SMW: Can We Compare Berlin to Silicon Valley?

By Conor Rushby |

Social Media Week is an impressive undertaking – a global event, covering 13 cities, which looks at the social, cultural and economic impact of social media. It also claims to be Germany’s biggest free Web conference; something which no doubt helps attract attendees. And there was certainly a good crowd in at the Immobilienscout24 HQ on Andreasstrasse, one of three SMW venues in the German capital, to hear a panel take on an old favourite: Is Berlin the new Silicon Valley?

It’s probably a given that the one-word answer is “No” – Silicon Valley is Silicon Valley; end of. But there were plenty of interesting points raised by the panel, which included Roman Bach of 24gorillaz and 9flats, Oliver Koch of QTom, Mirko Caspar of Mister Spex and Joel Kaczmarek, the editor of Gründerszene.

Moderated by Silicon Allee’s Dave Knight, the discussion looked at both the pros and cons of Berlin as a major international tech hub. Among its advantages is how international and diverse it is – a quick show of hands produced only three people out of more than 50 in the room who were born and raised Berliners.

The nature of Berlin as a place to live, with cheap rents and an attractive lifestyle, is important as a factor in attracting creative young people to the city. But when quizzed whether the fact that Berlin startups are looking globally from day one was a positive, the panel were unanimous in providing a negative answer.

Roman said: “In America you have a ready market. In Europe we always have to think cross borders. We have to think locally and yet globally.” This necessitates international workforces, but means for a Berlin startup the first hurdle is much higher.

Yet something is missing. Berlin has no giant; no eBay or Google. As Roman put it: “It’s very hard to get things done, the difference with Silicon Valley is that Berlin at the moment only has ideas.” The big boys of the Valley are already well established, and their cash flow is considerable. Joel pointed to a gap between the seed money available in Berlin, which he reckons is easy to find, and investments numbering in the millions, series A and B, which are not forthcoming. In Berlin he said, “investors are not in your social network.”

This is part of the difference in culture between the two centres of innovation. Of particular importance is how failure is dealt with. This may be an old topic to many, but it bears repeating. As a general trend, failure is much more acceptable in San Francisco than it is in the more risk-averse German business mindset. You can have a startup in the Valley, fail, and move on; investors can even see it as a useful learning experience.

Then there was another hot topic in recent months; the role of government. The consensus amongst the panel seemed to be that while the authorities, both at local and federal level, could do more to help entrepreneurs, they weren’t likely to propel Berlin to the same sort of status as Silicon Valley. Miko said: “They [government] could probably do a lot. If you talk to any founder its really hard to find people. They could do very simple things – send representatives to Kiev and get skilled grads by helping with visas.”

Ultimately, comparing Berlin with Silicon Valley is largely fruitless, but it gave the panel a chance to discuss what the tech scene in the German capital does well, and the areas in which it is lacking. And as the crowd dispersed, many deep in conversation, to go on to the next Social Media Week event, it was easy to appreciate the former.

You can win two tickets to meet the Geeks on a Plane at the Factory this Saturday – check out the details here!