The Berlin Startup Cheat Sheet

In September a group of TechCrunch employees were in Berlin in preparation for TechCrunch Disrupt Europe at the end of October, so I decided to prepare a document of usefulness. The aim was simply to provide a starting point for people who are new in town, with varying amounts of knowledge of the startup scene in Berlin. So I condensed everything I felt is important into one document, and made it shareable so that anybody can see it and download a copy for themselves. I’m considering creating Part Two with further info, so stay tuned.

So here it is:

The Berlin Startup Cheat Sheet

Enjoy. And if you tweet about it, do me a small favour and credit me @fakebananas. Thanks!

Sick of Silicon Valley?

From what can be gauged from recent opinion pieces online, people are getting fed up of Silicon Valley. The startup ecosystem is now very mature and there are a number of technology giants, several of whom have been in hot water recently over data protection. Yet still more people are flocking to the Valley and neighbouring San Francisco, looking to make money and maybe enemies too. So can we expect to see the same in burgeoning startup scenes like Berlin in the future? We found this post about San Francisco last week on Valleywag (the Silicon Valley news and gossip site) and it really struck a chord with us in Berlin. It was rather like gazing into a crystal ball to see what the city might be like in 30 years or possibly much sooner.

In the article, Chris Tacy laments the enormous rent prices in San Francisco, the overabundance of wealthy entrepreneurs and the lack of respect that new arrivals in the city have for their local area. He admits he was also once a new arrival looking to make his fortune, but declares “Now it’s worse than it was in 2000. Now it’s only about the money”.

What Tacy says about The Mission, an area of San Francisco, is alarmingly similar to how many feel about Prenzlauer Berg, Kreuzberg and more recently Neukölln. These areas are changing, becoming gentrified and as this affluence arrives, some of the interesting aspects get drowned out. According to the Guardian, in the 90s and 00s over 60% of Prenzlauer Berg’s residents were driven out – presumably by rising rents. Gentrification is a particularly hot topic here, with journalists musing over it, young locals spraying the streets with Go Home Yuppie Scum, and expats bickering over who was here first. Discussions in the forums of Toytown Germany, an English-speaking website, often point the finger at foreigners: “Friedrichshain is chock full of hipster imports. Suggesting they are not having an effect on rents is downright silly.” Of course, gentrification and the startup scene are not one and the same – in Berlin, San Fran, or anywhere – but they definitely overlap.

When reading the Valleywag article, we substituted San Francisco in 1992 with Berlin in 2008, and found that much of it still reads perfectly, such as this paragraph:

“I moved to Berlin in 2008. I was looking for a job – but I was also looking for a new life and a place that had hope and excitement and which provided a bigger, wider and more diverse world to play in. I found a city made up of wildly different people – of all types – spread across a huge range of little tribal neighborhoods. It was a massive melting pot of values, ethnicities, world views, ages and economic classes.”

Berlin certainly has a huge variety of lifeforms like San Francisco, and some of its diversity is potentially being watered down with the influx of hipsters and those looking to start their business here, which is causing tension with longer-standing expats. But unlike San Francisco, we’ve not really attracted the money-hungry set. Not yet anyway. People come to Berlin to start their business in a fantastic, welcoming ecosystem – not to make their millions, or even billions.

If the article really shows what’s to come in Berlin and other young startup scenes, we can potentially expect big exits, big cars and a lot of “douchebaggery”. We should maybe view it as something of a warning. Currently we’re so excited about helping make Berlin into Europe’s most important tech hub (with some even wanting to make into ‘the next Silicon Valley’) that we’re not paying attention to the potential downsides of this process. So can we slow down the negative impact? Some starting points would be caps on rising city rents, more initiatives such as Give Something Back To Berlin and on an individual level, doing your best to be aware of the impact you have as a person, as a foreigner and as part of a startup. Our impact is a mixture of positives and negatives, so our main job is to be considerate of our surroundings.

Berlin, as a city, is still changing and finding its identity – one that is quite different to San Francisco and the Valley – and we should aim to help maintain its amazing diversity and rich culture. In 10 years’ time, people might feel the same disdain for the omnipresence of startups as they do at the moment about Starbucks. So, in the words of Marissa Mayer, we should “promise not to screw it up”.

Photo credit: Dunkin’ Berliner and The Exiled

This post originally appeared on the Startupbootcamp blog on 19th June 2013

Where should you start your startup?

How expensive is it to build a company in Berlin, San Francisco & London? We wanted to know and did a little research. Find out how much a beer, rent and employee costs are in our comparative infographic.

Click the image for a larger version.

So what do you think? Do you find London as expensive as this? Where would you start a new business?

This post originally appeared on the Startupbootcamp blog on 23rd May 2013. The content and research was by me, and the graphic design provided by Julien at Startupbootcamp.

The end of the road for the peer to peer explosion?

It has just emerged that Housebites, a peer to peer startup nicknamed the “Airbnb for take-out”, is revising its business model and will be launching a new website soon. Housebites launched in 2010 and allowed independent chefs to sell their cooked food as a takeaway service, and their site has been replaced with a message saying “Goodbye for now” with a few hints of what is to come.

Housebites is one of a string of peer to peer networks that has run into trouble recently. Last month Gidsy, a peer to peer service for activities and things to do, announced that it was moving to GetYourGuide, a larger, older, B2C organisation. Only last week, Airbnb was in the news for being ‘illegal’ in New York, as New York and indeed many cities do not allow people to sub-let their apartments for short leases. There are a lot of grey areas in what Airbnb does – or what it allows and encourages its users to do – and now that the company is big enough to be heard of by everyone and their mum, the legal cases are beginning.

So is the peer to peer model broken?

The model isn’t necessarily broken but it appears very difficult to scale these companies successfully, as they centre around unique experiences. How unique can these experiences be once they are on a huge scale? And how can these companies assess and guarantee the quality of so many experiences? The companies need to be incredibly tightly-managed, and ideally have people on board who can negotiate legalese and provide suitable answers when probed on these grey areas.

The P2P startups also sometimes have a hard time securing funding because, as was the case for Housebites, they are not considered ‘techy’ enough. Their propositions centre on humans, which isn’t always appealing enough to attract venture capital.

What about the communities these companies are leaving behind?

There are a lot of lost people left over after the storm. The chefs who sold their creations through Housebites have created their own Facebook group and Twitter feed called Hungry Chefs (and they are pretty vocal at the moment), and many users of Gidsy were rather shocked when the announcement appeared suddenly on the website (above). Indeed, many of those users might not be interested to use GetYourGuide as the proposition is entirely different, although both revolve around finding things to do. So what will these users do? Those hoping to run collaborative movements will certainly have a lot of work to do, in trying to maintain momentum and the smooth running of these operations. But they are feeling positive about the future. I spoke to the spokesperson for Hungry Chefs, who told me:

“We are collaborating to see if we can build on the things we learned – good and bad – from the Housebites experience. Our aim is to use social media and mobile payment technology in the early stages as we think the platform should be secondary to fantastic food.

It should be possible resume delivery of great, home–cooked chef meals to foodies. As a collective, we will also be looking at ways to group all sorts of chefs under the Hungry Chefs banner to find meaningful work and opportunities outside of the restaurant kitchen.”

Overall we can only hope that these initiatives, as well as other P2P startups (anything that gets called “the Airbnb for _______”), are successful. Personally, I think that Gidsy, Airbnb and Housebites all have or had fantastic visions that a lot of people are passionate about, and it’s painful seeing such positivity get dragged down by red tape, lack of scaleability and lack of funding or income. Perhaps in 10 years the P2P model will have been cracked, and these companies will be celebrated as the pioneers.

Community management: how should startups cultivate their communities?

What happens when you mix coffee, noms, and a group of people who are obsessed with communication? Inspiration happens! The guys at HowDo organised a breakfast for a small group of community managers and other writer-y types from Loopcam, EyeEm, Readmill, GigaOM and Somewhere. There we talked about tone of voice, good examples of community management we’ve implemented or witnessed, and well, we talked a lot about talking.

Communications crew. Pinched from @severin

HEY WE’RE AN AWESOME STARTUP! HOW’S IT GOING?

Many startups tend to adopt an enthusiastic, bubbly tone singing the praises of the overwhelming awesomeness of their product and even of life itself. There is absolutely nothing wrong with spreading the love, but it can be hard to make yourself heard in this space. Even harder is making your communication style truly unique, while telling your brand story and putting across your values.

Share me

Some startups – and many larger companies – fall victim to a certain narcissism online. Yes, people have ‘Liked’ your page because they like your brand, but keep WIIFM in mind (What’s In It For Me?). Creating shareable content is 1 part magic, 1 part relevance, mixed with 2 parts awesome content. Ok maybe the ratio is wrong but they’re all pretty vital. Tell people what’s happening in your industry. Share other people’s content, sometimes they’ll return the favour. Even play on universal truths. They may be generic, but it’s ok to create or share them from time to time: inspirational images (particularly on Tumblr and Pinterest) and funny videos are incredibly shareable, and will expose your name to a much wider audience, even if the content is less key to your brand. As long as it’s relevant – in your industry, geographic location, whatever – you can play in this space sometimes.

I like this Gidsy post because it was timely (Einstein’s birthday) and relevant (imaginative maker types = core users). Generic is sometimes ok! Reach a bigger audience.

Who are you speaking to?

A lot of your output is going to be preaching to the choir. This is invaluable, as you’re keeping your most enthusiastic (and possibly most influential) people topped up with brand love, and they are going to evangelise like anything. But how will you speak to people that don’t already love your product? You might need a different channel for this, for example paid ads, or you could widen the net when posting things to your followers. By being a little more informative and persuasive about your product, there is a small risk of alienating your core group, but the risk the other way round is much bigger. People will simply hide, unlike, or unfollow if you give them irrelevant content.

Offline. Yummy.

Receiving lots of Likes and shares is always a boost, but meeting the users of your product In Real Life is genuinely inspiring. Organising events and meetups gives you a very different perspective than what Google Analytics will tell you, and best of all, it’s really fun! The next step is converting these people so that they actually use your product. Which brands do you think have done a good job offline? An event I enjoyed was an Airbnb open office in London, but that’s probably because I got a Moleskine luggage tag embossed with their logo. Swag is always going to be a winner (if you can afford to do it), swag that’s relevant to your brand is even better.

Which startups are doing this well? I’d be interested to hear other people’s thoughts on this.