Jan 2, 2019 · 34m · a16z
a16z Podcast | Scaling Ideas and Startups in the U.K. and Europe
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In this episode of the a16z Podcast, host Michael Copeland speaks with Seedcamp founding partner Reshma Sohoni and investor Shakil Khan to analyze the U.K. and European tech ecosystem. The group explores global scaling strategies, venture capital recycling, societal safety nets, and systemic diversity challenges facing European entrepreneurs.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. How this is scored →
The host as informed peer 3.1 Guest teaching 3.6 Guest disagreement 1.6 The host pushing back 1.7
speaking balance: gold is the host, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 3:51 Reshma counters Shaq's claim about missing repeat founders
Reshma directly challenges Shaq's assertion that UK tech lacks repeat founder flywheels, calling his stance harsh and bringing up TransferWise, Skype, and King.com as direct counterexamples.
Hardest push from the host ▶ 18:07 Host challenges founder archetype assumptionsHost explicitly asks whether European founders fit the Peter Thiel drop-out ideal, pressing the guests to compare European founder mindsets directly to Silicon Valley tropes.
Biggest teaching moment ▶ 20:02 Shaq educates host on cultural stigma around failure in BritainShaq educates the host on how the UK's welfare safety net and severe societal taboos around bankruptcy create a very different risk environment for UK founders compared to the US.
The host holds their own ▶ 4:42 Host connects London financial center gravity to Wall Street dynamicsHost demonstrates deep contextual knowledge by drawing parallels between Wall Street and the City of London, probing whether banking's pull drains top talent away from tech.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | The host as informed peer | Guest teaching | Guest disagreement | The host pushing back | Why |
|---|---|---|---|---|---|---|
| Introducing Guests and Assessing Europe's Tech Ecosystem | 2 | 3 | 1 | 0 | Host Michael Copeland stumbles slightly while introducing Seedcamp's mission. Reshma gently corrects his description to clarify Seedcamp's exact focus on European early-stage founders. | |
| The Lack of Massive Exits and Repeat Entrepreneur Cycles | 3 | 2 | 3 | 1 | Shaq points out the lack of repeat multi-billion dollar exits, citing Money Supermarket's founder leaving the ecosystem. Reshma counters Shaq's point as too harsh, citing Skype and TransferWise founders reinvesting in Europe. | |
| Finance vs. Tech and International Talent Flow in London | 4 | 4 | 2 | 3 | Host compares London's financial center to New York and Wall Street, questioning talent drain into banking. Shaq reframes the topic by highlighting international talent migration and explaining how small domestic European markets force an international mindset from day one. | |
| Urban Spread vs. Country-by-Country Expansion Strategy | 3 | 3 | 1 | 2 | Host asks whether European startups expand regionally, to Asia, or to the US first. Reshma and Shaq explain that founders now target urban density clusters across major global cities rather than expanding nation-by-nation. | |
| Navigating European Operational Nuances and Market Competition | 2 | 4 | 2 | 2 | Shaq details how US tech companies naively send Stanford grads to London expecting to manage continental Europe, ignoring deep labor law and regulatory differences. Reshma uses the failure of Hailo versus Uber to illustrate execution speed issues. | |
| Shaq's Accidental Investment in the Early Days of Spotify | 4 | 5 | 1 | 2 | Host probes whether European founders match the US college-dropout archetype. Shaq explains how UK social safety nets and intense cultural stigma against bankruptcy historically discouraged taking entrepreneurial risks. | |
| Addressing Gender Diversity, Inclusion, and Infrastructure | 4 | 4 | 1 | 2 | Host brings up a previous interview with Martha Lane Fox to address gender diversity in tech. Reshma highlights structural barriers such as UK childcare costs and rigid school schedules that hinder female entrepreneurs. |
Statements from this episode (23)
Sohoni: Seedcamp makes approximately 40 investments per year
“We're doing about 40 investments a year, so that puts us in quite the very active kind of investor role here.”
Sohoni: Europe has not produced a massive tech platform company yet
“We haven't quite hit that sort of massive platform business yet.”
Khan: UK Lacks Multi-Billion Exits Needed for Capital Recycling
“We haven't had those major hit after hit of multi-billion dollar exits, whether in the private market or in the public markets, such as the Googles or the Facebook. So that trickle-down effect hasn't happened, and it'll be a while till it happens.”
Sohoni: UK Tech Ecosystem Is 10 to 15 Years Behind Silicon Valley
“Actually, I am hearing of Simon Nixon more and more, but I would say we're probably a decade or 15 years behind in that sense.”
Sohoni: Seedcamp Portfolio Company TransferWise Will Become a Platform Business
“So, you know, you do have the Skype founders who've obviously done an incredible amount with Atomico and then some, but you have Tavit who left Skype and started TransferWise, which is a portfolio company of ours. Absolutely. And you know, I would say has a hu…”
Khan: London Bankers Are Less Active in Tech Investing Than Wall Street
“I think the London Financial Centre versus tech are two separate things apart from where fintech is involved. They seem like two very different industries, unlike Wall Street where a lot of investment bankers are active in investing in tech startups.”
Sohoni: Regional fragmentation in European venture capital limits startup scalability
“Venture capital, I think, continues to be so regional. I mean, it's a terrible thing. It just doesn't sort of unify across you know, across Europe. And so scalability is limited, therefore, you know to a big reason because of that.”
Khan: Small-market European startups succeed by designing globally from day one
“Take a market like Sweden, the reason why Spotify partly has been successful was, from day one, the product was built to go global. The same thing with Skype, transfer-wise, a building for a global audience, because The local population is far too small to be …”
Khan: UK tech giants Rightmove and Zoopla scaled successfully without international expansion
“Some of our biggest online real estate companies are just UK only. Rightmove and Zoopla, two huge companies, have never really ventured outside the UK. You couldn't do that if you're from Estonia, or if you're from Finland, or if you're from Sweden.”
Reshma Sohoni: European startups target urban density over geographic proximity
“Our founders are saying, let me launch immediately in London, Berlin, maybe even in New York, actually. So they're really going after urban spread rather than any kind of geographical bias.”
European Startups Adapt Better to City Expansion Than US Firms
“Look at the marketplace businesses, it's actually no longer about countries. It's cities, right? Which cities work and which cities don't work. And, you know, Istanbul is many thousands of miles away from here. And there's an entrepreneur probably go London, I…”
Global City Residents Share More Cultural Traits Across Borders
“I think a person in Shanghai feels a lot closer to the person culturally, kind of what their day-to-day needs are to a person in New York or San Francisco or London or Berlin versus kind of maybe even the rest of China or rest of India or so forth.”
Khan: US market is far closer to UK than France is
“US is far similar to UK than France will ever be.”
Khan: Uber won ride-hailing; Hailo VCs want immediate exit
“Halo is basically a London niche company funded by VCs who, if they could get an exit, would take their exit tomorrow and get out of the business, because Uber has won in that space.”
Shakil Khan invested half his net worth into Spotify before product launched
“Ended up meeting Daniel Ek when he was 22 years old with an idea of Spotify, and I put half of my net worth into the company before there was a product.”
Sohoni: European tech founders have become far more commercially astute
“When we started, there was a real lack and I think I can say that sort of confidently being American is a lack of commercial sense and sort of how do you get these products out to market and focus around product and usability and, you know, kind of thinking be…”
Khan: Strong UK safety nets make the country less entrepreneurial than US
“The country has never been as entrepreneurial as the USA has, and there's a number of social reasons and governmental reasons. One, we've got even though people may complain, we have a pretty amazing welfare system here, and a pretty amazing healthcare system …”
Sohoni: Crumbling welfare systems are spurring entrepreneurship in Southern Europe
“The challenges we're seeing across continental Europe you know, with those support systems falling apart is actually engendering a move towards entrepreneurship. So we see that in Portugal. Uni places just has been, you know, has had a great round of funding r…”
Sohoni: Female-led startups comprise only a tiny fraction of Seedcamp portfolio
“Even in our own portfolio, it's a tiny percentage that are female, female-led companies.”
Sohoni: Childcare infrastructure in London is nearly impossible for founders
“Childcare is, is kind of impossible in the UK market in London, and somehow it doesn't fall on my husband. It somehow falls on me to kind of think about that, right?”
Property Partner Crowdfunded 1.1M Pounds of Real Estate in 2 Minutes
“They just set a world record a couple of days ago. It was a block of four flats, 1.1 million pounds sold out in two minutes and 19 seconds.”