I'm an American that's lived in Berlin for the last 7 years, and run a startup here. This post is mostly correct; in fact, it's pretty impressive that the author soaked up the vibe that much in such a short span. But there are a couple points worth clarifying:
The jaywalking analogy is stretched. Like, the source of it is partly true, but it's a pretty boring social convention. There are enough places where Berliners proudly flaunt the law that make Californians seem like straight-laced prudes.
However, what the argument gets right is that the issue is more cultural than structural. There are a lot of things that come together to make German startup-culture somewhat tamer than the US variety, among them less of a drive for polarized go-big-or-go-home attitude, the historical strength of the German Mittelstand (medium sized companies) and less tolerance for risk.
Also, the thing on data and Google Maps seems off. I'm not sure why Google Maps has only recently started to integrate Berlin's subway data, but there are excellent apps for Android [1] and iOS [2] that accomplish the same (and are not published by the local transit authority, and I can't imagine that solo app authors have more clout to get at the data than Google). It seemed a bit lame to assume that since Google Maps doesn't have the data that it must be the city's fault.
Good article overall but anecdotal evidence is anecdotal
> Standing at a street corner I was shocked that no one jaywalked. There wasn’t a car in sight, yet Germans young and old stood there obediently, waiting for the green walk signal.
I am from Berlin and I jaywalk all the time :)
I think people who were actually raised in Berlin are very likely to jaywalk. Looking as to how you visited ITB I suppose many people you've seen were not originally from Berlin (also many startup founders are not originally from Berlin but from all over Germany)
I worked 3 years in a Berlin startup. Here's some things I observed over that time.
First the city itself. Berlin changed drastically and is still changing. Cost of living, especially housing sky-rocketed over that time (1). The city has become hipster central with many ghettos forming (Neuköln) (2), which isn't necessarily a new problem but I saw it expand over those 3 years. If you love hipster culture its great, if not there's little escaping it unless you can get into a calm Viertel of which there are increasingly fewer. Also Berlin is increasingly poorer (3) and crime is steadily on the rise (4), and this is a palpable increase in comparison to just 4 years ago when I moved to Berlin.
But to qualify my statements, Berlin is a multicultural city like just about every other major city in Europe - you can find and do whatever you want or imagine. But the above are generally the things neglected by those trying to sell Berlin as an amazing place to live your life.
Secondly, the funding and general startup environment. Here Berlin is number one in Europe and was so even before the Brexit as the article mentions. There is definitely a huge startup network and hub of activity, so in terms of numbers and access to investors, cofounders, talent, there is a lot going on, but what I think is still lacking, and this article does a good job of mentioning it, are break-out homegrown successes - at least in terms of notoriety, i.e. Spotify. There are indeed moderate successes, companies that get bought out by US expanders or develop a moderately profitable business which are homegrown.
I think there are many reasons for this, one could be we haven't had enough time in Berlin, another one of the biggest factors I think, is that the European market is very hard to penetrate at such a high level, there are so many different cultures/languages, EU laws and country specific laws that expanding is more difficult than homogenous markets like the US or China (obviously), especially when you are a small team.
Anyways, the experience was amazing and if I could go back I wouldn't change anything. Still Berlin is not all a bed of roses, just as its not all work and no ecstatic elation and amazing exitement when you're building a new company.
ITB was for the first week, the second two weeks I was working in the same environment most other berlin startups work in.
But yes, it's anecdotal evidence, observed continuously over 3 weeks. And it's an impression, that's all, never claimed to have done exhaustive research :) Like I mentioned in other comments, I obviously realize there are plenty of people who probably jaywalk, in a city of millions that much is certain. But I thought that particular observation reflected a lot of what I had heard from Germans themselves.
Berlin may not be the best representation of Germany as a whole right now. It is somewhat of an anomaly and may be the least German city in Germany right now due to attracting a large number of foreigners (which I'm not saying is a bad thing). Anecdotal evidence: Last time I was walking through Kreuzberg on a Saturday night at least half of the people on the streets seemed to speak English. However, as a German I have to say that he has a point. People not jaywalking is a symptom of a certain mindset in Germany with regard to rules and respect for authority. Along with this comes a lack of individual initiative and risk-averse behaviour. Being self-employed or starting a company is not seen as something to strive for but to avoid due to its inherent risks. People will actually give you funny looks when you tell them that you don't have a 9-5 job and they may actually pity you. When I quit my job to go freelance, everyone always pointed out the risk of not being in steady employment but interestingly nobody pointed out the benefits. This is curious as our social security system is rather extensive (expecially compared to the US). Even if you fail and fall, you're not going to starve or end up homeless and it'll be a comparatively soft landing. In theory this should benefit risk taking, but it does not. In fact, studies show that numbers of companies being founded and people going freelance go up in times of economic distress (e.g. '07-'09) and go down in times of a booming economy. When asked, the people answered that the did it out of necessity and not out of genuine desire to be independent. So we can conclude that Germans do prefer a 9-5 over the risk of being on their own despite the social security net. My interpretation of this is that most German's perception appears to be biased towards seeing the risks and not the possibilities even when the risks are objectively much smaller than perceived. Coming back to jaywalking this may mean that saving a minute or so may in their perception not be worth the risk of being run over or stopped by the cops however unlikely that may be in reality.
I also think that this mindset is a bad thing and has larger ramifications in a world that appears to be changing at an ever increasing pace than most people realise yet. Germany as an economy is highly dependent on the ability to export innovative premium products due to the relatively high costs of labour. Mechanical and chemical engineering are two of the main contributing sectors when it comes to exports. The extent of this becomes obvious if you take a look at the 30 stocks in our DAX index most of which stem from these sectors. What is also obvious is the distinct lack of IT companies. There is SAP and then there's Infineon, that's it and those are neither new nor particularly innovative companies. SAP is a 40 year old enterprise software company. I've never used their products but everybody I know who has, hates it. They may be very well on the forefront of companies ripe for disruption in the coming years. Infineon is a chipmaker that was spun off by Siemens (yes, THAT 165 year old Siemens). They have been struggling for years and had to spin off some of their departments which subsequently filed for bankruptcy to save themselves. There is really no company in Germany that would compare to the likes of Apple, Google or Microsoft in size or innovative potential and this looks like a major deficit in our economic structure to me. What I find notable is that nobody in Germany seems to be noticiing or even talking about this. Given that in the future IT will probably become even more important, this may very well come back to bite us.
I've just started mingling in the Berlin startup scene:
There's a lot of copying of the American tech market, retargeted towards a German market. That makes some investors here a bit conservative since "the proven model" is so unambitious. But there are VCs and Angels here in town and quite a few startups. Living is freakishly cheap for a European metropolis and in general it's a very attractive place to live.
Here's a map of startups registered on Deutsche Startups:
How's the Berlin startup scene these days? I visited the place around 2005 - it was a great city and had thriving culture, but seemed to be lagging behind Hamburg or Munich as far as startups. Has it changed since?
so tylee78: where did you get the information that everybody is leaving berlin? what kind of people you are talking about? it seems you haven't read the article. berlin is booming. every week two new startups are launching. berlin has two airports from where you can get to every other destination on this planet. berlin has several good universities and huge amount of young talented people. even academics from the best universities in germany (whu, ebs, hhl, mannheim etc.) and even from the U.S. (e.g. Research Gate - forunder moved from harvard to berlin) are moving to this city, because it is a perfect environment to create a new company on a low level of costs.
berlin isn't more dirty than hamburg or munich. berlin is just a huge city, where some parts are of course dirty, but it is the same for munich, hamburg, new york and san francisco too. berlin is the place to be in europe, if you want to setup a tech startup. if you care more about other things, you really shouldn't start a tech startup.
Couldn't read the article as the server is overloaded. But I have some thoughts about the headline. This may contain some hyperbole, you have been warned.
I don't understand Berlins appeal. It has one fatal flaw: no industry. In my opinion the great parts of Germany are where the world-famous "Mittelstand" sits. Is that in Berlin? I would argue it's not. Berlin is called "the city of students, the unemployed and cab drivers" by many, and probably not without reason.
Berlin is our hipster-central. However German engineers much prefer the living standards of Bavaria or BW instead of getting their Audi/BMW/Merc torched and their property vandalized. You're not getting lots of these people to move to Berlin. Big (US) IT corps know this, almost all of them have their headquarters in the south.
Now, if you're after 20somethings with no family, low income expectations and you build webapps using $WhateverIsCoolOnHN that targets other 20somethings around the globe - sure, go to Berlin. But then why don't you start wherever you are and get going instead of looking for another excuse that delays your product?
If your business plan even remotely involves selling goods or services to companies, you've chosen the wrong spot of Germany. The same is true for finances, Berlin is constantly broke and banks cling on to their money for obvious reasons.
And if your business plan involves pushing lots of data, you should be in Frankfurt.
I actually returned from a week in Berlin just a few days ago, and I was specifically there to investigate whether it would be a good place to base my startup.
Just to be clear, I very much WANTED the city to live up to it's hype but it has one major problem that, for me, was a deal-breaker: attitude.
It is true that there are lots of good, reasonably priced restaurants, interesting bars, good public transport, cycle-friendly roads and reasonable rents (although not as cheap as some are suggesting).
It is also true, however, that many Berliners have a HUGE attitude problem and a completely illogical resentment of foreigners. I would say that the majority of my interactions with Berliners were positive but I also regularly experienced a snide, superior, strangely bullying attitude in service situations.
Now, you don't go to any big city looking for happy faces and warm hugs and you can shrug such incidents off, but it does wear you down over time. To give you an idea of the extent of what I'm talking about, I find much bigger cities such as New York, London and even Frankfurt, Munich or Hamburg to be far more friendly - yes, even New York is less rude!
The passive-aggressive attitude towards foreigners is a red flag for anyone hoping to run a business because that is absolutely going to crop up again and again in the form of local government red tape and an extra scoop of bullshit from landlords, suppliers etc.
More worrying is the aggressive-aggressive attitude - several times in the course of just one week, I witnessed open hostility towards foreigners, including locals interrupting guided tours to self-righteously tell the tourists - people who had travelled across the world to learn about Berlin, spend lots of money, create jobs etc - that they were not welcome. I have travelled constantly for over two decades and I have never seen that happen elsewhere, not even to obnoxious bus-loads of German tourists.
Fascinated, I discussed this with locals and was amazed to find that, even among people who would identify themselves as left-leaning and anti-racist, there is a general sense that foreigners are bad for Berlin, that they are responsible for the commercialisation of the re-unified city. Bizarrely, they don't see the connection between this attitude, this tendency to scapegoat foreigners for all unwelcome changes, and the slow-building antipathy of their grandparents towards the Jews in the 1920s and 1930s.
I am not suggesting that startup founders are going to be marched off to death camps, but you should certainly visit the city and, before investing serious time and money, think seriously about the realities of living in a city where you are not welcome - no amount of buzz or hype can compensate for that feeling once you are actually based somewhere.
Cities that I rate highly would be Singapore, Dublin, London and Santiago. Amsterdam and Paris are beautiful but not business-friendly. Australia could be good, great lifestyle, but they have lousy Internet infrastructure and ignorant government. Several American cities - SF, NY and even smaller scenes such as LA and Austin - could be wonderful, especially in terms of funding, and the lifestyle is good, actual Americans are very friendly/positive, but the current immigration laws are insane and do not take into consideration the jobs and wealth you will create. I don't expect that to change until the US disentangles itself from its various wars and is finally forced to face up to its growing economic problems, but that won't happen for at least another decade.
Yes, this article doesn't tell much about the Berlin startup scene, but it really did got me curious about it!
Can some please link or post here a good review of the Berlin scene?
I'm surprised more companies haven't chosen Berlin. Big startup scene, desirable location, great transit links... seems to be obvious to me. I must be missing something.
I've been back and forth from Berlin for a little while now. My company's home base is in NYC, but I sometimes work out of Berlin.
Even this year while I was there (Feb. - May), the startup scene is exploding. I liken it to the satisfaction of knowing of a great band before everyone else: there's no doubt that Berlin will be muttered in the same breath as the Valley, NYC and London. It's only a matter of time.
The German culture can be a bit harsh to outsiders, but the Berlin startup scene more than makes up for that. The folks there are very kind and always willing to entertain a good conversation.
Indeed, but what I wanted to say this kind of article creates an impression Berlin is cool place with a startup scene where anyone can move and work there and a lot of people ignore their quality of life will decrease because they don't know the language.
Writing from a German startup right now, I can't quite follow the author here. Granted - German copycats and especially the Samwer Brothers have brought some bad feelings into the community... but Berlin is getting better and bolder every day. It's basically almost all the goodness from Silicon Valley, but without the hype and craze. It's a friendly, crazy and green city with great work ethics - you don't live for working, you work for a living. Contrary to the article, accelerators, VC funding and the war for talent have long arrived here for sure - but it's all still pretty calm and well-thought out. Maybe there's still a little less innovation here, but on the other side, it's much harder to get funding without a business model that makes sense. Color definitely wouldn't happen here. We got all the cool things and conferences, but I'm pretty glad we're doing it the German way: No hire and fire, health insurance for everyone and the income disparity feels just so much more just compared to the states. I once thought of moving over to Silicon Valley, but by now I'm pretty glad that everything I want has moved over here without bringing the TSA, mass surveillance, corporate politics, discussion about the validity of evolution, a deadlocked two-party system and a growing helplessness over the unstoppable and unlimited capitalism that's ruining society already over there. All the best from Berlin - and if you feel the same, maybe it's time to come over? Dom
The jaywalking analogy is stretched. Like, the source of it is partly true, but it's a pretty boring social convention. There are enough places where Berliners proudly flaunt the law that make Californians seem like straight-laced prudes.
However, what the argument gets right is that the issue is more cultural than structural. There are a lot of things that come together to make German startup-culture somewhat tamer than the US variety, among them less of a drive for polarized go-big-or-go-home attitude, the historical strength of the German Mittelstand (medium sized companies) and less tolerance for risk.
Also, the thing on data and Google Maps seems off. I'm not sure why Google Maps has only recently started to integrate Berlin's subway data, but there are excellent apps for Android [1] and iOS [2] that accomplish the same (and are not published by the local transit authority, and I can't imagine that solo app authors have more clout to get at the data than Google). It seemed a bit lame to assume that since Google Maps doesn't have the data that it must be the city's fault.
[1] https://play.google.com/store/apps/details?id=de.schildbach....
[2] https://itunes.apple.com/de/app/berlin-brb/id409357982?mt=8
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