Tuesday, 19 January 2016

San Francisco's view of Berlin

Berlin may be an emerging tech hub, but Silicon Valley seems unaware 

I’m in San Francisco this week, visiting my uncle and taking care of a few work meetings (potential freelancing clients). I haven’t been here in 12 years, so it’s been great to rediscover the city. 

I’ve also been visiting a lot of old friends from journalism school, all of whom are working in or around the tech sector. There are a lot of opportunities out here for tech-focused reporting or copy writing these days. Given that Berlin is considered an emerging tech powerhouse in Europe, I was curious to get their take on the scene there. But what I encountered was either a lack of knowledge or a dismissive attitude. For the tech people I’ve talked to, Berlin is either a non-entity or a nuisance. 

Let’s start with category A. These people were very surprised to learn that Berlin is, by some, predicted to overtake London as the ‘tech capital of Europe’ within a few years (if it hasn't already). They were also surprised when I explained the reason why so many start-ups are moving to Berlin – the incredibly low cost of living. 

I encounter this a lot in fact, people are surprised when I tell them there are not many jobs in Berlin and therefore costs run low. They’re used to hearing ‘Berlin as shorthand for Germany, and therefore mentioned in a context of economic strength and power. Berlin may be the capital of Germany, I tell them, but it’s not Germany. 

Of course the category A people are scratching their heads in the same way I have been – I can’t name one internationally successful start-up that’s actually come out of Berlin. There are many, many unsuccessful ones, but where are the Berlin-born Ubers, Skypes and Whatsapps? The only commercially relevent products seem to be developed exclusively for Germany (usually knock-offs of American apps). So perhaps it's no wonder that people in San Francisco don’t see Berlin as being on the map.

Then there’s category B – people who are aware of Berlin’s importance in the tech world. But these people saw Berlin not as an center of innovation but rather a center of burdensome regulation. 

For instance, one tech lobbyist I talked to said she was very aware of Berlin’s emerging tech role but saw it more as an academic center for data privacy issues. She’s been to a number of conferences in Berlin but they were all focused on the regulatory aspects of tech, not the commercial ones. And she was not impressed. 

She seemed to view Berlin as an annoying mosquito that keeps buzzing around people who are trying to innovate, frustrating their plans. She also resented Berlin’s disproportionate influence in Brussels, adding that she is well aware that the rest of Europe does not share Germany’s obsession with data privacy. And yet these German obsessions are writ large on a continental scale, she complained. 

This general reaction would probably be disappointing news for my friends developing start-ups in Berlin. And it may just reflect the opinions of this random sampling of people rather than Silicon Valley as a whole. 

But it remains true that Berlin is a fairly easy place to start a business, and in terms of costs, its much easier than in the bay area. The cost of rent seems to be a constant topic in this city – the amounts people pay is truly unbelievable (average rent here is now higher than in New York City). 

So it makes sense that people want to find cheaper locations to develop and nurture their ideas. But it remains an open question whether Berlin is that place.


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Anonymous said...

Nice article. I actually don't agree on the point on the lack of famous and successful startups.
For instance there is Zalando, Delivery Hero and Hello Fresh, all IPOed. Additionally, there are a number of growth phase startups, such as GetYourGuide and GoEuro.