20 April 2008
The problem with Web Mission
I’ve noticed that TechCrunch is fully supporting Web Mission ‘08 and I just can’t hold my tongue any longer.
Web Mission exemplifies everything that’s wrong with the UK and European web start-up scene.
The description from their site says:
“Web Mission 2008 will see 20 UK Web 2.0 companies travel to San Francisco to explore new opportunities for growth with key people in Silicon Valley. This event will showcase innovative UK web talent, seek meaningful assistance for companies ready for expansion, and provide a platform for those involved to gain valuable media and business exposure.”
This is being backed by some pretty smart people, including UK Trade & Investment, Oracle, Mike Butcher, Paul Walsh, Oli Barrett, Huddle, Doug Richard (ex Dragon’s Den), Atlas Ventures, Michael Birch (founder of Bebo), HSBC, Sun Microsystems and James Murray Wells (GlassesDirect.com) … so why is it such a bad idea?
We’ve got everything we need here
I believe the intention for Web Mission was great – networking and exposure for UK web start-ups. That’s fab, but here’s the problem – this project is declaring to the whole world, loud and clear, “We don’t have what it takes over here.”
If we’re ever going to create a healthy start-up culture in Europe, we need to stop running cap-in-hand to American entrepreneurs and venture capitalists. Why couldn’t we have spent the thousands of Pounds that it’ll take to run Web Mission and do something exciting in London?
This is exactly why we started Future of Web Apps in London in 2006 – to encourage web start-ups that they can do this, here in the UK and Europe.
Why not just focus on building a profitable business?
I just finished watching DHH’s talk at Startup School and I think it really sums up my position. Instead of working your ass off to get noticed by Google, Mike Arrington and Mike Moritz, in hopes of getting acquired, finding funding or getting TechCrunched, why not work your ass off to build a profitable ‘lifestyle’ business that services a specific niche?
As DHH points out, if you want to do $1M in revenue, all you need is 2,100 paying customers at $40 per month … and who wouldn’t mind being a millionaire? :)
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Sam Machin
# April 20, 2008 - 5:34 pm
I see the event is sponsored by UK Trade and Investment, a UK government body.
So this government body that supposed to help development of UK businesses is spending my taxes on encouraging UK companies to move to silicon valley……
Sheer Genius!
I couldn’t agree with you more Ryan, we really need a good startup culture here in the UK, and preferably outside London.
james
# April 20, 2008 - 5:39 pm
I think it depends what sector you’re in. Last.fm did well in East London because it’s near a great alternative music scene, skype made it Europe because it made it focus on language localisation. Other guys have had to go to Silicon Valley as the only way of raising capital for what they are trying to build. I reckon London is a great place for mobile startups right now though – there’s a great ecosystem here and lots of skills.
Douglas Neiner
# April 20, 2008 - 6:12 pm
Ryan,
You are so right. I live in America, but in Western MA… not in Cambridge, MA and not in San Francisco. I just run a web design and graphic design business, but you wouldn’t believe the amount of work right in the Berkshires (Western MA). So many people feel they need to travel to the social hub of activity to be a success. All they really ever do is put themselves in the middle of a TON of competition and expensive costs of living.
I think people should strive to do well and be a success where they enjoy being and living. In the case of the UK, you all have everything you need to be successful: Talent and Energy. Why else would I frequent your site and show interest in everything you produce and take interest in unless you were a success in this field?
And for the record, if I HAD to move somewhere to become a startup… England sounds way more interesting than SF. :)
Lee Mallabone
# April 20, 2008 - 7:51 pm
I couldn’t agree more Ryan. When I first read the announcements about Web Mission I did feel slightly envious, but then it dawned on me that there’s no reason to be. Focusing on just outright building something great is far more important for my company at the moment.
Quoted from the Web Mission front page: “The shortlist of companies selected demonstrates that the UK is able to produce credible web businesses.”
It really grates that the implication is that no one was quite sure if the UK had credible web businesses before this event – ridiculous!
I very recently set up Cambridge Web Heads so there’s an online focus for web businesses in my own area.
I’m also hoping to network with more UK web businesses at Business Startup 2008 at ExCel this Friday. Sadly, the programme doesn’t seem to have any technology-company focus, so we’ll see how successful I am with that!
Lee.
anonymous cow
# April 20, 2008 - 8:25 pm
From an outsider keen on knowing more about London’s startups is there a startup hub in London or are startups scattered throughout the city?
Ted Rheingold
# April 20, 2008 - 8:30 pm
I understand that the attending European entreprenuers have the option of getting their travel expenses covered by American businesses in exchange for a brief 7 year
servitudeemployment stint. Afterwhich, the entrepreneur will receive a stipend check towards internet access and will be free to work on whatever project they want at that point.Jamie Murray Wells
# April 20, 2008 - 8:41 pm
Guys – you’re fighting an ideological battle (US vs UK) rather than thinking about how startups can best position themselves within the status-quo to benefit themselves, and yes the UK ecomomy in turn. Which is what Webmission is doing. J
Jimmy G
# April 20, 2008 - 9:08 pm
I have been reading this blog for a while, and this post has made me want to comment more than ever.
Absolutely agree.
The UK has some great startups, some fantastic companies that can one day compete with the big guys like Google. Webmission may have good intentions, nobody’s arguing that. The message it is sending out to UK companies, however, is that we can’t manage without the US.
Just reading blogs like Valleywag and TechCrunch makes me think “wow, I wish we had that kind of developer community over here”. The UK needs to really start bringing all of our startups together – to communicate in a silicon valley-esque community.
Future of Web Apps in London is a great start (is there going to be another one soon?), and the government should be building on that.
I am interested to know what the startup ecosystem is like in London, because, as yet, I haven’t heard much about it.
Jimmy
Peter
# April 20, 2008 - 9:33 pm
i understand the ‘cap in hand’ sentiment, but i think it’s just not that important – the impressin made from this type of trip.
rather, i think of it more like the music industry. some ands do well overseas. a guy i met in san francisco – his band got signed in the UK and the rest of the world, but hadn’t gotten signed to release anything in the u.s. and we see this all the time, going in both directions.
Chris Whyley
# April 20, 2008 - 10:30 pm
Ryan,
My co-founder and I are just sitting in San Fransisco airport on our way back from Y-Combinator’sstartup school and felt compelled to write and tell you how much we agree about the need to put profitability first.
We run the UK startup Zamzar, and found DHH’s talk to be a breath of fresh air – going after a real business rather than trying to flip it may be harder work to begin with, but much more rewarding in the long run. We love the FOWA events and the work you guys are putting in to try and inject some passion into the UK scene.
Chris.
CISNKY » links for 2008-04-20
# April 20, 2008 - 11:37 pm
[...] The problem with Web Mission – Carsonified Spot on, we have all the resources here. (tags: rants web2.0) addthis_url = ‘http%3A%2F%2Fcisnky.com%2F%3Fp%3D324′; addthis_title = ‘links+for+2008-04-20′; addthis_pub = ”; [...]
Duncan
# April 21, 2008 - 1:35 am
Ryan
As an Australian I take what you’re saying to a point, and there’s no doubt that there are successful UK startups that cater to the local market as there are Australian ones, the problem though is can niche startups be profitable from a smaller market such as the UK or Australia: the (perhaps sad) truth is that many startups need to be known or even have a presence in the US as its still the biggest and most cash rich market on the planet. As much as it would be nice to think that local startups could stay local, we cant change the numerical supremacy of the US. Geofocused services (realestate.com.au comes to mind…there’s probably a UK equivalent) yes, niche or non-geofocused: no.
To answer this point: “We’ve got everything we need here” No you don’t, you don’t have 300million+ odd English speaking people ready to use whatever service the startup has created.
Erick Schonfeld
# April 21, 2008 - 2:32 am
Yeah, Ryan. Stop your whinging.
And why does your blog background look the same as the Peter Gabriel music site TheFilter.com’s:
http://www.techcrunch.com/wp-content/filtermusic.png
What are you trying to prove?
valley insider
# April 21, 2008 - 6:11 am
techcrunch will support anything as long as you pay them
Vijay
# April 21, 2008 - 6:30 am
Ryan,
I couldn’t agree with you more. We’ve been having the same arguments, debates and agreements within the entrepreneurial community here in India, and luckily we’ve decided that we are going to build what it takes here itself – and not depend on the US. But I think its slightly easier for us, being one of the fastest growing economies and also our markets being radically different from what the “developed” markets look like.
But applaud your bold statement. I’m with you on this one.
Vijay
PS: Have been following FOWA. Kudos to you guys.
Rob Smith
# April 21, 2008 - 6:50 am
Hi Ryan,
Initially when I read this post I need agree with you fully but since then and reading through some of the comments I do think some balance is required.
Yes, in theory we have everything we need here. And I do agree that if you just concentrate on building a profitable business (hard enough) and have a great service then there’s no need to involve the silicon valley, increasingly so if you are a localised or UK focused idea.
However, as said in many of the posts above I do believe there’s an argument for the fact that there are more VCs, more invesrtment opportunities and greater potential for working together with other start ups over in the US, if you’re ‘in the thick of it’ so to speak, and that will be of great benefit to many start ups.
In essence I don’t think this is issue is black and white and it’s whatever suits the startup best. Whether the UK trade and industry body should be encouraging it is quite another matter though. More needs to be done to foster the UK scene and in more places than London too.
Keep up the good work with FOWA!
Rob
Steve Andrews
# April 21, 2008 - 7:53 am
I think the initiative is to be applauded (better to do something than nothing) but what will the outcome of this expensive jolly/event be??? What was the outcome of the PaddyValley event?
Personally I expect all we will get is more stupid pictures of Robert Loch and Paul Walsh pissed with Loren Feldman (Shel puppet).
I guess there will be lots of mutual back slapping and the twittersphere will be even noisier with banal minute by minute comments.
I agree with Ryan, focus on making money. Moo.com, Glasses Direct etc have done really well on making money/profit (not everything on the web is advertising led or free).
I would add that I find it a little ingenuous of Ryan because most of his events rely on US headline speakers. Why have any at all if we have everything here.
Vijay
# April 21, 2008 - 9:29 am
@ Steve: “I would add that I find it a little ingenuous of Ryan because most of his events rely on US headline speakers. Why have any at all if we have everything here.”
I absolutely agree with that statement. One reason why in India, we’ve stayed away from inviting speakers over from the US, even though we might sparingly invite a few to be part, just to give their inputs.
John
# April 21, 2008 - 10:27 am
I think you’re confusing some things here, Ryan. I agree you should consider making a good/profitable business but you would do this even if you were aiming to get aquired. The value of the business on aquisition will be based on many things, including actual and potential earnings. I see no reason to have a business in which the ultimate aim is not to be profitable – if you have one of those then you actually have a hobby NOT a business.
My point is getting aquired will require a certain proof of profitability. So why do you think people are not concentrating on this and simply trying to “get noticed”, as you put it?
I also see no reason at all why you would not want to go to the US to see what they’re doing there – or anywhere else for that matter. As others have noted, your conferences have US speakers so you must also believe that they have something to add.
So why do you feel WEBMISSION 08 is so wrong? If I made films, even low budget art house films, I’d still like to have a peak at Hollywood and what they did there, even if it just confirmed to me that what I was doing was right for me.
Dennis Howlett
# April 21, 2008 - 11:05 am
The proof will come from those that achieve inward investment from this beano.
Vijay
# April 21, 2008 - 12:34 pm
@Dennis, If investments are the only motive, then it makes sense. But most investors would like to keep their investments close by, especially if its in a startup. Even look at the case of Paul Graham, he would prefer to keep the startups within the walls of his own entity.
Would that quite work out?
Ryan
# April 21, 2008 - 12:38 pm
“You don’t have 300million+ odd English speaking people ready to use whatever service the startup has created.”
@Duncan – for people who are trying to build the next Facebook, Google, etc, I totally understand the need to penetrate the US market (and get media coverage there). But for the 99% rest of us, you don’t need those kind of numbers. As I said in my post, if you’re aiming to make a decent amount of money, you really don’t need those levels of signups.
“And why does your blog background look the same as the Peter Gabriel music site TheFilter.com’s”
@Erick Schonfeld – Funny you should mention that. I contacted the company who’s responsible for TheFilter.com and they admitted to using our background image. They sent over a case of wine to say sorry :)
“I would add that I find it a little ingenuous of Ryan because most of his events rely on US headline speakers. Why have any at all if we have everything here.”
@Steve Andrews – This is a bit of a red herring in my opinion. The reason we have US-based speakers at FOWA London and FOWD London is because those folks are doing impressive things. There are also folks in Europe that are rockin’ it, so we invite them as well. It’s a meritocracy :) Inviting some US speakers to FOWA/FOWD doesn’t mean we’re saying you need to be US-based or get US-based media coverage to be successful.
“So why do you feel WEBMISSION 08 is so wrong? If I made films, even low budget art house films, I’d still like to have a peak at Hollywood and what they did there, even if it just confirmed to me that what I was doing was right for me.”
@John – This is exactly the mentality that I’m so frustrated with. Why do you feel you need to look at the ‘Hollywood’ of the web app world (which is something I disagree with anyway)? We need to start focusing on the special opportunities, connections, strengths that we enjoy here in Europe, instead of always looking for Americans and Silicon Valley to lead the way. I’d like to see more people rise up and say ‘We’re going to innovate and lead the industry.”
On a side note, I’d like to say I’m really proud of some of the start-ups that are starting to rise up in Europe. One great example is FlexiScale which is taking Amazon’s EC2 head on. More power to ‘em!
Mike Stenhouse
# April 21, 2008 - 1:47 pm
Surely you’re missing the point, Ryan. You’ve said, rightly, that choosing speakers should be a meritocracy. Why would you not apply that logic to the markets? It’s not a case of staying in the UK or going to the US… Why would you not do both? The US is the largest market for English-speaking software offerings and if you intend to sell across the pond you need to put in some legwork, either on your own or supported by the DtI. There’s nothing like a face to face meeting.
Same applies for venture capital. We have plenty of European funds but there is also lots of cash in the US. If you need money, why would you not shop around for the best deal? I would question your due diligence if I found that you’d not investigated all avenues.
It’s a global market and a global economy; who knows what’s best for your company?
[Oh, and for disclosure: we're on Web Mission.]
Web Mission 08 | AccMan
# April 21, 2008 - 1:49 pm
[...] Ryan Carson has criticized Web Mission o8, arguing that: I believe the intention for Web Mission was great – networking and exposure for UK web start-ups. That’s fab, but here’s the problem – this project is declaring to the whole world, loud and clear, “We don’t have what it takes over here.†[...]
John
# April 21, 2008 - 2:22 pm
This is exactly the mentality that I’m so frustrated with. Why do you feel you need to look at the ‘Hollywood’ of the web app world (which is something I disagree with anyway)?
- I’ve said why in my post (because I’d liked to know where I’m at/where they’re at and give myself another perspective – which are all good reasons) whereas you’ve not really given a good reason why I(or anyone else) shouldn’t.
I still don’t see what you’re against. I run a business, I’m interested in other people who run businesses, even if they’re not in the same industry. But if they are in the same industry (and the film one is a good analogy) I’d really like to look at the entire spectrum.
You seem to be saying, that the Americans that are doing good things can come and speak at your conferences but that WEBMISSION 08 shouldn’t encourage start-ups in the UK to going “fact finding” in the US because . . . (no good reason). I don’t get it. There are good people here and good people there, what’s there not to like about people going to the US to see how some US companies do things?
Mike Butcher
# April 21, 2008 - 2:51 pm
It’s just morning here in SF so I have just seen this post. I think it’s rather strange of Ryan to go “attack dog” now when he could have called any one of the WebMission partners weeks ago when this trip was announced and put together. Hey, he has a right to criticise, it’s a democracy huh.
Ryan, you are also probably not taking into account that although so far the trip just looks like socialising, the Saturday and Sunday were understandably light on business meetings for the group as it’s… the weekend. Keep watching…
It’s worth pointing out that a tiny minority of the WebMission companies have even hinted to me that they would move to the US. The vast majority are simply here to research the market, take meetings with potential partners or investors or perhaps look at establishing a small office here. They are also here to LEARN, and take back anything useful to the UK, to make the startup scene and their own businesses more vibrant. I question your view that there is NOTHING to be learned from this exercise and everything we need is need the UK. That seems nonsensical.
As for the “message” that this trip sense? I don’t see the problem. UK companies working out if there is anything to be gained from establishing trade or investment link in the US is not that big a story. Would we think the same thing is 20 startups went to Paris for a week with a similar aim? No, and probably they’d get criticised for going on a jolly – but aren’t there also French startups and VCs? Your post smacks of isolationism which feels unrealistic in today’s globalised world.
FYI Robert Loch / Paul Carr etc are not part of this trip and are not attending any official meetings or tours. Paul Walsh acted as an official advisor to the project. However, there was nothing to stop other UK companies coming along and creating a ‘fringe’ – but only some seem to have had the sheer imagination to do so. If you’d like to peruse the agenda, you’ll see it’s all open and transparent (and I’d ask to you name a similar tour with as much openness) http://webmission08.com/agenda.html
The post is also odd because I have been to Carsonifed events where it is often hard to find a British accent amongst the speakers. Many are often from… Silicon Valley. Now, that’s not a criticism. The reason Ryan (who is an American with great connections in the Valley) and his crew have been so successful and gotten so much love from the UK startup and geek community – and I include myself in this – is that they recognised that the UK needed to here from the kinds of people who created Twitter and Google and Sun and Pownce, etc etc. Plus, we get to see DiggNation live, which is AWESOME :-)
I’ll respond more fully on TechCrunch UK in due course. Personally, I would also have liked to have gone to this week’s conference in Kiev (see TCUK) because I think startups should be making lots of connections across Europe as well as the US (but I can’t clone myself just yet). In short, it’s all good, as they say.
TechCrunch UK » Blog Archive » Carsonified, which runs Silicon Valley-style UK events, attacks a UK startup trip to… Silicon Valley
# April 21, 2008 - 3:05 pm
[...] It’s just morning here in SF so I have just seen this post. The below is my initial response, but I have to go offline imminently (I am in San Francisco on the trip in question) so I’m just rattling this off now…. [...]
Mat Atkinson
# April 21, 2008 - 3:47 pm
Ryan
So a few entrepreneurs from the UK want to network in Silicon Valley. What’s the big deal?
You travel and network in the US all the time. It’s been great for Carsonified. Why do you have a problem with other UK entrepreneurs doing the same and building contacts in the US?
On your point about running “cap in hand” to the US, if the UK is so self-sufficient why are so many of the speakers at your London events from the US? This seems to me like a double standard. You are happy to use US resources to put bums on seats at your conferences, but not happy about UK entrepreneurs going to meet many of those same people on their own turf. I’m not sure I understand why that is.
****
Your points about bootstrapping to profitability are, as always, excellent!!
azeem
# April 21, 2008 - 4:07 pm
You can learn a lot going to the Valley–but really nothing you can’t learn by reading blogs and paying attention to the right ones.
I think there is a huge risk for sending UK startups to the valley: they get distracted.
They meet the best and brightest and they come away with ideas that will distract them from running their business. Worse, they see what it like to be an entrepreneur in the Valley–and the CA lifestyle–and not surprisingly think about how to get out to the Valley. YUes for business reasons but for something more.
There is a time and a place for a business to get out there but it really should be later than most European firms think.
I wonder how keen people would be if WebMission was to some shithole in the MidWest?
SO yes–valuable learning but the entrepreneurs need to take the right lessons back. One of which is: let’s not open a Silicon Valley office yet.
Newtype
# April 21, 2008 - 4:31 pm
Spot on. But for a different reason.
If you read the agenda it’s something written by a government worker. No offense meant, but when I do travel to the Bay Area I don’t spend the weekend drinking in the Cali equivalent of pubs and then on to one or two meeting per day. I am in back-to-back meetings trying to raise dough, forge partnership and so on.
Great idea in practice but run by people who are fundamentally employees.
Manoj Ranaweera
# April 21, 2008 - 5:06 pm
Ryan
I strongly believe webmission08 is a great initiative. http://www.edocr.com is a micro-business today and my shareholders are not in this business to make a comfortable living. US ought to be build into most business plans, e.g. over 50% our traffic comes from the US, which makes US a pretty damn important market for us. UK only brings about 10% traffic.
Secondly, I belive webmission08 will allow us to grow rapidly. This is not just down to potential investment, but it is also to do with publicity.
Best regards
Manoj
Selina Howells
# April 21, 2008 - 5:09 pm
Hey Mike, if you’re reading this I’m trying to contact webmissioners Shiny Media , Ashley Norris has posted on his blog that he’s on the trip and to contact his email to talk Shiny stuff but he’s not answering his messages and my comment on your blog hasn’t appeared either. If you can ask him to check his email, thanks! Selina.
Phil Bradley
# April 21, 2008 - 5:16 pm
One issue that ties the ‘be more home-centric/less SV-obsessed’ point to the ‘be sustainable’ point is that SV may well be in the midst of a bubble; just yesterday Paul Graham called for (a return to) investment on the basis of eyeballs (http://paulgraham.com/good.html, Note[1]) when even the biggest players – Youtube, facebook, bebo – haven’t yet demonstrated monetisation of their eyeballs.
Trying to learn too much from the Valley might bring back some business memes and attitudes (build it! they’ll come! we’ll monetise somehow! or flip it!) that totally destroy the nascent UK/EU startup scene if a bubble pop sweeps the web sphere. The equity gap between seed and series A that plagues the UK will not be resolved if we can’t demonstrate maturity and ability to build profitable businesses. If the Valley has instilled that confidence in their angels, fine for them, more power to the valley’s eyeball startups; but we still need to get our own angels psyched, start them off with low risk, demonstrated revenue startups.
Vijay
# April 21, 2008 - 5:27 pm
@ Phil: “The equity gap between seed and series A that plagues the UK will not be resolved if we can’t demonstrate maturity and ability to build profitable businesses.”
Wow. That’s Spot on.
And Yep, I did take a look at the agenda, and it seems like a govt and corporate funded trip with more of a PR agenda than anything. I’d be surprised if anything comes out “sparing three hours” a day to meet up with people, crossing oceans to get there.
Mike Butcher
# April 21, 2008 - 5:48 pm
I find it odd that some comments seem to imply that the WebMission attendees are somehow children who will immediately swallow the Silicon Valley cool-aid and destroy their businesses with US_thinking inappropriate to their strategy. Er, guess what people? They may well have their own grown-up minds and can take or leave the learning from this experience. Like, duh.
Mike Butcher
# April 21, 2008 - 5:57 pm
FYI – Here’s a link to my response – which is ongoing as I can grab WiFi on this trip
http://uk.techcrunch.com/2008/04/21/carsonified-which-runs-silicon-valley-style-uk-events-attacks-a-uk-startup-trip-to-silicon-valley/
Bronwyn Kunhardt
# April 21, 2008 - 6:13 pm
My perspective is that if Web Mission acts as a catalyst for people to discuss what it takes for web start-ups to get better support in the UK, then that’s ok with me. The Valley will always be a source of direction/inspiration/support for UK web companies. That will never go away and building good contacts and relationships over in the Vally is a normal part of any web business. The responses to this post are very balanced on that front. It’s not an “either US/or UK” situation it’s an “and” situation.
George Ornbo
# April 21, 2008 - 10:58 pm
I agree. London in particular has a thriving web community and a massive financial centre right next to it. Good ideas will always attract investment and we should stop looking at the Bay Area as the Imperial godfather.
I’ve freelanced for two UK based start-ups who are doing very nicely thank you and don’t care about registering on Google’s radar.
In many ways your article is about defining what success is and being comfortable with that definition. For the two companies I’ve worked for profit has equated to success and the purpose of the business in not to sell a loss making company for millions to a cash rich corporation.
Janusz
# April 21, 2008 - 11:01 pm
I think you guys are missing completely the point of Ryan’s post. The only reason why he wrote this is that its a perfect bait for Techcrunch to respond and get some publicity. There is a perfect business reason why Ryan wrote it. You can’t blame him. This blog needs more heated discussions and more exposure :)
Mike Butcher
# April 21, 2008 - 11:22 pm
FYI – Just so everything is clear about who and what is funding this WebMission trip I have had a candid conversation with the organisers and got the full info. The TCUK post has now been updated, so I suggest you read the update it and take it on board. The skinny: The taxpayer is getting a f*ck1ng good deal out of this.
Ben Prendergast
# April 21, 2008 - 11:49 pm
Hey Ryan,
Interesting post, I just wanted to add an Australian/US perspective, based on our experiences here at http://www.copperproject.com
The startup market in Australia is non-existent as far as we’re concerned. which is why we’ve been self-funded and profitable – by necessity – from day one. Copper Project is one of the web’s best Project Management Software apps, we’ve been around since 2001 (predating Basecamp), our customer base is almost entirely US-based, yet we’re still dwarfed by the traffic that our US-based competitors have.
We receive limited blog exposure, have yet to be techcrunched/gigaomed (while curiously another competitor with ties to Mr Arrington have) and it was only when we started to expose ourselves to the US market (poor phrase choice I know) with a local presence that we’ve been able to have our cake and eat it too.
Our operations are Melbourne/Perth/Singapore (5 staff) with a satellite office in San Francisco. So we’re able to take advantage of the better USD with development, claim GST expenses without incurring GST on sales (which occur predominantly overseas) and the Australian government is good enough to provide a 50% rebate on international marketing expenses.
There are more factors at play here though I think. The lure of the valley is a very real one when you consider the ease at which good ideas (or business plans) are funded, and the purchase-ready US consumer is a lot easier to deal with than their anglo counterparts in my experience. However while our model is profitable, there will always be that niggling “what if” factor of picking up and relocating stateside.
In its nature tech finance markets are fickle/short term players, so by extension it shouldn’t surprise you that the UK government et al ignore supporting local industry, it is a shame though.
The hostile Clift or hotel Clift? - Paul Walsh, the Irish Opportunist
# April 22, 2008 - 12:17 am
[...] This is my first post about the Web Mission and I’m afraid to say that the most prominent memory I have so far involves a few trolls that work at the Clift hotel in San Francisco. It’s a shame that the tone needs to be negative, but others are voicing their concerns over the little village people employed by the Clift, compelling me to write about it. I will of course write some positive posts about all the fantastic things that are happening on the trip. I’ll also address Ryan Carson’s attack on the Web Mission. In short, I agree with Mike Butcher and Paul Carr. [...]
Alicia Navarro
# April 22, 2008 - 5:38 am
I think I straddle both camps of this argument. I recently was a guest blogger on Center Networks, and my topic of choice was Why the UK is a great place to build a start-up. I wrote this because I passionately believe the UK has the ability to become a thriving hub of entrepreneurship, and I love the UK so much I want to be a part of that journey. I want to get my start-up, Skimbit, funded in the UK, and I want in years to come, people to talk about this time and the companies that were part of what helped transform the UK. So, on the surface, you would think I would agree with Ryan’s argument.
However, I am also part of Web Mission. Is this a contradiction? Is it hypocritical? Absolutely not! In my journey to be the best start-up I can be, nay, to be the best profitable business I can be, you have to know your market, your contemporaries, what works, what doesn’t work, meet as many people as possible, and amalgamate all this knowledge with your own set of ethics and modus operandi, and do the best you can. Being a part of Web Mission, for me, is not only a fact building mission, but a PR exercise I am conducting for the UK… I want to show the world how great the UK is to build a business, and I do this by going to San Francisco, and being part of the best PR that British entrepreneurship has had for a while. And I say this as an Australian – I am that proud to be part of the UK scene.
I think the debate is worthwhile, but hope that people aren’t so closed minded to not only the benefits of exposure, but the fact that perhaps, we are showing off how great we are, rather than selling ourselves cheap.
Sean Glass
# April 22, 2008 - 12:33 pm
Great to see such a good debate. When I was in the U.S. building my first company, we did it in New Haven, CT – well away from Silicon Valley. It worked well, however I always really enjoyed my trips out to the valley where I could meet so many connected people in such a short amount of time. I always ended up with a helpful introduction or two.
I think the primary benefit of packaging a group together to head to Silicon Valley is that it opens many doors for the UK startups. Yes, everything one needs to do a startup is here in London (i moved here for Startup #2), however having more connections only provides for a greater chance of success. How someone could really argue that it’s bad to reach out and make more connections is beyond me. If any of the folks on the trip had made a trip to SV alone, they wouldn’t have been able to put together such a fantastic agenda, however by putting a larger group together, not only has it endedup cheaper, but the list of connections they’ll make with investors and potential partners is much larger. It was a great idea and should be helpful both to the UK startup scene, and to the individuals on the trip.
Fletch
# April 22, 2008 - 1:07 pm
We initially entered the competition to go on this trip, but then made the decision not to complete the entry for the following main reasons:
- We met a legal team in London capable of handling a funding round for us, who ‘got’ what we do, and who we are happy to work with
- I personally am short on time for things like networking as we’re at a delicate stage of product release which requires total focus
- I recently came to realise that the most important interactions we need to be having right now are with our beta community and development team
So while I’m never averse to having some fun and rubbing shoulders with industry-important people, we’ve found everything we need in the UK along with the extended communciation opportunity created by the web.
Max Niederhofer @ Atlas Venture
# April 22, 2008 - 1:24 pm
“This is being backed by some pretty smart people, including … Atlas Ventures (sic)”
First time I hear of us backing this… I don’t think we’re involved. Which is not to say it’s a good or a bad idea or anything. Will let the net fight that out. :)
Max @ Atlas
Rachel Bremer
# April 22, 2008 - 1:24 pm
I’m pretty surprised by this post, knowing Carson as someone who seems truly interested in supporting the entrepreneurial community in London and Europe. Part of helping companies become successful is encouraging interaction with, and learning from, the wider world. Technically, could these startups find the specific resources they need in London. Yes. But would limiting themselves to one geography makes sense just to prove some kind of point that “we can do it ourselves”? No.
I’ve been helping out Web Mission and talking with the companies and don’t think it’s fair to assume that a organized trip to the Valley means that everyone involved is admitting that the Valley is the only place to start a successful company. Having worked with startups in San Francisco for five years before moving to London, I think one of the great things that this place has going for it is a broader view of the world. Companies based in London think about the world at large, they see potential customers everywhere, keep an eye on Asia, Europe and the US all at the same time, and hire global workforces. And they understand more innately what it means to create a global company from day one. Part of this is also realizing that there are very smart people in places other than your hometown who may at some point contribute to the success of your own venture. Wherever it may be located.
Piyush
# April 23, 2008 - 2:49 pm
Ryan, you may like a post by David Heinemeier Hanson on overratedness (if there is such a word) of Silicon Valley:
http://www.37signals.com/svn/posts/987-are-you-sure-you-want-to-be-in-san-francisco
The Indian-European Connection… And even the Valley. « Vijay Anand | The Startup Guy.
# April 24, 2008 - 12:43 am
[...] Tagged atul+chitnis, europe, FOWA, India, Paul+graham, silicon+valley, techcrunch, web Seems like we are not the only set of folks who are wanting to fix the problems we see around us and build a “sustainable” atmosphere around us. There is a post by Ryan who runs FOWA taking a stance against the Web Mission effort that is getting organized by the UK Government and quite a fair list of heavy weights, including Techcrunch. I think this post is important to observe for a couple of reasons. [...]
Ryan Gallagher
# April 24, 2008 - 10:41 am
My point is getting aquired will require a certain proof of profitability. So why do you think people are not concentrating on this and simply trying to “get noticedâ€, as you put it?
@John
Not true at all, having spent years in the valley and having had a start up there which was losing money very fast and had buy out offers you do not need to prove profitability. All you need to do is prove user traction and then get acquired by a company who have a way to monetize that, or who gain more in the stock market/PR game by buying you than they lose in throw away dollars, most of which were getting spent on tax anyway.
I have had startups in the UK and the US. Both scenes are very different and while I firmly believe that you should watch the whole globe to see what is happening, I do not believe you should take a Silicon valley ‘business model’ and try to run it over here. Anyone who has raised money on both sides and has done the walk down Sandhill road (I used to live on Sandhill) will tell you the vast difference in available money for the tech scene there compared to here.
Regarding the WebMission, it could be a good thing it could be a bad thing, it depends on how it is run. If it is to build bridges for two way communication and two way learning then it is great. If it is as Ryan Carson says to go hat in hand then it is not, but only time will tell which of the two it is being run as.
I know many companies here in the UK who are building businesses which are losing money hand over fist to try to get acquired. It is nothing short of gambling and some will win, most will lose. If you focus on making money and making profits (not revenue) then you will stand a higher chance of sticking around but more importantly you won’t have lost millions of dollars by proving that an idea just doesn’t work.
It’s very easy to get caught up in the hype and self generated PR that comes with a perceived success (my last start up won a Demo God award, we were in hundreds of articles and it was successfully funded) and you can learn a lot from it. I learned a tremendous amount. But a lot of what you learn is how not to run a business. Running a business means making more money than you spend. Gambling is a different thing and if you are gambling with someone else’s money then that’s even better, just don’t kid yourself you are doing anything else.
Ryan Gallagher.
John
# April 24, 2008 - 12:54 pm
@Ryan said:
“Not true at all, . . .All you need to do is prove user traction and then get acquired by a company who have a way to monetize that, ”
I’m sorry Ryan but what I said is true, and what you have said backs that up.
It is true because the company is “profitable” to someone else. And if you’re selling you still need to be able to demonstrate that or at the very least have someone be able to identify it in your company.
What ever you think, no one will buy a company unless it some value to them and will help their business by doing so. You are mistaken if you think people will buy just because of “user traction” – that’s only going to work if its a route to success in the overal aims of the buying business.
Ryan Gallagher
# April 24, 2008 - 1:25 pm
@john
It’s not hard to build a company that is potentially profitable to someone else. It’s hard getting them to buy it and it’s hard to run the loss until they buy it.
Regarding user traction, many companies have been bought for users alone and many companies sell their database of users after they have gone bankrupt. It happens every day so stating that it does not is incorrect. Many companies will buy another company to own the technology, just to take the technology off the market for competition on a product level, or for competition via a competitor level, to buy a key developer or team, to buy a route to market and many other reasons. Having a financially successful business is a very small part of the web industry.
My point stands, you do not have to create a profitable business to sell it to someone else. Many loss making companies have been bought and will continue to do so for many different reasons. Having a tech start up that makes profits and is self sustainable is a very rare concept.
Perceived value is not always ‘money’.
I know many companies in the first bubble and the recent past who have been bought and shelved, bought and written off and bought and stripped of assets and key staff.
Ryan Gallagher.
Jonny Haynes
# April 24, 2008 - 1:59 pm
Point well made Ryan. Surely there is as much chance of the start ups being successful over here (UK) as if they were to start up in the USA, if anything surely they’ve got more competition over in the States and are less likely to get noticed. Hmmm.
Anyways, not pleased that UK taxpayers money is being used to develop start ups in the States.
Web Mission doesn’t like its hotel at all - user generated content in action : Tips from the T-List
# April 24, 2008 - 11:53 pm
[...] The idea that a group of bright young things is running amok in Techland, California, has created a fair bit of debate and an equal number of angry responses. [...]
One thing is definitely still missing | Crossbone Systems
# April 25, 2008 - 9:13 pm
[...] When I read Ryan Carson’s post about the UK having everything it needs to foster new businesses, especially those that are web or technology-based, I was in full agreement. However, having made the trek from Cambridge to the docklands area of London today, I can state that there is one thing that is sorely missing (and has been for several years): easily accessible wi-fi that doesn’t cost the earth. A quick overview of my day: [...]
The Indian-European Connection… And even the Valley. | Indian Startups In News
# April 25, 2008 - 11:06 pm
[...] The Indian-European Connection… And even the Valley. (Wednesday, April 23rd, 2008) Published by Startups News in India, Vijay at 5:43 pm. Skip down to comments or read the others. Seems like we are not the only set of folks who are wanting to fix the problems we see around us and build a “sustainable†atmosphere around us. There is a post by Ryan who runs FOWA taking a stance against the Web Mission effort that is getting organized by the UK Government and quite a fair list of heavy weights, including Techcrunch. I think this post is important to observe for a couple of reasons. The striking similarities that we hear from folks around us in: 1. Thinking that the Silicon valley for some reason offers more opportunities. 2. Europe just like India, in most cases, seems to think that you only get funded if you hit the valley. Atleast we aren’t that bad. We have much more easier access to capital. 3. There are folks like FOWA (Future of Web Apps) who are trying to build a vibrant community of users, developers and startups in Europe, very much like how we are working on the same – with arguments that they have “everything that they require right there†4. There are also people, most of them, who seem to think that the UK companies should be looking into the valley for users and potential exit strategies. I’ve been working on a post that shows a snapshot of interaction between startups, venture capitals and the markets from across the globe – the valley, Canada, Australia, Europe and India. You’d be surprised how similar most conversations are. Trust me, things are not so hard because we are in India, neither too easy because we are here. We are just facing the same harsh realities as anywhere else. Perhaps the world is flatterning. Huh! who thought I’d agree to that, so easily! I’ll leave you with this comment by Phil Bradley in that post, which just gets the message home without any explanations: “The equity gap between seed and series A that plagues the UK will not be resolved if we can’t demonstrate maturity and ability to build profitable businesses.†Paul Graham has written a recent article where he is wailing and moaning on the same topic. And I think he lives in the heart of where the action lies. To Quote Paul from his Article, “I used to think of VCs as piratical: bold but unscrupulous. On closer acquaintance they turn out to be more like bureaucrats. They’re more upstanding than I used to think (the good ones, at least), but less bold. Maybe the VC industry has changed. Maybe they used to be bolder. But I suspect it’s the startup world that has changed, not them. The low cost of starting a startup means the average good bet is a riskier one, but most existing VC firms still operate as if they were investing in hardware startups in 1985.†That just eerily sounds like the issue we face here. PS: I haven’t thought through this yet, but I believe this only applies to Internet/Media related startups. [...]
Simon Grice
# April 26, 2008 - 8:25 am
One of the reasons that the UK doesn’t have the same startup culture as in the US is the difficulty in raising early stage (seed) funding. The process is ’still’ shrouded in mystery for many entrepreneurs – I know – I’ve been there. The main challenge is the time & effort involved in connecting with the investors in the first place.
We’re (http://ideas.org/ are building – SeedFund (http://www.seedfund.co.uk/) as a platform to connect entrepreneurs and investors in the UK (a US version will follow too).
We’re filming (each company has a 3 min video pitch filmed in HD) on the 15th May – if you’re a startup raising an early stage round (£50k – £1m) and you think SeedFund may help feel free to register on the website and we’ll be in touch with more details.
Mike Butcher
# April 27, 2008 - 7:19 am
Just to be clear about the tangible outcomes of this exercise: Apart from raising awareness of UK startups generally, and those on the trip specifically, each startup had private meetings about potential investment, partnership, distribution/marketing deals and other meetings. I know for a fact that several real commercial deals will be announced as a result of this trip in the coming weeks and months (Skimbit was the only one to be in a position to confirm three new partnerships during the week). Check TechCrunch UK for the costs involved (see link). Each startup contributed £1200 towards the costs, with UK Trade and Industry paying (I hear, off record) a tiny £125 per startup. No doubt this will now ignite another debate along the lines of “why oh why oh why won’t the UK government promote startups more abroad?”, leading to all the previous critics of WebMission to disappear in a puff of contradiction…
Carsonified » Blog Archive » Our idea of success is all messed up
# April 28, 2008 - 3:48 pm
[...] My last post on Web Mission stirred up a lot of discussion so I’d like to expand on my original thoughts. [...]
socialprofilr
# April 29, 2008 - 12:08 pm
I do not have the luxuries of a getting hands on funding in the UK for a Social Network I intend to develop, however I believe the niche I intend to target will get the exposure I need from the right people to see this happen. I intend to go the social enterprise route to get some startup assistance and the rest will come from investors intending to support this type of niche social network, you just got to think out of the box.
Incidentally the service wowjoomla.com has over 1000 registered users and we intend to offer training and tutorials for the Joomla CMS. It will hit the target of 2100 paying customers at $40 so should see that cool million coming in. This will take about 18 months to achieve realistically but should get there, I do not doubt it. By that time the Social Network will be ready to go live. It will partly replicate features of a *cough* US version that generates $20million revenue per annum, but that is just inspiration to drive the service.
Although I do not anticipate that kind of revenue, but certainly it will be a high profile service that will hit mainstream, just the nature of the niche it targets. I work in that field and see the potential that exists, just got to get the mechanics right. Government funding will be accessed for this service and I confident it will be achievable, I understand this market well enough to get there.
Coming to America: Getting visas to do business in Silicon Valley
# May 2, 2008 - 9:22 am
[...] While the Silicon-Valley v. Rest-of-The-World debate rages on and on there are still some companies for whom it’s essential to be in the heart of the industry. Getting a visa to come the valley is not easy though and with more first generation immigrants than almost anywhere else I’ve been, every San Franciscan foreign accent has a war story of how they battled their way into California. [...]
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# May 2, 2008 - 8:34 pm
[...] While the Silicon-Valley v. Rest-of-The-World debate rages on and on there are still some companies for whom it’s essential to be in the heart of the industry. Getting a visa to come the valley is not easy though and with more first generation immigrants than almost anywhere else I’ve been, every San Franciscan foreign accent has a war story of how they battled their way into California. [...]
blogging… » “Going” to America: Getting visas to do business in Silicon Valley
# May 5, 2008 - 7:36 am
[...] While the Silicon-Valley v. Rest-of-The-World debate rages on and on there are still some companies for whom it’s essential to be in the heart of the industry. Getting a visa to come the valley is not easy though and with more first generation immigrants than almost anywhere else I’ve been, every San Franciscan foreign accent has a war story of how they battled their way into California. [...]
The Global 5 million at Luckyspin.org
# May 7, 2008 - 7:44 am
[...] A couple of weeks ago I watched DDH’s presentation at Startup School. It was actually a lot better than I was expecting. The guy has charisma, clearly. There was a lot of really good stuff in it, but the thing that really resonated with me was his characterization of what should be the target audience for a web startup: the Global 5 million. Instead of trying to do a youtube, why not build a profitable, successful business and enjoy life? Right on! I think it hit the nail square on the head with the problem I have with a whole host of startups out there, even the ones I have worked for. youtube is a freak occurrence, albeit a great one for the guys who started it. But if you set out with that goal in mind, take a bunch of VC cash and succumb to the pressure to generate 10’s of million in revenue, you’re in for a hiding. It’s something that Ryan has been talking about too. [...]