Shownotes
In 1990, while working at CERN, Tim Berners-Lee proposed and developed what would become one of the most influential spinouts in history: the World Wide Web. The Web was opened to the public in 1991, and in 1993 CERN released the software into the public domain - enabling its rapid global spread and laying the foundation for today’s modern Internet.
In Episode 66 of The Difference Engine tech strategy podcast, Paul Maher and I explore a new report that shows European spinouts are emerging as a deep-tech powerhouse. Since 2019, they’ve accounted for 40% of all new startups in these fields - an 80% increase compared with the previous decade. But the US is still using M&A to capture most of the value from European innovation.
So the question is: how does Europe manage this momentum and build future global category leaders?
Also in this episode: we unpack the UK’s contentious Digital ID debate and explore the signs that Salesforce is entering the twilight of its era of uncontested category dominance.
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Transcripts
Okay. What's coming up today? We'll be unpacking digital IDs under they an economic engine or a threat to freedom,
[: [:Round are European spin outs dead or very much alive?
the European spin outs report: [:Uh, absolutely. Spin outs don't always get the spotlight. Um, we've long suspected, they're one of the most powerful innovation mechanisms we have here in Europe. Uh, I can't help thinking about Tim Burners, Lee's spin out from cern, um, which gave us the worldwide web. And this report put together by deal room with Atlantic.
Mito technology, Cambridge Innovation Capital, Oxford Science Enterprises, and Northern Gritstone, love that name really qual, really quantifies the impact of those spin outs.
[: cience startups founded since: [: [: [:I'm glad to say three of the top five universities for spin nets are British, right? And,
[: [: [: [: [: [: [: now, ETH Zurich and EPFL are [: [:Then it's Denmark, some great innovation coming out. Denmark, um, Sweden, we know about the uk, Finland, Belgium, all close behind. All very good. Any more good news? Well,
[: reached its highest level. In: Also,:Amongst them, it was ETH, Oxford, EPFL, and the University of Dubin. But as we all love to talk about the superior value generated by category leaders, US corporates and funds acquired most of the spinouts value nearly $24 billion since
[:Looking at the data, it seems so late. Stage capital is still Europe's Achilles heel. Nearly 50% of growth funding is coming from outside Europe, mainly to date, and I think this might change soon to date. You've guessed it from the us.
[:That is a profound structural risk. As I said, that particular issue we aren't gonna solve overnight. Um, but it's worthwhile thinking about. In what segments is the action actually happening?
[: Um, [:It's the who's who or Frontier Tech in Europe. Okay.
[: [: what we like in our reports, [:Would love to help with the, uh, category definition there. Um, more late stage capital to keep scale-ups in Europe. No shit Sherlock. Um, yeah. Uh, better incentives, uh, for researchers so that they see entrepreneurship as a viable career option, um, alongside just being published in academic journals. In other words, if Europe wants to turn world-class science into world-class companies, these are the levers.
[: [: [: [: uild the rest of the vehicle.[:So one of the things that has triggered me recently is, um. This debate we're having, uh, specifically in the UK about digital id.
[:Or you believe it's a fork in the road for personal liberty and a, and a door opener for the vice-like grip on our privacy, probably enabled by foreign firms. So I think we
[: here was that. It's somehow, [:That I can buy. Uh, national security is another claim. And national security in terms of reduced criminality is, I guess somewhere in the middle here. Most countries in Europe, you have to carry some sort of id, uh, and produce it on demand. Bizarrely, in the uk you don't have to, but if you don't, you'll rapidly be taking a trip to a police station.
[:Old people, you know, who are pretty digitally challenged. Uh, those people who like to do everything in cash, I want them wonder why they're against it. And of course, criminals.
[:Some of those people may be criminals. There's maybe an intersection there. Uh, people who love and prize cash, who just want the folding stuff when they're going down to the, to the, uh, post office or to the pub or wherever they're going, holding lots of cash that's very easily stolen. But, and the intersection, maybe they are the intersection with.
people who knows, and maybe [: [:So the people are spreading their entire lives all over. Facebook and TikTok have a thousand other absolutely. Media channels. How many times
[:Um, you know, where they've been, who they've been close to, what age they are, what their family looks like, what they like, what their political preferences are. I mean, it's, it's madness to think that stopping a digital id. Card, and that's what people seem to, uh, be, um, most egregiously, uh, offended by a card, uh, when they've actually got.
than they could ever tell a [: [:Now that. Strikes me as, as some form of extreme identification. And
[: [: [:Now, well, what did Nick Clegg go on to do? He went to join Facebook, which is the number one doxa and collector or personal data in the world.
[: [:No, that's, none of that's heading back. Um, yeah. Also, you know, politicians famously inept with our privacy. Um, we all know the widely rumored, uh. You know, let's just call it out what it is. Probably true request by the UK government recently to backdoor Apple messaging. Uh, and Apple had to withdraw a privacy, uh, function in their cloud just because the threat was they would be closed down.
So. You know, I feel as though politicians are, on the one hand having grown up conversations with big tech and treating the rest of us like adults, and it's not really helping us to have a proper debate about digital
[:You know, in the, in the same way as there is a big tech agenda around Army, um, you know, they are acting, um, as they should, as true capitalist companies. They're acting in their own and their shareholders' interests. But the issue is, is that in our interest as citizens,
[:So, Tony Blair tried to introduce this. Tony Blair has the Tony Blair Foundation, which is gonna bring world peace to Gaza, et cetera. We're led to believe, um, who is a massive donator to Tony Blair's Foundation, do we think? Oh, that would be Larry Ellison, wouldn't it? That would be Larry Ellison, who's, um, you know, owns a lot of TikTok, has a lot of government contracts, uh, is a.
though it's been denied, uh, [:He's related to Tony bla. So you can see how, uh, conspiracy theory, um, could be constructed. Although, um, I'm here to tell you, I don't think neither you or I are against digital IDs per se, right? There's a lot to be said for it. The most serious critique I've heard, or, or the one that seems to be getting the most, I wouldn't call it serious, I wouldn't dignify it with serious, but is that some people will be excluded because they're not digitally aware because they, they're not savvy.
iece of of evidence and that [:Same as all costs. That's
[:You know, based on digital id.
[: ng with children, et cetera. [:Two systems didn't speak to each other. They don't have a common reference point. Just to sum this up, then, where do we land on digital ID and this debate, which sadly seems to be rumbling on. No, I
[: [: [:It's the same thing in a nation as it would be with a company.
[: [: [: [: ave you been watching what's [: % between: [:There's something going awry and clearly Salesforce hasn't forgotten how to sell. So selling machine and whatever else you think about them, they are a process machine, arguably the most process driven organization ever built, although rather cruelly, we have previously referred to them as an events company.
With a software firm
[: [:Um, you know, it's classic late category problem when the category is changing under your feet. Um. You know, you've dominated for over a decade. You start thinking the system underneath is, is unbreakable. And just when you think about it, the tech industry's beautiful at this. Things move around. There's a change in the tectonic plates, markets move, customers shift.
And that's clearly what's happened here. And suddenly that amazing sales engine that used to run on rails. Starts to splutter.
[:Then the CEO steps back in and realizes that the underlying system. As we would say from the north, wouldn't we pull was all mouth and no trousers. I think we'd call that, um, fur coat and no knickers, but okay. We, we might, I was, I was trying to be clean. So you know what, you see tools everywhere, lots of activity.
The consistency of approach that enables the constant adjustment to emerging trends is non-existent.
[: of a Salesforce product that [:It's just drifting to the speed at which AI is eating. Its lunch and all you do in that case, if you keep doing the same thing. Is accelerate the wobble.
[:They forget that sales process that got them so far. So what you increasingly see is, is no clearly defined stages. S no qualification framework. Pipeline reviews that are just status updates, um, instead of the, the coaching opportunity that they really should be?
[:I mean, I think what's happening in, uh, economics is, um, you know, both here in, in Europe and in the states, uh, people are pre pressing pause instead of just, uh, reordering what they had. Uh, and that's largely because of the uncertainty in economic markets, but also because AI is. Causing them to rethink their processes and at least understand that there is a, a way that they might want to move forward, which is more AI led and less, shall we say, CRM led.
Um, but the point here is that ultimately you, there's no point in automating a sales process, which is fundamentally changed because of the market, uh, or because you've just topped it out and maxed out the efficiency of the sales process. Tools only amplify. Systems, they don't replace them, and that seems to be what's going on for Salesforce.
So when a category leader starts leaning too hard on tooling, instead of looking at the fundamentals of the market, that's usually a signal that they're nearing the end of their domination.
[:Their problem isn't automation. It's erosion of the system that made them dominant.
[:Uh, and process matters a lot. When things are very samey and you need repeatable processes and structure matters more than automation. If you're in a structured market, when things change, you need to flex. Uh, and I don't think that's what we're seeing, although you might argue blaming it on AI allows this company to pivot to where it needs to be.
The
[:But make no difference. Now that's really losing the plot.
tact details are in the show [:
