Next Silicon Valley? Berlin's battle to be a tech hub
bbc.com
bbc.com
Now if somewhere like Spain sorted out their bureaucracy and local corruption and made it feasible to set up business somewhere nice, by the sea maybe, somewhere with plenty of nice countryside, in a place where people could actually afford to buy their own homes, and the weather was consistently nice, then I'd be there in a Flash. Who cares if it's not on London or Berlin's doorstep. The actual Silicon Valley is as far away from the US's financial and political capitols as you can get, and used to be a good thing.
Quality of life. That's what will make me sit up and take notice of the next silicon valley wannabe. Until then I'll begrudgingly just go where the work is.
San Francisco vs. South Bay is a perfect microcosm of that choice. (which is ironic since I'm a huge house with a car with no neighbors within line of sight kind of guy)
That's a big ask.
I've scouted for houses in South Spain some time ago and was under the impression you can get a decent house near the beach for around 50k Euro, which isn't a lot.
Also, what about Mallorca? I've heard Martin Varsavsky say there is some sort of a retreat-hackerspace-coworkingspace thing?
That said, if you are already up for adventure, you could consider South East Asia or Latin America instead and really stretch your budget.
Of course, Nordic countries are much better infrastructure-wise. But they provide a lot more expensive, and more restrictive environment.
(Background: a Finn who has in addition to Helsinki lived in St. Petersburg and Istanbul, and has been in Berlin for the past couple of years)
Weird, I always look at these warm places with beaches and think to myself no wonder productivity is low in these countries
None of these apply to Berlin. Flamebait much?
At the very least tell me /why/ you think Berlin vs. London vs. Santiago is the next Silicon Valley. Instead, all I get is a list, series, catalog of companies that are based in the area (alongside a few quotes from people who have massive amounts to gain from feeding a bubble) - what am I suppose to conclude from that?
Parading an odd few companies is hardly worth your time. Maybe these companies haven't gotten to the size where they are able to move to SF yet. I want some deep, interesting research; research and insight tells me why 'X' is the next Silicon Valley.
This type of deep insight and research is sorely missing from this particular article. Here's a prime case in point: "One factor helping Berlin become more like Silicon Valley is that the attitude to risk is changing."
In this quote, the writer alludes to European's aversion to risk. Sure, I agree that's a problem, but I'd prefer some analysis rather than depending an a quote from a pop technologist. In particular, there's a lot to discuss about the treatment of bankruptcy in the US vs Europe; the European system penalizes bankruptcy a lot harder than the US, squishing risk-taking.
This is an interesting argument, but in this article, it doesn't get a look in.
Here's the point I'm trying to make: It's bad/unwise to write quick articles about technology that drive pageviews (like this one), but /it is/ a shame to see them keep bubbling to the top of Hacker News.
Hamburg and Munich are much more focussed on deliverying value, real products, make money. They aren't cool, they're expensive and tight. You have to deliver there or you will run out of money very soon (pressure => focus).
Imho Berlin needs to evolve without becoming the next Munich or Hamburg: Leave enough room to have a decent living/start up, to do experiments without having to burn millions for nothing (fancy rooms) — but also be able to rise money and go big, if there opportunities are there.
San Francisco was explicitly anti-capitalist for a long time as well; it's unclear to be if being somewhat anti-capitalist while being anti-corporate is actually bad, compared to being super capitalist and super stodgy/corporate/consensus/big-corp, like many other parts of Europe.
Bitcoin and small hardware projects (and security) seem like the main areas where someone could easily do that. Music/club/youth related startups too I guess.
Currently, this is still a very rare case.
While this sentence is obviously a generalization, I'd say it applies more to the city in itself than to the startup scene. "The scene" is quite heterogeneous - yes, you'll find anti-capitalistic parts, but then there are also many people who once worked for one of the Samwers companies, the corporate incubators (axel springer, telekom, ...) etc. These people are probably not as hipster (although the corporate incubators try hard...), but they're everything but anti capitalist.
Of all the bigger scenes in Berlin, the startup scene as a whole is in my experience one of the least anti capitalist.
I'm in general (with a few exceptions) very much impressed with the businesses, the people and the 'gruendlichkeit' on display. Berlin matters, and whether or not it will be a tech hub or not is not really up for discussion.
In the German language section of Europe it has already won its place as a hub, people from all over the continent have found their way there, and even some from other continents.
And in a larger context, of all the European capitals Berlin is moving the fastest, it likely will not eclipse London any time soon for sheer access to capital but in most other areas it definitely stands a chance to become the winner in the longer term.
What you could do is scour the websites of the various EU venture capital companies for press releases indicating investment into companies in Berlin and surroundings. If you make a nice survey and posted it here that would be a great resource to have.
Maybe this could serve as a starting point:
A bit if VC hype. Berlin won't be as big as either SV or NY in two years. Sorry.
Still, I'm very skeptical about ANY city here coming close to SV, mostly because of different mentality/tradition/culture across the ocean.
London in theory has everything going for it (ok, high cost of living, but so SV and NYC), but you don't hear so many success stories coming out of it.
The biggest drawback of Berlin would be the language, in my opinion.
Pretty much everyone in Berlin in the tech industry speaks at least good enough english. There are even some companies that use english exclusively.
(If I were the DE or Berlin governments, I'd make a huge focus of putting dual German/English signage all over in government and private life; everyone meaningful can speak English, but there are a bunch of places with German-only signage. In Frankfurt, there's the semi-absurd situation of English only signage, for stuff like Rental Car Return; due to the US military presence and international companies, there are probably more English-only renters than German-only renters.)
(I'm not sure what's gone wrong with Amsterdam. It had some great early successes, and some great universities, and hfh were about as awesome as ccc, if smaller, but people seem...not so risk-taking, and consensus focused?)
I'm not even sure you can make a cultural argument that makes sense about Amsterdam. There are so many foreigners there that the culture is <40% Dutch. A city where most residents decided to live there because of a fun urban environment is risk taking by some definition of the term. The only cultural argument I can think of is that it's quite euro-leftist, not very capitalistic.
You definitely would want to learn German for social reasons but it's absolutely not a prerequisite for moving there and being effective at most companies -- unlike, say, a top Japanese or Chinese company, or (from what I've been told) major French or Italian companies. In those places you might get away without good local language skills briefly if you're a specialist consultant, but it's going to make you pretty useless professionally otherwise, long term.
I suspect a reasonably intelligent English speaker could pick up enough German to be happy socially in months, based on my reasonably intelligent English-speaking friends who moved there without speaking German beforehand.
Its not a problem for the Germans, they like speaking English. I agree that it might be a problem for English speakers who irrationally decide that its a problem.
It's far from the markets and on the wrong side of trade barriers most startups serve (EU, NAFTA, etc). Other markets (including some pretty large countries) are completely inaccessible. Flying in and out is expensive and inconvenient. It's not a place people can arbitrarily migrate to so workforce is largely limited to locals. They speak a language and use a currency no one else does. It's not a financial hub, not even in the VC/startup niche. etc.
Then there is also the fact that the country is in a constant^ threat of existential war which means your employees are doing active reserve. Long term anxiety is real.
Of course there are the major positives that do make it work. I think that's an interesting point. Maybe the pluses get multiplied in a way that minuses don't in the case of startup hubs. That would imply that optimizing around the edges (eg living cost, CGT, typical "ease of business" measures) are not as important as complaints might suggest.
^By constant I mean that if you look at a 10-20 year horizon from any point in history, there is a substantial risk that conflict will affect your life as a citizen. Many Israelis hold foreign passport in case things go south.
I wonder what other places have this trait. University cities where smart people leave after university don't meet it.
Japan probably has the "lots of smart people want to be there" (the huge population of hacker type people worldwide who love Japanese culture), but either can't be there (due to a weird employment/immigration market), or the country itself is too difficult for a nexus of startupness to form.
Singapore and Dubai are awesome, but most of the expats I know in both places have a "want to make money for a few years then go home" view of the places.
SF, NYC, LA, Boulder seem like the most aspirational cities in the US. SLC for the Mormons. Maybe Portland?
If you want to know how Israel became the technology capital it is today, I thoroughly recommend Start-up Nation: The Story of Israel's Economic Miracle
Yes, the wages are low. Comparable to east-european wages.
Great for the startups that are there now, but seems to work against the goal of being a long-term tech capital.
There are huge numbers of 15-35 year olds who would take a 50-75% paycut and ~25-50% effective QoL decrease (in material terms) to live in Berlin vs. London or USA.
I think it's the same with Israel -- Israeli tech guys would generally make 4x as much money and live 2x as well if they moved to the USA, but they have their own non-economic reasons for actually wanting to live in Israel, and then make Israel into an awesome startup place. This has been a key factor in several M&A deals, companies setting up in-Israel labs, etc.
Another thing that is important is the ridiculously low rent. Seems to be ~75% cheaper than London. Many people in London/NY/SF/SV pay a whopping proportion of their salary into rent, so if you take a €2k/month paycut but end up spending the same amount less in rent, everyone's winning.
As nearly every startup hub is really struggling with insane rents, Berlin could be a serious competitor here. I think Berlin's property market will have enough slack to take on a fair bit of population growth, too.
The fascinating aspect of SV is how successful it is in spite of how many disadvantages it has relating to cost of living and cost of employees.
I suspect you don't know what you are talking about.
If it was really comparable to E-E wages, there wouldn't be a lot of Eastern Europeans working there (and yes, there are, I've seen it)
For a tech-startup job you can bet on 30k€ per year minimum. And cost of live in Berlin is still cheap, €1k per month gives you a very comfortable living.
Bulgaria/Romania: You can easily get 1500-2500 Euro gross with a few years of XP. Taxes and cost of living are lower too.
Ukraine: An acquaintance of mine, who's sold a few startups, didn't have success there, because experienced people wouldn't work for less than 4k Euro. Developers get paid a lot in the big cities.
Russia: Crazy high wages in Moscow/St.Petersburg, though cost of living is insane too.
Don't know much about other countries, but the situation is definitely comparable.
However there are still some regions not so fortunate, like Bielorussia
If you find good people from Belarus (which undoubtetly there are), try to get them visa to come to where you are.
Examples:
4000Euro/Month gross, net == ~2395 Euro
5000Euro/Month gross, net == ~2897 Euro
It would be interesting to see how much employees in Berlin cost their employers too.
Berlin is organic (as is London); that's why they have a decent shot. Berlin has some issues (mainly, a lack of great local investors; I'd love to run some money there on the side). It has the other elements (top universities, attractive to immigrants, especially from EU, stellar local talent (although maybe more "projecty" vs. "company-y"). CCC alone is worth about as much as UC Berkeley in the Bay Area.
I'm going to be sad if I'm not living in Berlin at least 50% time by the end of the year.
This is hugely important. So many places have tried to copy Silicon Valley, but it's just not very easy to artificially put everything together.
The "dark horse" for SEA is Myanmar; assuming the elections go well in 2014/2015, I could see them turning into a great place with essentially greenfield infrastructure investments over the next 5-10y.