I think the UK Government is listening to us

Following hard on the heels of the Home Office's announcement relating to Entrepreneur visas, this week's budget had a distinctly enterprise supportive flavour.


I had very much hoped this would be the case and certainly the signals coming out of the Department for Business (in the shape of Mark Prisk - who attended Seedcamp's SeedSummit for a full hour and half), the PM in his Tech City announcement and No10's enterprise task force including treasury officials, gave one hope.


Government has the loudest megaphone in the land and once they 'discovered' Silicon Roundabout at Old Street it moved swiftly into the vernacular and the media have been making regular trips east ever since.


Its easy to be cynical when it comes to politics but I do believe we have a tech friendly Government determined - and able - to keep Britain as the best place to start a business in Europe.
I have reason to believe too, that the personal pressure which David Cameron has applied to Google, Facebook, Cisco and co to heavily invest in Tech City is being taken very seriously by those companies.


The details of the budget are well covered elsewhere but its worth summarising some of the key points which will directly impact early stage technology companies and entrepreneurship.


1. Expansion of Entrepreneurs Relief:  limits capital gains tax to
10% on business sales under certain conditions. The “lifetime” limit on capital gains which can qualify for entrepreneurs relief  will be doubled from 6 April to £10 million.



2. Changes to the Enterprise Investment Scheme
offers income and capital gains relief for investors in growth businesses.
The rate of income tax relief on EIS investments will rise from 20% to 30% from 6 April 2011.
This means if you invest £100,000 in a qualifying company, you immediately benefit from an income tax
deduction of £30,000. ..and the qualifications and type of shares are to be made much simpler and wider - limits now to 250 employees rather than 50. The annual allowance for individuals doubles to £1m


3. Corporation Tax:

The main rate of corporation tax will be reduced from 28% to 26% from April 2011.
The rate will then be reduced by a further 1% in each of the following three years, giving rise to a corporate tax rate of 23% by 2014. This will give the UK one of the lowest rates of corporate tax in Europe.
The small profits rate of corporation tax will fall from 21% to 20% from April 2011.

4. R&D Tax Credits:

There is a major boost in the Budget for small businesses investing in research and development. The rate of relief on qualifying R&D expenditure rises to 200% from April 2011, with a further increase to 225% from April 2012.


All in all there has never been a better time for start-ups in the UK!

Related articles

• Facebook and Seedcamp partner to help build the next generation of social apps in Europe 
• Budget 2011: Tax breaks for businesses to boost brand Made in Britain (guardian.co.uk)
• Osborne cuts Corporation Tax rate (bbc.co.uk)
• Corporation Tax: Bigger tax cuts for business, but the banks will not benefit (independent.co.uk)
• Budget 2011: Surprise cut in corporation tax 'will stimulate growth' (telegraph.co.uk)
• Small businesses: Smaller firms welcome funding incentives to invest in research (independent.co.uk)
• HIGHLIGHTS-UK's Osborne delivers 2011 budget statement (reuters.com)
• Government accepts red tape challenge (telegraph.co.uk)
• Budget 2011: 'I like that I am supporting UK small companies' (telegraph.co.uk)
• Facebook And Seedcamp Sow European Social Startups (allfacebook.com)
• 'Silicon Roundabout' ready to ignite (ft.com)
• Tech Sector Welcomes U.K. Budget (blogs.wsj.com)
• East London marked to rival Silicon Valley (ft.com)
• Silicon Roundabout - who's investing in what? [John Colley] (ecademy.com)

UK Budget - not all bad for Entrepreneurs

With thanks to Graeme Burnham of Complete Tax Solutions .....[the comments in italics are mine]
The highlights extracted from the Chancellor's 2011 Budget are as follows:


· Corporation tax rate is reduced to 26% [for those making profits]
· EIS relief will increase to 30% from 20% [Great boost for Angels]
· Entrepreneurs relief lifetime allowance has doubled to £10m [Excellent news for founders]
· Non-domiciles may be able to remit income/capital gains without
charge if invested in qualifying businesses [haven't examined the detail but this could bring a lot of non - dom cash into the eco-system]
· The business rate – relief holiday for small businesses will be
extended to October 2012 [All helps]
· Small businesses (less than 10 employees) will face less
regulation [must be good - again, lets see the detail]
· The small companies R&D tax credits will rise from 175% to 200%
to 225% [Excellent!]
· Short life asset allowance to increase to 8 years from 4 years 
· National insurance will (at some point in time) be combined
with income tax
· Gift aid will be simplified and administration will be taken
on-line
· A 10% reduction in the inheritance tax rate if 10% of a legacy
is given to charity to be implemented in April 2012

Related articles

• Osborne's budget measures to encourage philanthropy (guardian.co.uk)
• All the Budget measures at a glance (mirror.co.uk)
• Budget: Key points at a glance (bbc.co.uk)
• Budget Day 2011 MANY TANKS, GEORGE (thesun.co.uk)
• Tax change 'to benefit charities' (bbc.co.uk)
• Osborne cuts Corporation Tax rate (bbc.co.uk)
• Budget 2011: Chancellor George Osborne pledges to boost 'growth and jobs' (menmedia.co.uk)
• Budget at glance (menmedia.co.uk)

Great Entrepreneurs focus on their mission rather than their competitors

I’ve noticed a tendency of some early stage tech companies to be excessively distracted by what their competitors are doing, or what they think they are doing.

Understanding the landscape and differentiating your product – or approach to the market - is of course essential and there could be a number of areas of head-on competition. Competing for key words on Google as key distribution channels are examples of these.
  

But, the overriding focus of the CEO must be the customer/user not the competitor. 

The questions to be answered are:

• ·         What is our real mission
• ·         What would make a better experience
• ·         How can we deliver our service/product better, cheaper, faster?  Than we are currently doing.

My own experiences have brought home the importance of this focus.

Joe Corre, co-founder of Agent Provocateur, never looked at a competitor’s product!   I well remember the occasion that a new member of the design/marketing team went out and bought a pile of competitor’s bras for price, quality comparison.  Joe absolutely flipped and practically threw both the offending garment and the unfortunate member of staff out of the office.  He and Serena, his partner, had our clear vision of what the product should be like and they wanted no distraction of that vision.

 This may be extreme but during my 5 years I was associated with AP I was able to see firsthand how this unfettered vision was instrumental in making AP one of the worlds admired fashion brands.

Steve Jobs at Apple clearly comes from a similar school.

Wonga, one of Europe’s start-up superstars, was founded and is run by two entrepreneurs (Errol Damelin and Jonty Hurwitz) who designed their business, product and service without any regard to competitors but rather by recognising a consumer need and filling it with precision and dedication to a great user experience.

The same can be said of Daniel Ek at Spotify.

Look around and I’m sure you’ll recognise the characteristics in most of the great new companies.

Great entrepreneurs and companies don’t spend large amounts of time and money refining and defining nuances of differentiation from competitors or indulging in feature wars with them.

Quite often the real competitor is NOT the other on line (or pure play) company but the off-line incumbents putting the user at the centre of the thinking, immediately flushes out who the real competitor is.

Related articles

• TechCrunch Europas Awards 22 European Startups for 2010 (thenextwomen.com)
• How Great Entrepreneurs Think (inc.com)
• The Europas European Startup Awards 2010 - The Winners and Finalists (eu.techcrunch.com)
• Robin Klein: Start-Up 100 judge (telegraph.co.uk)

TAG has 8 in Library House's Top 100

Image via Wikipedia

Congratulations to those companies listed in Library House's ranking of Europe's Top 100 Media technology companies.
One does get somewhat justifiably cynical about these awards or rankings but one must respect Library House's credentials as a leading research house for this industry and the advisory board was comprised of people from all the leading investors in the ecosystem.

The roll of honour had Moo at no 2 and Stardoll at No 10. The other TAGsters listed are:
Netlog and Zemanta in Community, Mind Candy in Games, MoveMe and Zoopla in Search and Directories and OpenX in Advertising.

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