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Failing to Find the Startup G-Spot? Embrace Consolidation

Failing to Find the Startup G-Spot? Embrace Consolidation

It’s always a bit sad when a platform you like closes down. That was certainly the case with 7Moments, a privacy-focused photo sharing service which I first wrote about what feels like an awful long time ago.

In an email explaining why they were giving up on 7Moments, the three founders told a story that is all too familiar in Berlin nowadays. For despite that fact that “every day new photo albums are being created and people join them” and that user feedback was “always very encouraging, kind and helpful, [and] our infrastructure always secure and stable,” there was one rather important thing missing: Growth.

Because, as the trio added in their message, they had seen that “the growth in usage did not meet the goals we set to maintain the high standards of service in this ever-changing world. Being a small team, we decided to move on.”

The public signup has been disabled; you can’t install the iOS app any more. Thanks for the memories, 7Moments.

Well, let’s not go too over the top here. After all, it didn’t manage to stand out in the myriad world of online photography, and frankly, it is a wise move on the part of the founders to recognise the low potential for long-term success and turn their considerable talents and experience to something else.

A Difficult Year for Startups

But they are not the only ones for whom it is hard to find that elusive G-spot, aka user growth. This is true in Berlin, where 2013 has been a difficult year for promising startup platforms, but also elsewhere across Europe. The fact is, it is very tough to get over the bump.

You take an interesting idea, you build a platform with great design and technology behind it, you raise a bit of cash, you launch with a fanfare, and then you watch your user numbers climb. Slowly.

The problem is in seeing that growth itself take an upward trend. At some point, people start asking questions. Is this thing really going to be a success in three or four years time? After all, if hoards of people aren’t using it now, how will it make money? The people asking those questions range from the founders themselves, their investors, their users, some guy on the street they have never met. It doesn’t matter – it’s a hard task.

I don’t want to be too depressing. It’s good to see Berlin be resilient; I don’t get asked anywhere as near as often as I used to whether the startup scene here is all buzz. Great things are being done here.

But the truth is, while it’s a great place to create and build small-scale commercial technology, it’s not ideal when it comes to going global. That can be said for Europe as a whole (the UK notwithstanding, perhaps) because of its fragmented nature.

Taking a Different Approach

That doesn’t mean it’s impossible, of course – looking hopefully at the likes of SoundCloud and Tape.tv here – or that people should stop trying. The Next Big Thing is just around the corner, and it’s as likely – nay, more likely – to come out of Berlin that anywhere else. But, perhaps, we need to take a different approach.

I’ve made it clear before that I’m not entirely convinced by accelerators (the jury’s still out on that one) but if it’s the fragmentation that is holding us back, perhaps we should look to increased consolidation as a good thing.

Perhaps, despite the initial disappointment felt by most of us in Berlin on hearing the news, activity marketplace Gidsy had it right when it sold out to GetYourGuide; perhaps Amen was right when it became part of Tape.tv.

Of course they had it right – they didn’t have much choice. But perhaps we should embrace it a bit more.

About David Knight

David is co-founder and Editor-in-Chief of Silicon Allee. Originally from London, he has lived in Berlin for over seven years, having previously worked for news portals including Bild.de and Spiegel Online before helping to found Silicon Allee in 2011.

One comment

  1. Great point and kudos for speaking out about it. The talent density required for a startup to really achieve success is quite high, and while there is a lot of talent in Berlin, and more and more coming to Berlin, there is certainly a lot of merit with ‘putting more wood behind fewer arrows’ if we want this ecosystem to succeed

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