All it takes to make an internet fortune these days is one brilliant idea. Technology Correspondent David Smith meets the young British entrepreneurs who are shaping the future of the web.
David Smith, technology correspondent
Sunday February 25, 2007
The Observer
Last week the site announced it had won £50m to develop its idea - a historical 'timeline' split into minutes, each of which can be bought by users to post memorable moments in their lives, for example by uploading video footage of a child's birthday or favourite pop concert. Its backers, Bright Station Ventures, were 'blown away' by the concept. Microsoft said: 'We believe DesignTheTime has the potential to be the next YouTube or Skype.' Such grand claims are commonplace in America's Silicon Valley. What makes Whitfield's venture remarkable is that it was born in Britain.
This generation of entrepreneurs is taking on, and sometimes beating, the Americans at their own game. The UK software economy is worth around £20bn, with Microsoft a huge investor. Millions are being poured into internet start-ups with a flamboyance once seen only in California, and some US venture capitalists have opened offices here for the purpose of making money. Experts say that economic and cultural changes - including TV programmes such as Dragons' Den and The Apprentice - have made entrepreneurship a fashionable career choice for young people, promising to slow the brain drain and revive Britain's pride in innovation.
But, unlike the first UK internet boom a decade ago led by Martha Lane Fox's online travel firm Lastminute.com, large-scale financial backing is not essential to get started: the spread of broadband access and the diminishing price of hardware make it possible to set up and run a virtual company from a bedroom or coffee shop. The next wave of would-be dotcom millionaires includes teenagers, university dropouts and a former Butlins redcoat. All they need is a big idea.
Whitfield, studying for a PhD in biochemistry at Oxford, spends his days researching vaccines for HIV and hepatitis C. Late at night, over eight months, he was hunched over a computer screen programming software for DesignTheTime. Eventually it wowed the judges at the university's own version of Dragons' Den. Whitfield and his two co-founders are from Germany, but will move to Britain permanently. 'Britain is very friendly for building up ventures like this,' he said. 'In Germany it's much more bureaucratic.'
Dan Wagner, a partner at Bright Station Ventures, said: 'Momentum is now gathering in this country. The fact we watch Dragons' Den on TV is illustrative of a change, and now if you ask young students what they want to do, it's start a business. They need the right funding to make their dream a reality, but the infrastructure is not there - yet.'
The poster boy of internet dreamers is Alex Tew, 22, who hit the jackpot in 2005 with his website Million Dollar Homepage. With a debt of £4,000 and more to come at university, one night Tew wrote, 'How can I become a millionaire?' on a piece of paper and began brainstorming. 'It needed to be ambitious, have a good name, grab attention, be directly about money and so simple I could build it in a couple of days,' he recalled. 'I needed a million of something to sell and I didn't have a million of anything, then pixels [the simplest graphical unit on a computer screen] came to mind. It was a lightbulb moment.'
Tew set up a website to sell advertising space in the form of a million pixels at $1 each. He borrowed £500 from family and friends to put out publicity which gained coverage from the BBC and snowballed: 'It became a self-fulfilling prophecy. People were in disbelief because I was making money for effectively nothing, and the very fact they talked about it was the reason it did well.' He made £500,000.
Tew, from Swindon, Wiltshire, said there are now opportunities that were unthinkable in the Nineties. 'It's so cheap these days for an internet start-up. Everyone has broadband, so the internet is a lot more appealing. Sites like MySpace and YouTube could not have existed five years ago in their current form.'
The self-confident can-do enthusiasm of Silicon Valley is now audible in the buzz of Second Chance Tuesday, a networking event in central London where hi-tech entrepreneurs, investors and visitors from the likes of eBay and Google swap ideas and business cards. The first, a year ago, was organised in 10 days with little publicity yet attracted 400 applicants; it is now invariably over-subscribed several times.
Co-organiser Judith Clegg said: 'We have businesses such as Bebo [a social networking site] and Skype [internet telephony] getting international recognition, and people all over the world are looking to London as a creative hub.'
A winning website can take just one person, a laptop and a killer concept that harnesses content generated by its users, a characteristic of so-called 'Web 2.0'. But fully fledged businesses, particularly those involving complex technology, still require initial support from venture capitalists or 'angel investors', individuals who back schemes without an aggressive profit-at-all-costs motivation. When Christina Domecq, a member of the Allied Domecq wine and spirits family, wanted to set up a hi-tech company she did not choose Spain, where she was born, or America, where she grew up. She came to Britain.
Domecq co-founded SpinVox - which turns mobile voicemails into text messages, and voice calls into internet blogs - and raised £25m from angel investors. Her staff has grown from 30 to 165 in the past year and SpinVox expects its six millionth user in 2007. 'I've found the UK amazingly welcoming,' said Domecq, 30. 'There's great opportunity for innovation and real breadth of experience here.'
Just as Stanford University is a powerhouse at the heart of Silicon Valley UK, so Oxford, Cambridge and London universities such as Imperial College are fuelling the UK surge. Venture capital investment in London, the east and south-east was £923m in 2005. But Bob Goodson, co-founder and chairman of the student society Oxford Entrepreneurs, warned that Britain still has some way to go - Silicon Valley investments for 2005 totalled £4.2bn.
'In the US, angel investors invest in people and markets at an early stage,' said the 26-year-old, now working for a social networking start-up in California. 'That concept does not seem to be prevalent in the UK, where it's more "Show me the business plan and exactly how I'm going to get my money back, times 10." That's all very well in a solid established industry, but when you're doing something for the first time you can't know everything in advance. You have to be nimble.'
Nevertheless, there is a sense of growing confidence and energy in digital Britain. Time and again, the most important ingredient has been a winning idea - and Britain's twentysomethings appear to be rich in those.
The young webmasters:
Oli Barrett
29, Reading
Site: www.connectedcapital.co.uk
Background: Dropped out of university and did a summer job as a Butlins redcoat. Went to Leeds University and started Amazingyou, a student headhunting site.
Big idea: Introduced a business version of speed-dating in which people meet for three minutes at a time.
He says: 'I'm 29 and still hungry.'
Adam Hildreth
21, Leeds
Site: www.crispthinking.com
Background: Came up with Dubit, a website for teenagers, when he was 14 and left school at 16 to run it full time. Turnover this year will be £1.5m.
Big idea: Technology to protect children from paedophiles online.
He says: 'The money isn't just handed over, there is a lot of testing to make sure it will work.'
Harjeet Johal
27, Nottingham
Site: underfivepounds.com
Background: Started his internet business in 2006. Turnover is now more than £5m.
Big idea: Online retailer selling items for less than £5.
He says: 'You don't have to be technically minded, just have an idea and drive it to its conclusion.'
Lindsay and Russell
Middleton
Sister and brother, 24 and 25, Plymouth
Site: www.wehanghere.com
Background: She read economics at University College London; he studied engineering at Cambridge.They created the site in their spare time and now have nearly 500 members .
Big idea: free website enabling users to look, via Google Maps, at their favourite venues and see who 'hangs out' there.
Lindsay says: 'We've no intention of going to Silicon Valley. We're proud to be British.'
reposted from: Observer/Guardian
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