Select Committee on European Union Minutes of Evidence

Memorandum by First Tuesday

  The success of First Tuesday demonstrates that the Internet has unleashed a wave of entrepreneurship across Europe. We began as an informal cocktail party, held in October 1998 to gather friends working in new media in London. That meeting caught a moment. It forged a sense of community among young entrepreneurs who believe that the Internet has created a time of overwhelming opportunity—and, by bringing together money, talent and ideas, it created a marketplace to help them build new companies to reap those opportunities. First Tuesday's popularity grew by word of e-mail—friends inviting friends inviting business contacts to join the group, spreading across both oceans and borders. In order to promote further the wave of entrepreneurship which spawned us, we are now building First Tuesday as a business dedicated to helping entrepreneurs achieve success.

  Our business consists of two parts: events and a website. On the First Tuesday of every month, we hold events in 36 European cities—and eight more outside of Europe. These are organised by local groups, composed of members of the local new media community but operating under licence from us to use our trademark and other intellectual property and, through a stock option plan, sharing in ownership of the First Tuesday company. Like the original event in London, these serve both as community and marketplace sharing ideas and inspiration but also helping to staff, finance, partner and build new businesses. About 30,000 people now subscribe to the mailing lists for event announcements, and the events are oversubscribed in most cities. We are now extending the range of events to include more events focused on specific audiences: for example, matchmaking events which introduce venture capitalists to companies seeking money.

  Although our website is still under construction, it already serves to extend and deepen the marketplace and community born at the events. Our jobs list—which puts those seeking talent in contact with those seeking jobs, and vice versa—is the most active with 50 or 60 postings a day demonstrating that talent is the resource in shortest supply in the new economy. We also have lists helping young companies to find short-term office space, and another dedicated to discussion and mutual self-help. We are extending the range and functionality of these forums. We are also building directories of resources which might be useful to our constituents: ranging from venture capitalists to fulfilment houses. Soon, we would hope that our site is an indispensable resource for any European entrepreneur building a new media company—and the locus of a global network of entrepreneurs.

  We have learned several lessons in the course of our rapid growth:

    —  Europeans are passionate entrepreneurs. Contrary to conventional pessimism, they are neither defeatist nor risk averse. Our constituents want to start companies not just because they can make money—although clearly that is important—but also because it empowers them to create the sorts of products and services that they would like to use;

    —  Government is not seen as relevant to entrepreneurship. Although attitudes to government vary somewhat—Germans and Scandinavians seeming to want more government involvement than other Europeans—the resources needed to build companies all come from the private sector and the entrepreneurial community itself. Government is encountered mostly as an obstacle;

    —  Scale is critical to entrepreneurial success. The Internet's global economy creates the opportunity—and the need—for pan-European start-ups. Only by expanding quickly across the region, and the world, can companies grasp the available opportunities and bulk up sufficiently to meet the inevitable American competition. This is one area in which entrepreneurs encounter government as an obstacle. Harmonisation has a long way to go in everything from consumer regulation to labour law;

    —  Speed is just as critical. Because the Internet is evolving so fast, and because first-mover advantage is so powerful, Internet companies have to move very, very fast. Here is another area in which government is encountered as an obstacle: regulatory and legal processes—from company formation to licensing—do not move at the speed required by the Internet;

    —  Governments themselves are slow in using the technology they urge others to espouse. E-mail and the Web enable entrepreneurs to communicate quickly and efficiently with each other. Most interactions with government require paper. Worse, most governments have no clear strategy for taking advantage of the new technology;

    —  A variety of financial and other regulations have yet to catch up to the new realities of the new economy. Stock options are critical to holding together companies whose core asset is people; yet they are discouraged by many tax regimes. Financial regulations designed for an era of paper publishing make it hard to use the power of the Internet to create more information-rich and efficient markets, particularly for venture investments in small companies. And, to name just one more example, conflicting consumer protection regulations stunt the growth of truly European retail businesses.

  To sum up: we believe that the European economy is already in wild transformation, that change will create more and more widespread opportunity for all and that the community itself is the most efficient way of building the future.

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