From nothing to something: TOA's Niko Woischnik on the evolution of Berlin’s startup ecosystem
Nikolas Woischnik could be called a veteran of Berlin’s startup scene. Since he moved to the German capital in 2008, he’s been dedicated to developing its startup and technology ecosystem.
Nikolas (affectionately nicknamed Niko) has founded several companies, such as coworking space Ahoy! Berlin, communications agency Openers, as well as Tech Open Air (TOA), an annual technology festival hosted in Berlin.
The German national says he’s so passionate about Berlin’s startup scene since it ostensibly “came from nothing.” In former years, Berlin was a city that had been rendered poor and divided by decades of war and political unrest. But after many people were left floundering, creativity began to take root.
Twenty years ago, the city began to recover as an artistic capital. An underground music and art scene flourished and people flooded to the city. “Many individuals came to Berlin to use the city as a canvas,” Niko tells Startup Guide. “They were inspired by the possibilities of creating art or building something new.”
We caught up with Niko to hear about the merits and shortcomings of Berlin’s startup scene, how it’s developed over the years and why he thinks it’s such an attractive choice for entrepreneurs.
What are some of the ecosystem’s challenges?
When I first started out, there was certainly a lack of capital. The first investors in Berlin’s startup scene seemed unwilling to invest in new, creative ideas. Instead, they chose to fund companies created by Rocket Internet as that was considered to be a trusted business model.
Nowadays, there's not a lack of funding in Berlin, but a lack of established industries. Berlin is still a young, nascent ecosystem that is not very rich in capital. Unlike other European capitals, Berlin doesn’t have a big media market or finance sector, for example. Generally, the market is much smaller and poorer compared to other large cities like Tel Aviv, San Francisco or Paris.
Do you think Berlin’s ecosystem is competitive on the global stage?
To understand how well Berlin performs as a startup scene globally, we’d have to look at the statistics. Berlin doesn’t necessarily have a higher rate of failed companies than other ecosystems. It’s also been rated many times as one of the top ten cities to start a company in.
Berlin's lifestyle entrepreneurs may have been detrimental to the city's international image.
In my opinion, companies that are bound to fail are started everywhere all the time. I think these companies just experience a slower death in Berlin as the cost of living is so cheap.
However, something that may have been detrimental to Berlin’s international image is the amount of lifestyle entrepreneurs in the startup scene.
What I mean by a lifestyle entrepreneur is somebody who is “living the life” alongside building a business, who is perhaps not overly invested in raising money for their company and making it globally successful and who enjoys work-life balance.
Some would say that these companies are not serious or ambitious enough, but I would actually disagree with that.
Two years ago, when I interviewed the CTO of Amazon, Werner Vogels, he said that lifestyle entrepreneurs are often made fun of but these people are what he would call real entrepreneurs. They don’t enter the rat race of raising serial rounds of funding and making as much profit as possible. They just live off the money that their company makes and enjoy what they do.
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It’s true that investors don’t often find these companies very scalable. But even if a startup doesn’t make a lot of revenue, they can still sustain a small team, create a good product and be a long term, sustainable business.
What makes Berlin so attractive to entrepreneurs?
I think the low cost of living is by far the number one reason why people come to Berlin.
Not only can people live cheaply, but they don’t necessarily have to choose traditional, money-making careers.
A lot of individuals here have jobs that are more creative and experimental in nature and they tend to value their happiness over how much cash they can make.
Berlin is also a very open-minded city which I believe is rooted in its history. The German capital experienced the Second World War and then The Cold War, where the city was split up into different sectors by Russia, America, Britain, and France.
I think that left a mark on the psyche of the city and the people who live within it. People are very open to new ideas and different cultures, and the level of English proficiency is extremely good.
Berlin doesn't lack funding. But it lacks established industries.
For me, it’s striking that Berlin even became an ecosystem, considering that there was basically nothing here twenty years ago. If you compare Berlin to other top ecosystems in the world, such as Tel Aviv, Silicon Valley, San Francisco, New York or London, they all had the capital and the infrastructure that Berlin didn’t have.
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Today, the city is attracting more and more talent from outside of the country which is making the ecosystem even more diverse and international. In less than two decades, Berlin has become one of the top places in the world to be an entrepreneur.
You founded Tech Open Air in 2012 when the city’s startup scene was only just taking off. Has TOA played a role in building up the ecosystem?
I feel like the story of Tech Open Air and the story of Berlin are related somehow. We started out by crowdfunding the event in 2012 and we were community-driven from the start. We developed alongside the city and the ecosystem.
I think TOA is a way Berlin can present itself to the startup community and to visitors from the outside. We want to tell the story of how Berlin built an ecosystem from nothing and inspire other countries to do the same.
When we take TOA on a world tour to cities like Mexico or Tokyo, for example, the unique message we bring with us is, “If Berlin can do it, then you can.” TOA is also based on the philosophy that if you can inspire one person, then you can change the world.
We have a few anecdotes about how people have come to the festival and have found cofounders or investment money or have fallen in love. We even have a TOA baby now from a couple who met at the event, which shows how simply bringing people together can change the course of someone’s life forever.
Where should startups from abroad that are eyeing the Berlin ecosystem start?
It’s important to build networks and tap into the resources available in your chosen city. In Berlin, there are active communities like Startup Guide, TOA, Betahaus, St Oberholz and Silicon Allee that act as portals into the ecosystem and are good landing pads for people from outside Germany.
What closing piece of advice would you give to a startup looking to set up in Berlin?
A few years ago, people were talking about Berlin being the next Silicon Valley, but that’s not what the ecosystem should be about. The question should be: what can Berlin uniquely bring to the world? Startups should think of their companies and build them with this in mind.
Main photo by TOA