THE BERLIN STARTUP SCENE
In renovated factory buildings, trendy offices can be found all over Berlin. It’s these kind of places where tech-savvy people meet, staring at laptop screens and developing the latest online gags. The startup scene of Berlin is famous all over the world. Companies like SoundCloud and Zalando all started from scratch in the German capital and have established their brands from here.
Probably the most successful Berliner startup is SoundCloud. It was founded in 2007 by sound designer Alexander Ljung and musician Eric Wahlforss. They moved to Berlin from Sweden and started their online platform for uploading and sharing audio files. Just last month, they announced an astonishing growth in users. 250 million people use their platform monthly, five times more than just five months ago.
It’s the success story every startup dreams of when coming to Berlin. But there are actually very few startups that have the same type of growth numbers as SoundCloud. It is said that Berlin is the place where companies are born, but is not the place to grow businesses. It is said that the right infrastructure to turn a startup into a mature business is lacking and that investors are not willing to take the same risks as they do in Silicon Valley for example.
Nevertheless, Berlin still very popular for many young ambitious tech-savvy people to move to. The low rents and the wide availability of co-working spaces like Betahaus in Kreuzberg, MobileSuite in Prenzlauerberg and the Agora Collective in Neukolln, make it relatively cheap and easy to start a business here. Many events bring ideas and developers together.
People from all over the world flock to Berlin to work for a startup or start something themselves. Recently many Italians – due to economic difficulties in their own country- moved to Berlin to join the startup scene. In typical startup cafes and offices, you will therefore hear English more often than German. Many startups are headed by foreigners. Gidsy (now GetYourGuide) for example was founded by two Dutch brothers.
Another well-known Berlin startup is game-developer Wooga. In 2009 Jens Begemann and Philipp Moeser started developing games for social networks – one year later the company already had 50 employees. Whereas their focus is on games for social networksites like Facebook and Google Plus, they started in 2012 developing games for smart phones and tablets as well. Among their games are Diamond Dash, Bubble Island and Fantastic Forest.
But young, starting companies are unfortunately also notorious for disrespecting working conditions, like Allard van Gent experienced at Zalando. Zalando started in 2008 as a startup in Berlin, founded by David Schneider and Robert Gentz who got the backing of investor brothers Semwer. The Semwer’s were already known for making several companies big and selling them for a lot of money, like StudiVZ and Jamba.
In 2009, Zalando expanded to Austria. It was within two years already dominating the online shoe business, but still made a 20 million euro loss. The last years saw a strong growth in turnover, but losses were still reported. At the moment, Zalando is active in 14 European countries and has a turnover of more than one billion euros.
Zalando came in 2012 negative in the news through a ZDF documentary showing the working conditions in the distribution centre close to Berlin. Recently, Zalando was again connected to bad working conditions, this time in their new distribution centre in Erfurt – which they build with government subsidies, promising to create jobs for the region. The Minister of Economy in the state of Thuringia now demands Zalando to create a special board overseeing the well being of their employees.