The state of the European startup ecosystems
“Dear Silicon Valley, America has fallen out of love with you”, we recently read on TechCrunch. When we talk about ecosystems, the focus always seems to be on the Valley, or the US at large. What about the rest of the world?
In September, global ecosystem builders were brought together in Cologne — Germany, to discuss the state of the European ecosystems. The “movers” and “shakers” of local ecosystems across the globe [e.g. Austin, Tirana, Dhaka, Athens, Sydney, Copenhagen, Azerbaijan] attended the Ecosystem Summit, as a prelude to the Pirate Summit — a yearly startup summit held in Cologne.
According to summit organizer and ‘Pirate’ Ben Peckruhn, this year’s key learning was that, “ gathering knowledge and experience of the right people in one room even for just one afternoon can bring tremendous benefits to everyone who is there”. And despite its short duration, Peckruhn indicated how these movers and shakers “gathered tangible approaches of how to increase event sponsoring, how to successfully work together with city officials, and what new startup ecosystems have to consider if they want to become successful”. Lets dive a little deeper into those lessons.
Not beaten by scale or language
First of all, Europe’s diversity makes it a challenging market: some countries (e.g. Macedonia) are too small to properly run experiments and get a startup of the ground. This means that starts from these smaller countries often go to neighboring countries, or the biggest country in the region that has a similar culture (e.g. the Macedonians exploring the Polish market). Second, the variety of languages in Europe is a challenge: not just for foreign founders to find their place, but also to let different ecosystems reach out to others. Lets take Denmark as an example here; the country has a lively startup scene, and it collaborates particularly well with other Scandinavian countries but less less so outside of the region.
However, some ecosystem builders consider this lack of same language-speakers or a market’s smallness in scale (and scalability) as an opportunity. Monica Wulff, CEO and co-founder of Startup Muster (the largest survey of the Australian startup ecosystem) explains how this also motivates these countries to hold summits or conferences that allow them showcase their communities.
A lesson she shared at the Ecosystem Summit, was that of Australia’s targeted approach of certain startup hubs, like Berlin and Frankfurt in Germany. The Australian Trade and Investment Commission created so-called ‘landing pads’ for established startups that want to grow their business abroad. This government-supported ‘soft landing’ in the German ecosystem entails a residency in a co-working space, access to mentors and investors, help with business developments, and access to a supportive community. So, instead of looking to the US as next step for a market-ready startup, the Australian government encourages to expand in other (non-US) hubs as well.
Fighting the European drama
Should language or the size of a country or ecosystem hold back entrepreneurs? At the Pirate Summit, in a talk by Oussama Ammar from Paris-based platform the Family, the answer to this question was a clear no. Yet, why is the Valley still more attractive to European founders? According to Ammar that’s due to “the European drama. We hate storytelling, and pretending to be bigger than ourselves. Silicon Valley has an infrastructure where average can people succeed, that cannot be replicated”.
Ammar shared three key pieces of advice for making it in the European ecosystem:
1) make use of what you can get your hands in a country (e.g. French startup Agricool who grows strawberries outside cities to actually provide it to these cities; a great story for branding, “Parisian strawberries”, and great in terms of logistics and keeping costs low);
2) be pushy around fundraising — entrepreneurs aren’t ambitious around fundraising, especially not in Europe, so ask bigger;
3) you can always hack your way around capital, that doesn’t per se need to come first.
But, perhaps the most valuable lesson to take from Ammar’s talk is that “Ambition doesn’t come from the outside, ambition is trying to do a little better every day”. If entrepreneurs would apply that ambition in the ecosystem, the European ecosystem would be much stronger says Ammar. So, Europe: it’s time to shine.