Taking Risk

https://tomblomfield.com/post/750852175114174464/taking-risk

by gatesn • 2 years ago

209 293 2 years ago

tomblomfield.com

osullivj• 2 years ago

US has more hi wealth families that can support startup kids, like Gates, making learning by failure more practical.

yobbo3• 2 years ago

Not only this, but failure has consequences socially and professionally.

Startup founders are seen a little bit like fortune seekers ("gold diggers") in that they seek fortune without "having to work". Of course it depends on details and context and so on.

Failed startup founders are seen like bankrupt gamblers, unless they were previously wealthy and could afford to absorb the losses.

davedx9• 2 years ago

Citation needed? The UK certainly has plenty of upper-middle class families. This is nothing to do with family wealth and everything to do with business culture.

varjag2• 2 years ago

The UK is a class society much closer in nature to East Asia than the United States. Wealth accumulation is still to a great extent occurs along the stratified classes and they ain't sending their kids to engineering schools.

petesergeant2• 2 years ago

I have degrees from two of the universities he mentioned, and am currently in the process of raising. He says both:

I don’t think it’s any longer about access to capital.

but also:

many UK investors take an extremely risk-averse view to new business - I lost count of the times that a British investor would ask for me a 3 year cash-flow forecast

Which I think are in conflict.

I feel like my biggest take-away from doing an Entrepreneurship degree at the UK university with probably the best startup ecosystem was: "you'll get a much bigger valuation raising in the US", and while I have some connections that mean I will shop around in Europe and the UK, I am going to spend most of my energy raising in the US. I'm highly mobile and not especially bothered where I have to live to get this done.

lordnacho4• 2 years ago

I think this is the answer. Ambitious people in the modern startup world move to the US, because that's where the ecosystem is.

It's like asking why do the best Brazilian footballers move to Europe.

artemonster• 2 years ago

I think the article also avoided a huge topic about risk averse companies that are your customers, if you are b2b. In US, if you are a young startup, and your solution can save huge amounts of money, you will get your chance to make your pitch to "big guns", as their incentive structures allow them to take risks and reward them, i.e. "here is % of these millions you saved integrating this new solution".

In Europe the old rusty impotent gray-haired managers wont even listen to you, even if you offer them a goddamn magic bean or a money printer machine. And why would they? They risk a lot and gain almost nothing, as there are no reward structures that incentivize risk in any shape or form.

davedx9• 2 years ago

In Europe the old rusty impotent gray-haired managers wont even listen to you, even if you offer them a goddamn magic bean or a money printer machine. And why would they? They risk a lot and gain almost nothing, as there are no reward structures that incentivize risk in any shape or form.

I don't know if this is true or complete hyperbole? (I'm from the UK and live in the Netherlands; I've pitched several businesses and startups to European "impotent managers"). It's true that enterprise sales is hard, and some business cultures are definitely trickier than others (Germany!), but there are plenty of thriving B2B startups in Europe.

colesantiago2• 2 years ago

The UK isn't really known for being an ambitious nation when it comes to the startup ecosystem.

For jobs, unless you're working in finance in London, for tech salaries (except for FAANG) it is simply no surprise that it is so low on average [0] that isn't even worth it.

What is more damning is that I saw an internship in the US earn more than a job posting of Head of Cyber Security at the HM Treasury which is $50-57K yr (senior level)

Doesn't matter if you went to the golden triangle of universities, it is much better to get a remote job in the US. each time.

As for startups, in the UK there is almost no connections here for VCs, angels or any investment network this might have changed in the few years but you would have to squint hard to find them.

[0] https://www.glassdoor.co.uk/Salaries/london-tech-salary-SRCH...

DeathArrow13• 2 years ago

The UK isn't really known for being an ambitious nation.

They've ruled the seas and half of the earth for centuries. They've ruled commerce and industry for centuries.

Isn't that a proof of ambitions?

hnhg• 2 years ago

Why did you forget the rest of the sentence, "when it comes to the startup ecosystem?"

colesantiago2• 2 years ago

Not when it comes to startups, besides the UK keeps going on about what they have done in the past.

So, why hasn't this translated to trillion dollar companies in the UK?

snapetom• 2 years ago

Yes, but what have you done for me lately?

Certainly Britain’s imperial history speaks for itself. However the last 25+ years of tech startups has shown us the psyche has changed.

red_admiral2• 2 years ago

The UK isn't really known for being an ambitious nation.

Industrial revolution? Railways? An empire on which the sun never sets? (Ollivander voice: "evil, yes, but ambitious").

Sure, things have gone downhill since then.

roenxi2• 2 years ago

We don't judge nations in the present based on their historical peak. The UK hasn't been capable of building anything like that for more than a century; the hammering the Germans gave them was really exposing weaknesses that were already starting to set in from the 1910s.

The UK is no longer known for being an industrial leader. Or indeed for achieving anything in particular except fading away with a certain gracefulness.

surfingdino3• 2 years ago

Wealth in the UK is in the hands of the landed gentry and getting investment is about who you know and who your parents were. I worked for a number of London startups and the CEOs were surprisingly often public school/Oxbridge trust-fund grads (you learn to recognise them after a while) and always part-funded through some gov grant, one even openly admitted that his startup doesn't need to make money, because his dad is an investor in the startup incubator they were a part of. The HR lady was married to a City lawyer and spent more time collecting artworks for their house than dealing with pesky distractions like paying people on time. London is great if you are of the right pedigree and want to set up a bank, an insurance company, or a payment processor. Not so great if you want to copy Silicon Valley. I tried to get people interested in projects I worked on and there is zero of the US enthusiasm or trying to connect you with the people who might be able to help you.

agjmills• 2 years ago

Whilst I dont want to defend the relatively low compensation for public-sector jobs in the UK, it is more nuanced than just salary.

In this case, it was actually a salary of £50,550 - £57,500, so total compensation of around £75k (circa $95k), as the pension scheme is in the order of 30% of your salary. Then there's the usual US vs UK medical cover and vacation allowances.

It's still a way off, but the gap is smaller than you think when you crunch all of the other benefits into a single number.

dagw• 2 years ago

as the pension scheme is in the order of 30% of your salary

Honest question, as I have no idea, but don't US employers also offer pension schemes that they pay money into, on top of the listed salary?

rwmj2• 2 years ago

The expected returns from "want[ing] to go and work at companies like McKinsey, Goldman Sachs or Google" are both greater and more certain, so perhaps the individual young people are acting quite rationally in the UK?

For context I spent years in my 20s doing start ups in London, and undoubtedly would have been better off financially now if I'd worked for some soul-sucking consultancy instead. I do agree with him that raising money in the UK is quite hard.

GeneralTspoon• 2 years ago

The expected return of working for Big 4 in your 20’s is a coke habit

Aerbil3132• 2 years ago

I don't get it, can you explain?

blitzar2• 2 years ago

The expected return of working for Startups in your 20’s is a heroin habit

dan-robertson8• 2 years ago

Yeah, but I think it’s also true in the US (even more so as pay from the non-startup careers is higher). Maybe one should ask why it’s so much more common to do the irrational thing in the US than the UK.

rwmj2• 2 years ago

Could be house prices again. You really cannot survive on ramen and hope to live anywhere close to London. I know that SF is not good either, but the US does have other cities with less of a housing crisis.

mike_hearn6• 2 years ago

Remember you have to normalize for population size. And when we say the US we really mean one small part of it. People in the US often move to California to start their startups, they don't necessarily stick around in the part of the US they're currently in. This is largely due to the VC ecosystem there which makes "irrationality" relatively safe vs everywhere else in the world where it doesn't. Tom's article makes this crystal clear when he says:

The downside of early-stage investing is that you lose 1x your money - it’s genuinely not worth worrying much about

The only potential downside is only losing all your money, what kind of stick in the mud would care about that?

So anyway, we might ask why is the VC ecosystem so much stronger in California than in the UK. But a lot people don't like to think about that because the answer is so obvious: in the 70s when Silicon Valley was getting established and the flywheel of founder->startup->success->sale->VC->founder was spinning up, the UK was mired in socialist hell with rotating power outages, militant unions toppling governments, four-day working weeks and an IMF bailout. At that time making a startup was entirely pointless and a VC fund literally impossible, because the top tax rate on investment gains peaked at 98%. You could invest in startups but the deal presented by Labour was: if you lose money you lose it, if you gain money you still lose it.

Thatcher and then Major beat back some of the most extreme aspects of this, and in this period the top level tax rates were systematically reduced to more normal rates. But Britain of the 1980s was still drastically more investor-hostile than the USA and there was no venture culture as a consequence. In particular the practice of granting equity in startups was not really known (notable exception: ARM, one of the few successful tech startups the UK has ever produced).

Even today British governments routinely levy so-called "windfall taxes" to grab the profits from companies that are doing well, the moment they have an opportunity to do so politically. That culture gap is ultimately the major difference. The idea of a windfall tax in the USA is hard to imagine, I'm not sure it's ever happened.

PeterisP3• 2 years ago

A key part is that in US you take less risk because investors are taking more risk - as described in the article, in UK the conditions you'd get for early funding push more risk towards the founder as most UK investors simply won't accept as much risk as US investors routinely do.

DeathArrow13• 2 years ago

It would be more interesting to not consider just US and UK, but the whole world.

Lots of new startups might come from Asia. Eastern European startup scene is interesting, also.

hedgehog02• 2 years ago

May I ask which countries in east Europe would you consider to be good and convenient, esp for foreigners (non-EU)? When I visited Budapest I like it there, but don’t know much about the tech scene.

varjag2• 2 years ago

Poland had a dynamic startup scene for a while, and it was enegrized even more when basically the whole IT sector of Belarus had to relocate there.

One caveat is you're not going to see the level of exits that is possible in the United States, but the talent is there.

sofixa5• 2 years ago

Estonia and Bulgaria both have good English speaking levels, decent visa schemes, low and flat taxes, very good in the case of Estonia and maybe getting there in the case of Bulgaria government digital services, and lots of people in tech (so hiring shouldn't be a problem if you can provide good salaries).

Also, Romania, Poland have good reputation in this space but I don't have any direct experience with them.

DeathArrow13• 2 years ago

In Romania there are many expats working in Tech. Most young people speak English and the price level is pretty low while the taxes are flat.

I would also say Estonia.

simne• 2 years ago

Eastern European startup scene is interesting

There something weird happen.

Ukraine, poorest country in Europe, before war few years generated at least one unicorn per year, and none unicorns from Poland happen these time.

red_admiral2• 2 years ago

There's the risk aspect and the regulation aspect. Personally I think there's something to be said for a country where your car can't collect data on your trade union membership and sex life and pass it on to your insurers. (The UK is no longer in the EU so it's not technically subject to GDPR anymore, but they "forked" that law when they left and it's now called the Data Protection Act (DPA).

xnorswap2• 2 years ago

It's worth noting that's Data Protection Act (2018), there was also Data Protection Act (1998) which predates GDPR and had many of the same laws. People outside of the UK only started caring when a regulator with enough teeth (and penalties harsh enough) took notice, but data protection has been a requirement in the UK long before GDPR and should hopefully continue long after it.

OJFord• 2 years ago

No, the Data Protection Act (2018) is just the legal instrument which sets out the (UK) GDPR. It is 'technically subject to GDPR anymore', it's just a different one (with essentially if not entirely the same contents).

M2Ys4U• 2 years ago

No, the Data Protection Act (2018) is just the legal instrument which sets out the (UK) GDPR.

That's not right either.

The GDPR is law because it's an EU Regulation that was made while we were part of the EU, and it became UK law automatically when it was passed, as regulations do.

The Data Protection Act 2018 augments the GDPR, but the GDPR would be the law of the land with or without the DPA.

reedf1• 2 years ago

I considered a startup after university in the UK. The talent arbitrage is absurd, physics grads with 1sts from top Russell Group unis fighting to be paid £30k/yr. For me it came down to security, life is expensive, rent is expensive. I didn't have a spare parental garage to setup five computers - I barely had room in my flat for one desk. I barely had money for that flat let alone internet, and food. I had zero capital, as in literally zero. The plan was to get an entry level job to provide some base line, but that base line never really provided enough life security that I felt comfortable leaving the system once I was inside it.

Guthur• 2 years ago

This is it exactly, it's the cost of capital and living that is the problem.

If our countries had control over their own capital and provided utility at cost the economic development would be easy. Instead we're charged monopoly rents for everything from water to electricity, taxed to oblivion and charged horrendous usary on all capital.

oblio11• 2 years ago

The talent arbitrage is absurd, physics grads with 1sts from top Russell Group unis fighting to be paid £30k/yr.

That much?!?

I'm joking, but I've always wondered with FAANG never set up large R&D centers in Southern Europe. They have good universities and salaries are extremely low, even lower than in the UK.

Plus good weather & co. The actual Mediterranean climate :-)

dan-robertson8• 2 years ago

Presumably because an ambitious young person in southern Europe would rather move somewhere like Zurich for higher pay rather than getting paid less in southern Europe? Who are those R&D centres going to end up hiring?

leoedin• 2 years ago

The low salaries are a double edged sword - the talent is cheap, but the kind of people who might start a company are unable to build up enough savings to take the leap. It's partly due to low salaries, and partly high housing costs.

It's crazy that politicians on all sides talk about growth, but then consistently do almost nothing to address the single largest thing that's sucking the life out of 20-30 year olds.

Saying that, it's clearly not the only cause as housing in SF and NY is also really expensive.

Aeolun2• 2 years ago

Just making housing cheaper would do so much for peoples ability to take the leap.

Nextgrid• 2 years ago

then consistently do almost nothing to address the single largest thing that's sucking the life out of 20-30 year olds.

They & their friends are literally profiting off it. Why would they kill their cash cow?

High housing costs is great for them - not only do their real-estate (& adjacent) investments go up, but a middle class perpetually in debt or barely able to make ends meet means there’s an infinite supply of cheap labor that won’t complain about terrible working conditions.

Aromasin4• 2 years ago

I'm in the same boat. I've been chasing my tail for the last 6 years, just trying to keep my head above water financially. I'm a computer hardware engineer so the pickings are slim to none outside of the military-industrial complex, which pays shit outside of sales and executive management. Ended up at one of the big US semiconductor companies where I got paid 1/3rd of what my peers in the US earn, with similar expenditures. A starting salary of £26k... Barely broke £34k, plus a couple of grand in stock each year during my time there, while my US colleagues doing the same job get paid $120k+. That's with a good master's degree from Bristol, which is relatively prestigious.

I'm sure if I moved to London and focused on software engineering I could make more, but that shouldn't be the only route to wealth in this country.

I've spent so long trying to build out a minimum viable product in my spare time, so I can make my start-up dream a reality, but going through integration hell needs to take up all of your time, every day, for a long time, to get through the hurdles in any meaningful time frame. Every time I go back to it, I feel like I'm back at square one. 6 years of saving and I have zero runway to take this full-time to give it the time it needs.

What's embarrassing is that I discussed this with my colleagues, and they didn't quite fathom how fucked it is for young engineers in this country until I had the conversation with them. I was getting the same salary now as my mentor did when he was my age; in the early '90s. Wages haven't just stagnated. When adjusted for inflation, they shrank massively. That's not even considering the £60k of student loan debt I get hammered by every month.

robertlagrant6• 2 years ago

I honestly think if you asked the average Brit on the street what an engineer was, they'd say "it's someone who MOTs your car".

dan-robertson8• 2 years ago

Is a ‘computer hardware engineer’ different from a ‘hardware engineer’? I think of a ‘hardware engineer’ as someone who works on the development of ICs (or things on FPGAs). I would guess that people in such a role are paid a lot less than software engineers (at comparably sized companies) in the US, and a bit less in the UK (though maybe with more variance). But the numbers you give are lower than I would expect for eg ‘hardware engineer working at Arm/Qualcomm’. There’s also hardware engineering in finance, which can pay well, but not a lot of it.

K0balt3• 2 years ago

I have a question.

What if there was a place that you and a few colleagues could go where you could have your living space and office space provided, basic food served, and basic amenities.

Such a place would probably be somewhat isolated and probably not in your own county. If such a place existed that catered to founders in exchange for minimal equity, is that something that would interest you, theoretically?

gampleman2• 2 years ago

As an immigrant to the UK I'm continually surprised on how poor life here actually is. The main culprit in my mind is the atrocious cost of real estate. Not so much in how much money it takes to buy a house - those costs can be comparable to other countries, but on the ratio of post-tax salary pound per square meter. Most of the real estate in the UK is very small, both in outdoor space as well as in indoor proportions.

In the US middle class housing often provides fairly large indoor spaces where multiple people can collaborate, as well as things like garages and large-ish lawns, these things are much rarer and more expensive in the UK.

This makes it much more difficult to have a space for multiple people to effectively collaborate on idea "for free". Sure, you can hire a co-working space, but that requires already some form of financial commitment.

throwaway20378• 2 years ago

    > As an immigrant to the UK I'm continually surprised on how poor life here actually is.

Why do you stay?

matwood• 2 years ago

The UK is a giant version of the Cayman Islands. It's a big bank providing financial services to rich people while keeping them anonymous. Everything else is secondary. And Brexit only made it worse.

uxcolumbo• 2 years ago

That sounds depressing af.

Do you see a way out? If so what is it?

buynlarge2• 2 years ago

On the other hand, the UK is one of the safest countries in the world, is full of kind people, has a general abundance of food, gives workers a relatively large number of days off in a year, has a functioning police force and takes care of sick people and those who can't work for whatever reason.

Of course it is not perfect.

The people of Britain may not have huge bank accounts, but this is partly because they collectively spend their earnings on the worthwhile things mentioned above.

pyb• 2 years ago

Exactly my personal experience. The talent arbitrage for £30k physics grads is real. But it's hard to take advantage of when you are that physics graduate, and can't build up any serious savings.

ggm2• 2 years ago

Bankruptcy laws and social mores massively different.

In the UK to go bankrupt is to be painted with indelible red shame dye. In America... going bankrupt means you are closing out the book on one failure to try another.

sofixa5• 2 years ago

In the UK to go bankrupt is to be painted with indelible red shame dye

Is it? Do people generally know when someone (personally, or in this case, since we're talking startups, their company) goes bankrupt?

heavenlyblue• 2 years ago

People don't know but bankrupcy bans you from openning another company for about 10 years I believe.

xnorswap2• 2 years ago

It comes with an inability to do lots of things for 6 (I think?) years, including things like not having an overdraft and more importantly to this conversation, prevents being a director of a company.

yobbo3• 2 years ago

Your future employer, friends and family will know.

People in general don't keep track of other random people.

ggm2• 2 years ago

perhaps I reflect views of times past. C.P. Snow's "strangers and brothers" series of books starts with Lewis (the hero) as a child, bearing the burdens of his fathers bankruptcy and the implicit expectation he will work life-long to repay the debt, which he rejects. Shock! Horror! -Thats a 1940-1970 series.

It's a common trope in fiction: to be bankrupt, to fail in a business endeavour is to acquire shame and disgrace in society.

If the 40s is too far back, John Le Carré has used it several times as a back plot driver for characters across his books, no doubt reflecting his own experiences as a child of a fraudster and serial bankcrupt. He was writing actively into the modern era.

Obviously I'm not saying there is a literal colourfast red skin dye reserved for failed businessmen: Societal expectation is a stupid social construct, not law.

dukeyukey5• 2 years ago

I can't speak for VCs, but at least in a social sense, if a friend of mine went bankrupt after a failed startup, I honestly don't think I'd even remember? Like I just wouldn't care.

davedx9• 2 years ago

I think you're mixing up personal and business bankruptcies

switch0074• 2 years ago

They are. And bankruptcy doesn't apply to businesses. They go insolvent, not bankrupt.

Honestly the amount of incorrect information in this thread about the UK is quite disappointing, especially as most of it can be corrected with a quick Google search

monsecchris• 2 years ago

Why bother starting anything in the uk, the taxman will just take any proceeds. The moment I get an opportunity to move to the USA I’m heading over there to continue my business.

toast0• 2 years ago

USA has taxes too.

Aerbil3132• 2 years ago

https://en.wikipedia.org/wiki/Windfall_tax

darkstar_16• 2 years ago

The post is about the UK but I suspect it is the same in most European countries. Startups just don't make sense financially.

dukeyukey5• 2 years ago

Ironically, it probably applies the least to the UK out of basically anywhere worldwide beyond the US and maybe China.

Shrezzing3• 2 years ago

I don’t think it’s any longer about access to capital

The link provided as proof for this comment is Wayve receiving a $1bn injection from Microsoft and Nvidia [1].

The $1bn raise is not the concern of a budding 23 year old graduate leaving Imperial/Cambridge/Oxford. They're looking at the first £100k capital to see them through the first few months. In the UK, the scene for the first capital injection is far weaker than in the US, which has an inevitable downstream impact.

[1] https://www.bbc.co.uk/news/articles/crgypzg4edvo

thom• 2 years ago

Been a while since I was in this position but that first £100k used to be a cakewalk. SEIS made it almost a no-brainier for any high net worth individual to invest in startups.

Shrezzing3• 2 years ago

The challenge in the UK at the moment is connecting willing high net worth individuals with entrepreneurs. Even with the tax incentives, and the relatively good incubator-ish organisations like Eagle Hub, there's some enormous disconnect between viable ideas and timely capital to execute on them.

petesergeant2• 2 years ago

SEIS made it almost a no-brainer

and it still should, as I understand it. On a £100k investment that the business loses all of, the investor gets £75k (£50k tax relief + £25k-ish loss relief) back or something ridiculous, don't they? Makes me wonder how this hasn't made UK capital more readily flow

SeanLuke3• 2 years ago

Along with UCL, these British universities represent 4 of the top 10 universities in the world.

... according to QS Global Surveys. A disreputable organization who won't open their data and whose rankings are based at least 50% on reputation surveys (!!), of which only 2% or so are responded to. Is it worth mentioning that it's based in England?

I'm not saying the US should have more institutions. I'm saying that it's highly unlikely that four of the top 10 institutions worldwide are British.

lordnacho4• 2 years ago

But reputations are what they are, and you can't dispute that those four unis are top drawer by that "measure" if we can even call it that.

Regardless of what you think of QS. I also think it's silly to have uni rankings, but the way to think about them is that they simply construct a ranking that shows what people expect based on reputation. If you don't have Harvard and Cambridge in your top tier, your ranking is wrong.

SeanLuke3• 2 years ago

But reputations are what they are, and you can't dispute that those four unis are top drawer by that "measure" if we can even call it that.

But reputation is not a just measure of quality. It's mostly a measure of whether someone has heard of the institution at all, or knows anything about them. Similarly, US News has reputation survey based measures for its terrible rankings, and is roundly criticized for them, as they largely shut out better but newer but less well known institutions.

Shrezzing3• 2 years ago

The UK has an age-based advantage in this metric. Oxford & Cambridge are nearly 1,000 years old. Once you take that into account, the stat becomes "of the top 8 universities (ex. Oxbridge), 2 are in the UK and 4 are in the USA". Imperial is very high quality institution, definitely the peer of Berkley/Yale. UCL normally isn't thrown into the top 10 though - it'd usually appear in the top 25.

oblio11• 2 years ago

The oldest university in the world isn't from the UK, so that clearly can't be such a huge factor.

sofixa5• 2 years ago

I think this misses a big mentality difference between the US and most other developed countries.

In the US, people like to exaggerate and boast. Everything is the best, biggest, etc.

In the US, "new is always better". Doesn't matter if the new is just the old with an app (coworking, food delivery, taxi, hotels), or just a worse iteration of an already existing thing (all the crappy companies trying to reinvent worse trains with "pods") it's celebrated for being new and innovative. Reminder that bloody Juicero got millions of dollars of investment.

In the US, there's a big celebrity culture. People genuinely worship celebrities, including successful business people (Steve Jobs, Elon Musk to name two popular examples). There's always the assumption that they were successful because they were smart and hard working (which is of course, at best, half the story).

None of those exist to such an extent in other developed countries. Hell, in France being a billionaire is seen as a negative thing in many social circles. Even entirely self-made billionaires such as Xavier Niel who dropped out of middle/high school to start a business over Minitel (a French precursor to the Internet) that have had a very positive impact on French society (by one, creating a telecom that brought extremely affordable internet and mobile phone plans to the general public, and two, creating a free and brilliant tech school, 42) aren't really seen as "good" or considered a celebrity worthy of respect/veneration.

Also, in many other developed countries people "work to live" instead of "live to work". Getting a stable good paying job that will get you plenty of time off to do things you genuinely enjoy, be they pottery, gardening, travelling, lego, rock climbing or whatever, is considered a good deal for many. Why waste your early years when you have the most energy hustling so that maybe you can make it big? People's ambitions usually revolve around personal things such as bucket lists of travel destinations, family, hobbies, etc., and often but not always, being successful at work, but to the extent of being able to calmly afford all the aforementioned and mostly enjoy/tolerate it, not necessarily becoming billionaire businesspeople.

oblio11• 2 years ago

Hell, in France being a billionaire is seen as a negative thing in many social circles.

Well, purely socially, having a billion euros is kinda... bad? If you think about it, what do we call all other kinds of people that have a lot of 1 thing, more than they need or could possibly use within their lifetimes?

Hoarders.

It's not a positive term. It implies something being wrong in the head.

Now, an entrepreneur building a business that becomes worth billions and themselves having a new worth of a billion? Probably a different story, but as we're seeing more and more, power corrupts and most of these folks don't really stay in touch with reality 5-10+ years after they become so rich.

TMWNN• 2 years ago

In the US, "new is always better".

Barney Stinson is a wise man. <https://www.youtube.com/watch?v=1SNRULEnTVQ>

thefz3• 2 years ago

Also, in many other developed countries people "work to live" instead of "live to work". Getting a stable good paying job that will get you plenty of time off to do things you genuinely enjoy, be they pottery, gardening, travelling, lego, rock climbing or whatever, is considered a good deal for many.

I wish this was more widely understood. And I agree with your whole post and wish for it to be higher.

coastermug• 2 years ago

I’ve noticed the risk appetite of investors in the Uk is much worse. They want a much larger slice of the pie early on, so there’s much less incentive to do a risky startup, rather than a sure thing like GS / Google. There’s nearly no risk in working at GS - you will work hard and you will be paid exceptionally well for it.

DrBazza6• 2 years ago

Financially, the UK is heavily centred around London, one of the most expensive cities in the world, so it's not altogether surprising that university students feel like they need a paying job that keeps a roof over their heads. Worse, the competition for rental property in London is ridiculous, which is the only choice in town for an ex-student.

And London is where the VC people are.

Also, in the USA 'bricks and mortar' businesses have far cheaper shipping costs, and 342 million people, without going international, that DHL or FedEx will ship across the entire US with a cheaper price than we can ship from SE England to NW Scotland. Then again, we both speak English, which is why the UK is always the second target for a US firm once they're up and running, and vice versa.

The UK is 4th in the count of 'unicorns' after USA, China, and India, and has not quite double that of it's closest European neighbour, so we're not doing that badly. It's just a shame everything is skewed towards London in the UK.

dan-robertson8• 2 years ago

Why does this rent argument not apply to SF/Silicon Valley? I think SF is more expensive than London, though typical pay in (non-startup) tech is higher.

DrBazza6• 2 years ago

Not sure, as I don't live in SF, but I know that not all start-ups are in SF/The Valley even if the VC money is raised there.

In the UK, they're disproportionately concentrated in London. In fact the UK government has encouraged many of them to set up around Old Street / 'Silicon Roundabout' (sigh). That area is only accessible by public transport, whereas SF/California is accessible via cars, so the choice of where you live is considerably greater in the US. The vast majority of people that work in London live within 10 miles of the absolute centre of London and use public transport. The magic '1 hr commute', if you will. Hence the rental prices.

Our government is continuing the prosperity of London at the cost of the rest of the country. If you remove London from the UK, we're poorer than Mississippi: https://archive.is/UJZBP

gambiting6• 2 years ago

Because it's not just "higher" - it's so much higher it's hard to comprehend what difference that makes to opportunities young people have. I finished my BSc and MSc in Computer Science from a prestigious Russel Group university 10 years ago, got hired as a C++ programmer for a big corporation.....making £18k a year. My take home was about £1200/month if I remember correctly, which was still ok-ish because I was sharing a flat with some people so I only paid like £150/month towards the rent. I was only able to save a very modest amount of money and it took me years to work up to what you'd consider a "decent" salary.

From what I understand, in US your costs are of course higher in terms of rent, healthcare, etc, but the difference in salary is so huge you can actually save up some capital if you want to try starting your own business in few years time.

cauch4• 2 years ago

Something that was not really approached in this article is the underlying assumption that "entrepreneurship is good" and the difference of culture towards that.

Start-ups can be seen as the things that bring society forward, or the things that create useless junk and enshitification from bullshit-talkers who just want to make money. It's not 100% the first in US and 100% the second in Europe, but the balance is just different.

I think that one aspect is just that US is more ok with bullshitters and con artists: they consider it's part of the game. In Europe, it's seen as immoral, and there is a fine line between "being optimistic while raising money" and "being misleading while raising money".

Inversely, Europe does not have so much prejudice against institutions. Maybe it is again due to the fact that in US, they consider bullshitters and con artists as part of the game: they are expected to be either the exploited or the exploiter, so, of course, you don't want to put yourself in a situation where you can be exploited.

TulliusCicero5• 2 years ago

I think that one aspect is just that US is more ok with bullshitters and con artists: they consider it's part of the game.

Startups aren't any more fundamentally scammy than any other business trying to get your money.

Oh sure, some are scammy, but that's true for big established businesses as well.

cauch4• 2 years ago

I'm not saying they are more scammy, I'm saying that the reputation score is computed differently in US and in Europe, and having a scammy aspect is penalizing the startups more in Europe than in US.

You can start from exactly the same facts: - X% are scammy - Y% are bringing something great - Z% are bringing yet another useless junk in shiny paper that pollute and had bad side effect - W% are making new discoveries - ...

In Europe, the first item will bring you -20 points, the second, +5 points, the third, -10 points, the fourth, +10 points, ...

In US, the first item will bring you -1 point, the second, +20 points, the third, -5 points, the fourth, +5 points, ...

So, at the end, the "goodness" of entrepreneurship is seen differently in the two sides.

I don't think institutions or other business are less scammy, or even that they are seen as better in Europe. Simply, if you score different paths, in Europe, the "entrepreneurship" path does not look that better than any other path, so why would you choose it.

ilikerashers2• 2 years ago

The UK economy is not very dynamic and becoming less so. Low wages, high immigration, low investment.

It’s not just a mentality thing, there are legitimate reasons unfortunately

deletedie• 2 years ago

It should (hopefully) be fairly uncontroversial that there are underlying legitimate reasons i.e. the fallout from the first decade of Brexit. Unfortunately it seems things are likely to worsen heading into the second decade.

mamonster• 2 years ago

UK economy stopped being dynamic well before Brexit. The simple reality is that the British political class (starting from New Labour and continuing with the current 14 years of Conservative rule) has no vision for Britain beyond the City + M11+ M40, all the infrastructure required to keep that afloat and a managed decline for everything else.

That said of course Brexit only made the above worse.

CalRobert4• 2 years ago

Not the UK, but I'm a Californian who lived in Ireland for ten years. The risk aversion is _intense_.

Me: "I want to build a house"

My Irish friends: "That's a bad idea, you will fail, it could fall down, you don't know anything about houses". They were extra horrified that I didn't want to build it out of concrete blocks because "you can't build a house out of wood"

My Californian friends (but one in particular): "Fuck yeah I'll bring a nailgun"

And this applies to EVERYTHING. If you have any ambition it's "notions". People scold their children for being "bold" (admittedly the word is used differently, but still). If someone makes one euro more than you they're a horrible capitalist bastard.

I point out that workers in my field are paid three times as much in the US (or more) and somehow am a class traitor.... for saying we should pay labour better.

Anyway, Europe has a bright future as a cheap third world backoffice for US companies at this rate. The fact that people here are paid closer to zero than what they'd make in the US is just sad, and they deserve better. The health care isn't even that good (though Ireland is especially bad at this).

Maybe that's just Ireland though. I'm in the Netherlands and it seems a bit better, maybe because the only people I talk to are other immigrants.

(I built the house, with contractors as well of course. It's a beautiful, warm, well-insulated, wood frame house with ridiculous new world features like high ceilings, aircon, and deciduous trees to the south)

blowski• 2 years ago

A few personal anecdotes aren't very convincing arguments about the future direction of the world economy.

tafox• 2 years ago

I also live in Europe (Germany & Austria) and what you're saying is 100% true. I like Europe, but I really miss the positive everything is worth a shot attitude in America.

Everything here is no, no, no, why would you do that? It's so demotivating, and G-d forbid you make a tiny mistake! Long term I also don't see how this place won't just keep getting poorer... unless there is a major attitude adjustment in the near future.

Also, everyone just tries to dunk on everyone with petty status games like owning a fancy car... as if that's the ultimate achievement in life... really lame & depressing.

It's the main reason I would like go back home tbh. There are a lot of problems in America and a lot of things are okay here, so it's hard to say where it's really worse, but I just don't understand why they always need to have these negative attitudes all the time... it costs nothing to have a positive attitude...? Maybe I'm just too stupid to understand.

technics256• 2 years ago

I live in Munich, totally agree.

CalRobert4• 2 years ago

There's a lot of things I love about living where I do, but if I could get Dutch urban design in California I'd look very closely at moving back. I also worry about the strength of US democracy, but Europe isn't immune to backsliding here either.

weiliddat• 2 years ago

I'm an "expat" living in Germany and am also thinking of moving to US/CA for the sake of living in a different environment that is more can-do, even if I don't end up starting my own thing.

I keep trying to convince myself that day-to-day life in Germany is great, e.g. low cost of living, low crime, etc. but I'm wondering if I'm just comparing to the worst parts of what I hear about the USA on the internet. It's a large place anyways.

i.e. what if I moved to a reasonably priced city with a similar crime rate, get a reasonable amount of insurance. Has anyone done that?

arpinum• 2 years ago

Same experience in England. There is little celebration of business success and more likely accusations of exploitation.

The class system is also alive and well in business - the ambition of many well off uni students is to manage others. Grinding on a startup doesn't fulfil that class ambition

gambiting6• 2 years ago

Exactly - if you are doing well as a business, then it must be because you screwed someone over, and in general you're a bastard for making people work for you and make you money, like how dare you.

switch0074• 2 years ago

Let's not pretend there is not actual exploitation and "exploitation".

The question is rather perhaps whether it's reasonable and justified given the huge amount of laws and regulations.

A typical small business owner will prey on the naivety of younger employees particularly around HR law. No business owner will be 100% truthful with their customers (ie they engage in some form of marketing). I have not worked a single job where this was not the case. It's celebrated here and called "growth hacking"

All of that is done for the gain of the owner, not solely so that they may enrich the lives of their employees

ilikerashers2• 2 years ago

While Ireland has some cash these days, it was a poor place until joining the EU. If you wanted to do well, you emigrated. This is still the case pretty much.

CalRobert4• 2 years ago

Certainly, though I wonder if part of the mindset I encountered was a result of any surplus wealth being taken by the landowners for a good 800 years or so. If you don't get to enjoy the fruits of your labour, why try?

DrBazza6• 2 years ago

Having just returned from the US, I was struck by this 'risk aversion' and the innate US 'competition'.

To give an example: there was a Subway on one of the streets in the US. A few doors down there was an independent sandwich shop that was offering similar, larger sandwiches, with more toppings, for less, with a huge advertisement saying so. In the UK, close to where I live, there's a Subway on the High St., and an independent cafe down the street. The cafe continues to serve two-slices of bread with an average amount of filling for slightly less than Subway, and has no interest in competing, despite Subway getting double, or more, the foot traffic.

That's the UK all over.

Anyway, Europe has a bright future as a cheap third world backoffice for US companies at this rate.

Already happening: https://archive.is/4Rer5

A lost decade+more due to austerity after 2008's financial crisis, plus huge amounts of furlough money, and a falling exchange rate doesn't make good reading.

CalRobert4• 2 years ago

Ah, I'd almost forgotten the styrofoam and mayonnaise sandwiches!

robin_reala3• 2 years ago

Our instinct is to regulate and tax the technologies that are being pioneered in California, in the misguided belief that it will give us some kind of competitive advantage.

I don’t think that that’s the reason for regulation: it seems to me that US companies traditionally don’t care about externalities (environment, privacy, accessibility, etc.), and regulation is required to bring them into line. That doesn’t always mean that their business model will survive unscathed, but that’s generally a good thing.

oblio11• 2 years ago

The US can also throw a firehose of money at stuff just by virtue of being big and more of a monolith than Europe, in general.

outsomnia• 2 years ago

Yes, they are regulated abroad because they are rightly frightened of what SV will do to them without it, it's unrelated to "competitive advantage".

rich_sasha2• 2 years ago

To be honest I'm not sure European companies are much better (VW emissions scandal, BP oil spill in Gulf of Mexico etc), it's just that regulation tends to be tighter. US seems quite happy to create global monopolies at the cost of its own domestic environment / consumer rights.

robertlagrant6• 2 years ago

This is a bad stereotype, I think. The US has regulatory failures like FTX, but at least that's a brand new market and type of commodity (or currency, maybe). And it was prosecuted under existing regulation anyway. The EU had Wirecard, a financially totally mundane company, and regulations didn't stop anything. It happens everywhere.

The difference is that the US is a force multiplier for businesses and innovation, so you get the most extreme stuff there. But you also get the most everything there. And even when it's not there, it's often funded or part-funded by the US. E.g. the NIH funds $45b of research a year, which is partly sent overseas, even though it's paid for by US taxpayers and businesses.

throwaway20378• 2 years ago

    > The EU had Wirecard

To me, this is misleading. Please stop writing as though all of the EU is uniform. It would be better to write: "Germany had Wirecard". That is much more accurate.

baxtr2• 2 years ago

Everyone here blaming the costs of living in London being a major driver for people looking for security: SF is not cheap either!

I don’t think you can boil it down to that only.

What can be others fundamental reasons? also for Europe in general?

oblio11• 2 years ago

Smaller countries, less money to throw around in general.

Focus on more traditional sectors and a general fear of software solutions (partially justified since many software things are net negative).

First mover advantage for the US as the country that invented the transistor, the social media, internet, etc. Especially in this era of Extremistans (see: Black Swan), being first is super important.

Oh, and this isn't talked about enough, US protectionism (and focus on locally produced things), look at all the efforts to keep jobs in the US, to keep Chinese companies out, etc. As an example, even when Apple was crap in the late 90s and early 00s, it still had relatively high percentages of the desktop/laptop market compared to the rest of the world, just because it was the poster-boy of US computer companies. It's more subtle and it's imperfect (see the steel and auto industry being overrun by foreign companies).

It's very complicated, but 1 & 2 are probably the biggest factors.

foldr4• 2 years ago

Everyone here blaming the costs of living in London being a major driver for people looking for security: SF is not cheap either!

I think startup salaries in SF are higher compared to the cost of living, though. There are startups in London that pay £50k or less to new graduates.

baxtr2• 2 years ago

Ok but then it’s startup founder/employee compensation rather than cost of living

candiodari• 2 years ago

Except normal Californian wages are 50% of a central SF apartment. Saving up to move there is very much an option.

Normal LONDON salaries are 30% of a London apartment.

Normal British salaries are 10% of a central London apartment, at best.

There's a big difference. You can save up as a USian and start a job in SF. You cannot reasonably do the same in Britain.

dan-robertson8• 2 years ago

The cultural commentary does seem right to me. People in the UK are probably more risk-averse and anti-ambition. There’s also some stuff about the culture of investors, like the thing about US startups making wild claims. This only really works because the investors in the US understand that the claims are nonsense, and VCs don’t sue the companies for fraud (because the companies are typically dead and it’s an iterated game).

Nevertheless I do wonder about the effect of people being able to move to Silicon Valley:

- moving there can be a good move for ambitious young people – it’s surely easier to raise capital, find employees/cofounders, etc

- for most internet businesses, starting in the US rather than the UK can be an advantage – doing business internationally can be harder and the US is 5x the size and wealthier on average.

- given this, there’s a reasonable selection bias in the pool of companies in the UK seeking investment: they are started by people who were ambitious enough to start SV-style startups but weird enough to not be doing it in the US. If those potentially-UK startups in the tail of outcomes are disproportionately being started in the US instead, that’s really going to suck for a VC.

TulliusCicero5• 2 years ago

The claims are hyper ambitious, that's not the same thing as being nonsense. Aiming extremely high isn't somehow fraudulent.

Lots of kids have plans to become pro athletes and almost all fail, but that doesn't mean all those plans were nonsense to begin with.

dan-robertson8• 2 years ago

Lots of the claims made by startups to VCs would be considered fraud if they were ever tried in court, which they aren’t because starting such a lawsuit would be terrible for the VC, and the VCs weren’t really defrauded because they correctly understood the claims to be highly exaggerated. The difference here is in cultural standards for what it means for a startup’s claims to be true.

caldarons• 2 years ago

At least in the UK graduates from prestigious universities can get good jobs. Where I'm from (Italy) even that is seen as crazy

sgt1013• 2 years ago

"quantum computers, nuclear fusion, self-driving vehicles, space exploration and drug discovery"

The mark of bullshit. No one can make this judgement.

sgt1013• 2 years ago

This is, at it's heart, about markets.

In the USA a startup's market is, essentially, global - China. In the UK the market is, essentially the UK.

In the recent past it might have been argued that the market was the EU - but the reality is that the EU's market for services is fractured. The USA has the capital and power to enforce their companies access to markets everywhere (apart from China), the rest of the world does not.

oblio11• 2 years ago

This is an awesome summary, it's the #1 item that causes this and I've never been able to put it into words so succinctly. Thank you!

davedx9• 2 years ago

In the UK the market is, essentially the UK.

This doesn't make any sense at all. There are tons of global UK companies. Why can't UK companies sell products or services outside of the UK and the US can? What on earth...

sgt1013• 2 years ago

The reality is that when you are trying to sell at scale somewhere outside your domestic market (where your laws and rules run) muscle counts. The USA plays relatively nice, but be under no illusion you will find that the game is stacked against you. Your IP in particular is at risk from domestic actors.

An anecdote: I was once part of an exercise to evaluate the potential for an IP case in the USA to be won. One fun part was that there was a jury simulation. The jury were presented with the case and asked to vote. In the first round the jury voted unanimously for us. In the second round the jury were told that the defendant was a US company and we were a foreign company - and they unanimously voted for the defendant.

In other places you will find that you can't play the game - you can't get licenses to operate, your staff can't work there, your payments don't go through, you get a tax case against you, your staff suddenly fail to show up and it goes on and on.

If you are a USA company that happens less everywhere because the USA has power. People in important places owe the USA their lives, and if not then they have had lovely experiences in the USA. If you are UK company then you operate, now, under the reality that the UK hasn't got that power. World markets are open for the UK - but more or less to the extent that the USA decides that they wish to maintain that openness. Often that suits US interests in places where the UK has no interests and does not suit the USA in places that the UK has extensive interests in.

If you wonder why we are doing Aukus and have two big expensive and hard to defend aircraft carriers then the above is why. We are trying to pay the tariff that the USA wants to tolerate us as part of their system.

But it is the USA's system, cut and dried, over and out.

worstspotgain3• 2 years ago

I think the "one thing that's not like the others" in the article are the crazy-high rankings of Britain's top schools. Universities are a bit of a self-perpetuating reputation scheme, and the UK has been punching well above its weight in that department.

Having worked with all Europeans, I can't say that I found the British to be skill or preparation outliers. Maybe just a little above the mean? Speaking English natively helps too.

That said, the UK was probably on its way to becoming the EU's tech hub, much to the chagrin of the French and Germans. Then 2016 happened.

Furthermore, the planetary economy has transformed itself, and has been consolidating around competitive advantage. Much of tech has massive scale economies. There's probably not enough 21st-century Britain to make it alone the way it used to in the 19th century. Its competitive advantage probably does not involve large-scale tech.

If you're a world-class tech graduate facing these realities, maybe you don't want to get marooned on an island.

gambiting6• 2 years ago

> are the crazy-high rankings of Britain's top schools

The problem(in general) with University rankings is that the ranking is done almost entirely on the number of publications.....in English. So it's no wonder that British universities take a lot of the top spots. I've had these conversations many many many times with people - it's not like the Universities of Warsaw or Milan or Prague are not as good as Oxford - but that's not what you're going to see in rankings because a lot of research doesn't get published in English, so somehow it doesn't "count".

As a completely separate point - British universities got absolutely decimated by Brexit in ways that are not immediately apparent, but I work with couple professors at Russel Group universities and they all say the same thing - the number of PhD and research positions applicants from the EU has gone from hundreds a year to literally a handful a year. Some of those were replaced by British applicants or non-EU applicants, but the number of people who want to be researchers in Britan and further the scientific fields has dropped drastically.

rich_sasha2• 2 years ago

British universities got absolutely decimated by Brexit

It's likely heading for another cliff dive, as the UK government is constricting the supply of student visas (because immigration), and application numbers are nosediving.

I got a great education in the UK and think back on it very fondly, but these days I'd advise people to apply to the US instead. It might even be cheaper.

DrBazza6• 2 years ago

I have several friends that are 30+ years as lecturers, also at Russell Group universities, and their view is very different to yours. They're generally of the opinion that UK universities have now turned into visa-mills and poorly run money machines, with lots of students signing up, but far fewer turning up in person and completing the courses.

Essentially the Blair-era of 'expand the universities' (and cynically get the 18-21 yr olds out of the unemployment figures) has lowered standards across the board. They don't, however, see anything like the "drastic" drop in numbers you report.

As an employer in finance, I've seen our criteria in the early 90s go from a first or 2:1 from anywhere, to a first from Oxford/Cambridge/Bristol/Durham/Imperial only, and now our criteria is an MSc from a list, or a PhD from anywhere. Yes, a PhD. And we still get dozens of applicants for a single job.

Eridrus2• 2 years ago

If only these were done on publications, it would be a lot more accurate.

English is the lingua franca of science, like it used to be german, because ideas build on each other so you need to be able to communicate your ideas to others.

Having your native language be the lingua franca is helpful, but many of these universities are filled with foreigners who have learnt English. They could have stayed in their native countries, but they chose not to.

vouwfietsman2• 2 years ago

a lot of research doesn't get published in English, so somehow it doesn't "count".

As it shouldn't. I am from a non-English speaking country myself, and I cannot begin to tell you how senseless it is to cling to native languages for any serious work. It's creating an arbitrary barrier to collaboration just for pride or convenience. English is the lingua-franca (lol) of the world, just embrace it and stop being proud of your weird language that you're stuck with because of random traditions and geography.

Imagine Prague universities would have top AI research published in Czech, would that actually help the scientific community? My bet is: not until someone goes and translates it to English, is it going to be read by anybody outside of the country, whether that person is native English or not.

In this thread there's a lot of talk of the EU losing competitiveness because it is a fragmented market between a group of isolationist countries, opinions like these are a big part of that. Stop putting English second place, this is a global world now, English is the language of the global world, learn it, use it, or lose.

mike_hearn6• 2 years ago

The UK is Europe's tech hub at this point (not the EU's), assuming by tech we mean the sort of tech discussed in the article. As the article notes, the VC ecosystem in the UK does actually exist and is spinning up, whereas in most of Europe it hardly exists.

If you want something a bit more objective than the article's assertions, there is an attempt to calculate a ranking here:

https://www.startupblink.com/blog/analysis-of-europe-startup...

The Global Startup Ecosystem Index compares the countries of Europe (not EU) and the UK is at the top with a massive lead. It has a total score of 127 vs 57 for the second place (France).

worstspotgain3• 2 years ago

Well, I suspect a lot of the UK's startup stats are still connected to its universities. The page you linked shows London with a massive index lead over the EU. When you scroll down to the lists of notable companies, only ~10% of them are UK-based. The contrast of London to the rest of Britain is also much starker than for some other EU hubs.

It's questionable whether the "startup hub seed" would have germinated had the UK not been in the EU back when. It's also questionable whether the plant will wither now that it's out. All else held equal, the exits of UK startups are probably more acquisitional and trans-oceanic. This adds to risks and costs.

Either way, my argument was not startup-centric. It's pretty clear that an island company faces more market hurdles than a continental one. The difference will widen as the EU integrates further.

shswkna• 2 years ago

Note that the Scandinavian and Baltic countries do have an active tech startup scene.

derbOac• 2 years ago

Universities are a bit of a self-perpetuating reputation scheme, and the UK has been punching well above its weight in that department.

Someone like Peter Thiel would maybe argue that the difference in risk taking in the UK and the US is actually reflected in the relatively high number of high UK university rankings? I'm far from Thiel in my general perspectives but it's worth noting that in certain circles there's sort of an ambivalent — if not outright hostile — attitude toward universities in the US and that ambivalence is only increasing. I think a Thiel-like person might think it odd to draw a direct line between some reputational rankings of universities and startup culture, and might flip the whole thing on its head and argue it's evidence of problems with universities today.

I don't necessarily agree with this perspective but do think it's maybe worth pointing out some of the implicit assumptions being made in the essay.

Eridrus2• 2 years ago

Yeah, I'm pretty sure that these rankings are bullshit.

If you look at, e.g. universities by number of papers at neurips (ok, just one measure, but related to the AI boom), none of the UK universities crack the top 10; Oxford comes in at 12th, Cambridge at 18th, and Imperial isn't even on the list: https://www.reddit.com/r/MachineLearning/comments/185pdax/d_...

goodfellah• 2 years ago

I have had the pleasure of being an immigrant visiting a startup event in England. To give you an idea of what this looks like: Five minutes in, an organizer comes up to me and informes me that the she was sorry but this event was invite only (I was invited).

At a tech meetup, most were happy to chat over beer, but every single one flat out refused to agree to a one-on-one, unofficial demo of my MVP.

I helped a startup debug and fix an urgent infrastructure issue on a critical customer-deployment, gratis. Their in-house guy had given up on it. Few months later I asked to sign up for a referral for my co, they stopped replying.

Doing a startup there is hard mode squared.

aranw• 2 years ago

I always wondered if it has something to do with employee protections, maybe the risk of starting a business in the US feels the same as joining a company as an employee with no protection and employee rights? Although I know that has changed a lot last few years and you now need to put 2 years in a UK company to get some employee right and protections

I've always been scared and worried to go off and do my own thing without something to fall back on. I have ideas and things I'd like to build but the risk seems really high. I end up asking myself questions like "how do I pay my mortgage?", "what do I do for food?", and so on...

What can be done to make it easier to start a company in the UK?

keiferski• 2 years ago

I’m in continental Europe, not the UK, but I think the same basic cultural attitudes toward startups and entrepreneurship are the same. It is not a common or accepted thing to be building a business here, especially if you’re in your twenties. Your family will most likely wish you got a stable job at BigCo/university/government/etc. and there is a very real sense of “falling behind” if you spend years on something that doesn’t pan out.

helsinkiandrew3• 2 years ago

It was inconceivable that the Bank of England would authorise me, a 31 year old who’d never even worked in a bank, to act as the CEO of the UK’s newest bank.

In general I would think this as a good thing. The UK has a more rigorous banking control than the US (where different state laws can make starting a bank easier than in the UK), with more scrutiny of the business model and customer protection - you need to prove what your doing is safe, not just talk the talk. This means there are no small 'town' or small specialist banks in the UK but also none of the failures that have happened in the US in the past few years.

I believe Richard Bransons lawyers also told him he wouldn't get a bank license. Monzo got its full banking license after a couple of years

throwaway20378• 2 years ago

    > none of the failures that have happened in the US in the past few years

I assume you are referencing Silicon Valley Bank, which wasn't a small bank and wasn't run by young, inexperienced leaders. In the US, community banks would be 10% the size of SVB at its peak (before the run). Except SVB, can you name any other failures? And were they due to young, inexperienced leaders? I cannot name a single one.

joecool10292• 2 years ago

Republic Bank just failed in the past month (not to be confused with the First Republic Bank that failed last year).

This newest Republic failure was a bank started by the guy who created Commerce Bancorp which was purchased by TD Bank. The guy is a piece of work: https://archive.is/DwtAx

(I wouldn't say he is young but really not the guy for the job given the history and the banking environment now)

helsinkiandrew3• 2 years ago

I assume you are referencing Silicon Valley Bank

No: https://www.fdic.gov/resources/resolutions/bank-failures/fai...

Many of these had far more, and many far less customers and deposits than Monzo in 2016.

switch0074• 2 years ago

This means there are no small 'town' or small specialist banks in the UK

We do have about 250 credit unions and 42 building societies though

helsinkiandrew3• 2 years ago

We do have about 250 credit unions and 42 building societies though

And many of those still don't have 'full' banking licenses - there's limitations on what commercial services they perform and how they raise money.

gadders• 2 years ago

Time to repost this comment: https://news.ycombinator.com/item?id=15659076

"Entrepreneurship is like one of those carnival games where you throw darts or something. Middle class kids can afford one throw. Most miss. A few hit the target and get a small prize. A very few hit the center bullseye and get a bigger prize. Rags to riches! The American Dream lives on.

Rich kids can afford many throws. If they want to, they can try over and over and over again until they hit something and feel good about themselves. Some keep going until they hit the center bullseye, then they give speeches or write blog posts about "meritocracy" and the salutary effects of hard work.

Poor kids aren't visiting the carnival. They're the ones working it."

thefz3• 2 years ago

I now live in San Francisco and invest in early-stage startups at Y Combinator, and it’s striking how undergraduates at top US universities start companies at more than 5x the rate of their British-educated peers.

But how many survive?

jmrm• 2 years ago

IMHO if those people have the money to be living in SF in the first place, that part must be solved beforehand

thefz3• 2 years ago

... I was talking about the startups. I really hope the people survive.

robertlagrant6• 2 years ago

Imagine how different the UK would feel if Google, Microsoft and Facebook were all founded here.

It wouldn't be the UK, I think. As a UK resident, who reads quite a lot of US business stuff, and who lived in South Africa for a few years, the culture is just totally different in both compared to the UK. I don't know if it's the frontier mentality still ongoing from them being relatively recent countries, but there's definitely something.

throwaway22032• 2 years ago

The UK is simply a significantly more zero sum economy than the US due to a combination of mindset and physical reality.

Examples of mindset:

- disincentivising rentals, home building, small business, general animosity between classes

Examples of physical reality:

- small land mass without much space left to grow, lack of natural resources.

The US outside of a few places doesn't operate in that way.

reducesuffering• 2 years ago

If you want those people to take more risks, YC's 1.5% chance at acceptance is too low.

light_triad• 2 years ago

There's many factors that make Europe less competitive than the US: small fractured markets, low salaries, high cost of living relative to wages, Brexit costs, fear of being labeled a failure, working to live, focus on worker's rights, stability, and pensions, general risk aversion etc.

A big issue is there's a lack of mega successes high margin software businesses that pump knowledge and money back into the startup ecosystem. From a cultural standpoint, some countries like France are also obsessed with credentials and what you could call a notion of 'innate superiority'.

The end results is a VC ecosystem filled with young finance types that went to locally famous schools with little experience in startups that deploy small amounts with deal terms that would be considered absurd in the US.

somethoughts• 2 years ago

"There's many factors that make Europe less competitive than the US: small fractured markets"

This first one seems the largest hurdle w.r.t. startups. If you are a startup founder of say a ride hailing app - the total addressable market is much larger in the US for the same level of effort. If you want to scale beyond your home state (i.e. California) in the US, there are probably just a handful of different state/city taxes/regulations that need to be accounted for.

If you start in a country in Europe, you need to factor in:

- language translation of the entire app

- different country cultures/customs (i.e. tipping, wording of prompts and promotions) - even down to the naming of the app which might have a negative connotation in a different language

- prior to the Euro - differences with respect to currency, trademarks, patents, etc.

- entirely new country regulations and politicians that need to be "handled" - each in their own separate language which means a separate lawyer and lobbyist needs to be on staff for each country

- home court advantage - French probably prefer to support LeCab while Spaniards probably prefer to support Cabify

nextos2• 2 years ago

You are right in terms of the addressable market. Except in some niches, like pharma, it is too fractured. But IMHO, the biggest problem here is mentality. Starting a business and taking risks is not something the society encourages. That is what we have from centuries of rent-seeking aristocrats.

A good counterexample is Sweden, where class structure is flatter and imitating American trends is seen as cool. Unsurprisingly, Stockholm punches above its weight class in terms of startups, despite Sweden being a tiny market.

jltsiren• 2 years ago

Low salaries increase competitiveness, while high salaries decrease it. That's one of the things you already learn as a kid when you live in an export-driven economy.

Even if your country is not particularly export-driven but you participate in competitive markets, the same effect may apply. For example, the US lost many manufacturing jobs to China, because American salaries were not competitive (low) enough.

Finland is sometimes said to be a country of engineers, for historical and cultural reasons. That doesn't mean engineers are paid well. On the contrary, engineer salaries are low and Finnish engineers like to complain how much more they would earn in Germany. What it does mean is that engineers have a higher social status than in most Western countries, and a lot of people want to be engineers. Finnish companies can hire good engineers with little money.

Finnish companies have traditionally been good at developing technology and bad at commercializing it. Explanations vary, from the low quality of business leadership to the lack of domestic capital; from the small size of the domestic market to foreign companies buying successful startups; from the cultural dominance of heavy industry to the culture of respecting laws and regulations.

throwaway20378• 2 years ago

This is an interesting post. Thank you to share your thoughts.

    > Finnish companies have traditionally been good at developing technology and bad at commercializing it.

Can anyone provide some concrete examples?

hiAndrewQuinn2• 2 years ago

It's true, speaking as a US to Finland expat. The median CS grad I've met here in Tampere handily outclasses the CS grads I knew at Northwestern - which is no MIT, sure, but they're definitely no slouches.

Marc Andreessen once described reading a magazine as a teenager and seeing the "Midwest tinkerer" archetype of tech mogul, people who figure out a little bit of everything from scratch because on a farm you just have to do that to stay afloat and then bring that mindset into their SWE work and become minor legends wherever they go, and having this sudden enlightenment moment that shifted him from quiet nerd to confident striver. I spent my honeymoon year in northern Finland and came to the conclusion that the whole country is like that. Except, no one filled them in on just how absurdly good the margins on software can be when you throw business prowess into the mix. So many companies here been punching well below our weight class. (Okay, the very business-hostile nature of making a startup in the 90s/00s didn't help either - that's less the case now.)

I'm convinced it's more sociological than legal, although there are elements of both. My long term aim while I'm here is to be missing link between Finland and Silicon Valley. These guys are genuinely, still, much better than they themselves realize.

creamyhorror• 2 years ago

small fractured markets, low salaries, high cost of living relative to wages...A big issue is there's a lack of mega successes high margin software businesses that pump knowledge and money back into the startup ecosystem.

Honestly, these factors apply to many countries outside of the US and stops them from being startup hubs as well. Singapore is in a similar position; despite its wealth and apparent connectedness as Southeast Asia's preferred location for company HQ, it didn't really succeed in kicking off a virtuous circle of winners helping fund new startups. It's pretty hard/costly to acquire customers in disparate small/nonwealthy markets, especially if they stick to established brands.

A related factor is investors' relative unwillingness to take on risk, because big payouts haven't been observed. So VCs all pile into the same few existing winners that are actually looking like they'll hit a payday.

At one point in 2013-2016 there was a flurry of support for new startups due to aggressive government funding grants and subsidies, but very few of these managed to cross the chasm and raise significant follow-on rounds. A few years later, the funding schemes were cut (due to a lack of observed successes) and the early-stage scene grew quiet.

It feels like only very big, integrated markets can support a dynamic startup scene (the US and China). It doesn't seem to happen without easy access to similar consumers/clients and the willingness of those clients to try new services and companies.

DeathArrow13• 2 years ago

There's many factors that make Europe less competitive than the US: small fractured markets, low salaries, high cost of living relative to wages, Brexit costs, fear of being labeled a failure, working to live, focus on worker's rights, stability, and pensions, general risk aversion etc.

In some Asian countries there is a thriving startup scene, so cost of living and working to live are not determining factors.

I would say the determining factor is the mentality. Europe focuses much on safety nets, welfare. Europeans learned that they should be content with earning a wage that allows them to live while working 8 hours a day, with enough time off, decent amount of holidays, a good work-life balance. They want state backed pensions funds, free or cheap healthcare, free education.

There are less Europeans willing to work on weekends than there are Americans and there are less Europeans working more than one job than there are Americans.

So Europeans focus more on living their lives while Americans focus more on Entrepreneurship. Their respective societies, cultures, history kind of teach them to behave that way.

It's not that a change in mentality is impossible, but it won't happen overnight.

DeathArrow13• 2 years ago

In Romania there's a huge pool of very talented SWEs. What do they do? They either work for foreign companies, or for a local company working for foreign companies.

They mostly outsource their skill. There are maybe two of three software products made by a local company known worldwide.

This is the result of risk aversion and lack of capital.

jbms• 2 years ago

Cynical theory, the UK is now full of the descendants of all those who said "Emigrating? That will never work", and that's set the culture. Grafters and optimists have had many opportunities to leave over recent centuries.

ilrwbwrkhv• 2 years ago

You maybe right. I think the UK and Canada share similar problems. Low risk taking, real estate as the only investment, pulling each other down like crabs, appeal to authority.

The US for all its faults, is the land of hope and can do. I have travelled a lot in the world but somehow places like Miami, New York, SF, Vegas, Dallas and a bunch of other cities have this palpalable energy that you can do anything that you want.

mikrl• 2 years ago

Reductive take…

Those that emigrated were descendants of people who didn’t emigrate.

jddj• 2 years ago

The country also added 600k[1] new people who do emigrate in 2023

[1] https://www.gov.uk/government/statistics/immigration-system-...

resource_waste• 2 years ago

How much DNA do we need to show to prove this is at least partially true.

And when it is partially true, it echos. I think even iRobot mentions this about Europe.

There is a difference in culture. Where the US dominates, europe is pessimistic, and (Africa/New New World) is growing. I suppose the New New world never really happened, the US stayed ontop. I imagine iRobot was a bit more optimistic about the political affairs of the New New world.

DeathArrow13• 2 years ago

Cynical theory, the UK is now full of the descendants of all those who said "Emigrating? That will never work"

If that was true, why didn't people from US emigrate again?

banish-m4• 2 years ago

Sad but true in one aspect, but another is it's useful for additional practical learning and opportunity discovery working for a megacorp for a few years. Stanford is (or was, last I checked) an exception though: extremely entrepreneurial PIs, staff, grad students, and undergrads.

At UT Austin a couple of times talking to a startup club dude, he was having trouble gathering interest on the Yellow Brick Road. I suggested he improve his advertising and marketing graphics, lead with thought-provoking questions and elevator convo about financial security and regret, and consider broadcast mechanisms on social media.

I think it's also younger generations aren't supported and encouraged appropriately to take risks, to view discomfort and fear as temporary obstacles to be sought, and are sold traditional dogma that "working as an employee equals financial security".

Unavoidable microeconomic law: You're never going to get anywhere near rich working for someone else without substantial equity.

dougb5• 2 years ago

The American dream is the belief that anyone can be successful if they are smart enough and work hard enough

Silicon Valley has practically symlinked the word "successful" to "started a company that got a high valuation". Maybe outside of the USA, people are likelier to center friends and family in their vision of success?

CM30• 2 years ago

This is really the biggest factor as to why the UK startup scene is a lot smaller than the US one (and from what I hear, why similar issues occur in Europe overall):

On the contrary, many UK investors take an extremely risk-averse view to new business - I lost count of the times that a British investor would ask for me a 3 year cash-flow forecast, and expect the company to break even within that time.

In fact, UK investors seem terrified of investing in consumer facing tech businesses in general. Something like Facebook or Google or Amazon or Netflix or Uber or whatever would be seen as far too risky an investment when they could get a nice safe return from a B2B focused SaaS business instead. They're not willing to plough money in for years on end on the assumption they might eventually get a return at the end, while US investors seem more willing to do so.

mushufasa• 2 years ago

My pithy take on the most important explanatory factors here:

1) EU/UK startups lack a big enough common market to sell into to go from 100 to 1,000,0000 relative to US and Chinese startups.

2) Tax laws in many EU countries significantly limit founders' exit opportunities and magnitude of personal financial success. This "tail wags to the dog" because of risk/reward: if the ultimate reward is not high, a founder can't justify taking on much risk, nor can their investors.

While the tax laws are interconnected with the societal culture (e.g. "American Dream mentality"), I think high frequency of examples of outlier success founders is what will change the culture, and those people won't start companies (or get very far) if they are dealing with 1) and 2).

Or they'll just move to USA to start their businesses, as has been often the case.

DeathArrow13• 2 years ago

1) EU/UK startups lack a big enough common market to sell into to go from 100 to 1,000,0000 relative to US and Chinese startups.

Are US companies selling only in US market? Why can't EU/UK startups address global markets?

disgruntledphd23• 2 years ago

It's much easier to start in your home market, get experience there and then expand.

Also, the US is basically the best market for everything (fortunately or unfortunately), so even if you start in Latvia, the next market you enter will probably be the US.

This is because it's relatively open and has lots of people speaking a common language, with a (mostly) common regulatory system so you can spread the setup costs over a much larger market.

Compare to starting in Ireland and then hitting the UK, France, Germany, Poland etc. Each of those countries will incur startup costs but the market size is smaller so you'll make less profit (all other things being equal).

charlie0• 2 years ago

The article answers its own question as to why most people don't take more risk. Most of it boils down to 2 things; not having a safety net and not being fortunate enough to know the right people.

I've been thinking about starting a business, but only because I'm now at a point where I have a safety net and I've grown my network enough to consider myself having an ok shot at making it.

tristor• 2 years ago

I am very well traveled and I spent considerable amounts of time in Europe in various different countries, I am however American, with particularly Midwestern sensibilities. One of the most common threads throughout the culture and society in nearly every European country I went to were three things in particular, that I think impact entrepreneurship:

1. An expectation that someone else will solve their problem, rather than an expectation of self-reliance.

2. A suspicion of anyone who thinks they have a good idea, as if that person is saying they're better than their peers and needs a comeuppance

3. A rejection of any kind of dream that entails class mobility, where the legitimate desires of people are to do something that fits the class they grew up in and "work to live" instead of "live to work" so they can spend as much time futzing about with friends and family rather than growing their family's class.

Many commentators in this thread have mentioned other aspects, but I think these three things are huge cultural drivers against entrepreneurship. In the US, when you found a startup, you are taking a financial risk, possibly a career risk, but you aren't taking a personal relationship risk or societal risk in the same way you are in Europe. In most countries in Europe, the people around you will think you are becoming too big for your britches the moment you entertain starting your own company, especially to do anything new, and will either cease their relationships with you or actively seek to tear you down socially. Not only is the financial risk larger, both in relative terms and in the legal structure, but the social and relationship risk that's non-existent in the US looms large in Europe. People will legitimately think you're a bad person who thinks you're too good to be around your peers for trying to do something more than the same job your father and uncle do.

#1 above is especially insidious as well, because most of the ways successful startups get founded is by finding a problem to solve and figuring out what you'd want to do to solve it for yourself. If you don't go and do this, it's really difficult to find any sort of product-market fit that resonates on anything but a tiny fractional basis. If you want to found a global company, you need to be able to devise /the/ solution to a problem, at scale, and if you are operating under the expectation that any meaningful problem has either already been solved or is the responsibility of some other entity, you won't do this, you won't have the right mentality.

throwaway20378• 2 years ago

The opening paragraph has a major blunder:

    > The US - a country with 5x more people and 8x higher GDP

Who cares about "8x higher GDP"? China has the world's second largest GDP and the world isn't clamoring to move there. Why? Because GDP per capita is still low, compared to many other countries. Finally, median income is a much better number to use when comparing countries.

SkyMarshal• 2 years ago

Imagine how different the UK would feel if Google, Microsoft and Facebook were all founded here.

Or if ARM and DeepMind remained UK-owned and based, and simply took smart venture capital and grew themselves independently, instead of selling to foreign owners.

MichaelRo• 2 years ago

> Most of these smart young people wanted to go and work at companies like McKinsey, Goldman Sachs or Google.
> "The vast majority of our smart, technical graduates take “safe” jobs at prestigious employers. I am trying to figure out why that is."

Well Europe pays significantly less than US and if one wants to make any amount of significant (for Europe, lame for US) money, one's gotta work for prestigious US employers. Starting a business requires capital so here we have it: Europe has less money and to get them, the usual route is work for US.

csomar2• 2 years ago

This is the most useless post one can read about some guy who is happy with his life and complain others are not doing things that he is thinking about...

just days before my start date at McKinsey, which finally gave me the confidence to choose the startup over a prestigious job offer.

I highly doubt many people are getting offers at McKinsey and getting funded at the same time. The dude talks about risk but he literally took little to no risk. He is funded. The profile that allowed him both this job offer and funding at graduation will allow it again if his startup fails.

Most people do not get funded while having a job offer from McKinsey.

Which brings us to the second point: How is the VC scene in the UK compared to the US?

The UK certainly doesn’t lack the talent or education, and I don’t think it’s any longer about access to capital.

The author proof is some random $1bn funding for some auto driving. This is weird when you can pull number (https://dealroom.co/guides/global) which shows the UK is still lagging the US.

Finally, the university ranking thing is bogus; which is what the argument of the author rests on.

kavalg• 2 years ago

Yes, to get a sense of risk taking, I'd rather hear many stories by risk takers that failed than one story from the guy that succeeded.

jasonkester• 2 years ago

That’s often the same person.

I had a dozen failures before I struck on the sass product that retired me in my forties.

You try, you learn, you improve, and eventually something might work. Or you don’t try, keep your safe job and work until you’re 70 like everyone else.

JohnFen2• 2 years ago

I have personally found that success stories aren't that useful to me. Failure stories, on the other hand, are.

veunes2• 2 years ago

Indeed. Learning from failure can sometimes provide more valuable insights than hearing about success alone.

camillomiller• 2 years ago

Well yeah, the entire thing reads like a piece from someone who should look up the meaning of survival bias.

a_c• 2 years ago

There is a saying that pessimist is right while optimist makes progress.

benjaminwootton• 2 years ago

I haven’t heard that saying before but it certainly feels correct. I know a few successful people who don’t seem particularly bright or analytical, but keep pushing on in the misguided belief that things will work out. And sometimes they do.

csomar2• 2 years ago

There are endless sayings. You can make a post about optimism as a startup accelerator fuel. I am just addressing the OP points.

openrisk2• 2 years ago

People attribute differences in the enterpreneurial landscape between the US and European countries to cultural factors (aka some "abnormal" risk aversion) but consider the possibility the difference is actually the rational stance on the face of persistent realities.

First, there is the issue of the absence of scale. As a Briton once said (and Brexit famously demonstrated), there is no such thing as Europe. This is particularly true in the financial domain that the author knows well. Every crisis, whether economic, natural or purely political leads to fragmentation and retrenchement back to national borders. Terms such as banking union or capital markets union are the sorry markers of an ambition that was never fulfilled. Alas none of the European countries is big enough for the emerging planet scale economic forces that are being unleashed.

Secondly, most European countries are quite statist, the central government plays a very, ahem, central role in economic life. This is not necessarily without merit - a different discussion altogether, but it does imply that the success or failure of potentially disruptive private sector initiatives hinges on political connections and access.

DeathArrow13• 2 years ago

First, there is the issue of the absence of scale. As a Briton once said (and Brexit famously demonstrated), there is no such thing as Europe.

Aren't the markets global? Aren't Google, Apple, Microsoft, Nvidia, Samsung playing on global scale?

Why limit yourself to a particular country or continent?

openrisk2• 2 years ago

Markets are now "de-globalizing" in real time but that is less relevant for startups. Any entity that is now a "global" multi-national had to grow into that status at some point in their lifecycle. That trajectory is much easier (depending on sector) if the starting point is within a larger country. There are multiple factors: easier access to capital, more human talent, larger customer bases, a single regulatory framework etc. etc.

These factors don't just act linearly, but in a combinatorial fashion that helps beat the genuinely low odds. Changing the world (which is what the formation of a major new enterprise effectively does) is not a trivial occurrence. Overcoming those obstacles is occasionally possible but it is very complex and costly. For the European economies the writing is on the wall.

DeathArrow13• 2 years ago

The US - a country with 5x more people and 8x higher GDP - has the same number of universities in the global top 10.

What if the number of top universities per capita is not positively correlated with GDP?

DeathArrow13• 2 years ago

Maybe top talent from other countries is hired in US after graduation?

DeathArrow13• 2 years ago

This:

On the contrary, many UK investors take an extremely risk-averse view to new business - I lost count of the times that a British investor would ask for me a 3 year cash-flow forecast, and expect the company to break even within that time. UK investors spend too much time trying to mitigate downside risk with all sorts of protective provisions.

contradicts this:

There is no longer a shortage of capital for great founders in the UK (although most of the capital still comes from overseas investors). I just believe that people with the highest potential aren’t choosing to launch companies, and I want that to change.

DeathArrow13• 2 years ago

If we look solely at US vs EU or US vs UK, we might think that US have a huge amount of money and the salaries are greater. But this doesn't solely explain why US has a healthy startup scene while EU or UK doesn't.

China was a poor country - and maybe still is if we factor GDP/capita - but they've built a thriving startup scene.

So maybe it's about the money, but not about the amount of money. Instead it's about how societies and governments manage to focus whatever amount of money into startups. It's about building a virtuous cycle, where startups produce wealth which is channeled into building further startups.

laylower• 2 years ago

I instantly thought of this comment when reading Tom's eloquent post. Tom is rightly advocating for more of the rich kids to not settle and keep throwing the darts. Rightly because this is the demographic that VCs want to invest in.

"" Entrepreneurship is like one of those carnival games where you throw darts or something. Middle class kids can afford one throw. Most miss. A few hit the target and get a small prize. A very few hit the center bullseye and get a bigger prize. Rags to riches! The American Dream lives on.

Poor kids aren't visiting the carnival. They're the ones working it. ""

https://news.ycombinator.com/item?id=15659076

oars• 2 years ago

Fantastic post highlighting difference in mindset towards taking risk and starting companies in UK vs US

conradludgate• 2 years ago

I dropped out of university for my £35k job as if I finished my final term I would have had _literally_ no money and no where to live. I could not afford to take risks. I had no family to rely on.

I was later invited to work for a startup as the first engineer. They offered me £45k which I negotiated up to £50k, which I declined as my stable job raised me to £52k to keep me. This startup is still doing well it seems, but that just wasn't a risk I could afford. I had no liquidity, I was barely saving £200 a month. If the startup fell through and I had no severance, then I would have had to find a job almost immediately or default on my rent.

This article is an extremely privileged take (which it acknowledges). University is relatively cheap in the UK, which makes the people that attend top universities often come from all classes of wealth.

I now have a lot more of my own cash in hand now and can certainly survive a few months of downtime, but I still probably wouldn't go for an early stage startup as I'd likely have to take a huge salary cut and would not be adding into this savings pot. I would rather be in a stable and good band of living rather than risk being on the poverty line again.

Taking Risk

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