Berlin, the promised startup land?



After having read more and more stories about Berlin and its bristling startup scene it was time to have a look in this self-proclaimed startup capital of Europe. In this post I’ll share a good set of insights and experiences from the one-and-a-half weeks that I spent there.

Startup scene in Berlin

Given Berlin is c. 4-5x larger than Amsterdam (depending on how strict you apply city limits) one would expect to see a bigger scene than the one in the Dutch capital, especially given Berlin’s recent appeal. And here it definitely delivers: Where Amsterdam has a good set of Meetups and events the amount of worthwhile meetups and events in Berlin is staggering. Also events like Hackers & Founders and Pitchrs (which I would see as core startup events in Amsterdam) usually draw 40-70 people, while some events in Berlin draw well above 200 startup enthusiasts (without losing their power).

Berlin Tech Meetup

Berlin Tech Meetup

Besides these social meetups / network meetups the city also has a great amount of “useful” events. These include sessions, classes and courses on coding, finance, PR, etc. Two great examples are General Assembly and Betahaus, who regularly host and organise quality events.

Startup culture in Berlin

Next to the size and abundance another striking difference is the startup culture in Berlin. While in the Netherlands it remains difficult to get meetings with people (even startup people) given their closed nature: “What would be the exact purpose of our meeting”, Berlin proved to be incredibly welcoming. Strangers, introductions, competitors, organisers, etc. everybody exudes a willingness to meet, talk and help each other (paying it forward culture in the making/in action?). A large part of this openness can probably be attributed to the facts that Berlin is an incredibly young city and that most people that operate there (even the Germans) have moved there from different places and have had to find their way by meeting new friends/partners/colleagues/etc.

Hy! Berlin 2013

Hy! Berlin 2013

Apart from an active and lively scene, the openness also leads to a mentorship culture. Berlin’s existing, (somewhat/very) successful founders are very engaged with the community too, both as seed investors as well as advisors to the new generations of startups. This is one of the points that Amsterdam, at least currently, still misses, although it is developing. A great example is semi-Dutch Gidsy, which counts (among a host of other impressive advisors/contacts) one of the SoundCloud founders as one of its directors.

Finances and funding

Two final positive points about Berlin are both monetary related:

1) The cost of quality living in Berlin, as well as salaries, are very modest. This means one can even afford to “live it large” (…) on a startup budget, great meals can be had for as low as € 5 per person, while rent seems to range from a couple of hundred euros for a shared apartment in up and coming areas to a luxury apartment in established Prenzlauerberg at € 1,200.

2) Availability of funding. Where Amsterdam lacks an established seed capital culture and also has virtually no follow on venture capital, these are both present (abundant would be too much) in Berlin. There is a good amount of angels, current/former founders, that are willing to reinvest some of their cash back into risky startups, while both German based, as well as American funds are active on the VC side of things.

The dark side

After all the praise for the Berlin scene now also some words of caution. A frequently heard comment during conversations there was the “hype factor” of Berlin. Obviously the city (as well as a couple of its startups) have done very well in promoting themselves and conveying an air of success. However, the amount of actual successes is still rather low and some of those are part of the infamous Rocket Internet portfolio. It is time for Berlin itself to really show some traction and create a couple of stellar success stories, before the hype runs out.

Finally, another point oft mentioned: lack of talent. While everybody stated labour comes cheap in Berlin, experienced developers command significant premiums. Like in Silicon Valley, but also the Netherlands, it is very difficult to find good quality developers for your projects. Even with a steady supply of Polish coders, as well as talent from all over Europe, startups in Berlin are also struggling to form their teams.

To conclude

So, should you, as founders immediately and blindly pack your bags and move to the promised land of Berlin? As far as I’m concerned that’s not an automatic conclusion. Yes the scene is bigger, the culture seems more open and there is more money available for quality teams. Yet, also the Berlin scene still has to produce more champions to solidify its position as leading startup scene in Europe.

Furthermore a lack of talent, while the hype is only starting, points to potential difficulties ahead… However, for teams looking for a change of scenery and open to a new adventure, Berlin offers a great place to come and help build the hype!

[Photo: qubodup][Feature photo: 'Berlin Startup Tour', Heisenberg Media, Flickr]

Powered by Facebook Comments

About the author

Wouter Kneepkens

Co-founder @favour_it | Internet entrepreneur with strong background in business & finance | INSEAD | http://favour.it | Website: wouterkneepkens.com.

Related Posts