Technology policy is increasingly pitched as a zero-sum game: where London wins, it must do so by stealing startups and talent from Silicon Valley, New York, or Tel Aviv – or so conventional wisdom goes.
But that might be a needlessly combative attitude, according to a partner at one of Europe’s leading venture capital firms.
Saul Klein, a partner of Swiss venture capital firm Index Ventures, says that the best-placed tech firms are increasingly international from day one. They’ll launch an office in a second country before they’ve even left the co-working space they were founded in.
“The best entrepreneurs tap in to any and all” of the various ecosystems, from London to Tel Aviv and San Francisco to New York, Klein says.
“If you’re starting a company in Copenhagen, like ZenDesk, those guys got on a plane and moved to San Fransicso. And now they’re a $1bn company. You have other companies like Criteo, probably one of the most successful tech IPOs in the last ten years: they grew up in Paris, moved to the UK, moved to the Valley, moved to Japan, and now they’re a multi-national doing business across the board.
“I think the best companies take a journey that taps into this global ecosystem.”
Klein’s comments contrast with those of policymakers, who are focused on building the capital up as the best place to start a business.
In 2013, Boris Johnson launched the Million Pound Startup competition, aimed at enticing promising businesses to London. Described as “a new, groundbreaking global competition to bring a high-growth technology company to London”, it offered £1m to the winner, as long as they moved their HQ to the capital.
But by this year, the competition had been abandoned, with one judge admitting that “In the end it proved difficult to find companies that had both the right level of ambition and could stand a valuation for £2m-£10m.”
For Klein, London is already a big enough player to stand as a necessary part of any company – but it’s silly to try and compete with Silicon Valley on its own terms.
“Talking about the Bay Area, there’s more capital, there are more corporate clients, there are more forward-thinking academic institutions, there’s just more of everything, in orders of magnitude. It’s been going for 60 years and I can’t believe that that’s necessarily going to change in my lifetime, or even my children’s lifetimes.”
But just because everything in San Francisco is bigger and better, Klein cautions against start ups “jumping on a plane” in the hope that “money falls from trees”. “There’s more money, but more people going after it. The standard to which those people are held is as high – if not higher.”
Index Ventures started in Geneva in 1996, before expanding to London and San Francisco. The firm has been an early investor in firms such as Dropbox, Etsy, and Skype, where Klein himself worked shortly before joining the venture capital firm.
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