Here’s what VC Aaron Birkby learnt about the UK startup scene at London Tech Week

The airports are quieter

Across the board during my time in the airports in Brisbane, Dubai, Frankfurt, Stuttgart, Munich and Heathrow, all are noticeably much quieter than the last few years – fewer passengers but also the airport labour shortages appear resolved so moving through airports is impressively quick.

There also seemed to be fewer flights between the UK and Germany.

London is quiet

Ok, well not from an audio level measure (London remains loud) but the streets are noticeably less populated than the last few years.

Shoreditch seemed muted by comparison. Whereas it is normally common for London pubs to be packed to the point of overflowing into the streets during summer, this year it was easy to grab a table in most venues.

This year we could even host 120 ANZ founders in a pub with plenty of space to move around and without fighting for oxygen or security going nuts on us!

Zero alcohol beer and spirits are widespread

Despite the UK’s drinking culture, zero alcohol alternatives are on the rise and readily available at all venues.

Our bar tabs at events we hosted were refreshingly much lower than previously years, possibly also attributed to us having a delegation of later-stage founders who were focussed on hustling and getting deals done.

Aaron Birkby

Inflation is noticeable

The conversion of AUD to Pounds Sterling has always been painful on the pocket, but in London and even in Germany it was very noticeable how much the cost of food and eating out has gone up.

Hotel prices, catering costs, and other mission base costs all jumped up this year.

UK tech ecosystem as strong as ever

Dubbing themselves the ‘new Palo Alto’, the UK tech ecosystem reported strong growth and metrics across the number of startups, investment fund raising, number of unicorns, and job creation.

I’ve been taking groups to the UK for 9 years and the gap between the UK and Silicon Valley has been closing at an accelerating rate. On a per-capita basis, the UK is out-performing.

Remote work remains strong

Somewhat explaining the above observations about London, we heard and witnessed that a lot of the London workforce are working remotely from home, with a common pattern of work bringing them into the office once to twice or week (others once a month), typically on a Tuesday, Thursday or Friday.

There was an expressed reluctance by many to come into London if it could be avoided. This creates a weird quirk where Aussie startups can come all the way to the UK to end up meeting with potential customers via Zoom, or where all meetings are jammed into one day of the week.

It also means that most Brits want to meet outside of the office for a coffee, breakfast, lunch, dinner or drink.

Fractional C-suite execs are on the rise

In Australia we’ve seen the rise of the ‘Fractional CFO’ and ‘CFO as a Service’ offerings, but what was evident in the UK is that more experienced professionals are leaving their (previously-)stable corporate jobs to pursue careers as fractional executives or joining together with other fractionals to provide full services to startups and scaleups.

Corporate spending is down

Corporates are laying off staff and aren’t spending money on startup products which they see as experiments. The common feedback across the board was that corporates are hurting and busy solving their particular single biggest problem. Right now, unless you are solving a real ‘hair on fire problem’ then you won’t get airtime with them.

This is consistent with what we have been reporting across markets for the past 12 months but appears to be escalating in severity.

More than ever, you need a compelling business case with direct benefits and few alternatives to get cut through in the market (this has always been a big part of our investment thesis at Tribe).

Ghosting and non-response rates are higher than ever

As referenced above, doing business in the UK has always been relationship based, so without a warm introduction it is very common to hear deafening silence in response to any cold outreach. But this year the rate of ghosting and non-response to even semi-warm relationships was noticeably higher than ever.

The feedback across the board was that people are busier than ever, focussed on solving their own problems, and unless you have a clear value proposition to help them, they simply don’t have capacity to give their time elsewhere.

UK networks matter

Normally it takes about 3 weeks to work my UK connections to get a warm introduction to a key person or company. This year it now takes 10 weeks.

And it’s not just my general incompetence, the various state Government Agents-General and trade commissioners in market are saying on average it now takes their teams about 12 weeks to work a warm introduction in the UK.

Now more than ever your UK networks and tribes matter.

You still have to be in market to be taken seriously

Despite the observations above, or maybe because of them, you still have to be ‘in market’ in order to be taken seriously, whether with investors, customers, channel partners, or for Government support.

Credibility signalling matters as much as ever

Successfully doing business in the UK has always required warm relationships and strong credibility in order to earn trust as a precondition to any potential discussion of a transaction.

Once you are aware of it, you quickly notice how much the Brits name-drop and reference their experience during conversations and networking events.

It’s something that goes against the grain of our anti-ego Aussie culture which underpins our tall-poppy syndrome, but it is a key skill and nuance of conversational style that Aussie founders need to develop in order to build credibility and trust in the UK market.

I’ll write more about this in another blog.

UK market entry is still bloody hard

As much potential as the UK market holds, there is no shortage of tombstones in the graveyard of companies that have tried and failed to enter the market (Bunnings had their spectacular $1.7 billion failure).

But more often the difficulty manifests as poor capital efficiency rather than a total failure to launch.

While success leaves clues, it’s the failures that offer the most insightful lessons, and it’s why we spent so much time during the week hearing from Aussie founders and expats who had been there and done it (under the promise of strict Chatham House rules).

Less UK rah-rah

With the election looming and the Government in caretaker mode, we didn’t get to hear from the PM this year.

Nor did we hear the usual hymn book where every sentence starts with “The UK is Great for …”.

Mock it as we might, the UK is great at unifying all levels of Government and ecosystem around a common pitch and song book that just sings and sells the UK. This year it felt a little flat by comparison.

PS: If Londoners are to be believed (and that proved to be wrong with Brexit), there will be a change of Government come July 4th.

Every country is competing for your startup

London Tech Week has always attracted international delegations from around the globe, but this year there was an explosion in the number of countries with exhibit stands pitching their ‘startup attraction’ programs in an attempt to hoover up talent and attract the high-growth ventures that will drive future economic growth.

From regulars like Germany, Dubai and Estonia, to new exhibitors like Macedonia and the Ukraine, this is a globally competitive sport. Australia is noticeably absent and has no comparable startup attraction programs to speak of.

There’s more to the UK than just London

It’s not just countries fighting for your startup with aggressive attraction programs, but every region of the UK also offers incentive programs, grants, funding, free office space, or attractive investment terms to lure you to relocate or setup a satellite division.

The incentives offered are getting stronger.

Swag gives you swagger

Startup swag matters. The Tribe swag was in hot demand, but even big brands like Canva with their huge stand at London Tech Week had gone next-level on their branded swag giveaways (they had personalised juice!).

Similarly Technology One had gone heavy on their merch and swag giveaways during their official ‘launch’ in the UK some weeks prior, reportedly including branded sneakers.

It’s much easier to spot trends in the UK

It’s hard to spot trends in a small market like Australia, particularly if headquartered in a small city like Brisbane.

Whereas our delegates coming into the UK as outsiders reported that it is much easier to identify industry, tech and economic trends with the sheer volume of data points, access to the spawn points of new tech, and insights from broader Europe.

This is why we often describe our trade missions to Europe and Silicon Valley as being like a time-machine, enabling you to see over the horizon and to adjust your strategy accordingly.

Personally it was also a treat to have dinner with Pink (ok admittedly she sat two tables over) and bump into Renée Zellweger (even if security did ask us to move on as we were interrupting filming).

But it brings home a point that the draw of London plus its density of startup activity means you bump into exceptionally talented founders and investors in almost every brew house and venue.

Next stop: The US in October. It will be interesting to see how Silicon Valley has changed since my last visit.

If you’d like to join one of our trade delegations and scaleup missions to the UK or USA then checkout our upcoming missions via tribeglobal.vc/missions

• Aaron Birkby is the cofounder & CEO of Tribe Global Ventures a B2B VC firm that invests in Australian and New Zealand tech companies and helps them scale to the UK & USA. He’s also cohost of the Tribe Talkin’ weekly podcast. Listen here.