Great talk by Valery Casey, founder of the Designers Accord, the global coalition of designers, educators, and business leaders working together to create positive sustainable impact.

Valery is an impressive force in the design industry: She was named a "Guru" of the year by Fortune magazine, a "Hero of the Environment" by Time magazine, a "Master of Design" by Fast Company and one of the "World’s Most Influential Designers" by BusinessWeek. The World Economic Forum has honored Casey as a "Young Global Leader."

2011/12 Creative Mornings with Ben Chestnut from CreativeMornings/Atlanta on Vimeo.

Unlike in the U.S., venture capital on the other side of the Atlantic is a relatively young industry. It had an inglorious and stuttering start in the 1980s, often as an extension of the activities of conventional banks or as a limited part of fund managers’ remits. The first Gulf War and 1990 recession were among several setbacks, even before the promise of the first Internet boom culminated in the dot-com bust. This left many investors bruised—and venture capital out of favor in Europe.

As we approach the end of 2011, it’s clear that European venture capital has finally come into its own. There are now a number of well-established firms based in London and elsewhere that invest across the region and have helped entrepreneurs build significant businesses during the past 15 years. The early big wins of ARM, Cambridge Silicon Radio (CSR), and Autonomy have been followed by ASOS, Betfair, Lovefilm, Playfish, Skype, Spotify, Wonga, and Vente-Privé in recent times, to name just a few.

The culture of early-stage investment also has shifted. Most investors now understand that forensic examination of business forecasts isn’t very productive or predictive: Thorough assessment of the management team, the product, and the relevant market are better indicators of a business’s likelihood of success.

More critically, a new breed of smaller funds mixed with high-caliber angel investors is emerging in Europe. Angels are people whose understanding of the needs of early-stage businesses is borne from firsthand experience as entrepreneurs. In the U.K., for instance, firms such as Atomico, Eden, Notion, Passion, PRO Founders, and Octopus (where I work) are combining with seasoned businesspeople such as Sherry Coutu, Alex Hoye, Simon Murdoch, Jon Moulton, Robin Klein, and Hermann Hauser to foster a new wave of fast-growing young companies.

Empathy, resilience, and network are brought to bear alongside financial investment. A culture of partnership between entrepreneur and investment partner is taking hold, borne of better communication between stakeholders and more transparency around investment terms. The view that building significant businesses takes patience and flexibility—as well as fortitude and ambition—is well-established.

There is also more willingness to learn best practices from the West Coast, such as inward migration of skills and a greater risk appetite. Technology and expertise is now accessible online and only a tweet away from those wishing to improve.

Significant challenges remain, nonetheless. Clusters and density of domain expertise take decades to build, and the venture capital community is no different. The U.K. lacks the depth of capital to support startups through the cycle from seed through growth to exit. The U.K. also struggles in the absence of established technology companies that could provide sources of both liquidity and highly skilled human capital. Finally, we also see the hallmarks of brain drain: All too often successful entrepreneurs, having honed their skills in the U.K., choose to build their second business in the U.S., having tasted the raw energy and ambition on those shores.

These are not challenges that can be met overnight. But the trend is favorable. Entrepreneurs and venture capitalists are working together more productively and efficiently than ever before, increasing numbers of startup businesses are succeeding, and the foundations for a promising future have now been laid.

On the news of the Zoopla merger with Digital Property Group (owner of Primelocation & Findaproperty) last week, it was pleasing to read the headlines that ensued and [significantly premature] talk of one of the UK’s biggest ever startup exits. There are many challenges ahead before such an exit can become a reality, but it is a big milestone for Alex Chesterman and his team at Zoopla, the angel and venture capital investors Atlas and Octopus who partnered the business from an early stage, and for the wider entrepreneurial community in Europe.

It is also right for commentators to mark this event with exuberance and excitement. The European entrepreneurial ecosystem must learn to celebrate its businesses with greater verve and volume: let’s take a leaf out of the book of our fellow travelers on the West Coast. Creating a business on this scale in this timeline is a Herculean task and worth shouting about.

The paucity of $billion exits for venture backed businesses in Europe is often used as a yard stick to compare the relative proficiency the entrepreneurial ecosystem to that in the US. Many commentators have invested time exploring why this remains the case today. Some point to the quantum of capital available; others to the lack of an initial public offering market or large number of established technology companies to serve as both acquirers and source of highly skilled human capital; and some recognise that the European venture market is still young and it will take time to create the density of energy and skills required to regularly create such successes.

For me, this last point resonates the most. Holding the bold ambition for numerous $billion exits should be encouraged, but it should not be the only goal at this time. Entrepreneurs and investors must define success for themselves. Unrealistic expectations can hurt a business as much as benefit it: the vast majority of businesses in the UK, Europe and the US sell for less than £25m. Appreciating this brutal reality is critical for all stakeholders in a young business. The stories of XYZ Ltd’s latest pre-money valuation of £350m or the most recent conference speaker’s “How my business grew revenue by 1000%” are rarely informative and often misleading.  

As London and Berlin emerge as the leading lights for European entrepreneurs and early stage investors, I sense it is more important that increasing numbers of entrepreneurs and angels alike discover their first taste of success. This should be measured on a return on capital basis: seeing increasing numbers of startups build and return anything approaching 10x (whether that be at £25m, £50m or £100m exit valuation) will have the greatest positive impact on the entrepreneurial community. If this occurs, confidence in creating, joining and backing startups will grow significantly. In time, joining and leading startups will afford entrepreneurial types multiple occasions to hone their skills – and ultimately, one hopes, be lucky enough to enjoy the good fortune and coincidence of numerous events that leads to the creation of $billion companies.

At a time when Google defies the global economic slowdown by posting a 26 per cent. rise in net profits for the last quarter, it may seem curious to challenge the behemoth’s future. As Larry Page, Google's co-founder and chief executive, declared "we had a great quarter", before going onto highlight the progress made with Google+: "People are flocking into Google+ at an incredible rate and we are just getting started". Amongst analysts there is palpable excitement that Google may challenge Facebook’s dominance and this is before one considers the incredible success of the Android platform and various other projects, applications and revenue lines.

But. And there is a but. What about “Search”?  Larry Page once described the “perfect search engine” as something that “understands exactly what you mean and gives you back exactly what you want.” Equally, the second Core Principle at Google (after “1. Focus on the user and all else will follow”) is “2. It’s best to do one thing really, really well”. Set in this frame of reference, suddenly all the superlatives gushing from the world’s financial press appear somewhat misplaced.

Despite being used and valued by hundreds of millions of people every day, Google has not mastered Search. The sector as a whole remains in its infancy. Well over a decade since inception, it is clear that Google (and every other popular search engine for that matter) has not mastered even in the basics of semantic search: it remains completely unable to understand users' queries - or web pages (Google’s main information source) - if it did, it would respond with an answer to user’s questions. Instead, users are forced to spend time browsing several blue links that may or may not provide the answer to their questions. This mismatch of supply with demand presents itself clearly as the first words of every search: “About x,xxx,xxx results (0.yz seconds)”. So what?

This fundamental flaw in Google’s core business looks set to become more challenging with the exponential growth in Search via mobile handsets. Users do not want results determined by the Google parameters (relevance, freshness, comprehensive and speed), they just want answers. Almost all mobile handset users seek local information and a lot of it: questions around restaurants; shopping; sport; food; travel and weather dominate. Mobile information seeking is action-oriented and users want what they are looking for directly. Browsing hundreds of web pages from a mobile screen is not practicable or desirable. Information is for the here (contextual) and now (immediate). Statistics-based, index- powered search fails this mission.

The challenge in Search has moved on from “indexing the world’s information” to enabling greater access to information. No longer is the consumer concerned by the availability of information but rather the fast simple retrieval of it. This trend is acknowledged by Google. When asked what the perfect search engine is, Google’s Marissa Meyer replied:

“It would be a machine that could answer that question, really. It would be one that could understand speech, questions, phrases, what entities you’re talking about, concepts. It would be able to search all of the world’s information, [find] different ideas and concepts, and bring them back to you in a presentation that was really informative and coherent.”

Sound familiar?

Last week also saw the technology world aflame with news of the latest iPhone arrival. Much to the dismay of many, it looks identical to the last Cupertino release. But as commentators, reviewers and the fortunate few who found themselves at the front of Apple Shops around the world discovered, the iPhone 4S includes a remarkable new software application called Siri: in Apple’s own words, “your wish, is its command”. The user can ask “Siri to do things just by talking the way you talk. Siri understands what you say, knows what you mean, and even talks back”. What Siri does is analyse unstructured “natural language” queries and deliver results in ways that are “actionable.” This is “Search” as it should be: ask a question, receive an answer.

Q: “Is traditional web search dying?”

A: “Yes. And fast.”

Next time someone recommends an investment opportunity - consider the following:

1. Is the introducer being paid by the company to raise investment funds? or
2. Is the introducer investing their own funds alongside yours?

Given a choice, most angels and VCs will choose (2) since it is a clear indicator of the introducer's belief in the investment opportunity. However, almost without exception, formal angel networks in the UK and Europe fall into (1); that is, the angel network is working on behalf of the investee company - not the Angel investor.

Clearly (1) and (2) are worlds apart: on the one hand the introducer relies predominantly on a successful fundraising process (without ongoing financial incentive or commitment), and on the other the introducer invests alongside you, and like you, is remunerated on a successful return on capital.

Therefore, although a network may position themselves as outwardly serving angels, their real customers are the businesses they represent. At Octopus we do things differently.

We review over 3,000 businesses a year to invest in 10-15. When we invite our Venture Partners to invest, we commit our own funds to the business on identical terms. We are directly aligned with our customers, the Venture Partners, and work hard through the lifetime of the investment to build the business and exit the investment. For us, the investment is a start point, not the end point.

The announcement of Startup Britain has unleashed all manner of commentary: some positive, some constructive but a lot that is negative - and it is this final category I struggle with: I wonder if we are focusing on what matters? 

For me, the announcement of Startup Britain is a statement of intent. At its origin is a group of entrepreneurs who have come together to make a difference, to drive change and to improve the startup landscape in the UK. Yes – the website has flaws, and yes the offering is not sufficiently refined yet – but this is a start up too – and (quite incredibly) a start up run by several entrepreneurs who have their own businesses to run at the same time. 

Is it really fair to dismiss this as a government sponsored PR stunt? I think this is unduly cynical. It is no small feat to persuade the Prime Minister, the Chancellor of the Exchequer, the Secretary of State for Business and the Enterprise Minister to meet in a room and collectively stress the importance of our community and what it means for the wider UK economy.

At the same time, before we challenge the efforts of others, can each of us say that we have made the same significant and public commitment outside of our own endeavours to contribute to the startup community?

For those that are vociferous in their criticism, or are unhappy with the offering from a particular company, or hold that the suite of products/services are not the right ones, let your feedback be known in a constructive manner - support the statement of intent - and help the entrepreneurs modify the offering until it meets the needs of the community.

As a first step, I have started a question on Quora – what should the Start Up Britain package include? Please do share your views and afford the organizers of Start Up Britain the opportunity to hear frank and constructive feedback which can hopefully benefit everyone.

http://www.quora.com/What-should-the-StartUpBritain-package-include