Happy New Year!
2020 is going to be even bigger and better (this is quite something, given what we achieved last year).
In case you’re new to us (or need a recap), we work to change policies to support Britain’s entrepreneurs. Whether this is around areas like tax, investment, visas, regulations, or broader issues impacting the ecosystem like the education system, transport or housing, we will continue to be the leading voice for entrepreneurs in the public policy debate.
(To give you a flavour of what’s to come, below Annabel Denham has an update on the All-Party Parliamentary Group for Entrepreneurship and Female Founders Forum, and Sam Dumitiu gives you a taste of some of the research we have planned.)
We don’t think supporting entrepreneurship should be an end in itself; we do this because entrepreneurs are the key driver for innovation, employment and economic growth, which improves the lot of everyone. Entrepreneurs are the lead actors in solving the world’s problems, making everyone wealthier, healthier and happier.
But entrepreneurs don’t do this alone. They need advisers and employees to realise their vision, and they need the right laws and institutions in place. And so, for better or worse, the quality of governments matters. That’s why I’ve written for CapX on why we should be optimistic about ambitions to radically reform the way the government interacts with entrepreneurs.
I take Estonia as a model for what can be achieved. Within a generation it went from having limited internet access to a cutting edge digital state, with people able to securely pay tax (e-Tax), vote (i-Voting), store their health records (e-Health), and even live and run a business remotely (e-Residency). The prize for success is significant: it is estimated that X-Road, the keystone of Estonian digital society, saves business owners around 12 million hours every year.
Update from Annabel
A new Parliament means a reformed APPG for Entrepreneurship, and while Seema Malhotra MP will remain Chair with Dr Lisa Cameron MP as her Vice, we’re busy inviting new faces to join (around a fifth of the new intake are former business owners). We’re excited to announce that Katherine Fletcher MP, Rob Roberts MP, Jerome Mayhew MP, James Daly MP and Saqib Bhatti MP have already agreed to get involved.
The APPG will continue in its mission of informing politicians on what is needed to create the most favourable conditions for entrepreneurship, opening a dialogue between policymakers and business owners.
The Female Founders Forum continues to grow. At the end of the year, I was on Sky News discussing the need for role models for young girls and we will continue to shed a light on all these women have achieved to inspire and encourage more to follow suit. Importantly, we will be taking our events across the country, reaching out to entrepreneurs across the regions. If you’re a female entrepreneur – particularly in the healthtech or agritech spheres – and want to get involved, drop me a line.
Update from Sam
Last year was The Entrepreneurs Network’s biggest year yet for research with notable reports on the massive impact of immigrant entrepreneurs in the UK, the link between management and productivity, the huge strides made by female founders, and the entrepreneurial ambitions of Britain’s young people. 2020 is set to be even bigger.
As we’re planning on being even more productive this year, it is fitting that we’ll be kicking off with research looking at SME productivity, in particular, the link between it and digital adoption. The report will explain how we can turbo-charge SME digital adoption and make the UK a world leader in digital business. Sticking with the theme of productivity, we’ll also be looking at a range of factors that affect it – from business dynamism to the local determinants of productivity.
Last year, we found that over half (51%) of British young people (aged 14-25) have thought about starting (or already have started) a business, but while entrepreneurial intention is widespread, the know-how to make it a reality isn’t. That’s why we’ll be looking at the way entrepreneurship is taught (if at all) in schools.
We’re also going to be working with a new foundation to cover a range of issues, from how policymakers can harness the power of entrepreneurship to tackle environmental challenges to better tracking the social and economic contribution of SMEs and unlocking more investment for early-stage businesses.
Smarter for ten (or fewer)
Our good friends at the Small Business Charter, in partnership with a consortium of 15 business schools, has been awarded BEIS and Innovate UK funding to support microbusinesses to explore digital and new technologies that could help them grow. The programme offers fully funded opportunities for business owners employing fewer than ten people, and they have asked us to spread the word. Find out more here.
Startup Manifesto: Reform the Investor Visa
Policy 8: Reform the Tier 1 Investor Visa by lowering the minimum qualifying investment threshold for investment in UK startups, scale-ups and venture capital funds
In collaboration with The Coalition for a Digital Economy (Coadec), we have produced a manifesto to make Britain the best place in the world to start and grow a business. It features 21 policies across three key policy areas: access to talent, access to investment, and regulation. We’ll be sharing a policy every day on our blog. To read the full manifesto, click here.
The Tier 1 Investor Visa grants the right to live and work in the UK to any foreign national who makes a qualifying investment of £2m or more in the UK. Until recently, the most common form of investment for Tier 1 Investors was in gilts. However under new rules, investments in government bonds no longer qualify. This follows a change in 2014 that prevented investments in property from qualifying. While the rules have encouraged Tier 1 Investors to invest in share capital, the vast majority are investing in established FTSE 100 companies.
In order to promote job creation and innovation in the UK, the Tier 1 Investor Visa should be reformed to direct more capital into startups and scale-ups. Governments have developed multiple targeted tax reliefs such as SEIS, EIS, and Venture Capital Trusts to incentivise investment in higher risk, early stage ventures. Due to the substantial tax relief on offer, the schemes are closely monitored and feature a principles-based risk-to-capital test, alongside restrictions on investments from connected persons, such as relatives or employees.
To promote investment into UK startups and scale-ups, the government should relax the minimum qualifying investment threshold for the Tier 1 Investor Visa for any investments into Venture Capital Trusts and businesses that would qualify for either EIS or SEIS tax relief. A higher threshold should be maintained for lower risk investments.
The government should also remove additional barriers to foreign investments in risk capital. The requirement to top up an investment if the value of an investment declines, pushes investors towards low-risk investments. In the case of a struggling startup, this requirement could swiftly become prohibitively expensive.
Roaring Twenties
This week Westminster welcomed 140 new MPs. PoliticsHome has a nice run through of all of them.
There are quite a few former business owners among them, including Theo Clarke, MP for Stafford, who in 2011 set up an arts blog called Russian Art and Culture that evolved into curating exhibitions on contemporary art, which she sold in October 2016. And Stuart Anderson, MP for Wolverhampton South West, who founded eTravelSafety, which uses AI to assess the risk level of destinations around the world. A former soldier, he bounced back from losing his house after the security firm he managed went into administration.
Party like it's...
What a year! We kicked off 2019 with Management Matters, our report looking at practical reforms – including tax breaks for self-funded work-related training – to encourage greater investment in management capability to reduce the rate of unnecessary business failure. It was launched in the Lords by small business minister Kelly Tolhurst MP and supported by the Association of Business Executives (ABE), who we will be undertaking another project with in the new year.
February saw our Female Founders Forum project host a roundtable in Bristol. We also hosted our second film premiere (the first being The Founder in 2018), On the Basis of Sex, for our large and growing group of female founders. Now entering its fourth year, we will once again be partnering with Barclays to support female founders up and down the country. Watch this space (or, better yet, sign up to Annabel's email to be kept updated).
In April we helped launch a piece of research at an event with the National Centre for Entrepreneurship in Education (NCEE) with the APPG for Entrepreneurship and Baroness Wolf. This is a format we would like the APPG to emulate. As such, just let us know if you're releasing any relevant research you think would be interesting to MPs and Peers and we will help coordinate the APPG to launch it. We also hosted a roundtable with competition supremo John Fingleton on how healthtech regulation can be reformed to support innovation in the sector.
Summer saw us release our Job Creators report, which was kindly supported by the inspirational entrepreneur Sukhpal Singh Ahluwalia. Sukhpal arrived in the UK in 1972 as a refugee, fleeing the regime of Idi Amin in Uganda, but went on to found Euro Car Parts, employing more than 12,000 people. The report found that 49% of the UK’s fastest-growing startups have at least one immigrant co-founder. As with all our reports it received extensive press coverage, and has help to change the public debate on immigration.
During those warm(ish) months we also: hosted a Business Stay-Up roundtable with Gillian Keegan MP; partnered on the Festival of Technology and Innovation in Manchester; hosted a Female Founders Forum roundtable in Edinburgh; delved into reforms to support more flexible rail fares with Baroness Kramer and the Rail Delivery Group; got into the challenges of raising finance at Berenberg; as well as the challenges of running a high growth business in your twenties at the London Stock Exchange with Ivory Capital Group; considered how to support the next generation of entrepreneurs at Octopus Group; and helped launch Professor Mark Hart's Global Entrepreneurship Monitor UK Report with NatWest at its Accelerator. Phew!
In August we launched Future Founders, which found that over half of British young people have thought about starting (or already have started) a business – and much more besides. It was undertaken in partnership with Octopus Group, who we've been working with for a long time. In fact, they were our founding sponsor when we launched all the way back in 2014.
We also hosted Dr Nima Sanandaji to discuss his Brain Business Jobs research – that is, jobs that are crucial for income and productivity growth – and ran our first Kingsley Napley immigration roundtable (the next one is in January).
In September we were at the party conferences at Barclays Eagle Labs, hosting events with Seema Malhotra MP, Rupa Huq MP, Catherine West MP, Gillian Keegan MP, and Dr Caroline Johnson MP. BDB Pitmans also hosted a roundtable with the Freeports Advisory Panel to delve into whether this policy can support Britain's entrepreneurs.
October saw the launch of Here and Now the latest research as part of our Female Founders Forum project. Using Beauhurst data, it revealed that the share of funding to women-led firms has doubled in less than a decade, while follow-on funding data reveals that women are just as bankable an investment as male-only firms once they have received funding.
The Office Group also also hosted a book launch on the Secrets of Sand Hill Road with its author Scott Kupor, managing partner at Andreessen Horowitz. We were also in Parliament with Dr Lisa Cameron MP for a roundtable on mental health and entrepreneurship, which was supported by our Adviser Guy Tolhurst, and hosted a private dinner for some of our Advisers with Chuka Umunna and Ed Davey MP. We are planning a lot more private dinners with Ministers, Shadow Ministers and noted MPs in 2020 – including as part of The Leap project, which we work on with Mishcon de Reya. Just drop me a message if you would be keen to find out more about how these work.
Last month we ran an event during Global Entrepreneurship Week at Drummonds on the next generation of entrepreneurs. We also hosted another roundtable on visa reform at Kingsley Napley with the founders of some high-growth businesses from our Job Founders report.
We partnered with some great small business organisations for our 2019 General Election Small Business Debate with front bench politicians, including Lis Truss MP and launched our Startup Manifesto with Coadec. The Manifesto features 21 policies across access to talent, access to investment, and regulation, and was backed by over 250 entrepreneurs in our network. Thanks to everyone who supported it! We are raising these and our other policy ideas with the new Government (in fact, I was in No 11 today doing exactly this).
2020
Next year will be even bigger and better!
Given what we do is free for most, I'm often asked how to help. Of course, getting support like Sukhpal, or Chris Hulatt, Simon Rogerson (and originally Guy Myles) from Octopus has been invaluable. And we wouldn't be here without all our corporate partnerships and those who support us both financially and with their time as Advisers and Supporters.
However, we appreciate this isn't for everyone. As such, if you believe in our mission it would be great if you could simply let other people know about the work we do. We have built a network of thousands of entrepreneurs and people who support them through word of mouth. If you know someone who you think should get involved, forward this email, direct them to our website, or suggest they sign up to this newsletter.
I'll update you with more of our plans in January. Until then, Merry Christmas and a Happy New Year! See you in the Roaring Twenties.
Replication Crisis, Explaining Extremists & Land Banking
Does science self-correct?
Matt Clancy, New Ideas Under the Sun
Suggested by Sam Dumitriu, research director of The Entrepreneurs Network
There is a replication crisis in the social sciences. Many findings in social science simply can’t be reproduced by other researchers. Scientist Brian Nosek got 270 of his peers to attempt 100 psychological studies published in top journals. While 97% of the original studies produced statistically significant results, just 36% of the replications did. This is a major challenge to many lines of enquiry in social science.
But how do scientists respond when entire fields are called into question? Innovation economist Matt Clancy tries to answer this question by looking at what happens when papers are retracted. The findings are broadly heartening: “scientists are pretty responsive to news that research is flawed. They rapidly stop citing retracted work and they look more skeptically at work by the same people, especially when they have less reason to trust the author (either because they didn’t self-report or they have a less prestigious track record). They even exercise more caution in citing work in similar fields.”
I wonder if the real issue is not how scientists retract, but whether news of a retraction or failure to replicate makes it to the media. Take Paul Dolan’s now retracted claim that married women are, on average, “f***ing miserable” based on a misreading of the data. Prominent magazines were still publishing op-eds uncritically citing his claim a week after it had been retracted.
Explain your extremists
Bryan Caplan, Econlib
Suggested by Philip Salter, founder of The Entrepreneurs Network
If you held the opinions of an average person in any village, town, city or country at any point in history, you would have happily thought things that seem to us morally indefensible. Just consider slavery, segregation and human sacrifice.
And yet, it would be surprising if we just happened to be born at the historical apex of moral enlightenment. Surely there are things that we do today that will be looked upon by future generations as abhorrent. Some people do question the status quo. Historically, these people were considered extremists.
In a recent post, Bryan Caplan asks readers to account for current extremists. Perhaps, for example, their proposals are politically impossible, unstable or costly. (And, if you’re the extremist, maybe you’re not being pragmatic.) Either way, what makes you think you’ve discovered your side’s Golden Mean?
Caplan himself has plenty of extreme views; including that America – or any country for that matter – should have completely open borders.
Land banking is a myth
Barney Stringer, Barney's Blog
Suggested by Philip Salter, founder of The Entrepreneurs Network
Land banking is the practice of buying undeveloped land purely as an investment, with no plans for its development. For years, commentators from across the political spectrum have blamed the practice for reducing supply and pushing up house prices.
It was a claim without evidence, which has been proven false by Barney Stringer and his team. Looking at 604 sites across London with planning permission for 175,963 homes, they uncovered why sites weren’t progressing.
Above all, they found that the complexity of planning and development is delaying delivery of housing. Reserved matters (additional planning details that are required), delays to infrastructure like Crossrail, time taken to get a Compulsory Purchase Order, and waiting for current businesses to vacate are all slowing down developers.
Given that councils are expected to find an additional 260,000 homes in the next five years and this study only identified current planning permissions for 176,000 homes, one thing isn’t a myth: we aren’t building enough to keep up with demand.
Check out the work of London YIMBY if you’re interested in finding out more about this issue.
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Startup Manifesto: Utilise private coding schools as lifelong learning providers
Policy 7: Utilise private coding schools as lifelong learning providers
In collaboration with The Coalition for a Digital Economy (Coadec), we have produced a manifesto to make Britain the best place in the world to start and grow a business. It features 21 policies across three key policy areas: access to talent, access to investment, and regulation. Over December, we’ll be sharing one policy every day. To read the full manifesto, click here.
It’s no secret that there is a real digital skills shortage here in the UK. Tech companies are starting to feel the squeeze already with one study suggesting the country is losing out on £63bn a year because companies are struggling to find people with adequate digital skills.
Better education helped power economic growth in the 19th and 20th centuries, and efforts to modernise the national curriculum to include coding – as well as through digital T-Levels – have been extremely welcome. But addressing the digital literacy and employability of 5-18 year olds is only one facet to ensuring an adequate talent pipeline.
Private coding schools are a widely untapped resource that have a proven track record of turning novices into fully qualified coders in just 12 weeks. We should leverage their success by putting them on a more formal footing with the current education system. Allowing coding schools, and their prospective students, to tap into government funding would ensure that it’s not just those in traditional education that have access to digital skills training opportunities.
Taken alongside the National Retraining Scheme, private coding schools can play a crucial role in ensuring that the labour market evolves alongside the skills demand. The next government should explore ways of harnessing the success of our coding schools, as they can provide invaluable mid-career education and help to upskill and reskill sections of the workforce within a short time frame. This will ensure the current and future workforce have the necessary skills.
Startup Manifesto: Support more women to start and scale businesses
Policy 6: Support more women to start and scale businesses
In collaboration with The Coalition for a Digital Economy (Coadec), we have produced a manifesto to make Britain the best place in the world to start and grow a business. It features 21 policies across three key policy areas: access to talent, access to investment, and regulation. Over December, we’ll be sharing one policy every day. To read the full manifesto, click here.
Women have made great strides in entrepreneurship this past decade. In 2011, 11% of startups that raised equity investment for the first time were female founded. By 2018, the figure had almost doubled to 21%. Once funded, women-led businesses are just as likely to secure second and third rounds of financing.
Barriers to participation and growth persist, however. Just one in five business owners is female and women-led firms are underrepresented in those sectors most likely to scale (e.g. tech and IP-based businesses). Studies suggest they are held back by three factors: access to finance, risk aversion, and access to networks.
We offer three recommendations to ensure more women start and scale businesses. First, we need to tackle STEM drop-off rates by gathering more data, consulting with schools and universities to examine the role of socialisation in the disparity, and examining how careers guidance could inform and tackle gender stereotypes.
Second, we should ensure the Minister for Women and Equalities has female entrepreneurship in their remit, and encourage MPs and Ministers to open the doors to Number 10 and the House of Commons to formally validate and celebrate female entrepreneurs’ efforts.
Finally, a lack of networking opportunities remains a persistent barrier to female founders. By providing networks – through LEPs, for instance – and encouraging more female employees and founders to get into schools and universities, we can shine a spotlight on role models and inspire the next generation.
If women set up businesses at the same rate as men, we’d have 1.1m more in this country. If they can scale them at the same rate too, we could add nearly £250bn to the UK economy.
Bolt from the Blue
The people have spoken. Yesterday's election was the largest Conservative majority since Thatcher’s 1987 landslide and the largest majority overall since Blair’s landslide in 2001. The Conservative Party now has what is being described by many as a 'stonking' or 'thumping' mandate with a majority of 80.
In case you're in any doubt, this majority means the Withdrawal Agreement Bill will pass through the House of Commons before the Christmas recess and we'll leave the EU at the end of January.
After this, there are three paths forward for the full exit on 1st January 2021: A hard "WTO" rules Brexit; a "Canada-minus" deal; and an "extend and pretend". Experts disagree on what will happen. Economist Jonathan Portes has a bet with Ivan Rogers, the former Permanent Representative of the United Kingdom to the European Union, that Boris will opt for the latter.
Labour the point
Yesterday felt decisive, but as Tom Clark writes in Prospect on six reasons why the Left need not despair: "On a day like this, I realise all these arguments for hope on the Left and Centre may sound naïve at best or deluded at worst. But recall how all-conquering Thatcher was when she won a slightly bigger majority in 1987; she was gone in a little over three years. Labour was said to have blown its last ever chance in April 1992, and yet within the year the victorious John Major was ruined. And as recently as 2015, the David Cameron/George Osborne duo was said to have locked-in a new majority for modern Conservatism, and yet a year later both were crushed by the Brexit vote. Progressive Britain has been routed by nostalgia this week, but nostalgia will not provide a recipe for navigating the future forever."
Even blue rinse dyed-in-the-wool Conservatives must see the value of having an effective opposition to hold the new Government to account. And there's no inherent reason it couldn't back Britain's entrepreneurs. As archcritic of Corbynomics Dr Kristian Niemietz wrote a few years ago: "You can easily combine support for high levels of income and wealth redistribution with support for a laissez-faire economic policy. You can take the view that the state should redistribute wealth, but it should not get too involved in its creation. Related to that, you can take the view that the state should fund a generous welfare state, but that it should not itself be the main provider of welfare services."
What next?
We'll continue to act as a bridge between entrepreneurs and politicians and policy makers across the political spectrum, inviting some of the new MPs to join as Officers and Members of the All-Party Parliamentary Group for Entrepreneurship. And we'll continue to make that case to government and opposition alike that our vision of a more entrepreneurial society is a noble one.
Of Korski
Entrepreneur and former special adviser to David Cameron has a Twitter thread on how to make UK public services fit for the 21st century. Following the Science Committee's criticism of the slowdown in digitising government services, Korski calls for a Department of Technology and Innovation led by a world class venture capitalist or globally-known entrepreneur; the merging of the Government Digital Service with parts of the Cabinet Office like the Crown Commercial Service to create a Government Transformation Agency reporting to the Prime Minister; a replacement of G Cloud for procurement; and much more besides.
Korski is spot on. A govtech revolution is one of our asks in our recently published Startup Manifesto, and an issue that we will do more work on next year.
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Failure, Coffee Houses and Old Boys' Clubs
Why Entrepreneurs Don’t Learn From Their Mistakes
Francis Greene, Wall Street Journal
Suggested by Philip Salter, founder of The Entrepreneurs Network
'Fail fast, fail often' has been the disputed mantra of a few tech entrepreneurs and their orbiters for a while now. And there is some sense to it. Trial and error, experimenting and iterating, can evolve an unprofitable idea into something with a market. And, more broadly, there are many anecdotes of entrepreneurs succeeding from the ashes of failure.
But we shouldn't romanticise failure. In fact, as Francis Greene's research shows, many entrepreneurs don’t learn from their mistakes. "In fact, it’s the opposite: Fail once and you’re most likely to fail again. Believing in the myth only sets entrepreneurs up for more failure – and leads to disappointment and frustration."
Greene looked at 8,400 German startups to see if the new companies launched by failed entrepreneurs did any better than first-timers. They didn’t, having poorer outcomes the second time around.
For Greene, the shifting complexities of running a business mean that the lessons of failure aren’t gainable or even applicable to future endeavours. If his work replicates, it should be taken seriously by individuals and policy makers.
If at first you don't succeed? Perhaps you should try your hand at something else.
The Lost World of the London Coffeehouse
Dr Matthew Green, The Public Domain Review
Suggested by Sam Dumitriu, research director of The Entrepreneurs Network
Why did the Industrial Revolution start in 18th century Britain, and not at any other time or place? It’s an interesting question and an important one too. In fact, given that the Industrial Revolution was responsible for an increase in real income per head by anywhere 2,500 and 5,000 per cent, it’s probably the most important question out there.
Most of the explanations don’t stack up. To quote Deirdre McCloskey “the modern world was made not by material causes, such as coal or thrift or capital or exports or exploitation or imperialism or good property rights or even good science, all of which have been widespread in other cultures and other times.” The economic historians I find compelling credit ideas: ‘an improving mentality’, ‘trade-tested betterment’, and the enlightenment.
If ideas matter for economic growth, then we should pay attention (and tribute) to the institutions that enabled them to spread. London’s coffeehouses may seem rather sterile today, but in the 17th and 18th century they were rowdy places. As Dr Matthew Green writes “early coffeehouses all followed the same blueprint, maximising the interaction between customers and forging a creative, convivial environment. They emerged as smoky candlelit forums for commercial transactions, spirited debate, and the exchange of information, ideas, and lies.” Green’s short history shows how the debates in London’s coffeehouses helped shape the modern world.
Of course, there’s an alternate explanation for coffeehouses' role in the modern world. “Until the mid-seventeenth century, most people in England were either slightly — or very — drunk all of the time. The arrival of coffee ... triggered a dawn of sobriety that laid the foundations for truly spectacular economic growth in the decades that followed as people thought clearly for the first time.”
Zoe Cullen & Ricardo Perez-Truglia
Suggested by Annabel Denham, associate director of The Entrepreneurs Network
We are closer than ever to gender equality in the workplace yet still so far. Progress is agonisingly slow despite the opportunity cost for companies and the wider economy. Nowhere is this more stark than the investment sphere. Female entrepreneurs receive a small piece of the funding pie and many complain of an “old boys’ club,” where male investors network with and ultimately invest in innovators who are themselves well-connected men.
A new study from Harvard University reinforces the alleged advantage that male employees have over their female counterparts in schmoozing with powerful men within the workplace. The authors find that when male employees are assigned to male managers, they are “promoted faster in the following years than they would have been if they were assigned to female managers. Female employees, on the contrary, have the same career progression regardless of the manager’s gender.” As with venture capital, this mechanism creates a self-perpetuating cycle.
Further, “when male employees who smoke switch to male managers who smoke, they spend more of their breaks with their managers and are promoted faster in the following years. Moreover, the effects of these smoking manager switches are similar in timing and magnitude to the effects of the gender manager switches.”
The research has implications for policies aimed at narrowing the gender gaps in leadership or pay. Companies could change their promotion review systems, the researchers suggest. They could level the opportunities for employees to socialise and connect with their managers. Success isn’t guaranteed, but it certainly sounds simpler, and less archaic than suggesting women take up golf – or cigarettes – to be closer to the nexus of power.
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Startup Manifesto: Extend the Tier 5 Youth Mobility Scheme visa to European citizens
Policy 4: Extend the Tier 5 Youth Mobility Scheme visa to European citizens
In collaboration with The Coalition for a Digital Economy (Coadec), we have produced a manifesto to make Britain the best place in the world to start and grow a business. It features 21 policies across three key policy areas: access to talent, access to investment, and regulation. Over December, we’ll be sharing one policy every day. To read the full manifesto, click here.
Tier 5 is a successful suite of visas that support youth mobility. The Tier 5 Youth Mobility Scheme visa currently allows those aged 18 to 30 from specific countries to live and work in the UK for up to 2 years, which includes the freedom for them to start their own business. This should be extended to citizens of EU countries and it should also be considered in future trade deals, if we leave the European Union.
The Tier 5 visas allow young people to get experience of the job market, but migrants’ connections can also benefit UK businesses to scale up by helping support expansion and growth into new markets; strengthening client relationships in existing markets abroad by being able to use their language and cultural awareness; and helping with business activities using local connections within the UK.
Migrants are able to bring to the workplace culturally unique and complementary skills, as well as knowledge of processes and ideas. They have been known to innovate, up-skill colleagues, improve processes and secure new work.
If there isn’t the political appetite to extend this scheme to the whole of the EU, the UK could discriminate, picking countries where there is a perceived special relationship, while allowing citizens of other EU countries to use the Tier 5 Temporary Worker – Government Authorised Exchange visa. The number of visas allocated to each scheme would need to be significantly increased.
In addition, to make the visa system easier for migrants, all Tier 5 visa holders should be able to switch from Tier 5 to Tier 2 (assuming they find a sponsor) as well as other visa routes without the added unnecessary bureaucracy of having to leave the country and apply from their home country.
Startup Manifesto: Reduce the Tier 2 Visa Salary threshold and allow stock options to be considered in visa applications
Policy 3: Reduce the Tier 2 Visa Salary threshold and allow stock options to be considered in visa applications
In collaboration with The Coalition for a Digital Economy (Coadec), we have produced a manifesto to make Britain the best place in the world to start and grow a business. It features 21 policies across three key policy areas: access to talent, access to investment, and regulation. Over December, we’ll be sharing one policy every day. To read the full manifesto, click here.
The current salary requirement of £30,000 for Tier 2 Visas has proved difficult for startups to meet because many people are paid less in the early stages of a company. ONS data shows that 46.1% of people employed in technical jobs receive a salary of less than £30,000, which makes it difficult for startups to hire at junior and mid-level positions, as those salaries fall below the threshold. These positions cannot be filled easily via the Tier 1 Exceptional Talent Visa either, which leaves a hiring gap for many companies.
It would be preferable for the salary threshold to be lowered to around £21,000, which 25.3% of employees in technical jobs and 39.2% of all people in full-time employment earn less than.
Stock options form an important part of the compensation packages offered by startups, as equity is often offered to key hires in lieu of a higher salary, in order to moderate operational costs at the beginning of a startup’s lifecycle. There is no reason why their value should not be taken into account for the salary thresholds in visa applications, especially since they are already used for other reporting criteria such as gender pay gap reporting. It would be reasonable to expect the equity to be written into the employment contract and worth under 30% of the total compensation package.
Startups are able to compete against big tech companies for domestic top-tier talent by offering equity in lieu of a higher salary. They should be given the same level-playing field when seeking to hire from abroad.
Startup Manifesto: Reintroduce the Tier 1 General visa – or an equivalent
Policy 2: Reintroduce the Tier 1 General visa – or an equivalent
In collaboration with The Coalition for a Digital Economy (Coadec), we have produced a manifesto to make Britain the best place in the world to start and grow a business. It features 21 policies across three key policy areas: access to talent, access to investment, and regulation. Over December, we’ll be sharing one policy every day. To read the full manifesto, click here.
If and when we leave the European Union, ending free movement will deprive startups of a vital source of high-skilled labour. This makes reforms of other visa categories even more necessary.
The Government has called for the introduction of a points based system, but it’s rarely acknowledged that the current system is the remnants of one. In 2015, the government stopped accepting applications for the Tier 1 (General) visa, which had been introduced in 2008 to replace the Highly Skilled Migrant Program (HSMP).
The Tier 1 (General) visa allowed highly skilled migrants from around the world to come to the UK to live and work for any employer, including working for themselves, with the initial visa lasting for two years. This meant that the best and the brightest could to the UK with the freedom for the individual of not being tied to a specific employer, while early-stage businesses could employ them without the costs and bureaucracy of needing to go through a sponsorship route.
If we are to compete internationally, the next government should bring back the Tier 1 (General) visa, or create a similar path.
Startup Manifesto: Ensure that the Start Up and Innovator Visas are implemented successfully
Policy 1: Ensure that the Start Up and Innovator Visas are implemented successfully
In collaboration with The Coalition for a Digital Economy (Coadec), we have produced a manifesto to make Britain the best place in the world to start and grow a business. It features 21 policies across three key policy areas: access to talent, access to investment, and regulation. Over December, we’ll be sharing one policy every day. To read the full manifesto, click here.
International talent is the driving force behind the UK’s startup success story. While just 14% of UK residents are foreign-born, 49% of the UK’s 100 fastest-growing startups and 11 out of the UK’s 16 startup unicorns (pre-IPO startups with a valuation of over $1bn) have at least one foreign-born co-founder. There is an overwhelming economic case for keeping the UK open to international entrepreneurial talent.
The Tier 1 Entrepreneur and Graduate Entrepreneur visas were bureaucratic, badly promoted, and not fit for purpose. The government was right to replace them with the new Innovator and Start Up visas giving incubators, accelerators, and venture capital firms a key role as external endorsing bodies. However, serious flaws in the implementation of the Innovator and Start Up visas risk making it even harder for foreign entrepreneurs to create jobs in the UK.
At the time the previous Tier 1 Entrepreneur visa route was closed, there were no endorsing bodies ready to accept applications, and only one of the 30 initial endorsing bodies had any information about the visa on their website. This created a situation where the UK was, briefly, the only major developed economy without an entrepreneur visa route. In the first quarter since the Innovator visa route opened just two applications were successful. At least four of the initial 30 endorsing bodies have already dropped out.
There are two major flaws in the implementation of the Innovator and Start Up visas. First, the requirement for endorsing bodies to receive approval from two different government departments has delayed endorsing bodies from being able to accept applications. This additional requirement was announced after the scheme had been live for 2 months and without any pre-warning, after a number of bodies had already submitted applications to become endorsers. Second, endorsing bodies are unable to charge immigration fees, despite the fact that in order to endorse an applicant, the endorsing body must input several hours of work in assessing the business plan, alongside other costs.
If endorsing bodies are unable to charge fees, they will only have a financial motivation to endorse an applicant if they are taking loan or share capital in the new business. In practice, entrepreneurs who have their own capital, or capital from organisations other than the small pool of pre-approved endorsing bodies and don’t want to give up additional equity will find it difficult to enter using this route.
Alongside resolving the issues mentioned, the Home Office should also collaborate more with Local Enterprise Partnerships, cities, and business groups to ensure that sponsoring organisations have a wider geographic and industry spread so they better represent the UK’s entrepreneurial ecosystem.
Spoilt or Choice
This time next week we will know the result of the election.
We're not going to tell you who to vote for. After all, you can take a look at the main party's manifesto promises for businesses and decide for yourself. And, more importantly, you will no doubt vote, spoil or abstain for reasons beyond the impact the result will have on entrepreneurship.
Of course, we think policies impacting entrepreneurs should be an important consideration. As our Policy Priorities page states: "Entrepreneurial endeavours have taken humanity from subsistence to relative affluence and it is entrepreneurs who will raise long-term living standards of future generations." But this doesn't capture everything that matters to us in politics, and I doubt it does for you.
One thing I've heard a lot from entrepreneurs over the last few years is that many feel politically homeless. I've always felt like this, so can sympathise.
For some, the solution is to disengage completely from politics. For others, now is the time to get stuck in at the party level – whether locally as a councillor or engaging in groups directly attached to political parties. I admire the grit it must take to work within the system.
But for anyone wanting to make a difference but put off by the idea of committing to a particular party, think tanks offer a neat compromise. Whatever your ideological leanings, burning passion or change you want to see in the world, there's a think tank – or a combination of think tanks – for you.
Unlike political parties, the best think tanks offer a forum to engage with ideas without the burden of worrying about getting the party reelected. And, for better or worse, think tanks wield real power in the battle of ideas so your involvement can really make a difference. The big political movements of modern politics – from the Fabian Society's socialist vision, to the IEA, CPS and ASI's Thatcherite revolution, through to the IPPR's Blairite Third Way – were started and flourished in think tanks.
Voting is one expression of your political voice, but it doesn't have to be the only one.
Can tab
Cambridge Central Library is looking for someone skilled and willing to share their pitching skills with startup founders. Email BIPC@cambridgeshire.gov.uk to find out more.
Human Intelligence, Faked Experiments and the Right Frustrations
Stanford professor who changed America with just one study was also a liar, by Susannah Cahalan
Suggested by Philip Salter, Founder, The Entrepreneurs Network
Most lectures are dull – not David Rosenhan's. The Stanford psychology and law professor opened one of his lectures sitting on a student’s lap as a way to test the class’ reaction to abnormal behaviour.
The 70s were wild. Rosenhan is famous for convincing his students to go undercover as psychiatric patients. The story goes that eight healthy volunteers went into 12 psychiatric hospitals across the country, each telling doctors that they heard voices that said, “thud, empty, hollow”, after which they were diagnosed with a mental illness, hospitalised and only able to leave “against medical advice.”
Rosenhan's 1973 paper 'On Being Sane in Insane Places' was hugely influential, expediting the widespread closure of psychiatric institutions across America. It should shock us that a paper with such a small sample size had any impact at all; it should appal us that it seems to be based on lies. In 'The Great Pretender', Susannah Cahalan finds that Rosenhan "paints the picture of a brilliant but flawed psychologist who was likely also a fabulist."
It is said that the worst lies are the ones we tell ourselves. I disagree. It's the lies told by Stanford University Professors in the 1970s.
Principles for the Application of Human Intelligence, by Jason Collins
Suggested by Sam Dumitriu, Research Director, The Entrepreneurs Network
We tend to be biased in favour of the status quo. As a result, we tend to overweight risks and underweight benefits when deciding whether to adopt new technologies. In this article, Jason Collins flips our concerns about algorithmic decision making on their head, asking us to imagine what if human intelligence was the new technology. Collins writes “Humans may be a powerful technology with great potential. But until we have developed human decision-making systems that comply with some basic principles, we risk substantial harm.”
We need to start a more nuanced debate about the use of algorithms in decision making, Collins intuition pump is a good attempt at that. You can read my own attempt, with a special focus on fintech, here.
Small Projects, Big Companies, by Daniel Gross
Suggested by Sam Dumitriu, Research Director, The Entrepreneurs Network
When we think about entrepreneurship, we often picture people like Mark Zuckerberg or Bill Gates, college dropouts who founded companies in their twenties. Yet some evidence suggests the average entrepreneur is older and that older entrepreneurs are on average more successful. One reason for the success of older entrepreneurs might be the benefit of having the right frustrations. As Daniel Gross notes:
“Pizza delivery. Event planning. Bill splitting. We see many of these at Pioneer. I call them “incombustible ideas”. Founders relentlessly try to ignite them, but they just don’t light up. I don’t blame the firebrands. Solving anecdotal problems is a good instinct in most situations. But it can also lead founding teams down a stray path, spending years working on a company in a dog market.”
Entrepreneurs in their early 20s don’t tend to have the kind of gripes that can lead to creating massive B2B businesses. To help them out Daniel Gross has listed 7 business problems worth solving. Perhaps, they might inspire you to build the next Salesforce.
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Our Manifesto in the Media
Our #StartupManifesto, which outlines 21 policies the next government should implement to boost British business, was covered widely in national, local and trade media.
The Telegraph trailed the report in an article outlining the ways we could put Britain in the digital driving seat. “A new manifesto by policy campaigners Coadec and think tank the Entrepreneurs Network [suggests] regulations and bureaucracy have contrived to help keep the information age’s biggest pots of gold beyond reach. Backed by dozens of entrepreneurs from Britain’s start-up and scale-up ecosystem, their manifesto outlines a simple, three-pronged plan of action. The aim is to cement and greatly extend Britain’s position as Europe’s most innovative nation.”
An op-ed penned by Seedrs founder Jeff Lynn – one of the 250 entrepreneurs who endorsed the Manifesto – for The Times focused on how Britain must continue to attract the best and brightest globally after (if) we leave the European Union. He writes: “In the shadow of Brexit it is vital that the UK remains open to attracting and retaining great entrepreneurial talent. The manifesto rightly calls for proper implementation of the Startup and Innovator Visas, to enable more entrepreneurs to come to the UK to start and grow businesses, just as I did.”
The Manifesto was covered in the News section of both City AM and FT-backed Sifted, while our Research Director Sam Dumitriu wrote an opinion piece for CapX. “Startups and young businesses are the engines of job creation… Supporting them is key,” he writes. Joel Gladwin of Coadec – our partners in the project – wrote in the New Statesman that the next government “must reform the R&D tax credit if UK tech is to thrive”. And Annabel Denham wrote for Conservative Home outlining why the Tories cannot take the business vote for granted.
It also featured in the FinTech Times, FE News, FinTech Alliance, Small Business, and Essentials.news.
Zuckerberg, Teacher Impact and Grant Lotteries
A Conversation with Mark Zuckerberg, Patrick Collison and Tyler Cowen
Suggested by Philip Salter, founder of The Entrepreneurs Network
If pushed to come up with a shortlist of interesting dinner party guests, Mark Zuckerberg, Patrick Collison and Tyler Cowen would all have a decent shot of getting an invite. Luckily the've had the conversation without me needing to cook.
For those familiar with Collison and Cowen's shared thesis and their wider views, this interview might not offer much that's new (besides the not insignificant pleasure of seeing their intellectual world collide with Zuck's). But for everyone else, it's a worthy use of an hour (or perhaps less if you skim the transcript).
So what's the big idea? There are quite a few, but Tyler expresses one that too many people fail to grasp: that there is connection between the need to build more homes in cities and the prospects for young people in rural areas:
"Let's say you want to improve the lot of people in West Virginia. One growth enhancing way of doing that is to make it easier to build, say, in Washington D.C. and the Bay Area. Right now, to move from West Virginia, say, to Menlo Park, it's extraordinarily expensive. You can't just pick up and show up here and hope to get a job washing dishes the way one might have done in America 50 years ago. So by having more building, more economic growth, also more GDP, it would increase more opportunity. So economic growth and opportunity – they do tend to be correlated, and sometimes the problem is we don't have enough growth, not that we have too much."
Teacher effects on student achievement and height – a Cautionary Tale
Suggested by Sam Dumitriu, research director of The Entrepreneurs Network
How do you distinguish between good and bad teachers and schools? You might look at student achievement, which school or class has the best exam results. There’s an obvious pitfall: private schools, for instance, might get better grades, but you can’t attribute them solely to the teaching. Students from wealthier households may be more likely to be privately tutored, to have more attentive parents, and face fewer environmental hazards (e.g. air pollution). To use a footballing analogy, winning the league with Manchester City isn’t the same as winning the league with Leicester City. (Coincidentally, the Economist have a fun piece on football management along similar lines.)
Looking at value-added, the difference between a student’s predicted grades and their actual achievement might be a better approach. However, a new study offers a cautionary tale. Using administrative student data from New York City, they use commonly estimated value-added models to an outcome teachers cannot plausibly affect: student height and find the standard deviation of teacher effects on height is nearly as large as that for math and reading achievement.
Science funders gamble on grant lotteries
Suggested by Philip Salter, founder of The Entrepreneurs Network
For many, the idea of a lottery for science funding will seem instinctively unfair. After all, shouldn't the best ideas win? But as reported in Nature, a growing number of research agencies are assigning money randomly.
The argument is that above a threshold, it's wasteful trying to rank (nearly) equally good grant applicants. As economist Margit Osterloh explains: “Referees and all kinds of evaluation bodies do not have really good working criteria,”... while "random chance will create more openness to ideas that are not in the mainstream."
Randomness has also been shown to reduce biases and Osterloh thinks it might be good for scientists' egos: “If you know you have got a grant or a publication which is selected partly randomly then you will know very well you are not the king of the Universe, which makes you more humble,” she says. “This is exactly what we need in science.”
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250 British entrepreneurs back Startup Manifesto in open letter
250 British entrepreneurs, including the founders of Transferwise, Mumsnet, YO! Sushi, Bloom and Wild, Zopa and LendInvest have signed an open letter endorsing the policies in The Startup Manifesto, which we co-wrote with The Coalition for a Digital Economy (Coadec).
“As founders of some of the UK’s most successful businesses, we call on the parties seeking to form our next government to prioritise the needs of Britain’s startups and scale-ups.
Despite Brexit uncertainty, the nation’s entrepreneurial spirit is undimmed. Since 2010, the number of people engaged in early-stage entrepreneurial activity has increased by a third. Total venture capital investment in UK tech topped £6bn in 2018, more than any other European country. And all this growth has meant hundreds of thousands of new jobs.
Entrepreneurship is essential to the British economy. That’s why we support the Startup Manifesto by The Coalition for a Digital Economy (Coadec) & The Entrepreneurs Network.
What startups need from government to build world-beating companies is simple. Access to top talent from both here in the UK and abroad; the right tax incentives to foster and grow early-stage businesses then access to the capital needed to scale them; and a clear, simple set of rules and regulations flexible enough to encourage new and innovative startup business models.
This means reforming the visa system so startups can attract the best and brightest without needless bureaucracy, streamlining tax reliefs so we can get timely investments in ambitious businesses, and reforming pension regulations to attract more funding into early-stage businesses.
These policies would be good for startups, but more importantly, they would be good for the UK. When you support Britain’s entrepreneurs you support the whole economy. We urge all the political parties in this election to bear that in mind and develop a startup and scale-up friendly approach for the years to come.”
List of signatories:
Carlos Silva – Co-founder, Seedrs
Aron Gelbard – Co-founder & CEO, Bloom & Wild
Christian Nentwich – CEO, Duco
Emma Jones – Founder, Enterprise Nation
Sarah Wood – Co-founder, Unruly
James Lohan – Founder, Mr & Mrs Smith
Mats Stigzelius – Founder and Chairman, Takumi
Mike Lawton – Founder, Oxford Space Systems
Shaun Azam – CFO, Sweatcoin
Stephen Rapoport – Founder, Pact Coffee
Simon Rogerson – CEO, Octopus Group
Edwina Dunn – CEO, Starcount (Founder, dunnhumby)
Virginie Charles-Dear – Founder & CEO, toucanBox
Giles Andrews – Co-founder, Zopa
Tom Carrell – CEO, Cydar Medical
Jonathan Sattin – Founder, triyoga
Simon Woodroffe – Founder of YO! Sushi & YOTEL
Dom Hallas – Executive Director, The Coalition for a Digital Economy
Daniel Korski – CEO and Co-founder, PUBLIC
Kris Naudts – Founder, Culture Trip
Doug Monro – Co-Founder & CEO, Adzuna
Celia Francis – CEO, Rated People
Christian Faes – CEO & Co-Founder, LendInvest
Merlie Calvert – Founder and CEO, Farillio Limited
Tugce Bulut – CEO and Co-founder, Streetbees
Alex Stephany – Founder & CEO, Beam
Cecile Reinaud – Founder and President of Seraphine ltd
John Spindler – CEO, Capital Enterprise
Jeff Lynn – Executive Chairman & Co-Founder, Seedrs
Rajeeb Dey MBE – Founder & CEO, Learnerbly
Andrew Webster – Co-Founder, DesignMyNight
Husayn Kassai – CEO & CoFounder, Onfido
Justine Roberts – Founder, Mumsnet & Gransnet
Vincent Fraux – Co-Founder, Oxford Space Systems
John Fingleton – Founder and CEO, Fingleton
David Dunn – CEO, Sunderland Software City, Chairperson, UK Tech Cluster Group
Philip Salter – Founder, The Entrepreneurs Network
Thish Nadesan – COO, Cleo
Tania Boler – Founder and CEO, Elvie
Taavet Hinrikus – Co-Founder and Chairman, Transferwise
Anna Lane – CEO, The Wisdom Council
Adrian Gregory – CEO, DataIQ
Ana Andres – Co-founder, TidyChoice
Bryony Simpson – Founder, Engineers for Pioneers
Iglika Ghouse – Founder & CEO, USPAAH
Guy Tolhurst – Group CEO, Indagate Group
Ian Drew – Chairman, Foundries.io
James Dean – CEO, Sensat
Iona Smith – Founder, New Life Classes Ltd
David Murray-Hundley – Chairman, E-Fundamentals
Elizabetta Camilleri – CEO, indiluup
Hannah Cox – Founder, betternotstop
James Clews – CEO, Venture
Ana Andres – Director, TidyChoice
Irina Pafomova – Co-Founder, Engelworks
Janice Gordon – Founding Director, Problem Solving Company
Andrew Dixon – Founder, ARC InterCapital Ltd
Anne-Laure Le Cunff – Founder, Ness Labs
Dana Denis-Smith – Obelisk Support, CEO
Geeta Sidhu-Robb – CEO, Nosh Detox Delivery Ltd
David Regler – Founder, Maine Associates Ltd
Cordelia Meacher – Managing Director & Founder, FieldHouse Associates
Emma Joy Obanye – CEO, Mindful
James Lemon – CEO, The Growth Works
Ben Fletcher – Founder, Lead Bullets
Adrian Wong – Founder & CEO at Fuse Foundry
Maria Tanjala – Co-Founder, FilmChain
Mark Twigg – Executive Director, Cicero Group
Merita Memisi – CEO, Carter Labs
Christina Richardson – Founder, weare3Sixty
Miguel Martinez – Co-Founder and Chief Data Scientists, Signal AI
Daniel George – Founder, StepEx
Michael Piddock – Founder, Glisser
Maria Inmaculada Martinez-Rubio – Venture Partner, Deep Science Ventures
Rachael Twumasi-Corson – Co-Founding Director, Afrocenchix
Mike Battle – Co-Founder & CEO, LaplandUK
Simon Hall – CEO, eCommerce Performance Model
Charlie Stein-Cohen – Founder & CEO, Net2Work
Manya Klempner – Founder, Rathbone Boxing Club
Robert Hollamby – Professor of Enterprise, Leeds University
Sven Al Hamad – Co-Founder & CEO, Webiny
Gemma Taylor – Director, Rocket Bridging Limited
Simon La Fosse – Founder & Chairman, La Fosse Associates
Ashok Suppiah – Co-Founder & CEO, Mitra Innovation
Dinara Asadulina – CEO, Plombir
Kate Grussing – Founder, Sapphire Partners
Matt Kuppers – Founder & CEO, Startup Manufactory Ltd
Shane Smith – CEO, Intelligent Crowd TV
Karina Robinson – CEO, Robinson Hambro Ltd
Randa Bennett – Founder & CEO, VeeLoop
Vincent Boon – Founder, Standing on Giants
Rick Lowe – Managing Director, Brands In Ltd
Neeta Patel – CEO, Centre for Entrepreneurs
Russ Shaw – Founder, Tech London Advocates & Global Tech Advocates
Alpesh Patel – CEO, Pipspredator.com
Julie Walters – Founder, Raremark
Joe Seddon – Founder & CEO, Zero Gravity
Ross Fobian – Co-founder & CEO, ResponseTap
Diane Banks – Founder & CEO, Northbank Talent Management Ltd
Elizabeth Drew – Founder, Osmology (Acre Supply Co. Limited)
Actar Arya – CEO, D A Languages Ltd
Mark Lightowler – Founder & CEO, Phorix Limited
Sheelpa Patel – Founder & Managing Director, Mavens & Mavericks Ltd
John Attridge – CEO, BBXUK
Reina D’costa – Founder, Bizlaw UK
James Boyd-Wallis – Director, Fourteen Forty
David Holloway – CEO, Marlin Hawk Group
David Benigson – CEO, Signal AI
Joe Charlesworth – Director, Highway Data Systems Ltd
Tim Chater – Director, Zero to Sixty
Krisztina Tardos – Founder, The Merit Club
Toby Schulz – Founding Director, Vantage Power
Will Young – CEO, rais.io
Agata Boczkowska – COO, rais.io
Jude Ower – Founder/CEO, Playmob
Robert Lingard – CEO, Power Brand Communications
Hanadi Jabado – Director of Enterprise, University of Cambridge Judge Business School
Hela Wozniak-Kay – Co-Founder, Sister Snog
Sam Gordon – Founder, Gordon & Eden
Halima Hamid – Founder, The Rustic Roots Company
Lisa Thorne – Managing Director & Founder, Together Group Ltd.
Chi-chi Ekweozor – Founder & CEO, Assenty
Veera Johnson – Managing Partner, Johnson Capital Advisory Ltd
Raphael Chow – CEO & Co-Founder, Wevat
Jack Pearson – Director, EngX
Una Cottrell – Founder & MD, Authentic Marketing
Allison Alexander – Founder, Branue
Lucy Sharp – Co-Founder, Dot Residential
Frankie Fox – Co-Founder, The Foraging Fox
Sean Ramsden – Founder and Chief Executive, Ramsden International
Fiona Castela – Director, Castela Consulting
Tilly McAuliffe – Owner, Think Publishing & Wanderlust Magazine
Natalia Bojanic – Co-Founder, Form Nutrition
Richard Carter – CEO, CCww
Touria Roqaa – Founder & CEO, Roccabox
Will Dracup – CEO, Biosignatures Ltd
Simon Cherry – Director, Phantom Ltd
Nick Sturge – Director, Engine Shed
Yannick Brunner – Co-founder, WealthKernel
Stuart Clarke – Director, Paceline
Ben Brabyn – Head, Level39
Iris Anson – Co-founder, Etiq
Pratik Sampat – CEO, ihorizon
Dr Nicholas Field-Johnson – Senior Partner, Fraser Finance LLP
Madhuban Kumar – Co-Founder & CEO, Metafused
Al Gerrie – Founder & CEO, ZigZag Global
Rick Benfield – CEO, thirdbridge
Andrew Tibbitts – COO, TechHub
Kully Singh – CEO & Founder, Player Up
Aneesh Varma – Founder & CEO, Aire
Stephen Oldroyd – Head of Strategy, Adzuna
Luke Robinson – Partner, Post Urban Ventures
Alastair Paterson – CEO, Digital Shadows
Sophie Sandor – Founder, Uncouth Chic Films
Kristian Papadakis – Founding Director, Presso Network
Davide Machado – Founder, Splitcab Ltd
Jonathan Holtby – CCO, Dataswift
Nilema Bhakta-Jones – Chief Operating Officer, Farillio
Alex Gurr – Head of Sales, Farillio
Manita Rai – Operations Manager, HireHand
James Garner – Founder, Sticky
David Hulmes – Founder, Jackhumble
Darin Brockman – CEO & Founder, Firsty Group
Alma Ramirez Acosta – Co-Founder, Vibio
Rosemary forsythh – Founder, Forsyth Group
Yogesh Gupta – Founder, GET-NILA LIMITED
Peter White – CTO, W Cubed Tech Ltd
Kuvera Sivalingam – Co-Founder, Learn How Now
Niall Jones – Founder, Innevent
Phoebe Yiin – Head of Operations, Dataswift
George Biddle – Founder & CEO, The Grad Soc
Theodosis Georgiou – CSO, Wild AI
Jack Dow – Founder & CEO, Grapevine
Sakunthala Panditharatne – Founder, Asteroid Technologies, Inc
Geoff Anderson – CEO, PixelPin
Natasha Guerra – CEO, Runway East
Simon Francis – CEO, Flock Associates
Jack Gaskin – Co-Founder, GoKart
Steve Day – Co-Founder, Football Matcher LTD
Phil Day – Co-Founder, Football Matcher LTD
Carl Stephen Patrick Hunter OBE – Chairman, Coltraco Ultrasonics
Oliver May – COO and Co-founder, Streetbees
Seb Barker – Co-Founder & COO, Beam
Dan Walker – Founder, Lnet Digital Ltd
Sophie Newbould – CEO, Newbould & Co Solicitors | COO, Athensys
Ian Merricks – Chair, The Accelerator Network
Fabrizio Nicolosi – Founder, Leaders First
Emma Little – Founder & CEO, ExecSpace
Yuliana Topazly – Director, My OutSpace
Evgeny Shadchnev – CEO, Makers
Kevin Flanagan – Founder, Dialoguers
Edmond Ibrahimi – CEO, Propertalis
James Butler – CEO, Tollo Ltd
Laurence Nicholas John – CEO, Ctrlio ltd
Lee Strafford – CEO, ADV
Chris Barley – Founder & CEO, Converso
Ellie Webb – Founder, Caleño Drinks
Vivi Friedgut – Founder, Blackbullion Ltd
Louise Doherty – CEO, Yoller
Meera Panchal – CEO, Synadd
Elizabeth Ellis – Founder, Blue Marble Private
Dr. Maria Aretoulaki – Founder & Director, DialogCONNECTION Ltd
Chang Liu – CEO, Extend Robotics
Jerry Young – CEO, ieDigital
Simon Thethi – Founder, Tech City News / Indicium Ventures
Ajay C Thomas – CEO, Sweans Technologies
Vicky Ngari-Wilson – Founder, The Rural Retail
Sara Ahmadi – CEO & Founder, shopest
Christopher Lier – Co-Founder & CMO, LeadGen App
Sharmadean Reid – CEO & Founder, Beautystack
Pawel Bojarski – CEO, Sceenic
Paul Bellamy – CTO, truenova
Paul Andrews – Founder, School Lettings Solutions
Ross Williams – Founder, Venntro Media Group
Dalila Duffy – Finance Director, Mercanto Limited
Anna B. Sexton – Founder, Open To Create… Ltd
Becca Courtenay – Co-Founder, The Plantifull Food Co.
Michele Trusolino – Co-Founder & CEO, Debut
Shelley Stuart – Director, Stuart Consulting
Lizzy Hodcroft – Co-Founder, Myndr Ltd
Charlie Mowat – Founder & CEO, The Clean Space
Nicolas Colin – Co-Founder & Director, The Family
Chris Butcher – Co-Founder & CTO, Portify
Jonathan Wiggin – Founder and CEO, Pionr
Sho Sugihara – Co-Founder & CEO, Portify
Michael Nabarro – CEO & Co-founder, Spektrix
Anne Sutton-Scales – Start-up Founder, Designihastings.com
Daniele Baroncelli – CEO, Trenìt! / GoBright Media Ltd
Rafael dos Santos – CEO, High Profile Club
Dharmin Polra – Partner, London Investable
Michael O’Sullivan – CEO, Bywire News
Sorcha Lorimer – Founder & CEO, Trace
Carlo Alberto Seneci – CEO and Co-Founder, Future Forge Ltd
Shaan Ahmed – Founder, Uown
Kirsty Macdonald – Investment Manager, JamJar Investments
Fotini Markopoulou – CEO, doppel
Freddie Blackett – CEO, Patch
Sarah J. Wadham – Founder & CEO, SJW Corporate Services Ltd.
Peter Bance – CEO, Origami Energy
Keyu Sumaria – Co-Founder, The Oblique Life
Adrian Palmer – Former CEO, Proven Legal Technologies
Dmitry Ivanov – Co-Founder, Wevat
Sophie Eden – Co-Founder, Gordon & Eden
Elizabeth Varley – Founder & CEO, TechHub
Alexander Fitzgerald – Founder and CEO, Cuckoo Internet
Silvia Ferrero – CEO, MediaLoc Ltd
Simon Hulme – Programme Director, MSc Entrepreneurship, UCL School of Management
Diane Young – Co-Founder & CEO, The Drum
Dr Christopher Haley – Head of Startup Research, Nesta
Jessica Mendoza – Founder and CEO, Monadd
John Stapleton – Founder, Entrepreneur & Business Advisor
Giles Palmer – Brandwatch
Letitia Seglah – CEO and Founder, Build Scale Grow
Jonathan Cohen – Founder, Canvus
Ufuk Polat – Founder & Engineer, Deplike
Kim Palmer – Founder, Clementine
Annabel Denham – Founder, Female Founders Forum
Emma Sinclair MBE – Co-Founder, EnterpriseAlumni
Karen Kerrigan – Chief Operating Officer, Seedrs
William Page – Co-Founder, FilmDoo
Jillian Kowalchuk – Founder & CEO, Safe & the City
Jinn Koriech – Managing Director, Ixydo
Have a Cow
Hei from Slush!
I'm briefly in Finland at Helsinki's founder-focused event to speak at three events on our recent reports: Job Creators, Future Founders, and Here and Now. As a general rule, I don't attend conferences – not least, because we put on so many events of our own – but with great speakers like Sequoia Capital's Michael Moritz, Stripe's John Collison and Clearbanc's Michele Romanow, this one is making me think I should attend more. If you have any that you think are particularly worthwhile for busy entrepreneurs, let me know so I can share them in advance with our 10,000+ members.
The State of European Tech Report 2019 was launched at the event. The headline finding is positive, the number of industries receiving significant capital is increasing, but there is certainly room for improvement. One fun fact stuck out: based on Meetup data, Milton Keynes is one of the fastest growing tech hubs across the continent. From concrete cows to concrete businesses.
Labour the point
Political parties are busy making their policy positions more concrete. Labour and the Lib Dems have released their manifestos.
Labour's is radical. By its own calculations, it would push up day-to-day spending by £80 billion in 2023–24. To pay for this, the tax burden would be well above levels sustained in the UK since the Second World War. As usual, the IFS has produced the leading economic analysis.
The independent IFS has a robust take on Corbyn's plan to increase corporation tax from 19% to 26% (this would take corporate taxes in the UK to the highest in the G7 and almost the highest in the whole OECD):
"The truth is of course that in the end corporation tax is paid by workers, customers or shareholders so would affect many in the population. In the end, it is unlikely that one could raise the sums suggested by Labour from the tax policies they set out. If you want to transform the scale and scope of the state then you need to be clear that the tax increases required to do that will need to be widely shared rather than pretending that everything can be paid for by companies and the rich.”
Entrepreneurs would also be impacted by the end of Entrepreneurs' Relief; the new treatment of dividend and capital gains income, which would be treated as other income (ie. 40%, 45% or 50%); and the minimum wage increase from £8.21 to £10. While for larger companies, 10% of shares in all UK companies with more than 250 employees would be owned by employees through inclusive ownership funds.
I should point out, John McDonnell disagrees with the IFS analysis, insisting that 95% of people would pay no more tax than they do now. And Labour would give EU nationals the right to remain, which while logistically challenging would be welcomed by many entrepreneurs and their staff. They also have some good stuff around the apprenticeship levy – making it easier for employers to spend the levy by allowing it to be used for a wider range of accredited training. This is something we suggested in our Management Matters report that we produced as part our Business Stay-Up campaign with ABE.
Land liberalisation
You can read what the IFS thinks about the Liberal Democrat's manifesto here. It's not as dramatic as Labour's manifesto, but it still gets quite a lot of criticism. But ultimately, their promise to remain in the EU is probably the marmite policy that will trump all others for entrepreneurs (though don't forget that Labour is promising a second referendum on Brexit).
I want to pick on a policy recommendation in the Lib Dem manifesto that mimics something recommended in our APPG for Entrepreneurship Tax Report (and elsewhere). On page 11 of our report, we suggest the Government transforms business rates into a business land tax levied on landowners. We called for the Government to reform Business Rates to reduce administrative burdens and cash-flow issues by levying the tax on commercial property owners and not occupying businesses. And in order to incentivise investment, we suggested it should be assessed on rateable values upon the underlying land value of a commercial site rather than on the value of the property itself.
This might sound like niche stuff, but it's important. It's the smart way to fix business rates and is pretty much what the Lib Dems have in their manifesto. Labour and the Conservatives are also reviewing the plan. This is pleasing and why think tanks matter.
The Conservative Party hadn't released its manifesto yet at the time this was written. To read the full e-bulletin click here, and don’t ever miss one in the future by signing up here.
Uber loses London license: reaction
In response to the news that Uber has lost its license to operate in London", Research Director Sam Dumitriu comments:
“TfL’s decision to strip Uber of its license to operate in London is disproportionate. It sends a signal across the world that London isn’t open to innovation and competition.
“The violations uncovered by TfL, while troubling, have been addressed through stricter checks on drivers using AI and facial recognition. There’s no reason to expect that this specific problem will continue. Furthermore, if you take into account Uber’s other safety features, it’s likely they compare favourably to other modes of transport in London and definitely favourably compared to transport in London ten years ago before Uber.
“Unlike the initial ban, there is now intense competition in London’s private hire market. However, there is a serious risk that a similarly aggressive regulatory approach will be applied to Uber’s competitors, such as Kapten and Bolt.
“Disruption, innovation, and competition in the private hire market has been overwhelmingly beneficial to Londoners. Cutting fares and wait times, while providing flexible work for thousands of drivers in London.“
Sleep, Scientific Progress and Child Labour
What's wrong with "why we Sleep?"
Suggested by Annabel Denham, Associate Director at The Entrepreneurs Network
Alexey Guzey’s analysis of Professor Matthew Walker’s critically acclaimed book Why We Sleep is worth reading. Contrary to Walker’s claims that the shorter you sleep, the shorter your life span, Guzey reveals that most studies on the relationship between life span and sleep duration find a U-shaped relationship between length of sleep and longevity: both short- and long-duration sleep are associated with higher mortality.
Neither will sleeping less than six hours a night double your risk of cancer: “Walker does not cite any studies that support this assertion anywhere in the book.” Nor has the World Health Organisation ever declared a sleep loss epidemic throughout industrialised nations (though if you now Google “WHO” and “sleep loss epidemic” you’ll find results citing, you guessed it, Matthew Walker.
That two-thirds of adults in developed nations fail to obtain the recommended amount of sleep is a conclusion Guzey suggests Walker reached through a series of non-sequiturs. Further, “the quote is empty because the WHO does not stipulate how much an adult should sleep anywhere”.
We should worry less about sleep. Sleep is like a cat, it only comes if you ignore it. Instead, let's heed Guzey’s advice: “as long as you feel good, sleeping anywhere between five and eight hours a night seems basically fine for your health, regardless of whatever Big Sleep wants you to believe”.
Is the rate of scientific progress slowing down?
Suggested by Sam Dumitriu, research director of The Entrepreneurs Network
A new paper by my former colleague Ben Southwood and economist Tyler Cowen suggest it is. Defining and measuring scientific progress is a tricky task, so Southwood and Cowen look at a range of metrics including "productivity growth, total factor productivity, GDP growth, patent measures, researcher productivity, crop yields, life expectancy, and Moore’s Law"
However, their findings aren't so straightforwardly negative. While "a wide variety of “per capita” measures do indeed suggest that various metrics for growth, progress and productivity are slowing down. On the other side of that coin, a no less strong variety of metrics show that measures of total, aggregate progress are usually doing quite well. So the final answer to the progress question likely depends on how we weight per capita rates of progress vs. measures of total progress in the aggregate."
Why child labour beats school
Suggested by Philip Salter, founder of The Entrepreneurs Network
As part of Unherd's radical policies series, Ed West has an article on why child labour beats school.
"Sure, when you put it like that, it sounds a bit… regressive. Perhaps I also think women should be denied the franchise or that MPs should be elected by rotten boroughs? Maybe the return of serfdom?", writes West.
West believes most - perhaps all - children would benefit from working a bit. And he thinks some children could benefit from ditching most of school and working after fourteen.
Referencing economist Bryan Caplan, West suggests schooling is often a costly arms race for credentials and is an overrated part of economic development. Would many teenagers not be better off in a "working environment [that] allows them to interact with adults, adopt adult social norms and learn skills when their brain is rapidly absorbing information?"
West's idea is as big as it will be unpalatable to some. But having sat in classes where some students got precisely nothing out of it - except the daily humiliation of being reminded that they aren't up to scratch (to say nothing about the impact on other children they disrupt), those shocked by West's solution still need to find one or two of their own to solve this policy failure.