Britain’s top 100 young founders have built cheetahs, gazelles and unicorns, but will they achieve Big Tech status?

Looking at the UK startup ecosystem, it’s easy to get the impression that entrepreneurship – especially in the arena of high-growth, VC-backed companies – is something of a young person. Perhaps to a certain extent it is. Certainly, a disproportionate number of the founders I speak to are under the age of 40, a large number are in their twenties, and a handful have yet to see their twenty-first birthday.

One could argue that the startup community’s relative youthfulness reflects a willingness to take risks and pursue ideas before other pressures — like raising kids and meeting mortgage payments — kick in. And you could also point to the fact that entrepreneurship is seen as much more of a career option for graduates and school leavers in Britann than it was fifteen or twenty years ago.

But here’s the question. Will the emerging generation of Generation Z founders create the powerhouses of tomorrow or will the more successful of them be content to build their business to a relatively modest size before selling out and moving on to the next project. The UK has its share of successful startups, scale-ups and, increasingly, unicorns, but so far there isn’t really a UK innovation economy company that can be described as operating in the ‘big tech’ arena.

A kind of journey

But the hope must be clear that some kind of journey is underway. Today’s young (or relatively young founders) are on a path that will eventually lead to the creation of multi-billion dollar global companies. So how’s that going? A report from research institute, Hurun suggests that progress is being made.

Hurun’s UK Under 30s report, released this week, sees itself as a celebration of young entrepreneurial talent, identifying the top 100 companies founded and run by founders that have yet to pass the big “three zero” milestone.

But perhaps more importantly, the report provides a clue to what could be happening in the UK startup ecosystem.

But let’s start with the headlines. Hurun finds that the entrepreneurs on the list have built companies worth an average of £100 million. As Hurun Report chairman and lead researcher Rupert Hoogewerf acknowledges, that average is skewed higher by the presence of three unicorns, in the form of event company Get ininsurance company marshmallows and fitness company, Gymshark. Nevertheless, the £100 million average confirms that we are talking about some very successful companies.

The average age of the founders on the list is 28, with the youngest – Edward Beccle of the religious app Glorify – being 23. Perhaps unsurprisingly, the largest number of the top 100 startups are based in London, with the English Midlands in second place. Fashion and food and drink are the most represented sectors.

But let’s look beyond the headlines. What does this list say about the future? Commenting on the findings, Hoogewerf said, “If they can build such a big company at age 30, imagine how big they could get when they reach the age of Jeff Bezos, James Dyson or Warren Buffett. You can safely say they are the most likely billionaires of the future, especially as founding teams and investors are increasingly experiencing how to focus on value creation rather than sales.”

Climb the ladder?

In that analysis, you can extrapolate an entrepreneurial journey that starts with real success at a young age, equipping the entrepreneurs in question with the skills and experience to do bigger things as they get older. And there is some evidence that that is happening. Hurun has identified 46 British unicorns, the majority of which are not publicly traded, and were created by entrepreneurs of previous generations, namely those in their 40s and 50s.

But that’s not quite the same as creating businesses that can be categorized alongside Amazon, Google, or Facebook. So when I spoke to Hoogewerf I was eager to hear his thoughts on the challenges and opportunities for innovation in the UK.

There are, he admits, some cultural issues that can stand in the way of a UK-based startup from entering the major league all the way. One is the tendency – ingrained in the script of many British entrepreneurs – to start and grow their business to the point where a life-changing exit can be secured. “There is a clear trend in entrepreneurship. Young entrepreneurs achieve success and are then sold out,” he says.

And this has an impact. “If you look at the UK, we’re in a good time zone, we have good universities, but there are very few companies that are the equivalent of big technology,” he adds.

So how do you change that reality? The obvious answer is to nurture the ecosystems that will provide opportunities to grow cheetahs to gazelles and unicorns to $10 billion businesses and beyond. But what does that mean in practice?

One way to move forward is more opportunities for flotation. “Companies should be given the opportunity to float on lively trade fairs,” says Hoogewerf.

This is an area where the UK is lagging behind competitors in North America and Asia. AIM – the alternative investment market – was established to provide fast-growing companies with a route to listed status. “But compared to the NASDAQ or the markets in China, it has underperformed,” says Hoogewerf.

On the positive side, the report highlights the importance of UK universities, not only in terms of attracting potential entrepreneurs, but also in the support they provide. Hoogewerf cites innovation centers and access to academics with expert scientific and technological knowledge as examples of where the support comes from. It is important that not only the high Oxford and Cambridge provide the entrepreneurial foundation. “Oxford was number one on our list, but Warwick and Bath – both not so well known – were up there,” he says. “Obviously Warwick and Bath are doing something right.”

However, universities are not necessarily where founders meet. “British unicorns usually have two founders,” says Hoogewerf. “1 in 8 of them meet in college, but the most common place was their previous workplace.”

Often that place will be a corporate business, emphasizing that there is quite a bit of human traffic between large companies and startups. Hoogewerf indeed emphasizes that large companies themselves are often very enterprising,

Also positive, as the report sees it, is a greater role VCs play in mentoring.

So where does that leave us? The UK isn’t quite there yet compared to Silicon Valley or the hot spots of Asia. But there, the report does suggest a growing pipeline of ambitious entrepreneurs. Against this background, Hoogewerf says he hopes for the emergence of the big one.

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