How to ensure Britain’s night time entrepreneurs flourish

When I consider some of the changes that have happened in Britain recently, I am reminded of the Chinese curse: “May you live in interesting times”.

Why a curse? There’s an idea now that anyone can start a company, that there are countless opportunities. There’s an idea of an “entrepreneurial spirit” taking over the country, and this is a positive thing. From Thatcher onwards, many people have been supportive of that idea; now that the Conservatives are in power, the public is generally pro-business. As a result, I think many people believe there are plenty of opportunities for entrepreneurs, and that regulation is fading away, and they see that as a good thing.

Read more

Uber is safe, cheap and innovative. So why the TfL crackdown?

Uber is facing a massive crackdown after a new Transport for London consultation proposed new regulations that would ban some of the minicab-hailing app’s key features.

It’s bad enough that our government should want to regulate against the public interest and limit innovation to protect black cab drivers from competition from Uber and similar firms, says The Entrepreneurs Network’s programmes director Annabel Denham in the Huffington Post. But more worrying is an article from Steve McNamara from August 2015, in which the General Secretary of the Licensed Taxi Drivers’ Association (LTDA) proposes a range of regulatory changes. They were said to dictate (among others):

– A minimum five-minute period between booking and pick up;
– That operators must not show vehicles available for immediate hire – either visibly or virtually, via an app;
– That the fare must be specified at the time of booking;
– That drivers can only work for one operator at a time;
– No ride sharing;
– That operators must record destinations at time of booking;
– That operators must offer a pre-booking facility – up to seven days.

These – published a month ago – are almost word-for-word what TfL is now proposing. Oh, and the LTDA has a seat on TfL’s board. Can we really be surprised that commentators are (rightly – in my opinion) crying “regulatory capture”?

As Charlotte Bowyer of the Adam Smith Institute has pointed out: “It’s hard to see how a mandatory wait time between booking a vehicle and it arriving can provide any value or security to consumers”. It only furnishes the “flag down” black cab trade with a competitive advantage. In addition, restrictions on the number of operators a driver can work for will only shackle hard-working, entrepreneurial drivers who combine shifts at traditional minicab companies with flexible and ad hoc hours with Uber. Ultimately, this will hurt passengers by reducing the supply of drivers.

“The TfL proposals are anti-competition, anti-innovation, and anti-entrepreneurship. Technological progress may seem inevitable, but history is testament to the fact that good or bad politics plays a huge role in a country’s global competitiveness. Lawmakers here in Britain rarely shy away from self-congratulation for our growing economy: it’s time they stopped promoting policies that slow growth and hinder economic opportunity.”

Read the article in full here.

The challenges of growth

I founded Funding Circle with two friends from university. We quit our jobs at the end of 2009, launched in 2010, and we now have offices in San Francisco and London and employ about 350 people. We’ve raised around $300m of equity capital for the business.

We’ve lent over $1.3bn to businesses through our platform, and I expect us to do between $1bn and $1.5bn over the next 12 months. We’ve funded around 12,500 businesses – connecting investors to businesses who want to borrow money.

We have around 50,000 different investors. They range from people who have savings to invest, central government, the British Business Bank and local government. We also have institutional investors, which are long or speciality funds lending through our platform.

We’ve historically grown between 120% and 170% a year on average. But although we’ve grown consistently, we see cycles – growth isn’t always linear or exponential and we have phases where we grow and other times where we consolidate.

I remember in our original business plan, we drew a lovely hockey stick and we’ve been able to achieve those growth plans, growing faster than we imagined back then. (Although I would add I’m pretty sure we were meant to be hugely profitable by now and that has yet to be the case.)

Before I get started, full disclosure: we weren’t the first business to adopt this model. Zopa, which was set up by a bunch of guys who worked at Egg (the first internet bank) applied the model to consumer loans; we’ve since applied it to small business loans. We’re the leader in that globally and it’s probably fair to say we’re the only real global presence in terms of peer-to-peer lending.

The following are some of the challenges I think are really important with growth.

Read more

What the MBA offers entrepreneurs

Can “entrepreneurship” be taught? The value of the MBA to aspiring business leaders may be hotly contested, but even if you don’t go on to become the next Phil Knight, the chances are you’ll graduate and get a great job, writes Programmes Director Annabel Denham in today’s City A.M.

On the one hand, programmes at the top schools cost around £50,000 – and wouldn’t that time be better spent building a prototype or researching the market? The longer spent in the classroom, the greater the chance of someone else beating you to the punch. And, for those without an idea, there’s no guarantee of a lightbulb moment in the lecture hall.

However, business schools are responding to entrepreneurship’s rising popularity. Not only are they equipping students with the essential cheap ativan canada skills needed to run a business (time management, innovation, entrepreneurial finance), but they also offer invaluable extra-curricular opportunities like mentoring or financial and administrative support.

And these courses are attracting the world’s top talent: the top 10 programmes have an acceptance rate of less than 10 per cent. The people you rub shoulders with could become your future business partners, or your future go-to network.

Fundamentally, however, MBAs are broad-based degrees, teaching the basics of everything – from finance to risk to law. So even if you decide that you’d rather work for an investment bank or large corporation, the MBA will give you two risk-free years and it’s likely you’ll still come out with a great job.

Read the article in full here.



Why UK entrepreneurs are cautious of Corbyn

As the dust settles on Corbyn’s election as leader of the Labour Party, The Entrepreneurs Network’s Programmes Director Annabel Denham considers what his appointment might mean for UK entrepreneurs.

“On the one hand, Corbyn’s plans to freeze business rates for small businesses have been warmly welcomed, and his pre-election pledge to address the skills gap through a National Education Service was encouraging. But we can also expect policy announcements that will shift the burden of taxation from consumption to income and wealth. This might make sense from a redistribution perspective, but taxing wealth, capital and savings doesn’t make economic sense. It’s distortionary, pushing people to consume now what they would otherwise save and invest – which is bad for entrepreneurs and the process of wealth creation. As Jeff Lynn, the entrepreneur behind online crowdfunding platform Seedrs points out: “a Labour government under the leadership of someone who understands the role that wealth creation plays in social progress could be good for entrepreneurship”. The fear is, that someone isn’t Corbyn.”

Read her column in full on The Huffington Post’s Politics page here.

It’s time to support zero hours contracts

There has been a 6% rise in the use of zero-hours contracts by UK businesses in the last year, according to data from the Office for National Statistics (ONS).

But far from a form of employment equivalent to modern slavery (as they are often portrayed), zero hours contracts have boosted UK employment and acted as a vital crutch as the country emerged from the Great Recession, says The Entrepreneurs Network’s Programmes Director Annabel Denham in the Huffington Post.

Former problems with the contracts – such as exclusivity causes which prevented people from working for more than one employer – had led to employees being treated unfairly. However, these were rightly scrapped earlier this year. Recent polls now show that employee satisfaction among those on zero hours is greater than those in full-time employment: 65% are happy with their work-life balance, compared with 58% of average workers (the CIPD found).

As she points out:

“But whether or not the number of people on zero hours contracts is on the up (the ONS has warned against that conclusion, saying that it could just be that more people are aware of the contracts), they are here to stay. “We should not lament or celebrate an increase in the number of people using them,” James Sproule said last week, but rather acknowledge that they are a small – but important – part of the UK’s flexible labour market.”

Read the blog in full here.

Was Cameron right to appoint Michelle Mone “startup czar”?

The Prime Minister’s judgement was questioned by business leaders and politicians after he appointment of Michelle Mone as the UK Government’s “start-up czar”, with one executive suggesting he must have “lost his marbles”.

While Work and Pensions Secretary Iain Duncan Smith said no-one was “better qualified to help young entrepreneurs from deprived backgrounds”, others, including Scottish tech entrepreneur Ian Ritchie and GAP Group director Douglas Anderson, have questioned her credentials. One Scottish Tory added: “She’s a personal brand rather than a serious businesswoman”.

But in her latest Huffington Post column, our programmes director Annabel Denham suggests that the problem is not with Mone – who has since been appointed a Tory peer and whose success story is “extraordinary” – but with the very notion of “czarships”. As she points out:
There is little evidence to suggest that plucking someone from a particular industry, giving them direct access to ministers and use of government resources in exchange for “expert advice” is a good idea. As Ruth Levitt, senior research fellow at King’s College London, recently pointed out: such informal arrangements are “vulnerable to ministerial idiosyncrasy, opaque procedures, lack of accountability, and things can go wrong”.
However, in the right role or environment, using expert advisers from a given industry can add value to government policy and enhance the overall quality of advice given to ministers. But instead of taking on fluffy or ambiguous titles, entrepreneurs should instead respond to consultations that they can directly influence, should attend events held by organisations like The Entrepreneurs Network, and if they’re truly passionate about a certain issue, they should write about it.
Read the blog post in full here.

Why aren’t more female entrepreneurs scaling up?

We know that more and more women are choosing careers in entrepreneurship. So why aren’t there more high-growth, female-owned companies, asks our programmes director Annabel Denham in today’s Huffington Post.

While the number of female entrepreneurs increased by 9.6 per cent in the two years to 2013, compared with a 3.3 per cent rise for men (according to the Office for National Statistics), data also show that women-led businesses are not scaling up at a rate even close to male-led companies.

Research has also shown that the main challenges confronting growth in women-owned businesses relate to a combination of access to finance, fear of failure and lower perception of opportunity. But it is that fact that women are much less likely to use private equity or venture capital, and are more likely to be discouraged from borrowing, that is particularly worrisome.

Speaking to Blackbullion founder and member of The Entrepreneurs Network Vivi Friedgut, the author concludes that:

“The government could help. It is positive that coding has already been added to the curriculum for every five year old – but we need more girls to be inspired and encouraged to study and build careers in the science, tech, engineering and maths (STEM) sectors. We need more campaigns like WISE, which aims to get 1 million more women into the UK STEM workforce. And we need the government to work more closely with schools and universities to promote these subjects.

Female entrepreneurs are a huge untapped resource. “There’s a gap in the market that will be filled by women,” says Friedgut. And angels and VCs will capitalise on that. It’s just a matter of time.”

The Huffington Post column can be read in full here.

Has the Conservative Government Been Good for Entrepreneurs?

In the week that Labour leadership contender Jeremy Corbyn pledges to back entrepreneurs through his “better business” plan, The Entrepreneurs Network’s programmes director, Annabel Denham, asks whether, 100 Days in, the Tories have been good for entrepreneurs.

“The government has already served up some good policies for entrepreneurs. But our position as one of the best buy ativan canada online countries to start and grow a business is not inevitable, and it is relative. Talent is increasingly mobile: if entrepreneurs can build a bigger, better business elsewhere, they probably will.”

Read her full Huffington Post article here.

What MPs know and think about entrepreneurship

Following the release of our new Parliamentary Snapshot 2015 today, The Entrepreneurs Network’s director has highlighted the importance of government policy on entrepreneurial success – in any country.

Entrepreneurs, Philip says in his most recent Forbes column, are not a loyal bunch – and if they can build a bigger, better business elsewhere, they probably will. Read his take on the findings of our report here.