April 5, 2008

Europe Is Searching For Its Silicon Valley

Erick Schonfeld

108 comments »

Over the past few days at the Next Web conference in Amsterdam, I had the opportunity to hang out with about 700 Internet entrepreneurs from all over Europe. The startup scene in Europe reminds me of Silicon Valley four or five years ago—hungry startups building Web companies on the cheap and products that scratch a personal itch.

Swedish startup Twingly, for instance, wants to come up with spam-free blog search by starting with the best 450,000 blogs and letting users share blog posts with each other. ~~Paris~~Brussels-based Zilok is creating an eBay for renting things such as drills and digital projectors. London’s Fav.or.it makes a feed reader with extra powers—you can leave comments on blogs within the reader, it ranks posts based on how much they are actually read, and it lets you filter posts by tag, rank, or category. In Munich, andUnite has created a service that allows you to collect your search terms and share them with others.

And a handful of companies are even gaining substantial traction. I was surprised to learn that the social network Netlog claims 30 million unique visitors and four billion page views per month (comScore counts 11 million visitors, but five billion page views). Netlog operates in 15 different languages, and 20 countries. Then there is eBuddy, the Meebo of Europe, which boasts 12 million Web users and 1.6 million mobile users of its Web-based instant-messaging service.

Most of the startups I encountered, however, are still operating under the radar—in Romania, Sweden, Holland, Ireland, France. But a cross-border Web 2.0 culture is definitely gaining steam across Europe. Technology itself is helping to break down borders. A VC showed me the landing page on his mobile phone. It wasn’t his e-mail. It was Twitter. Another startup founder told me that Twitter helps him keep a dialogue going with other entrepreneurs and VCs across Europe, and even with contacts in the U.S.

Europe is still a mosaic of employment law, tax regulations, and cultural habits that can influence where it makes the most sense to locate different parts of a business. One Dutch CEO, for instance, told me that ~~it costs~~ you need a minimum of 18,000 Euros in starting capital just to incorporate in the Netherlands. ~~And that is just the government’s fee~~.

When I asked which region was most likely to emerge as Europe’s Silicon Valley, the answers were all over the map: London, Munich, Berlin, Zurich, Geneva, even Barcelona. The money is in London, cheap office space is in Berlin, the mobile expertise is in Helsinki, the weather’s nice in Barcelona, and the inexpensive engineers are in Estonia (which may not even consider itself part of Europe, but is close enough to manage from Berlin or Amsterdam).

As Europe searches for its Silicon Valley, it may turn up as a state of mind rather than a specific place. The truth is that Europe may not need a single Silicon Valley because business is becoming so distributed. While some Silicon-Valley chauvinists may disagree, the idea of concentrating all the talent and capital in one region seems so last century to many Euro 2.0 entrepreneurs.

(Photo © Pieter Baert).

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Comments

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Andrew

April 5th, 2008 at 11:34 pm

I think it pretty much has to be somewhere in Britain since English is pretty much universal for the internet, seeing as how most of the world knows it. If they went with Germany or Italy or France it would be too much of a language barrier for most startup owners to move there.

Doesn’t have to be London though since its pretty expensive, so probably will be some town near London and its airport but not in the city itself.
符碼印象 JackLin

April 5th, 2008 at 11:44 pm

It’s great to have so many startups in Europe, there should be more ideas around the world!
Web Hosting Tips

April 5th, 2008 at 11:45 pm

With the rise of Silicon-like in Europe, it will be good for technology all over the world. Silicon California now has a formidable competitor. Competition will yield better products and services. Welcome to the new world.
Yakov

April 6th, 2008 at 12:00 am

It should be in Moscow, Russia, the fastests growing European online nation
JosefVirek

April 6th, 2008 at 12:07 am

They should all move to the US. Europe is where ideas die.
Peter Thomas

April 6th, 2008 at 12:14 am

Estonia is an official member of the EU; I’m pretty sure they’ll consider themselves European
CARversation.com

April 6th, 2008 at 12:20 am

YUPPPPPPP
A.T.

April 6th, 2008 at 12:21 am

Yasha, please… Moscow is Eurasia (i.e. not Europe), and the best national startup is Gazprom
pico

April 6th, 2008 at 12:52 am

Good for Europe.

is Asia doing the same thing? Can anyone point something about..?
I guess we (Asian) don’t have to wait all the time for Silicon Valley for every new innovations…
Finnsense

April 6th, 2008 at 1:05 am

It doesn’t need to be Britain at all. London is prohibitively expensive and the level of tech education there is pretty weak except at the top end. Nordic peoples all speak excellent English and have very functional business-friendly (except income taxes and VAT) societies. The weather’s not great though.

Helsinki is probably out because Nokia soaks up all the talent and it’s all mobile-based here. That said, there are some interesting web 2.0 startups popping up. Rents are pretty high though. Estonians are not that cheap anymore either. A decent programmer will cost almost the same now as in Finland.

There isn’t an obvious place in my opinion so it will probably remain fragmented but it’s not a huge problem. You can’t replicate the Valley - all we should try to do is make sure best practice gets distributed quickly.
Bruno Figueiredo

April 6th, 2008 at 1:20 am

Why not Lisbon, in Portugal? The weather is nice all year round, it has good network infrastructure, office space is cheap, as is housing and living costs and most portuguese people under 40s speak basic english.
Andrew Dubber

April 6th, 2008 at 1:28 am

Looking around me, I think it’s starting to take shape in Birmingham, and nobody seems to have noticed.

It’s not Startup Central by any stretch of the imagination - though there are certainly some brilliant startups here - it’s a slightly different kind of thing. Call it Silicon Valley 2.0, perhaps. The creative sector here — from journalism through to music and graphic design — has been exploring and testing the limits of social media, poking at it to see what it won’t do and finding new ways to put what already exists together.

Rather than a rarified group of coders making things FOR people with the help of VC money (though certainly this is going on at an unprecedented rate) — this is more about people making things for themselves and with each other.

It’s also fascinating to see what kind of evangelism and uptake is going on here. From what seems to be the first traditional newspaper in the world with its newsroom staff all on Twitter to a Birmingham City University Media project to provide music and radio organisations with a research and development team; professional bloggers having to turn down work — and social media activists becoming local heroes and celebrities.

Not being from here (I’m a kiwi) but having lived here for the past few years, I’ve witnessed a radical shift from a small group of nerds doing interesting things in 2005, to an exponential uptake and a rate of innovation that’s kind of staggering. The last month has been a wild ride with giant steps being taken daily.

It’s not the new Silicon Valley in the sense of being a repeat of the concentration of tech startups in the old Silicon Valley - but in terms of the sheer rate of change amongst people who would perhaps not traditionally read TechCrunch but are seizing the creative, cultural and social opportunities that digital technologies are currently affording them - this is one hell of an exciting place to be right now.
Derek

April 6th, 2008 at 1:33 am

Erick,

Not sure what this Dutch CEO told you, but there is no such thing as a 18.000 euro’s government fee in the Netherlands. There is a minimum share capital of 18.000 euro needed though to start a limited liability company. In other words: it’s the minimum initial value of the shares in a new formed company, i.e. you don’t loose it.
Filip

April 6th, 2008 at 1:33 am

You misunderstood the Dutch CEO, There is a minimum capital requirement of 18.000 Euro to incorporate a dutch BV , a Limited corporation , the costs would be around 2000 euro max ….
Nicole Simon

April 6th, 2008 at 1:40 am

*rotfl* Andrew, have you ever been to other places than “Britain” - you may not be aware that there are other places in Europe where a) english is the official language or b) the country is small enough to not have everything dubbed in television and movies (like the northern countries or for example netherlands) that the level of english in the public is so high that it is no problem at all to go there.

Even in one of the not so english countries as Germany you can get around very nicely in towns like Berlin without speaking German. It helps of course but you do not necessary need it.

In regard of taxes - Erick I assume you talked to somebody about setting up a certain kind of company with a certain kind of legal protection which cost that much money.

In Germany for example you can start with nearly zero plus some things like insurance etc, but it is not advisable because you would be liable with your personal assets. The route togo is a GmbH or similar, this one requires afair at least 25K. But you can start without.

I do not think that we ever will have a European Silicon Valley - and btw at the prices of London that one is out of the question just for that reason - but will evolve into something new and connected where we do make conscious decisions on how to generate that buzz we need plus meet people to stay energized.

And if all is not of our liking, we can still move to the Valley itself - but with the built in advantage that Europeans, once they have understood that benefit of the distributed world, have way more advantages in making something bigger than just the US market.
Dennis Bjørn Petersen

April 6th, 2008 at 1:42 am

Great post of the “problem” in Europe.

I don’t think you can compare Europe in terms on Silicon Valley. The laws are too different from country to country, even within the Union. Hopefully in time this will change.

I doubt we’ll see a European Silicon Valley, but instead a lot of small local “Vallies”.

Lots of various European conferences and launches are on the ways to make start-up Europe smaller and attendance at the American ones.

I’m still crossing my fingers for the Danish break-through
Daniel Thomaser

April 6th, 2008 at 1:53 am

Very nice post Erick.

There is no place in Europe which has the right infrastructure to become the next Silicon Valley.
In Germany for example you still have the problem, that many people see to be ashamed of having success or being talented and that you really have to dig deep for the good ideas/engineers/…
jilm

April 6th, 2008 at 1:54 am

That remark about Estonia means… what? Not a part of Europe?? You should study geography and history more.
Stefano Buliani

April 6th, 2008 at 2:01 am

London is the winner.

Expensive though as it may be it’s definitely the right place to start a business for 3 very simple reasons:

1) Money is here
2) Talented people sooner or later come to London, even if just for a brief period. This means you’ll be able to hire great talents on the cheap simply by giving them the possibility to relocate.
3) The UK has has cut bureaucracy and employment laws. Incorporating a company is quick, easy and practically free.
Robin Wauters

April 6th, 2008 at 2:12 am

“As Europe searches for its Silicon Valley, it may turn up as a state of mind rather than a specific place. ”

Spot on.

By the way, Zilok is not based in Paris like you mention in your post and CrunchBase seems to be wrong too. It’s a Belgian company, incorporated in Brussels.
Robert Gaal

April 6th, 2008 at 2:15 am

Great to see my comment about the Dutch 18.000 euro’s helped Erick. Thanks for the questions during dinner about that. As others are pointing out, you need it as starting capital, not as a fee. After that with some lawyer costs added it will cost you around €800-1000.

I think it’s ridiculous none the less. I mean, Most Y-Combinator startups don’t even have 18k. Most politicians seem to agree and want to scratch this threshold, but it’s been delayed on the political agenda until 2009. I guess people would rather vote for some immigration issues instead of entrepreneurial stimulation…

You’re totally right about Europe being more distributed. As a European founder I’m not worried. I’ll just head of to the valley whenever I’ll feel like it and come back fully charged
eelco

April 6th, 2008 at 2:18 am

I don’t think there will ever be a European valley. I think many European start-ups eventually move to the other side of the ocean, because that is where it all happens. And probably the European money does the same. Does the world need two valleys anyway?

Also, the European nationalists would rather have no EU valley at all, than one in a country other than theirs.
Bob L'Eponge

April 6th, 2008 at 2:43 am

There’s a lot to be said for the ‘Golden Triangle’ of London-Oxford-Cambridge. There’s a vast density of very impressive tech (comsci, biotech, nanotech) universities there - Ox, Cam, Imperial College, UCL, etc; at least here in my brief time at Oxford, I’ve seen a big, big emphasis on entrepreneurship, namely:
- the emergence of oxford entrepreneurs as the largest student society, organising sellout events like Idea Idol
- the Gordon Brown-backed “Building a Business Course”, entrepreneurship evening classes delivered for free by the business school, focused particularly at scientists
- the business school putting on events like “Silicon Valley Comes to Oxford”, which was a huge amount of fun
- a few reasonably successful startups coming from its ex-students, for example Auctomatic, Groupspaces, Younoodle, Slide; and a fair few startups unrelated to the uni but here anyway: We7, Fav.or.it
diystartupnews.com

April 6th, 2008 at 3:30 am

You were right to mention the tax laws. They are all over the place, I would’t work in Germany or Belguim because of them.

I suppose the real question is can there be another silcon valley? Surely we should be looking to create something new in this day and age.

Don’t we already have a virtual silicon valley called the internet now? we can network, we can find talent, we can do PR, we can do marketing and most of all we can release product. The only problem is finding the money.
Dirk Krischenowski

April 6th, 2008 at 3:43 am

If you have read Richard Florida’s latest book “What’s you City” you would argue that distribution of money, talents and place is the past. The future will see a much more spiky world where only the combination of the creative class with the money and environment will have success.

Many, many US start-ups have moved to Silicon Valley because the there’s the exposive mixture to give their ideas feets.

Read the book an you will know that Europe needs not much more than 1 or 2 place to be.
John Petersson

April 6th, 2008 at 3:56 am

where did you get the info that Estonia not part of Europe (or EU)??
Danial

April 6th, 2008 at 4:52 am

Good Post
Tim

April 6th, 2008 at 4:54 am

Estonians sure consider themselves as Europeans, moreover they consider as innovative Europeans. I`m one of them too
Yuri Ammosov

April 6th, 2008 at 5:01 am

There is a good way to lower costs - OUTSOURCE. All you need is to settle your busdev people and some system architects. Then you buy cheap labor in some remote parts of the world. You can do it online - on sites like Rent-a-Coder. Or you can look for a developer in impoverished places like Romania, Belarus or Sri Lanka. People work there almost literally for food (sometimes they can even be inmates sentenced to hard labor and coding for free). This really cuts down your budget - you can build a viable value proposition off just maxing your credit cards.
Pete Clutton-Brock

April 6th, 2008 at 5:02 am

I agree with Bob, although I would like to see some consolidation around either Cambridge or Oxford as I think the physical community is important. The relationships that are built via parties/events/etc are really valuable.

Both Cam and Ox have good transport access to London (and therefore investment), which to my mind is important as if I were a VC I would want to invest in companies that I could meet with on a fairly regular basis without too much hassle. Also they both have good pools of talent to draw from. My impression is that Oxford has the edge judging from what has come out so far. All they need to do is somehow get rid of the tribal feel they currently have so they can attract more outside talent.

London itself is expensive but more importantly I think that somewhere outside of a huge urban sprawl might inspire more creativity and has more chance of getting a community feel.
Max

April 6th, 2008 at 5:50 am

Europes Sillicon Valley will surely be in Britain, having it in another country brings important issues such as language barriers. Most Europeans are able to speak English as it is very global.

I think a perfect place for Europes Sillicon Valley would be Manchester, it’s not the largest city and its not the smallest and its rapidly growing!
Tara Kelly

April 6th, 2008 at 5:51 am

I’m a founder of a European startup. We’re in Italy, which is one of the harder countries to raise funding in, and has some of the most obtuse labor laws you can imagine.

That said, Italy has top talent, fairly low wages and low employee turnover (partly due to the culture instilled by aforementioned labor laws - 2 sides to every coin I guess).

All that said, I think the distributed business is more accepted here than it is in the US. It’s a necessity. No one country has it all.

Then again… isn’t Web2.0 about breaking down silos?

My thoughts: http://tinyurl.com/5ecwwy
Erick Schonfeld

April 6th, 2008 at 6:01 am

Thanks for setting me straight on the 18,000 Euros. When I heard that, it was over dinner after a long day, a few drinks, and I wasn’t taking notes. I’ve corrected it in the post.
Btwoo

April 6th, 2008 at 6:19 am

Zilok is a great site! I was wondering when they were going to expand to Germany. So I checked Zilok.de…….

I like the different approach of CI at http://www.zilok.de

lol
chrisco

April 6th, 2008 at 7:21 am

1) I think you captured it nicely Erick.

2) The Next Web Conference was a great experience, thanks to you and all the great people who participated. And thanks to Boris, Patrick and TNW crew.

-chrisco

PS: Nice to meet you at Friday night’s dinner/party.
Theo Matrakis

April 6th, 2008 at 7:35 am

Europe definately needs to keep up the pace with Silicon Valley, but is struggling to get to speed. Nevertheless London is a hot spot, but very expensive to operate. Interesting stuff is happening here in Greece and Cyprus, MySpace is big, HI5 is a top 10 site and local start ups like Wadja are really growing fast.

Weather is good and Cyprius, in particular, has is a great place to incorporate. As a former British Territory, it follows UK commonlaw, 10% flat tax, english speaking population, and part of the EU…oh and it has the best weather in the world (SUN AND SURF) Just a thought.

Techcrunch..you guys are doing great!!!
jilm

April 6th, 2008 at 8:18 am

Maybe you should consider to correct that sentence about Estonia too, it seems to me pretty offensive.
Ghaus

April 6th, 2008 at 8:18 am

Lol. What are these labor laws and Taxes ? I am from Pakistan, and there are tons of new start-up companies working. In Pakistan there are no taxes on Information technology companies and there are no special labor laws for this industry. To incorporate a company it costs only $800. And establishing a start-up takes only a day.

Here are some nice steps,

1. Buy an office
2. Employ 100s of talented people
3. Earn Profits !!!!

Wasn’t it simple !
Simon Rabente

April 6th, 2008 at 8:36 am

An interisting way to find the right place for an European Silicon Valley might be to publish the Google Analytics Geographic Stats of Techcrunch

Greeting from Cologne, germany
Gandolf Hübinger

April 6th, 2008 at 9:01 am

@erick: important post. but “sooo american”. you probably know “european vacation” with chevy chase. so you should know some oft the problems: culture and language, not to mention the heterogeneous legal corporate framework which is currently under reform throughout europe. where did you expect the “european valley”? in brussles?

here is a perspective from berlin, germany: our market is german (100 million) some of our developers are in romania (and would love to come to berlin but cannot afford to despite relatively low rents), some are on estonia (excellent mobile expertise. developers are allowed to and can afford live here but do not want to).

some of our lead investors are only succesful with copying american concepts (greetings to the samwer brothers) and would never touch a risky technological venture. and because many u.s. startups internationalize too late they do no have to either.

for us sillicon valley is more of a concept than a physical place. if i could set it up today i would locate in helskinki (snow in may!). home of europes most important tech company: nokia.
Senthil

April 6th, 2008 at 9:01 am

I think , London would be the silicon valley of Europe. Its the right place for innovation.
Cheers.
Senthil
Erick Schonfeld

April 6th, 2008 at 9:03 am

We could debate what is part of Europe and what is not, EU membership notwithstanding.

I have no problem lumping Estonia in with Europe, but learned that some Estonians just like to think of themselves as Estonians. Not part of Europe, certainly not part of Russia, but linked to both economically and historically.

No matter how you try to define Europe, you will always end up offending someone.
ha

April 6th, 2008 at 9:04 am

will we get the 3 months off? sooooo there if I get the 90 days!
Massimo Moruzzi

April 6th, 2008 at 9:29 am

Estonia does not consider itself part of Europe? You Yankees!

Estonia has entered the European Union in 2004…
jilm

April 6th, 2008 at 9:42 am

Erick show me any Estonian who refuse that Estonia is a part of Europe. What else should they be? Asians? Africans? I mean Europe is mostly a continent and as a continent it is quite preciselly defined. At least as preciselly that Estonia is in the deep of Europe.
Peter Cooper

April 6th, 2008 at 10:00 am

What’s more surprising is the continuing existence and importance of Silicon Valley, and not the lack of Silicon Valleys elsewhere. Most industries do not have such exclusive locations once they have matured (consider the automotive industry - once somewhat locked to Detroit but no longer), and since the Internet industry is somewhat maturing now, a centralized location is not important.

As with other industries, the skills necessary for Web / Internet companies are now found almost everywhere. There are user groups, meetups, and all sorts of Internet events taking place in every far flung corner of the world.

It could be argued Europe needs a Silicon Valley for the social aspect, rather than the purely business side. I’d argue against this though, since European entrepreneurs socialize in a very different way to Americans (far more cliquey, less open-minded, less… Californian). This is an Internet-based industry.. so let’s keep it online and bring it to wherever we are, rather than go searching for a hallowed valley that doesn’t exist.
van den Hook

April 6th, 2008 at 10:17 am

What the U.S. investment community should realize that funding European talent is the great undiscovered opportunity.

It is no secret that there is a funding gap in proportion to the ideas available in Europe.

So my guess is that the money, possibly meaning U.S. based venture capital companies that initiate operations in the EU, will decide where the next EU silicon valley develops.
van den Hook

April 6th, 2008 at 10:18 am

…and yes, Estonians are as European as you can get.
Shafqat

April 6th, 2008 at 10:26 am

I have to put my vote in for Geneva! Home of Index Ventures and NewsCred! Great to see Europe entering the conversation though…
;)

April 6th, 2008 at 10:47 am

My vote is for Ireland.

12 1/2 % corporate tax rate.

2nd most open economy for business.

Closest to the valley!!

All the tech giant have bases here:

Google, Yahoo, Microsoft, Apple, Amazon, Dell, Intel…
Kamal

April 6th, 2008 at 11:11 am

Though Israel is not in Europe, its nevertheless the next high tech destination after silicon valley. It may not have many web 2.0 companies, but has a large number of high tech companies.
More Profitable than Justin.tv

April 6th, 2008 at 11:13 am

My guess is it could being Ireland (if if happens at all) though Cyprus is a bit more tax friendly
Keren Dagan

April 6th, 2008 at 11:30 am

I’m excited to see more great start-ups coming out of Europe. I think that the hectic start-up arena in Europe is an indicator for a change. Maybe Europe is this era “new world”. If I can offer one advice to European start-ups is to try and maintain some of the culture over there. Do not try to be American as I wrote in here specificly about blog search:

“The Blog Search” - single exit strategy? Thinking outside the search (edit) box.

Thanks to TechCrunch for being the connection between US and the rest of the world entrepreneurs.

Keren
Nick

April 6th, 2008 at 11:52 am

no one mentioned: http://en.wikipedia.org/wiki/Silicon_Fen
Martin Owen

April 6th, 2008 at 11:56 am

Does it matter? I would not move my start-up to London when in an Objective 1 EU region there are funds for bootstrapping start-ups and and aid for all kinds of things.

When the idea is right for sale…. then we will look for appropriate buyers. One of the firms local local to me, accountis, has just been bought by Nasdaq listed Fundtech for a good price - after receiving local government sponsored VC support.

I have spent the last week working in my bedroom in the top left hand corner of Europe stitching a big (9 MEuro) augmented reality/mixed reality proposal with partners in Bonn , Athens, Dublin, Barcelona, and Helsinki. We have Skype, easyjet and Ryanair.

Do it where you can. There is no magic location - though it does appear a Stamford education helps (anyone for Edinburgh - Europe’s Stamford?)
darrylxxx

April 6th, 2008 at 12:02 pm

Gotta be Belfast. Startup scene is just emerging. We speak (a form of) English. There is plenty of cheap office space. We are in Europe. We are less than an hours drive from another European country(!) And even better, the beer’s here and the craic is mighty!
Remy Blaettler

April 6th, 2008 at 12:15 pm

Switzerland it is
We are in the middle of Europe, highest living standards, good education, almost no crime and 4 native languages. Perfect to expand from here in all 4 directions.
Google just choose Zuerich as it’s European cornerstone. Must mean something.
j

April 6th, 2008 at 12:19 pm

In my opinion, in a connected world there’s no need to have a web technology hub in Europe.
People find eachother on the web.

But when you’re into biotechnology then you do have limited options.
For instance you have to go where the universities are and where there already are succesful companies because that’s where the angel investors are.

Personal taxes are high in Europe but it covers healthcare and it pays for your retirement, at least that’s the goal the politicians have.
The higher a country’s debt, the higher the taxes will be.
That goes for the US as well.
What some people do is go to Luxemburg, Monaco or Liechtenstein because you don’t have to pay any personal taxes over there. But life is more expensive over there.

When it comes down to corporate taxes it depends on what kind of corporation you have. It’s usually around 25 to 40%
I’m not sure what the rate in Silicon valley is but 25% is usually what the big corporations pay in the other parts of the US.
Ireland is definitely the cheapest and that’s the very reason why a lot of technology companies can be found over there.
American companies go to Ireland. I think Dell can be found over there.
I’m not sure there’re a lot of start-ups over there because they usually don’t make any money when they start out.

For more information on the taxes rates around the world, go here: taxfoundation.org/blog/show/1331.html and download the file on the bottom of the page. It gives you 2003 data but it’s still very much the same.
Important to note: it doesn’t show you the average. It shows you the highest corporate tax rate.

I hope this helps.
TS

April 6th, 2008 at 1:23 pm

Erik: “We could debate what is part of Europe and what is not, EU membership notwithstanding.”

Yes, we could. We could also debate whether the moon is made out of green cheese or not.

Erik: “No matter how you try to define Europe, you will always end up offending someone.”

That is not the issue. It’s about facts, not about who is offended.

Max: If everyone speaks English in Europe anyway (not true of course), why would there be a language barrier? And seriously, you mean that being in Amsterdam would be a disadvantage over London in terms of language? Why? Because in Amsterdam your employees would speak other languages in addition to English, and that would somehow drag them down in some way?

Seriously, London is a fine place for startup, but so are many other places like Amsterdam, Barcelona, Berlin, many more. You won’t see one Silicon Valley but many places. Being more English-centered may in some cases be an advantage and in some cases a disadvantage when you focus on the European market. At the least, you will probably do better in many cases by having a team that knows other languages than English, even if they communicate in English within the company.
Joe T.

April 6th, 2008 at 1:45 pm

It should be in Transylvania, Romania!!! Muahahahaha!
Gil

April 6th, 2008 at 1:48 pm

If you happen to visit Barcelona in August, you may reconsider your statement about the weather.
Erkki

April 6th, 2008 at 1:51 pm

Greetings from Estonia.

Interesting to hear your thoughts about Estonians not identifying themselves as Europeans. Care to elaborate what lead you to come to the conclusion?

We definitely consider ourselves to be European. We’re also a Baltic State and some might say a Nordic Country, but European nevertheless.
Boris

April 6th, 2008 at 2:16 pm

“the idea of concentrating all the talent and capital in one region seems so last century to many Euro 2.0 entrepreneurs.”

Hi Erick, what a cool quote! Who said that?
Jean

April 6th, 2008 at 2:21 pm

I’m French. France would be the worst place ever for that. Ireland would be the best one, IMO, being the most entrepreneur-friendly place in Europe.
Maxx Kredit

April 6th, 2008 at 2:38 pm

Hi everybody,

I think you must only look at Germany, Saxony-Anhalt. There´s is a really new place for new technology - called “Solar Valley”.
Mike Mertz

April 6th, 2008 at 4:44 pm

Romania, especially the Transylvania region, has tremendous untapped talent. I was there a couple of weeks ago on a business trip and all the programmers/developers I met spoke good English (and Italian, French, Spanish) and they are eager to work. Not sure if it’s true but someone told me that the second most spoken language at Microsoft is Romanian. That to me is a testament to their talent. On the other hand, Ireland is another hidden jam with tons of talent. Watch out for them!
nemrut

April 6th, 2008 at 5:08 pm

It’s all about attracting/maintaining talent. Europe will never replicate the hub that is Silicon Valley as long as it is culturally, socially prohibitive do so.

What many European respondents fail to recognize is that SV is successful not jsut because of concentration of $$ and tech companies, but the openness of the environment that affords opportunties “to Anyone, from Anywhere” regardless of age, sex, race, religious beliefs. Sadly this not even remotely possible in even the most progressive of European cities.

There is a lot of untapped wealth in Europe but it’s maturation into a mini ‘tech hub’ of sorts will always be limited by cultural/governmental policies and unwillingness to embrace and leverage non-European talent.
Marius

April 6th, 2008 at 5:59 pm

If you see Nicoleta for sure you declare Romania … the Silicon Valley
http://www.nicoletaluciu.ro/web/galerie.php
Joaquin

April 6th, 2008 at 6:12 pm

Get the money from London, incorporate in Luxembourg or Ireland, hire talented people from all Europe and be based in Spain(Madrid, Barcelona, Valencia, Zaragoza or Alicante) because you can manage to get all by your own but the local weather you like.
Lisa

April 6th, 2008 at 7:29 pm

Nemrut (#67), you’re simply wrong.

Before launching on my own, I worked for a small start up that had talent from India, Russia, New Zealand, Singapore, Holland, Sweden, and so on, ladies and gents, old and young, all coming together on European soil to make something that had not been done before in wireless internet.

The common corporate language was english while the office was in a non-english country.

And it happens all the time all over Europe, however, not in a centralized fashion like it happens in Silicon Valley.
Mario

April 6th, 2008 at 8:25 pm

Is nice that we going to have a Silicon Valley in Europe, Iam happy about it, I have family there
Nicolas

April 6th, 2008 at 11:07 pm

I love the “choose my country because the weather is nice” argument. I would actually say the contrary. Choose Zurich, because the weather there is usually crummy enough to have all developers stay inside to debug their javascripts all day!
Mark Johnson

April 6th, 2008 at 11:27 pm

What about Walldorf, home of SAP? hoho
Rushabh Choksi

April 6th, 2008 at 11:33 pm

After Europe I guess its gonna be India:)
Raturo

April 7th, 2008 at 12:40 am

http://www.eioba.com is a Polish app… not bad.
Barcelonian

April 7th, 2008 at 12:53 am

Well… everybody talks about money and corporate tax bla bla bla… but nobody seems to talk about good ideas. And good ideas will prevail any beaurocracy matter. Funding is mobile. People are mobile. So why not Barcelona, where you can get the same as in London for less, and also sunshine! (which makes a HUGE difference!)
web hosting

April 7th, 2008 at 2:37 am

Social infrastructure is also one of the key requirement while we talk about infrastructure however Europe has emergent high-tech pool and it would be one of the finest destination for silicon valley.
Vladimir

April 7th, 2008 at 2:57 am

@Mike Mertz: true about Romanian talent. And is not just Microsoft. Google is starting to become very populated with Romanians also. Adobe is doing a lot of development in Romania and many companies from Europe are actually based in Romania. It is not just outsourcing (the wages are becoming more and more European) but business development, design and marketing. But we are a little bit under the radar….
Roald Cyberath

April 7th, 2008 at 4:33 am

I agree with many comments here: great ideas can spring out from about anywhere across Europe. And talent is available, money is available.

Still, many improvements would be welcome: critical mass of investors, experienced entrepreneurs that have done several startups, projects more ambitious than national markets, (online) ways to exchange experience and visibility.
In this web 2.0 era, a lot of this can happen online more than in the physical world.

Roald Cyberath
Editor, Europe 2.0
Rick

April 7th, 2008 at 5:07 am

Erick has got it right, there’s no need for a centralized Silicon Valley in Europe. The borders are wide-open for business and workers, everybody in the biz speaks english, travel is getting cheaper every day, laws are being harmonized and the internet makes communication real easy. If anything, healthy competition amongst countries to attract tech-industry will prevent the creation of one single Silicon Valley surrogate, but results in rapidly improving climates all over the place.

The only major problem is the VC’s: US VC’s stay in the valley, and European VC’s are rare and much more conservative. If it gets easier for European startups to get funded, I predict you will find that we have not already found a way to work around the other perceived disadvantages of not being centralized in a Silicon Valley, but the European way actually has a number of unique advantages.
Francois

April 7th, 2008 at 5:13 am

I think south-west of France is the best place to make it. (Ok I’m from Bordeaux but listen to me)
Top 10 reasons:
1. Bordeaux is well known world wide
2. Bordeaux have a lot of engineers thanks to its great graduate schools. Talent is here.
3. Bordeaux has always been international minded because of its history
4. Weather is warm on summer, cool on winter
5. Mountain is 2 hours south and atlantic ocean is less than one hour west.
6. Unlike other cities in France, the State is helping innovative start-ups giving them offices, financial help, plus no tax!!!
7. The number 1 ecommerce actor in France and Europe is here : Cdiscount.com
8. There are a lot of start-ups dealing with nanotechnology, biotechnology, and mobile industry
9. Buying a flat or a house is cheaper than a lot of cities in Europe.
10. The wine is better than in california
Michael B.

April 7th, 2008 at 6:31 am

I think london would be the best place because of it being a business-like city.

-Check out my blog for ways to make money online http://mikesmoneyclub.blogspot.com/
David Stone

April 7th, 2008 at 9:55 am

I’d like to mention Brighton on the south coast of the UK here. It currently has more people who deal with ‘build’ rather then ‘business’, however that’s slowly changing a little, but when you do start it should make hiring that little bit easier!

I co-run a site helping to document what’s going on in Brighton as surrounding areas, Sussex Digital http://sussexdigital.com if your interested. Obviously I’m bias though.
Anthony Kuhn

April 7th, 2008 at 1:27 pm

Man, it’s a comment frenzy on this piece! Well, best of luck to them, but it’s not like they can just strike out on their own and just have it happen, in typical EU fasion they’ll have to have committees and detentes to make sure it follows all the laws and rules. I think they’ll end up with a elerhinopotomous in the end. But hey, good luck with that!
shaft

April 8th, 2008 at 3:26 am

In some countries which could be real contenders, social taxation on small business is a handbrake.
Be careful when calculating because social tax is sometimes not referred to as a “tax” and carefully hidden. Ie. in Poland and Spain it costs €250 monthly just in social tax to run a one-man freelance operation, no matter if income is null. It is €3000/year compared to €250 a year in Ireland or UK. Paired with these countries’ low wages it can be a showstopper.

- Ireland: low corporate tax, relaxed taxation system, English language. Good if you want to incorporate, but damn expensive to live, which might be a factor at an early stage.

- UK: abundance of creative people, potential investors and startups themselves. Bearable taxation, easy on small business. Lots of freelance options in case you’re a self-funded garage startup type and extra support is needed. Expensive to live though.

- Catalonia (Barcelona) seemed the mecca of web professionals a few years ago, but it just isn’t happening there. Rental costs are huge and socialist Spanish government scares business off. I know a web programming team in BCN who are available, their employer is just wrapping up their business.
Wages are low, which might attract investors: an experienced Perl developer cashes in €1500/mo, this is just about minimum wage in Ireland.

- Poland: Plenty of good developers, cheap to live and operate. Be wary of an unfriendly tax system.
shaft

April 8th, 2008 at 10:02 am

Socialist Spanish Prime Minister Zapatero announces his intervention plan, aiming at boosting the economy while keeping social funding high.
This is a clear message for the business: Run!
I’m joking, but only a little: things don’t look promising.
Marc

April 8th, 2008 at 3:33 pm

I agree with Schonfeld’s final assessment. I think a central location is so last century. European cities generally don’t need to rely on good weather, since most capitals have so many cool things to do even when the weather is bad.

Have you ever spent a week in Silicon Valley? They need all the good weather they can get. SV’s built environment is the definition of sprawling wasteland. You couldn’t pay me enough to work in that suburban ghetto.
Marc

April 8th, 2008 at 3:42 pm

@69 - Zaragoza, please. I would never stop in that hell hole again if the bus between Madrid and BCN didn’t stop there. Malaga is way nicer.

@74 - Bangalore is your SV. Pretty much already decided. Europe is developed in many different areas.
Haji

April 10th, 2008 at 3:49 am

Go to Pakistan and enjoy terrorism
tom

April 10th, 2008 at 3:52 am

Mandrid for sure
tom

April 10th, 2008 at 3:55 am

Beteer Give to India Bangalore !!! cool