarageSale's app is fun, fast, and engaging. And most of all, VarageSale's trusted community approach makes it the safest place to buy, sell, and be together on the Internet," Schreier says.
See the rest of the story at Business Insider
San Francisco residents sometimes say things along the lines of, “It’s too expensive here already. Tech companies should move somewhere else that’s cheaper. After all, it would be better for their bottom line.”
And it’s true, in some ways. It would be better, for example, for the tech startups of Silicon Valley to decamp for Silicon Hills or Silicon Lakes or Silicon Upstate or what have you. There’s no fundamental reason why a tech startup must be headquartered in the Bay Area, the way a mining operation really does need to be situated by a quarry.
There’s no such thing as a landlocked fishery, but apps can be made anywhere. San Francisco’s proximity to Burning Man is a plus for the tech industry, but it’s not good for anybody.
It’s easy to tease out all the ways that breaking up Silicon Valley would boost the fortunes of everyone involved. NIMBYs could declare victory, of course. Venture capitalists might warm up to the idea of investing less directly in the Bay Area’s high housing costs. Cities across the country would risk an awful lot to lure startups to relocate.
Look at reality, though, and the opposite trend is true. Competition is driving up prices for housing and commercial real estate alike in San Francisco, San Jose, and other hot Bay Area markets. Companies such as Apple, Google, and Facebook are entrenching, turning to high architecture to make their marks on the suburbs of Silicon Valley with elaborate corporate campuses.
Bloomberg reports that Facebook will pay its workers $10,000 to live close to its headquarters in Menlo Park. This might draw some teensy bit of pressure off San Francisco home prices, take a tech bus or two off the road, and produce more efficient workers for Facebook. But note that venture capital is essentially paying to correct the strange setup whereby workers live in a tremendously expensive urban hub but commute to a very expensive suburban office park for work. Worse still, as Bloomberg reports, this correction isn’t especially workable for other companies for tax reasons.
There are reasons that Snapchat* doesn’t pick up and move to Cleveland. Most of the reasons tech stays put boil down to “path dependency”: It’s a lot easier for companies to find and recruit new employees if they all work and socialize in one small geographically bounded area. The same goes for sharing (and stealing) new ideas. It seems strange to think about something like the Internet as a localized resource, but to a limited extent innovation does work that way. Plus, San Francisco is very nice. People want to live there.
But the costs of the entire industry insisting on working in one place are enormous. A study by Zumper has claimed that for every $1 billion in venture capital that pours into a local economy, rents rise by between $69 and $99 per month. There are problems with this study, namely that it doesn’t account for zoning regulations. Pouring venture capital into a locality where housing supply is low and zoning is restricted is going to raise rents more than in some other place.
Put another way: Tech startups that insist on operating in the Bay Area, and that’s a lot of them, are going to require more money. High housing costs dig into worker salaries. Workers either have to suck it up and pay those costs or live further away from work, which leads to longer commutes and lower productivity.
There’s a chicken-and-egg problem here: Venture capital might be raising rents by making labor markets more attractive to workers. Startups are congregating in highly productive labor markets where housing prices are high and rising, meaning that more VC winds up in the hands of landlords. There’s no single reason why why it has to be this way, just a lot of justifications for why it is this way. Tech companies can leave Silicon Valley any time, but there’s no reason to think anything will change.
* Correction: Snapchat, an example first used for this illustration, isn’t based in the Bay Area. It operates out of Venice Beach.
Mondo is a London fintech startup that's looking at banking in a different way. It doesn't have branches, and its current account is controlled from a smartphone app that analyses spending and can be used to contact the company at any time.
You can't actually use a Mondo card yet, as it's still being alpha tested to make sure that everything works (you don't want your bank account to have problems).
However, we were given access to one of the alpha testing cards. Here's what it's like to use a digital bank:
Mondo invited lots of developers and startup figures to its office-warming party where it gave out the alpha cards.
Here's what the Mondo card looks like — just like a normal card. Pink is the only colour choice for now.
I stuck £50 on the card. You have to transfer money onto it from another account to get started.
See the rest of the story at Business Insider
Foursquare, once a mobile app that allowed users to “check in” restaurants and stores when launched with great fanfare in 2009, and “once one of New York’s hottest startups” as TechCrunch ominously calls it, apparently needs cash desperately enough that it’s willing to accept a monstrous haircut.
It already raised $162 million in prior venture financing and debt. We don’t know how much of it is left and how much it burned through. But it’s time to go back to the trough – under punishing conditions.
Perhaps it’s the sound of hot air hissing out of the startup funding bubble where billion-dollar valuations for companies with no business model and no revenues have become routine: investors are suddenly looking at them with a more critical eye.
Foursquare is “close to finalizing” a new round of funding that would give it a valuation of only $250 million, Re/code reported. When it raised $35 million in 2013, it did so at a valuation of $650 million. So this round would be a devastating 61% haircut.
At its peak in 2012, Foursquare raised funds at a valuation of $760 million. From that level, its valuation got slashed 67%.
Foursquare is also talking to potential corporate buyers, “sources say,” according to Re/code. “So it could still conceivably sell instead of finishing up the funding, which should raise at least $20 million and as much as $40 million.”
There has long been speculation that Yahoo would buy it as Yahoo has been buying just about anything in order to find something that might successfully distract investors from its own problems.
According to Re/code’s sources, “at least one new investor will participate in this round.” Among the prior investors are Andreessen Horowitz, DFJ Growth, Microsoft, Silver Lake Partners, Spark Capital, and Union Square Ventures.
This type of “down round” – where the current valuation is lower than the valuation at the prior round – is anathema to startup exuberance. All kinds of employee hopes, dreams, and stock options suddenly become worthless. Instant millionaire coders with plans of retirement at 30 are suddenly discovering that they’re working stiffs like everyone else, a sobering experience. Some investors lose their shirts. Founders, if they didn’t protect themselves adequately, might get trampled.
So why would a company do this? TechCrunch:
The current investment environment has led many startups to pack on the pounds to prepare for leaner days potentially ahead. At this juncture, the rewards of getting the money you need to grow outweigh the optics of a decrease in valuation.
But for people who own shares or stock options, down rounds go beyond mere “optics.” They can be devastating. But the “current investment environment,” as TechCrunch put it, is getting tough. Numerous startups have had down rounds. The IPO window has just about closed. Corporate buyers are getting somewhat more reluctant. Investors and employees see fewer possibilities to exchange their startup equity into real money.
Then there are company specific issues. TechCrunch:
Down rounds tend to show both a more conservative interest in the company’s core business, and potentially slowing growth for the startup. Foursquare, essentially, has to find a new way to impress investors with strong growth — which requires some rejiggering.
Have you heard people rave about how they “checked in” at a taco truck in recent years? Me neither. So the company tried to reinvent itself. In May 2014, it separated its check-in and location-sharing app Swarm from its local search and recommendation app Foursquare. In August 2014, it launched a new version of Foursquare that abandoned the check-in and location-sharing functions altogether to focus on local search. Other social networks with similar services have chipped away at its user base. And this split, according to TechCrunch, didn’t do much for its traffic.
Foursquare does have something of value: enormous amounts of user data. Yup, users just thought it was free. And it has some business and advertising services that leverage this data for predictive and other purposes. TechCrunch:
There’s a good reason why the Microsoft part of the story makes sense: It already has a relationship with Foursquare, for one, and as part of that deal it gained access to the company’s significant store of data.
In its last financing round, the deal will had Foursquare’s data contributing to the Bing platform’s location and context layers on both Windows 8 and Windows Phone.
And Microsoft figured out where the future moolah is: in user data. Hence, it tries to shove its flagship product, Windows 10, down your throat “for free” by spamming your Windows 7 or 8 desktop with unstoppable obnoxious popups several times a day, every day, apparently until you cry uncle, because Windows 10 gives it access to your data on your computer. And that is worth a lot more than the one-time sale of the operating system would have been. Your computer just keeps on giving. So investing in Foursquare data and data collection capabilities fits that strategy.
But since everyone is doing it, and since your data which you thought was yours is being commoditized, the value of it has been shrinking. And this coincides with what TechCrunch called the “current investment environment,” where some aspects of reality are beginning to reassert themselves.
Turns out, the party is over in startup land: What is now called “pent-up supply” of IPOs meets a world with no demand. Read … IPOs Collapse, “Worst Year Since 2009,” Worst Dec. since 2008
What's holding back European tech?
The ecosystem on the continent is booming, but it's still small fry compared to the US scene. Research from GP Bullhound in June 2015 pointed out that Facebook alone is worth twice as much as every single European "unicorn" (a startup worth $1 billion or more) put together.
Everyone has their own pet theory for this disparity. Some point to the lack of venture capital funding available to help startups grow; the gap between funds raised by American and European VC firms is as high as six-to-one.
Others blame Europe's fragmented markets, which force companies to deal with dozens of different languages and regulatory regimes — something the EU's "digital single market" aims to help fix.
Sebastian Siemiatkowski, the CEO of one of Europe's big tech success stories, doesn't think any of these things are the key issue.
To him, the biggest issue facing European tech and entrepreneurs starting out is simple: "Bad advice."
"Who do you learn from?"
Siemiatkowski is the founder and CEO of Klarna, a Swedish payments company. It was founded in 2005, and offers merchants an easy way for customers to buy things with a single click — without even having to enter their card details. Since then it has grown into a multi-billion dollar business; in its most recent funding round, in August 2015, the startup was valued at $2.25 billion.
Business Insider sat down with the entrepreneur at WIRED's Retail Conference in London recently to get his perspective on the challenges facing those trying to build a business in Europe.
"If you're one arrogant person, who doesn't listen, I have a low likelihood of you being successful," Siemiatkowski says, "because learning is part of that core es sense of what entrepreneurship is about. So what's crucial is: Who do you learn from?
"And the huge advantage San Francisco has is that if you have the slightest level of talent and you have some interesting ideas, you are so quickly through that network going to be connected to individuals who have done this a couple of times before. While in Europe, you have such a high risk of stumbling into somebody who claims they know stuff or whatever, but have never been part of a true growth story."
He continues: "There aren't many growth stories [in Europe]. So what you're going to end up with — because every entrepreneur is honest, moderate, and listening — is they're not going to recognise that they're going to sit and listen to this poor advice for a couple of years before they realise this was really bad advice, right."
"There's starting to be a network of older people that have been [there]"
Has Klarna been affected by this problem? "Oh absolutely." The company has some great startups and mentors over the years ("there's still stuff [one mentor] said that I'm like 'oh f**k, he was right!' seven years later"), but some shoddy ones too.
"We definitely had some people that advised us on technology and other stuff that I just should not have listened to. You were searching — you know, it's a youth thing, you're out there trying to get someone to guide you — and someone sounds very convincing and has this great CV on LinkedIn. And you're like 'oh my god, I've got to listen to him,' even though your gut feeling might tell you actually I don't think this makes sense ..."
This is, Siemiatkowski says, less of an issue than it was — especially in established startup hubs. But it's certainly still something to be wary of. "It has changed, you can definitely see in London and Berlin and Stockholm — which to me are the three cities that have had some success — [there's] some kind of ecosystem ... Now there's starting to be a network of older people that have been [there] ... that have had a couple of success stories and now connect to this next generation of startups and can really help them and give some advice.
"Actually, I think that's more important than the money issue, and all the other stuff that's being debated — access to talent, all that stuff. We hire 50% of our people not from Sweden but outside, we hire tech people from all over the world. Of course it would be easier in San Francisco, but that difference isn't the major one. The major one is that you have mentors, people you can talk to. "