6 ms·

Next Silicon Valley? Berlin's battle to be a tech hub

45 points by uladzislau 13y ago

jacquesm 13y ago
I've travelled to Berlin several times last year to look at start-ups about to be invested in. 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.
- nick2 13y ago
  Can you mention some companies that are doing cool innovative stuff? Most of the stuff coming out of there that I know of seem to be copies of US start-ups geared toward the EU market.
  - davidw 13y ago
    These guys went through YC, but are located in Berlin: https://www.directededge.com/ https://www.directededge.com/
  - jacquesm 13y ago
    No, sorry. Which companies I visit is - for obvious reasons - subject to NDAs. And there is more to the .de startup scene than the Samwer brothers, a lot more, actually. 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: http://www.crunchbase.com/search/advanced/companies/2255804 http://www.crunchbase.com/search/advanced/companies/2255804
watt 13y ago
"[Zoobe] Founder and chief executive Lenard Krawinkel told the BBC: "[...] You can employ people for far less money than in San Francisco - and even for far less money than in Asia."" Yes, the wages are low. Comparable to east-european wages.
- potatolicious 13y ago
  This seems like a short-term advantage, but a long-term liability - wouldn't a massive wage disparity simply encourage emigration/brain drain? Great for the startups that are there now, but seems to work against the goal of being a long-term tech capital.
  - rdl 13y ago
    The thing about Berlin is costs of living are low and people want to move there for reasons unrelated to the economy (it is probably the world's best party/club/edm/etc. destination). 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.
    - martinald 13y ago
      This is a really great point. And not only 'would' take a 50-75% paycut - they already do this en masse. 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.
- 13y ago
hiphopyo 13y ago
I thought Malaysia's Cyberjaya was the "next Silicon Valley" due to its close proximity to the Iskandar megaproject with Singapore?
- rdl 13y ago
  Cyberjaya is...in Malaysia. And essentially the product of government. It's not really any more likely to succeed than Russia's attempts at a "Silicon Steppe". 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.
  - davidw 13y ago
    > Berlin is organic 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.
    - rdl 13y ago
      I'm also pretty down on Malaysia as a country due to the racism directed by their government (generally anti-Chinese/pro-Malay), which seriously influences economic policies -- both in their goals, and their general desire for a top-down centrally imposed plan for things. This sort of works in natural resource extraction, but is antithetical to startups. I'd probably bet on Indonesia instead of Malaysia long term for this reason; less state-directed, more chaotic and natural.
      - shardinator 13y ago
        I can't speak for Malaysia, but agreed on Indonesia. I just visited a co-working space, Jogja Digital Valley (Yogyakarta), and got the feeling that good things would come of it. It will take time, but the combination of skills (Gadjha Mada and many other universities) and capital are here (8 companies get around 30k which goes much further here). The main problem with Indonesia is their poor Internet connectivity, unless something is done, it seems hard to imagine a Facebook being born in a dorm room or garage.
spikels 13y ago
Anyone know DTZ's 2014 cost per workstation for San Francisco and Silicon Valley? In the 2011 it was much cheaper than New York and London and similar to Berlin. Not sure why the BBC author left it off the story.
spikels 13y ago
Ciaran O'Leary, a partner in the Early Bird VC firm: "I think Berlin still needs a couple more years to really be one of the top one or two places in the world." A bit if VC hype. Berlin won't be as big as either SV or NY in two years. Sorry.
- rdl 13y ago
  Realistically Berlin just needs to become a/the top place in Europe (i.e. competing with London). USA is essentially one entity at this scale, and Israel is the other. Berlin could be the third, and probably could become #2 without too much growth (Israel is amazing, but it's tiny)
  - Kurtz79 13y ago
    Agreed. A tech hub in Europe has a potential pool of talent/investors as high as the US, and doesn't have to compete with it. 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.
    - mAritz 13y ago
      > "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.
    - rdl 13y ago
      Agree on language, but that's actually a strength of Berlin vs. anywhere else on the Continent: you can get by with English-only quite well. Maybe not quite as well as in the nordic countries/NL, but cost of living is absurd in nordics, and they're "boring" so not so appealing to 15-35 year old immigrants from the US/UK/etc. who could live/work anywhere. (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?)
drpgq 13y ago
No mention of the Samwers?
tomelders 13y ago
I'm bored of hearing about how dull, miserable, offensively expensive and/or painfully trendy places are poised to be the next Silicon Valley. 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.
- rdl 13y ago
  In my experience, more young people in the tech industry prefer crappy weather and lots of clubs/music/dating/party/etc. and living in an urban core, vs. having awesome houses in great weather. 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)
  - jusben1369 13y ago
    I understand your micro regional distinction there but it strikes me that most of those enamored with SF cite the weather and/or wonderful lifestyle is a key driver for most people being there. As to Spain, my startup Spreedly is sort of an infrastructure service for payments challenges with global support. I'd say Spain is the most active country we see for startups in Europe (if it's second it's second to the UK). I'm always impressed and also drearily wonder if it's a function of Spain's incredibly high youth unemployment rates. (making a startup more appealing given the dearth of other good options)
  - tomelders 13y ago
    There's more to the tech world than young people.
    - 13y ago
chriseidhof 13y ago
I live in Berlin. It's awesome. I don't think it'll ever be the next SV, or even come close. If it ever becomes as "successful", it'd be in a very different way.
ekpyrotic 13y ago
This article is little more than an advertisement for a couple of companies that have set-up base in Berlin. Much like everyone else, I'd tired of these technology 'gossip columns' that add very little to the dialogue. 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.
rmoriz 13y ago
Berlin has a problem that everyone will feel it after a while living there: Its scene roots are still very anti capitalistic. This still influences the culture there, even CCC and other "digital culture groups". Still many people don't want to earn big money because they don't want to lose there scene credit. It's creepy, but still many of my Berlin colleagues think that way, especially in the CCC and pirate party orgs. 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.
- rdl 13y ago
  The "anti-capitalism" is real, but at least all the people I've met are fine with "project which makes a product/service we sell", particularly if it's super disruptive -- more anti-corporate than purely anti-capitalist. 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.
  - rmoriz 13y ago
    In the end a developer has to pay her or his rent and food. It's sad to see many hackers in berlin wasting their true skills in unpaid hobby work and sitting in some bozo-driven copycat startups from 9-5 coding in a crappy $language.
    - rdl 13y ago
      I think what will help them is some great local examples of people doing awesome technical work and changing the world through it and getting paid, and local investors who can support that. Right now there is the bad example of the Samwers, and the good example of Soundcloud. 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.

45 points by uladzislau 13y ago

I've travelled to Berlin several times last year to look at start-ups about to be invested in. 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.

nick2 13y ago
Can you mention some companies that are doing cool innovative stuff? Most of the stuff coming out of there that I know of seem to be copies of US start-ups geared toward the EU market.
- davidw 13y ago
  These guys went through YC, but are located in Berlin: https://www.directededge.com/ https://www.directededge.com/
- jacquesm 13y ago
  No, sorry. Which companies I visit is - for obvious reasons - subject to NDAs. And there is more to the .de startup scene than the Samwer brothers, a lot more, actually. 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: http://www.crunchbase.com/search/advanced/companies/2255804 http://www.crunchbase.com/search/advanced/companies/2255804

watt 13y ago

"[Zoobe] Founder and chief executive Lenard Krawinkel told the BBC: "[...] You can employ people for far less money than in San Francisco - and even for far less money than in Asia."" Yes, the wages are low. Comparable to east-european wages.

potatolicious 13y ago
This seems like a short-term advantage, but a long-term liability - wouldn't a massive wage disparity simply encourage emigration/brain drain? Great for the startups that are there now, but seems to work against the goal of being a long-term tech capital.
- rdl 13y ago
  The thing about Berlin is costs of living are low and people want to move there for reasons unrelated to the economy (it is probably the world's best party/club/edm/etc. destination). 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.
  - martinald 13y ago
    This is a really great point. And not only 'would' take a 50-75% paycut - they already do this en masse. 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.
13y ago

hiphopyo 13y ago

I thought Malaysia's Cyberjaya was the "next Silicon Valley" due to its close proximity to the Iskandar megaproject with Singapore?

rdl 13y ago
Cyberjaya is...in Malaysia. And essentially the product of government. It's not really any more likely to succeed than Russia's attempts at a "Silicon Steppe". 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.
- davidw 13y ago
  > Berlin is organic 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.
  - rdl 13y ago
    I'm also pretty down on Malaysia as a country due to the racism directed by their government (generally anti-Chinese/pro-Malay), which seriously influences economic policies -- both in their goals, and their general desire for a top-down centrally imposed plan for things. This sort of works in natural resource extraction, but is antithetical to startups. I'd probably bet on Indonesia instead of Malaysia long term for this reason; less state-directed, more chaotic and natural.
    - shardinator 13y ago
      I can't speak for Malaysia, but agreed on Indonesia. I just visited a co-working space, Jogja Digital Valley (Yogyakarta), and got the feeling that good things would come of it. It will take time, but the combination of skills (Gadjha Mada and many other universities) and capital are here (8 companies get around 30k which goes much further here). The main problem with Indonesia is their poor Internet connectivity, unless something is done, it seems hard to imagine a Facebook being born in a dorm room or garage.

spikels 13y ago

Anyone know DTZ's 2014 cost per workstation for San Francisco and Silicon Valley? In the 2011 it was much cheaper than New York and London and similar to Berlin. Not sure why the BBC author left it off the story.

spikels 13y ago

Ciaran O'Leary, a partner in the Early Bird VC firm: "I think Berlin still needs a couple more years to really be one of the top one or two places in the world." A bit if VC hype. Berlin won't be as big as either SV or NY in two years. Sorry.

rdl 13y ago
Realistically Berlin just needs to become a/the top place in Europe (i.e. competing with London). USA is essentially one entity at this scale, and Israel is the other. Berlin could be the third, and probably could become #2 without too much growth (Israel is amazing, but it's tiny)
- Kurtz79 13y ago
  Agreed. A tech hub in Europe has a potential pool of talent/investors as high as the US, and doesn't have to compete with it. 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.
  - mAritz 13y ago
    > "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.
  - rdl 13y ago
    Agree on language, but that's actually a strength of Berlin vs. anywhere else on the Continent: you can get by with English-only quite well. Maybe not quite as well as in the nordic countries/NL, but cost of living is absurd in nordics, and they're "boring" so not so appealing to 15-35 year old immigrants from the US/UK/etc. who could live/work anywhere. (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?)

drpgq 13y ago

No mention of the Samwers?

tomelders 13y ago

I'm bored of hearing about how dull, miserable, offensively expensive and/or painfully trendy places are poised to be the next Silicon Valley. 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.

rdl 13y ago
In my experience, more young people in the tech industry prefer crappy weather and lots of clubs/music/dating/party/etc. and living in an urban core, vs. having awesome houses in great weather. 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)
- jusben1369 13y ago
  I understand your micro regional distinction there but it strikes me that most of those enamored with SF cite the weather and/or wonderful lifestyle is a key driver for most people being there. As to Spain, my startup Spreedly is sort of an infrastructure service for payments challenges with global support. I'd say Spain is the most active country we see for startups in Europe (if it's second it's second to the UK). I'm always impressed and also drearily wonder if it's a function of Spain's incredibly high youth unemployment rates. (making a startup more appealing given the dearth of other good options)
- tomelders 13y ago
  There's more to the tech world than young people.
  - 13y ago

chriseidhof 13y ago

I live in Berlin. It's awesome. I don't think it'll ever be the next SV, or even come close. If it ever becomes as "successful", it'd be in a very different way.

ekpyrotic 13y ago

This article is little more than an advertisement for a couple of companies that have set-up base in Berlin. Much like everyone else, I'd tired of these technology 'gossip columns' that add very little to the dialogue. 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.

rmoriz 13y ago

Berlin has a problem that everyone will feel it after a while living there: Its scene roots are still very anti capitalistic. This still influences the culture there, even CCC and other "digital culture groups". Still many people don't want to earn big money because they don't want to lose there scene credit. It's creepy, but still many of my Berlin colleagues think that way, especially in the CCC and pirate party orgs. 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.

rdl 13y ago
The "anti-capitalism" is real, but at least all the people I've met are fine with "project which makes a product/service we sell", particularly if it's super disruptive -- more anti-corporate than purely anti-capitalist. 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.
- rmoriz 13y ago
  In the end a developer has to pay her or his rent and food. It's sad to see many hackers in berlin wasting their true skills in unpaid hobby work and sitting in some bozo-driven copycat startups from 9-5 coding in a crappy $language.
  - rdl 13y ago
    I think what will help them is some great local examples of people doing awesome technical work and changing the world through it and getting paid, and local investors who can support that. Right now there is the bad example of the Samwers, and the good example of Soundcloud. 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.