Brent Hoberman, the cofounder of Lastminute.com and a serial entrepreneur, believes that the UK will have even less chance of building technology companies with $10 billion (£8 billion) valuations if it’s not part of Europe’s digital single market.
The digital single market, which is still in development, is designed to enable businesses in EU member states to sell their products and services to the 500 million digital consumers that live across Europe with relative ease.
Speaking to Business Insider last month on the topic of decacorns, Hoberman said the digital single market will “smooth” a lot of “mega barriers” when it is finished, thereby helping tech startups to scale. The entrepreneur, who runs the Founders Factory incubator and several other businesses, added: “It looks like we’re going to be out of it, so then what’s the politicians’ answer?”
The reason the UK does not already have tech businesses as big as Apple, Google, Amazon, and Facebook in the US, or Alibaba and Huawei in China, is because it doesn’t have a big enough home market, according to Hoberman. China has over 1.3 billion people and the US boasts over 300 million, but the UK only has 64 million.
“We’ve got just enough of a home market to make a good business, but not enough to make a mega business, so you have to go abroad,” said Hoberman. “If you’re going across pan-Europe, which is the most obvious thing to do, it’s really hard, and I don’t think anyone gives credit to European entrepreneurs who are pan-European and I say this from somebody who arrogantly thought doing it wasn’t really hard when I did lastminute.com.”
Even though the UK has voted to leave the European Union, there is still a possibility that it could remain a part of the digital single market.
“I think somebody in the government should stand up and recognise that this digital single market would be one of the most valuable things we could do and I haven’t heard them even talk about the digital market,” he said. “So I think saying we’re missing out on that, is there any regime we could do, to help us get access to that, would be helpful. The question is would it be smart politics? It would be smart business, but is it smart politics?”