Michelle Wright is featured in the Financial Times' Silicon Valley article
Outside the British Consul’s house in San Francisco is a palm tree and a giant sign proclaiming “Technology is Great”, with the word “Britain” squeezed underneath. The posters form the backdrop for our unusual group: the inaugural mission of 17 British female technology CEOs.
It has been put together by leading tech investor Silicon Valley Comes to the UK (SVC2UK) – or, in our case, the reverse – with UK Trade and Investment and the local consulate. Our pilgrimage marks the recognition that British start-ups lag behind their US rivals. “Companies think in a different way here,” says Andy McLoughlin, the British co-founder of Huddle, who we visit in San Francisco. “For tech start-ups this is still the centre of the earth.”
I am curious to see if anything has really changed for British start-ups. My first job at the FT in 1999 was covering technology during the inglorious days of the bubble. In April 2000, I wrote about the new generation of UK entrepreneurs, asking “whether, unlike their predecessors, they can make it on the world stage”. The obstacles to success are even higher for women. In the 1990s boom there were only a few female founders in London, such as Martha Lane Fox at Lastminute.com. Over Foreign Office austerity hors d’oeuvres, I am curious about the new generation.
Unlike a decade ago, when many British tech businesses were copycats of American ones, or focused on ecommerce, these businesses are eclectic. They include a software company that analyses which customers send online orders back; a healthcare company that tracks when women are most fertile; a developer of behavioural analytics software for professional investors; and Blippar, a mobile visual browser. Although the female founders have been selected because their businesses have increased revenues, on average, by 300 per cent a year, will these women succeed? Is the next Facebook founder in our midst?
Scale and ambition
Pilgrimages to Silicon Valley can be dismissed as mere “innovation tourism”. Foreign executives ditch their suits, arriving “pale, jet-lagged and dressed in black”, as one investor told the FT this year. At a party I bump into an FT consultant who has gone a step further: dying his hair neon blue, and quitting his job to remain here. Such is the Valley’s seductive appeal.
Our group is already entrepreneur-hip, with blue nail polish, knapsacks and orange cycling pants on display. Our first stop is Nextdoor, a private social network for neighbourhood communities. It has concrete walls, ping-pong tables and word magnets on the fridge turned into “poems”. Several employees watch the live screening of Apple’s Watch launch. It is here that we get our first Silicon Valley lesson: “Scale and ambition is everything.”
Sarah Leary, Nextdoor’s co-founder, casually establishes her credentials by revealing that a previous start-up she was involved with became Shopping.com, selling for $625m. She raised $7m for a sports website but it failed to gain enough traction. “We had meetings trying to come up with new billion-dollar ideas. We felt an urgency to work on something that had the potential to be a great company. We knew what success felt like. We weren’t experiencing that.”
The new business has signed up 49,000 neighbourhoods in four years. “This has the potential to be one of the biggest social networks, with LinkedIn and Facebook,” she says.
Such bold assertions are typical. “In investor meetings you need to be brash and bold,” explains Ruzwana Bashir, a British entrepreneur now based here. “In the UK you are not supposed to say you are going to change the world. As women, we tend to not want to be as brash. Even if you think you are sounding big-headed, you’re not. You are up against young brash men.”
“We want to become a verb. We want people to say they Blipp” - Jess Butcher, CMO and co-founder of Blippar
Our group is hardly lacking in soaring rhetoric. “We want to become a verb. We want people to say they Blipp,” asserts Jess Butcher, co-founder of Blippar. The name of Bethany Koby’s business is equally immodest: Technology Will Save Us. Her aim is for her DIY tech kits to be in “all schools”.
Yet, it is not enough for founders to be confident; their investors need to be too. Nextdoor has raised $100m but “we’re not monetised yet. That is an explicit strategy,” admits Leary. “Our investors are very patient.”
That detail is a talking point later. “I was amazed at the strategic decision to be pre-revenue for four years,” says Debbie Wosskow, who runs LoveHomeSwap.com, a “grown-up Airbnb” allowing owners to swap their homes for short periods. “In Europe there aren’t many VCs that would even listen to that conversation. That business could not originate this side of the pond.”
One problem is the funding gap. Sherry Coutu, co-founder of SVC2UK, a leading tech investor and our consigliere, says: “The amount of capital in Silicon Valley is $60bn. In the UK $10bn.”
“Venture capital here is willing to back a business without an immediate route to revenue,” says McLoughlin. “It is one of the reasons why we don’t have a Google or Facebook.”
For an insight into real scale and ambition, we head to Google. Google’s founders want it to be “relevant in 100 years”, says Rachel Whetstone, senior vice-president of communications and public policy, and a former Conservative party chief of staff. Dressed in grey puffa jacket and Converse sneakers, she has a rapid-fire delivery. “Big breakthroughs in technology are about big change. You have to focus on the forward-looking stuff, or you will lead your company to irrelevance.”
Google is famous for allowing its engineers to spend up to 20 per cent of their time on pet projects. Roberta Lucca, who runs Bossa Studios, a games company, and has just created a 3D start-up, asked one engineer how Google evaluates these experiments. “If it only works for 100 million people, it’s not really interesting. It needs to be at least 500 million.” It is the casualness of that sentence that is the wake-up call.
Culture is everything
After the distressed-warehouse vibe of San Francisco, Palo Alto and Menlo Park seem moneyed, anonymous, sprawling and lacking in soul. “It is like Reading but with palm trees,” as one entrepreneur puts it.
Facebook’s headquarters are not what I expect. First impressions are of a new, corporate culture being grafted on to its freewheeling, arrogant-developer one. Posters everywhere proclaim corporate slogans. “Slow Down and Fix your Shit”, “Nothing at Facebook is Someone Else’s Problem”, “If you don’t make mistakes, you’re not reaching far enough.” Some are ironic: a cartoon of a Kool-Aid jug, saying “Oh Yeah!”. All are for sale in its poster shop.
"UK female entrepreneurs should spend more time in the US to learn a more confident attitude" - Debbie Wosskow, CEO of LoveHomeSwap
Facebook now employs a resident artist. There are artfully broken red chairs glued to a wall; graffiti of a skateboarder wearing a “Move Fast” bomber jacket. The most revealing symbol, in an unintended nod at Ayn Rand neoliberalism, is a “Fox Safety” sign outside. It warns employees not to feed them: “They need to know how to live on their own.”
The most impressive campus visit is to Google. Its canteen is like looking at a perpetual ant colony, with some omnipotent queue-master overseeing it all. Hundreds of employees forage for tuna or sushi, guided by the “Well-Being Indicator”. Feeling perverse amid all this guided goodness, I rapidly eat several snickerdoodle bars at the counter.
The coffee shop gives a hint of Google’s ambition, mocked in Dave Eggers’ parody The Circle , to create an all-encompassing workplace. A shelf where workers can store their mugs, proclaims it is “your home away from home: Welcome to the Coffee Lab Family.” One mug reads: “Always be yourself unless you can be a unicorn then always be a unicorn.”
Such impressions have impact. “I just bought my team a sofa to nap on, a fridge, toaster, microwave and plan to paint the walls bright green,” says Vicky Brock, founder of Clear Returns, on returning. “I want them to love to work here, urge others to work here and to work from the office – so spending a grand total of £450 to make this office somewhere they love to be seemed an important start.”
Every Silicon Valley executive stresses that company culture is critical. Facebook’s culture, for example, has changed over time. The word “fun” was consciously ditched from its corporate values. In a bid to be more considerate of customers, “empathy” is being taught to its engineers.
Back in San Francisco, Julia Hartz, co-founder of Eventbrite, an online ticketing service for events, echoes that. “The culture in your company will carry some of your DNA as founders. For example, I can’t keep a secret to save my life. We have an open-source culture.”
Created in 2006, Eventbrite now has 423 employees and a valuation above $1bn. “If I could go back six years and talk to myself, I would definitely ask, ‘What do we want to permeate our culture?’ I would have been more intentional about it.” For example, the company now has a Tuesday tradition. “New Britelings stand up at lunch and talk about what impact they hope to achieve and to add an embarrassing moment. The culture changes every week.”
Julie Hanna, the charismatic executive chair of Kiva, a microfinance website, tells us: “Here we care most about technology and people. The times I have gone against instinct, it always backfires. Whatever that microsecond of hesitation was, I imagine it amplified over time.”
"Experienced start-up founders in Silicon Valley are not afraid to set a ‘big vision’ with inspirational values" - Roberta Lucca, cofounder of Bossa Studios
Emily Brooke, founder of Blaze, which makes laser lights for bicycles, is the youngest of our group. She abandoned physics at Oxford to pursue product design. Should she hire an adult or people like herself? “What you need to be mindful of is not that you need grown-ups but that you need perspective. We made three key hires and it catapulted us because of their perspective.”
“They can see beyond just the horizon,” says Hanna. “They’re game-changers.”
For Lucca, this is a central lesson of the trip. “Big vision combined with a well-crafted company culture is a massive competitive advantage, as attracting the best talents, who want to belong to big revolutions, can make or break your start-up.”
The network is all – invest back
Conversations in Silicon Valley start in the middle. Talk bypasses the gossip stage and dives straight into the core idea. A related trait is that people immediately ask how they can help. “We talk about tribes here. Doing favours happens more here than elsewhere,” says Coutu.
For all its big thinkers, Silicon Valley can feel provincial. “It’s an incredibly small Valley. You have a short career if you cross people,” says one local entrepreneur. “Rather than being secretive, it is better to tell everybody your idea, as everybody has a piece of the answer.”
That instinct seems counterintuitive. It is a recognition that few ideas are original. Execution is all. To be a success requires blunt, honest collaboration. Susan MacTavish Best, founder of her own lifestyle brand, recalls working in Paris. “French start-ups were competitive with each other. I kept thinking, no one even knows you exist, you’re not important. You need to collaborate to get investors’ attention in Silicon Valley; stop being so French!”
That lesson is evident to everyone in our group. As Gemma Cocker, VP of growth at Neverbland, reflects: “I hope the relationships formed between our delegate troupe prove to be as valuable as those we forged in SF. I’d put my money on it.”
Some of this culture cannot be replicated. “It’s in the schools, country clubs, at restaurants. It feeds off itself. People share information,” says one investor. “My 16-year-old son talks about technology. He created a Facebook for Pets. Someone babysat for a VC. They were paid in Bitcoin. The key to success is the network. Stay in touch with anyone you meet.”
Over at LinkedIn, in the most valuable, practical session, we are given advice on how to do just that with tools to find customers, recruit staff, build company pages and optimise our personal ones. LinkedIn has pulled all our profiles, dividing our group into early adopters and most popular (Thankfully, they do not do a “least popular”.) “LinkedIn’s gold is vanity and voyeurism,” a trainer tells us. “We are very competitive at LinkedIn.”
"The culture in your company will carry some of your DNA as founders" - Eventbrite founder Julia Hartz
This dense network of relationships is given extra lubrication by successful founders, addicted to start-up adrenaline, recycling cash back. McLoughlin has invested in more than 25 start-ups, forging his own network of future loyalties. “It is this area where the UK is depressingly opposite [to] the Valley,” says Michelle Wright, founder of Cause4, a body that helps social enterprises. “UK-based entrepreneurs often come across a culture of resistance, fear or bitterness towards those that are successful.”
Is this enough for women to get ahead?
For all the generic lessons for British start-ups, the theme that constantly resurfaces is the obstacles facing women. There is an awkward moment when a male co-founder sees a room of 20 women. He remains nervously in the doorway. “I know what’s good for me and strong women are good for me. I’m feeling a little intimidated!” he says, as he escapes.
Such experiences are likely to be rare for him. For all Sheryl Sandberg’s “leaning in” (she generously leans in to our group during a photo-call), woman are in a minority in Silicon Valley. Just 11 per cent of venture capitalists are women, according to the National Venture Capital Association in 2011. A study of 12 top technology start-ups, ranked by market capitalisation, found they had just 6.8 per cent women on the board. (Public companies were a little better, at 21 per cent.)
Female founders secure only about 4 per cent of venture funds. By contrast, about half of the funds on Indiegogo, a crowdfunding website, go to businesses created by women. This points to a concern that the much-heralded Valley network is simply another name for “old boy network”.
Women need earlier access to Valley networks and internship opportunities. “It boils down to credit,” says Mary Lou Jepsen, head of the display division at Google X. “Despite elite contributions of women throughout Silicon Valley in technology, they have been largely invisible when the VC investment is awarded. I’m hopeful for change in this current cycle of frank discussion about conscious and unconscious gender biases.”
Marc Andreessen, a leading venture capitalist, concedes: “We need more women in Silicon Valley. We need more female founders, female engineers. Any time a qualified founder walks through the door, we get excited. Any time a qualified female founder walks in the door, it’s oh my God! The level of enthusiasm to find more is extremely high.”
Women could get rarer still. The 2013 United States Census Bureau report shows less growth in female employment for younger women in science, technology, engineering and mathematics. “Most of the growth in women’s share of STEM employment among those under the age of 40 occurred between 1970 and 1990.” Such skills matter. “If computer science programmes are going to generate 10-15 per cent of women per year, that’s a fundamental pipeline issue,” says Andreessen. “From a VC standpoint, you can’t lower the actual standards. You can’t say, for starting technology companies, you don’t need a technical background. It would be flushing money down the toilet.”
Another issue is sexism. In the UK, some of our group have been criticised for being “too confident”, or “too emotional”, in the case of Wosskow. “That term would never be applied to a male CEO,” she says. “I never had any obstacles that weren’t down to my own confidence until I was raising money,” recalls Brock. “You enter this weird world of meeting mostly male strangers to ask for money in circumstances that in other contexts could align to dating. I never experienced anything inappropriate but did feel more uncomfortable than I expected.”
Andreessen tackles this head on. “There are stories of women who got hit on during pitch meetings. Either bad comments or sexual harassment or whatever. This is obviously unacceptable,” he says. “We have the problems that the rest of the culture has. Yet as places go, this is open and welcoming. Many women have done very well here. It’s going to be a very good environment for women to work in over the next 20 years.”
There are tentative signs of change. Two prominent American female VCs recently launched their own investment firm, Aspect Ventures. One of our hosts, Alexis de Raadt St James, has launched Merian Venture Partners, a $100m fund to invest exclusively in women-led businesses. This inaugural visit is a sign of progress too. Many of the British female founders returned home inspired to change investor pitches, product direction or launch in America.
For me, there were three pieces of start-up advice I took away. “You need to disrupt yourselves. You should not get success attachment.” And, more ominously: “Be very afraid of people from big companies.” And finally, from Julia Hartz, the most amusing tip. “We bought our dog, Cutie Pie Sparkle Hearts. Getting a dog was the worst decision I ever made. It almost destroyed us.”
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