If by "viable long-term businesses" you mean ordinary slow-growing ones, people already do start lots of those in the UK.

But if you're talking about startups, meaning super fast growing companies like Google, Facebook, etc, what you seem to be claiming implicitly here is that there is a way for the UK to become like Silicon Valley in the sense of becoming a place where such companies are started, without also acquiring other qualities of Silicon Valley that you seem to dislike, like early acquisitions.

That seems pretty unlikely. Any other city that evolves into a big startup hub will have its own personality to some extent (e.g. NYC might be more focused on retail), but it seems unlikely that a new startup hub would be structurally different.

The trouble so many have with the Valley isn't early acquisitions per se, it's that so many companies are basically fake. As you yourself explain, in "Hiring is Obsolete", many companies wind up being something the founders do to prove their worth as big company employees, rather than something that might someday make money. A huge fraction of acquisitions are shut down afterwards - pretty conclusive proof the "company" (the software, product, business model and sales channels) has negligible value.

Of course, as you've also pointed out, such "HR exits" are a small fraction of your and other VCs' returns. However, if they predominate numerically - if 80%, say, of YC companies are "acquihired" - this will inevitably affect the character of both YC and its applicants, making it more similar to just another recruiting agency. When our brains assess the character of a place, they weight by "number of people I've talked to", not "market value at exit".

Actually very few startups are fake. Companies look fake in retrospect if they make something that flops and then get HR acquired, but very few founders I encounter are deliberately aiming for that path.

What I suggested in "Hiring is Obsolete" is not that founders build something random to get the attention of acquirers, but that they build the product the acquirer should have built. I'm advocating founders aim for product acquisitions, not HR acquisitions.

And no proportion of HR acquisitions would be enough to affect the character of YC. Not only are we not interested intellectually in funding companies that fail, we probably net lose money on them.

I'm afraid I'm not 100% convinced that Google and Facebook are great examples of these sorts of startups. Google was certainly disruptive to the established search industry at the time, which was drowning in poor results and nested portals. But it took years to take over and did so by being clearly better than everything else and sustaining that. FB was locked down to academia for years and even then played second fiddle to myspace as it grew almost in the background. Neither of these were acquired early (AFAIK).

I'm not suggesting there's a way for the UK to become like SV without early aquisitions. I'm not sure that I see the value proposition in the UK growing that sort of scene at all.

You can put this down to cynicism on my part. You can put this down to the British attitude to business. Or just to short sightedness. I'm not going to doubt your investment acumen or experience in this space, I certainly have nothing to compare to that and you clearly have the knowledge to make money out of what you do. And we could argue about what constitutes utility or value until the cows come home. But I'd still rather see tech firms establish themselves traditionally in silicon glen or silicon fen than I would see people get caught up in the hype cycle of silicon roundabout.

You're certainly correct in that neither Facebook or Google were acquired and it's not the cash from smaller acquisitions which make the real jobs and the real revenues.

However it was the fast sale of Paypal which put enough money in Peter Thiel's pocket to put $500k straight into a young and green Mark Zuckerberg's pocket. It was also the acquisition of Granite Systems after only a year which put $132M in Andy Bechtolsheim's pocket such that he was happy to write a $100k cheque to the Google founders on his doorstep.

Acquisitions are like occasional rainfall in deserts. It may take plants which are focussed on arid survival to make it and you need to be a tough survivor. Without the occasional life-bringing rainfall though everything dies.

There is a growing number of high quality entrepreneurs and engineers starting to bed in in London (and the real ones are not the noisy ones you read about in the UK press) and given the right conditions they can create some substantial, revenue generating companies.

This is a pretty special opportunity. For what is comparatively very little funding indeed, there is the chance to get the brilliant engineers who would otherwise go into banks and getting the money that would otherwise go into property and creating some really interesting high quality new companies and job-creators.

While I think the odds are probably stacked against it happening, one essential ingredient either way is some acquisitions. Bring enough of those and the giants will follow.

"viable long-term businesses" might mean ones that don't change hands at values based on increasingly speculative multiples. Can't a tech scene without a casino-like investment atmosphere succeed?