IT is simply untrue that Britain doesn’t produce any wealth and job creating entrepreneurs any more. Take some of the stories in today’s City A.M.; they demonstrate that Britain retains a vibrant start-up and growth culture. Hugh Willis, 50, and Mark Poole, 49, who founded BlueBay in 2001, are today each £82m richer after they sold their firm to Royal Bank of Canada for £963m. Many in the City were saddened last week at the premature death at the age of 57 of Andrew Beazley, who co-founded the eponymous Lloyds insurer in 1986; his firm today confirmed that it is bidding for its rival Hardy. Meanwhile, CQS is floating a fund on the stock exchange; the firm, one of London’s most successful hedge funds, was founded in 1999 by Michael Hintze, a brilliant Australian-born ex-Goldman trader.
London is home not only to established global giants, from GlaxoSmithkline to Barclays, but also to thousands of newer companies founded by self-starting, hard-working and visionary entrepreneurs. But there is one class of entrepreneurial firm we don’t have. The UK is completely useless at producing truly revolutionary start-ups that go from nothing to global domination in the space of a few years. I’m thinking of the likes of Facebook, Google, eBay or Amazon, mass market, consumer firms set up by scientifically brilliant, idiosyncratic and absurdly young geeks.
The stories of many of the new generation of Silicon Valley tech billionaires are astonishing; they just wouldn’t happen here. Take Mark Zuckerberg, who co-founded Facebook: he started programming when he was in middle school, excelled in the classics, specialised in latin and went on to study IT. While still at school, he designed and programmed an app to help workers in his dad’s office; he built a version of the game Risk, as well the Synapse Media Player that used artificial intelligence to learn the user's music listening habits. Microsoft and AOL tried to buy him out and recruit him, but Zuckerberg instead made the app available for free and went to Harvard. That is where he co-founded Facebook in 2004 with his roommates, before dropping out to work on it full-time that summer, moving the start-up to California, enlisting the help of specialist venture capitalists and creating a fresh batch of tech billionaires. A cursory look at the CVs of the founders of other revolutionary US firms shows similar backgrounds; Peter Thiel, the 43-year old billionaire co-founder of PayPal and key investor in Facebook, has already been a US chess grand master, the founder of a newspaper, the creator of an ultra-successful hedge fund and a seed investor in LinkedIn and others.
For a variety of cultural, ideological, regulatory, economic and other reasons, there is no way anybody could deliver similar success stories here in Britain. They used to in Victorian times – but no longer. Polymaths don’t start their own firms while at UK schools; it is taboo to drop out of universities, which remain poor incubators; the VC infrastructure doesn’t work as well; there is no UK equivalent to Palo Alto, where kids can rent houses, eat pizza and change the world. Somehow, sometime, this needs to change. Britain too needs epoch-defining new firms that revolutionise industries, change the way hundreds of millions of people live their lives and force the world to notice. In this week of austerity and gloom, we can but dream – and reflect upon the fact that in some countries, dreams often do become reality.