“Ten years ago, you’d never get VCs coming to a place like this,” Paul Jozefak pointed out, part-way through his talk on day one of the Tech Open Air Berlin festival, held at notorious Berlin club Kater Holzig.
Tech Open Air Berlin, co-initiated by Nikolas Woischnik and Lutz Villalba-Adorno and backed by €26,000 of crowdfunding and sponsorship, aims to bring startups, tech, music and art together. It might be smaller than the 10,000-strong Campus Party Europe also on in Berlin this week but it’s punching well above its weight — free massages, cold drinks and low-key chats in the sun, as well as workshops, panels and pitch sessions.
Having two such events on at once, pulling a who’s who lineup of international tech stars into the city, is testament to the city’s growing status as an international tech hub. That’s something TechCrunch’s Mike Butcher – who kicked off the first speakers’ session at Tech Open Air with Ansgar Oberholz, proprietor of famed Berlin co-working space Sankt Oberholz’ – seems to have mixed feelings about. “You should all be in London,” he joked.
Oberholz’ reflections on why Berlin is gradually earning its status as a up-and-coming Silicon Valley weren’t what you might expect. No mention of cheap rent, position within one of Europe’s largest internet economies. Instead, he highlighted Berlin’s “laid-back lifestyle without losing focus” and unusual, for Europe, acceptance of failure. “Berlin is a city of success for sure, but also a city of failure,” he pointed out. “Failure’s OK in Berlin.”
“Developers are like celebrities” – Startup growth in Berlin as an art form
The first panel of the morning, moderated by VentureVillage’s Marguerite Imbert, focused on startup growth and execution, pulling in a range of speakers who did a pretty good job of representing the diversity of companies active in Berlin: Fabian Siegel (Delivery Hero), Lasse Clausen (Foundd), Verena Delius (Goodbeans) and Matthias Henze (Jimdo).
Fabian Siegel leads one of the city’s fastest growing companies, two-year-old online food ordering platform Delivery Hero, which grew 84 per cent in the first quarter of this year and now employs over 450 employees around the world.
By contrast, Foundd’s Lasse Clausen revealed his entertainment recommendation service made its first official hire last week. “Good developers are like celebrities,” he mused. An important question for Foundd is how wide to cast the net – finding the right point between Netflix, which just recommends films, and Hunch, which recommends everything. “If you’re too broad, it’s hard for the user to build an emotional connection.”
The exceptional part of Goodbeans’ story is the company’s pivot one year ago, from online social game developer for children Young Internet to a mobile app maker for children and families. The name change was probably the easiest part:
“We took the decision, let’s go for mobile, but with the existing team,” Verena Delius explained. “There were 16 people doing something and we had to shift them to something completely new. We went one by one, OK, you’re a flash developer, iOS; you’re a Java developer, iOS…”
After some hard and at times humbling slog to learn new skills in a new market, Goodbeans has launched six apps in the last nine months — including free app finder WeWantApps, out today — and plans to release four more in the next three months.
You might not have heard of free website creator Jimdo, which has quietly grown to over 100 staff and an office in San Francisco — and that was a deliberate choice, co-founder Matthias Henze explains. The team chose to focus almost entirely on product rather than marketing, in contrast to main competitor Wix, he said. Wix has now raised about $60 million in VC backing, Jimdo just €500,000, but that’s a choice he’s happy with as “we don’t want to commit to an exit at this point”.
Liquid Labs’ Paul Jozefak on pitching – “You should want to build a billion dollar company.”
From the other side of the negotiating table, in a red-lit club room, Liquid Labs founder and Hamburg-based VC Paul Jozefak held a rapid-fire session on how to nail an investment funding round. The first point – never, ever undersell. “You should want to build a billion dollar company,” he said.
Some in the crowd disagreed, alluding to the tendency for German VCs to look down on “big talk” their Silicon Valley counterparts might embrace. “Yeah, but don’t believe it,” Jozefak fired back. “That’s such a preconception. The guys who are going to be successful in Germany, the guys who are raising money now are going into a completely different market than people who were raising money two or three years ago. The market is evolving very fast.”
That’s a point that should be kept in mind as Berlin’s bumper week for tech events continues. Berlin’s not trying to be Silicon Valley, not entirely, and it won’t be — by the time it starts to approach that level, it will probably look like something entirely new…