Do UK tech companies need Silicon Valley?
Joshua March, co-founder and CEO of Conversocial, joined this year’s WebMission 2011 trip to the heart of the web 2.0 scene, Silicon Valley. He describes the experience.
Standing in a luxurious San Francisco mansion surrounded by the ‘Silicon Valley elite’, it’s easy to believe that this small valley is the centre of the entire web 2.0 universe. This affluent group of entrepreneurs have made a name by creating and investing in numerous fast-growth global companies, and being able to talk to and take advice from such people is an invaluable opportunity for any ambitious tech entrepreneur.
Relaxing at the party were the likes of Dave McClure, the straight talking founder of 500StartupUps, serial investor in many of the most exciting new web businesses, including Mint.com; Max Levchin the phenomenally intelligent co-founder and CTO of PayPal and Slide – recently acquired by Google; and Philip Rosedale, founder of virtual universe Second Life, which has created several real millionaires selling digital goods.
The party was hosted by Michael and Xochi Birch, the UK founders of Bebo, which they sold to AOL for $850m. It was part of WebMission, a tour of Silicon Valley investors, partners, press and customers for a set of 18 fast-growing UK based tech start-ups. Partly sponsored by the UK government, the trip included visits to Twitter, Salesforce and Microsoft, amongst others, and was designed to help build networks and relationships across the Atlantic.
The trip was definitely some kind of pilgrimage to the holy land of web 2.0; but that doesn’t mean the entrepreneurs are just waiting for their chance to relocate. Most of them already have thriving, growing businesses in the UK – and any future US presence is more likely to be a sales and marketing office to help grow their customer base than anything else. In fact, although the valley certainly has all the biggest consumer social sites – Facebook, Twitter, YouTube – when it comes to businesses serving enterprise, London is more than standing on its own feet. A number of the companies on WebMission are leading lights in serving business needs in the new world of social media.
On the Sunday morning after we arrived, we were hosted for brunch and cocktails by Susan Best, of Best PR – well known for handling all the early PR for Craigslist. One of her more recent clients is the US based Klout, that works out the influence ranking of people on Twitter – useful for companies to identify influential customers (or potential customers). Klout’s founder, Joe Fernandez, got to clink glasses with Azeem Azhar, the founder of WebMission company PeerIndex, which is hot on their heels. PeerIndex works out influence within peer groups or industry, for example recently working out who were the most influential investors in the UK for the Telegraph Start-up 100.
On Tuesday, we were hosted by the hugely influential technology blog Techcrunch. This was a great opportunity to meet their journalists, including Sarah Lacy who recently published Brilliant, Crazy, Cocky, a book about fast growth entrepreneurs in developing countries. She got to swap stories with Lucian Tarnowski, founder of UK based Brave New Talent – a rapidly growing recruitment company focusing on building up connections between companies and talent through social media – which already has an office in India, and is well connected to Indian businesses and entrepreneurs.
In the end, WebMission was a great week of huge value to all participants. The relationships forged with press and partners in the valley will help the companies on their quests for global domination, and the friendships formed between the WebMission companies themselves will last for years. All of us have come back to the UK full of excitement.
WebMission shows that the UK’s start-up community is growing in stature. However, it is still missing one of the defining characteristics that has led to the success of Silicon Valley: the ‘Silicon Valley elite’. These experienced entrepreneurs, rather than retire to some big country house, keep starting companies and actively investing and passing on their knowledge on to new entrepreneurs. They provide a ready source of money and experience to start-ups that are too early for traditional venture capital investments, something that is very hard for entrepreneurs to get anywhere else in the world.
Despite all the noise about the fast growing technology hub in east London, it is this smart, seed-stage money that we really miss. There are a few entrepreneurs starting to buck the trend – Max Niederhoffer, one of the WebMissioners, was a successful entrepreneur turned venture capitalist. Since then, he has created a new start-up – Qwerly, a leading B2B social media business that provides data on the connections between social accounts – and is actively investing and advising other entrepreneurs. Maybe, in a few years, the WebMission alumni will be some of the first ‘east London elite’?