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Taking Risk

tomblomfield.com

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Re: Taking Risk

#181

Post by buynlarge »

matwood wrote: post #152
reedf1 wrote: post #22

I considered a startup after university in the UK. The talent arbitrage is absurd, physics grads with 1sts from top Russell Group unis fighting to be paid £30k/yr. For me it came down to security, life is expensive, rent is expensive. I didn't have a spare parental garage to setup five computers - I barely had room in my flat for one desk . I barely had money for that flat let alone internet, and food. I had zero cap…

The UK is a giant version of the Cayman Islands. It's a big bank providing financial services to rich people while keeping them anonymous. Everything else is secondary. And Brexit only made it worse.

On the other hand, the UK is one of the safest countries in the world, is full of kind people, has a general abundance of food, gives workers a relatively large number of days off in a year, has a functioning police force and takes care of sick people and those who can't work for whatever reason.

Of course it is not perfect.

The people of Britain may not have huge bank accounts, but this is partly because they collectively spend their earnings on the worthwhile things mentioned above.

Re: Taking Risk

#182

Post by mushufasa »

My pithy take on the most important explanatory factors here:

1) EU/UK startups lack a big enough common market to sell into to go from 100 to 1,000,0000 relative to US and Chinese startups.

2) Tax laws in many EU countries significantly limit founders' exit opportunities and magnitude of personal financial success. This "tail wags to the dog" because of risk/reward: if the ultimate reward is not high, a founder can't justify taking on much risk, nor can their investors.

While the tax laws are interconnected with the societal culture (e.g. "American Dream mentality"), I think high frequency of examples of outlier success founders is what will change the culture, and those people won't start companies (or get very far) if they are dealing with 1) and 2).

Or they'll just move to USA to start their businesses, as has been often the case.

Re: Taking Risk

#183

Post by davedx »

sgt101 wrote: post #73

This is, at it's heart, about markets. In the USA a startup's market is, essentially, global - China. In the UK the market is, essentially the UK. In the recent past it might have been argued that the market was the EU - but the reality is that the EU's market for services is fractured. The USA has the capital and power to enforce their companies access to markets everywhere (apart from China), the rest of the world…

> In the UK the market is, essentially the UK.

This doesn't make any sense at all. There are tons of global UK companies. Why can't UK companies sell products or services outside of the UK and the US can? What on earth...

Re: Taking Risk

#184

Post by switch007 »

heavenlyblue wrote: post #57
sofixa wrote: post #44

Earlier quoted context omitted.

> In the UK to go bankrupt is to be painted with indelible red shame dye Is it? Do people generally know when someone (personally, or in this case, since we're talking startups, their company) goes bankrupt?

People don't know but bankrupcy bans you from openning another company for about 10 years I believe.

1 year

Re: Taking Risk

#185

Post by TulliusCicero »

cauch wrote: post #172
TulliusCicero wrote: post #161

Earlier quoted context omitted.

I think you're probably just categorizing something as "scammy" when it's more about being unrealistically ambitious.

You are the one who started talking about "scammy". Look at what I've said, I've JUST said that US is more tolerant with con artist and bullshitters. I did NOT say "start-ups are con artist and/or bullshitter". What I mean is that US is less concerned to dodgy things, the more extreme being scam, the more benign being, for example, unrealistic claims. I'm just saying that the two are from the same mentality. In other…

> You are the one who started talking about "scammy".

Not really? You said "con artist", did you not? "Scammer" is a near one-for-one replacement, I said "scammy" because "conny" isn't a word.

> I did NOT say "start-ups are con artist and/or bullshitter".

This is absolutely the implication of what you said.

If I say, "I don't know how I feel about Ted Cruz, I don't like voting for rapists", then I didn't explicitly say that Ted Cruz is a rapist, but that's the obvious implication. If you start talking about how Americans are more accepting of con artists while in the middle of an explanation of why Americans are more positive towards start-ups, it doesn't take a genius to connect the dots in what you're trying to say.

If your point was more broadly about dubious/unreliable claims, that's fair, but "con artists" is a lot more specific and critical than that, and that's what I was responding to.

Anyway, you're probably right that Americans are more tolerant of dubious/overambitious claims from a cultural perspective. I'm not sure if they're more tolerant of outright lies though, I think most draw a line between stretching the truth vs breaking it in half.

Re: Taking Risk

#186

Post by jonas21 »

oblio wrote: post #69
dan-robertson wrote: post #64

Earlier quoted context omitted.

Presumably because an ambitious young person in southern Europe would rather move somewhere like Zurich for higher pay rather than getting paid less in southern Europe? Who are those R&D centres going to end up hiring?

People don't move if their lives are decent enough. If FAANG sets up shop in Milan and pays 80k compared to the local average of 40k, few people would rather move to Zurich for 150k and have to learn Swiss German and have worse weather and few local friends. For comparison, Eastern Europe has FAANG offices and people working there generally don't move as much, and the few that do leave, generally go to Switzerland (o…

The people who are ambitious and driven enough to move for better opportunities are probably the ones they want to hire.

Re: Taking Risk

#187

Post by resource_waste »

jbms wrote: post #156

Cynical theory, the UK is now full of the descendants of all those who said "Emigrating? That will never work", and that's set the culture. Grafters and optimists have had many opportunities to leave over recent centuries.

How much DNA do we need to show to prove this is at least partially true.

And when it is partially true, it echos. I think even iRobot mentions this about Europe.

There is a difference in culture. Where the US dominates, europe is pessimistic, and (Africa/New New World) is growing. I suppose the New New world never really happened, the US stayed ontop. I imagine iRobot was a bit more optimistic about the political affairs of the New New world.

Re: Taking Risk

#188

Post by jmrm »

thefz wrote: post #121

> I now live in San Francisco and invest in early-stage startups at Y Combinator, and it’s striking how undergraduates at top US universities start companies at more than 5x the rate of their British-educated peers. But how many survive?

IMHO if those people have the money to be living in SF in the first place, that part must be solved beforehand

Re: Taking Risk

#189

Post by dan-robertson »

mike_hearn wrote: post #132
dan-robertson wrote: post #70

Earlier quoted context omitted.

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 t…

I think your population size argument is something like:

- SFBA has ~2% of the population of the US

- London has ~10% of the population of the U.K.

- the populations of the areas are similar (ca 7e6)

So for SFBA to feel full of startups, you can get away with e.g. 0.2% of the population of the US doing tech startups in the Bay Area at any one time, but for London to feel similarly full of startups, you would need 1% of the population of the UK doing tech startups in London at any one time.

Is that the point you are making about size, or is it something else? Network effects in VC?

Re: Taking Risk

#190

Post by charlie0 »

The article answers its own question as to why most people don't take more risk. Most of it boils down to 2 things; not having a safety net and not being fortunate enough to know the right people.

I've been thinking about starting a business, but only because I'm now at a point where I have a safety net and I've grown my network enough to consider myself having an ok shot at making it.

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