On 22 March 2016, Readie is bringing together leading experts from across Europe to discuss the best ways uncover emerging technologies, businesses models and hot startups and scaleups. Our guest author Ivo Spiegel, tech.eu co-founder and author of ‘The EU Startup Revolution’, is one of them.
To hear Ivo, Robin Chase (founder of Zipcar), Nicklas Lundblad (Director for Public Policy, EMEA, at Google) and many other world-class digital leaders, book your tickets for the Readie Research Summit here.
In this piece, Ivo tackles the regulatory environment and asks what can be done to remove barriers to startups so that they grow and prosper:
European technology as a global leader: a battle for hearts and minds
“It’s so fantastic to see that this happens everywhere all over our beautiful continent! I love Europe, I love the different cultures. Every place you look, you see tech ecosystems emerging.”
This was Stefan Glänzer’s comment during our conversation about European startups, in early 2014, when I interviewed him for my book “The European Startup Revolution“. Stefan was right in many ways.
Digital transformation is taking place all over Europe – from the glamorous financial and technology hubs of London, Berlin, Paris and Stockholm to cities that were not on any business map just a few years ago like Tallinn, Lisbon, Ljubljana, and my native Zagreb in Croatia.
I have met, mentored and written about many high growth European companies over the last eight years. It’s an exciting world and the players in this ecosystem share the same challenges, use the same methodologies and frameworks and “speak the same language” regardless of where they are building their businesses.
According to a report sponsored by the European Commission, “Sizing the EU App Economy“, developers in the app economy (e.g. applications built for smartphones, tablets, social networks and smart TV’s) generated €17.5 billion in 2013. This is expected to rise to €63 billion in 2018, creating 4.8 million jobs (up from 1.8 million in 2013).
These and other figures clearly show the importance of high technology industries, innovation, digitalisation and startups to the European economy. This begs the question: are we doing enough to support it? More particularly, are European politicians and policy makers doing what is needed to fully support the growth and development of a strong, globally competitive digital economy and digital single market in Europe. The answer, I’d say, is “sort of”.
The Commission has shown strong support for innovative, high growth startup companies, as well as through various forms of financial support. The European Investment Fund (EIF) continues to be a powerful investor throughout Europe, at all levels of company maturity and size. So much so, in fact, that VCs have commented that there would be no VC industry in Europe without the EIF.
And yet we see so many obstacles and setbacks hampering stronger growth of the digital economy in Europe. Imagine, just for a moment, that American businessmen turned off mobile data on their phones as they travelled from one state to another, from New York to New Jersey or from San Francisco to Seattle. It’s an image almost comical in its absurdity, but it is also the reality for millions of European entrepreneurs, as they wait (and wait) for roaming charges to be eliminated. Only a few years ago, in September 2013, the Commission’s “Connected Continent” initiative called for roaming to be eliminated in July of this year. Last summer, however, the telco lobby managed to push through another year of the charges, citing (sic!) “reduced growth and employment” as the consequences of eliminating it. Now it seems we may finally be rid of this nonsense in the summer of 2017.
My friend Damir Bandalo’s story is, unfortunately, to me a symbol of how the EU is still far from the true Union it needs to be from the perspective of an entrepreneur. Damir is the CEO and co-founder of a movie ticketing startup, Superpopcorn. His team started the company in Zagreb, so they of course established a legal entity – their company. He then got funded by Bulgaria’s Launchub so they needed to set up another company, in Sofia. Finally, as a next step, the company’s next funding round was from Berlin and their target market was Germany. You guessed it – yet another legal entity to establish.
I’ve come across some amazing and inspiring stories of successful European startups. I’ve discovered there are no set rules, despite ‘myths’ commonly found in the press. No – you don’t have to move to the US to build your company. Soundcloud, Deezer, Spotify, Skype, Fon, TransferWise, Rimac Automobili, Supercell, Wargaming, TradeShift, Outfit7… the list of globally successful European companies that have ‘made it’ from their European base goes on and on. You don’t even have to be in a major technology hub, as witnessed by Runtastic, Rimac, Nordeus and many others – you just need a great idea, a fantastic team, lots and lots and lots of perseverance and very, very hard work.
When thinking about how entrepreneurship impacts the digital economy, I recall my conversation with Ilkka Paananen, co-founder and CEO of the incredibly successful Finnish game maker Supercell. I asked Ilkka how his team balances the emotional drive with customer and Internet data when making decisions about which games to launch on the market and which ones to kill.
“We go by the heart,” was his response, and he continued “We are obsessed with data. We collect tons of data points from our millions of gamers and distribute the most important information, in a compact format, to every Supercell team member at the beginning of each day. We then use this data to either validate or question our instincts.”
Policymakers, academics and entrepreneurs in Europe might do well to consider this strategy when working together to create a more competitive, dynamic technology landscape on “our beautiful continent“, as Stefan said. Readie and others are hard at work producing tons of very, very relevant evidence and data about what’s going on and how the landscape is being shaped.
It’s the leaders’ hearts, their instincts and their vision that needs to drive change. There are many opposing forces, many who find the status quo to be perfectly fine in all three sectors. A strong mixture of inspired hearts and very well informed minds will be needed to shape the future of European technology and lay our claim to global leadership.
Ivo’s top 3 EU startups to watch:
Supercell – Finnish maker of global hit games including Clash of Clans, Hay Day, Boom Beach and Clash Royale, played by more than 100 million people every day.
Rimac Automobili – Croatian maker of the fastest electric supercar in the world but also of cutting edge technology powering electric vehicles on land, on sea and in the air.
Transferwise – Revolutionizing financial technology, making it far more affordable for customers to send money to each other