“A few crazy guys like us can pull it off”: Simon Schaefer on new Berlin tech hub The Factory

Simon Schäfer
Simon Schäfer

Berlin’s planned startup campus The Factory brought a surge of excitement when news first broke in April and momentum isn’t letting up. Construction is still at “detailed planning stage” but the full list of tenants is almost ready to announce, led by first signer SoundCloud, and some have already moved in. The official opening is scheduled for early next year.

While there are some similarities to existing tech hubs, such as Google Campus in east London, angel investor and entrepreneur Simon Schaefer – one of the key people behind the project – says there’s no real model for what they’re trying to do. Berlin is also a very different city from its counterparts, which is what’s made the whole project possible…

Simon Schaefer

The lowdown: 10,000 square metres of awesome

JMES, an angel and seed investment company that counts 88tc88, Monoqi and Silicon Allee among portfolio companies, is partnering with s+p Real Estate on The Factory’s development. Three teams of architects are working on the project with Julian Breinersdorfer, a “very fresh and young guy” who previously worked at Zaha Hadid Architects, doing the core creative work.

The Factory will be built across five buildings together covering 10,000 square metres on Rheinsberger Strasse, on the old Oswald Brauerei site. Two new storeys will be added; there’ll be an auditorium, fitness room, basketball court, restaurant, coffee shop and art gallery.

About 3,000 square metres will rotate between very new companies though Schaefer says they’re trying to avoid the terms incubator or accelerator. “We’re trying not to fix ourselves on a certain model. It’s more the social environment of that space, and our friends and network will decide which companies will move in, together.”

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A space for the startup community to share ideas

The idea behind The Factory came to Schaefer and partners about a year ago. Schaefer had just joined JMES as a partner and found himself spending most of his time in the car driving between portfolio companies, while trying to run his own company on the side. That, plus JMES founding partner Udo Schloemer’s background in real estate development, and starting a new space for startups in Berlin started to make sense.

The team found a space in Hackescher Markt and didn’t get it. In November last year, they spotted the current space on Rheinsberger Strasse and bought it a month later. SoundCloud were already on the hunt for a space so it was a quick step for them to become first tenant.

JMES will be the only investor in residence and some JMES portfolio companies will be tenants “because we want them close” but Schaefer says this won’t affect which other companies can move in. “We’re not doing this primarily as JMES trying to find new deals,” he says. “It’s more that we want to create a space where all of this can happen.”

“All of this”: the networking, mentoring, idea-swapping and collaboration that happens when likeminded people work in the same space. The big players such as SoundCloud will act as unofficial mentors; others will go there to create businesses. Events will be a way to involve the wider startup community.

“If you look at other spaces that have a similar system, they’re mostly driven by one big company to encompass their employees and give them perks,” Schaefer says. He believes this is the first time someone has tried to do the same with companies of mixed stages and without trying to create an incubator or accelerator.

Some interior design tips will be picked up from the likes of Google. “We’re looking to what the great Silicon Valley companies have done in terms of great interior spaces, the ratio of working spaces to meeting rooms, having white boardrooms where you can write on the walls…”

Affordable space in the middle of the city – welcome to Berlin

One big difference compared to the Facebook, AOL and Google complexes in Palo Alto: the Factory will sit in the middle of a capital city. That could only happen in Berlin, Schaefer says, where space is still plentiful inside the city. “Plus Berlin is still in the financial situation where a few crazy guys like us can pull it off. Google in London – they didn’t buy that space, they’re leasing it. That’s a big difference.”

Berlin is changing rapidly and the future of its urban spaces and famously cheap rent is a hot topic. So is the future of the startup scene. I ask Schaefer, a Berliner since the age of three and an old hand in the startup and creative scene, where we could be heading.

“There’s so much hype in this ecosystem right now. Everybody’s looking to Berlin but, if you look at the substance of it, it’s at the very beginning of something,” he says.

“Right now, to be too keen on what’s bad about the trend of economic growth and businesses being created in Berlin, it’s too early to look at that. I think we at least have another four to five year window where it’s still going to be very affordable to live in the city – and probably even longer than that.”

The important thing right now, he says, is to focus on building strong communities (startup-related or otherwise) in Berlin and fostering creativity. “That’s one of our motives – to use this space in a good way. We could have flipped the building, we could have created apartments and made a fortune but we didn’t. The intention wasn’t to make money; the intention was to create somewhere we want to be for the next 10 years, where we can create companies that come to mind and do stuff.” Amen to that.


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