AI and tax changes reshaping UK startup landscape: Lessons from a recent exit – London Business News | Londonlovesbusiness.com

Fresh from selling his field service management platform Klipboard to Kerridge Commercial Systems, entrepreneur Draven McConville shares insights on the changing landscape for UK startups and the twin challenges of policy shifts and technological disruption.

The shifting ground for UK startups

McConville, whose journey from homelessness to successful tech exit exemplifies entrepreneurial resilience, warns that recent policy changes could fundamentally alter the UK’s startup ecosystem. His concerns center on how inheritance tax changes might impact the availability of patient capital – the kind that enabled Klipboard’s measured growth strategy.

“Patient capital from family offices was crucial to our success,” McConville explains. “The autumn budget’s inheritance tax changes could reduce this vital funding source for the next generation of founders. When you combine increased tax burdens with rapid technological change, you risk pushing innovative businesses to more competitive markets.”

AI’s impact on development economics

More immediately, McConville highlights how artificial intelligence is transforming software development economics. At Klipboard, the implementation of GitHub Copilot led to dramatic productivity gains. “Tasks that previously took days were being completed in hours,” he notes. “This isn’t just about efficiency – it’s about the democratization of software development.”

For founders, this transformation presents both opportunities and challenges:

1. Lower technical barriers: AI-assisted development is reducing the technical complexity of building software
2. Increased competition: As development becomes easier, differentiation through pure technical capability diminishes
3. Shifting value propositions: The focus moves from technical features to industry knowledge and customer relationships

Strategic implications for founders

McConville suggests founders need to adapt their strategies accordingly:

“We’re entering an era where technical barriers are falling rapidly. Success will depend less on your ability to build features and more on your understanding of customer needs and market dynamics.”

His advice for current and aspiring founders:

• Focus on building deep industry expertise
• Invest in customer relationships early
• Consider how AI tools can accelerate your development cycle
• Look for patient capital that aligns with your growth strategy
• Build strong fundamentals rather than chasing rapid growth

Policy environment matters

While optimistic about Britain’s entrepreneurial talent, McConville emphasizes the importance of supportive policy. “The UK has incredible innovation potential, but we need policies that encourage long-term investment and support technological adoption.”

For founders navigating this changing landscape, he suggests staying informed about both policy changes and technological developments. “Understanding how these factors interact is crucial for strategic planning,” he advises. “The companies that thrive will be those that can adapt to both technological opportunities and policy challenges.”