All things hot in Silicon Allee
For the record, I was totally misquoted about the language part. I said that you don’t need German to work in the startup scene, but now that I had committed to Berlin, and my visa has been secured, I think it is important to learn the language. [Read more…]
And I’m back! After a two month stint in California and a jaunt to Nicaragua, I have returned, and Berlin Startup Girl lives on.
Last night, for my first event in 2014, I headed to Hy Summit.
As many of you know, one of my favorite pastimes is complaining about events in Germany. The organizers typically mean well, but the small details are lacking. Like, who has a tech event and doesn’t offer wifi? Or, an event in November without a coat check? Networking here is awkward enough without having to hold onto your jacket, scarf, gloves, plus an ipad.
So when I walked into Hy Summit yesterday, I had a moment of “Wait, what happened to Berlin in the last three months?” I’d thought of Hy as one step above a Meetup, but they proved me dead wrong. They stepped up their production value, and offered a coat check, wifi, friendly and efficient check-in people, the right amount of seats, and GET THIS headsets for the English speakers so the event could be translated.
It did not feel like a German event until the VC sitting next to me complained that they were not running on time, probably due to the government official who was from Bavaria, which may have correlated to his tardiness or was just an additional anecdote. To my neighbor’s credit, the event did start thirty minutes behind schedule.
Hy Summit kicked off with a surprisingly un-cheesy video about the future of innovation, featuring music by Moderat. It did not however, include any women, as noted by WomenShiftDigital. On that note, the women in the crowd (not counting staff or waitresses) probably accounted for 5% of the audience. Hy did include Anna Alex of Outfittery (which just announced in February a €13m funding round led by US-based VC Highland Capital Partners) in the panel (w)hy Berlin?!.
Next up was the aforementioned Bavarian, Alexander Dobrindt, the current Federal Minister of Transport and Digital Infrastructure, but since my translation headset did not work, I spent the ten minute talk noting the other people who were listening via headsets – I counted less than ten.
Ijad Madisch, the co-founder of ResearchGate, turned out to be the most engaging German presenter I’ve ever seen. Yes, his company is one of the most interesting out there as it is solving a real problem, and Bill Gates is an investor. But Ijad’s story of how he started the company despite being advised not to, and why he did it in Germany, was inspiring. The presentation also featured photos of fingers grafted onto mice, stories of Russians solving mathematical problems, and lots of references to hair loss. Ijad is so unbelievably charming someone needs to make him the poster child of German startups.
The (w)hy! Berlin? panel was made up of Ciaran O’Leary of Earlybird, Anna Alex of Outfittery, and Lucas von Cranach of THE Football App. It kicked off with Hans, the moderator, asking about the good, then the bad, of Berlin. Ciaran’s point really stuck – Berlin is the only city on this side of world that is inspiring, English-speaking, and focused on Entrepreneurship. Talent was mentioned as another plus. When they discussed the bad part of Berlin, Anna shared what was, by far, my favorite quote of the evening: “We knew it was a waste of time to talk to German investors.” Way to call it like it is! There isn’t enough capital here, the Germans are too risk averse, companies sell too early, and raising money is much more challenging than it should be.
Peter Thiel, while clearly a brilliant entrepreneur and investor, is not a natural public speaker. He gave a very high-level, big-picture talk without any actionable insights. He started by discussing forms of progress and moved on to important questions to ask when starting out, which include: What is valuable? What can I do? What are others not doing? The audience was then invited to ask two questions, and the first person picked asked the same question everyone in Berlin asks at these events: What did Peter Thiel think of the Berlin ecosystem? To which he replied that Berlin is missing one extraordinarily big success, which is right on. For the Berlin ecosystem to thrive, investors and entrepreneurs are going to have to take more risks.
The event blew me away. Not only was the organization flawless (Hans, Aydo – well done!) but it showcased a new, more grown-up Berlin. The previous events I’ve attended in Berlin typically fell into one of two categories: (1) Berlin is AMAZING – we are on the path to be the next Silicon Valley! or (2) We aren’t growing fast enough, how can we be the next Silicon Valley?
The Hy Summit showed a more mature side of Berlin, comfortable in our position in the world. In 2013, everyone was talking about hype. So far this year, we’ve seen real progress, especially in terms of funding. Since January, Delivery Hero announced a whopping $88m, Outfittery raised a €13m funding round, TVSMILES closed a $7 million Series-A funding round, and a handful of other companies including Clue, Sensorberg, and Mbrace have raised sizeable seed rounds. The startup system is growing and, while there is plenty that needs to change, especially when it comes to raising funds, for the first time everyone seems realistic about Berlin opportunities.
With that, the networking part of the evening commenced. Because this is Berlin, and not the US, I walked up to Peter Thiel and asked to take a selfie because I am American and have no shame.
So here it is. Ola and I chillin’ with P’ Thizzle (caption provided by Johanna of Frestyl).
A few months ago a former Berliner (and briefly co-worker) wrote a piece in The Guardian: Berlin and the tech startup scene – 10 things to know before making the move.
Like Lauren, I have also lived in Berlin for eight months. I’ve been through unfortunately many more that two boyfriends and one flat, but have been offered and kept jobs with five clients. While I can’t comment on the London scene, which Lauren occasionally uses as a comparison, I am a San Franciscan who has spent the last two years working in international startup ecosystems. I’ve been dwelling on this article since its October debut (proof that some Berliners have real jobs) and figured it was time to throw in my two cents.
The Berlin Scene is a Total Bubble
Berlin will be the next Silicon Valley. Berlin is a total bubble. Depending on the weather, or the mood, Berlin is either on the peak of success or headed toward disaster. Look, Berlin is not going to be the next Silicon Valley, but neither is London, or Istanbul, or even New York. Check out Berlin-based VC, Ciaran O’Leary’s awesome post about the “my tech hub is better than yours” attitude.
Berlin is young. We are ten years behind London, thirty years behind San Francisco, but big things are starting to happen. Issues that once held Berlin back are changing. The German VC’s are too conservative? No prob, the Americans are coming. 6Wunderkinder recently announced $19m in Series B funding round led by US-based firm Sequoia Capital. No talented developers? They will get here, especially when the money does. There are now firms like Expaway (disclosure – I do write for them) whose sole purpose is to bring talented international developers to Berlin.
Tiger Onesies
Lauren, you are right about this one. Awkward. We learn and move on.
Nobody Has A Real Job
True, but who in their right mind wants a 9 to 5 job anymore? In Berlin, this should not be a problem. And if you want something more, you may be able to find it, but it will take a lot more than working eight hours a day. Half of my friends have a “real job” at places like SoundCloud or Nokia and the other half are building their own companies from the ground up.
It is possible to fall down the party hole.
Berlin is mind-blowingly fun. But for every night I’ve had drinking Ratzeputz while bar hopping through Kreuzkolln until dawn, I’ve had 30 more going to bed at a semi-reasonable hour in order to wake up at 5am to write. I don’t think I’m the exception.
Everyone is Inward Looking
“Everyone living in it is very Berlin-centric. They talk about the city, they love it, they live and breathe it and they complain about it. When you live in a city this cool, it is bound to happen.” Think that is bad? Spend a week in the Marina District.
Getting Paid is a Luxury Not a Right
I can only speak from personal experience on this one, as I don’t have regular conversations about salary with my friends. After only really starting a company six months ago, I get paid more than enough to cover my expenses. While it is a fraction of what I made in San Francisco, my beautiful one bedroom apartment is one sixth of the cost of the warehouse I shared in SOMA. As more money pours into the ecosystem, wages, along with the cost of living, will rise.
Fail Culture Rules
Coming from the States, at first all this failure talk felt like overkill. Sure in San Francisco, we have Failcon, and everyone knows it is cool to fail. You get a pat on the back, you learned a lot and your next venture will go so much smoother. The concept of failure as a good thing isn’t a given in other countries, but it should be, even if you have to shove it down their throats.
When I was living in Istanbul doing marketing work for startups, the fear of failure was so strong that most of the entrepreneurs I met weren’t confident enough to build their own projects. If you only have one shot at success, why not pick a model that has already proven successful, like a Groupon spinoff. And we all know how well that worked. Berlin isn’t that much different that Istanbul in that respect, but it is the investors rather than the entrepreneurs that need to learn that one failure doesn’t predict future failure.
In the startup world you need to be fearless, and unless you are an American, that needs to be taught. So if more failure days lead to more innovation, bring them on.
Cafes and Bookstores
Yes, Lauren, most are candle lit with exposed brick. At least you aren’t paying $6 for toast and black coffee.
Nobody Speaks German
Gott sei Dank. Okay, okay, if you plan to live in a country for a certain amount of time you should learn the language, but in Berlin the fact that you don’t need to helps the startup scene. German is helpful, but it isn’t a prerequisite for finding a job or building a company here. Let’s look at Paris. Cool scene, if my French was good enough to converse at a business level you better believe I’d be living in the Marais begging for a job at TheFamily, but it’s not, so I stay in Berlin.
Your Circle of Friends Will Decrease
Sadly, true. Our city is a transient one. Many good friends have left, including several from the latest session of Startupbootcamp (where I worked briefly with Lauren). But these people are doing amazing things in Amsterdam, London, and back in the States. And as international entrepreneurs, we will stay in touch and cross paths again. Count on it.
The Streets Aren’t Paved With Gold
Unless you went to an elite university and are in finance (and Jesus, who wants that anyway?) the streets aren’t paved with gold. Berlin, like every city in the world is what you make of it. But after traveling to 30+ countries, and working in four of them in the last three years, I can say that Berlin has something special.
And my advice for all those looking to Berlin? It is truly the coolest city in the world right now. People will be talking about this time like they talk about Paris in the 20’s or Prague in the early 90’s. If you want to come to be an artist and fuck around, cool, but get here now because prices will go up soon enough. If you want to come and build a company, cool, but be prepared to work just as hard as you would in San Francisco. While the streets aren’t paved with gold, they are full of potential and rich with possibility.
Berlin Startup Girl in Paris
When I think of Paris, I think of making out with strangers, drinking wine from the bottle in the Place Des Vosges, and macaroons. Startup ecosystem in the same sentence as Paris never crossed my mind.
This changed last month, after I wrote about the Israeli startup scene with a link to the Startup Ecosystem Report. The comments I received were not about Israel, but Paris. People were outraged that Paris was ranked 11th while our beloved Berlin was in 15th place. How could this be? I decided to buy a last-minute ticket to Paris to check it out myself.
After spending four days talking to French investors, entrepreneurs and accelerators, Paris began to feel like brash Berlin’s elegant older brother. Berlin tosses you a beer in the Betahaus courtyard; Paris pulls out your chair and orders the most expensive bottle of Côtes du Rhône. The energy is more refined, but it is there, and so is the funding.
I kicked off my visit at Rude Baguette’s monthly Founders Event, hosted by the enthusiastic editor and former Californian Liam Boogar. We met again the following day at the Poissonniere Starbucks (yes, Starbucks in Paris) so I could pick his brain about the differences between Paris and the Valley, but never had the opportunity. Liam, seriously popular, had so many meetings back-to-back that the morning turned into informal office hours. American entrepreneurs, Bulgarian investors, and French techies circled in and out, a kind of Starbucks salon.
Several points were becoming clear: Paris doesn’t spend time on hype. Not one person at the monthly Rude Baguette’s Founder event tried to convince me that Paris is the place to be. Berliners may be dreamers, but Parisians are realists. The French entrepreneurs readily admitted that it is a bitch to build a company in France. Nobody attempted to sugarcoat the bureaucratic obstacles or the dismal tax situation.
At the same time, France has a solid technical infrastructure and some serious talent, with thousands of engineers coming out of top programs. They also have money. ISAI, Jaina Capital, and Kima Ventures – the most active angel investors in the world – will invest in one hundred startups this year. According to a report by venture capital firms DFJ Esprit and Go4Venture Advisers, based on data from about $1.8bn in venture deals over the first half of this year, France secured 22 percent of the total European venture capital, and the DACH countries (Germany, Austria and Switzerland) received about 19 percent. Financially, Paris is hot.
One of my favorite aspects of Berlin is the international diversity. Among my startup marketing clients are founders from Germany, Denmark, Ukraine and Italy, and we all communicate in English.
By comparison, the Parisian scene is overwhelmingly homegrown. About 80% of the entrepreneurs I met were French (almost half of which were hoping to move to the Valley). A remarkable number were bootstrapping and living with their families to get by since the cost of living is 42% higher in Paris than in Berlin.
President Hollande is trying to lure international talent with talks of a new entrepreneur visa for foreigners seeking to set up innovative start-ups in France, as long as they invest a “sufficient amount” of money, but the specifics, including how this program differs from the EU Blue Card is at this point unclear.
France is not known for being friendly to foreigners or businesses, especially where taxes are concerned. A certain French film star (My Father the Hero, anyone?) made international news when he bailed to Russia to avoid taxes.
Things are changing. Slowly. Earlier this year, President François Hollande announced ten pro business measures that would affect France’s startup scene. He introduced a graded scale for tax breaks on capital gains for entrepreneurs who bought start-ups: 65% if the company has been held at least eight years and 50% after two years. Progress, right? Experts say that Hollande’s plan would mean an effective tax rate of 60%, compared with 15% on long-term capital gains in the US.
After two days with French founders and American angels interested in France, I decided that France is where I will move after I build and sell my startup. The money that I would save on capital gains alone would pay for a chateau in Burgundy.
Then, I met TheFamily.
Maybe you have heard of Paris’s new accelerator TheFamily? They were recently featured in TechCrunch for raising ‘just under’ one million Euros from Index Ventures.
Alice Zagury, TheFamily’s co-founder and CEO, graciously invited me to their regular Thursday night dinner. The address was on a chic side street in the Marais, but I would have wandered all night if I had not run into Liam a block away. He escorted me to their unmarked blue door squeezed between trendy boutiques where, despite all inventory marked half off, it is still impossible to find a dress for less than four hundred euros.
I was buzzed into a courtyard and greeted by the svelte and elegant Sandrine, who gave me a tour of the apartment (whose former inhabitant was some kind of movie star) including the Barbie bathroom with pink walls and sparkly pink tiles. I was home.
TheFamily is different from all other accelerators that I have had the pleasure of getting to know. For 1% equity, TheFamily will provide what they call ‘education and unfair advantage’ including access to mentors, special workshops with catchy names like Les Barbares Attaquent! as well as networking opportunities. They are focused not only on money, but also on revamping the French ecosystem by way of government lobbying and collaborating with other incubators. Co-founder, Nicolas Colin (whom I did not meet) is the go-to-guy when it comes to anything policy related. He recently published a report commissioned by the French government on the tax system and the digital economy.
Each week, they organize a family dinner, an intimate affair with a featured guest and mind-blowingly delicious food prepared by co-founder Oussama Ammar. On the night I attended, the guest of honor was Tikhon Bernstam, San Franciscan bro and founder of Scribd and Parse (recently acquired by Facebook for 85 million).
Tikhon’s talk was followed by bottles of wine and more conversation, soon accompanied by Oussama’s roast chicken and a superb ratatouille. Luckily, I was seated next to the chef who, in addition to making the best meal I had in Paris, launched his first company at age twelve, and made me envious with his travel stories, a feat very few people have the power to do these days. In an earlier age of Paris, this group would have been talking revolution, or art, or existentialism. Today, they are growing companies and transforming the startup landscape. While the French government is stumbling around trying to figure out how to encourage startups and innovation, TheFamily is doing it, along with wine pairings.
And they have a castle. Let that one sink in.
The startup ecosystem report is suspect, but you already knew that. Any score that includes a Mindsetter Index (“how well the population of founders in a given ecosystem think like great entrepreneur”) cannot really be taken seriously. The fact is: Berlin and Paris are booming tech hubs and entrepreneurs would be lucky to live in either.
They feel different, but whether you are learning about customer development in a castle in Normandy, or on a beanbag in a warehouse near Checkpoint Charlie, the goal is the same: make money, disrupt the market, and change the world.
Yesterday I sat down with Stef and Roldano, the inspiring duo behind Startüberlin. We talked about my travels, my first marketing company: Battered Suitcases Marketing, and I even shared details about the new media company I co-founded that will be officially launched next week. Stay Tuned….
http://www.youtube.com/watch?v=r1dGTk_WD14
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