The recent sale of Autonomy to Hewlett Packard has got an opinion out of just about everyone who cares about the high-growth SME sector in the UK, or who has been involved in a tech start-up, whether on the entrepreneurial side or in a venture capacity.
Mike Lynch is an extraordinary entrepreneur. He has built a headquarter company with revenues in the billions out of the UK which has dominated a market, indeed he created a market, and became a global leader.
To state that Lynch has inspired a generation of entrepreneurs along the way would be an understatement. He's the one that many hold up as an example of the UK's finest tech entrepreneur.
I heard him speak at a recent event of The Information Technologist's Company, and loved one of the things he said that evening from the stage: "Always bring a gun to a knife fight". I thought - now there's a man who understands that being an entrepreneur, no matter how big or small your company is, is a game of asymetrical warfare, and you better know how many rounds of ammunition, and how to trump your competition. I imagine Lynch has not lost too many battles with competitors.
But what does his acquisition by HP mean?
First of all, it means - as if it were ever in question - that the UK's entrepreneurs are just as capable of building world-class businesses as those from any other neighbourhood. The fact that the business software unit is going to be based out of Cambridge speaks volumes about the importance of Autonomy to HP. The fact that they are jettisoning their PC business at the same time triply underscores the centrality of Autonomy to HP's strategy.
While many of the senior management will want to stay and build out the next phase of Autonomy, many of the Autonomy top brass will leave. Many of those who leave will go on to set up their own businesses. Many of those who go on to set up their businesses will become successful. Many of those may even rival Autonomy in terms of influence and profits ... down the line, another 16 years away perhaps from their founding to billion dollar exit .. just like it may have been difficult to predict at the beginning of Autonomy that it would become one of the biggies.
The point is that these supernova exits are part of the success of a start-up ecosystem. When you have tasted the drug of working in a successful start-up, you realise that there is nothing better. You become hooked; it really is an addiction.
These ripple effects of tremendous exits yielding the next generation of entrepreneurs demonstrate that everything is alright in the "entrepreneur country" that the UK is becoming. These ripple effects have driven the power of Silicon Valley and Israel as well.
Everytime we have a lastminute.com, Skype, WGSN, Espotting, Kashya, or SpinVox (the explosive growth companies that I've personally been involved with since I came to the UK 13 years ago) go through the rapid growth to become acquired by a "better parent", we create another group of business builders who say to themselves, "I played a role in that success, but I can do it myself next time".
So the Supernova effect is part of the process.
Entrepreneurs like Lynch and the rest of the millionaires that he created then go on to back other entrepreneurs with their millions. Again and again, tech entrepreneurs tell me that the more money they make, and they can make more money with lower capital gains tax, the more they put into backing the next generation of emerging entrepreneurs. Ariadne Capital, my firm, pioneered this at an institutional level in 2000 when we aggregated 58 leading entrepreneurs to channel their capital and networks into backing our portfolio companies.
Round and round it goes.... the Autonomy's, the BetFair's, the Coller Capital's, the Element 14's and thousands of others .... These outstanding British firms weren't the product of enterprise zones. But they are making Britain into a leading enterprise zone itself.
So I say it's really pretty simple - Follow The Entrepreneur. He or she has the market insight. He or she has the obsessive drive. He or she is the hero.
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