On Compass’s Global Startup Ecosystem Ranking from 2015, New York City is ranked the second best city for startups. Berlin is ranked 9. After you read those two facts, you might ask, “How does New York have anything to learn from Berlin?”
While the Global Startup Ecosystem Ranking takes many things into account, there are simply some things that can’t be measured, such as creativity, comfortability and ultimately, the entrepreneurial attitude of a given city. Writing from Berlin-based startup Spacebase’s open office in the heart of Kreuzberg, there’s definitely a few pointers that NYC could stand to pick up.
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International Employees
Berlin and New York City have both been known as hotbeds for diversity and immigration throughout their long histories. Lady Liberty has stood as a welcoming symbol to immigrants for over 130 years, while Germany’s capital still attracts over 50,000 new inhabitants every year. Out of the approximately 3,500,000 inhabitants of Berlin, 16.5% are foreigners. Yet the rate of diversity is even higher in the city’s startups, with 49% of startup employees not holding German citizenship. While no official numbers could be found for New York City’s international startup workers, a research report by Goldman Sachs found that 13% of the country’s technology sector was filled by foreigners on H-1B visas. The national statistic is far from comprehensive, since immigrants can use other visas or permissions, such as an employment-based green card. However, it does offer a quick glimpse into the difference in diversity in nationalities in the two startup scenes.
In general, Germany is noted across the EU for having a comparatively lax visa process for foreigners, especially skilled workers or entrepreneurs. This makes it much easier for talent from all walks of life to gather in the country’s capital. The city itself is quite stretching and there is room for every way of life thanks to Berlin’s tolerant and accepting nature. The freedom to be who you are in Berlin, regardless of your nationality, is one of the main reasons that it makes for such a good startup capital. A study published by Cambridge Scholars Publishing interviewed Berlin startups and their experience with foreign workers; the study showed that 36.4% of executives stated that an influence in creativity was their main motive to hire immigrant workers, which is always a vital factor for innovative startups. New York City has creativity long engrained in the city’s identity, so hiring more immigrants seems like a natural fit! However, with H-1B visas undergoing changes under President Trump’s agenda, it’s not certain that NYC will remain as diverse of a startup scene as Berlin.
2. Easy City Living
New York City has long held its reputation as one of the most fantastic cities in the world to live in. With billions of Empire State Building t-shirts and posters of the iconic skyline, it’s hard to imagine a place that better embodies urban life. Yet, over these last industrializing centuries, NYC has gone from a dream city to the impossible dream; rents have skyrocketed into unattainable territory and the city’s sprawling development is placing newcomers farther and farther away from the center. The rent crisis in itself is a deterrent for new tech talent coming to join New York’s startup scene, but when paired with longer commute times to the office, it gets to be downright unbearable, eventually affecting a person’s happiness and anxiety levels.
Berlin stands out as a problem solver in this respect, as the German capital boasts some of the shortest average transit times (22 minutes) as well as some of the cheapest rents. Berlin’s technology employees pay an average of $179 euros a week while New Yorkers from the startup sector have to fork over around $682 to their landlords every week. The high rents may be too big for tech startups to solve on their own, but taking a page out of the Wunderflats book could help. The Berlin startup offers fully furnished apartments with shorter rental periods, purposefully suited to the moving habits of freelancers and startup talent relocating to a new place. It’ll definitely help getting new talent to the city and giving them more time to find the lusted after yet seldom found affordable NYC apartment. The marriage of cheap, stylish flats and an easy way to work is one of the combinations that makes Berlin such a desirable startup scene; New York City is tough competition, but with a seemingly unfixable rent crisis, can startups step in to offer new solutions?
3. Sights on Multiple Markets
Making it big is the main goal on mostly every startup founder’s mind as they pick a brand name and buy a website. In that regard, startups are similar regardless of their founding city. However, startups in Berlin have a particular advantage when looking towards their future; since the German market is relatively small compared to the U.S. (and because overhead costs are lower as well), startups have an easier time getting started here, collecting valuable data from their launch and turning that approach onto other international markets. Berlin startups are seldom available in less than 2 countries, as Berlin’s East-meets-West reputation making moving to different country’s markets seem only natural.
Not only NYC startups, but all American-based startups can be a bit shortsighted about international markets. It’s not very often that NYC startup companies launch their service in France or translate their website and product into German. NYC definitely has a rightfully deserved reputation for being a great place to do business, but that doesn’t mean startups should limit themselves. Launching in other countries can help companies discover unseen revenue streams as well as invaluable cultural feedback from new international customers. In fact, David Goldberg, CEO of SurveyMonkey, once remarked to HBR, “...[if] you aren’t focused on international, you are missing out on two-thirds of your potential customers.” NYC startups would benefit hugely from observing Berlin startups’ multiple market launches.
