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. ParisBrussels-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).
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.
My guess is it could being Ireland (if if happens at all) though Cyprus is a bit more tax friendly
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
no one mentioned: http://en.wikip...iki/Silicon_Fen
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?)
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!
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.
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.
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.
It should be in Transylvania, Romania!!! Muahahahaha!
If you happen to visit Barcelona in August, you may reconsider your statement about the weather.
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.
“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?
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.
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”.
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!
thank you
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.
If you see Nicoleta for sure you declare Romania … the Silicon Valley
http://www.nico...web/galerie.php
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.
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.
Is nice that we going to have a Silicon Valley in Europe, Iam happy about it, I have family there
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!
What about Walldorf, home of SAP? hoho
After Europe I guess its gonna be India:)
http://www.eioba.com is a Polish app… not bad.
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!)
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.
@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….
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
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.
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
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://mikesmon...b.blogspot.com/
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.
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!
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.
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.
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.
@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.
Go to Pakistan and enjoy terrorism
Mandrid for sure
Beteer Give to India Bangalore !!! cool
In sunny n excitin’ Spain
@Yuri Ammosov
So true. In fact, right now I am typing this from my mobile phone while imprisoned in a local Romanian jail (we’re corrupt so you can bribe the guards and bring mobile phones in, yes). I was arrested for spamming charges and now I have to lay low for a couple of years then maybe I start over again (hey, web 2.0 has different meanings for everybody, ok?)
I like to code to kill the extra free time I have in between the showers and the meals. And yes, Romania is really cheap, you can incorporate for less than $1 – you should really give it a chance.
…
Please, stop being ignorant about the rest of the world, it’s not polite. Come visit, enjoy and draw conclusions based on empiric evidence, ey?
Thank you
God forbid.
He shouldn’t come here, since they came about 60 years ago and forgot to leave. I personally think that Yuri is jealous that Romania is an EU member…
People in the UK have a saying: you get what you pay for…
Being able to start up a company with very little money is just a myth. Let’s not forget that there re some costs related to development. For instance> can someone develop and test a decent and innovative web application on a computer that’s 9 years old? And how about marketing? Is it free? Of course not.
This is precisely why the EU will never have a Silicon Valley, because the important factors that determine the start up and evolution of a company come in different flavors across the EU, one flavor being suitable for certain business profile while another flavor (being suitable) for another (business profile).
I think it is important to note that the availability of all these flavors is good for competition.
If you take a close look, you can see all sorts of startups that have potential, I have seen on the startup20 competition and on the killerstartups pages there are a lot of European Startups that are known in the US, but not in Europe, simply because a German wants to read in his own language, a Spanish or a French, as well, so what do we do? Are the European entrepreneurs supposed to make a website readable in every known European language?
Sites as iFoods, Genoom,Mister-Wong, Yobler are already known to the US market
Ireland is perfect – some terrorists are all that is missing
@ Yuri Ammosov
Oi, go take a nap! You might even need a longer one ’cause you’re having a nasty hangover mate.
You’re out of this world when you talk about Romania. It might not be the richest country in EU but what you say is just stupid. I personally payed romanian lads with 2000 euros/2 weeks or 4000 euros/month, for your mathematics, just to give you an example.
If you wanna hire some inmates to do you… well, is a free world mate. Feel free to do this. But watch out for your rear end, ’cause they might program your ass all the way up to your throat.
Cheers!
Ireland has, indeed, low taxes for corporations, but… how about the people working for these corporations? 41% tax for anything over 34 000 Eur (below it’s just 20%).
Then think about the fact that Dublin is one of the most expensive capitals in the world.
You might expect as well nice weather with the ‘Silicon Valley’ in Ireland? Wrong, unless you like gray days most of time and humid blows of wind that strike cold straight into your bones (I can only recall the sky in Quake 3 when I think about it).
On the other hand, as Yuri mentioned Romania earlier, Romania has 16% tax for everyone – that’s right, corporations and their employees can both make a living there.