What’s unique about European tech?
Europe is often regarded as a difficult market to break into. European founders as well as foreign companies struggle with the diversity of legislations, languages, consumer behaviors, and cultural differences to truly scale their products beyond their local markets.
Some go even as far as calling Europe the “globe’s consumer-tech underachiever,” as Jeremy Kahn from Bloomberg recently argued. Although the region has great universities, infrastructure, and double the population of the US, it hasn’t produced any tech companies that are remotely comparable to Apple, Amazon, Alphabet, Microsoft, or Facebook.
But does Europe’s diverse tech ecosystem also bring about unique opportunities?
To find out, we asked five investors from the US and Europe at the Lisbon Investment Summit to weigh in on the current challenges and opportunities of the European tech ecosystem.
We focused on three big questions:
- What’s unique about the European tech ecosystem?
- What has changed?
- And what are the opportunities for European founders?
Our interview partners: Marvin Liao (500 Startups), Jenny Fielding (Techstars), and Zach Coelius (Angel investor) from the US; and Stéphanie Hospital (OneRagtime) and Ricardo Sequerra (Cherry VC) from Europe. The interviews were conducted during Lisbon Investment Summit 2018.
The lowdown: While Europe’s diversity and infrastructure can be an asset, and talent and capital are as widespread as ever before, the greatest challenge for European startups might actually be their mindset — that is, their ability to think big and scale their ideas globally.
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“Big exits will happen in the next 2-3 years”
Marvin Liao, Partner at 500 Startups (US)
Marvin sees a lot of diversity and connected ecosystems in Europe, and the EIF (European Investment Fund) making investment capital more widespread and accessible across the continent. Examples of big, massive exits are still missing in Europe but Marvin believes that they will happen in the next 2-3 years.
Marvin’s advice to founders: Focus on the customer. Talk to them, meet them, call them. Focus your time on understanding them and their problems. Too many startup founders don’t do that enough.
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“The challenge for European startups is to think big”
Stéphanie Hospital, Founder at OneRagtime (Paris)
Europe is unique because of its talent pool — there are more developers than in the US and sectors like data analytics are specifically strong. Its legacy of traditional sectors like automotive, food, retail, and services make it uniquely positioned to re-invent the future and disrupt these sectors. The key challenge for European founders: to think big and execute.
Stephanie’s advice to founders: Surround yourself with good people, think about your customers and think big.
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“European entrepreneurs should do things differently than in Silicon Valley”
Zach Coelius, Angel Investor (US)
Europe is different to the US in the way it approaches taxation, labor laws, and risk taking. But that isn’t necessarily a disadvantage, argues Zach. Each region has different problems and challenges… and what matters is how you solve them.
Zach’s advice to founders: Find the delta between the status quo and the solution to the problem you can provide. Getting that delta right is the magic of a successful startup.
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“Access to capital and mentors are the biggest challenges”
Jenny Fielding, Managing director at Techstars
The guiding thesis behind Techstars is that you can build great companies outside of Silicon Valley. Jenny observes a lot of local ecosystems growing in Europe and entrepreneurs starting to think more globally. The key challenge for European founders is still access to capital and experienced mentors, she finds.
Jenny’s advice to founders: Surround yourself with incredible people. Build yourself a great group of mentors and advisors that can help guide you through this journey.
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“Adaptability and distribution make Europe unique”
Ricardo Sequerra Amram, Principal at Cherry Ventures
Ricardo sees Europe’s diversity as an advantage; each ecosystem comes with its own expertise. The result is a high level of adaptability when it comes to understanding each market and developing a different approach to each. In his view Europe’s challenge is not the availability of talent, but the lack of experienced people who have successfully built and scaled startups.
Ricardo’s advice for founders: Entrepreneurship is about solving problems. The best way to achieve this is to learn and iterate fast.
Are you building something in Europe? We’d love to hear from you. Meet our team in Berlin and London.