30. April 2013–
Well, it was nice while it lasted. Last week news dropped that Gidsy, the “Airbnb for experiences” and de facto poster-child of the Berlin startup scene was being acquired and subsumed by fellow Berlin travel experience platform GetYourGuide.
No great surprise. But behind the Xanax-happy, rainbow-hued holding screen on the now inactive Gidsy site, reactions have ranged from sentimentalist bleatings that it's the death knell of the "creative Berlin startup spirit" to panic-merchants proclaiming it a “massive blow to the Berlin ecosystem”.
Am I alone in thinking that this is a) a minor storm in a relatively small teacup and b) A Bit of a Good Thing? Now, of course, I'd rather not see a young, idealistic company with a good concept and great people take the money and run, but perhaps it's just the kind of reality slap that this upstart scene needs.
This time last year there was a mass, teenage gushing over “Edial, Felix, Ashton, Eric, Alex, etc, etc, etc”. It was good for Berlin. It brought the city international attention – it represented an unconventional, sexy, creative capitalism that attracted startup hopefuls in their droves, thus feeding the ecosystem even more. And frankly, it allowed sites such as ours to get off the starting block.
The wide-eyed optimism of the startup scene
Gidsy was a gift for the international press – the unconvential back story (those goddamn mushrooms), the celebrity endorsement (Ashton, the actor/angel who puts the vest in investment) and of course Edial – the utter personification of the freshly scrubbed, wide-eyed optimism of the Berlin statup scene.
But since then, what? As one VC source told us: “Gidsy has raised seed money from Index Ventures, Sunstone Capital, Alexander Ljung of Soundcloud, Werner Vogels of Amazon and Ashton Kutcher (among others) worth €1m or so. That was about a year ago, which means Gidsy was probably in the market to raise more money....”
Why the premature exit?
So why didn't they raise, instead going for what feels like a premature exit? Our source goes on: “The very easy (and likely) answers is: they could not raise more money. We could speculate about the reasons: the unit economics of the Gidsy model did not work. The traction just wasn’t there...”
Sunstone partner Nikolaj Nyholm obviously refutes this, telling us: "Gidsy had the opportunity to either go out and raise a new round and did have offers on the table. Or they had the opportunity to join GetYourGuide. It became pretty evident that these two companies could complement each other much more than be in a competitive situation."
One likely conclusion is that Gidsy realised to grow a sizeable business, they'd need to move from P2P to B2C, a space that GetYourGuide was already in – growing fast and executing well. With the ubiquitous Christophe Maire acting as "rainmaker" the discussion between the two companies quickly turned into an M&A. Gidsy smelled a quick and easy exit...
"A decisive moment in building a really big Berlin company"
But how many tears should we be wiping away as we watch much-hyped Gidsy gets sucked up into a more “corporate” black hole? On the one hand, Berlin is desperately trying to vie for its space at the grown-up's table in the startup ecosystem – and this "message" of founders selling out early has been construed as a negative one. But come on, people, this sort of thing happens in the Valley every single day. It's called business.
And let's not forget that this is positive news for another Berlin company – GetYourGuide. Johannes Reck and Co have quietly built up a business which can now claim to be the “world's largest portal for travel experiences”. As Johannes told us: “This will, I think, in a couple of years time, be viewed as a decisive moment in building another really big Berlin company…”
They might not have a cute backstory, a sexy investor or a cuddly concept. But what they do have is a company with over 50 employees, 20,000 activities on the database in more than 1,930 destinations and $14m in funding that has allowed them to flex their acquisition muscles.
And it's not all doom and gloom for the Gidsy team either – my money's on a polite earnout period, with the Dekkers (and possibly more of the original team) going on to bigger and better (and more carefully realised) ventures, with an untarnished reputation, a wiser outlook and hopefully some cash in their pockets.
Berlin needs to keep its dreams, but escape the dreamworld
Without sounding like one of those hoary old ToyTown trolls whose broken Berlin dreams have left them calcified, brittle and filled with bile, this city needs a smattering of realism now and again to accompany its happy-clappy, Hacky Sacky, ping-pong playing, StartupVitamins-swallowing optimism.
Berlin is a deranged and wonderful place – and what makes it unique is the feeling that dreams can still come true here. That electric air of anything-can-happen opportunity – whether that be in the boardroom or at Berghain – draws us all here. The promise of a more creative, collaborative capitalism will hopefully mean some really interesting companies breaking through soon.
And while these are the reasons I fell in love with the place, it's also part of Berlin's identity crisis. Every wonderful, floaty idea also needs a big, robust business plan and ballsy founders to back it up. Otherwise, it's castles in the sand. Berlin needs to escape the Inception-style spiral of its own creation if it wants to hold its own in the real world.
Keep your hands on your talismans, Berlin startups, this year is going to be an interesting ride...