POKE fun at Facebook’s plummeting shares all you like. Call the company overhyped. Doubt its lofty valuation. But the facts remain: Facebook, born eight years ago in Mark Zuckerberg’s Harvard dorm room, has nearly a billion regular users and dominates internet social networking. Whether or not it continues to grow at breakneck speed, we’re all jealous that it wasn’t created on this side of the Atlantic.
It raises the rather embarrassing question: why hasn’t the UK developed a Facebook equivalent? We have the right timezone for an international star; we speak the world’s language; and we have our own entrepreneurial hubs – Shoreditch’s Silicon Roundabout and Cambridge’s Silicon Fen. So why are the giants of online media, entertainment and ecommerce still American?
Start with finance. I took $20m (£12.9m) in funding from a major UK-based venture capital fund (VC) in the late nineties and vowed never to do it again. Britain’s VC industry is far too risk averse. It’s only prepared to back tried-and-tested models. If someone says: “The big data market is going to be worth $50bn by 2017,” the British VC will typically sit back in his or her chair and wait for the explosion to happen. The American VC will hunt down the ideas ahead of the curve and write out cheques. A case in point: Silicon Valley had invested a billion dollars in social media before anyone had really heard of Facebook.
Britain’s high-street banks are just as bad and obsessed with personal guarantees. They’re the last people you’d expect to make a success of a business themselves – they don’t have an entrepreneurial bone in their bodies.
The wrong people are in charge of money in the UK. When capital is scarce, it’s much easier to go and do something where you can make sales immediately – and that’s when invention and creativity suffer.
Next, let’s compare the entrepreneurial attitudes in the UK and the US. I’m originally from Sheffield and now I’m based in Silicon Valley, so I’ve experienced both sides of the pond. When I first arrived in California, I assumed the work culture was laid back. Employees would bring their dogs into work, play table tennis in the office and have meetings on beanbags. But behind all that was a very fierce focus on innovation. Backed by other entrepreneurs, American entrepreneurs think big and they think global. If they fail, they’re slapped on the back and told to give it another shot. Their attitude is “can do” not “might do”.
In Britain, we’re stifled by old-fashioned snobbery, a fear of failure and too many rules. Why else is a country that’s covered in tennis courts only able to produce one half-decent player every generation?
It begs the question: if a British Mark Zuckerberg walked into your office, would you even notice?
David Richards is chairman and chief executive of WANdisco.