Saul Klein: capital is a commodity, and Europe is quietly building the New Palo Alto
Key points
Key takeaways from New Economies podcast interview with Phoenix Court co-founder Saul Klein (August 2026):
Capital is a commodity. Klein argues that with roughly 20,000 VCs worldwide competing on money alone, "most investors are either useless or actively value-destroying" — a fund whose pitch is simply "we have money" stands in a line of 20,000 saying the same thing.
The real value-add is a contract, not capital. He ranks what a firm can offer a founder: first, access to a customer or purchase order (non-dilutive revenue); then the right talent; then broader capital-formation options (grants, credit, contract financing) that most investors and founders don't even know exist.
"Peak Silicon Valley." Klein contends the Valley's 60-year narrative dominance is not over but has peaked, and that after the US and China the UK is the third-largest innovation economy — home to four of the world's top 10 universities and, per capita, the "gold medal for global innovation."
London as "New Palo Alto." He frames the London–Oxford–Cambridge–Paris cluster (a five-hour train ride) as the world's second-biggest innovation hub after the Bay Area, citing the densest "AI square mile" on the planet and every major American fund now on the ground.
Don't blindly go west. Klein calls it a "catastrophic error" for European founders to reflexively make the US their second market — usually a red ocean — arguing domestic and neighbouring European markets (each treated distinctly, not as one bloc) are larger and more profitable than founders assume.
LoveFilm and Skype. Reflecting on his operating years, Klein recounts LoveFilm reaching over £100m revenue and ~£10–20m profit before its Amazon sale, and Skype scaling from zero to $200m in SkypeOut revenue and 20 to 500 staff within roughly 12 months, driven almost entirely by product-led network effects.
Ownership as stewardship. Phoenix Court is structured as a limited company, not an LLP, distributing 10% of profits and carry across every employee "from front of house to senior" plus its foundation — and this year moved to make the foundation its largest shareholder at ~30%, with the team second.
Backing missionaries over mercenaries. Klein says the best founders solve problems that matter, pointing to portfolio bets such as photonics diagnostics firm Spore.Bio and 17-year-old-founded Comined, and to Phoenix Court's ~700 European "thoroughbred" companies that reached $100m+ revenue.
Read more: Phoenix Court · New Economies
