What does it take to be the next Silicon Valley? Talent, money and 'crazy people'

Experts from the startup hubs of Dublin, Berlin and other European tech capitals reveal how to bring tech to your town.

© Florian Küttler/Westend61/Corbis

Sock it to me. A potential startup hub needs to be able to attract people who are willing to take risks, sartorial or otherwise.

Photo by Florian Küttler/Westend61/Corbis

Cities around the world are vying to become the next hotbed of world-changing startups. But what are the magic ingredients required to encourage entrepreneurs to build tech in your town?

Apparently they include talent, funding and "crazy people."

That's according to representatives of hot startup cities Dublin, Berlin, Amsterdam, Moscow and Paris, who discussed the topic in Barcelona on Tuesday at 4 Years From Now, a startup-focused conference at technology trade show Mobile World Congress.

Why would a city or region want to become a centre of startup activity? Because it's the 21st century.

"Tech is going to be involved in every single facet of our lives," explained Niamh Bushnell, Dublin's first commissioner for startups, "so if you want to have an economy in wherever it is that you live, you need to be encouraging and nurturing startups. You can build it with the right policy and the right culture."

Returning to Dublin after 16 years in New York, Bushnell identified some aspects that Dublin shares with the Big Apple, a leading hub for business and technology. Those similarities include a density of companies, a "can-do culture" and a cluster of enterprise-focused firms. In fact, Bushnell describes Dublin as a bridge between the US and Europe because of both its location and the presence of Amazon, Google, Facebook and Microsoft's European headquarters, thanks to Ireland's generous tax laws.

One obvious universal element any prospective startup hub needs, apart from a supply of investment capital from venture capitalists or government funding, is talent. A pool of smart people with smart ideas actually starting companies is the foundation of any startup scene.

Those entrepreneurs can either be locals benefiting from education in technology and business, or they can be people from elsewhere attracted to a welcoming startup culture. Drawing in the latter is a priority for Amsterdam in the year ahead, by way of a European startup Visa for people coming from Brazil or the US to get involved with startups in Europe.

It's not just a technology-focused culture that attracts wannabe entrepreneurs to a fledgling hub. Frederic Oru of French accelerator Numa cites the food and fashion of Paris as important elements of its thriving startup scene. "For entrepreneurs it's really important to have a place to live and grow," he said, "with a way of life that's interesting."

And one of the strengths of the Dutch startup scene is that "Amsterdam is full of crazy people", according to Sigrid Johannisse of StartupDelta, a government initiative to encourage entrepreneurship. "You need an open-minded culture," she said, in order to encourage an entrepreneurial spirit prepared to take risks and try different things.

Some cities are hotbeds because they're lucky enough to be located at the heart of a major market. Moscow is one example. "You have to be in Moscow if you want to be in the Russian market," said venture capitalist Pavel Bogdanov. "The Russian market is a large market -- more people online than in any country in Europe, more people with smartphones than any country in Europe."

And in more good news for enterprising Russians, their comrades seem to favour homegrown companies. "Russia is peculiar because it somehow is resistant to global champions," said Bogdanov. In Russia, homegrown search engine Yandex is far more popular than Google, for example, while indigenous social network VKontakte dwarfs Facebook.

That said, Bogdanov stresses that it's important for players in the startup scene to look beyond even the biggest local market. "No country can afford to just be centred on itself," he said.

It's not just startups themselves that need to be encouraged in order to make a city successful. "You need young people with talent and an entrepreneurial spirit," said Cornelia Yzer, Berlin's senator for economics, technology and research, "but what you also need is an administration with an entrepreneurial spirit, that brings hurdles down so people with a good idea are not blocked."

That extends both to local government and bigger established companies that could become partners or clients of startups, in what Bogdanov described as a win-win situation for both smaller and larger groups.

Local government and big companies can also help by thinking ahead to new technology like 5G.

"What we have to do as governments to support startups," said Johanisse, "is to build up the digital infrastructure of tomorrow so the companies can work with it today."

On the government side, education is important too, teaching young people to be proficient and excited about coding, development and business. In Berlin, Yzer and her team are addressing this by actively recruiting new IT professors to German universities.

So where will the next startup hub explode into life? Johanisse identified Chile, Kenya and Estonia as up-and-coming environments for startups. But she stressed that in order for a fledgling hub to mature into a successful and sustainable startup environment, the scene needs the "stamina of decades", as well as the flexibility to continually reinvent itself.

The lessons of Dublin, Berlin and other startup hubs will be studied by cities around the world. But as much as there might be common factors in the success -- or failure -- of a startup scene, what's right for one place might not be right for another.

"There's no one recipe," said Johanisse. "We always talk about Silicon Valley -- which is amazing what's happening there -- but as soon as you start to define what it really is and try to copy it, you are already 20 years behind...There are things you can learn from Silicon Valley, which is the speed and the openness to do business with each other...but the key is to always look at your own strength."

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