Our tech industry is being undermined by a psyche allergic to global growth
The tech sector in the UK is in high-growth mode. In 2021, there was a record-breaking $35.1bn investment into tech, almost 120 tech unicorns and nearly 40 tech IPOs. The record level of venture capital investment in the UK has increased the valuations of both public and private tech companies, putting Britain third in the world, with a $1tn industry, after the US and China.
But even with the early success of our most promising tech businesses, many companies are leaving prematurely before reaching their full potential. This is in stark contrast to the US firms who go on to become the dominant global market leaders and achieve the trillion-dollar valuations. This begs the question – what’s hindering these UK companies from pushing on for further growth?
Much of it is down to our need for even greater cultural ambition and aspiration. UK scaleups must aspire to win accolades on the global stage rather than exiting quickly, and this growth mindset must come from the leaders – the board, founders & CEOs – who set the business’ vision, values, strategies, culture and direction.
There is a marked difference between the US and UK psyches. I have seen the power of fearless ambition and leadership in Silicon Valley, where a key mantra was to “grow fast or die slowly”. Boardroom discussions centered on how to grow, smash barriers, expand into new markets, identify acquisitions, create new categories, and become the global market category leader. Driving the agenda was vision, customer obsession, colleague engagement, clarity of strategy, flawless execution and building exceptional value for all stakeholders. All of this was enabled by bold, aligned and strategic financial backers and stakeholders that shared the same vision. Noble ambition levels mobilised and empowered companies to achieve what was previously deemed impossible by naysayers.
The good news is that I see this mindset emerging in the UK today. Lessons have been learned and the riches of UK talent and experience proliferate. There are many more successful founders, CEOs, and investors who learnt “the American way”, returning to the UK tech scene and recycling their experience and capital.
We have a stronger VC community and more experienced UK “digital native” board members today. When I returned from the US, many UK tech boards were ready to throw in the towel prematurely. They were obsessed with being bought out and “exiting”.
Today is different. Collectively, the key players have raised ambition for UK scaleups to continue to grow and be prepared for global expansion. They understand what “grow fast or die slowly” means and apply the playbooks to become global market leaders. One good example is Poppy Gustaffson, CEO of Darktrace, which listed on the London Stock Exchange last year and demonstrates ambition to grow organically and through acquisition.
Yet, as a nation, we need to continue to build this ambition to expand overseas. To remain competitive on the global stage, we must look to market leadership globally – not just on our shores.
To support this we need a radical wide-ranging agenda that starts with the UK education system. Growth and ambition need to be embedded within the UK DNA – from regulation to pension fund management structures. We need even more role models (like the UK’s growing number of tech ‘unicorns’ – including Skyscanner, Revolut and Monzo), to influence the UK tech scene and create heroes from the UK’s entrepreneurs, who are working to scale their tech companies and achieve global market leadership. When I came back from Silicon Valley in 2006, the US had 3rd and 4th generation founders and CEOs recycling their capital and expertise. The UK is now in the position to learn from these successful foundations.
There are predictions that 50 per cent of the UK economy will be digital, tech and creative industries. We need clear strategies to encourage entrepreneurs to achieve a prosperous UK tech sector and develop that winning psyche of achievement and celebration that will be crucial to underpinning the country’s future tech and digital economy success.
We must cultivate a strong growth ambition, a winning culture that becomes so contagious people talk of the “London mentality” where they would previously refer to Silicon Valley. This will create a new wave of entrepreneurs to drive the future success of UK tech.