Hey Alex,
Thanks for the response. Couple of points:
On the Harrison Ford quote on my blog, where I originally posted this, I attributed to the quote to Harrison Ford. When @mikebutcher asked me to post this on TC:UK, I thought I’d better do some fact checking (happens occasionally) and the provenance of the quote ended up being in dispute, or maybe I thought a picture of Leia was more suited for TC:UK.
As someone whose entrepreneurial achievements I have a tremendous amount of respect for (‘It’s the van Somerens’ was often muttered in kow-towed tones by attendees of First Tuesdays back in the wild west), the thing that surprises me about your note is that it sounds incrementalist.
Your notion that the tradeoff for getting EIS and Vat reclaims should be complex is absurd. What does the complexity do other than, well be complex? The purpose of the forms is–I assume to log this is going on and to guard against fraud–fine. That is the purpose. The question is: can it be done simpler? Should it be done simpler?
I am happy–as i am sure many are–to warrant the veracity of claims that I might make (except for Harrison Ford / Carrie Fisher claims which I clearly pull out of the ether). But the question is whether those warranties can be done in a simple way or a complex way. Wonga manages to lend money faster than its rivals and at similarly (penal) rates. The complex an be made simple.
I am not the only one who thinks complex is stupid and a waste of everyone’s time. And that poorly designed systems are dehumanising. (There are probably ten TED lectures on the subject).
In fact, on the tube this morning I noticed an ING advert touting the simplicity of their mortgage application process (Something like ‘ You’re applying for a mortgage not writing a thesis on quantum physics’ Having not written a thesis in physics, I can’t tell you how complex it would be, I assume complex.)
Alex, I believe one of your busineses was in cryptography. You’ll note (as I do, having made five EIS compliant investments in the past year or two) that the reference code of an EIS investment is, er, long. I checked one of my forms-the reference code is 28 (twenty eight) characters–and is not human readable. My twitter ID (which has much more and much more nuanced information) is six characters long (including the universal @ sign). The designer in me looks at a 28 character long reference (seriously, are there really around 10^28 investors in EIS schemes? Will there ever be?) and says something has gone wrong. And that might not be the fault of Mr L[xxx] of Cardiff’s VAT office. It is a reflection of a cultural problem within bureaucracies.
To your point that business is about overcoming obstacles–it certainly is. The message behind Hernando De Soto’s forceful book, The Mystery of Capital, he clearly walks through how bureaucracy–the inability to start a limited company easily or to hold title to physical and other assets–is one of the things that keeps people poor. At the same time on the main TC site, Vivek Wadhwa has shared some data that show that in the US since 1980 startup businesses have added 40m jobs to the US economy and contributed one-third to GDP growth. If you consider that net of population growth, US employment is flat today compared to a decade ago (read John Mauldin on this), then the only reason the US doesn’t have 20%+ unemployment is to do with these businesses.
But push this further, Vivek further argues that it is the small precentage of highly-scaled businesses (i.e technology businesses) that drove the bulk of these gains.
So let’s say that those similar dynamics are true or good be true in the UK. I guess TC readers want it to be true, I guess @mikebutcher does too, and we are all rooting for TechHub.
Then the question is how far can we go? What do we know about high-scale businesses? We know that they are close to winner take all. These aren’t 40:20:10: blah market share sectors that get created, they are 80:10:5: who gives? sectors. So every incremental advantage that you-as a representative of HMG-can give us, increases our chances of being the 80% winner.
There is an argument put forward by the truly awesome Naval Ravikant that points out that the winner-take-all-nature of cloud-based consumer businesses means you should need every single edge. . Perhaps he’s right, perhaps he’s wrong. But there seems to be some truth in it.
So if you believe, any or all of this, then I am kind of shocked at your response. EFG was a total waste of time, since basically no-one lent. But your implication seems to be that it was a good way for me to waste my time. And that I seriously doubt.
And yes there are little obstacles, and we overcome them. (Like our bank having four different sort-codes and account numbers for our one bank account–that is weird.)
I am also surprised to hear you say that I should try doing buisness in other countries. That isn’t relevant. Seriously. This isn’t a comparative game: “Yeah, we have 4% infant mortality, but it’s so much lower than in Congo” – this should be about absolute standards and absolutely moving forward.
But there are also obstacles that don’t need to be there. There are things that could be done much better. Systems that could be designed with the end user in mind. With customers in mind.
In a weird way our jury system is quite a good example. I was called to be a juror a decade ago around the time I was closing my first funding. I phone up the court officer and explained that being away for three weeks at this time could have a really crippling effect on a three man company; and he understood. Jury service postponed until the next time.
We have a great opportunity with a real entrepreneur, like yourself, in the heart of UKTI, because you dared the world to be different with NCipher and the others, and so you made it different. Likewise, don’t start with the status quo and say let’s inch from there. If we want government to understand entrepreneurship–and understanding is never bad–then we need you to get them to feel it, feel the raging desire to make it different, to have a big goal and get going.
Cheers
Azeem
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