If you look at the six most valuable public companies in the world today, you will notice something striking. Five of them are the tech companies Apple, Alphabet, Microsoft, Amazon and Facebook, founded on the West Coast of the US between 1975 and 2004, three of whom who have achieved this ‘most valuable’ status in the last five years.
Whilst the highest ranked European company today is 19th-ranked Nestlé, there is a clear positive in that these six companies have achieved their status so recently. This, combined with the fact that Europe has just produced it first $100B tech company in SAP, and two new $10B tech companies in Supercell and Zalando, gives me great confidence that European companies are well on their way to claiming this prize.
Last Friday, I returned to my undergraduate home of Queens’ College Cambridge, along with some of the UK’s leading investors and entrepreneurs, for an afternoon discussing exactly this question — whether the world’s most valuable company could be built from the UK.
Here are five reasons why I think it could:
- So much more than just London: According to data from Startup Britain, only 32% of UK startups in 2016 were based in London. Other major cities such as Manchester, Birmingham and Leeds have vibrant startup communities and according to Tech City, each hosts tens of thousands of digital jobs. Smaller cities with histories of innovation like Bristol, Oxford and Cambridge definitely punch above their weight here too. In his talk on starting companies in Cambridge, Cambridge Angel David Cleevely said “Cambridge succeeds because of its strong local network, its mix of businesses and expertise across technology, business, consulting and consumer, and the strong potential for chance encounters”. With so many tech hubs in the UK, each with their own unique mix of expertise and their own close networks, the chances of great companies getting the support they need to start out is high.
- Leading the world in AI: The UK is establishing itself as the global epicenter of AI research and company creation. Leading academic and corporate research groups such as those at UCL, Cambridge University, Google DeepMind and Amazon Cambridge Research Centre provide the environment and resources for researchers to do groundbreaking work, pushing the boundaries of what computers can do. These groups also act as great training grounds for founders, with their graduates increasingly going on to start their own companies focused on solving more specific or commercial problems. As was recently reported in Atomico’s State of European Tech (SoET) report, the investment is there to facilitate this, with $1.3B invested into UK companies between 2011 and 2016. As my colleague Siraj said in discussion with Demis Hassabis, Founder of DeepMind, “The most interesting place on the planet to do anything with AI right now is DeepMind and the ecosystem should spring up around it, like back in the Silicon Valley’s golden days”. Stanford Professor Andrew Ng recently said that “AI is the new electricity”, and the UK is increasingly emerging as its primary power station.
- A pool of diverse and highly-skilled talent: Companies in the UK have access to a significant talent pool, both homegrown and from across Europe. In the UK, an increasing number of young people have more exposure to the ecosystem and see joining or founding startups as a real opportunity. Programmes like Cambridge University’s incubator ideasSpace, or talent focussed accelerator Entrepreneur First help facilitate this through making these paths clearer to young people. Access to Europe has for along time been a great asset to the UK, with a recent report estimating that 40% of London based founders came from outside the country. Everyone who spoke on Friday agreed that Brexit could significantly impact this, and that the government has a crucial role to play ensuring that access to these talented individuals remains open. Speaking about his own founder journey, Demis Hassabis reinforced the importance of being able to work with the best talent, saying that “your co-founder can be as important as your idea” and that he knew he was on the right part with DeepMind when “a lot of people who were very smart were willing to commit themselves to the idea”. We will need to fight to keep the broader talent pool open, but as of today the quality and diversity of the people working and willing to work in the UK is unparalleled.
- People who have done it are inspiring the next generation: The London tech ecosystem is now maturing, and the group of high profile successful entrepreneurs who have “done it before” continues to grow. These individuals act as a catalyst for the next generation, providing mentoring, infrastructure and funding. All of the entrepreneurs who joined us in Cambridge on Friday now invest either as angels or part of a fund, groups like the Cambridge Angels help companies to access these people, and Atomico’s research suggests that 44% of successful entrepreneurs are now angel investing and mentoring. Robert Dighero, Partner at Passion Capital, speaking about the role of investors in helping startups to succeed, said “It is not just founders that need to be ambitious — everyone around them needs to be ambitious too.” Today the UK has a group of entrepreneurs who are both ambitious and successful, and will drive and support the next generation of companies in their successes.
- The UK culture is to think big and global: The UK has always been a nation of big ideas and ambitions. Many of the greatest breakthroughs in technology over the last 200 years, including the general purpose computer and the internet, have originated from a country which today accounts for less than 1% of the global population. We are a nation of people that take our ideas and experience and travel with them out into world, just as Demis did when he went to MIT and Harvard to understand the current state of AI research before coming back to found DeepMind, or as Entrepreneur First did as they opened their second campus in Singapore. As more of the world’s population and wealth leaves the traditional western strongholds, this will ultimately be necessary to create significant value and hyper scale.
One of the key messages from all of the entrepreneurs speaking on Friday was the role luck played in their successes; the right place, the right time, the right people. The UK has all the pieces to make this luck. Niklas Zennström summed it up in his keynote at the start of the day. “It is clear that the next Google or Facebook can come from Europe, the UK or Cambridge. We have all of the ingredients; it is the age of the entrepreneur”.