EU startups

Why Europe’s Startups & tech companies rival Silicon Valley’s

Stuart Dredge Trends

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How many times have you heard the bullish claim that ‘[Place That Isn’t Silicon Valley] is the new Silicon Valley’? Or seen new variants on the phrase used to imply a similar idea? Here in the British Isles alone we’ve had Silicon Fen (Cambridge), Silicon Glen (Scotland), Silicon Docks (Dublin) and Silicon Roundabout (London) even if the latter was originally coined as a self-aware satire of the ‘new-Silicon-Valley’ notion.

Still, other parts of the world are finding the confidence in their startup ecosystems to stop comparing themselves to that specific historical confluence of US companies, capital and citizens. Europe included, whether you consider it as a continent or a political entity.

The higher-education establishments rolling out budding entrepreneurs may be more fragmented than Silicon Valley, but they do exist. The venture capital pockets may not be as deep, but they are getting deeper. And there’s an array of startups and larger tech companies finding global success while maintaining strong roots in the specific cultures and contexts that have fuelled their growth.

Music? There’s Spotify and WiMP from Scandinavia; Deezer from France; and SoundCloud and Simfy from Germany; as well as Shazam and Songkick from the UK. Games? Rovio and Supercell from Finland; King with studios and offices all over the continent; Mojang from Sweden – now Microsoft’s $2bn Mojang, of course (creator of Minecraft, see photo below); NaturalMotion – bought by Zynga for $527m earlier this year – from the UK; Wooga from Germany and any number of talented studios with ambitions to be the next big thing, scattered across the EU.

Minecraft European startup

Mojang’s game Minecraft (via Shutterstock – OlegDoroshin)

Other European (in the continental sense) tech startups with a consumer focus include *deep breath* BlaBlaCar, SwiftKey, EyeEm, iZettle, Hailo, Withings, Telegram, Wunderlist, Nordeus, Toca Boca, ZeptoLab, Babbel and more. I write more about the apps side of the industry, as you may have guessed, but Google’s acquisition of artificial intelligence startup DeepMind earlier this year shone the spotlight on the B2B side of things too.

Europe also has an emerging ecosystem of incubators and accelerators working hard to provide startups with the support they need, from your Seedcamps and Springboards to your Wayras and a flurry of localised initiatives like Ignite in Newcastle, whose well-won reputation now travels far beyond the north-east of England.

It feels strange to focus in on “European” as a defining characteristic of many of these companies, especially those that have experienced global success. Spotify is the largest streaming music service in the US already, for example, while the main growth in Shazam’s business has come from its push into TV and advertising – again, in the US first, before turning back across the Atlantic.

Angry Birds is a global brand, as are Clash of Clans and Candy Crush Saga. And parents around the world know that the distinctive chimes of Toca Boca‘s jingle is a guarantee that the app they’re loading will be creative, playful and safe for their kids to use. These companies stopped being regional in their appeal a long time ago, if they ever were that in the first place.

Do European companies have their own identity? Some are deliberately transatlantic in their mindsets: Toca Boca has an office in San Francisco, while Seriously – maker of the currently-hot mobile game Best Fiends (see photo below) – is split between LA and Finland, reflecting some of its staff’s history within Rovio as well as its desire to court the entertainment industry.

Best Fiends European startup

Best Fiends (via Seriously)

For now, European startups aren’t facing some of the negative perceptions that exist in the US around technology companies: the cult of the boorish, chauvinist “brogrammer” and some of the social integration clashes that are growing in profile in cities like San Francisco. Avoid generalisations though: brogrammers aren’t the rule in the US, and Europe, like anywhere, has its share of douches.

Another risk of generalising about European startups for those of us based in the region is that this veers towards cheerleading: we get so carried away by their growth and ability to take on bigger Silicon Valley rivals, that we forget to scrutinise their business practices and analyse their failings as we should.

Spotify has managed to persuade 10 million people to pay for streaming music, which is hugely impressive; but the business model of streaming still needs a lot more debate about how it works for musicians – a number of whom see Spotify as a villain destroying their living, not a hero rescuing it.

Wonga has won awards and acclaim for being a European startup, but its payday loans are hugely controversial – a recent reminder of which was the company being forced by UK regulators to write off £220m (€280m) of loans to borrowers who should never have been allowed to take them out in the first place.

Rovio‘s recent announcement that it was laying off up to 16% of its workforce after slower-than-expected Angry Birds growth sits alongside King‘s most recent financial results hinting that Candy Crush fever may have peaked, or the enduring struggle of London’s Mind Candy to evolve its Moshi Monsters brand to survive mobile disruption. We can celebrate their success so far, but also think hard about what went wrong and why.

It’s a symbol of Europe’s maturity as a market for homegrown startups that we can criticise our companies as well as cheer them on, in other words. Europe has some super startups, but it’s when they encounter super-challenges or claims that their businesses have not-so-super elements that our response will show just how far the continent has come as a tech ecosystem.

 

“The Invasion of the European Super Startups” is one of LeWeb’14 Paris’ key tech trends. Curated by Facebook’s Julien Codorniou, this conference track will include speakers from BlaBlaCar, Nordeus and Lightricks. More LeWeb’14 programme info here

Stuart Dredge is a freelance journalist, covering apps and technology for The Guardian, and entertainment technology for Music Ally. He notably interviewed Nest’s Tony Fadell at LeWeb’13 Paris. Follow him on Twitter here.

Top photo via Shutterstock – worker