Venture capital, the location and state of mind…

This shall be a more geeky approach to the topic that cooks up every few years (right now we have it boiling in Germany and the US again): Venture Capital, the Valley, the US and the rest of the world.

Raising VC (venture capital) is a strange process. I have done it at the end of the 90’s and I still have no idea, why it worked the way it did :-). We grew much too fast in a time out of control. It was definitely funny and a cool time. My task was to work in the US for a German company and build up a subsidiary in the States. In 2001 everything combusted (or better imploded) and recovered slower, more sensitive over the years.

I have followed the invests of friends in the “New Economy” (which you still might call new from my point of view). There has been 1 full swing back and forth of the mood around that topic already again.

Today we are at the end of what I call “the mobile fever”. The whole process might be worth a complete blog post or book of its own: “VC from the view of a coder”, but I leave that for Mark Zuckerberg to write.

Recently I was invited to join a German government delegation to fly to the US and consult around the topic “VC”, growth and support for young technological companies.

Well, I have some thoughts on that! There are some things, without the claim to be complete, that come to mind:

a) There is no global player from the OUTSIDE of the US, who succeeds in marketing on the same level of Amazon, Google, eBay, Facebook, Cisco, Oracle, etc.

Published by Techcrunch

Published by Techcrunch

There a great successes. There are billionaires from Internet companies, not living the States. China has some fantastic internal stories here.

Yet: if you grow significantly in Europe to a level you make “billions”, you are either acquired by a silicon valley holding or you are a hidden champion here. Local players like XING could have swallowed LinkedIn years ago, if there would be backing from the financial markets. But there is none in that level. If you walk out on the streets of Europe and ask for successful Internet companies, you will hear “Google” and maybe “Amazon”, no famous local brands.

Why is that?

b) European investors and companies have not reached the level of marketing synergy a US combination has. We are getting there, but if I look at the VERY BAD evaluations the Samwer guys get or how Berlin sometimes act like a Kindergarten: An Accel Partners would not allow that bad press to spread with their investments. Heads would roll and Millions would be invested to save the brand.

c) Maybe we are missing an unique local factor: Stanford, Sand Hills Road and the successful other guys in the area just kill it for the Valley and New York City is not too far away with the designers and publishers around huge VC funds.

Take a look at scale. Simply the scale:

economy The Valley

 

I see all “venture capitalists” up Sand Hills Rd. in Palo Alto. I see Google, Oracle,craigslist, eBay and Apple with their core activity there. But I also see Stanford and Berkeley (yes, the guys who invented Unix).

Then I look at the same scale at our precious Berlin:

economy Berlin

 

and all I see are 2 local VCs, with a few who opened an office there to have a presence (sorry, Earlybird – but you are Munich and Hamburg by heart). If you really cook it down are Germany’s most famous Samwer brothers not even REALLY there, either. So I see a few startups, one real Berlin VC (point9 / Team Europe) and a lot of early stage wannabes…

On a national scale, I see some chances to compete:

economy Strong Part of Europe

Aha, now we are talking: within 1 hour of air travel time, we include Munich, London, Paris, Frankfurt, Zurich, Berlin, Stuttgart, Prague and even Copenhagen. Maybe it is time to really think European. If it comes to VC and creating a global player on the web: we have the resources within the same 1 hour LEGAL circle.

The only barrier might be the language, I agree :-). Yet: on that map, I have the best European universities, most of the Venture Capital of Europe and the entrepreneurs, who are willing to eat sh*t for a few years to make it work!

Time to think: European Start-ups vs. US Start-ups!

 

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