London’s startup fog has started to clear.
For decades, if you’ve wanted to make it big as an entrepreneur, the U.S. was your safest bet. That’s because starting your own business is one of the fundamental American Dreams--one that takes vision, risk, hard work, determination and a certain spirit from deep within to build your own creation.
That idea is a tangible one here in the States. Most Americans know a small business owner--an uncle who owns restaurants or a friend who hit it big in Silicon Valley.
And now, across the pond, in the city where Big Ben has been ringing for more than 150 years, it's entrepreneur time, too.
“London now has become a vastly better place to start up,” said professor Jeff Skinner, director of Entrepreneurship at London School of Business (LBS), who describes how the frosty climate a decade ago is becoming increasingly friendly to small-business ventures. “Ten, even 15 years ago, the seeds were there. But you kind of reached a cliff edge. You had the idea and you were pumped with enthusiasm, but where did you go next?”
Skinner said there were hardly any early-stage investors or lawyers who were interested in new businesses, and culturally the concept was misunderstood.
“At one time nobody would have understood…. ‘I’m an entrepreneur. ‘Does that mean you're a consultant? Does that mean you're unemployed?' Or you're doing your own thing, beavering away at some little business?” he explained. “Now people know what it means, and people can admire the tenacity and the success.”
Daniel Hulme, a young entrepreneur with a tech startup that’s based out of London, agrees that the city is beginning to cultivate and stimulate entrepreneurship. In 2009 he was part of a group of entrepreneurs that former Prime Minister Gordon Brown sent to the U.S.to examine the entrepreneurial culture.
“I was part of the Global Scholars Programs at the Kaufmann Foundation,” said Hulme. “We became immersed into U.S. entrepreneurship and then went back home to start up and teach others to do the same."
The Kauffman Foundation, headquartered in Kansas City, is a private, nonpartisan foundation that, among other things, has been providing international students with the chance to learn about how the U.S. creates high-scale businesses. Its annual Global Scholars program accepts 15-30 students or recent graduates to take classes, visit entrepreneurial hotspots and intern at American startups.
“What’s impressed me is these students have returned to their home countries, bringing that entrepreneurial spirit and seeking out others who have it,” said Wendy Torrance, director of Entrepreneurship at the Foundation.
And in countries from Ireland to the Ukraine to the UK, all you have to do is turn on the TV to see the excitement of startups: The BBC show Dragon’s Den, where entrepreneurs pitch their ideas to a group of venture capitalists, has been a hit for years.
“It’s a very popular show in London,” said Skinner. “Entrepreneur has become quite a fashionable word.”
Mariana Tricolici has seen it firsthand. The 27-year-old LBS student, who is starting a day care center in London, said since leaving Goldman Sachs in 2009, an influx of her friends are starting businesses.
“The credit crunch has shown people that there are not only traditional careers to build a future,” said Tricolici. “Now if you have the dream to do it, you have the opportunity.”
Her business, which will focus on day care with more flexible hours than what’s currently available, has already secured financing from what Tricolici explained is amusingly called “the friends, family and fools round”.
“Instead of just a friends and family, in London they add fools, for those who don’t know you but still invest,” she said.
That’s typical English humor. And while Hulme said culturally there is still a lot more pessimism about the possibility of a business becoming successful–something is changing.
The government and other private sources are providing more grants for startup funding--and Boris Johnson, the mayor of London, is looking to make Olympic Village (which is being created for the 2012 Summer Games) into an entrepreneurial hotbed after the medal winners go home.
“We’re looking for the world’s most creative minds to bring their ideas and investment to this,” he said in a press release in 2008. “To underpin the area’s growing prosperity and development.”
Today’s opportunities, professor Skinner said, are only the beginning of what he thinks is in store for London.
“I’m convinced that we are on the cusp of something here in London," he said. “As somebody once said once upon a time if you walked into a pub and you wanted to get the attention of all the girls you'd say you were a banker. Now you'd say you were a clean-tech entrepreneur."