#tcb09: Gadowski — European startups need to loosen up, innovate and cluster

Yesterday we held the TechCrunch Berlin roundtable meetup and explored some of the themes driving the tech scene here. Lukasz Gadowski, founder of the Team Europe investors and the serial entrepreneur behind Speadshirt, StudiVZ and others in Germany, spoke on “Competing with US players”. As is often the case with Gadowski, he threw the cat amongst the pigeons with a passionate speech, exhorting his fellow countrymen to start to link science and technology to business much more closely. What he said also revealed a lot about the attitudes to tech startups and business in general in Germany.

Gadowski said Europe is on the periphery of Internet Entrepreneurship while the US is in the centre. Why is that? Are Europeans “dumb and un-innovative”? No. We have great scientists, great institutes and a high performance business culture – “North of France ;)” he added cheekily.

However, despite this there still remains the issue of “Copy-Cat” startups. So why does the US dominate tech? He nailed it down to four reasons.

Demographics: The US is one large market speaking one language, while Europe is a collection of smaller markets.

Learning Curve: US consumers where online earlier and move quickly with the times, as does their tech sector. They also have large numbers of business people with a highly developed ecosystem. Being ahead of the learning curve means they see problems sooner, and you can‘t innovate without being able to see the problems first. That also means you can execute faster.

Clusters: The US also has a relatively centralized area (Silicon Valley) for tech and there is a culture of openness and support. This contrasts with some companies in Europe who operate under “1000% Confidential and Stealth mode” all the time.

Business & Tech mix: People from business and technology innovation also mix a lot more in the US and understand eachother’s worlds. There are also centers of excellence for both of these fields on one university campus (MIT & Sloan; Stanford etc).

However, although Europe is lagging, there is no reason for despair and we have come a long way. For example, in Germany “the last 5 years have been incredible!” he said. So the groundwork has been laid.

Gadowski suggested further ways to improve the environment for startups in Europe. He said to bridge the gap between technology and business students must study business as well as technology course, at the same time (e.g. a Double Major).

European culture – which can be pretty anti-capitalist at time’s and is very much so during the economic crisis – needs to be changed. “Capitalism is good! It is not evil! Exploitation is the exception, value creation the rule!” he said. So “the Rolex watch” aspect of business’ conspicuous consumption is the exception, the foundation of new venture is the rule in business. It’s significant that he actually had to spell this out and although I’m sure he was preaching to the converted at a TechCrunch event, the fact he felt he had to do so does speak volumes about the prevailing attitudes in Germany and, perhaps, across Europe.

He also told the audience to “Please tell your local CCC chapter”. In other words, go tell the Chaos Computer Club members – who have a history of anipathy towards business – that tech startups are not evil. Wow.

He also added, “be ethical yourself; don‘t sell your soul and do not support unethical groups. Have Respect!”. In other words, there’s a prevailing feeling in Germany that business sometimes operates unethically. Personally, as a Brit, I’d say they have much less to worry about than the UK!

He also called for tech business people to not look down on geeks because they seem less interested in the money side of the business.

He also called for startups to “Innovate!” rather than copy, to get the best returns on their businesses. “But: please make sure your innovation is a business! Most are not.”

In contrast he added that people should still not scoff at copycats, since “a successfull copy makes great entrepreneurship and helps us to climb the learning curve.”

Gadowski told the audience to stop being secretive about their startups and share knoweledge as “1000% confidential sucks – it misses lots of benefits. Ideas are overrated, execution is key.”

He also addressed the issue of clusters. Many VCs in Germany are based in Munich. There are no full-blown VCs in Berlin, and yet that is currently where most of the German startups are based, as it’s cheap to startup here. “When will the first VC relocate?” he asked.

In a final “to do” list he told the crowd to “Support A teams (and learn) instead of building the 5th B company. Focus the Community on Successes; Go international!”

Finally he told everyone to read Techcrunch Europe and Gruenderszene. Thanks Lukasz.