Europe: you pissed me off. Thank you!
I just spent another 2 weeks in Europe with Startup Catalyst (I did the same trip same time last year) leading visits to 40+ accelerators, incubators, corporate labs, co-working spaces, startups, and investment groups. I returned home frustrated that the rest of the world is accelerating away from us, but massively inspired that we can and must do more.
Our group of 20 mission participants included mostly investors, scale-ups and startups, plus accelerator/co-working leaders, corporates, University faculty, and public servants. Every participant took away something different, but my short perspective is this: Europe is crushing it; a silent tsunami is building; and we have to take things to the next level in Australia, or we’re dead.
The growth in the UK startup scene from last year to this year is impressive. To put it in perspective, the UK has 800+ startup hubs and programs, including 167 accelerators, of which 50% are corporate back, plus 42 corporate venture funds. In 2016 UK digital tech investment reached £6.8billion, that’s 50% higher than any other European country. Individual co-working spaces in London typically house 300 to 1000 members, and places like Campus London have around 40% female membership. WeWork alone has 9 locations just in London, just one of which houses 3500 members.
Another one of those 800+ hubs is the new Plexal Here East facility at the Olympic Games site, which is an entire new village dedicated to startups — we did a site tour complete with hard hats and fluro vests, and the main building alone could house the entire Australian startup ecosystem, with room to spare. No shit.
The single suburb of Shoreditch has 3228 startups per square kilometre. The next post code over has 1580 startups per square kilometre. Dwell on those numbers for a moment until it hits you. They are not total head-counts, they are density measures (view more stats here).
In every space we visited, room after room is jam packed with people, smashing keyboards, making calls, building startups. They have scale. But more importantly, intermixed between the founders are corporate executives, freelancers, fintech experts, and industry. To that point, these are true particle colliders — collision factories where random serendipitous conversations spawn atomic outcomes.
The UK also has proactive Government intervention, with a few years head start on us for investor incentive schemes. They have an Exceptional Talent Visa which brings 400 experienced tech-entrepreneurs (with previous experience building companies) into the UK each year.
They also have groups like London & Partners, Tech City UK, and UK Department of International Trade, all of who’s purpose is to attract talent and investment to the UK. I’ve been told that UK DIT alone has 50+ staff in Australia working full-time to streamline entry into the UK. Even the city of Birmingham has 2 staff in Australia working to attract Australians to do business in their city.
Site visit after meeting after site visit, like every other mission I’ve done before to other startup hotspots, confirmed that as great as the ecosystem is here at home (and it is awesome), we still have a lot of things to do.
But what specifically should we be doing? Here goes…
- Lesson 1 for founders: stop the bullshit and work on something epic. A panel of UK accelerator EIRs put it best: “if you are working on another iteration of a food delivery service or a 5th generation of ride sharing app, then you won’t get in my accelerator”. We have incredible talent here in Australia — the best in the world — but I get frustrated when they work on small problems in small markets (indeed, that’s the reason Startup Catalyst exists). Work on horizon 2 or 3 innovation. Work on something that will shift the needle. And stop whinging about how you had to kill your startup because the Government didn’t give you a handout.
- Lesson 2 for founders: London is open. (We heard this exact quote at every event, even 15 times in just one speech!). It is incredibly easy to get on a plane, land in London, and pull off a deal. To the point, 2 of our mission participants potentially pulled off epic deals while on the ground, and our 2016 mission participant Adepto are now well established in market and picking up significant local traction. Corporates there are eager to do business with startups, plus there is just so much support to help you do business in Europe (see above).
- Lesson for corporates: stop the innovation theatre. This will be a topic for an entire post and even events of its own, but OMG corporate Australia, you are doing innovation all wrong. Don’t get me wrong, Australian corporates are great at top-down innovation, and solving for known problems, but true innovation is grassroots up. Real innovation is not a transaction — you can’t buy 3kg of it, and you shouldn’t have a defined ROI. This is R&D. This is investing in the unknown exactly because you can’t predict the outcomes that will impact you the most. I’ll talk more in future posts about the fantastic models we saw, like Innogy, Porsche Digital Labs, and Barclays Rise London, and compare them to the vacuous waste that is the CBA Innovation Lab in London, and to some of the corporate sector programs here at home. Stay tuned.
- Lesson for Startup Catalyst: the model works, so scale what we do. Catalyst is a not-for-profit, and I have no additional upside whether we deliver 6 missions a year or 44. But I’m more convinced than ever of the massive impact these missions have on the participants we take, and we need to scale this up. Hence I’m now raising sponsorship from every corner of the country to ramp up and deliver more of these missions every year. We need to reprogram more Australians to have the global mindset, to work on epic shit, and to target massive markets.
- Lesson for me: honest conversations. I’m a polite guy, but when the world is on fire, there is no time to sugarcoat shit. I’ve vowed to have the transparently honest conversations at all levels of my life. We have a “non-refundable lifetime” to invest, so I am going to invest my time even more wisely now.
Words can’t do this topic justice. Video might help, but really you need to go there (and go in the right way, with the right cohort mix, and visit the right places). Startup Catalyst will be doing this mission again next year for London Tech Week, but we are also working on a female-only mission to London sometime sooner, which will be announced as soon as we can secure the funding for it.
If you want to hear more from the other participants, please join us for a panel catch up in Brisbane on July 17th, tickets available here.