I recently attended an event co-hosted by the Centre for Cities and Cambridge Ahead, part of a series on the challenges to growth and innovation faced by regions around the UK. In Cambridge’s case, the city is already home to one of the country’s most successful tech clusters, so the discussion tended more towards the strains created by growth, in particular with high house prices and relatively underfunded services.
These are problems other parts of the UK might well envy. In South Yorkshire, where we are delivering TEAM SY, cities like Sheffield have begun to attract tech workers looking for a better deal on housing costs than can be found in London, as Prolific North recently reported in this story on the Steel City’s ongoing transformation.
With its fast-growing life sciences and gaming ecosystem, Cambridge faces a different set of challenges. In his keynote, David Braben of Frontier Developments and Raspberry Pi mentioned what he called ‘the British disease,’ or the tendency of early-stage founders and investors to cash out at the first opportunity. By staying the course just a few more years, Braben argued, the rewards would increase 10x with more of that prosperity staying in the UK instead of being syphoned off by the acquirers.
It’s a parlour game of sorts to list British companies that have been acquired, often by large US tech companies, and speculate on what they might have become had they stayed independent. While tantalising, it can also resemble a form of backseat driving. Any founder of a growing startup has chosen to undergo a superhuman marshmallow test. Is it any surprise that when a deep-pocketed acquirer comes calling, they are ready for their marshmallow?
In the near term, it may be that some startups have no choice but to be acquired as fundraising becomes more difficult (our CEO, John Spinder, recently published a long post on the outlook for investors in light of the funding downturn). But there’s also a challenge here for investors and startup supporters, both in the UK’s best established tech hubs like Cambridge and where ecosystems are still being developed as in South Yorkshire. How can we encourage the most promising startups in these ecosystems to politely decline the marshmallows put on the table by big acquirers, stay independent, and keep more of the jobs and prosperity they create in the places that spawned them?
Image courtesy of Frontier Developments from Elite Dangerous: Odyssey.