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Germans don’t do tech startups – more access to capital might change that

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Re: Germans don’t do tech startups – more access to capital might change that

#41

Post by destartupop »

Jdam wrote: post #27
destartupop wrote: post #2

I've been trying to build deep tech startups in Germany for 6 years. I managed to sell the first one I built to a US company (for a very small amount of money) and started afresh after taking a break as an employee. Right now I'm at the point of giving up again because it's so damn hard to find customers here. In my opinion, for deep tech startups the problem is not primarily access to capital but access to customers…

I‘d have been eligible for EXIST, but that program is a bad joke. 100k for 3 persons for one year before tax? C‘mon. That is financial sucide, if you’re in tech these days.

It's not much money but absolutely sufficient to cover expenses and focus on building your startup. It paid 2500 € / month in income per person back in the day, and until recently the money was considered tax-free (as a scholarship) so it corresponded to a gross salary of about 50.000 € (without social security or retirement of course, so subtract 300 € per month for that). Now it's no longer considered tax-free but they increased the amount a bit in response, I'd say you will get 2.000 € in net income per month if you have a PhD (people with a Master or Bachelor degree get 500 € or 1000 € less, respectively). It's still not a tech salary but a living wage, and actually similar to what many people in non-tech jobs earn working full-time.

On top of that the program pays about 50k (?) for additional expenses, which you can use to e.g. rent an office, hire freelancers or cover legal costs.

For comparision, YC gives you 150k for a team of usually 2-3 people, and living expenses in SV are way higher than in Germany. So I wouldn't consider it a "bad joke" personally. Also, while the tutoring is not as good as YC some universities (especially TU Munich / LMU Munich and TU Berlin) provide really excellent mentoring, so I'd say overall it is a great program.

I'm just bummed out that nothing comparable exists for people with longer industry/work experience.

Re: Germans don’t do tech startups – more access to capital might change that

#42

Post by cabraca »

zorkw4rg wrote: post #18
_petronius wrote: post #5

We do have tech startups here in Germany, and quite a few of them. It's just that they tend to be funded differently, and with less of the wild valuation-speculation that goes on in the US. I'm not sure that's a bad thing. As a corollary, the article cites European data protection law (in the context of not being able to collect usage data to improve the product) as a barrier to building startups which ... is also ve…

meanwhile there is not a single tech startup from germany worth talking about, but yeah sure not everyone has to do it the SV way of doing things, like actually being successful

> like actually being successful

lets be honest, there is a huge amount of SV startups that bleed CV money like there is no tomorrow. not to mention the ones that failed.

Re: Germans don’t do tech startups – more access to capital might change that

#43

Post by dschuetz »

In Germany most start-ups are self-funded with maximum personal risk. That means that you only fail once, after that you'll never be able to recover from bankruptcy only to do your next thing. As Germans are not known to be risk taking folks it's understandable why there are slim chances for the next Silicon Valley in Germany. It's all about risk and risk taking. Tweak those parameters economy-wise, then we talk about bold entrepreneurship.

Re: Germans don’t do tech startups – more access to capital might change that

#44

Post by maze-le »

_petronius wrote: post #5

We do have tech startups here in Germany, and quite a few of them. It's just that they tend to be funded differently, and with less of the wild valuation-speculation that goes on in the US. I'm not sure that's a bad thing. As a corollary, the article cites European data protection law (in the context of not being able to collect usage data to improve the product) as a barrier to building startups which ... is also ve…

Exactly, I've worked in 3 companies in Germany that you might call startups without venture capital. I think it is also a cultural issue, with investors and founders alike. Its like, a small company with an independent revenue stream and a small but reliable customer base is worth more than artificially (VC-)inflated companies, that might make it... one day... maybe.

Re: Germans don’t do tech startups – more access to capital might change that

#45

Post by jacquesm »

roadbeats wrote: post #6

I moved to Berlin recently and started making a list of “cool” startups and venture capital firms in my public notebook. It can be a reference for people who are curious about the ecosystem here: cool startups: https://github.com/azer/notebook/blob/master/berlin.md#cool-... venture capital firms: https://github.com/azer/notebook/blob/master/berlin.md#ventu... PRs are welcome.

Endeit Capital and Capnamic should be on your list, as well as Project-A ventures and Partech.

Re: Germans don’t do tech startups – more access to capital might change that

#46

Post by zby »

jayalpha wrote: post #15
mprev wrote: post #9

Has the author not heard of Rocket Internet? Hello Fresh? Zalando? Contentful? SumUp? Wooga? Deepstreamhub? Delivery Hero? N26?

Rocket Internet were just the scumbags that ripped off every US based idea and tried to implement it in Germany. A few "me-too" businesses. Okay. There are very few big ideas that investors in Germany would pour money into.

Facebook was not an original idea either.

Re: Germans don’t do tech startups – more access to capital might change that

#47

Post by thatfrenchguy »

baxtr wrote: post #39
_petronius wrote: post #5

We do have tech startups here in Germany, and quite a few of them. It's just that they tend to be funded differently, and with less of the wild valuation-speculation that goes on in the US. I'm not sure that's a bad thing. As a corollary, the article cites European data protection law (in the context of not being able to collect usage data to improve the product) as a barrier to building startups which ... is also ve…

I have to disagree. We don’t do tech startup like in the US or China. Yes, we do have a lot of great B2B industrial startups. But ask yourself this questions: as a developers where would you want to work? In the US that’s easy to answer, Google, MS, Apple, amazon. Where do you want to work in Germany? Which tech company provides the opportunity to earn a lot of money while working on really interesting topics at a la…

“In the US that’s easy to answer, Google, MS, Apple, amazon. ”

That’s a dangerous thing though to push as a one-stop solution I think. There is huge advantages to work for one of these companies, but the drawbacks are also there, and they’re definitely not made for everyone

Re: Germans don’t do tech startups – more access to capital might change that

#48

Post by roadbeats »

jacquesm wrote: post #45
roadbeats wrote: post #6

I moved to Berlin recently and started making a list of “cool” startups and venture capital firms in my public notebook. It can be a reference for people who are curious about the ecosystem here: cool startups: https://github.com/azer/notebook/blob/master/berlin.md#cool-... venture capital firms: https://github.com/azer/notebook/blob/master/berlin.md#ventu... PRs are welcome.

Endeit Capital and Capnamic should be on your list, as well as Project-A ventures and Partech.

Could you send a PR?

Re: Germans don’t do tech startups – more access to capital might change that

#49

Post by chillydawg »

Jdam wrote: post #27
destartupop wrote: post #2

I've been trying to build deep tech startups in Germany for 6 years. I managed to sell the first one I built to a US company (for a very small amount of money) and started afresh after taking a break as an employee. Right now I'm at the point of giving up again because it's so damn hard to find customers here. In my opinion, for deep tech startups the problem is not primarily access to capital but access to customers…

I‘d have been eligible for EXIST, but that program is a bad joke. 100k for 3 persons for one year before tax? C‘mon. That is financial sucide, if you’re in tech these days.

Consider, for a moment, you have a great idea and a couple of friends to start a company. You have no money. Is 100k to give it a shot "suicide"? Of course not. If you're at the right time in your life, this is an excellent opportunity. Not everywhere has $4k/mo rents and $10 coffees.

Re: Germans don’t do tech startups – more access to capital might change that

#50

Post by Jdam »

_petronius wrote: post #31
Jdam wrote: post #19

Earlier quoted context omitted.

I’ve lived in Berlin for some years. What I‘ve seen from most of the startup scene there was that people are more collecting memories than building businesses. The predominant mindset was like „we don’t want to take over the world and we will most likely fail anyway“. The successful ones, like Dubsmash, leave for the US after a while. If I, as a German, was to create a startup in Europe today, I’d do so in London.

I would humbly submit that your sample size is too small. Even just the Rocket Internet output is a pretty good indicator of the size and diversity of successful startups tsrgetting the German market specifically (and thus with no incentive to move out to the US).

I‘ve worked at a major company that is more or less controlled by Rocket and my direct neighbor was the Germany-CEO of one of their successfuller ventures, so I think I have a rather good picture of Rocket. However, I think they have not met expectations. They have not become huge, and are just doing okay, what I consider as a failure, given their goals.
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