The European startup ecosystem arrived

http://eu.techcrunch.com/2011/01/27/the-european-startup-ecosystem-arrived-but-paul-carr-wasnt-paying-attention/

by lfittl • 15 years ago

79 83 15 years ago

eu.techcrunch.com

ladon86• 15 years ago

The first comment is correct - this is the UK scene more than the european scene.

My real problem with the UK scene is the relative lack of talent available to startups. Where do talented graduates from the UK want to work? Banks, consultancies and accountancies. How much do they want to be paid? About £40k starting, please.

With the cost of living being so high in London, why wouldn't they?

Unless you can raise enough money to pay these people, your chances are far more limited. And London VCs are still far more risk-averse than SV VCs. To my mind that makes entrepreneurship in London a rich (and older) man's game compared with SV.

Of course there are counter-examples, but I think they've succeeded despite London. I'm sure this situation will improve (it has already been doing so), but in the meantime I plan to move to SV. I just think it will improve my odds.

zumda• 15 years ago

Out of curiosity, what do you consider the other startup hubs in Europe? Guessing from your comment that this is the UK scene, there should be others.

milestinsley• 15 years ago

Berlin has a very active, vibrant startup scene.

jkaljundi2• 15 years ago

At Garage48.org, we look at the Baltic-Nordic region as one strongly tied together scene, as the countries and cities themselves are all tiny. During the last year, the change towards a more vibrant startup scene has been visible in all the region's capital cities, no need to single out any of them.

stefanobernardi• 15 years ago

That was my comment. I'm not stating that there are other "hubs". Europe still doesn't have a central hub, which btw I think would be a great thing, but I'm not sure London can take that role. UK is surely not the California of Europe, and I sincerely fail in finding another candidate.

tomh-• 15 years ago

There is a lot going on in Copenhagen, Denmark is also often ranked as the best country to start a business as the costs of starting one are low (living there is not) see http://www.prosperity.com/entrepreneurship.aspx.

In my country, Holland, many people mention Amsterdam, I don't agree with that in the sense that it is a hub. The up and coming region here is Utrecht, it has a province and university backed business incubator Utrecht Inc. and a government backed gaming incubator, which both enabled some startups with national or global impact. The startup scene is still behind that of other countries and the numbers of 'me too', 'Y for X', 'X for social media' or 'X which doesn't suck' ideas are huge.

bnastic• 15 years ago

From personal experience, talent is to be found outside of London. But it's difficult to get them to move to London, they just don't think it's worth a hassle. There is a reason why so many successfull UK hardware companies are based in Hampshire, Oxford or Cambridge.

zeemonkee5• 15 years ago

I do get a fair amount of job offers from startups in London, but they are very inflexible about remote working (I'm in Scotland). Want me to move to London ? Sure, double whatever salary you're offering and I might consider it. Otherwise it would be a big drop in my standard of living - nice big apartment up here for cardboard box down there.

There is a lot of good talent in the UK, the problem is we have a massively over-centralized economy, which is bad for London (way too expensive to live for average workers, and infrastructure straining under excess population) and bad for the rest of the UK (no jobs). Contrast with Germany, which has a more distributed (and far healthier) economy - Berlin, Munich, Hamburg etc.

Remote working would help redress the imbalance but some startups for good and bad reasons are reluctant. And no, I could care less about twin monitors or aeron chairs.

fedd4• 15 years ago

watching The Social Network, i saw some wordless hackers that were happy to work for early facebook when they only had $1000 in bank to pay for servers.

is it something different in American climate?.. :)

SimonPStevens• 15 years ago

I totally empathise with this. When I'm looking for work I see lots of firms in London hiring, but I have no interest in moving there, and although commuting is just about doable for the very short term, it totally ruins my out of work life. I would happily work remotely, but no one ever offers this.

I'm not sure I quite understand the obsession companies have with London. There are plenty of talented people around the rest of the country.

narag2• 15 years ago

I've been planning to move from Spain to London for some months. You're scaring me. Is £40.000 not enough for a decent flat and once a month flight back home?

gregdetre• 15 years ago

heyhey zeemonkee, drop me a line if you're interested in talking about remote working. g

Isofarro• 15 years ago

"Sure, double whatever salary you're offering and I might consider it. Otherwise it would be a big drop in my standard of living - nice big apartment up here for cardboard box down there."

I think this gets to the heart of the cultural difference between the UK and California in terms of startups. I get the feeling that people working for / running Silicon Valley startups are living extremely cheaply (hence references to Ramen profitability), sharing places with groups of people, working long hours with very little time off, sometimes sleeping over in the office instead of going home.

I don't get the feeling that attitude happens within London, so working for a startup isn't much more different to a desk job in a big company - salary, set working hours, regular vacation time. Maybe a slightly better options/share stake in the company.

Also the business infrastructure of London doesn't facilitate a lean startup environment. Registering a company with Companies House is cheap enough, but running it is quite costly for a group of people who are trying to build something that might pan out later. It's like London only wants organisations with existing revenue streams, not startups with potential.

And there's the expectation of potential employees for London startups, they want the benefits of working for an established business. Silicon Valleyers seem more inclined to be involved with something interesting, and live a minimalist life outside of that role.

Am I completely wrong here? (Would be interested in hearing back from people working in startups in Silicon Valley and London, but also elsewhere in the world - how is your organisation legally registered, do you pay salaries or offer compensation in stock ownership, are you living comfortably, or living off ramen noodles until you've created a decent income stream?)

axod2• 15 years ago

There's plenty of affordable housing a stones throw away from London on the train if you're prepared to commute.

I did it for a couple of years (1 hour each way).

woodpanel• 15 years ago

I agree with you. The density of London makes it an awesome tourist attraction. But living there? No, thank you.

I think what would help you getting remote working jobs are

1. knowing people down there, that know you're good/professional/trustable/likable/[insert social-binding characeristic] enough

2. raising the number of people from pragraph 1 by networking or getting down there for like 3 months and do some work.

In my experience its all about knowing people who have worked with you and know that you can deliver. they will hire/recommend you or let you know if they hear anything about new jobs, fitting for you.

If you are working in the same industry, those people will still be in the same industry in years. And if not, you propably won't get any jobs either by then. Plus, people swith employees over the time, so your 'eyes and ears in the field' increase.

jkaljundi2• 15 years ago

Are you saying there is more lack of talent in UK than in Silicon Valley?

bad_user• 15 years ago

Then hire from remote locations all over Europe.

Give me your email if you want my LinkedIn profile; all I want is £30k :-)

yummyfajitas• 15 years ago

And London VCs are still far more risk-averse than SV VCs.

This is the real problem. Most US startups pay considerably more than 40k GBP = $63k USD. $63k USD would be considered laughably low for anyone besides perhaps a middle-of-the-pack recent graduate.

So it seems that startups need to either generate revenue quickly move to where the money is (NY and SV, apparently).

david927• 15 years ago

Or consider alternate compensation, such as alternating remote work. London is a cheap hour flight away from most countries in Europe. Most big companies in London simply don't allow, say, a week remote and a week on-site. Be flexible and you might find a much bigger talent pool.

true_religion• 15 years ago

But 63,000 USD is far above the US media income (44,000 USD).

Granted, I made that just out of college as well but I was living a whirlwind life of monthly travel, and daily partying. For a single person 63,000USD is a lot of money---money enough that when I cut back on partying I could easily consider taking on a mortgage for a house with my discretionary income.

eftpotrm2• 15 years ago

How much do they want to be paid? About £40k starting, please.

Best of luck to them. I know few (non-contractors) who pull in even 90% of that with substantial experience.

Idle wandering of mind a while back, I came to the conclusion that if I wanted to do a startup I'd base it in Northampton. Relatively cheap area by UK standards but livable, hour by train to both central London and Birmingham/West Midlands (about half the size of London so a substantial catchment area in its own right), good N/S and E/W road transport links and if I advertised for experienced devs at USD50k (equivalent) I'd be beating them away with a stick. I don't have any plans in that direction mind you, but it's that sort of thing that makes me wonder why anyone bothers setting up in London.

kgutteridge• 15 years ago

I am in Northampton for the transport links you mention, the reason to setup in London is however simple the majority of good people in Northampton are commuting to London. As you say its about 50-70% of the cost of living in London but still accessible

alain94040• 15 years ago

I live in Silicon Valley but organize an incubator in Paris (with other branches in other European cities). I argue these issues daily with our founders.

To hire someone in Silicon Valley, plan on spending a minimum of $80K. A senior engineer will cost you $130K easy. So I don't understand why salaries would be a barrier to hiring in Europe, people work for cheap there.

One of the barriers I see is the lack of super-angels. I don't want money from dentists and doctors, I want to raise money from entrepreneurs who know what it's like to start a company. The problem is that in France (and Europe in general), even the successful entrepreneurs tend to hide, because it's not polite to talk about being successful/rich.

In Silicon Valley, there is an endless stream of entrepreneurs with serious cash who are interested in hearing your story.

echubb3• 15 years ago

Here in Ireland we're constantly hearing about "the knowledge economy" but I think it has yet to materialise. Ever since Intel set up shop here we've managed to attract the biggest movers in technology to set up their European HQ.

So much so in fact that the bigger European countries constantly bitch about us, citing our 12.5% corporation tax rate to mask their own failure in attracting these investments. The real reason probably has to do with the fact our spoken English is the best in the world and years of "free" fees for college places have resulted in a hugely educated population.

Producing indigenous firms which don't serve niche markets is still beyond us. This is probably due to a conservative funding community with the "spend way more than you need, we'll refund it after" model, as well as university students majoring in "safe" subjects like arts, languages or business rather than mathematics and computer science.

Even for those students majoring in compsci, they gear you towards getting a job, not starting your own company.

nfg2• 15 years ago

> Producing indigenous firms which don't serve niche markets is still beyond us.

I'm not sure about that, I've been in Havok (http://www.havok.com/) for several years now, very successful Irish startup in the Games/Entertainment space (hardly a niche), acquired by Intel three years ago ($100m+). Granted there's room to improve in terms of the number of indigenous startups, but there are success stories out there.

dkersten5• 15 years ago

In my opinion, Havok is an outlier success story though. Sure, there are a few other Irish startups that achieved phenomenal global success, but they are relatively few and far between when compared to the more startup-focused places like SV.

echubb3• 15 years ago

I'm not suggesting that Ireland is devoid of successful startups, just they seem to be the exception rather than the rule. We have also had Baltimore, Iona etc but we should be producing way more.

dkersten5• 15 years ago

I dunno.. I think our corporate tax does have a lot, if not close to everything, to do with companies basing their European headquarters here (eg, see Double Irish/Dutch Sandwich [1]). Our spoken English isn't as amazing as you make it out to be (its certainly not bad, but best in the world?? besides, have you ever been to Cork ;-) or certain parts of Dublin for that matter...) and while the "free" fees certainly helped our education, I still feel our education is inferior to a lot of the rest of the world. For example, computer science-related courses are still not attracting as many students as it should, even though, here in Ireland, IT jobs are much more plentiful than others [2].

Of course, regardless of how great we think we are as a startup hub, I've seen very little focus on startups here. Besides the occasional startup weekend, nubie.ie and Enterprise Ireland (which, IMHO, isn't very useful to a lot of - if not most - Internet tech startups), I see absolutely nothing here that shows any kind of innovation or advancements in the way of startups. Which is a pity, because I think that would be a great start to improving the economic situation.

university students majoring in "safe" subjects like arts, languages or business rather than mathematics and computer science

Funnily (or sadly) enough, I think the "safe" subjects are the ones that are really feeling the full force of the economic problems, while jobs in sciences, from where I stand anyway, are reasonably plentiful (well, compsci anyway, I haven't paid much attention to others since they're not relevant to me personally).

Even for those students majoring in compsci, they gear you towards getting a job, not starting your own company.

Agreed. This is definitely the case here. I think its holding back our potential, but I don't know what could be done about it really.

[1] http://www.bloomberg.com/news/2010-10-21/google-2-4-rate-sho...

[2] for example, http://irishdev.com/Home/News/1403-The-State-of-Play--IT-Gra... though from personal experience I know this to be true for all kinds of computer/programming related jobs

fedd4• 15 years ago

> our spoken English is the best in the world

better than in England? :)

echubb3• 15 years ago

Yep. If you go to some parts of South Dublin, Kildare, Cork, Galway (where the technology hubs in ireland are, incidentally) the accents are very neutral and easy to understand. Several European news stations with a spoken english bulletin use Irish presenters for this reason.

zeemonkee5• 15 years ago

Best in the world ? Try Inverness, Scotland.

yalforreca3• 15 years ago

Go to Portugal. Great weather with amazing beaches and country side, low cost of living and lot's of engineers that can speak fluent English. Also the government has subsidies for tech companies, specially in the IT sector. Spain is ok as well, but I find that people there have a hard time with English and like to party a bit too much. And the comments about London are true. It is very expensive to live here and the quality of life is appalling. Many people who start out in sexy industries ( games, web, etc... ) gravitate to finance because they can't afford to live an adult life here on the wages of those industries.

fun2have2• 15 years ago

Come and join us. Read our post about opening our R&D office in Portugal. http://blog.webnographer.com/2010/10/an-rd-office-in-lisbon/

Portugal salaries maybe lower but if you have not lived in Portugal for 10 years you can apply for non-habitual status which means you pay a flat rate of tax of just 20%!

Also you have the sun!

yalforreca3• 15 years ago

I left Lisbon around 7 years ago and moved to Barcelona for games programming gig. Moved to London 3 years ago and life has become less flexible so moving back to Lisbon is just a wish for now. But I do think about it a lot. The quality of life is just great. Miss the Ocean. I know some great people there if you need some references.

jcoen• 15 years ago

Actually I've worked both in Portugal and Spain, and I find the latter better than the former in many aspects. Never had a problem with English and Spaniards never struck me as party animals, at least no more than elsewhere.

notahacker2• 15 years ago

The article highlight for me was "Silicon Valley has been around a lot longer than London and is more mature".

Possibly our very European sense of perspective is what's holding us back...

StudyAnimal• 15 years ago

People earn far too much in Germany to be attracted by startup salaries. Still, once I finish my part-time masters, and my wife goes back to work too, I wouldn't mind getting into the scene. Got a few ideas, but would probably rather be a technical co-founder alongside an ideas/business guy.

Still, if anything is happening in Cologne in the mean time, give us a holler.

thisisfmu2• 15 years ago

He obviously has a vested interest in lauding his backers. If the European ecosystem is actually so great then why did it take the author three years to raise $1.3m?

ig14• 15 years ago

I believe GroupSpaces raised an angel round in 2008 and only started looking for the VC round in 2010.

thisisfmu2• 15 years ago

seedcamp invests about $80k, which is nowhere near enough to fund a London-based startup with 3+ people for more than two years. although the official story may very well be that they "only started looking" in 2010 this does not match up with this simple fact very well.

Occam's Razor therefore suggests to me that it actually took forever to raise a round (despite nominally ideal conditions, such as a well-connected founder with a CS degree from Oxford, trip to SV, liked by startup media, simple to understand product, etc).

jacquesm• 15 years ago

In my opinion one thing that is very different from the US compared to Europe is that labour laws here are pretty favorable to employees. This has the downside (from a start-ups perspective) of having a workforce that is mostly happy.

Happy people are in a strong position to negotiate and will also not easily go and leave their happy well paying jobs in order to be 'repeatedly punched in the face' (that's not mine).

So besides the obvious advantages that an ecosystem like Silicon Valley offers you can bet that if you see a European start-up that the people behind it are extremely well motivated and probably have some funding. As opposed to the 'throw stuff against the wall and see what sticks' strategy employed in Silicon Valley. Typically European start-ups have a higher rate of success than their American counterparts but the magnitude of the individual successes is lower.

This is all from my limited perspective so apply salt liberally.

The European startup ecosystem arrived

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