7-15-13

Berlin Startup Girl in the Startup Nation: Venture Capital and Gas Masks

Berlin Startup Girl

Berlin Startup Girl

In a single afternoon, I went from meeting with a Tech Crunch Disrupt finalist to learn how they raised a seven-figure sum from VCs to jotting down the hotline number for ordering gas masks to be delivered to your door, in case chemical weapons from Syria spilled over. Welcome to Israel, the World’s #2 startup ecosystem, which I toured in June with Bizrael, a program to introduce aspiring entrepreneurs to the Israeli high-tech revolution. I wanted to see for myself the reason that tiny Israel, of all places, is by far the closest contender to Silicon Valley. What did they have that Berlin (#15 in the startup ecosystem) lacked?  And with all of the resources offered to immigrant entrepreneurs, should I consider Israel as an option?

What makes Israel the Startup Nation?

Intel microchips, cellphone camera technology, drip irrigation systems, the swallow-able camera pill, and cherry tomatoes (cherry tomatoes, people!) – all of these products were invented in Israel. What else? If you don’t mind apocalyptic undertones, check out this video.

My question was this: Why Israel?  Why is Israel’s most talked about acquisition Google’s purchase of Waze for one billion dollars, while Berlin’s most talked-about deal is GetYourGuide acquiring Gidsy for an undisclosed, presumably much smaller, sum?

99 Problems, but Funding Ain’t One

Startups in Israel have healthy capital through the startup lifecycle. Check out these stats:

  • In 2012, 575 Israeli startups raised money from investors, both local and foreign. Of these, 157 were seed-stage companies.
  • The total dollar amount raised was $1.92B.
  • VC-backed deals (i.e. deals in which at least one VC fund participated) amounted to $1.37B, Of these, Israeli VC funds contributed around $516M.

And Berlin?

  • In 2012, VC investment in Germany was 252 million euros, with 133 million going to Berlin.

There is significantly less investment in Berlin, and also a significant funding gap before and after product market fit. 

Military Minds

Say what you will about the Israeli Defense Force, but holy scheisse, they teach people to code. High tech training, coupled with team formation, gives Israel a strong advantage.  36% of high-tech entrepreneurs in Israel served in one of the IDF technological units, including the founder of Waze.  29% of high-tech workers were also originally trained in these units.

High Tech

Not to get too scientific on y’all, but check out these startup maps of Israel vs. Berlin with a breakdown by industry. By the way, these startups maps were created by a current IDF soldier and all around amazing guy, Ben Lang.

Here is one example of the different startup industries: Life Sciences is not a category in Berlin, and only three startups in the health care category appear on the map. In Israel, there are 49 Bio and Medtech startups listed, which makes sense since Israeli Life Sciences companies raised the most money in 2012 – a total of $497M.

Selling It

I do not believe that better pitches is the secret ingredient that make Israeli a powerhouse, but after watching the Betahaus Global Pitches in Berlin last weekend, I think it is worth mentioning the difference in pitch techniques. Here is the scenario: You pour your heart into your startup, into your pitch, and when you finish a judge asks you:

1. A Stupid Question

2. A Condescending Question

3. A Valid Question You Can’t Answer

In Europe, the presenter will look embarrassed and answer politely, often without providing any additional information. In Israel (please note that the founders were pitching to our group, not to funders) the founders turned the tables. They made the questioner feel ridiculous for asking, or doubting their idea, restated that their startup was one of the best in the world, and that there is NO WAY it will fail.

Cool Stuff Happening in Israel

Our 15-day itinerary was packed. We visited consultants, VCs, industrial parks, universities, and even a pharmaceutical company and a desalination plant. Here are the top startups and organizations that are worth checking out:

  • Jerusalem Tech Park and Glide

While it doesn’t quite have the hype of Factory, Jerusalem Tech Park is pretty incredible – 15 acres of offices and green space that houses hi-tech companies including Glide, a video messenger that allows you to send and receive short video messages that can be seen live or later.

 If you are a Jew looking to build your startup, you must reach out to David Goldberger or Jonni Niemann. Upside Israel provides full business development, cross-marketing and funding combined with relocation services.

Their marketing material doesn’t do them justice, but these guys are worth getting to know. They created an interactive game that is all about collaboration and the new entrepreneur. And they don’t just talk the talk. You’ll be seeing this group in Berlin in no time.

Visiting Israel? Check out this awesome coworking space in the heart of Jerusalem. It is just like Betahaus, but with access to VC.

Yet another global innovation platform connecting startups to investors, but these guys have serious partners and sponsors. Berliners, take note, as they are expanding their presence in Europe.

Israel: The Ultimate Dichotomy and Why I’ll Be Staying In Berlin

Israel, and Jerusalem in particular, is an insane dichotomy of high-tech powerhouse and backwoods ideals.  For instance, a mere ten-minute stroll from state-of-the-art Jerusalem Startup Hub will bring you to Mea Shearim, the ultra-Orthodox neighborhood. This is an entire part of the population that actively rejects technology. They have kosher certified cell phones that only allow calls, and block internet, messaging, and video capabilities, because G-D forbid sexting may occur.

Or there is the whole deal with kosher wine. Starting after the grapes are picked, for wine to be kosher, it must be produced, packaged and poured by Sabbath observant Jews. Even if the wine is made by Jews, if a non-Jewish waitress pours your glass at a restaurant the wine is no longer kosher. So how do you get around this? By BOILING the wine. Seriously.

I loved Israel and its intensity. Without a doubt, the country lives up to its Startup Nation reputation. But, after three weeks, I was ready to board my flight back to Berlin, with its lack of international VC capital; where the only piece of protection I should invest in is not a gas mask, but a bike helmet; and where my riesling does not need to be boiled before being served by a shiksa waitress.

 

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Filed Under: Israel
6-28-13

UberB2B – Forcing Interaction Since 2013

Yesterday I wrote about how hard networking is in Berlin and that collaboration can be difficult to redefine, but it turns out with the right moderators and environment it is possible.

The organizers of UberB2B, a brand new casual conference for B2B businesses in Berlin, must understand this conference networking conundrum, because they employed tactics that I will refer to as ‘forced interaction’ throughout the day.  And you know what? It worked.

During the first session, a facilitator divided the group into teams of four. Each team was instructed to write down the answers to four questions, write a joke, turn the paper into a paper airplane, and send it flying to the far side of the stage. The first team to land their plane on the stage, with the most correct answers, won free drinks at the after party. Everyone was engaged, attendees let down their guard, and not only was it fun, but team members created instant bonds that lasted throughout the day.

The second session was called, ‘I Collaborate My Way To Success’, and the speakers were Alex Farcet from Startup Bootcamp; Dr. Torsten Oelke from Smart Mobile Factory; Alex Saric from Ariba; and Felix Swoboda of Mobile Event Guide. The lecture was interesting, but what happened after the Q&A period was a novelty. Moderator Dr. Katja Nettesheim made all of the attendees pair up with the closest stranger, explain our business, and come up with three potential ways that we could collaborate.  My partner was the founder of an intriguing health-related startup and he was looking for a PR freelancer.  Bingo. UberB2B paid for itself within an hour.

There were also some misses, like the workshop ‘I Can Flirt At the Office, Without Drama’. The ‘flirt coaches’ were sweet kids, but had clearly never worked in a professional environment.  Their advice was often off-color (Always be yourself! Flirting is harmless!), and I was tempted to share my own flirting in the office story which ends with the resignation of the Chair of the Board of Directors. There was yet more ‘forced interaction’, especially when we partnered up, and one partner was told to speak for a minute straight, about any topic, with no feedback from the other partner.  There is camaraderie in awkwardness.

I came away with two potential clients, a handful of Linkedin connections, and a few individuals I might actually meet for beers, all people who had been my partners throughout the day. Startup conferences usually focus more on industry trends, or how to find investors, but UberB2B with its emphasis on connection, truly makes it a new standout in the Berlin conference scene.

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Filed Under: Networking, UberB2B
6-27-13

Croissants and Awkward Glances: A Tale of Networking in Berlin

Networking in Berlin is painful. I’m talking about old-fashioned face-to-face interaction, not reaching out with a click of a button on LinkedIn or Xing.

As a native Californian, I come from one end of the personal networking spectrum.  I knew that it was time to leave San Francisco when I could no longer find a table at my neighborhood café because it was packed full of twenty-year-olds in entrepreneur approved hoodies, surrounded by multiple Apple products and munching on vegan donuts, keen to tell everyone within a five-table radius about their epic new photo-sharing startup.

Here, in Berlin, I’ve reached the other extreme.  Shortly after I arrived, I attended Startup Camp and Next Berlin, eager to network and discover new clients for my startup-oriented marketing firm. The mornings were the toughest. I would approach a fellow attendee near the obligatory croissant table and, after a polite introduction, inquire about their company. The typical response is a vague answer – “I have a B2B startup” – followed by an awkward pause, and a glance down at the nearest handy device. It has reached the point that I do not even attempt to network during the actual conference. Instead, I wait until the after-party, when attendees loosen up after knocking back a few Tannenzäpfle.

At first, I put it down to modesty. Over time, I have realized that Germans have a different cultural approach to the idea of ‘collaboration’. The dictionary gives two definitions:

  1. to work, one with another; cooperate, as on a literary work: They collaborated on an epic new piece of software that led to a monster IPO.
  1. to cooperate, usually willingly, with an enemy nation, especially when they are occupying one’s country: He collaborated with the enemy during World War II.

In the early days of Silicon Valley, openness fed innovation. Gradually, the cooperative spirit turned into cutthroat competition. However, the new generation of wannabe entrepreneurs in San Francisco drank the kombucha of openness. Californians are just dying to tell anyone who will listen about their startup idea, but the Germans are cautiously reserved, fearful that someone may take their ideas.

I am not advocating that Berliners become more like San Franciscans. I like this city, and the profoundly unpretentious tech scene, so much better. But until collaboration is seen as a positive part of business, Berliners are missing out.

Successful entrepreneurs not only live and breathe their product; they share it. Their excitement is infectious and it attracts potential collaborators. Every time you go to a conference and look down at your iPad, rather than talking to the person standing next to you, you are missing an opportunity.

 

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Filed Under: Rants
5-1-13

NEXT Berlin – Here be Dragons

“Failure was not an option – the fate of the world is at your hands.”

That was Harper Reed,  CTO of the successful Obama reelection campaign, at the NEXT Berlin Conference on April 23, 2013 at the Berliner Congress Center.  The conference was packed with dynamic speakers and offered amazing networking opportunities.  The crowd, 30% of whom came from outside of Germany, chatted and even danced during the Tuesday night reception (after watching Bayer Munich triumph over Barcelona). I’ve been to handful of networking events since I arrived in Berlin, and this was by far the most productive.  There were a lot of decision makers present, and they were eager to hire new employees and freelancers.

Thanks to NEXT and the Berlin Geekettes for the invitation to attend!

The highlight of the conference, for me, was Harper Reed. He was funny, engaging, and his presentation was packed with interesting take-aways.  Reed’s earlier venture, Threadless, pioneered the art of crowdsourcing. After realizing that he had accomplished his goals there, Harper went on a vision quest, complete with spirit animals, until the Obama team came knocking.

The campaign knew that leveraging technology and big data was key to winning in 2012, and hired forty engineers and one hundred and twenty technical staff compared to the four engineers and twenty tech staffers that they had in 2008.

They built a data platform called Narwhal, then deployed two hundred products including mobile and social apps. The focus was on user experience through analyzing analytics.  One entire month was spent testing failure.  Everything that could possibly go wrong was tested. Other key points of Reed’s talk included how to build a great team starts by pruning; you can’t be afraid to fire people. One of my favorite quotes was, “When hiring you have to sell yourself and I’m not talking about free fritos or whatever, or foosball, or any bullshit like that, but we are trying to solve the world’s problem and here is how you can help us.”

You can check out Harper’s entire presentation here.

 

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Filed Under: NEXT BERLIN
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