What about attitudes towards failure. Not all businesses succeed. It may take many entrepreneurs several attempts before they create a successful business. What are attitudes to failure like in the UK?
Matt: “They have improved, not at the US levels yet, but above the average levels seen across Europe. There is more to do, a lot comes down to having family members or knowing individuals that have tried, failed and tried again, and also a lot comes down to media coverage and how the media presents entrepreneurship and business failures – the tone of voice, which is becoming less negative. However, there are lot of entrepreneurs who are tarnished – for example, an article in a newspaper may introduce an entrepreneur by stating: ‘ex-bankrupt entrepreneur says….’ There are still cases when an entrepreneur, through no fault of their own, have wound down a business or seen it fail, and that stigma may stick to them, even if they are on their third of fourth venture.”
Returning to the Dragon’s Den and the Apprentice, what effect have they had?
Matt: “We launched the centre because while they have done well to raise awareness, our surveys of entrepreneurs and business owners would suggest that they do present entrepreneurship in quite a harmful way – The Apprentice re-enforcing a highly negative personality type and Dragon’s Den wholly misrepresenting the relationship between angels and entrepreneurs. In fact, the angel needs the entrepreneur just as much as the entrepreneur needs the angel, and it creates an unfortunate image of the entrepreneur crawling up towards the angel begging for their money. In fact, with EIS and SEIS there are so many options, entrepreneurs don’t just want dumb money, they want opportunities and support and confidence that an investor will follow-through.”
Advice to an entrepreneur. Sum up the advice you might give to an entrepreneur in one sentence:
Matt: “Find a mentor, continue to invest in your training and development and challenge yourself not to recruit people like yourself.”
Raising money. Is it too hard for entrepreneurs to raise money in the UK?
Matt: “In Britain, no. With SEIS in particular, the amount of investment is so widespread that any good idea should get money in Britain. There are regional disparities, a few years ago, businesses had to come to London to raise, but now investors have started to invest outside of the home regions, and also through exits there are now home-grown investors."
He cites Skyscanner as an example, the Edinburgh business sold last year.
Matt: “This was a suitably large exit, not only the founders like Barry Smith but early stage employees with share options have suddenly found themselves with quite significant wealth – so you will see many companies come out of the Skyscanner family."
And so that’s the theme – one entrepreneurs’ success leads to another. Find a mentor – well, that may be practical advice today, but it was a good deal harder to carry out a few years back when the UK was less entrepreneurial. Funding for entrepreneurs partly becomes available as people who have enjoyed success, reinvest some of the money made, but also the knowledge, skill and passion, in the process supporting the next generation of entrepreneurs.
Maybe the UK is in the midst of a positive feedback loop – something we see in nature all the time – evolution often works in spurts, as a specific new characteristic creates such a benefit that it becomes exaggerated very quickly – an adaptation that gave a big cat a mildly stripey coat, for example, providing a degree of camouflage, rapidly creating the tiger. In business, the spark that lit entrepreneurial spirit has created an eco-system, one that is becoming self-reinforcing.
But we are not there yet.
More of the interview with Matt Smith will follow.
The UK is emerging an entrepreneurial success story – but more needs to be done, and one way to achieve this is to shine the media spotlight on entrepreneurs, their challenges, their failures and of course their successes.
The NatWestGreat British Entrepreneur Awards are currently open for applications, and entrants can apply here