Tramway à Lisbonne by yannick le goff on 500px
This morning I stumbled upon a blog post by a Berlin-based venture capitalist (Ciarán O'Leary) talking about how Lisbon feels like the next Berlin. In other words, it feels like the next great European startup hub.
Here’s his reasoning:
The tech scene is organic – it happened on its own, came out of nowhere. That is much more fun and sustainable than any kind of political or targeted economic strategy.
There are a ton of constraints (funding, local talent base, etc.) so entrepreneurs need to hustle to make things happen. Hustle is good.
Berlin was an economic void, Portugal had a massive economic crisis and Lisbon sure isn’t letting that crisis go to waste.
Entrepreneurship has the real chance to be a center stage act, not a side gig. It’s everywhere.
The city is very, very cool. You just want to be here.
You can have a great life on a startup salary.
Everyone speaks english; everyone is welcoming and open. That matters a lot when you want to attract international talent and funding.
Of course, he’s not the only one calling Lisbon the next Berlin. The EU also named Lisbon “the most entrepreneurial region in Europe in 2015.” Isn’t it interesting what can grow out of economic crisis? See PIGS.
I also don’t think it’s a coincidence that Monocle held its first ever Quality of Life Conference in Lisbon. It’s a testament to O’Leary’s point above that, “You just want to be here.”
And while being “very, very cool” may not seem immediately relevant to creating a robust startup environment, it really is. It may be the most important point. It makes the city a magnet for talent.
Just the other day I was trying to explain Berlin to someone and I used a similar lexicon. I said: “It’s an unbelievably cool city. It bleeds hipness. You will love it.”
If you’re a city, that’s a great thing to be.
Aaron M. Renn of The Urbanophile, recently wrote an interesting article in Governing called, Where’s America’s Entrepreneurial Economy? In it, he argues that despite the fact that there’s a perception that entrepreneurship is on the rise, overall rates are actually declining.
The Brookings Institution found that so-called “firm entry rates” have declined since the 1970s and that they suffered a steep fall post-2005. And though millennials are often seen as an entrepreneurial generation, The Wall Street Journal reports that business ownership among those under the age of 30 recently hit a 24-year low. Self-employment has seen a similar downward trend. A study by Economic Modeling Specialists International found that both the total number of self-employed and their share of jobs have fallen since 2006.
His argument is that outside of tech — where yes, the barriers to entry have fallen significantly over the years — it has actually become harder to start a company in a lot of other cases. And he specifically mentions two industries where he believes that is very much the case: construction and real estate.
Why is that?
Well, he cites a number of possible factors, one of which is increased licensing requirements for many industries. But the two most interesting for me are slow disruption cycles and the presence of large dominant firms.
Real estate has both of those.
It’s also a capital intensive industry. And it’s becoming harder for smaller private players to compete with larger institutions and pension funds who struggle with “moving the investment needle”, not with access to capital. Real estate is no longer the fringe asset class it once was.
In contrast, you have the tech space with fast disruption cycles and low barriers to entry. Yes, you also have large dominant players (Apple, Google, Facebook, Amazon, and so on), but even they don’t have complete immunity in an environment where new ideas frequently trump access to capital.
A culture of entrepreneurship across all industries is important for our society. I hope we never lose that.
Mackenzie Avenue, Revelstoke by Ian Houghton on 500px
Despite being rainy and unusually warm, I had a great time in Revelstoke, BC. I first heard about the city a few years ago when I told a close friend of mine (who is an avid snowboarder) that I was going to Whistler. He told me: “Forget Whistler. Go to Revelstoke.”
Revelstoke has been on the map for skiers and snowboarders for decades. Some consider it to be the helicopter skiing capital of the world. But there are only so many people who can afford $1,000+ per day skiing, so it wasn’t until 2007 when the first gondola opened up on Mount Mackenzie that people started calling Revelstoke the next Whistler, the next Jackson Hole, the next Zermatt, and so on.
As both a snowboarder and a real estate developer, this is of course exciting. Everybody wants to be a part of the next big thing and they want to call it before anyone else. That’s how you make money – by being right about things before the masses catch on and/or when everyone else thinks you’re wrong.
But 2007 happens to come before 2008. And 2008 wasn’t a kind year to the real estate community. Revelstoke was no exception.
The condos at the base of the mountain weren’t selling (about half of the ones that did sell were sold to Canadians I was told). Expansion plans to become the largest ski resort in the world were scaled back. And the resort teetered on the brink of bankruptcy. But since then, new ownership has taken over the resort and the sentiment on the ground seems to be that Revelstoke – as a real estate play – is somewhere near the bottom.
But something even more interesting is happening in Revelstoke, beyond just luxury condos at the base of a mountain. And since I was on the disabled list for the second half of my vacation, I had time to explore.
I was fortunate enough to meet a local entrepreneur (who happened to also be from Toronto) and his message to me was clear: Ontario is moving in. Both talent and capital from Ontario are starting to flock to this small mountain town of almost 8,000 full-time residents (it’s technically classified as a city). And from my experience at the bars and restaurants in town, he appears to be right.
Now, you might be thinking these people are just ski bums looking for an excuse to live in a mountain town. But is that such a unique and bad thing? Today’s up and coming generation is looking for lifestyle + career. And so if your city or community can offer both, you have a competitive advantage when it comes to attracting talent.
Revelstoke knows they have the outdoor amenities and the “epic pow”, so now all they need to do is bring the businesses. And that’s exactly what Revelstoke wants to do. If you’re an entrepreneur or business owner, Revelstoke wants you to move there. I’m serious. The vision is to create a sustainable live, work, and play mountain community in the BC interior.
I hope that happens.
Drop me a line if you want to talk mountains and business.
Post Update: The beautiful photo of Revelstoke at the top of this post was taken by Ian Houghton out of BC. This is his business website and this is his Facebook page.