Top thinkers in the Berlin startup scene came together at Social Media Week to discuss a much-raised topic around the Club Mate cases in this city: Is Berlin the new Silicon Valley? Hosted by David Knight from Silicon Allee, the topic received a fresh insight from the panel, which included Gruenderszene’s Editor in Chief Joel Kaczmarek, Mister Spex CEO Dr Mirko Caspar, Qtom Managing Director Oliver Koch, and Global Marketing boss of 9flats.com and MD of avocadostore.de Roman Bach.
Predictably, the theme of the discussion centered on Berlin’s long road to becoming the “new Silicon Valley”. And as to be expected, cheap rents and the low cost of living in Berlin was the talked-about drawcard. But the major difference between Berlin and Silicon Valley that everyone agreed upon was that Silicon Valley has the ideas and the money, while at the moment Berlin just has the ideas.
As Bach commented, “it’s easy to build a great international team in Berlin. But if you want funding, you have to go elsewhere. There are very few people in Germany who would have invested $6 billion in Groupon. It just doesn’t happen.”
Kaczmarek agrees, “I haven’t seen a Berlin startup successfully growing in the US, it’s just not comparable. We don’t have any of the Googles, the eBays or the Facebooks coming out of Germany.”
A major problem facing Berlin is the need for startups to roll out internationally in order to gain any form of success. The challenges associated with developing and launching a startup that will gain interest across the vastly different countries in Europe is detrimental to the Berlin startup scene. While American startups are able to launch successfully – even if they stay within the States for the first year, this luxury is not enjoyed by Berlin companies.
Germany’s traditional interest in funding and supporting the automobile and engineering industry rather than digital businesses was also seen as having a negative effect on the progression of the Berlin startup scene.
Koch noted the difference in attitude between the respective Heads of State in Germany and the United States: “Are we going to be as important to Merkel as Silicon Valley is to Obama? Probably not for the next 20 or so years that she’ll be in power.”
Bach disagrees, saying that “Germany will invest in the startup scene when it becomes more important – when startups start being relevant and gain proper commercial success of at least one million. Until then, no one will be interested.”
As far as the difference in the education system and the willingness to poach talented kids from universities, it seems that Berlin is on the right track by setting up the first MBAs in the city. But it’ll be another 10 years until the effects will really be seen.
And finally, the differences in mentalities of Germans and Americans was commented on, the pride of failing and picking yourself up again that characterises American startups is desperately needed in the Berlin hub, along with more lenient bankruptcy laws in Germany.
The panel highlighted what we all know, really: Berlin is doing well, but there’s definitely a long way to go before the continental startup mecca will be rolling in the big league.