(Editor’s note: this article was written by Tech.eu in connection with a partnership with the upcoming Le Web conference in Paris, and was cross-posted on their blog.)

At the upcoming LeWeb conference in Paris, I’ll be co-hosting the European Forum, a series of sessions on the Eiffel stage that will shine a light on six of Europe’s top ‘startup nations’.

You can see the full LeWeb programme here, but essentially we’ll be dedicating the morning of Thursday 11 December to highlighting the opportunities and challenges of the booming tech ecosystems in the UK, Israel, Germany, France, Russia and Sweden.

In the lead-up to the event, I wanted to focus attention on some of the specifics of said ecosystems, and categorise them under ‘the good, the bad and the ugly’. It’s important to note that this is a mix of facts and opinions based on my own observations, alongside feedback from a good number of local industry insiders. You’re free to disagree; in fact, the comment floor is all yours.

Israel

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Tel Aviv skyline (Sean Pavon / Shutterstock)

The Good

– Entrepreneurship is in Israelis’ DNA and heavily ingrained in their culture
– An inherently small market means Israeli entrepreneurs are forced to think international from day one
– Access and experience comes ‘cheap’: Israel has its army, boasts lots of startups and is home to many a big tech multinational – this means lots of opportunities for the willing
– Israel has seen a fair share of built-to-last tech companies and exits, so there is a high degree of maturity
– Funding isn’t particularly hard to come by, especially in the seed stage, although bootstrapping remains the norm for many startups
– As one insider noted: “In Israel, it genuinely is OK to fail.”

The Bad

– The abundance of startups, technically well-trained and entrepreneurially-minded people means it can be hard to recruit and retain talent
– The above also creates a lot of noise and a fair share of ‘wantrepreneurs’
– Although this is changing, Israeli startups all too often go for the quick exit
– Having to go international from the start also translates to early operational and financial challenges
– Government support undoubtedly exists, but is often misplaced and channeled inefficiently
– Consumer-facing startups launching in Israel first often face an ugly, unnecessary death

The Ugly

– Founders are prone to lose a lot of equity in early-stage funding rounds, even if it’s through government-backed programs
– Israeli startups typically get funded in Dollars but pay salaries in Shekels
– Government regulations often slow down adoption or even import of any hardware-related tech
– Though there is a strong general sense of community and sharing in Israel, one insider observed that not everyone is naturally supportive of one another

United Kingdom

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London skyline (QQ7 / Shutterstock)

The Good

– Mature ecosystem that is home to several major tech companies and a entire generation of promising new startups
– Epicentre of the European VC, investment and banking industry and home to a massive concentration of angel investors, seed funds and international accelerators
– Heaps of government support, sometimes misplaced but often helpful (Tech City etc.)
– Tons of international technology companies (and other big multinationals) have offices in London, making partnerships and acquisitions more likely
– A few big exits have resulted in liquidity for and increased activity from both founders and their investors, angels and VCs alike
– London has traditionally been a good ‘bridge’ for tech companies looking to break into the large US market, and has made a lot of efforts in attracting overseas companies to set up shop in the city as well
– A few strong sectorial clusters, most notably fintech (TransferWise, GoCardless, Nutmeg, FundingCircle etc.) and ‘e-commerce’ (Net-A-Porter, AO, Farfetch, Lyst etc.)

The Bad

– Fierce competition for technical talent: big corporations, startups and non-tech multinationals all fighting for the same people, which is driving up salaries fast
– Shortage of affordable office space; incubators and co-working spaces have more demand than they have room, and growing tech companies have a hard time finding bigger spaces to rent

The Ugly

– High cost-of-living compared to most of the rest of Europe
– Lots of noise: plenty of meet-ups and physical hubs in London that don’t really add value

France

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Paris skyline (Luciano Mortula / Shutterstock)

The Good

– The French government listens or is at least learning to listen to tech startups – France has a dedicated minister to digital (Axelle Lemaire) and even has a brand (La French Tech) meant to promote French startups internationally
– Experienced and entrepreneur-friendly investors make for a solid seed funding and VC ecosystem, and foreign investors regularly hunt for opportunities in France
– France boasts a strong community with plenty of co-working spaces, accelerators, ‘office hours’, meet-ups and a couple of large internationally-focused conferences
– It’s not just Paris: regions like Lille, Nantes, Lyon, Grenoble, Toulouse, Bordeaux and so on are developing solid networks and establishing themselves as vibrant startup hubs
– Key people with ambitious dreams, chief among which is Xavier Niel with his Ecole 42 coding school, 1000startups incubator and seed investment firm Kima Ventures
– Entrepreneurship is becoming trendy in France, with digital startups and key people regularly getting featured in mainstream media, including on television
– France is home to internationally acclaimed engineering talent and top business schools

The Bad

– In France, certain ‘sectors’ are very independent from each other. For example, people who work for the government have all gone to l’Ecole Nationale de l’Administration and they have only worked in the public sector – and tend to therefore be rather removed from the world of startups and business
– As other countries have introduced programming into the national curriculum and for K-12, France needs to catch up when it comes to tech education
– The tide is changing, but the general perception of the French towards ‘doing business’, making a lot of money and failing at ventures is still rather hostile
– La French Tech is a good brand / initiative but there needs to be more collaboration with other programs such as TechCity in the UK, etc.
– French government has a tendency for volatility and slowness when it comes to making changes

The Ugly

– Like in Israel, because entrepreneurship and ‘doing startups’ is becoming hot there is an increasing amount of noise and ‘wantrepreneurs’
– The French continue to be obsessed with ‘entrepreneurs leaving France’ rather than who is coming over (both founder and investors)
– A constant urge to compare the local ecosystem with the US, UK and/or Germany

Germany

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Berlin skyline (Sean Pavone / Shutterstock)

The Good

– Young but fast-maturing ecosystem(s) where entrepreneurship takes center-stage
– Particularly in Berlin there’s a very international atmosphere with lots of expats being attracted by the city’s vibrance, creating a pool of diverse talent with plenty of foreign language skills
– Compared to most major European cities, office and living space is very affordable in German cities like Berlin, Cologne and Hamburg
– Strong desire for Germany-based founders to build global businesses (examples aplenty, but some well-known names are SoundCloud, Wooga, ResearchGate, EyeEm, 6Wunderkinder, Delivery Hero etc.)
– Berlin in particular enjoys lots of attention from big tech multinationals (e.g. Google Campus @ Factory) and international investment firms
– Berlin’s artistic image has a gravitational pull on creative people (designers, UX specialists etc.)
– Thought it took time for politicians to notice, German government officials are increasingly pushing new initiatives, taking an active interest in startups, and taking measures to improve conditions

The Bad

– Fierce competition for talent, particularly for technical and senior management people, especially as massive companies like Rocket Internet and Zalando ramp up operations across the board
– Some of Germany’s most-hyped startups have resulted in relatively small acquisitions (e.g. Gidsy, Amen, Moped, JustBook etc.), leaving observers wondering when there will be some really big exits
– Because entrepreneurship and ‘doing startups’ is hot, there are a good number of me-too startups and wantrepeneurs coming out of Germany, giving credence to the notion that German companies are good at cloning successful businesses from elsewhere (whether true or not)
– Local VC scene is still very much developing and nowhere near ‘mature’
– Disconnect between large tech companies like SAP, Siemens, Deutsche Telekom and the startup world, although this is rapidly changing

The Ugly

– Disconnected clusters and the perceived ‘competition’ between major German cities hinders collaboration and knowledge exchange between regions
– High degree of bureaucracy and red tape sometimes slows startups down
– Not exclusive to Germany, but boy is there a lot of media hyping going on
– Some argue that Berlin can actually be too fun

Russia

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Moscow skyline (Pavel Burchenko / Shutterstock)

The Good

– Big domestic market so companies can scale up even if only targeting Russian-speakers
– Lots of capital available; even the old ‘oil’ money is increasingly invested in tech
– Abundance of technical talent and solid education in STEM fields
– Fast-growing digital economy and e-commerce market
– Very high degree of smartphone penetration and a huge online population
– Relatively cheap to attract and retain talent

The Bad

– Capital in spades but not enough ‘smart money’ available
– Big domestic market but it’s very difficult for large tech companies to expand or scale abroad
– For better or worse, foreign investors continue to shun Russia for being ‘risky’
– Government can be too involved in the startup scene, particularly at the seed stage, rather than invest in support programs or improving fundamentals / infrastructure
– Russians have traditionally lacked a culture of entrepreneurship

The Ugly

– The geopolitics of the Russian government has a negative impact on business – enough said
– Legislation in Russia is exquisitely complex and paper-based, often requiring battalions of lawyers and accountants
– Russia has strict (and constantly more) laws regulating Internet and media usage
– Subpar basic infrastructure, from roads to decent broadband connections, let alone speeds

Sweden

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Stockholm skyline (Tupungato / Shutterstock)

The Good

– Like in Israel, the domestic market is too small for entrepreneurs not to think internationally from the day they start building their companies
– Scandinavians, in general, have high work (‘heads down’) ethics and diligence (+ underdog attitude)
– Sharp technical skills developed thanks to solid education and hobbies (which is often attributed to the darkness in Swedish winters)
– Overall good English language skills – many startups have English as their #1 language which makes it easier to market internationally, and to attract talent from abroad
– High output of world-class tech companies per capita: experience and role models aplenty
– Stockholm in particular has solid clusters in given categories (Spotify, Auxy, Teenage Engineering etc. in ‘music’, Klarna and iZettle in ‘fintech’, Minecraft and King.com in ‘gaming’ etc.)
– Public funding and government support plays an instrumental and generally positive role in the Swedish startup ecosystem
– Swedish corporations are increasingly taking an interest in the startup scene

The Bad

– Like in Israel, the small size of the home market also brings challenges
– Family often comes first, which isn’t bad in itself of course, but it’s important to note that Scandinavians in general like to work not much longer than ‘regular’ office hours
– Long summer holiday period which sometimes leads to not much being done for a period of up to 10 weeks
– Limited number of top-tier VCs – sizeable A and especially B-C funding rounds come from abroad – and not nearly enough experienced angel investors offering ‘smart’ seed money
– A lot of the top talent gets scooped up by deep-pocketed consulting companies and financial institutions

The Ugly

– Especially at the seed stage, valuations for funded Swedish startups tend to be low, giving founders a disadvantage when seeking follow-on funding
– Everywhere in Europe, physical hubs – co-working spaces, incubators and whatnot – are mushrooming, yet it took Stockholm a long time to get those (SUP46 is one but only a year old)
– Not a very close-knit tech community – still a lot of disconnect between entrepreneurs (especially ‘older’ vs. ‘younger’), sectors and the various startup ‘entry points’
– Lack of government-sponsored incentives for starting up
– Poor tax conditions

Featured image credit: Harvepino / Shutterstock

  • Denys Zhadanov

    How about Ukraine?

    • or the other 45 countries not in this list? :)

    • Johann Q

      You could try to do that yourself, maybe. One productive way to use the possibility to comment here. 😉

  • A common Swede

    lol, the tax conditions are superior in Sweden, very favorable for the inhabitants! where do you get your information, Robin?

    • Patrick Soeder

      “tax conditions are superior in Sweden” – Care to elaborate?

  • Joe Haslam

    Hope this one the first of a series. Next up Spain, Ireland, France, Portugal and … of course Belgium!

    • Did Lisbon already. You can related to other regions like Porto, Coimbra or Braga. Very similar stuff happening there.

    • Guest

      “France is home to internationally acclaimed engineering talent and top business schools”.

      I see that Joe Haslam has mentioned “France”.

      Could you give the name of the university that produces the “internationally acclaimed engineering talent” in France? I am sad to say that I am not familiar with any French University that produce high quality engineers, but would be interested in hiring from them if it were true.

      • amokranechentir

        To be honest, pretty much all the Grandes Ecoles d’Ingénieurs produce solid engineers as their graduates follow a very intense 2-year program called Class Prepas where they build a solid foundation in Mathematics, Physics and other scientific disciplines. The rest of the curriculum (which last 3 years) is spent specializing on a given major. The nice thing about this model is that it produces engineers who know how to think and solve problems regardless of the technology being used. I recommend looking for two labels which certify the quality of the education: CTI as Commission des Titres d’Ingénieurs http://extranet.cti-commission.fr/recherche and CGE as Conférence des Grandes écoles http://www.cge.asso.fr/, the latter being harder to obtain than the former. So one method to find good engineering schools is to find them in their database. The other method is to look for the rankings of these schools called: Palmarès des Ecoles d’Ingénieurs but do check the criteria that are used to establish the ranking.

        Note that I am not saying that Universities are not as good, some of them really are (Paris 6 – Jussieu is an example). At the end of the day, a school or university can only provide an environment where the passionate and motivated engineers can thrive and learn, the difference between the good ones and the others will heavily depend on their motivation to keep on learning and stay on the edge throughout their careers.

        Source: I studied in a CTI certified school ISIMA http://www.isima.fr/ I do recommend their engineers, actually we have a good network of alumni. who are now working for top tech companies around the world, including Silicon Valley.

  • Ololosh

    – Subpar basic infrastructure, from roads to decent broadband connections, let alone speeds

    http://en.wikipedia.org/wiki/List_of_countries_by_Internet_connection_speeds

    Roads in russia are awful, that’s true, but before making any statements you should check facts.

  • Pawel

    And Poland

  • Good analysis but you might like to get out of London next time you are in the UK! In Scotland alone we have vibrant communities in Glasgow, Edinburgh and Dundee. Lots of others across the UK and its a lot lower cost of living than the Angel.

  • I run a small startup in Barcelona. Let me add Spain to that list:



    Spain

    
The good

    -Very attractive place to work at, easy to hire foreign talent (especially Barcelona and Madrid)

    -Entrepreneur visas: http://www.nytimes.com/2014/11/23/business/international/at-spains-door-a-welcome-mat-for-entrepreneurs-.html

    -Low salaries and high supply of young, motivated people (who are often surprisingly good at English)

    -Costs of living and office rents lower than in most other Western European countries

    -Huge reductions in ancillary wage costs if you give new (previously unemployed) employees a permanent contract

    -New startups can have a reduction in corporate-tax to 15% for the first two years



    The bad

    -Tech scene is relatively small, lack of role models
    
-Generally very little appreciation for entrepreneurs in Spanish society („if you are successful you must be some kind of fraud“)
    
-Tax advisors often don’t know the rules very well



    The ugly
    
-New exit tax: http://tech.eu/news/spain-government-startup-tax-reform/

    -Bureaucracy involved to set up and run a business (example: writing off your business lunch requires you to ask the restaurant for a proper invoice stating your name and tax ID)


    Feel free to add other things!

    • Nice work and thank you for not just commenting “And Y NO SPAIN WTF?”

  • Great post Robin

  • Volksgasmaske

    Germany still sucks when it comes to force funding themes and structures for entrepreneurs and startups. German politicians still belive that the internet is #neuland and the old economy like Volkswagen, Siemens etc. will strike back.
    I guess, at the end it doesn’t matter from where you start or operate. Important is what is your business model and who do you know in the scene.

  • David Alonso

    and Spain?

    • Beautiful country in the south of Europe, why?

      • alonso_50

        Ok… thanks

  • Great post and beautiful photos. I would add ‘Law of Jante’ to the list of bad in Sweden

  • Did a similar exercise for Lisbon together with another founder, Antonio Rocha-Ferreira, and this was the result.

    LISBON

    The Good

    – Early stage ecosystem, home of some interesting tech startups.
    – Tech talent: Lisbon houses some good tech universities & students. The connection with the tech hub is not fully developed yet. If you are willing to do the hard work, you can find yourself good fresh graduate engineers and designers for half the usual price, but you will need to train some them from “lecture listening” to doing stuff. The competition for technical talent is starting to rise but still not having a big effect on prices.
    – An inherently small market means Portuguese entrepreneurs are forced to think international from day one.
    – Some of the startups bootstrapped and already left for London, SV or elsewhere since they need to grow after seed investment. Nevertheless founders have been going back to support the ecosystem, giving back experience, and connections.
    – There is no shortage of affordable office space; incubators and co-working spaces have less demand than they have room, growing tech companies don’t have a hard time finding bigger spaces to rent.
    – There are a few acceleration programs that bring in lots of international startups, e.g. Lisbon Challenge.
    – One of the lowest costs-of-living compared to most of the rest of Europe’s capitals.
    – Lisbon boasts a growing community with plenty of co-working spaces, accelerators, ‘office hours’, meet-ups and a couple of large internationally focused conferences, such as Go Youth Conference and Trojan Horse Was A Unicorn.
    – The ecosystem is relatively small when compared to major European hubs, so the tech scene is easy to know and Lisbon is a great city to live in. You can arrive anywhere by car in 20m and the international airport is located literally in the middle of the city.

    The Bad

    – There are some international companies in Lisbon, but mainly representation offices.
    – It’s difficult to find space where you want to: next to other startups. There is a huge waiting list for the city’s main incubator: Startup Lisboa.
    – There are a handful of major tech companies but the connections are weak.
    – There are almost no exits so the ecosystem has not come to the self-funded stage yet.
    – The small number of companies means that clusters are still forming.
    – Having to go international from the start also translates to early operational and financial challenges.
    – Government support undoubtedly exists, but is often misplaced, channeled inefficiently and overly bureaucratic.
    – The society doesn’t fully understand startups and there are many wantrepreneurs.
    – Due to the small market Consumer-facing startups often face an ugly, unnecessary death.

    The Ugly

    – General lack of startup experience.
    – Funding: don’t go to Portugal without funding. There are some government led funds but the business angels and VCs are few.

    Bottom line: Lisbon is home of some good tech companies, a couple funded by SV and some other European VCs, specially London VCs. The tech talent is great and some companies even move their product development to Lisbon. Nevertheless, the number of exits is extremely low and funding is definitely an issue. You should go to Lisbon to bootstrap if you don’t have a lot of money, want to test something and need good quality cheap (in other words: not expensive yet) talent.

    • Nice work and thank you for not just commenting “And Y NO PORTUGAL WTF?”

    • Olivier Dublin

      Do you know what would be the salary of a freshly graduated software engineer?

  • Gianmarco Carnovale

    Good article. But interesting that not one reader did even imagine to mention Italy in comments.

  • Karsten Deppert

    Regarding the points about Sweden, I would say about not working as long hours in Sweden seems a bit odd in my perspective – don’t see people working less hard here then in Berlin, from my experience. But that is with my selection-bias of course.

    Also, coworking has been big in Sweden for a long time – Entreprenorskyrkan and Hus24 in Stockholm, Mindpark and Minc in Skåne. Just because SUP46 is new does not make it the only coworking space. Both Minc and Mindpark are around 10 years old, Kyrkan and Hus24 (althou Hus24 has changed into co-living only) have been around for 3-5 years. And there are probably a lot more I don’t know about.

  • Ali Halabi

    Y NO TURKEY WTF?

    • Ali Halabi

      AND*

    • Thanks for your insightful contribution to the discussion.

  • Evgeni Petrov

    Where is Bulgaria in this one? 10% flat corporate tax, one of the best internet connection, weak regulation, low wages.

  • Jay

    Are noise, proliferation of wantrepreneurs and lots of unnecessary meetups just a side-effect of a growing (and/or sometimes hyped) tech ecosystem? (although I’m not sure how much this is the case in the US).

  • Darya Avasapova

    I have a startup of electric transport. I would like to develop it in Germany. Can you tell me please where I can find a support in this sphere? my e-mail d.avasapova@gmail.com

  • Darya Avasapova

    I have a startup of electric transport. And I would like to realize it in Germany. Maybe someone knows how is better to promote….or to start it.