I love London. For 13 years I have called this vibrant, international city home. But this year, I took the difficult decision to move my company’s headquarters from London to New York.
The blow that Brexit has dealt to the talent pool, the hesitancy when it comes to sales culture in Europe and the need to maximise our chances of building the biggest possible tech champion — these were all factors in making that decision.
Location is key to startup success
Like all founders, I am ruthlessly focused, obsessed even, with making my business a success. I’m constantly optimising for success factors, including one that's often overlooked: location. A business’s home base must be in a place with a culture that aligns with its needs and give it the best chance of fulfilling its potential.
The UK, and specifically the brilliant city of London, has been Eigen Technologies’ geographic home since its founding in 2015. London has many strengths as a tech centre supported by Europe’s (particularly Britain’s) outstanding network of research universities that produce a diverse pipeline of talent indispensable to nascent technology businesses.
Advances in the type of small data AI we do — AI created without vast data sets — would have only been possible here in Europe, with its deep and diverse technical and mathematical talent. This would have been difficult in Silicon Valley given US tech’s reluctance to experiment and innovate, beyond the conventional "big data AI" approach.
Early in Eigen’s history many London-based employees prioritised technological purity over commercial success. It was almost fatal for us
London’s size, global outlook, business culture, talent pool and time zone are also significant advantages, and it remains a good place to access global markets, giving businesses the ability to sell around the world.
But Brexit has diminished this significantly. Almost my entire R&D team who received PhDs from British universities had them funded by the European Union. This includes both my founding chief research officer and myself. The loss of this funding and scientific exchange is a major loss for British and European academia — and innovative companies who need to hire the best scientific and technical talent.
This is not to say that the UK has not shown a commitment to ensuring growth in the tech sector. The recently announced National AI Strategy and Kalifa review of fintech are proof of this commitment, but these will not be enough.
How (and how not) to run a startup.
Beyond that, I believe that Europe’s (particularly Britain’s) negative cultural attitude towards sales is a major inhibitor to building tech champions on the same scale as the US or China. In my thirteen years of working in the UK, I’ve learnt that in British culture sales and selling is viewed negatively. This leads to hesitancy and lack of aggression when it comes to sales, which inevitably impacts revenue generation. Early in Eigen’s history there were many London-based employees who prioritised technological purity over commercial success; it was almost fatal for us. However hard it is, the UK needs to transform its cultural attitude to sales.
American investors always ask “How big can you get?”, while Europeans wonder “What issues might you face?
This focus on innovation without the hustle of entrepreneurship creates a problem for European businesses. In the UK, Brexit will make scaling even more challenging for entrepreneurs by depriving them of talent and easy access to European markets. Beyond the UK, the issues of size, scale, ambition and talent is a major concern in the VC community who also believe that European tech companies simply cannot compete with the US and China when it comes to these factors.
Through our international investor base, I’ve heard it said that there is a huge difference in outlook between US/Chinese and UK/European investors. The former always ask “How big can you get?”, while the latter ask, “What issues might you face?” I am not alone in believing Europe has a problem with founders and investors, who lack ambition in comparison to the best of Silicon Valley or Shenzhen. While I have been blessed with my European investors, who are very much the exception to this rule and share my ambition, I have seen this lack of boldness during my various fundraising processes with many other investors.
So what does the US have going for it?
I believe that US markets are far more welcoming and understanding of high-growth, ambitious and risky tech businesses and as a result I expect more European based tech companies to choose to list in New York over London. The sad truth is that there are no listed trillion-dollar tech companies in Europe. Given Europe’s market size and depth of its talent pool, this is a surprise. Deliveroo, for example, had an extremely challenging IPO, trading at much lower multiples than some of its American peers despite better metrics.
This is reflected in an attitude I once heard the chief executive of a London-traded company express: “You go to the London Stock Exchange if you want to have a stable experience, but you go to the NYSE if you are comfortable with high uncertainty.” The former is precisely the wrong approach to tech founders like myself who are committed to risk and success. No Silicon Valley tech founder would list on an exchange to “be stable” when they are seeking to follow in the footsteps of Microsoft, Apple or Amazon.
Given all these considerations, my board has routinely asked me whether Eigen should move to the US over the last few years. And I finally decided to take the plunge to ensure we maximise our chances of success by being based in our biggest market, one that is the most open to using advanced AI. We will continue to innovate and operate in London and Lisbon, but our headquarters are now in New York.
We’re in good company making this step: SaaS giant UiPath moved its headquarters to New York in 2017 to be closer to its international customer base. At that time UiPath was at a similar stage of growth to Eigen.
Our roots will always be in the UK and Europe, but we’re excited about what our new home will mean for our future. On a personal level, I’m coming home to the hustle and bustle of New York. But I will really miss London, where I have always felt welcome.
Dr Lewis Z Liu is cofounder and CEO of Eigen Technologies.