What role for Berlin in the European Startup Ecosystem? Community.

Jan 21, 2013
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community_s4_google_250x250(1)During Hy!Berlin last week, Milo Yiannopoulos, Editor in Chief at The Kernel, interviewed Carter Caterfield of Art.sy, a New York-based startup working on bringing art deals online. The interview, which played on the theme of the intersection of Art and Technology, was aptly placed in the Hamburger Bahnof, a museam of modern art in Berlin. During the interview, Milo posed many questions, most of which were based on they hypotheses that Berlin was a great place for innovating in the intersection of art and technology, which got me thinking about how seemingly unrelated characteristics of a city can impact its ability to grow gain traction in certain sectors.

The Silicon Valley’s first web startups were well-positioned, with HP, IBM, and other key technology companies headquartered in the area. New York, likewise, rolled through the real estate and financial crisis with former day traders switching over to investing in startups when other markets looked less promising, which allowed FinTech startups in New York in Boston to excel (likewise the historic location for brands have helped startups who’s clients are brands to grow quickly). This smooth evolution of a city can be disrupted by a ‘black swan’ startup, like Facebook relocating out to California from the East Coast, allowing the region to become a prominent place for social startups; however, Europe and its cities cannot just sit back and wait for a black swan startup to excel – they need to take action and leverage their strengths.

At Betahaus, a well-known startup hotspot & Berlin’s 1st coworking space, a panel of Berlin residents spoke about why Berlin is awesome, curated by the lovely Colette Ballou, who recently opened a Berlin office of her successful European Tech PR Firm. During the panel, entitled “Who cares about Berlin?” Thomas Madsen-Mygdal, Danish investor and member of the startup community, made a very interesting point about how, while Berlin boasts its cheap rent and living style, this is not what Berlin should stand for, and its not how it should present itself to outsiders. In truth, Berlin will never be the #1 cheap route (India, China, Africa, etc.), and instead, it needs to focus on something it can be #1 in.

I don’t believe in the idea of a European Startup Capital – Silicon Valley VCs travel to New York when necessary, and I’m pretty sure London VCs aren’t moving to Berlin. If this is true, then a city’s relevancy to the larger European ecosystem will depend on what it brings to the ecosystem as a whole – I think that may be Community.

As an event, hy!Berlin outdid itself, as I already mentioned; however, its intimacy and ability to attract international superstars from 500 Startups, GigaOm, SendGrid and more, was only a taste of what it does well. What I initially mistook for ‘hype’ seems to be an ability to create buzz, bring outside interest (something Europe sorely lacks) and maintain relationships. Paris lacks this desperately, and I think that Paris entrepreneurs will be better off going to Berlin to network with Londoners, Berliners and more then trying to woo them to lovely Paris. Frankly, it’s just not in Paris’ culture.

So with Paris producing Europe’s Innovation, IP, and engineering talent, London holding all the money, and Berlin bringing everyone together for networking, events, and relationship-building, perhaps 2013 is the year where we begin to see a European ecosystem form. For now, I’ll be travelling all over Europe so that I don’t miss an opportunity, and I think for those seeking real opportunities, Berlin is definitely a must.

Hy!Berlin will be back in Berlin in the beginning of June, and I will definitely be there.