
A Letter to the Berlin Startup Scene - what_doyouthink
https://medium.com/@berlinwhatdoyouthink/a-letter-to-the-berlin-startup-scene-4e23e1baec6a
======
Kequc
This doesn't really get to the big issue. Which is that Berlin being a startup
hub is all marketing in the first place, it's probably not very popular to say
but somebody has to say it.

Berlin has no money, investors don't come here. More than a couple of
investors I jumped through hoops for eventually I made it all the way to the
top decision maker who was forced to reveal "oh we don't have any money but in
exchange for some equity we can hook you up with business connections." No
small amount of equity. Double digits every time. And the same is true if you
find an incubator willing to take you, expect very little money, a short
tenure, and a double digit equity stake. This all is in line with the level of
talent which exists here. If you take a look at the Berlin job market it's all
about legacy systems, some PHP, maybe Java if you're lucky.

There's no help available from the government. In fact if you own a startup
your taxes skyrocket. Your health insurance doubles. If you're trying to sort
out a visa at the same time as all that, good luck! The government will
subsidise a loan for you, but it has to be a personal loan. Which means banks
are willing to give out risky loans. It's the same thing that happened in the
housing crash. Which is why it needs to be a personal loan, your company
failing means nothing you have to pay it back.

Letters arrive in your mailbox claiming you owe them money, which apparently
isn't illegal. All scams. People you meet at networking events promise to hook
you up with business connections for equity or money.

This is a market that sells shovels.

You want to buy a shovel and start digging there's a hundred people around
selling them. But you better hope that shovel doesn't require Wifi because
bars and cafes are held responsible for torrent traffic, which means none of
them offer it. Therefore rent a co-working space [shovel] or an office
[shovel].

~~~
nordify
Why always the focus on free Wifi? Germany, like most of Europe, has good
3G/4G coverage. Rates are reasonable, so you can provide your own
connectivity. Far more cheaper than renting a space just to get free Wifi.

That doesn't mean that the German laws about liability for offering
connectivity don't suck.

~~~
jakobegger
Cellular rates in Germany are pretty high. On a recent trip I was shocked to
find out that prepaid mobile data is roughly 10x - 20x more expensive than in
neighbouring countries.

~~~
pferdone
I pay 15€/month for 4GB LTE with unlimited SMS and minutes and it's prepaid. I
know it's not the best in Europe but it has gotten better.

~~~
greggarious
Unlimited 4G?

~~~
pferdone
No 4GB monthly data cap. winsim.de

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pascalo
Berlin has had a nasty culture in its labour market for a long time. People
working low paying or even unpaid internships to get a foot in the door would
get sucked dry by digital and advertising agencies. I knew people in their mid
30s still technically being student and working in their 10th or so internship
position, never making it.

Where I worked, the way us junior people were treated was horrible, and I
declined a full time position after completing my vocational training because
of it. But talking to my mates in the industry back then we all encountered
similar shitty exploitative attitudes.

I left in 2004 and have never looked back really.

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sveme
Bad management, basically, that's his complaint. I believe the issues with the
Berlin startup scene lie somewhere else, though are related: a lot of the
startups are started by former elitarian management students, often from WHU,
that started companies because it was the fancy thing to do and a get-a-
Porsche/Tesla-quickly scheme. A lot of the founded companies are therefore not
original, but e-commerce or local copies of international startups. Rocket is
a horrible role-model to follow, yet followed by a lot of people with similar
backgrounds - the beforementioned WHU absolvents.

Other cities are different in that respect: Munich has its engineering and IT
tradition, hence a lot of founders have a rather technical background; Hamburg
has quite a gaming industry, so in a way far more interesting as well.

There is some interesting stuff going on in Berlin, yet what is desperately
needed are nerds founding companies instead of MBA graduates doing it because
their peers do it as well.

~~~
HSO
Agree, with one minor quibble: In what sense "elitarian" (do you mean
elitist)? To my discredit, I went to one of those "elite" institutions before
doing something better-suited for me, and I have to say those "elitarians" are
_at best_ middle of the barrel in terms of intellect or taste (and that's
being generous). Their real strong suit is an above-average greed, strong
"goal-orientation" [1] as well as an uncanny ability to think highly of
themselves no matter what. I suppose business students/people have _some_ role
to play in society, but the best hedge fund (RenTec) has no use for them
except in secretarial roles and the best tech companies (Apple, Google, …)
seem to also have no use for them except in sales or interfacing to other
people of their ilk, so there's that. "Elite" is far from what I would
associate with this category of people. They can sell sugar water and they're
administrators, really. In a rare flash of truth in advertising, it says it
right there in the title: master of business _administration_! :-)

_______________

[1] I am using "goal-orientation" in Alan Kay's sense of not being able to
evaluate an idea on its own merit but only in relation to some external goal,
usually "career advancement" (here's another one of those made-up, pretentious
business words), ego protection, or ego inflation.

~~~
sveme
Indeed, I meant "elitist" \- elitarian is the false friend of the German
"elitär". And I absolutely agree - very often it is just their self-perception
as being part of the elite, nothing based on true intellect or capabilities.
Just pretty good at playing the game and knowing the symbols.

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AhtiK
Much more lighthearted take on the same issues in Berlin. It's brilliant.
[https://www.youtube.com/watch?v=e22vY4CWpEI](https://www.youtube.com/watch?v=e22vY4CWpEI)

~~~
stevoski
This is superb. An excellent and hilarious summary of Berlin's pluses and
minuses.

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tga
It sounds to me like the author would rather work for a big multinational
instead of a startup. By definition, a startup is an organization that doesn't
even have a clear business model, let alone prospects for its employees'
career development 10 years down the line. While it is reasonable to expect
civility and common sense from startup managers, their pressing concern is
getting the ship afloat before the money runs out, not giving new hires back
rubs.

There is a choice to make between experience and hipster points (because
that's all you'll get as a junior employee in a Berlin startup) and a solid,
stable (at least as much as the economy) job.

~~~
PythonicAlpha
I disagree. A startup should at least have a draft business model and also a
startup should make sane investments in its personal (I rather dislike the
word "human capital").

Just burning people like burning money to someday find either a big buyer or a
sane business model -- really looks rather insane to me.

~~~
roel_v
How many companies have you run?

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drinchev
Working as a freelancer with a couple of startups, I would like to share that
they are really, really struggling with their employees ( dev. teams ).

IMHO, they have unrealistic budget & business expectations for most of the
developers. Because of that employees' burn-rate is really high and they
switch jobs very often ( 6-8 months ).

New talent comes form mostly eastern Europe, but since it's obvious after 2
weeks working and a couple of tech events that you might find a better job (
maybe salary! ), they usually don't stay loyal to their first employer and
quit within 6-8 months.

Now I see another flow of startups hiring people from countries that need VISA
to work here. Which again sounds like another way to keep the employee ( will
have more difficulties fixing papers if he/she quits ), without improving your
business strategy. Anyway don't have any insights about this case, since I
don't have a lot of friends like that in my network.

Also not every startup is look-a-like, but almost no startup will give you
individual salary based on your experience level ( they usually will determine
the paycheck by the position that you take +/\- 10% ).

Nevertheless for a freelancer, Berlin is an awesome city to work in!

~~~
petre
Wouldn't it be easier to move the startups to Eastern Europe?

~~~
tormeh
Berlin is in the rare position of being large, cheap and having good
institutions. Usually you only get two of those. Moving further east has its
own set of problems. The baltics have good institutions (particularly
Estonia), but Tallinn has 500k residents. Germany ranks 15th in the Ease of
Doing Business ranking, but Poland ranks 25th (it's on a strong upward trend,
to its credit). To give you an idea of how many intra-EU differences there are
regarding business: Greece ranks below Jamaica and far below Kazakhstan in the
Ease of Doing Business ranking.

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matt4077
Concerning the manager<\-->employee relationship, the author may be right.
I've loathed some people I met. It's often because they're young and insecure
after suddenly being thrown in a position of power. Inexperienced people then
often feel the need to assert dominance and that's sometimes not pretty to
watch.

But the author is wrong concerning the cultural aspects, like "Club Mate" and
art exhibitions and friday drinks. That stuff is critically important because
it fosters communication across companies. With so many ideas being rapidly
tested, some failing, some changing completely – and with mostly young people
also changing, it facilitates the "optimal allocation of resources".

People meet at parties, get talking and often start a project together, with
many being involved in several projects at the same time. They can easily
shift time to where it's most productive and the cost of trying something is
kept low. It's also a lot more fun than a cubicle at a bank.

What may be missing is (a) raw engineering talent in the way Stanford or
(previously) Bell Labs produce it. You need a few people who are above and
beyond everyone to start the really exciting stuff. And (b) possibly the
funding infrastructure.

~~~
blablabla123
>What may be missing is (a) raw engineering talent in the way Stanford or
(previously) Bell Labs produce it. You need a few people who are above and
beyond everyone to start the really exciting stuff. And (b) possibly the
funding infrastructure.

I would challenge that. Some universities in Germany are very strong in
Engineerung and natural sciences at the same time. During my studies I have
worked with incredibly talented people. However most of these stayed in
academia because they found business too boring. Actually that used to be my
plan as well, however due to a number of coincidences I didn't pursue a PhD.

One might argue it's a vicious circle: the strong engineers stay to a large
proportion in academia, some of them leave into big companies. A tiny rest
gets lost in the startup world. So the people who start companies concentrate
on Club Mate e-commerce and weird business relationships - not attractive for
other strong engineers to join etc etc... ;)

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andrewstuart
Ha. This is just the normal process of growing up and understanding how
companies work. If you are disillusioned once you have see behind the curtain
then it is time to find work that is meaningful to you, not just buying in to
the traditional thinking on startups.

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infodroid
As much as I agree with the importance of mentoring, listening to, and
investing in your employees, I don't think it's fair to expect all this from a
startup. Maybe from an established company, yes.

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je42
The guy/girl is actually not so junior any more if he/she realizes this.

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345218435
amen. i can attest to that. but the entire city is a big shit show.

in startups i've seen it. countless low-pay-workers (students who need money)
who do useless shit all day. devops who actually do 2 jobs for one salary.
ceo's feeling special drowning in certain circles or think they accomplish sth
when one of those useless shithead ministers come and look around, talk lies
about how they'll improve investmemt regulation.

this city is one giant tourist multi cultural smoke screen.

there's not even one club playing good music (that is, music of my taste).
everywhere it's all just weird electronic or rock/pop crap mixed by dirt cheap
dj's who take the word "mix" too literally.

~~~
SyneRyder
Wow, I felt the opposite about Berlin's music scene. (I guess we have
differing tastes?) I'd fly across from Australia because Berlin had a
goth/rock/metal nightclub with 5 floors that ran multiple nights every week,
and in my hometown we were lucky to get a 'club' organized in a bar once a
month. (I'll really miss K17.) I also liked Last Cathedral, not much of a club
but a great place to relax with a drink & some Rammstein.

There was an excellent jazz bar that opened just off Kurfürstendamm, open
every night of the week, and not only was the music excellent, but the
bartenders were brilliant and cared about their whiskey. I wish we had a jazz
bar like that in my hometown.

And while it's cheesy mainstream pop/rock, I loved seeing Unheilig and Bollmer
perform live in Berlin, something I'd never see in Australia. (Totally worth
the airfare.) An acquaintance of mine even moved from Australia to Berlin to
build his recording studio there.

I'm really sorry you didn't find what you were looking for in Berlin :(

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pferdone
Companies calling themself startups after 2 years of trying to find their
market or get into one, just to pay you below average, make you work overtime,
because if you don't they can't turn the ship around...are just too common.
I've been there a couple of times.

It's almost always between bullshit promises of 'we are this close to go
through the roof' and asking you to take a 20% cut on your salary, because
everybody is, and at the same time bringing in new people every month.

They call themself startups, but they are not. They are businesses hanging on
to straws, because of narcissistic people unable to admit they failed.

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lucaspiller
Isn't this the case for startups worldwide? Ok if you are lucky (which is as
much being in the right place, as knowing the right people) you can get a good
salary, but finding a startup that actually cares about its employees (other
than the 'perks' \- which is just marketing to be attractive to potential
employees) is like finding a needle in a haystack.

I've been contracting for the last few years, the pay is better and I know up
front if things go downhill I'm going to be the first to go (1 week
termination period). I would like to find something more stable as my wife and
I are looking to start a family, but it seems I'm going to have to give up my
free time and take a big pay cut, if I want a permenant job in the startup
scene.

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jsdario
How is this "letter" has been winning so many "points"? There are no
references to the real world, it could be any angry ex employee talking about
any city with a relatively young startup ecosystem.

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PythonicAlpha
I like startups, because they are a way of bringing new thinking into the
world, where dinosaur corporations rule.

But there has also settled some notion today, to make making startups like
having an assembly line. It is no more about having new ideas or about solving
worlds problems -- it is solely about burning more and more cash and making
new cash-cows from it. The idea itself, the customers and the people working
on it, have become second nature.

All of it is of course hidden by a geeky, hip culture, where everybody can
feel fine -- if he does not think to much about it.

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hashkb
This doesn't sound unique to Berlin.

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stefek99
Startup - low salary and high expectations regardless the place... And if
management doesn't care about you just move on.

About the "what_doyouthink" \- why such inconsistent underscores?

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k__
I like the Berlin culture very much. But here in the south is simply more
money...

~~~
claudiug
what is the berlin culture? for me, is cheap dreamers, fake expectation.

~~~
k__
in the business world yes...

But besides that it's nice, many alternative/left people.

