5 simple things you can do today to help European startups achieve
(This post first appeared in a different version as a guest blog on the Telefonica Digital Hub)
Two weeks ago, I was invited to an informal hangout with top European tech entrepreneurs at the offices of Vice President of the European Commission and “digital chief” Neelie Kroes. Kroes wants to promote European entrepreneurship through a campaign called “Startup Europe”, and she thinks that one possible solution is to offer young European entrepreneurs better role models.
And the people she found for her leaders club are really quite inspiring – there was Niklas Zennström, a founder of Skype and the London based VC firm Atomico, as well as Kaj Hed, founder and chairman of Rovio (Angry Birds), Boris Van Zanten of The Next Web, Zaryn Denzel of Tuenti, Daniel Ek of Spotify, Lars Hinrichs of HackFwd and Xing, Reshma Sohoni of Seedcamp and Joanna Shields from Tech City UK.
They’re all entrepreneurs who show that you really don’t need to be based in Silicon Valley to build a successful tech business. That’s a great thing, and it was long overdue. We need homegrown success stories to inspire European entrepreneurs.
I think Neelie Kroes’ initiative shows that finally, everybody is waking up to the fact that we need a real single market if we want to give European startups more chances to become big successes.
But as Niklas Zennström was quick to remark, the Leaders Club is ‘not a program’. What he meant is that the entrepreneurs of the Leaders Club won’t get on a tour bus with tinted windows along European tech hubs, with Zennström, Hed and Van Zanten speaking to packed football arenas. The leaders club is a mostly symbolic club, and most of the work will have to be done by… you.
Yes: because you are who is holding back the single market. On the other hand, that means that you also hold the key to make it a reality. And by doing these five things, you can make an enormous difference for European startups:
1. Buy from a Swede…
(…or a Spaniard, or an Italian or Romanian) without meeting them first. Why? Because international scaling is essential for startups, and our 27 national markets are making that very, very hard.
Despite all the talk about who will be the dominant hub in Europe – Berlin? Stockholm? London? Paris? – Europe will never be Silicon Valley, where the entire scene is physically in the same area. We might as well face that reality. But that makes it very hard for startups to play, because they seldom have a budget to hire sales teams in every country. They also don’t have the budget or time to travel around Europe “to have coffee” with you.
This is a very real problem. Today, I met an entrepreneur who has all but given up trying to sell abroad. “I just let distributors handle it. Okay, they take a 30 percent commission, but it’s just the reality: it’s too hard to go out and sell in other countries if you don’t have a local team.”
That means that if you want to help startups, you will have to take a chance on someone whom you haven’t necessarily met in real life.
Europeans like to look someone in the eye to get a feel for how trustworthy and credible they are. But there are other signals that you can gauge to base trust on, like referrals, testimonials, shared industry contacts. Try to take a leap of faith and close a biggish deal with someone in another country without asking them to come over and present themselves.
It would help the European startup scene a great deal if we would learn to assess and trust these signals better. Selling internationally will allow startups to specialise in interesting niches much earlier, instead of being forced to become generalists in a small markets.
And if you like their work, please recommend them to your business network. It’s great that Zennström and Lars Hinrichs are now part of a Champion’s League of European entrepreneurs, but not everybody will be able to sell their startup for 8 billion dollars to Microsoft, like Zennström. What we need is a thriving “middle layer” between the local ecosystems and the Leaders Club. You can be a part of that, and you can help develop it by looking beyond your national borders.
2. Share stories from across the borders
What I notice on Whiteboard is that stories about local startup scenes always work well – in that particular local scene. But it’s a bit baffling to observe how little interest there is for stories from other tech hubs, while there is a voracious, almost frenzied interest in reading about US based apps and startups. It’s like stories have to pass a very strict border patrol first (and here we were, thinking we had a single market).
I realise that Silicon Valley is sexy (I can see why Business Insider writes about Marissa Mayer four times a day). But part of why they are sexy is because of the echo chamber of US tech blogs, who write about the same subjects with unabated enthusiasm all the time. You can probably name the founders of Pinterest, Path and Nest. Now, do the same with GetYourGuide, Tradeshift, Wrapp or Klarna, which are European companies that show incredible growth, traction and management talent. If you see such a story, why not share it? You will help those startups a great deal in their quest to find customers and funding.
You will also help your own network. What I notice is a tendency in Europe to make 27 versions of the same idea, on a shoestring, while competitors in Paris, Bucharest and Stockholm are trying the same thing. You should make sure that you are informed about what happens in other European hubs. Ask yourself: is it surprising that you get blown away later by a US competitor with the same idea as the 27 of you, but with deeper pockets?
Share these stories about other founders in your own network. Maybe some of your contacts would benefit from the work that other European startups are doing.
3. React faster
When a startup has a request for you – a meeting, an introduction, some feedback – it needs those things now. Not in two months.
I recently did an interview with Steffen Reitz, the German founder of Smarchive who went to Silicon Valley. He told me: “ I’m constantly amazed at how fast good people will help other good people here. They’ll make time for you within a day or two. It’s not like in Germany where successful people tend to want to be left alone, or frequent only their own circles. Here, I was meeting billion dollar companies after a few introductions – it’s like an elevator that brings you up in minutes. I can never imagine that in Europe.”
Runway is essential for startups, because it is so short. You can kill a startup very easily by just waiting. In the end, it becomes a self fulfilling prophecy. “I’ll wait a bit and see what comes of this startup. See if they survive their first year.” Well, without your help, they likely won’t.
Because they run out of money, but also because they need constant feedback from the market to iterate and pivot their product until they find something that can actually make money.
4. Answer your e-mails with requests for information and validation
In the same vein: answer e-mails from startups as soon as you can. Recently, a French founder I know wrote this on Linkedin profile:
“I sent an e-mail to 20 French CEO’s and 20 US CEO’s with a short survey. A few days later, I received answers from 20 CEO’s. A few weeks later, I received one (!) answer from the French CEO, who told me he didn’t have time to answer my questions.”
If you want to make yourself useful in the European ecosystem, pledge to answer e-mails from startups as soon as possible.
5. Don’t hold back (push the button)
And finally, like in the Chemical Brothers’ song: stop holding back when you introduce an entrepreneur. I know it’s a very European thing to be cautious, to hedge a bit. But really, try hard to find reasons to give startups and founders a warm introduction in your network.
Do you believe in the idea or the founder? Then convince your network of their value. If you don’t believe in an idea, but you believe in the founder – give them feedback and help them make it better. Then, when they get it right, you can introduce them without holding back.
But that thing where you do a lukewarm intro? That’s how startups die. Because the founders will spend the next few weeks trying to get an appointment with your contact, who is trying to find excuses not to meet with them because they feel that you just sent that mail out of politeness. You are forcing them to waste effort that will lead to nothing.
On the other hand, it’s very easy to help that same startup. There is a thing called a performative utterance: by saying something, you are making it happen. Expressing confidence is extremely performative. By saying: “I believe that this can work, because it’s a great idea and I have confidence in the team”, you are making the idea and the team succeed. Doing a startup is hard enough as it is. If you can help a founder by selling a bit for him, they can spend their energy elsewhere, where it’s also much needed.
Europeans like to ask when the European Facebook will appear. Well, it will appear when you start to do these five things. Because it takes a continent to make a Facebook, and one thing is certain: it will need your help.
Photo credits: pppspics, Flickr
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