What is the worlds hottest startup capital? – Well. Berlin was able to achieve an unprecedented lot in its young age of founding new businesses. But to claim it’s even hotter than Silicon Valley, the city with over 40 years of experience in entrepreneurship could only come from the poor but sexy (sorry I needed to say that), inexperienced, but overly self-confident German capital.
However, repeat it over and over again, it might actually become true: Berlin has almost everything it needs to be a rocking startup capital. The city is exciting, creative and an affordable place to live and work. At the same time it’s benefitting from Germany’s healthy economy and the comparably low youth unemployment rate. Berlin is also full of like-minded people: Christoph Räthke told Venture Village some time ago, that Berlin isn’t just a hipster paradise – It’s filled with ambitious, creative people eager to use technology to help change the world. While it is technically possible to build a great startup from anywhere in the world, the opportunities and serendipitous connections that are presented in a city like Berlin are priceless.
All these things mentioned above are reasons for innovative entrepreneurs to come to Berlin.
Okay, Berlin is still missing some kind of catalyst – Silicon Valley has the University of Stanford, it has Shockley and Fairchild. But there are quite a few Berlin companies who have the potential to become global players as well. Think of ReseachGate – Bill Gates invested in it last year – or how about Soundcloud, the successful music sharing platform?
The only thing Berlin is still short on is venture money, but it’s increasing exponentially: The American investor Insight Venture Partners recently invested $88-Million in Delivery Hero, a global food ordering company, making it the largest investment in this industry just yet. Lieferheld, Delivery Hero’s German daughter and Just Eat equivalent might have played a part in landing this coup. It announced that it had become profitable just a few months prior to Insight Ventures investment.
The Berlin startup-scene is thriving and blooming with only a few minor setbacks. I’m saying minor, because latest German media coverage on the topic shows that some startups failing is a big deal to Germans. What the German economy press doesn’t understand is that failing is okay, it’s part of the process and it’s important. While in Berlin, “failures are scaring the sector” Silicon Valley’s mentality is a rather different one: “Fail faster. Celebrate Failure.” Successful entrepreneurs are usually serial failures:
“The very first company I started failed with a great bang. The second one failed a little bit less, but still failed. The third one, you know, proper failed, but it was kind of okay. I recovered quickly. Number four almost didn’t fail. It still didn’t really feel great, but it did okay. Number five was PayPal.” – Max Levchin (founder and former CTO of PayPal)
Yeah, Berlin probably does need to learn a whole lot more before being able to claim it’s the hottest startup capital, but as international investors are more and more looking into markets after the short startup period of somewhat 4 years I think it’s save to say: Watch out Silicon Valley, we’re on to something here…