Conditions Have Never Been Better Than Now for European Startup Success
Europe's tech hubs are thriving today because of the effort that the region's first generation of entrepreneurs has plowed back into the ecosystem.
Europe’s thriving technology hubs have historically been overshadowed by Silicon Valley, but things are changing.
Confidence in the European market is growing. Significant local exits have shown that homegrown startups can compete with Asian and U.S. counterparts, while unprecedented investment has accelerated the growth of the local ecosystem.
Those that wish to build startups from Europe are now in a strong position. Here’s what they need to know about choosing this market as their base.
Tap into the tech hubs on your doorstep.
The Europe of today is a far cry from the market I left as a graduate in the early 2000s. Back then, few European entrepreneurs saw their home country as an attractive place to start a tech business, and like most of my cohort I left for Silicon Valley, where I experienced the ups and downs of the dotcom bubble first hand.
The experience taught me some powerful lessons. One of the biggest? A successful startup simply cannot exist in a vacuum.
Though the media likes to suggest otherwise, no success is ever entirely self-made -- even a genius such as Michelangelo had his Medici garden schooling. Just as the success of Silicon Valley is built on decades of investment and experience, Europe’s tech hubs are thriving today because of the effort that the region’s first generation of entrepreneurs has plowed back into the ecosystem.
The foundations have now been laid, and today, founders can more easily access local expertise and build a valuable network of peers. The key is to get stuck in, and never take this community for granted.
Stay close to fundraising.
Historically, one of main criticisms of Europe’s tech scene has been that U.S. startups have far superior access to capital. But that’s changing. Today, European founders have their pick of international investors, newly-launched local funds and a raft of storied European VCs (whose sum of total funds raised is at an all-time high, according to recent Atomico research).
This vibrant funding environment is radically different to the one I saw in 2009, when raising capital for BlaBlaCar in the wake of the Lehman Brothers collapse. What I learned then is even truer today -- it is crucial, as a founder, to personally commit the time to choosing the right investors.
Too many founders think of fundraising as a distraction, or as something that needs to be outsourced. I believe it is one of the very few things that founders should stay close to. If you are switched on, have a compelling vision and are personally committed to the fundraising process, you should be able to secure capital in any market and in any funding climate. You will also, importantly, partner with investors that grow into invaluable mentors to your business.
Give something back.
As technology takes over Europe, the region’s lawmakers have started to take note. City by city, mayors are working to create an attractive environment that promotes and attracts tech entrepreneurship. The same is true at the E.U. level. All the same, tech innovation is happening far more rapidly than policymakers can keep up with, so entrepreneurs must take proactive responsibility for sharing the insight, experiences and concerns that they’re gathering at the coalface.
In France, President Emmanuel Macron has amended local labor laws, simplified the visa application process for foreign entrepreneurs, and positioned government agencies within Parisian startup campus, Station F, to streamline tax and immigration queries.
For Europe to maintain momentum and nurture the the next generation of tech startups, founders must help create an environment where everyone is willing to give something back. That’s something I feel particularly strongly about given BlaBlaCar’s own history -- our co-founders met at an entrepreneurial event in Paris where young innovators gathered for advice and inspiration. Having personally benefited from the ecosystem, we are always looking for ways to foster its growth.
Push for improvements.
Europe is getting so much right that in all probability, the next industry-defining startup could well emerge from one of its blossoming tech hubs.
But as in any adolescence, there are still growing pains. To sustain their current growth, Europe’s startups will need to hire more than 100,000 people in the next year, but strict local rules deny many the option of offering share ownership schemes -- one of the key levers used by U.S. companies to attract talent. Local founders are calling on legislators to rethink these rules, in a push to attract the brightest and best to Europe’s growing tech hubs.
Still, many of the uncertainties facing Europe today are shared by other markets, and there’s no reason that the "old continent" can’t overcome them. The opportunity is here, and it’s exciting. Those that still see Europe as an also-ran should come to one of its major cities and see it for themselves.