Entrepreneurship in London

So in the aftermath of the Entrepreneur’s International Challenge, I have to write my post on business and entrepreneurship in the UK. I already started profiling a few startups in London through a guest post on the RUNmyERRAND blog last semester. Here, I’m going to focus on more big picture things.

First off, London is no Silicon Valley and it’s probably not even a Cambridge, but there is a good deal of activity going on here. When I was doing sponsorship work for EPIC, I visited several modern, unconventional, and fun startup and small business offices that reminded me of those we saw on EPIC. We also went to a massive 2 day entrepreneurship fair where startups and businesses that support startups (like IT and marketing) tried to promote their businesses. There were keynote speakers, “speed dating” style workshops, and all sorts of networking going on.  And despite this recent article on TechCrunch, I do think the UK government is legitimately trying to promote entrepreneurship especially through giving out seed grants. They’re just really inefficient by nature.

Nor are UK startups absolutely dull and old fashioned. No one’s expecting the next Facebook or Google to come from here, but as you can see from the four business I profiled for RUNmyERRAND, and WAYN.com (Where Are You Now, a travel social network), another EPIC connection, are tech related. Some of them are uniquely London or big city like eCourier. Others are just downright quirky like carding service Serve Legal (don’t know if paying someone to make sure your own employees are carding is really sustainable) or Ben and Jerry style smoothie maker Innocent (who have an annual cap knitting campaign for their bottles).

Even students are coming up with some good ideas. The finals for Pitch It! this week, LSE’s version of BCVC, featured three interesting but in my opinion misguided companies:

  • BestGiraffe is an online marketplace for corporate advertisements. However, other companies have already done this and the mid-smaller size firms they’re aiming for could easily use Craigslist or crowdsource directly to get their work done. Also the team relied on leveraging developing countries for labor to offer low prices but since advertising is highly sensitive to regional and cultural nuances I doubt its really as useful as they believe.
  • Pressure Trade is an online game that simulates certain trading skills. It’s obviously targeted to investment banks and those who want to get jobs with them. Honestly though I think this is a very weak idea. Why not just play a real stock market game that simulates actual trading, not just activities that are similar to trading? One of the judges was smart to point out that this business could have a lot more potential if they just made it a fun, social game. Think WoW or Farmville for trading and investing. I would play that.
  • Youny is a matching service for tutoring. I think this one ended up winning (I didn’t stay till the end) but again I thought it was a weak idea. First off, most universities offer formal tutoring programs that will do this for free. You also run into a one time user problem because once someone finds a tutor they like, they’ll bypass the middleman and arrange future sessions on their own. Finally, the team wanted to attract users by building up a database and having live responses but this can be done for free through a wiki or forum.
  • Younity is a social enterprise that allows users to donate their loyalty points from shopping to charities. I didn’t stay for the social enterprise portion of the competition, but this one caught my attention. I like it because it’s creative, simple, and viable. However, I think most loyalty programs/credit card rewards programs already give you this option to an extent, so I don’t know how much of a market they’ll have.

So maybe I’m a little harsh on these business plans, but as you can see, there’s no shortage of ideas or inspiration.

The problem I think lies in the culture. Entrepreneurship just isn’t something most people consider as a career path. Students at LSE are mostly stuck on the investment banking/consulting route. There’s a culture of working for a nice corporation with a steady paycheck and not taking risks. One entrepreneur told me that in some parts of England, there’s actually a social stigma attached to being an entrepreneur or small business owner. I find this to be the complete opposite of the U.S. where the small business is heralded as the everyman of America. The education system also has a lot to do with it too. The university system here is really focused here so there’s little to no chance to explore outside subjects. The core and liberal education in the U.S. may be a pain at times, but it definitely stimulates creativity and innovation.

Will things change here? I think so. Just look at the popularity of BBC’s Dragon’s Den, an American Idol style competition for business plans. In fact, of all the reality show competitions the Brits could’ve exported to the U.S., I wonder why this one hasn’t made it across the pond yet.

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