Conquered, We Conquer?

The “Trillion-Dollar Company” Complex

• The UK isn’t growing fast enough and in reflex the thought blob has a new obsession: birthing the first home-grown trillion-dollar company. But what are we actually solving for?

• Tax revenue? Multinationals optimise for global tax arbitrage, not patriotic duty. Jobs? Only 6k of Unilevers 125k FTEs are UK based, PwC employs twice as many in the US. National pride? In a multipolar world does anybody care if Deliveroo is British or American?

• Zoom out and what policy makers actually want is:

  • (a) strategic leverage. Crown jewel companies like ASML, TSMC, CATL, DJI etc. so as we enter what Strauss-Howe might call a ‘fourth turning,’ DJT picks up Keir’s calls.

  • (b) an answer to our productivity & demographic woes. How the UK wins without scale, creating value non-linearly to population, else risking the populist inevitabilities

• For the VC complex, it’s just about vibes. The belief of the possible. Especially the possibility to return these massive funds.

Scale and the Idea Factory

• Historically, the UK had scale via empire and a coerced labour force. But let’s not start pitching East India Company 2.0. As this unwound we increasingly acted as an idea factory for products that scaled out into large commercial entities in the US single market, e.g. Bessemer Steel process seeding the US Carnegie steel empire, Whittle birthing jet engines, Stephenson steam locomotives

• In some ways this rhymes with China’s current role as the scale-out factory for US derived IP, e.g. Bell Labs created the first practical solar PV, an industry now dominated by the Chinese

• In science, engineering, and culture, Europe still produces the minds that shape the frontier. Geoffrey Hinton, Demis Hassabis, Tim Berners-Lee, and Michael Moritz are all products of UK systems and have catalysed world-changing innovations and companies. How much does it matter if these substantiate into British companies?

  • Palantir is American on paper, but its London office is one of its largest globally, spawning an army of UK start-ups from alumni. No doubt this decision stems from Alex Karp having studied his PhD in Germany and then founding Caedmon Group in London.

  • DeepMind would never have stayed a UK-only company. Even without Google’s acquisition, it would have expanded aggressively to the US for talent and resources. It still has a major London R&D hub employing 1.5k FTEs per LinkedIn.

• Is Deepmind or Palantir better for the UK? What does that even mean? Is it not under appreciated that between Demis & Mustafa British executives are steering the AI efforts of >$6trn of US market cap?

Conquered, We Conquer?

• In antiquity, Rome conquered Greece militarily, but culturally the opposite happened. Roman poet Horace warned, “Greece, though captive, took her fierce conqueror captive.”. Revered, Greek tutors, philosophers, and artists shaped Roman thought for centuries.

• Can the analogies of Greek hellenization be applied to the UK and Europe today? Militarily and economically, the US dominates, leaving us as modern client states. If we accept that scale will happen elsewhere, perhaps the UK should lean into “capturing the conqueror”. Tony Blair is right? Stripe’s Cheeky Pint is manifest?

• Now maybe the EU harmonises and Vinted is a bellwether for AI reducing localisation frictions to create a closer rival to US scale, but for now the most EV positive decision for an entrepreneur tends to be accessing the US. Localglobe posited an interesting concept of Green Card companies, those like Cleo who’d built solely from Europe while focusing exclusively on US customers.

• In early stage circles, EF’s decision 18 months ago to push each batch towards relocating to SF was a divisive topic. Yes, near-term funding competition increases for EU VCs via this ‘systematic exportation of early stage talent’, but if we’re playing infinite games increasing the ‘n’ of British entrepreneurs and enabling them to learn on the US dime might not be such a bad thing. Mistral for instance is a by product of Meta’s Paris FAIR AI lab, which was created by a group of French AI researchers who grew tired of the valley and insisted on an EU outpost. This after all is a game of random walk, but one where policy must magnetise the return path …