While I was in the UK for the launch of Techstars in London, I held a “random day” where I met with 24 companies, back-to-back, for 15 minutes each at the awesome Warner Yard. Over the course of the day I met a lot of interesting people and gained a little more insight into the specific struggles and challenges of the UK startup community.
Random days of interactions with people I wouldn’t normally meet have led to all kinds of connections, friendships and even some investments. The idea for random days comes from Brad Feld, who has held them regularly for years. In fact, I met Brad on one of his random days, when I presented the idea for Techstars to him. He ended up not only being interested, but actually becoming a cofounder.
Of course the highlight was working with the 11 companies we’ve funded in our inaugural London program. Five of those companies are from the UK, and six are from other countries. I can tell you one thing from spending a month with them that it’s going to be a great class of companies. If you’re interested in checking out Demo Day in September, just let me know.
My London random day–and the entire month I spent talking with people involved in the startup community there–really highlighted the way that entrepreneurs all around the world are working on similar things. You see the same ideas in London as you see in New York. If there are two startups in London doing something, there are probably two or three in New York and a couple in Boulder doing the same thing. This kind of competition is happening all the time on a global scale. The ideas entrepreneurs are working on and how they’re thinking about the world aren’t all that different from one community to the next. (This certainly underscores the fact that if you have a great idea for a startup, other people probably have the same idea. What really makes the difference are things like execution, passion, vision and your team.)
Many people have asked me what major differences I’ve seen in London, compared with startup communities in the US. The biggest difference I’ve noticed is in the velocity of investment. Not necessarily the quantity of investment, but the slower speed, and how much friction is often involved with getting through a seed round. Companies in the UK that are raising a seed round typically have to go through the same diligence as a company raising an Series A round in the US. So there’s more diligence, more spreadsheet work and a lot more focus on actual valuations. There’s also a lot more scrutiny of the business model, as opposed to just finding good people with a good idea. I’m not saying this is better or worse than how seed funding happens in the US, but it does seem to cause more UK entrepreneurs to self-fund, bootstrap, focus on revenue earlier than might be natural–or simply decide to pursue their business in the US. I did notice that the London community seems to be starting to make a shift toward the notion that at seed stage you sometimes need to trust your gut more than the spreadsheets.
Entrepreneurs and investors in London are hungry for their community to continue to improve and they’re enthusiastic about all the things happening there. And we’re tremendously excited for Techstars London to be a part of it all.