Entrepreneurial culture: A tale of two cities
Stephen Rockman on why the UK is not creating the right ecosystem for entrepreneurs – and what needs to change
I’m at ITU World in Geneva where there’s a terrific group of young entrepreneurs from around the world who competed to get here: they are all optimistic, passionate about their ideas with a deep hunger for knowledge and guidance but above all displaying surprising maturity in terms of the investor give/get and the hard work required to secure investment.
Meanwhile back in London and the UK we’re in danger of producing a generation of McDonald’s entrepreneurs: mass produced, uniform mediocrity. Thanks largely to the charade that is Dragons’ Den, we have entrepreneurs who think that three minutes of TV fame counts for something; that a smart quip is a substitute for detailed insight and that there’s no need to build relationships with potential investors (OK, the ‘I’ll-kick-you-round-the-room-the first-time-I meet-you-to-show-how-clever-I-am-because-I’m-a-dragon’ approach may be partly to blame for that).
The ecosystem that should support and nurture successful founders is multi-layered and complex yet once again in the UK we’ve embraced an American idea without grasping the detail and nuance.
So we have early-stage investors with no symbiotic feel for start-ups; government websites trotting out start-up advice that’s trite nonsense and a generation of entrepreneurs who think Evan Davis is the gatekeeper to untold riches. Whichever way you look at it, UK entrepreneurs need help.
I’ve come to realise that in order to overcome these challenges (which are amplified in the social and impact sector because of its relative lack of maturity) we need to start building earlier relationships with potential entrepreneurs and prospective investees. In addition to providing seed investment, we also need to seed knowledge and experience.
Paul Graham recently wrote that successful early-stage incubators are dependent, not on the availability of cash and investors, but on the establishment of a community and an ecosystem where talent and money intersects. Hub Venture Labs is just such community. A huge space for collaborative working in the heart of London that nurtures and supports social and impact entrepreneurs where we’re able to plug in a year-round schedule of incubator and accelerator programmes underpinned by deep dive educational courses. Where the community itself also becomes a platform for discovery and crowdsourced due diligence thereby increasing deal flow and reducing investment costs.
To achieve our target of engaging 300 entrepreneurs and founders in the first year we’re building deep partnerships with universities and other incubators to grow the community and develop content. We’re already up and running: Village Capital is a proven incubator programme in Europe which relies on peer selection for its two £50,000 prizes and so impresses upon its participants the importance of peer networks and agility.
In January, we’ll start a night school course based on Goldsmith’s MA in Social Entrepreneurship aimed at encouraging more people to consider becoming entrepreneurs. And we’ll shortly be announcing a programme to ‘train’ angel investors so that we expand the pool of smart money available for social ventures.
While the basic mechanics of early-stage investing are simple, cash plus an appetite for risk, I’m now convinced that, in order to address the scarcity of great entrepreneurs, investable businesses and serious early stage-investors, learning and community must become the focus.
Teaching not testosterone will empower and equip a new generation of entrepreneurs; we need to help them appreciate that relationships are the difference between success and failure, that it’s a long haul not a three minute reality TV slot and that integrity, ambition and a desire to learn are paramount. And the same goes for investors.
Stephen Rockman is the founder of Merism Capital, the UK’s only seed investors in social businesses, and co-founder of Hub Venture Lab, a joint venture between Merism and Hub Westminster, the first year-round incubator in Europe for social and impact entrepreneurs.