The unbalanced startup scorecard:

London vs Athens

It was only while rushing to get to the tube amidst a summer storm that I realised it: the last summer I spent in London was 16 years ago.

In 1999, during my degree’s “industrial placement”, I worked at a large investment bank. It was during the bull period for the world’s financial markets, and the spirits were high in the City.

Within 16 years, change is inevitable. Some happened through specific ‘black swan’ events: another investment bank, occupying the floor right below my then-office, filed the industry’s most consequential bankruptcy in 2008. Other changes came about more gradually: The Olympics reshaped the city and helped absorb the crash (at least within the real estate industry); Shoreditch, from downright dodgy, has become hip and filled with startups.

Fast forward to today, and it is this level of intense activity that brings me here again: our digital health startup Care Across is part of the MassChallenge UK accelerator.

But shortly after touch-paying for my £2.90 tube ride, the trail of thought led to Athens: my “home city”, in a country that has been battered, unstable, and with the uncertainty of its junk bond status. Charting its 16-year course would be challenging (as I’ve moved cities a few times since then), but it was inevitable to start the comparison engine…

London vs Athens: for a startup, is it even a contest?

You may be in for a surprise.

Overall vibe

You can’t escape the bustling activity of London — even if you’re just flying over it.

Above ground, there are cranes everywhere for new developments — offices for more companies or buildings for more students, professionals and families to call home. On the ground, the number of co-working spaces and events is growing and still reaching capacity, as more and more people of all ages start out on their own or want to feel part of the ever-growing community. (Case in point: only a couple of weeks before the MassChallenge UK programme kicked off in June, its Tobacco Dock headquarters were virtually unrecognisable — and now 90 startups are fighting against time and established competitors, often armed with little more than passion and caffeine.)

As for under-ground… well, if this is any indication, the London Underground service is expanding with more lines under construction, and aims to start operating 24x7 this fall. Never mind the gap, the tube’s on tap.

Athens is no sleeping city — although sometimes for the wrong reasons. And while I still find it hard to stay at a café for more than half an hour (I need 5 minutes to drink my coffee, unless I’m in a rush), the activity levels in most central areas never stops. There is something remarkable about the resilience of a population that seems to find the way to connect with each other and enjoy life beyond the uncertainty and feeling of impending doom. In some parts of town, the numbness from years of economic downturns, political unrest and fear of the future has given way to creativity, restlessness and a long-lost entrepreneurial spirit. Students come together to work on various projects, young professionals start companies, and the word “ecosystem” is firmly back in our vocabulary.

Institutional support

A couple of years ago, I came across the term “Tech City”. Part of the language used by London’s political and social forces about pushing the City beyond its financial heritage, it has led to a rapid shift in the balance of talent, industry sectors and investment criteria. It is the same thinking that led to the Prime Minister and the City welcoming MassChallenge with open arms here: a US establishment for talent and entrepreneurship, for the first time reaching out to the old continent. Now the City supports multiple initiatives, ranging from co-working spaces to co-investment schemes, a new economy that appears to be singing some of the new tunes that London is dancing to.

In Athens, the word “institution” has gotten a bad rap. The only support most locals want from institutions is to get out of the way (although whenever such support does arrive, it is sought after with server-crashing passion). The more maturing and composed views call for more solid and balanced structures and measures to be put in place, including those that allow for longer planning. That would be a real “innovation” for citizens who will be told this year’s income tax rates about a year later.

Funding

In 2012, Her Majesty’s Revenue and Customs (HMRC) introduced generous tax incentives (the Enterprise Investment Scheme and its Seed equivalent), enabling individual investors to drastically recalibrate their risk-reward profiles. This greatly benefits UK investors, startups and SMEs, and the overall economy in a really decisive manner.

Beyond the government’s measures, though, venture capital is in no short supply, with firms seeking to invest slightly higher amounts than before but still eager to participate early on.

In Greece, on the other hand, is still clear as mud in terms of its incentives to investors. Thankfully, the European Investment Fund has helped catalyse a lot of funding activity through national Jeremie funds: The OpenFund, PJ Tech Catalyst, Odyssey Venture Partners & Elikonos. Together with the startups they have invested in, they have made the news from Greece so much more positive.

Cost of living

Apparently, London is 2.29 times more expensive than Athens. Not only that, but it keeps getting more expensive, and even pushing more people outside the M25. This breeds interesting dynamics for companies moving here to take advantage of the positive economic climate and other benefits. Thankfully, however, entrepreneurs are (or should be!) lean, and there is plenty of office space available for attractive prices (thank you again MassChallenge UK!).

So what does this make Athens? Affordable, at least. Co-working spaces are offering good rates for startups, service providers are willing to drive prices low for any business they can get, and real competition is beginning to actually work. Importantly, startups are beginning to collaborate instead of hiding from each other. Case in point: entrepreneurs getting together to help others affected by the recent capital controls.

Talent

London enjoys high quality, well-educated talent from its own top universities, as well as talent coming from other parts of the UK. It also attracts large number of graduates from everywhere in the world who arrive here to reap the benefits of its rapid pace, strong financial markets, as well as social and cultural activities. A more important component in the talent equation is their level of experience: a bachelor’s degree in the UK lasts 3 years, allowing 21-year-olds to enter the workforce and enhance their skills in a highly competitive environment. By the time they are in their late 20s, they are relatively skillful, have been exposed to more than a couple of different jobs or professional settings, and some have cut their teeth in managerial positions as well.

This is not really the case with most young people in Athens, and it is not for lack of them trying. Studies last longer; there are fewer established companies with solid organizational structures to help them grow well-rounded capabilities; the smaller market means young professionals get less exposure to large, complicated projects. This is clearly not just a Greek problem, but the dragging economy is placing all these talented individuals at the risk of never reaching their potential. Some are fleeing to other countries, making brain drain a national issue. Others, perhaps subconsciously, may lower their expectations and start wondering whether investing in themselves is worthwhile or not.

Thankfully, there is a more optimistic perspective: compared to London, at least, wages are lower and the potential is there. Young professionals are increasingly eager to learn so that they can actually earn.

Finding the talent to grow into the next generation of achievers, managers and leaders is a big challenge — but a positive one to face.

Is there a winner?

This is not a zero sum game — but it does not take much to pick its winner. As evidenced by the countless startups moving to London from all over the world, the city is a magnet for those embarking on the entrepreneurial journey.

However, this is not the point.

One of the main traits of entrepreneurs is to “skate where the puck is going to be, not where it has been”. There is a fundamental challenge there: people always feel much more comfortable with whatever they know has been working well, and struggle when it comes to picking the next winner. (This is, after all, how fortunes are made in the stock market.)

Thousands of founders are contemplating which “startup ecosystem” to call home. Accelerators, incubators, politicians are all trying to promote their own cities. And we have all read our share of articles evaluating which ecosystems are ideal for specific industries.

This article is not about promoting any particular city for your startup. It is about looking beyond the ecosystem, and seeking the specific characteristics that make sense for you and your startup.

Ask yourself:

• Where are our customers, users, partners? How close to them do we need to be, how often, and why?
• What kind of talent do we need, and where should each team member be based? Does the kind of talent we want prefer to work for startups, or is the target city geared to those who prefer 9-to-5, predictable jobs?
• What kind of pivot in our plan would make this city less appealing?
• Could an unexpected local or global event make this city inappropriate for us?
• What other cities share the same key characteristics, but are less “celebrated”?
• What kind of value for money are we looking for, and where does that value come from? (Hopefully it’s not from the free food at startup events).

Postscript: So could the winner be …Athens?

That’s your call, but for all its troubles, Athens still has 2 things going for it…

One of them is the power of the underdog: The hardships bring the competition for startup resources down and keep the costs modest overall..

And the other is… the room to build momentum: Athens is barely moving, but if it starts rolling in the right direction, it may work wonders.

Let’s hope it has cash to buy gas.

Photos by Gareth Williams, Andrea Puggioni, Leon Brocard