Speaking on the radio show, Alphabet's current executive chairman said that the country had nothing to stop itself from building "hundred billion pound companies."
"Britain has every aspect that it needs to build billion pound, ten billion pound, hundred billion pound companies. You have the right regulatory environment."
"You've got the right role within the (European) continent. (Just) look at the e-commerce plays and service plays that are now happening in London."
While Schmidt believes the U.K. can excel, he admitted there is a "widely discussed" view that British entrepreneurs often sell up earlier than U.S. businessmen. If someone has a "strong (growing) franchise," it's most likely better to wait before selling, he added.
For anyone looking to create a lucrative small start-up now, the "only thing that matters is the product quality," Schmidt said.