I’ve been a part of five startup ecosystems: New York in the late 1990s, Silicon Valley in the early 2000s, Paris, London and now Berlin. All were at different stages in their evolution. For example, New York, at the time, had stalled – it’s clearly a lot better today. The Valley was going through a boom, and then a bust. And London is finally starting to achieve some of its promise.
These experiences tell me that the Startup Genome Report 2012’s assessment of Berlin as experiencing the “Hype” stage is correct. In other words, Berlin has great potential, but it’s still early days. As a community, it’s our job to help Berlin get to the next stage, to make sure we’ve got a solid foundation upon which to build a sustainable, profitable and transformative emerging technology ecosystem. Here’s some good news: there are things we can do right now.
The World Economic Forum produced the above chart, which outlines the classic characteristics of a thriving entrepreneurial ecosystem. On the whole, Berlin is doing well, but there are clearly areas in which we should invest for the mid to long term, even though we may only ourselves be here for the short term. That is to say, we owe it to the generation of entrepreneurs who will follow us. When I say the “next generation”, I mean those following us in three to five years.
So let’s talk about the few things that are currently missing from this fine city
- A world-class engineering school
- A mayor who is interested and invested in our sector
- A critical mass of investors for Series A and Series B financing rounds
- International companies, especially hyper-creative and dynamic ones, with offices here: think Etsy, Mozilla. We need more like this.
- Big exits with widespread wealth creation
- On the heels of those whopping exits, a few big companies churning out creative energy, shedding teams that go on to create new companies of their own
- A business-friendly regulatory environment, along with tax incentives for investors and for founders
Here are some specific actions we can all take
- Education: A tough one, since it’s the government’s responsibility to invest for the long term. But you’d be surprised by the influence of grassroots lobbying organisations on elected officials: why not establish an industry lobbying group, comprised of the most prominent investors, entrepreneurs and key players, with the sole purpose of lobbying local government for the creation of more technical education facilities? And how about an entrepreneurship program, and integrating it with the needs of the startup industry on both the business and engineering side? Universität Potsdam has a good public/private partnerships programme that could be emulated and improved upon.
- Let’s select a mayoral candidate. No, I’m serious. Mayoral elections don’t normally have massive turn-outs, but if there’s one thing I’ve learned about Berlin so far, it’s that the young entrepreneurs here are more than motivated and enthusiastic enough to get momentum going behind a political campaign. How fabulous would it be to get an angel investor or serial entrepreneur as an independent candidate in City Hall? Or find a way to hijack one of the parties on a state level?
- If you are a later-stage investor: We love that you visit, but, please, open an office here. If we can’t get you to settle (have we mentioned the quality of life and cheap housing prices?), visit more often, hold office hours at Soho House or somewhere central and let us know about it (ask me, I’ll help).
- If you are in economic development: Make it easy and financially attractive for high-growth companies to set up offices here. We need the expertise and talent they bring.
- If you are an advisory firm, investment bank, law or accounting firm: Teach seminars to startups on what they need to know now about structuring themselves in a manner that allows for growth and acquisition. This means tax laws, legal structures, and a mind towards exit, be it acquisition, being acquired, or an IPO. Such seminars aren’t bad for new business, either.
- If you have anything to do with the airline industry: Help us get more direct flights from New York, San Francisco and London’s City Airport. We need to make it convenient for the people we need to power the ecosystem to visit, to talk about us and to spend money and start companies.
- If you’ve built a business or a product, or are building one that is getting somewhat successful: Go to meetups, mentor, offer advice.
- If you are in government, have influence over those in government, or are in the legal profession: Lead the charge to help influence the regulatory environment, including business-friendly tax incentives, less red tape and fewer onerous employment laws.
So that’s what I reckon Berliners should get down to doing. I’ll do my part, too, of course: I’ve noticed that German companies aren’t the best at talking about themselves – in fact, they’re sometimes outright awkward about it. Reasons range from an ill-judged “if we build it, they will come” mentality to having trouble understanding and adapting to different audiences (what you say to a potential customer differs from what you say to a potential investor). The Ballou PR Germany team will be teaching seminars on how to talk about yourselves and how to do PR for as long as people will attend the classes.
With thanks for thoughts and inspiration, to:
Ciaran O’Leary @ciaranoleary
David Noel @David
Jess Erickson @Jessjerickson
Max Niederhofer @maxniederhofer
Jonathan Gebauer @jogebauer
Wolfgang Bremer @WolfgangBremer
Kelly Sutton @kellysutton
Felix Petersen @fiahless
Milo Yiannopoulos @nero
For related posts, check out:
“There is always money” – your guide to public funding for Berlin startups
Want to pitch to the likes of Bill Gates? “World-changing entrepreneurs” wanted from Germany
The Startup Genome report: London has trendsetters, Paris has talent and Berlin has hype (and the fewest female entrepreneurs)…