The British startup scene is flourishing. Investment in tech firms has increased more than tenfold since 2010. Tax relief from the government, a growing number of venture capital firms, and support from large firms (particularly from Financial Services for FinTech), has fostered many ambitious and successful startups.

Institutional factors aside, it’s the lessons Britain has learned from our friends on the US West Coast that have influenced the biggest successes. That’s why as an investor, I only support those entrepreneurs that understand 5 big lessons from Silicon Valley…

Lesson No. 1: you can’t build Rome in a day

The most successful startups are those who concentrate on one solution to one customer problem. We’ve seen this over and over again from Silicon Valley. Our venture capital partners across the US, Israel and the UK repeatedly tell me that they only invest in startups that are completely laser focused. And I completely agree.

Future Fifty star Yieldify is a great example of this. They are relentless in their focus on increasing customer conversion for brands. Online marketers face many different challenges, but rather than trying to solve them all, Yieldify specifically help convert visitors into loyal customers – the one big challenge every marketer wants to solve. This single focus has attracted M&S, L’Occitane en Provence and French Connection as customers.

Trying to be all things to all people does not work. This lack of sharp focus is a mistake I see entrepreneurs make all too often as they get caught up in their energy to get to market. Building out your offering comes later.

Lesson No. 2: always put your customer first

Silicon Valley taught us the principles of co-creation, design thinking, early customer testing and basic feedback mechanisms. When applied, they’re really powerful.

Some of my team were part of the customer testing for Mondo’s Alpha card. They raved about how this British startup actively learnt from their customers, using feedback instantly, and continuously, to improve their product on the spot – right there next to them. It’s driven from the top – their CEO and CTO were actively listening, sharing new iterations with their community. By putting their customer first, Mondo set the record for the fastest crowdfunding round in UK history: £1m in 96 seconds.

The most successful startups are involving customers at every stage of product development, making sure they create something that customers actually want – rather than what they think they want! This is a major advantage over large corporates, who are struggling to embrace this fundamental shift. And startups are stealing their market share.

Lesson No. 3: collaborate to accelerate

Second to giving us the world’s tech giants, collaboration is what Silicon Valley is most famous for. Open innovation, co-working spaces and sharing ideas are what the tech capital was built on. In the UK, we can often be overly protective of our IP and shield our products from others. Silicon Valley strongly believes in ‘paying it forward’ – sharing, helping and collaborating with others, as they know it will come back when they need it most. Startups all over the world have learnt that they cannot succeed without getting on board with the new technologies, open APIs and ways of working brought to market by their peers.

Successful startups understand the need to build, iterate and scale quickly. By using APIs to access capabilities like payments, analytics and maps, they can focus on their business. And the specialists providing these APIs are becoming very successful businesses themselves. One of our VC partners, Accel, is focussing their investment towards this ‘APX Economy’ (the API-ification of businesses).

But I’m not just talking about startup to startup, or entrepreneur to entrepreneur collaboration…I’m seeing more and more successful examples of startups and large corporates collaborating. Corporates are starting to learn how to innovate and put their customers first, and startups are being offered scale and a route to market. Both sides (and most importantly, the customer) really benefit.

Lesson No. 4: agility & resilience win the race

Silicon Valley famously taught us to fail fast and often. Businesses of all sizes can get a lot of value from learning to embrace failure.

British insurance content platform, Slipcase, is a great showcase of this. It started life as a social network for insurance professionals, saw great uptake, peaked early and failed to go anywhere, despite its popularity. They took a step back, re-focused on their core strengths and changed into a news and thought-leadership platform for (re)insurance and broker organisations. They now work closely with several of the world’s largest firms and media groups.

So we can see it’s not just embracing failure that British startups have learnt from Silicon Valley, it’s turning that fast failure into learning that’s important to innovating at speed. The most successful startups are super resilient and are able to ‘pivot’, rebuilding until they get it right for their customers and can really disrupt an industry.

Lesson No. 5: to be the best, you need the best

Like Silicon Valley, our proximity to top universities means we can enjoy access to some of the world’s best talent pools. Startups have taken advantage of this and initiatives like the fast-track visa scheme, designed to attract world-class tech talent.

But it’s not just geography and government programmes that attracts top talent to startups. They’ve learnt from Silicon Valley that it takes more than funky furniture and equity options to get the best: it requires a marriage of mindsets.

Successful startup founders understand the importance of communicating their vision openly and honestly to those they are trying to attract and retain. It’s often a person’s alignment with what the company is trying to change in the world that seals the deal. Take Citymapper – they’re building the ultimate transport app – and everybody knows it. It’s a lesson in culture that corporates could learn a lot from.

British startups: on the world stage

Last year, tech firms in London alone secured $2.8 bn in investment – domestic and international. London is undoubtedly the FinTech capital of the world. Britain has absolutely earned its place on the global startup stage, and we’ve got a lot more to come. A lot of what this has been built on is the lessons that Silicon Valley has taught us over the years. We’ve embraced those lessons, made them our own and in the spirit of collaboration, are now teaching others what we’ve learned along the way.

As an investor, and as a customer, I’m looking forward to seeing what the British startup scene will offer us next. Will large corporations finally catch up, and accept they need to learn the same lessons from Silicon Valley if they want to survive…?

Or will today’s startups become the big companies of tomorrow?

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