Starting Up in Europe
With the release of The Telegraph’s European Start-Up 100, Europe gets another benchmark for tech companies that are looking to break it big. From our perspective, the list mostly features companies quite far into their startup life, but it provides an interesting perspective into what the European startup landscape is looking like. There are certainly successes, with many more on the way.
Starting up in Europe has its unique challenges. Working across Europe, we at HackFwd are keenly aware of having to take them into account. There are the immediate ones, such as different paperwork and widely differing requirements in setting up companies. There are some cultural challenges and challenges of language. While much of the European startup crowd is fluently bi-lingual (or even tri-lingual) and English is lingua franca, this may not extend to the support functions, customers or partners that the startup might have or is looking to go after. In the paper-pushing side, the European Company Statute, while promising as an initiative, has not yet proved to be a solution for startups. Less than 800 such companies in total were registered by the time of writing.
Startup financing is equally fragmented. HackFwd has a fixed investment model across Europe, and we like to think that’s a bit of breath of fresh air, given that investment sizes, practices and both public and private instruments vary from country to country.
Geographical fragmentation is also interesting from the perspective of competitive research. You might be working on the next big thing in your niche and nobody in the English-speaking world, according to your extensive, near-paranoid googling seems to be doing the same. But how do you know there is not something big brewing in the German or French parts of the web, that just hasn’t been localised yet, possibly on purpose? Not translating into English is no way to keep a startup in stealth, of course, but limited market areas can serve as test beds for certain types of products that benefit from social spreading but are not ready to be brought out in a big way. Intimate local knowledge is one of the reasons HackFwd likes to keep feet on the ground in as many countries as possible in the form of our referrer network.
There are many more special aspects of starting up in Europe. The biggest, implicit even in this discussion, is the constant comparison to the US. Europe is fragmented, and we point that out over and over again because the US is not. This will continue to be a relevant comparison for a long time, but it is good be mindful of another comparison, well delivered by Benjamin Joffe at last week’s GeekNRolla in London. It is not only the US we should be comparing against and considering, but Asia as well, in some cases foremost. There are many good reasons why European startups want to get traction in the US (tapping into the big-name VCs and startup experience not being the least). But there can be many valid reasons why European companies could look East instead of West.
The key to starting up in Europe is thinking big, thinking the world instead of just parts of Europe. Being multilingual is a given in most of Europe and even fragmentation can be used to your advantage. There is financing and no shortage of talent capable of exceptional execution. All these are needed. But, especially in Europe, thinking big is the key.
Mikko Järvenpää, Marketing Geek, HackFwd
