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Saul Klein, co-founder and Managing Partner of Phoenix Court, joins the podcast to make the case that the UK is quietly the third biggest innovation economy in the world after the US and China, why capital has become a commodity, and what real venture value-add looks like when every fund says “we have money.”
Saul also walks through building LoveFilm as a scrappy answer to Netflix, joining Skype during its 400,000-users-a-day growth spurt, and how he things about venture stewardship.
About Phoenix Court
Phoenix Court is the London-based home of LocalGlobe, Latitude, and Solar, backing entrepreneurs building global businesses from pre-seed through scale-up. Founded in 2015 by Saul and Robin Klein, the firm has helped back over 700 companies that have grown from seed to $100 million-plus in revenue, and LocalGlobe ranks as EMEA’s number one seed fund.
Watch Now: Saul Klein — Co-founder at Phoenix Court
Watch or listen now across YouTube, Apple Podcasts, Spotify, and X
Download the transcript 👇
Timestamps
(0:00) Meet Saul Klein
(2:21) Starting LoveFilm
(8:48) LoveFilm's Route to Market
(11:10) Building Skype
(17:30) Skype's Early Network Effects
(19:29) Is Europe Still a Great Place to Build?
(24:10) Which Are the Best Regions to Start?
(31:10) Hardest Challenges in Scaling in Europe
(35:26) How Should Founders Select Investors?
(43:47) VC Stewardship & Shared Ownership
(52:36) What Would Saul Build Tomorrow?
Our notes from this conversation
Capital is a commodity. Access to a contract is not.
With 20,000 VCs in the world, “we have money” isn’t a value proposition, it’s the line every fund uses. Saul’s actual differentiator: nondilutive revenue, a real purchase order or contract, then access to the right talent, then capital formation most founders don’t know exists. His analogy: 20,000 barber shops all shouting “I cut hair” until someone breaks the pattern.
Netflix’s real innovation wasn’t DVDs by mail. It was demand data.
LoveFilm’s (the company Saul founded) edge wasn’t logistics, it was the queue: people ranked 20-50 titles, giving the business live demand data that became leverage with studios. The company hit $100M+ revenue growing 30-40% a year, largely by powering DVD rental for Tesco, ITV, Odeon and MSN.
Skype grew 400,000 users a day, and Saul couldn’t spend a marketing budget.
Product-driven virality was adding users faster than paid acquisition could. In 12-18 months the team went from ~20-30 people to 500, and Skype’s revenue went from zero to $200 million.
Blindly chasing the US as market #2 is what Saul calls a catastrophic error.
Most investors are “sheep,” and following them west assumes the US is one easy market, it’s actually fifty fragmented jurisdictions and usually the toughest “red ocean” to enter second. Zoopla, a strong #2 to Rightmove in a market worth hundreds of millions, is his proof a well-chosen home market often beats the US by default.
Phoenix Court’s & venture stewardship.
Structured as a company, not an LLP, since year one, a rarity among ~20,000 global funds - Phoenix Court has always shared profit and carry with every employee, not just partners.
Links
Follow Ollie on X: https://x.com/ollieforsyth
Follow Saul on X: https://x.com/cape
Phoenix Court: https://www.phoenixcourt.vc
Our partner for today’s episode is Harmonic - the go-to startup database: https://harmonic.ai
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