

Ask HN: What is the best city to start a start-up in Europe? - roschdal

What is the best city to start a start-up in Europe?
======
adamt
I am surprised no-one has mentioned, Cambridge.

* 7% of all of European VC is invested in Cambridge ([http://noweurope.com/2010/01/13/case-study-what-can-we-learn...](http://noweurope.com/2010/01/13/case-study-what-can-we-learn-from-europes-most-successful-cluster/)), which is not bad for a City of 125,000 people.

* Close enough (50 mins by train) from London's ecosystem of VCs

* Close to Stansted airport for easy access to the rest of Europe

* Large density of tech companies, and tech competent employees. Similarly the professional advisors (lawyers/accountants) etc understand startups.

* Costs are (generally speaking) considerably less than London. Most costs (rent, salaries, professional fees) are 20-33% cheaper than London.

* Pleasant attractive historic town.

* One of the world's best universities, along with a significant research presence from the likes of Microsoft ensures there's lots of smart people about.

* For a long time Cambridge companies have been interesting startups but not made successful large businesses but the likes of ARM, Autonomy, CSR etc have all grown up to be billion dollar businesses.

~~~
Chris_Newton
Agreed on almost everything (as a Cambridge guy with entrepreneurial
tendencies).

It's worth knowing that the average house price in Cambridge itself is now
higher than the average in London, though, and that the local authorities are
almost religiously anti-car, which makes the city centre area much less
attractive (in a business sense). If I were planning a start-up with funding
for significant numbers of staff, I would probably aim to be based on one of
the business parks on the outskirts, or in one of the smaller towns/villages
close by. That way, you're still within easy reach of the people, industry and
support services, but day-to-day running costs and accessibility for local
employees who don't want to walk/cycle in every day and for professional
visitors driving to your premises are better.

~~~
blasdel
Wow, you'd love Houston Texas!

It seems a bit daft to be choosing a location based on the convenience of the
hypothetical middle managers and mailroom employees you'll have in a
successful future. Sure it's _professional_ , but it isn't _startup_. Burn
your business plan, remember?

~~~
Chris_Newton
> It seems a bit daft to be choosing a location based on the convenience of
> the hypothetical middle managers and mailroom employees you'll have in a
> successful future.

It's not just the middle managers and mailroom staff, though. Most people in
Cambridge don't live near the city centre, because it's an old city and much
of the space is taken by either the university or business premises. There
are, however, many residential areas on the outskirts, and a whole string of
surrounding villages.

Plenty of tech companies have set up in the middle of Cambridge, but with the
transport policies of the local authorities, car access and parking is
absurdly difficult. That makes it awkward to host visitors if you need to, and
it is a genuine recruitment issue in that not everyone is willing to walk,
cycle, or rely on our less than stellar local bus service for routine commutes
to work from the surrounding area. Setting up on one of the business parks --
which are still within cycling distance of the city centre for keen cyclists
based there, but also easy to access by car and usually by bus as well --
seems to have all of the advantages of being in Cambridge, without the
unnecessary travel limitations.

------
jkaljundi
For anyone interested in Tallinn and Tartu in Estonia, we at
<http://startupleadersclub.com/> are glad to help and give advice. The
community is pretty strong.

There are 2 larger world-class companies (Skype and Playtech) that have 3-400
people in tech & development here in Tallinn/Tartu, which can sometimes be a
problem for startups competing with hiring. At the same time, many people are
also leaving those big companies for startups.

Still I believe locating sales, marketing and any customer facing operations
in consumer space in SF Bay Area or NYC/Boulder etc. Having product
development and anything tech related in Central and Eastern Europe makes a
lot of sense on other hand.

------
falsestprophet
Paris. The business culture here is so toxic and aristocratic that you could
probably recruit any developer by promising to not terrorize him. (An
internationally competitive salary is not required: small steps.)

~~~
mickeyben
Cost of living is very hight, taxes are very hight, there's not a lot of VCs
(compared to SF, NY, london or berlin), bureaucracy is a hell in france from
opening a bank account to pay bills or taxes, it's difficult to get a work
visa ...

~~~
cdavid
Are you basing this on facts ? Cost of living is indeed high (much lower than
London though), but taxes are not so much higher than in many other countries
in West Europe. You will need a French account manager from time to time so
that you benefit from various tax cuts, especially in the first few years.

I am curious about the banking issue as well. Never heard of it being that
difficult. Working visa are indeed becoming increasingly difficult, but I am
afraid this is a trend that is not restricted to France.

I think the issues in Paris are much closer to the toxic environment mentioned
by the OP. I know several people who founded their own company just to avoid
the usual IT job which consists in being a semi-slave for one of the numerous
consulting companies.

~~~
mickeyben
Taxes are very hight to afford for a startup, I don't have numbers right there
but look at what cost an employee in France ... and taking advantages of
government support for young companies requires a skill in french bureaucracy
that not all entrepreneurs have + it's often harder to get it when you're not
a french entrepreneur. Banking was just an example about bureaucracy in
general. You'll spend way more time in France to setup simple things, need way
more papers, seriously it's a pain ! I can't compare with lot of countries but
by experience it's far more easier in Berlin or in SF.

And about the issue about being a semi-slave : I worked for many startups in
Paris and I never felt that. Of course if you take the consulting way you
can't really compare with startups. And yes an internationally competitive
salary is required and it costs an arm for the employer.

~~~
alain94040
As someone who runs an incubator in Paris but lives in Silicon Valley, let me
add my 2cents:

 _look at what cost an employee in France_

An engineer in France is way cheaper than an engineer in Silicon Valley. Taxes
on salary are indeed higher, but the base salary is so much lower that in the
end, France is cheaper. To give you an idea, a basic salary in Silicon Valley
is $100K, the equivalent in France would be below 50K€. Those cost the
employer about $120K and 75K€ respectively, so you can see which is cheaper.

On top of that, France has a pretty good tax incentive for R&D engineers. You
can almost get all your money back as the employer, it's frankly crazy (it's
called CIR). But nice for startups.

The main issue in France is the complexity of navigating all the government
aid. It's a patchwork of measures that don't fit well with one another...

~~~
cdavid
The complexity of the bureaucracy is indeed a bummer from what I could see
when I worked in small companies. One company I worked for lost a lot of money
just by not getting in time some forms for some tax/"charges" reduction.

Concerning the cost of an employee: one thing to keep in mind is that once you
paid your employee, he already got his basic retirement and health plan in
place, contrary to the US and pretty much everywhere else outside western
europe. As an example, I earn more here in Japan than in Paris, the cost of
living in Japan is certainly cheaper than in Paris, and taxes are low but in
the end once I factor out the cost of health insurance, retirement, and maybe
soon sparing money for children's education, France is really not so bad.

I actually know several friends who came back to France after earning "so much
money" in the US, especially once they had kids.

------
erikstarck
There's quite a few things brewing in the Copenhagen/Malmö-region. Flattr is
located there, Bambuser, Polar Rose and Neo4j are there and there's even a
startup accelerator going on for the first time just now in Copenhagen:
<http://startupbootcamp.dk/> and another similar in a nearby university
college <http://www.startupcamp.se/>

But as you see from the other replies there's not one particular region that
is so far ahead of the rest that it can be called the startup centre of
Europe. Berlin, Barcelona, London, Stockholm... the startups of Europe are
spread all over the place.

~~~
grk
It's quite expensive to start a company in Denmark. You need ~10k eur for a
limited liability company (ApS) and to be stock-based you need ~70k eur (A/S).

The startup scene is growing, there's a lot of pressure from the government to
create new companies. See: <http://venturecup.dk/>
<http://www.vf.dk/?sc_lang=en>

~~~
davidw
Italy has the same problem with limited liability companies. I created a
modest initiative to attempt to get things fixed: <http://www.srlfacile.org/>

I'd be more than happy to link to sister initiatives in other countries!

------
harscoat
Berlin as explained by many here:
<http://news.ycombinator.com/item?id=1565375>

------
phjohnst
I'd definitely say London, purely for that fact that it has many of the same
things that make Silicon Valley so appealing: a (relatively) thriving tech
community, especially around the Old St area, it's close to VCs, there's lots
of networking events, conferences, etc. Only downside is cost of living, which
has frankly been overemphasized here. NY is just as expensive, and theres a
pretty sweet scene there...

London for sure.

------
neuromancer2600
There was a very similar thread not too long ago:
<http://news.ycombinator.com/item?id=1565375>

~~~
roschdal
My question is different, because I'm asking about Europe specifically.

~~~
bitboxer
Than pick the european cities from that thread :) .

------
adw
London or Berlin are where all the action is in consumer and B2B web startups.
They're where the money and markets are. If you're doing something connected
with the media or financial industries, then I think there's a very good case
that London's the best city in the world to start it; Silicon Valley doesn't
have the depth in banks, advertising, publishing, music, TV, film or fashion.
The only competition for those startups'd be New York. Net-a-Porter would
never work in Silicon Valley.

The Baltic states, especially Tallinn, have benefitted from Skype; the
Scandinavian countries are full of developer talent. They're also full of
English speakers, and if you're looking to go global, that doesn't hurt.

If you're doing hardware or biotech, the answer's Cambridge, though.

------
paolomaffei
Glad no one mentioned Italy, don't even think about it. Just founding a
limited liability company costs 6000euros+ (2500 of those are to be put in as
starting capital MANDATORY and the rest is pure cost)

~~~
gizmo
That's not a lot of money. Neither relatively nor absolutely. For contrast,
starting a GmbH in Germany (llc equivalent) requires a 25000 euro investment
plus all the fees and legal cost. Starting a B.V. in the Netherlands
requiresna 18000 euro investment, again not including overhead and
registration. The US is the exception, with its liberal LLC and bankrupty
laws. In europe there just are a few additional hurdles.

I agree that italy should be avoided, but for other reasons (mentality,
corruption, etc)

~~~
fun2have
Separate corporate structure from where you base yourself. For example to
start a limited company in Ireland with accountant fee's etc is about €300.
Capital Requirement is €1. And that company can base itself anywhere in
Europe. One of the advantages of the Single Market.

~~~
davidw
I've heard varying things about this from people in Italy. I'm not sure it's
entirely ok to live and work in country A for a company that is located
elsewhere, but I'm neither a lawyer nor an accountant.

~~~
fun2have
It very much ok to have a company registered in one country and work for it in
another . This is the whole idea of the Treaty of Rome, which is the treaty
that forms the EU. Some famous examples are like Air Berlin which is a UK PLC.
Where things can get a bit complex is the tax situation. You need to pay tax
where the business is, which can be different from where it is registered.

------
jonathandeamer
Great thread! I have worked (and continue to work) for a handful of startup-
type companies in Liverpool (NW England). I don't have a wide enough
experience of European cities to say it's the best place to start a business,
but it's a great place to live and relatively cheap to rent office space and
similar. Historically there's been a good amount of public sector funding
available (although whether that will continue under the coalition government
remains to be seen!), but of course there isn't an "VC ecosystem" equivalent
to that of London.

All that said, there are amazing, interesting and fun people here doing cool
things with tech, and there's the beginnings of a great scene. I love it :-)

But my main reason for posting was to ask: is there a directory of some sort
compiling answers to questions like this for cities globally, detailing the
sort of recruitment and funding opportunities available, as well as what sort
of startups are already based there? Almost like a "Crunchbase for
cities"...might have to think about knocking such a thing together if it
doesn't already exist!

------
bjonathan
1) london for the ecosystem 2) berlin for the quality/cost of living and a
pretty booming ecosystem

------
jasonkester
Interesting question. I think once you get outside of the Bay Area, it really
doesn't matter anymore where you are.

SF has the whole echo chamber thing going for it, which can be a huge
advantage, and it has tons of little startups to interact with. Nowhere else
has either of those, so there's no particular reason to pick one place over
another.

In Europe, I've set up shop in Pamplona, Chamonix, Kalymnos, and now in a
little town up in the Lake District of England. Each has pretty much exactly
the same startup culture, consisting entirely of me and whatever other
developers I've brought out with me.

~~~
phileuro
Yes, I am in Southern Spain and the concept of being an entrepreneur and
starting a company seems to be completely foreign (pun intended!). There is a
department in Andalusia that is supposed to help startups but they seem to
focus on startups with very high capital behind them already - they point
blank refused to help my company do anything (even finding an accountant!).

------
toto
(No offense) All the answers make no sense. How can you advise a country with
so few information about the start-up?

Dimensions to assess that would totally change the selected country:

\- A start-up in which business domain?

\- What will you sell?

\- Who are your targeted customer? Where are they located?

\- Where are you main competitors?

\- Where is the best "ecosystem" in your domain that could help
you/partnership with?

\- Do you need some VCs?

\- Tax optimization requirements?

\- What is your "exit strategy"?

Hint: be located close to your competitors, partners and of course...
customers.

------
socksy
What's Edinburgh like? I was under the impression that a few companies had
started up there from the university.

~~~
arethuza
Have a look at <http://techmeetup.co.uk/>

I went to the Techcrunch event in May and there seemed a few interesting wee
companies and at least one sensible VC around.

Edinburgh is a gorgeous city with a great atmosphere and fairly convenient for
the Highlands if you like outdoor sports (the skiing in Scotland last year was
particularly awesome).

The main downside to Edinburgh is that travel can be a bit painful - although
it is a lot better than it used to be.

------
hcho
Define start up. Are you going to be profitable from day one? London, that's
where the big money is. Do you need VC money? London, that's where the big
money is.

Are you self financing and have limited run way? Go to cheaper places.

~~~
chomchom
I second this, if you think you can get to money within the first year get
yourself to London. If you are within the UK and can't get to money within the
first year, live within 1 hour commuting distance and plan to move there. This
has worked pretty well for me. It is extremely expensive to be able to live
here but the ability to casually attend and walk to serendipity tech
networking events is a real luxury and I save a lot of money commuting. The
lively eco system around the Techhub interested people is exciting and I
recommend it.

~~~
topbanana
I third this. I've avoided London for many years (traffic, overpopulation,
cost) but now that I'm here I realise I should have done it earlier. It's
almost like another country - everything is going on here.

------
speleding
There are a bunch of recommendations in a previous thread on HN "What is the
best startup city outside the US" here:
<http://news.ycombinator.com/item?id=1565375>

Anyway, I like Amsterdam: People speak English and the state provides a lot of
stuff for free if you're not making money yet (child care, health insurance,
even access to museums). Once you start making money get out of there or pay
the worst taxes in the world ;-)

------
ovi256
SF/Silicon Valley. Seriously, if you have the freedom of choosing among
cities, a hop across the pond is not a big deal. Might as well stack the chips
in your favour.

~~~
jrockway
Immigration issues are probably simpler for Europeans moving throughout
Europe. Putting "Hi, I want to move to the US and do nothing visible, and oh,
I have no money" on your US visa application is probably not going to put it
in the "instant approval" stack, but that's what a startup is.

------
Geea
As some of you have already said it, some cities have a better ecosystem,
others have a low cost of living but no ecosystem and crazy bureaucracy,
others have low taxes.

The solution is an offshore: you start your company in a low-taxes European
country (Cyprus, Bulgaria) or a tax haven, you live close to an ecosystem
(near London, for instance) and you hire developers from Eastern Europe (low
wages, highly skilled).

~~~
Ras_
There are places for everything:

Åland Islands (Fi) - no VAT

Jersey (UK) - no VAT on goods sold, as long as items cost less than £18 and
are posted individually, no import taxes to mainland UK

Estonia - no corporate profit tax (flat 21% tax on dividends)

------
fauigerzigerk
Apart from UK cities I would also check out Dublin. Barcelona does have a
startup scene as well but spanish laws and regulations are generally insane.

~~~
makeplaylearn
Dublin is insanely expensive, and not to put too fine a point on it, but every
Irish investor will hold his breath until you get the much-required Enterprise
Ireland seal of potential approval. As a place to live, Dublin is actually
more expensive than either London or New York. In both London & NY you have
the option to go down market. Cheaper digs, more suppliers, more options.
Dublin is a small city with few options on many levels.

~~~
earnubs
Also, having worked in a (very) well funded Dublin based start-up, I would add
that the infrastructure isn't great.

~~~
makeplaylearn
Infrastructure? What infrastructure?

<http://almacz.wordpress.com/2010/01/24/living-in-eire/>

------
iaskwhy
Some people claim Lisbon to be the upcoming Silicon Valley of Europe:
<http://seedcapital.pt/2009/11/18/lisbon-by-the-sea/>

That's where I live and work, can't say it's easy to get money but I'm pretty
sure I don't know the right people yet. :)

~~~
woodpanel
Been there once. A nice town. My first impression was: ok, how could i make a
living here? I know some people who kept their clients from back home and
moved there, so they make the same money but pay less for costs of living than
in central europe, while enjoying the nice climate. Very clever I guess, but
what keeps me from going the same route is, that you dont get far there
without speaking portuguese though.

------
rmoriz
There a some people recommending Bratislava: next to Vienna, great place to
live and still cheap.

Would be interested in hearing more about it. Anyone?

~~~
abless
Bratislava is probably not as cheap as you might think - yes, Slovakia in
general is very cheap and that might be true for most parts of the country,
but Bratislava is more westernized. Don't get me wrong though, it is still
cheaper than the average city in Western Europe.

I am not sure if there is much of a startup culture here, though...

------
Keyframe
I'd personally opt for either Prague or Frankfurt on one hand or Geneva or
London, if you could sustain it financially, on the other hand.

~~~
zmmz
Prague? That's insane, its close to being the _worst_ place to be a startup:
[http://www.praguepost.com/business/3757-venture-capital-
hard...](http://www.praguepost.com/business/3757-venture-capital-hard-to-find-
in-cr.html)

I also have a hard time believing Geneva, have you actually been there? In
Switzerland I would understand Zurich or Lausanne, but Geneva does not even
have a technical university, compare that with ETH and EPFL.

~~~
mace
I would think Zurich would be pretty good for the following reasons:

* ETH (availability of talent from a good computer science research university)

* Good transportation alternatives (you can get a direct flight to/from Zurich from/to most major airports, direct high speed trains are also available to France and Germany)

* Business friendly tax rates (relative to other European countries)

* Switzerland, in general, has high quality of life

Side note, Google has a sizable office in Zurich and is able to attract and
keep talent from both Western and Eastern Europe.

------
appl3star
London, Berlin, Barcelona, Hamburg

~~~
roschdal
Why?

Cost of living is very high in London.

~~~
bhattisatish
Compared to Eastern Europe and Southern Europe, yes. But if you compare London
against Germany or any of the northern siblings (Scandinavia region for
instance), London is very cheap. If cost of living is your highest priority,
then cities in Czechoslovakia, Hungary, Italy and Spain (in that order) will
be your favourite. But then that's just not what a startup needs, doesn't it?
In case of software, London has the best ecosystem. London is also not bad for
lifestyle, etc ...

~~~
jules
London cheap compared to Germany?! Compared to Scandinavia perhaps, Germany
no.

~~~
pdelgallego
Berlin is way cheaper than London.

------
makeplaylearn
Any thoughts on carrying the message to Newcastle &/or thedifferenceengine.eu

