From time to time, I report on business events I attend in Berlin, most of which focus on the startup community.
On 9 March 2017, Viva Technology hosted a panel at Factory Berlin to discuss Growth for European Startups. The panel was moderated by Tolgay Azman, editor-in-chief of Business Punk, and the panelists were
- KATHARINA LÜTH (Weltsparen/Raisin)
- JOHN FRIJTERS (ReWalk Robotics)
- ANTON WAITZ (Project A)
- JULIE RANTY (Viva Technology)
- MAXIME BAFFERT (Viva Technology)
Much of the discussion revolved around differences between the major European cities with respect to startup culture, activities, and investment. According to Ranty, France expects 3 more unicorns to emerge from its ecosystem, which they anticipate will grow following the Brexit. However, Lüth concedes that London will need to lose a lot of startups to become weaker than Berlin or Paris.
A stark difference between American and Berlin startup culture was described by Waitz. He noted that American startups know how to sell themselves, but after three months, if you scratch the surface, you begin to see the flaws. Waitz added that the marketing abilities in Germany have improved over the past three years.
In response to Azman’s question as to why the EU startup field has not created a Facebook or another big global business, Waitz said there’s a huge later-stage funding gap of approximately $25 billion between the U.S. and EU for B & C series funding. Here in the EU, Waitz says investors are looking at profits & losses from day one, but that is not the case in Silicon Valley.
Frijters pointed out one of the big obstacles for EU startups is that investment is 90% dependent on data, and there’s no enthusiasm in marketing a startup to investors. He said in the U.S., investment is 40% dependent on data and that marketing accounts for the rest of why investors support a business.
A second major obstacle for EU startups, Baffert added, is that in the U.S., there’s a user testing market of millions of people. In the EU, there are many countries and borders. He said the idea of the common market has not fully arrived. Lüth agreed, noting that “Harmonization does not mean standardization.” Every country has different registration and tax laws. A business needs to have a tax lawyer in each country to deal with all the differences, Lüth said, which makes it difficult for scaling across Europe.
Viva Technology, an event for the European startup community, will be held 15-17 June 2017 in Paris. More than 45,000 participants attended the Viva Tech event in 2016.
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