A Couple of Bad Habits in Berlin
(with love)
When I moved to Berlin a year ago to launch The Family, I knew almost nothing about its tech scene. As a Parisian, I was obviously biased, as our local ecosystem literally went from “Meh…”to “wtf happened!…” in less than 3 years. I started observing the local tech culture with a fresh perspective that maybe only an outsider can have, and pointing out some habits that maybe only an outsider would notice. Now, habits never define a person or a culture forever. They’re just potential traps that sometimes prevent great individuals or teams from realizing their full potential. Anyhow, here’s what I found…
🎓 The “business school” habits
Having smart & hardworking business school graduates flowing into the startup scene is never a bad thing in itself. Being rational & structured is useful when building a business. But the moment that structure becomes a mold for the mind, then it’s called a coffin. In that coffin are a few bad habits we’ve seen:
- Raising money too early: Raising €250k before building anything is a great way to lower personal and business risks, especially when the money is available. Problem: It really fucks up the cap table, prevents you from discovering deep insights & will most likely scare away top later-stage VCs.
- Sticking to the plan: Risk-averse teams tend to over-plan, spreading the risk & money over time. Problem: Strategy is when you have more money than time.
- Stopping when it hurts: If building a company is a rational opportunity, then why keep pushing when it doesn’t make sense anymore? Problem: Startups are not MBAs. They’re not a fancy line on the CV either. They are 10-year commitments.
😎 The “wannabe” habits
Berlin is cheap, or at least it was VERY cheap a few years ago. Berlin is cool, and it will definitely still be cool for at least a dozen more years! Cheap & cool is great, it attracts talent from all over Europe. You know what’s not cool though?
- Hanging around co-working places: These places are amazing for chilling out, often on the (very) cheap. If feeling comfy is the goal, then these spaces are the answer. Problem: It’s easy to spend more time pitching your fellow co-workers than working. Plus, most people leave Berlin co-working spaces around 6pm. You’ll feel like a hero if you’re still there at 7. Sad.
- Talking to corporates: Early-stage startups should shy away from corporates as much as possible. I’ve seen the opposite happen a lot here. I get it, it feels good, it’s attractive. What if you score a multi-million dollar contract with a big fish? Problem: It takes forever, and early-stage startups enter into a supplier-type relationship the moment they sign a deal with a corporate. And that’s dangerous. Ever tried giving a gorilla a mouse to play with? *This is fine*
- Doing it because it’s cool: Let’s not lie to ourselves. It’s now become cool to say “I’m a startup founder” at a party. A few years ago it still sounded like “I don’t have a job” to most people. Problem: Being here for the wrong reasons won’t make you stick around when the novelty fades away.
😈 How toxic, really?
Having these two mindsets ingrained in Berlin’s tech ecosystem is bad for at least two reasons…
First, they can kill companies that would have otherwise been good enough to succeed. I’ve seen cool teams with great products and decent traction doomed to die because they gave 25% of their company to a weird local angel for €250k a year ago. It’s not about the founders being too weak, or not good enough. It’s about the fact that if that’s the only way they know, that’s the way they’ll go. One can argue that this is natural selection at play, I don’t agree with that. I believe we should enable good enough founders to create good enough companies. The invincible ones shouldn’t be the only ones to survive.
Second, it scares the singular founders away from the ecosystem. And there are some here in the city. A few of the rare singular founders we’ve met are the Pexel guys: I remember when I first stumbled upon them — two 21-year-old twins and their childhood friend — at one of our events in Berlin. It would have been easy to take them lightly. They were calm, didn’t talk much and sat quietly, smiling and listening as I was pitching The Family. I was in pitch mode. And they just said they had bootstrapped a free stock photo platform with millions of monthly visits. From Berlin. While studying. You wouldn’t have seen them raising money from angels, pitching at an event or hanging around in a co-working space. They were too busy pushing it further while being profitable and rocking Product Hunt’s most-upvoted leaderboard.
🦄 The Family’s Black Swans
At The Family, we’ve had the chance to witness the hatching of amazing teams. Initially, these never looked good, obvious, or cool. They never rationally make sense at the beginning. Now, though, they’re the shit. A few examples:
- Algolia: A bunch of nerds coming out of Exalead, the French government’s attempt to build a platform to rival Google. They’re now on their way to a billion.
- Agricool: Two sons-of-farmers who got so pissed at the taste of modern strawberries that they started growing their own in a container. They are now changing the way we grow food in cities.
- CaptainTrain: A UX-obsessed founder that couldn’t stand the way we were booking tickets with France’s national railway company. They built it. They sold it to Trainline for $200M.
- Tribe: A former French reality show celebrity, now building a Sequoia-backed video app in L.A. A wannabe? No. A killer.
🤗 You’ve got a Family
Do we still believe in Berlin? Of course! It’s filled with amazing talents, investors & companies. The city lifts you up as soon as you arrive, as you realize fast that its DNA is built upon the belief that the future is better than the past. That’s unique in Europe.
We just think ambitious founders shouldn’t feel alone in Berlin. It’s increasingly important to find people who share the missionary mindset with you. People who don’t think it’s necessary to raise money before having built & learned anything. People who don’t spend more time pitching at a co-working than talking to users.
At The Family, we’re fighting for the best companies in Europe and are onboarding 15 of them every 2 months. This is what we believe in, and this is how we’re building it. But hey, it’s not only about what we say, it’s about what we do. Ping me, ping us, anytime, and let’s talk about it. 😉
LOVE. 💖
Hugo.
Also, special thanks to Alice, Kyle, Rowan and Jasper for helping me out sort my thoughts and provide feedback. 💯
