The US Startup Visa: A boon for dismayed, frustrated British entrepreneurs

I’ve been reading a lot about the proposed US Startup Visa.

Right now, one of the biggest things that prevents smart entrepreneurs (British or otherwise) from going to live and work in Silicon Valley, is the Visa issue. Sure, most nationalities can get 3 months worth of time in the States, but after that, they need to leave and come back again… and thus begins the dance with the immigration chaps at San Francisco International Airport.

This is the comfort blanket that most British entrepreneurs cling to.

It stops them actually doing anything.

Instead they arse about in the UK dealing with total numbskull venture capitalists — most of whom are playing the role admirably up until it comes to coughing up cash. It is all about risk, as John Malloy from Blue Run Ventures pointed out in a recent interview we did.

In Silicon Valley, they get risk.

Your brilliant, amazing, its-gotta-work idea is risky. Anything new is inherently risky. But in America, you try it. You mitigate as much risk as you can then you try it. You get stuck in and you see what happens.

In the UK, entrepreneurs try too. The first thing that happens is they become social outcasts. They’re labeled, with a bit of a laugh, ‘delboys’. But those doing the labelling do actually mean it. And this is the horrifying thing in the UK — normal people do quite like to thwart the efforts of anyone thinking outside the box. There are two fundamental points about the British culture contributing to this:

1. British people are inherently jealous of any success whatsoever. I often joke, ‘that shouldn’t be allowed‘, when I hear someone has made a pile of cash. I am being ironic, but it’s fascinating to watch the number of people who actually nod along with the statement.

2. Know your place. British people need to ‘place’ you in society. They need to understand where precisely you are in the hierarchy. And if you’re seeking to change that hierarchy — by doing something entrepreneurial, well, that’s your fault. See point 1.

Executives in big UK companies are super examples of this. Whilst they’re earning — for example — £200k a year, they will do their utmost to be suspicious of startups. What’s particularly annoying for these executives is discovering that the startup founders were middle managers — subservient to him — prior to starting their company. And, with just a signature, this executive could ‘make’ the startup company by granting them a stupendous contract.

What typically happens in most deals is that British businessmen (and women) will evaluate whether or not they’d like to see the other person be successful. The answer is resolutely ‘no’. Therefore all sorts of difficult questions ensue — how are you backed, what happens if, I’m concerned about the risk… all the sorts of questions that are never asked of bigger, more established companies. Because of course, you’re never actually dealing with the founders of big companies. So you never have to deal with the jealousy issue.

This is a critical reason why most tech startups in the UK go absolutely nowhere. You can’t legislate against it. It’s built straight into the culture.

Which is why the cleverest escape.

The biggest misjudgement I ever made was staying in the UK throughout my twenties and not moving to Silicon Valley. Instead I fought tooth and nail against the establishment. By hook or by crook, I managed to get my ideas out the door. I paid for it. I mean, I literally had to fund it all, with the exception of the initial capital. Which came from… you guessed… America! Or, An American venture capitalist. Once, I managed to secure a small amount of investment from a thoroughly understanding angel investor. Once. Those people are unfortunately few and far between in the United Kingdom. Although I worked with smart Americans all the time, I failed to recognise reality: If you’re starting a new tech business, the only place — the ONLY place — you should be is Silicon Valley.

The amount of times I have been nailed to the wall by insanely jealous British executives is simply ridiculous. Any business concept I’ve had — it’s typically gone nowhere because when I try and pitch it to the Brits, in order that someone actually pay for it, the answer is invariably no, no and thrice no. Until some bright spark starts the business in the States, gets a good bit of venture capital and… ‘momentum’. Then I have had to watch with familiar dismay as that same executive gets on a plane and flies out to do business with them.

Which is why you find me in San Francisco every two weeks. Well, I was there more or less every two weeks last year. There’s a baby on the way here so I’ve had to change my priorities slightly. It’s a surreal experience, going from the British boardroom to the American boardroom.

Can’t-do becomes Can-do. The word ‘yes’ is used a lot more. There is no immediate feeling of jealousy. Instead, there’s excitement.

Sit down with a Bank Manager in Silicon Valley and they will — genuinely — treat you as though you’re serious. As though you could well become the next Bill Gates. Talk to your accountant and they’ll do the same. They’ll make sure you’re setup in a tax efficient manner so that when you get ‘your first round’, it’ll be easy to grow the company. You’ll fall off your chair when the chap picks up the phone and calls his friend (“he’s usually good for $20-30k and he loves mobile stuff”). You’ll start having heart palpitations when your accountant puts the phone to his chest and asks, “Can you do a drink with him tonight?”

They move fast, they move seriously, they move with passion and excitement. It’s everything you’ve experienced in the UK, but inverted.

By the way, for the Americans reading — and for the British reading who don’t quite get the ‘jealousy’ thing that I’m talking about, here’s a good example: This is a Bugatti Veyron in Manchester (via Autoblog).

That is a traffic warden putting a parking ticket on the Bugatti. That is also a crowd cheering on the traffic warden. Why? Well it’s because each of the people watching will never, ever, ever have the capacity to even think about buying an £800,000 Bugatti. They know it. They know their place. Why should someone else be allowed to be successful enough to blow almost a million quid on a car? Yeah. Fluck’em! Rich B’stards!

Alas, this is generally the attitude found in the UK. It doesn’t really matter out on the streets. But when you’re trying to get a contract or trying to get a company to buy your new service — 9 times out of 10 — you’ll have to deal with a middle manager who would have been stood right at the front of that crowd above, jeering. They can’t be arsed to think outside the box. They can’t be arsed to startup their own business. And they’ll sure as hell lord it over you and, if at all possible, not give you the deal. Or they will give you the deal, but on punitive, ridiculous terms.

1 out of 10 business people get it. These are the chaps who contact you, get you in for a meeting and then award you the deal there and then. These are the people who understand entrepreuenrs — they’re the ones who will actually add a zero on to your cheap-as-chips pricing, commenting, “I actually need you to stay in business, ok? And we can afford this. We need good service.”

It doesn’t happen very often at all, unfortunately. It’s why you’ll have seen one or two British tech startups succeed. At some point, they got a 1-in-10 person at one of their clients and managed to establish themselves and hire some staff. In the UK you need a lot of middle managers so that they can do business with the other middle managers at your prospective clients. Middle managers cannot stand the smell of a successful entrepreneur, especially if, last year, that entrepreneur was doing their job.

Of course, after reading this, most British entrepreneurs still won’t get it. I speak to British mobile and tech entrepreneurs all the time. They simply don’t believe what I say about Silicon Valley. Some do believe, but — well, it’s all too easy to sit in the UK and spunk the little money they do have up the wall.

Most of them invest in hope.

But there’s a looming problem for these entrepreneurs. This rumoured ‘StartUp Visa Act’ that the Americans are discussing would completely and utterly destroy any barriers for the poor British entrepreneur. So explains BusinessWeek:

The StartUp Visa Act would create a new type of two-year visa, called an EB-6, available to any immigrant entrepreneur who has secured at least $250,000 in capital from accredited venture capitalists or angel investors. After two years, the person would become a permanent U.S. resident if his or her business has met one of three criteria: created five full-time jobs in the U.S., raised an additional $1 million from investors, or achieved $1 million in revenue.

If this is made law, I can foresee bucketloads of talent heading West.

And good for them, all things being equal, I’ll be there too.

Meanwhile to all British entrepreneurs reading, your head can go back in the sand now.

Update: Thanks to @micrypt for adding this post into the Hacker News feed here. I noticed an excellent comment on that discussion by Pete Warden who links to both Paul Carr’s Guardian column (“I’m calling time of death on London’s startup industry“) on a similar subject and his own analysis (“You can’t fail if you don’t try. Or why I left the UK“).

Definitely worth reading both.

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  • Dave Sharp

    Ewan, as always, your bang on the button, I agree totally with your comments and sentiments in this article.
    Things won’t change until people want to change things, don’t hold your breath.

  • http://twitter.com/tomcuprcz Tom Cupr

    Thanks for this Ewan! Awesome article and very very true!

  • http://www.mobileindustryreview.com Ewan

    Do you reckon British entrepreneurs will be persuaded to look at Silicon Valley if that visa becomes available, Dave?

  • http://www.mobileindustryreview.com Ewan

    Nice one Tom

  • http://twitter.com/Jesso52 Jessica Williamson

    Love the cultural comparison from the British point of view. I've actually moved the opposite direction, Northern California to Scotland, and it took me a few years to recognise why I actually enjoy working here so much.

    Surrounded by can't-dos, I find that it's easy to make a big impact with a can-do style. It cracks me up to be doubted and dis-encouraged so often, which would be toxic if it were not for my California blood. And who decided 'can't be bothered' was a legitimate excuse for not doing or trying something?!

    Ewan, hope you and all the other CA-aiming startups can make it over there. The visas are ridiculous and I'd happily trade if we can get a scheme going. Think a bit of cultural mixing does everyone a lot of good.

  • pgbowen

    brilliant

  • http://twitter.com/c_davies Chris Davies

    Depressingly believable, Ewan. As a Brit who writes about tech with a US better-half, the difference in work-attitudes has been well discussed.

    My only negative prediction might be how open the US turns out to be re. immigration. VCs may be pushing for the new visas, but the Federal Government has shown itself to be pretty closed-minded; witness the ongoing H1-B debacle and various other matters of immigration policy. Or perhaps that's just my cynical, jaded Britishness showing through!

  • http://twitter.com/kgutteridge kgutteridge

    I will be moving in the future (assuming I can get a visa) for all the reasons you list Ewan and one further one, failure in a risky venture is not looked at as badly, as long as you can prove all lessons were learnt from the experience and lets face it you encounter more problems on the way down than you do on the way up. This effect causes people to hang onto broken business models longer in the UK than would be tolerated in the US because of the fear of perceived failure.

    However for those of us who do think differently in the UK, it does provide an opportunity in the simple fact there is less competition, however I do think it means we are much slower to roll products out, even though innovation levels are broadly similar.

    Removal of taper relief on CGT in the UK in 2007 proves the short sightedness of our system, why take a risky 2-4 year investment when you could have invested in a bank back in 2007…….

  • http://nseriesus.com matthew bennett

    Ewan, you inspire me! I can't comment on the British, but in California people are serious. I'm very fortunate to live here!

  • jamesplummer

    Wow. How right you are!

  • http://www.mobileindustryreview.com Ewan

    Have you experienced anything as I've described, James?

  • jamesplummer

    Sure.

    I have run a search and selection company for 25 years and have
    frequently recruited teams for technology 'start up's' and worked with
    European subsidiaries of expanding US companies. Do you want more
    detail? I have also run a couple of large events. Take a look at http://www.working2gether.net/
    and some years before http://www.surfsup.org.uk.

    James

  • http://twitter.com/deanrmorrison Dean Morrison

    Fantastic article, Ewan. Back in Australia we have something called, the “Tall Poppy Syndrome”, which is almost exactly as you described. While everyone butt-kisses those entrepreneurs that have made money, behind their backs they wish and hope they fail, and sadly, cheer when they often do.

    Having said that, I would much rather deal with the business culture in the UK than any other place (including Silicon Valley/SF) for a number of reasons.

  • http://www.mobileindustryreview.com Ewan

    Tall Poppy Syndrome? Love it! What reasons are you preferring British 'can't do' business culture? ;-)

  • http://twitter.com/deanrmorrison Dean Morrison

    Because there would just be no fun in ribbing the Americans about being bad at almost every team sport known to man ;)

    But on a serious note, you are spot on in many aspects. Maybe the only way to instigate genuine change is for a wave of British entrepreneurs to hit the Valley in numbers. Maybe after some time, people will wake up and attitudes may change, when people realise that their “can't do” business culture is forciing the brightest and best off-shore.

  • http://www.mobileindustryreview.com Ewan

    Especially American Football. What a pansy sport that is. Rugby all the way.

    I think what tends to happen is the smart Brits exit the UK and relish the Silicon Valley way — and don't ever bother coming back. Or do come back but understand that British can't-do culture is so engrained that it isn't going to change for a long, long time.

  • http://www.blackphoebe.com/msjen Ms. Jen

    Hi Ewan,

    I went to grad school in Dublin and there they call it Begrudgery. In the last few months of my course, I was quite shocked by the depths of the bitterness and front-stabbing, most bizarrely it came from the folks who did the best in the course not the middle or last.

    I think London is an exciting place and I know quite a few North Americans who are working in small firms or start ups in London and love it. I myself am seriously researching how I can come and live and work in London as I am a bit over California right now. ;o)

    I wonder how much of your frustration is because you are British and you know the British culture, whereas maybe many of the North Americans I know in London originally missed the cultural cues you are talking about and then when they saw them, like Jessica's comment, then considered it a challenge to be taken on.

    California is not a magic land, but is a place where many people from all over got sick of the Can'ts and moved to California because there are more responses of, “Cool! How are you planning on doing that? Can I help? Can I hook you up with X…”

    At what point, does the culture change because folks choose to step out of the box and keep doing it?

    Personally, I think the UK and the US should have a one in, one out policy for highly qualified tech folk & entrepreneurs. So, if you want to move to California to start a company, then I could move Black Phoebe Dev to London and we could each have a 3 year visa to the other's country. ;o)

    A Dutch friend of mine is currently applying for the Start Up visa and he has asked two US based folks to be 'silent' founders for his firm, so that he can get the visa right away and not have to wait. You may want to consider this option.

  • http://www.mobgeo.com/ Simon Davis

    Hilarious. But true to my experience: our angel is American and we are do great business everywhere we go – except the UK where we get passed from pillar to post while people wait for a risk free way to do something new.

  • rpercy

    Ewan Interesting article and …. I will be there too!
    Richard

  • Dave Marutiak

    Great comparison – not only of the UK culture but many other cultures that don't share the whole risk driven capital investment approach that they drive in the Valley. There was a brief period years ago when the Chinese were taking over Hong Kong that Canada actually moved faster than the US. Canada started giving automatic citizenship to anyone from Hong Kong that brough in $1M in investment and started a business that would produce jobs. They came over in droves. Many feared, at the time, that the Chinese would immediately dismantle the freedoms that HK had built.

    After a short period, the US started offering a similar deal, but cut the price for citizenship in half – invest $500K and build jobs and you could come in. If you're going to encourage real entrapeneurs you also have to be ready to compete with others that want them….

  • Harry G

    Great article, insight and very true. I have to add one thing that I have directly experienced. If your startup does not require external funding (angels, VC's etc.) and is targeting consumers direct, with a bottom up strategy as favoured by michael robertson from the states and does not require any B2B deals for distribution, sponsorship, ad-funded model etc then you can bypass this negative can't do culture as you don't really encounter any middlemen or need their approval – thank god!

  • http://www.mobileindustryreview.com Ewan

    Excellent point Harry

  • AJ

    The British aversion to risk can be a remarkable thing sometimes. It is part of the steady-as-she-goes mentality that is evident all around us and that, at least in part, led to the current economic crisis. No-one likes to rock the boat here or put their neck on the line. I have worked with a few people in this country whose main, maybe even their only, skill seems to be covering their back and never being in a position where they might one day have to take some blame. Better to be mediocre, urge caution and hold on to a job than to take even the tiniest of leaps into the dark.

    I have just come back from an emerging market where I worked as an investment broker for 4 years. We worked with all types of investors and from a number of different countries. However, the UK investment funds were almost impossible to deal with. By the time the Brits had worked out a project might be interesting, an Arab or Asian syndicate would have jumped in and moved on and with far fewer fund managers, due diligence lawyers, accountants and tax advisors whose prime motivation often seems to be just just skimming off the top for the sake of a rubber stamp whilst simultaneously limiting their own liability (and without adding any real value).

    The irony is, after passing on excellent projects time after time, the British funds I worked with would almost invariably end up investing in a truly awful project that was almost guaranteed to lose money. In one case an unscrupulous local employee had privately negotiated a backhander to promote a project internally and it was only months later (after the employee had left) that they realised what a mess they were in. They might as well have flushed c£50m down the toilet – at least they would have had more fun while they were doing it. We watched in amazement having warned them in vain. The investment managers ended up being sacked and replaced after the fund lost around 70% of its value but the new crew were identikit versions of the previous bunch. Maybe even a bit worse.

    There are different approaches to investment. In my experience, the British sometimes hate to lose money more than the utility they would gain from earning a good return and as a result they often end up somewhere in between – this is why pension fund managers often fail to outperform basic yardsticks in spite of being paid huge sums. I realise this is a sweeping generalisation but it is based on my own experience and for better or for worse investors elsewhere definitely have a different way of doing things and these approaches are worth investigating. I know we did.

  • http://www.mobileindustryreview.com Ewan

    Fascinating perspective, AJ!

  • http://tripleodeon.com jamesgpearce

    I don't spend much time dwelling on the pros and cons of business culture in various countries – there are certainly none that are perfect.

    Nevertheless, in the last 4 years, I've notched up Ireland, India, 'on the road', and now Belize – and haven't once wished I was back living a professional and entrepreneurial life in the UK.

    Maybe it's not so much that there's anything wrong with Britain – just that I've discovered I can be just about anywhere and still equally effective. (Although sadly no Veyron yet.)

    It's no co-incidence that I am loitering in a nearby timezone whilst those to the north figure this new visa out. Perhaps I'll see you there.

  • http://archlever.blogspot.com Jeff Dickey

    Chris, the problem with the H1B is that it's being used by EXISTING businesses to artificially depress wages, especially in the software field. Most people like me who've been burned by the H1B situation are solidly cheering for the Startup Visa…because it would create NEW jobs, and, being a new program, would be sensitive to the kind of abuses we've seen to date.

    And, just to be perfectly clear: I don't have anything against those H1B people themselves who are actually competent at their work; if I were in their situation, I'd do the same thing. My beef is with the companies who a) set up in the US but b) systematically exclude American workers and c) egregiously exploiting the workers they DO bring in, while d) complaining that they “can't find qualified people.” The fact that there ARE people available who are far more qualified/experienced than the ones being brought in just adds insult to injury — for both the Americans and the visa holders (who usually figure out how screwed they are within days or at most weeks after starting).

    I'd love to see the qualification that EB-6 visa-holding founders cannot hire H1B or L1 visa holders, at least from their home country…because I've already seen forum posts aimed at these vultures I've been talking about, where the vultures are advertising “once SUVA is enacted, we will hook you up with visa holders who are also from (the home country).” I'm counting on — perhaps “praying for” would be more accurate — bad publicity slamming the door on any individuals who do try this.

    If you want to come to America and start a business, great; we only ask that you hire Americans first. Otherwise, you might as well just stay put wherever you are. And I'd be willing to bet that most UK entrepreneurs considering making the move would be only too happy to play by those rules.

  • http://www.mobileindustryreview.com Ewan

    I think you're absolutely right Jeff, I'd have no problem hiring Americans

  • glenngillen

    Very interesting read, I'm intrigued to see how it all pans out as I'd be keen to jump the pond myself given the right opportunity.

  • http://www.onelifenofear.com Entrepreneur Blog

    Sad…. but true.

  • Kabs Ayofe

    Good read, and a lot of your assertions about the UK are bang on. Hoping to cross the pond in a year or two.

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