Entrepreneurship in Europe

August 1, 2006

VentureBlog is discussing the business ecology necessary to support a startup, and whether such an ecology could be fostered in Europe. I’m intrigued by the comment at the end “Amsterdam … may just succeed while London isn’t looking.” Which reads to me as assuming that London has pole position in European startups, possibly a natural assumption for an American to make, as London is the financial centre of Europe, and is English speaking.

I suspect London’s role as a financial centre will prevent it ever being a start up centre. In London hacker types are drawn into banks to work on trading systems by the excess remuneration. Start ups can’t compete on salaries. Consider New York: all the coders are working on Wall St.

Fortunately the UK does have start up action outside London. Cambridge is the centre of a lot of activity in the business park & MS Research has an office there. Autonomy and ARM are recent Cambridge success stories. The Thames Valley hosts a lot of software activity too.

I wonder if this is invisible to the US VC mindset because so many of the UK companies are focused on verticals. ARM and Autonomy are exceptions in cutting across sectors and having the horizontal reach and scale that generate really big pay offs. Before I worked in finance, I spent several years with UK ISVs that were world leaders in mechanical engineering and petroleum production software. They were more typical of the UK start up scene. Both were businesses founded in the 80s.

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