What is the best place to build your start-up in Europe? In the era of cheap airline fares and diminishing significance of national borders, it is definitely a question worth asking. In today’s article, we look carefully at Berlin, trying to assess all the advantages the city offers for international start-up founders.
Most of the data and insights are based on the Global StartUp Ecosystem Report 2017, as well as a chat we had recently with a UX designer from one of the Berlin start-ups. Here is what we found out.
The city of possibility
Looking at the numbers, it seems like Berlin gives everyone a chance to make their dream come true. The city has the second highest ratio of immigrant start-up founders in the world, giving way only to Silicon Valley. Its visa acceptance rate is the 3rd highest in the world.
According to TechCrunch, in 2016 a new start-up was founded in Berlin every 20 minutes! This shows that there must be some good system in place that makes it possible for the start-up scene to develop at such a pace. What are the elements of this system?
First and foremost – Berlin start-ups accelerators and incubators, such as Betahaus, Factory or Startupbootcamp, just to name a few. However, in the past few years, the driving force for the local start-up scene has been Rocket Internet. The company incubates and invests in technology companies with proven business models. It has bred many successful start-ups which grew into European or even world players – for example, Zalando. It has also raised a total of $ 1 billion in funding for start-ups in 2016.
Besides well-established start-up accelerators and funding programmes, there are other institutions which make it possible for virtually anyone to start a business in Berlin. A good example is the Chamber of Commerce and Industry of Berlin. The institution provides new founders with necessary legal assistance, workshops, welcome programmes for foreigners and so much more.
Finally, the opportunity for founding a successful tech company in Berlin is enhanced by the fact that Germany is not so technologically established as one might think. Because of the existence of the Berlin Wall until fairly recently, the flow of innovation was at least to some extent limited. The technological infrastructure is still developing – and any tech company carrying a good idea can play a part in this development. You might need a helping hand of our Business Development Managers in Berlin.
One big start-up family?
According to the Global Startup Ecosystem Report, Berlin ranks #7 in the world in regard to the Performance factor. This high level of performance is achieved largely due to a well-established start-up community and support network.
This network is closely connected to co-working spaces, such as Factory or Betahaus, which also run their own acceleration programmes. This is where the start-up community meets to learn, share ideas and look for employers or investors. Among many tech events, one can also find initiatives designed to improve overall well-being – such as the Workout for Happiness, a meditation programme organized by Factory.
Corporate players are a significant part of the ‘Berlin start-ups family’. Many of them take active steps to engage with this innovative ecosystem, as they recognize the symbiosis between a start-up and an established company is extremely beneficial for both parties. A great example is Deutsche Bahn, the nation-wide railway company, which has recently started moving some of its engineers to co-working spaces, so they can be close to the start-up culture on a daily basis. This led them to initiate cooperation with some small ventures and bring more innovative solutions into Deutsche Bahn (such as experimenting with gesture-responsive ticket machines and augmented reality).
The easiest way to realize the number and variety of the Berlin start-ups community initiatives is to visit the MeetUp.com tech events page. Each week there are dozens of learning and networking opportunities which can support any start-up founder – no matter what idea they want to develop.
The mechanics behind the flow of talents towards Berlin are quite simple:
1. Many developing companies receive high amounts of funding, which attracts specialist from all around Europe and other parts of the world.
2. Berlin is still really cheap, comparing to most western European capitals or even other cities in Germany. Paired up with good start-up salaries, this allows tech employees to enjoy a fine standard of living.
3. The city’s atmosphere, vibrating with tolerance and equality, lets everyone feel at home – regardless of their race, religion or sexual orientation. This is particularly appealing while extreme rightist and nationalist movements are growing in many places in Europe.
4. Because life is so comfortable in Berlin, the number of qualified specialists constantly increases. This, in turn, drives even more capital and enthusiastic investors willing to invest in Berlin-based start-ups.
Of course, this process has side effects, which will likely be shaping the future of the city. The council has already recognized some problems and is in the process of fixing them. The main issues include growing gentrification and problems with infrastructure – such as difficulties with finding a place to live.
Is Berlin a place for your start-up?
Berlin start-ups community revolves around ventures which are beneficial for the society. It is not just about making money – but also making a difference. To illustrate this trend, it is enough to mention that one of the most rapidly growing branches of tech start-ups in Berlin is digital health.
A model example of a start-up initiative in this sector is FTWK – a network of digital innovators that shape the future of healthcare. Their various services include consulting, design of digital products, running acceleration programmes and many other activities revolving around health. The company is also a great representation of what seems to be the “Berlin start-ups’ core values”: community support, learning, innovating and making a social impact.
So is Berlin the place to make your start-up idea become reality? If you are community-and-learning-oriented, open to unforeseen opportunities, and you want to make a positive impact on the world while enjoying a good living standard – chances are, this city will serve you well. Is it the best possible location? We don’t know – but no-one will ever be able to tell you that.
What we do know is that Berlin holds a lot of possibilities for the ones who are willing to take them. Plus, it offers a big dose of necessary support – both from the community and the local authorities.
Ideamotive loves to work with start-ups – no matter whether they are based in Berlin, London or Dubai. If you need a tech team to design your digital product or want help with business strategy – contact us email@example.com here.