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Taking Risk

tomblomfield.com

131–140 of 304 posts

Re: Taking Risk

#131

I think the "one thing that's not like the others" in the article are the crazy-high rankings of Britain's top schools. Universities are a bit of a self-perpetuating reputation scheme, and the UK has been punching well above its weight in that department. Having worked with all Europeans, I can't say that I found the British to be skill or preparation outliers. Maybe just a little above the mean? Speaking English nat…

The UK is Europe's tech hub at this point (not the EU's), assuming by tech we mean the sort of tech discussed in the article. As the article notes, the VC ecosystem in the UK does actually exist and is spinning up, whereas in most of Europe it hardly exists.

If you want something a bit more objective than the article's assertions, there is an attempt to calculate a ranking here:

https://www.startupblink.com/blog/analysis-of-europe-startup...

The Global Startup Ecosystem Index compares the countries of Europe (not EU) and the UK is at the top with a massive lead. It has a total score of 127 vs 57 for the second place (France).

Re: Taking Risk

#132
post #7

The expected returns from "want[ing] to go and work at companies like McKinsey, Goldman Sachs or Google" are both greater and more certain, so perhaps the individual young people are acting quite rationally in the UK? For context I spent years in my 20s doing start ups in London, and undoubtedly would have been better off financially now if I'd worked for some soul-sucking consultancy instead. I do agree with him tha…

Yeah, but I think it’s also true in the US (even more so as pay from the non-startup careers is higher). Maybe one should ask why it’s so much more common to do the irrational thing in the US than the UK.

Remember you have to normalize for population size. And when we say the US we really mean one small part of it. People in the US often move to California to start their startups, they don't necessarily stick around in the part of the US they're currently in. This is largely due to the VC ecosystem there which makes "irrationality" relatively safe vs everywhere else in the world where it doesn't. Tom's article makes this crystal clear when he says:

> The downside of early-stage investing is that you lose 1x your money - it’s genuinely not worth worrying much about

The only potential downside is only losing all your money, what kind of stick in the mud would care about that?

So anyway, we might ask why is the VC ecosystem so much stronger in California than in the UK. But a lot people don't like to think about that because the answer is so obvious: in the 70s when Silicon Valley was getting established and the flywheel of founder->startup->success->sale->VC->founder was spinning up, the UK was mired in socialist hell with rotating power outages, militant unions toppling governments, four-day working weeks and an IMF bailout. At that time making a startup was entirely pointless and a VC fund literally impossible, because the top tax rate on investment gains peaked at 98%. You could invest in startups but the deal presented by Labour was: if you lose money you lose it, if you gain money you still lose it.

Thatcher and then Major beat back some of the most extreme aspects of this, and in this period the top level tax rates were systematically reduced to more normal rates. But Britain of the 1980s was still drastically more investor-hostile than the USA and there was no venture culture as a consequence. In particular the practice of granting equity in startups was not really known (notable exception: ARM, one of the few successful tech startups the UK has ever produced).

Even today British governments routinely levy so-called "windfall taxes" to grab the profits from companies that are doing well, the moment they have an opportunity to do so politically. That culture gap is ultimately the major difference. The idea of a windfall tax in the USA is hard to imagine, I'm not sure it's ever happened.

Re: Taking Risk

#134

Earlier quoted context omitted.

Why does this rent argument not apply to SF/Silicon Valley? I think SF is more expensive than London, though typical pay in (non-startup) tech is higher.

Because it's not just "higher" - it's so much higher it's hard to comprehend what difference that makes to opportunities young people have. I finished my BSc and MSc in Computer Science from a prestigious Russel Group university 10 years ago, got hired as a C++ programmer for a big corporation.....making £18k a year. My take home was about £1200/month if I remember correctly, which was still ok-ish because I was shar…

£18k/year as a junior programmer in London in 2014? I was underpaid as a junior at £16k/year in London (fintech) in 2004, and we were paying junior developers in the high twenties in 2015 in the public sector. You were definitely being seriously underpaid.

Re: Taking Risk

#135

Earlier quoted context omitted.

Because it's not just "higher" - it's so much higher it's hard to comprehend what difference that makes to opportunities young people have. I finished my BSc and MSc in Computer Science from a prestigious Russel Group university 10 years ago, got hired as a C++ programmer for a big corporation.....making £18k a year. My take home was about £1200/month if I remember correctly, which was still ok-ish because I was shar…

£18k/year as a junior programmer in London in 2014? I was underpaid as a junior at £16k/year in London (fintech) in 2004, and we were paying junior developers in the high twenties in 2015 in the public sector. You were definitely being seriously underpaid.

North East, not London. But still, it was on the lower end of the scale.

Re: Taking Risk

#136
post #25
post #20

Earlier quoted context omitted.

Citation needed? The UK certainly has plenty of upper-middle class families. This is nothing to do with family wealth and everything to do with business culture.

The UK is a class society much closer in nature to East Asia than the United States. Wealth accumulation is still to a great extent occurs along the stratified classes and they ain't sending their kids to engineering schools.

Again, citation needed. These are extremely broad claims about the nature of British society. Or just go ahead and downvote me if that makes you feel better

Re: Taking Risk

#137

I think the "one thing that's not like the others" in the article are the crazy-high rankings of Britain's top schools. Universities are a bit of a self-perpetuating reputation scheme, and the UK has been punching well above its weight in that department. Having worked with all Europeans, I can't say that I found the British to be skill or preparation outliers. Maybe just a little above the mean? Speaking English nat…

>> are the crazy-high rankings of Britain's top schools The problem(in general) with University rankings is that the ranking is done almost entirely on the number of publications.....in English. So it's no wonder that British universities take a lot of the top spots. I've had these conversations many many many times with people - it's not like the Universities of Warsaw or Milan or Prague are not as good as Oxford -…

I have several friends that are 30+ years as lecturers, also at Russell Group universities, and their view is very different to yours. They're generally of the opinion that UK universities have now turned into visa-mills and poorly run money machines, with lots of students signing up, but far fewer turning up in person and completing the courses.

Essentially the Blair-era of 'expand the universities' (and cynically get the 18-21 yr olds out of the unemployment figures) has lowered standards across the board. They don't, however, see anything like the "drastic" drop in numbers you report.

As an employer in finance, I've seen our criteria in the early 90s go from a first or 2:1 from anywhere, to a first from Oxford/Cambridge/Bristol/Durham/Imperial only, and now our criteria is an MSc from a list, or a PhD from anywhere. Yes, a PhD. And we still get dozens of applicants for a single job.

Re: Taking Risk

#138

Not the UK, but I'm a Californian who lived in Ireland for ten years. The risk aversion is _intense_. Me: "I want to build a house" My Irish friends: "That's a bad idea, you will fail, it could fall down, you don't know anything about houses". They were extra horrified that I didn't want to build it out of concrete blocks because "you can't build a house out of wood" My Californian friends (but one in particular): "F…

Having just returned from the US, I was struck by this 'risk aversion' and the innate US 'competition'.

To give an example: there was a Subway on one of the streets in the US. A few doors down there was an independent sandwich shop that was offering similar, larger sandwiches, with more toppings, for less, with a huge advertisement saying so. In the UK, close to where I live, there's a Subway on the High St., and an independent cafe down the street. The cafe continues to serve two-slices of bread with an average amount of filling for slightly less than Subway, and has no interest in competing, despite Subway getting double, or more, the foot traffic.

That's the UK all over.

> Anyway, Europe has a bright future as a cheap third world backoffice for US companies at this rate.

Already happening: https://archive.is/4Rer5

A lost decade+more due to austerity after 2008's financial crisis, plus huge amounts of furlough money, and a falling exchange rate doesn't make good reading.

Re: Taking Risk

#139

Earlier quoted context omitted.

£18k/year as a junior programmer in London in 2014? I was underpaid as a junior at £16k/year in London (fintech) in 2004, and we were paying junior developers in the high twenties in 2015 in the public sector. You were definitely being seriously underpaid.

North East, not London. But still, it was on the lower end of the scale.

Oh, sorry, I must have imagined London in your original message. That’s more understandable.

Re: Taking Risk

#140

I think the "one thing that's not like the others" in the article are the crazy-high rankings of Britain's top schools. Universities are a bit of a self-perpetuating reputation scheme, and the UK has been punching well above its weight in that department. Having worked with all Europeans, I can't say that I found the British to be skill or preparation outliers. Maybe just a little above the mean? Speaking English nat…

The UK is Europe's tech hub at this point (not the EU's), assuming by tech we mean the sort of tech discussed in the article. As the article notes, the VC ecosystem in the UK does actually exist and is spinning up, whereas in most of Europe it hardly exists. If you want something a bit more objective than the article's assertions, there is an attempt to calculate a ranking here: https://www.startupblink.com/blog/anal…

Well, I suspect a lot of the UK's startup stats are still connected to its universities. The page you linked shows London with a massive index lead over the EU. When you scroll down to the lists of notable companies, only ~10% of them are UK-based. The contrast of London to the rest of Britain is also much starker than for some other EU hubs.

It's questionable whether the "startup hub seed" would have germinated had the UK not been in the EU back when. It's also questionable whether the plant will wither now that it's out. All else held equal, the exits of UK startups are probably more acquisitional and trans-oceanic. This adds to risks and costs.

Either way, my argument was not startup-centric. It's pretty clear that an island company faces more market hurdles than a continental one. The difference will widen as the EU integrates further.

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