European startup scenes compared(whiteboardmag.com)
whiteboardmag.com
European startup scenes compared
http://www.whiteboardmag.com/european-startup-hubs-compared-tel-aviv-london-paris-moscow-berlin/
47 comments
Quick question: Do people think the rising cost of living in a place like London will have a negative effect on start ups?
Currently it doesn't look like it from that report but I'm currently on an intern's wage and have struggled to live here, I can only imagine how hard it is to potentially work for a small wage maybe even just equity whilst being a bit older than I am and potentially more responsibilities.
Currently it doesn't look like it from that report but I'm currently on an intern's wage and have struggled to live here, I can only imagine how hard it is to potentially work for a small wage maybe even just equity whilst being a bit older than I am and potentially more responsibilities.
To some degree the answer depends on what you need from a physical location. Some of the benefits you get with London:
* Density of people with expertise - easy to hire or find people with specialist skills
* Variety of talent levels - getting people at the right level if you're building an extended team
* Availability of people with similar experiences - support groups; shared space
* Availability of support services - legal, financial, VC
* Supportive employment and tax region - UK rather than London specific
* Large market for testing and product validation - UK is both a gateway to Europe and has similarities to the US if you're moving your product from Europe
* Language and time zone advantageous if you are multi-region
If you're a light-weight start-up with a small team that has all the skills to create and bring the product to market then it may be less important.
If you're likely to grow into a small company (say you're VC backed) and need lots of different skills then London has advantages - these are the same advantages any large city or Silicon Valley has and they vary to degrees. Note that in that scenario direct cost of salary is only one element in the total cost of running the business.
* Density of people with expertise - easy to hire or find people with specialist skills
* Variety of talent levels - getting people at the right level if you're building an extended team
* Availability of people with similar experiences - support groups; shared space
* Availability of support services - legal, financial, VC
* Supportive employment and tax region - UK rather than London specific
* Large market for testing and product validation - UK is both a gateway to Europe and has similarities to the US if you're moving your product from Europe
* Language and time zone advantageous if you are multi-region
If you're a light-weight start-up with a small team that has all the skills to create and bring the product to market then it may be less important.
If you're likely to grow into a small company (say you're VC backed) and need lots of different skills then London has advantages - these are the same advantages any large city or Silicon Valley has and they vary to degrees. Note that in that scenario direct cost of salary is only one element in the total cost of running the business.
I'm planning a startup in the next couple of years, and the high cost of living in London is making me lean toward Cambridge over London.
Cambridge is very expensive as well. While it is not as expensive as London, I don't think it makes much difference, unless you want to hire people with families (Cambridge is much more affordable if you want a garden, things like that). For younger people, I think they would be willing to spend a bit more for a bit less space in a vibrant city compared to a city which is not very exciting to say the least.
In my experience Cambridge is a lot cheaper than London. Both in terms of both living costs, and costs of employing people.
It depends also on the skill-sets you're looking for. London tends to be trendier and have people with who are into the latest-trendy tools.
It depends also on the skill-sets you're looking for. London tends to be trendier and have people with who are into the latest-trendy tools.
I guess it depends on the reference, but I was shocked how expensive Cambridge was. Having a decent 2-3 bedrooms house at walking distance of the 'center' can easily reach 1500 pounds a month. I myself have a flat which while near the center is in a shitty building, and it already costs > 1000 pounds a month. I would have something obviously smaller and not in Z1/Z2 in London for that price, but at least there would be something to do the WE that does not involve drinking.
Unless you're really into outdoor activities, it is hard for me to see Cambridge as very appealing. I was actually expecting more hacker related meetup and co, especially given the academic background of the university, but there is not much going on.
Unless you're really into outdoor activities, it is hard for me to see Cambridge as very appealing. I was actually expecting more hacker related meetup and co, especially given the academic background of the university, but there is not much going on.
Interesting profile. Do you have a blog or twitter I could follow?
Yes, it is still expensive, but I can get somewhere cheaper and nicer than where I am currently living in London NW3. As someone who is married and planning to have children in the next few years, I think you hit the nail on the head. If I were 20 and single I would be living on Old Street.
Yes. In London it is possible, though perhaps not enjoyable, to live on a low wage. Many people from around the world do it for a few years. They come to London and learn a lot. If you are trying to throw something together quickly with a few people that's very doable in London.
The problem comes when your company needs to hire and retain senior people - ie people who have families, mortgages, etc. The cost and pain of living in London makes it very hard to keep and motivate those people for extended periods. The infrastructure means they either need to suffer a difficult expensive commute (or work remotely, at which point you have to ask why your business is in London) or be paid massively to live in the center.
The problem comes when your company needs to hire and retain senior people - ie people who have families, mortgages, etc. The cost and pain of living in London makes it very hard to keep and motivate those people for extended periods. The infrastructure means they either need to suffer a difficult expensive commute (or work remotely, at which point you have to ask why your business is in London) or be paid massively to live in the center.
Possibly, I live in the North and our rent and general life cost is significantly lower, however the start up scene is still slowly coming into life. It seems at the moment London is the place to be, but because there's significantly less funding the likelihood of survival drops accordingly, but the primary investors are there so being based outside could potentially go against you.
I'm pretty sure that when they give the name of a city, they include the suburbs as well. Paris is a huge metropolis with some cheap areas but it's small and overpriced if you exclude the suburbs.
N.B. I have heard the cost of living in other European cities is a lot lower which is why I thought they would be in a similar shape to London before reading that article.
I have been living for a substantial amount of time (years) in London and Madrid, a short while in Berlin, and the latter two are definitely cheaper, offering a similar quality of life (personally I would say better, but it's a matter of taste, it has also to do with the sheer size of London).
In London I was living in a shared flat in Zone 3, and I was paying more of what I pay now for a decent studio in the middle of Madrid's city center. Public transport is cheaper and more efficient both in Berlin and Madrid, just as well, and eating/going out too.
Then again London has a better start-up scene, more availability of jobs and better paid ones, so as with everything, it's a matter of trade-offs.
BTW, the EU it's not really popular these days, but I always found the fact that you can decide where to work and live with no legal barriers among dozens of different countries absolutely amazing, also considering that those countries were waging war between themselves for centuries up to about 70 years ago...
In London I was living in a shared flat in Zone 3, and I was paying more of what I pay now for a decent studio in the middle of Madrid's city center. Public transport is cheaper and more efficient both in Berlin and Madrid, just as well, and eating/going out too.
Then again London has a better start-up scene, more availability of jobs and better paid ones, so as with everything, it's a matter of trade-offs.
BTW, the EU it's not really popular these days, but I always found the fact that you can decide where to work and live with no legal barriers among dozens of different countries absolutely amazing, also considering that those countries were waging war between themselves for centuries up to about 70 years ago...
Yes, but for legal/tax reasons, UK is much more attractive than most other EU countries.
Good point. I've come across quite a few Berlin based startups that are actually incorporated in the UK e.g. Soundcloud. Someone said to me that one of the reasons for this is share capital requirements. You only need £100 to incorporate an ltd in the UK whereas in Germany it's apparently in the thousands.
There's actually no minimum capital requirement for the UK. You can incorporate a company with £1 in capital, if you wanted to.
Ah yep you're right. Don't know why I had £100 in my head.
Yes, that's one way of doing it. I guess it's not different from the US, where most companies are incorporated in Delaware.
I'd say the UK certainly has the lead in Europe in terms of talent pool size, legal services, tax regime and government support.
I'll shortly be moving back to there and incorporating a company for my bootstrapped startup. I live in France at the moment and the decision to move and kick it off from the UK was a no brainer.
One of the major attractions is the SEIS scheme and the potential this gives me to attract funding via a crowd funding platform like http://www.crowdcube.com This sort of startup friendly business environment just doesn't exist anywhere else in Europe (at least that I'm aware of).
Edit: in connection to the above, would love to know if any UK HNers have had any experience with http://www.vwv.co.uk/ ? I need some legal advice before I incorporate and I've heard they're good and very startup friendly.
I'll shortly be moving back to there and incorporating a company for my bootstrapped startup. I live in France at the moment and the decision to move and kick it off from the UK was a no brainer.
One of the major attractions is the SEIS scheme and the potential this gives me to attract funding via a crowd funding platform like http://www.crowdcube.com This sort of startup friendly business environment just doesn't exist anywhere else in Europe (at least that I'm aware of).
Edit: in connection to the above, would love to know if any UK HNers have had any experience with http://www.vwv.co.uk/ ? I need some legal advice before I incorporate and I've heard they're good and very startup friendly.
Interested in the reasons behind the 'no brainer' move. We're in France, and the regime for startups, with innovation tax cuts and other security nets is pretty favorable. The engineers are pretty good too!
YMMV but for my specific setup, it was just easier on all fronts. My French isn't terrible (my partner is French) but English is my mother tongue and what I'm most comfortable in (especially for business stuff). It's also much easier to get quick, good access to startup focussed legal advice. Then there's the SEIS scheme which is very attractive if I run out of runway after launching and need to look at additional seed funding. Company incorporation is easy and inexpensive. Rent is cheap if you aren't in the South East (and I'm not locked in to a long contract as is standard in France). If my startup turns out to be successful and I need to employ people it's much easier and more cost effective to do this in the UK than in France. And the list goes on.
I'm currently under the Auto-Entrepreneur scheme here and frankly it's a bordel :) I'd like to kill URSAFF sometimes...
Edit: I should also say that I'm out in the sticks in the Limousin region. I imagine things are a bit better in Paris. Where are you guys based?
I'm currently under the Auto-Entrepreneur scheme here and frankly it's a bordel :) I'd like to kill URSAFF sometimes...
Edit: I should also say that I'm out in the sticks in the Limousin region. I imagine things are a bit better in Paris. Where are you guys based?
haha, everyone would like to kill URSAFF, but they are your life after your biological CPU has turned into a good old Pentium :)
And yes Limousin, may not be your startup hub of choice, but after all, it is probably cheaper than everywhere else. Probably good enough while you are in the coding phase, not that good afterwards for sure.
The language problem is real though, and I understand your move much better now.
We're in Toulouse, some other startups I know are in Paris. Ping me if you ever come down South (everything above Bordeaux is Great far 'beyond the Wall' North for us :) ).
And yes Limousin, may not be your startup hub of choice, but after all, it is probably cheaper than everywhere else. Probably good enough while you are in the coding phase, not that good afterwards for sure.
The language problem is real though, and I understand your move much better now.
We're in Toulouse, some other startups I know are in Paris. Ping me if you ever come down South (everything above Bordeaux is Great far 'beyond the Wall' North for us :) ).
Haha je connais bien "la ligne de Bordeaux"... My partner is Catalan and we lived near Perpignan for 3 years before moving here - she thinks of the Limousin as another country!
Would be great to meet up for a beer/wine/ricard and talk startups the next time I'm in the South. I can't see your email but mine is in my profile.
Would be great to meet up for a beer/wine/ricard and talk startups the next time I'm in the South. I can't see your email but mine is in my profile.
Last time I checked Tel Aviv is in the Middle East not Europe.
> As the only “European” startup hub, Tel Aviv...
Indeed! Use of quotes in original piece says it all.
Indeed! Use of quotes in original piece says it all.
Tel Aviv is in Europe now?
Enough to be in the Eurovision (it's a more complex question than you might imagine).
http://en.wikipedia.org/wiki/Israel%E2%80%93European_Union_r...
http://en.wikipedia.org/wiki/Israel%E2%80%93European_Union_r...
This is so hypocritical. What it actually says is: world is full of politics and bullshit. We just bomb the ones we want and call them enemies while we call others friends because it is better in our intere$t.
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Israel tags along several European events such as football championships, Eurovision etc. Partially I suspect it's because they don't have the necessary relationship with their neighbours to be included in a more regional context.
Similarly, what continents do Istanbul and St. Petersburg belong to?
Cyprus is an EU member state, but geographically, it is in Asia.
Cyprus is an EU member state, but geographically, it is in Asia.
Part of Istanbul is in Europe, another part is in Asia.
Whole St. Petersburg is in Europe.
No part of Tel Aviv is in Europe.
Sure, geographically speaking, that’s correct. That’s not what I was getting at, though. Israel is more akin to Western Europe culturally than European countries like Albania. Israel has a functioning democracy, freedom of speech and religion, excellent education and healthcare, and it has a higher GDP than most European countries. Europeans have been coming to Jerusalem en masse for thousands of years, especially this guy by the name of Jesus has been quite popular with Europeans.
Pretty much everyone I know considers Israel to be a middle eastern country. While it's true that European Jews have absorbed a huge amount of European culture and are Europeans for all intents and purposes, whether Israel can be considered a part of Europe is extremely debatable.
Just because certain nations are culturally close, that doesn't suddenly close the geographical gap between them. New Zealand and Australia are culturally much closer to Europe than Turkey and yet that doesn't make them a part of Europe.
Now, to say that Israel is a western country would be correct (as are US, Canada, Australia, New Zealand and possibly even many central and south American countries). But to say that they are in Europe would be incorrect. Let's stick to geographical facts and not reinvent common knowledge, shall we?
Just because certain nations are culturally close, that doesn't suddenly close the geographical gap between them. New Zealand and Australia are culturally much closer to Europe than Turkey and yet that doesn't make them a part of Europe.
Now, to say that Israel is a western country would be correct (as are US, Canada, Australia, New Zealand and possibly even many central and south American countries). But to say that they are in Europe would be incorrect. Let's stick to geographical facts and not reinvent common knowledge, shall we?
In the same vein, "European" is not the same as "In Europe"
There's no question that London is suffering from a funding gap however some of the excerpts seem incredibly difficult to quantify:
They are more motivated by building a great product than by changing the world compared to SV entrepreneurs
I also don't really understand how a preference towards mobile orientated start-ups is indicative of quality:
London has been slow in adopting mobile as a new trend. It has 30% less startups than SV or NYC in the mobile space
They are more motivated by building a great product than by changing the world compared to SV entrepreneurs
I also don't really understand how a preference towards mobile orientated start-ups is indicative of quality:
London has been slow in adopting mobile as a new trend. It has 30% less startups than SV or NYC in the mobile space
Because the less it is like SV the less intersting it is. I am joking obviously, but I found the article strange: it compares all these places with the be-all-end-all bay area and obviously concludes that it is not the same. It doesn't seem to consider that being different can also be an advantage.
Depending on what happens with UK politics over the next 3-5 years that might change dramatically due to the constant drum beating on immigration and EU reforms.
Agree, as an non-British EU company founder based in London I can not think of a better way to discourage investment. Berlin will be the beneficiary.
Tel Aviv scores fairly high in the funding and support index but poor on the performance and trendsetter index. Kind of proves the point that $ isn't all it takes but sure helps you become visible.
The Berlin pin looks more like Bremen.
It's an interesting report, though unless there's actionable information in this for you (there is for me, actually), it's probably infoporn rather than anything worth reading...