When I left the USA in 1995 and moved to Europe, the start-up scene on the Continent was pretty dead. But a lot has changed since then, and events like TechTour 09 are further proof that there is great talent, capital and great ideas in Europe too. And in a crisis, surprisingly, these three elements are more likely to ignite into a successful start-up.
Last night I spoke at the TechTour dinner thanks to a kind invitation by fomer Fon European, MD Robert Lang, now at Result (disclosure: I am an investor in Result). Nina and I left Madrid around 4pm and arrived in Lausanne at 7pm, stayed until 10pm and then flew back to Madrid. It was a short stay but in those 3 hours we had enough time both to speak and to learn from some of the 150 entrepreneurs and VCs gathered at the event.
My speech was about how the crisis is negative for most but a boom for entrepreneurs. More concretely, it was about how the unique European system of high severance pay and welfare payments (in Europe stock options are not common but extremely large severance pay packages are) constitute a source of capital that can allow a former executive to become an entrepreneur. Many unemployed European executives find themselves unemployed with enough money to devote, say, a year of their lives to a start up without additional compensation. Also in Europe, some very talented people get laid off because it is cheaper to fire them than less talented but older colleagues. And those people are exactly the ones who may be needed in a start up. Lastly, the crisis reduces the difference between large companies, as providers of stable employment and start ups. As people realize that there’s risk anywhere, being the master of their own destinies becomes more attractive.
After my speech I was able to speak with some VCs and entrepreneurs that make the European start up ecosystem very lively. There were many VCs of small funds, funds of say less than 100 million euros, generally funded by Family Offices or holding companies of wealthy European families. What distinguishes Europe from America is that institutional funds are less into start-ups, but fortunately wealthy families whose fortunes came from start ups are more active investors in the area. I end with Poken, a Lausanne based start-up that deserves special mention. Poken is a little device that “shakes hands” with other like devices and in so doing exchanges information about their respective owners. Pokens are great for conferences and events as they are time savers for people exchanging information.
Here are some pictures of the event.
Follow Martin Varsavsky on Twitter: twitter.com/martinvars
Alex Griffin on November 20, 2009 ·
Martin, I presented at Tech Tour on Wednesday. Really enjoyed your speech. Would be great to catch up and introduce you to my business Bouf.com when you have a moment. Alex
wixho on November 22, 2009 ·
good post, is is possible you upload your speech here?
Leave a Comment
You must be logged in to post a comment.
Charlie Ranalli on November 19, 2009 ·
Great note. More mature start-ups already in the market can also benefit wonderfully from a crisis. They are usually directly or indirectly replacing established and therefore larger competitors that will in most cases have to adjust to new economic realities reducing personnel, marketing investment, travel and R&D. In the process they get distracted and become prey to entrepreneurial hunters that see the confusion and chaos as an opportunity to accelerate grown. Customers will also be looking for cost saving opportunities and therefore more open to change. Cool blooded leaders willing to reach out to investors during a crisis and propose to speed-up market penetration with creative action plans can do amazing things…