What’s happened to entrepreneurship in the UK?

When I arrived in Britain at the turn of the millennium, it was bristling with entrepreneurial promise. From biotech to branding, from Camden to Cambridge, the UK was the envy of Europe for its startup spirit. Richard Branson, Charles Dunstone, James Dyson – these were world-class and, increasingly, household names. Having those great role models made it easier to believe “Oh! It’s okay for people to do that.” And there was Dragons' Den – great television, where you saw people pitching all these goofy ideas.

Today, I’m less certain about Britain. The UK government is supporting entrepreneurship through tax schemes, the EIS and SEIS in particular, incentives where investors get a tax break for funding early-stage businesses. That’s helpful. But the real challenge is not building startups. Where one company is starting up today, there’s another one failing, so there’s a lot of churn. The challenge, and the societal and economic benefits that come with it, if we can conquer it, is finding the great startups and helping them to grow. So we need these high-growth entrepreneurs, but we don’t have programmes in place to enable that growth to happen.

Britain invented the Industrial Revolution and gave the world Isambard Kingdom Brunel, Ada Lovelace, Tim Berners-Lee. Even Stephen Hawking, who understood black holes better than most understand balance sheets, knew that the collaboration between thinking and doing is where magic happens. Britain remains a crucible of scientific and creative genius, but too often fails to turn that genius into scaled businesses and enduring prosperity.

Too many UK startups hit a wall as they attempt to scale. When an American titan like Larry Ellison spots promise in Oxford and invests £100 million, it should be a wake-up call. If Ellison believes in the UK, why don’t more investors? Of course, there is a bit of scoffing at the UK for having shot itself in the foot with Brexit; David Cameron, betting the future of his country to solve a political problem in his party.

On the plus side, entrepreneurship is no longer a dirty word, despite the fact that in Britain, we seem to prefer using the word “enterprise” in its stead. Before, if you were the parent of a university-age student, the last thing you wanted them to do was to go on and become an entrepreneur. You wanted them to get a job in government, or in industry. Now, it’s an acceptable route. But there seems to be some lingering distrust around the idea of entrepreneurship, and not just because it involves risk. If you’re growing really fast, there’s an attitude.

American culture is all about start a company, and grow it. I’d built businesses and helped build businesses before I taught the subject – some succeeded, one of mine failed – but I never doubted my courage, creativity, or nous. I’m an American, and we celebrate business endeavour, winners and losers alike. We value trying, and it doesn’t matter if you fail, you’ll get up and try again. There’s a saying in Silicon Valley: failure is a lesson paid for with somebody else’s nickel. So, if you fund me, and I fail, you’ve paid for that lesson. Now I get up, brush myself off, and set off again.

At London Business School, I meet brilliant minds every week, many from abroad, who still look to Britain as a launchpad. Immigrants of every shape and kind are a fantastic source of entrepreneurship around the world, because most of them have been through extraordinary hardship, and they’ve seen it all. There’s a lot of hardship in being an entrepreneur and immigrants have the grit to get through that.

Despite world-class financial and academic infrastructure, though, UK entrepreneurs are too often starved of growth-stage funding. Traditional institutions avoid risk. Pension funds here barely touch venture capital and private equity. The result? Innovation stalls in the so-called “valley of death” - that dangerous gap between academic discovery and commercial viability.

Meanwhile, the world isn’t waiting. Poland, with its ravaged 20th-century history, is setting economic agendas in parts of Europe. South Korea built a tech juggernaut in one generation. And the US – where professors wear patent filings like medals – continues to surge ahead precisely because risk is celebrated, not pathologised.

What are the successful British entrepreneurs getting right? First, they realise it’s a team sport, not a solo sport. They hire people with complementary skills. Secondly, they understand that entrepreneurial success is most often problem-driven. You don’t have to have an idea. You need to find a problem that your skills are well suited to solve and that fits with your interests.

Happily, yesterday’s focus on pitching business plans has gone the way of the buggy whip. You can’t really plan for these uncertain ventures. As the great management thinker Peter Drucker said, “If you’re successful, you’ll probably be successful selling products you didn’t think of at first, selling them to customers you didn’t identify at first, used for purposes that you hadn’t imagined”. So it’s not Plan A that’s going to work, it’s probably Plan B. You don’t get that by writing a business plan, you get that by going into the marketplace. You run experiments and they give you the answers. A new business is really nothing more than a bundle of hypotheses waiting to be affirmed or rejected. So get out there and learn!

Two of our alumni exemplify this wonderfully. Tristram Mayhew, together with his wife Rebecca, built GoApe after seeing a treetop adventure site on a vacation in France. They went to the UK Forestry Commission and said, if we can increase your visitor count, can we use your trees? By “borrowing” the trees, the car parks, and even the loos, the upfront investment to build a new site was small. It’s a fabulous business model and now they have 37 sites around the UK, plus another 16 in the US. And Alex Lyakhotskiy, founder of Pass the Keys, which helps Airbnb owners manage their properties, is a great example of a pivot from Plan A to plan B. You can read my case study about his company’s early days here: Pass the Keys.

The UK needs to teach its children – and remind its adults – that entrepreneurship is not a fallback plan; it is a noble calling. Virtually all the net new jobs in most every economy are created by fast-growing entrepreneurs and the companies they lead. Honour not only those who publish papers or sleep in their labs, but those who build, sell, risk, and employ. Celebrate not just Dyson, but the next hundred Dysons-in-waiting. And yes, see and reward failure as the tuition fee for success.