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Matt Barker, Global Head of Cloud Native Services, Venafi/Co-founder Jetstack and OpenUK Entrepreneur in Residence

State of Open: The UK in 2023

Phase Two “Show us the Money”

Part 1: “The Economics of Open Source Software”

Matt discusses the influence of American contributions on the success of open source software businesses in the UK. Despite a robust business environment and talented engineers, Matt notes a dependence on American projects. Cultural differences in risk-taking are highlighted, suggesting that Americans are more willing to take financial risks and learn from failures. He encourages the UK to embrace a more ambitious and risk-tolerant approach to foster growth and success. While the UK continues to innovate, Matt emphasises the need to leverage the strengths of the “special relationship” with the US.

Thought Leadership: Entrepreneur in Residence’s Conclusions
Matt Barker, Global Head of Cloud Native Services, Venafi/Co-founder Jetstack and OpenUK Entrepreneur in Residence

What do the Case Studies Show?

In the past businesses have gone to the US. As I sit here a couple of days past Independence day and reflect on what makes Brits different from Americans, I am reminded of a recent conversation in which I was told:

“Americans were willing to get on a boat with no idea of where they were going, to build a dream of a better life. All differences in culture and approach pretty much stem from there on out.”

As I read the case studies of Open Source businesses that have grown and succeeded in the UK, I am struck by just how reliant we still are on our American cousins. But why?

Having been plugged into the Open Source Software market in the UK for going-on 20 years now, it never fails to amaze me how often I’m introduced to someone through friendship circles in the UK who says ‘oh I’m behind that project.’ When I look up who they are and what they do, I realise they live and work from a house in the middle of nowhere in the UK, and are essentially responsible for making large parts of the internet work.

So we’re certainly not short of ambitious, innovative Open Source Software engineers.

In my role, I also hear from many foreign-born entrepreneurs that the UK is a great place to do business. It’s easy to set up a company, it has a strong legal framework, it has generous tax breaks for innovation, and it has a world-class education system.

So it’s not that either.

It’s not like we don’t have people to sell to either. We have a strong economy, we’re the proud owners of a global financial hub, and we are home to plenty of international business we can sell to.

So if it’s not that, then what is it?

”For you to have the big outcomes, you have to have paid loss
“Failing fast and failing early is an important philosophy. There’s no stigma for me with failure. If anything that’s like, this is a hardened entrepreneur. This is someone who’s been through the wringer. I don’t know if that’s true in the UK. There is that cultural, societal element of shame, or this guy’s no good, because the last one didn’t work out.” Tom Drummond, Founder and Managing Partner, Heavybit

My personal view says it comes down to the way we think. It’s no doubt that in the past we’ve been able to think big. Castles, bridges, ships, even empires. But is that still the case?
In speaking to many people trying to build companies in the UK, they are frustrated. They are frustrated that we don’t have the ability to do that any more. We’re unable to take big financial bets on the opportunities we believe in. We haven’t learned how to scale on a global stage. We’re less likely to swallow our fears and push past that next stage to take the chance to reach the top, rather than check out and buy that property we’ve been refreshing on Zoopla.
And for these reasons, we’re still reliant on America. They give us a sense of what’s possible, the money to unlock that, and a confidence we don’t seem to want to give ourselves.

But it’s not just one way traffic.

Brits are still innovating, building, and exploring. But they’re maybe doing it for slightly different reasons. Where Americans are doing it to be a huge commercial success, and take the number one spot, Brits are doing it to scratch an itch, prove a point, or simply to satisfy themselves ‘it is possible’. Fortunately, this is still where a lot of big technological breakthroughs are coming from, and currently in the hands of the people who I meet living quiet lives running huge, successful projects.

But from my experience, a lot of this ends up being to the benefit of the Americans.

Brits know how to create cutting edge Open Source Software, but Americans know how to grow and commercialise it.

Fortunately we’re learning, and where 10 years ago it was second-hand from the likes of Elastic, Confluent, MongoDB, it’s gotten a bit closer to home thanks to the success of Snyk, Revolut, Babylon, Hopin and others. It was only a few years ago I was struggling to find people in the UK with any first hand experience of productising and commercialising software at a large scale, but as we continue to evolve, I’m growing more certain in the ability to find those people now we’ve created a few home runs of our own.

As a dual British and American citizen, I like to think of myself as being able to see both of our respective strengths a little bit more clearly.

In many ways I think the UK Open Source Software market would benefit from starting to embrace our American sides a little more in order to help us grow and succeed. These case studies give me more confidence that we’re reaching a place where that’s possible.

So let’s think a little bigger, push a little further, bet a little bigger – and that’s going to help us in the long run, even if we do still need to rely a little bit on the ‘special relationship’.

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