British startups don’t get the ‘respect’ of Silicon Valley

The CEO of Tarmin claims his British startup needed a US base to be taken seriously by prospective customers

There may be a burgeoning technology scene in the UK, but without offices in the US, new companies will struggle to get their foot in the door.

This was the belief of Shahbaz Ali, CEO of Tarmin, who after studying and living in the UK, founded his storage software company in Essex.

“We started off in a bedroom as most humble beginnings are…  [and] when we opened the office it was in Ongar, a nice village just outside of Epping Forrest,” he said.

“They had a very interesting innovation centre [and] Essex Council [offered a lot of] support for business planning, fundraising and investment. I think Essex Council did a fantastic job to help growth.”

But despite his praise for the support he received in the UK, Ali believed he had to set up offices in the US to be seen as a serious technology company.

“We basically realised that when we were selling in the UK, going to a leading bank, for example, then saying we were a UK organisation… it has a psychological [effect],” he said.

“Although I don’t really like to admit it, if you say you are British, they don’t actually give you the respect that you get from being a Silicon Valley or Boston-based startup.”

Ali blamed this attitude on the amount of cash floating around the technology hubs in the US, meaning it was much easier for new firms to find investors.

“There has been more innovation coming from Silicon Valley and Boston, partly because there is a lot of funding momentum there,” he added. “You have got to admit that basically in these areas companies get $50m, $60m, even $100m of funding just like that in the tech sector, whereas with British start-ups, if they get $5m it is a big thing.”

As a result, Ali decided to place his company headquarters in Boston, surrounded by a talent pool of graduates coming out of one of the several highly rated universities in the area and existing employees from tech companies across New England.

“I think we basically had to move to Boston [for our] headquarters to firstly recruit the US teams and penetrate the US space, but also to address the issue we had in Europe,” he said.

But, if Ali was to embark on another start-up venture, he would return to Europe to kick things off.

“If I want to do my next startup it will be in Europe and it will be in the UK,” he said. “If you think of the cost associated with engineering as well as business development in the US, it is [much] higher and the thing is even in this country, if you want to hire a very smart team it is not easy. It took me quite a long while despite the fact I have a good track record.”

“I think there is a huge amount of talent in London. If you think about London, it is an amazing town, you have actually got a culture there that is international, truly international, and that culture and kind of environment actually creates and fosters innovation way faster. I am already on the board of two startups in London helping them at no cost and that is because I want to see some eco system coming from there to create some world class companies and I think that we can.”

Ali concluded: “You can bugger off easily to Silicon Valley but the thing is if you don’t get the respect at home, you are not going to get it anywhere else.”

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