To hunker down, or not to hunker down, that is the question I explored in our fortnightly Big Ideas feature. While I sympathise with the advice that entrepreneurs should focus on what they can control, I don’t think this means they should just mind their own businesses. Instead, I suggest they venture into the world of policy and find a way to “channel their rage” (or whatever emotions they‘re feeling).
As if to prove my point, yesterday we saw the Government shelve reforms to Companies House that would have required businesses to file their accounts in a more onerous manner. Under legislation brought in by the previous government, small and micro companies would have had to disclose their profit-and-loss statements for the first time as part of their annual accounts.
This volte-face didn’t happen by chance, but because lots of business owners and business groups alerted the Government about the impending problem. While governments don’t listen to every gripe, if we can make a strong case that entrepreneurs are actually aggrieved, and that it will negatively affect the economy and, potentially, as a consequence, politicians’ election prospects, they’re all ears.
Also, many of the UK’s most exciting startups are in sectors where ignoring politics and policy isn’t a choice – whether because they’re in a highly regulated market, or because it’s a completely new one where policy is still evolving.
Here are just three examples. If you want to run a consumer-facing website, game or social app that children might use, you must comply with the Online Safety Act. If you want the NHS to buy your software, devices or supplies, your tender must include a Carbon Reduction Plan. If you want to offer budgeting tools, payment initiation or any service that connects to UK bank accounts, you have to implement Strong Customer Authentication under the FCA’s PSD2 regime.
All that being said, there are exceptions that prove the rule. Just this week, I received a bulleted list from an entrepreneur setting out how to reform the entire tax code. It happened that I agreed with quite a lot of it, but I don’t fancy his chances of convincing the Chancellor when the peerless Mirrlees Review hasn’t succeeded yet. There is no point in fighting a lost cause.
Also, not every idea is one worth pursuing. Entrepreneurs or business groups can come up with bad policies. Sometimes they don't adequately understand the problem or justify government intervention. Sometimes the policies are poorly constructed, too costly or impractical to implement. Sometimes they are impossible due to the political landscape or public sentiment. Sometimes they would undermine good governance. I could go on.
But all in all, we are definitely underweight in getting the insights of the UK’s innovators into government. Those creating wealth, jobs, and on the front line of regulation should have a louder voice. And when we band together, we believe we can make a difference. I ended my article on the other Substack with this quote from Margaret Mead, and I hope regular readers will forgive me for doing so again:
“Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has.”
Lords A-Leaping
This week, we introduced some of the members of the Young Entrepreneurs Forum to investors (including the youngest partner ever at A16z), but now comes the think-tanking. And for that, we need to hear from the next generation. There are three easy steps:
First, join the Young Entrepreneurs Forum by filling out this short form. Second, answer these questions – your insights will shape the report, and you may be quoted or featured as a case study (if you want), which could gain you media attention. Third, once you’ve done that, request a place at the report launch in October.
Lab to Launch
We’re embarking on research for our next report in the Female Founders Forum series. This time we’re focusing on spin-out founders. We want to understand three key things:
What speeds up or slows down the path from research to company?
How do negotiations over equity, support and funding play out?
Are the 2023 spin-out policy reforms making any real difference on the ground?
If you’ve recently founded (or are in the process of founding) a university spin-out in the UK, we would love to learn from your experience. We’re equally keen to hear from those who support spin-outs – whether you work in a TTO or advise academic founders independently. If that sounds like you, drop Anastasia a line.