Paul Jozefak

Guest post: Next10 showed Europe is Next

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This is guest post by Paul Jozefak who is a managing partner at VC firm Neuhaus Partners. In this post he gives his impressions of the Next10 conference, which just took place in Berlin, and takes the current pulse of the European startup scene, along with sharing some tips on how to make the most out of attending a conference like Next10.

What is it with German events? Take an established event, put it in the capital city, invite lots of people and you should have a party, right? That’s what I thought initially.

Don’t get me wrong. I really enjoyed the two days I spent at Next10 in Berlin. It’s almost become like a class reunion of sorts. You basically know everyone who shows up and you get the chance to catch up. Finally, folks from outside of Germany are making the trek to attend this show (if ash clouds aren’t setting their travel plans askew). You have a ton of speakers on the agenda. Food is available as is coffee and other drinks. Hey, even the wireless was good. For those of you who like to keep your insides as tarred as the Mexican Gulf coast, Dunhill was passing out free cigarettes at their lounge near the entrance.

So why the low energy?

As Stefan Glaenzer and I tried to do onstage in our panel, it’s time to look on the bright side. Things are picking up and we’re clearly moving in the right direction. Just look around when hanging out at Next10. There are plenty of start-ups presenting their innovations. Sponsors stepped up and made this event possible, to the tone of almost €1 million budget I overheard. The Station is a great venue. Plenty of space, well spread out, good acoustics, easy accessibility with public transport and no lines at check-in. You had a great place to meet with the tech scene for two days.

Yet many people mentioned to me in passing that somehow the vibe just wasn’t there. I heard more than once that “last year was somehow better, I just can’t say why”. My theory is pretty simple. People are bogged down thinking about issues which aren’t necessarily going to affect the tech scene directly. Am I delusional to think that we’re not going to feel the effects of Greece in Europe or any of the other macroeconomic problems? Trust me, I’m just as aware of the problems that we have as are all of you. Yet, let’s see the positive side of things.

Money is available for start-ups in Europe and in my opinion, the consolidation of venture capital and the private equity scene is past the worst. You have super angels springing up all over the place. Sources of support and capital such as Seedcamp have established themselves. Funds like Index are launching new, dedicated seed funds. Even the governments are doing their part, like it or not, as is the case in France and Germany.

So why the lack of energy?

Well, at least as far as the Germans go, people tend to be pessimistic as opposed to optimistic. No one goes out of their way to market themselves. Put a founder from the States in this crowd or on stage and they won’t shut up about what they are doing and how great it is. They exude energy! Ask a German founder about his business and he’s more likely to tell you everything wrong about it and his market before actually trying to sell you on the benefits. This needs to change.

Further, there were pretty good speakers on tap but very few who really had anything new to say. Like him or not, Andrew Keen did his best to stir things up a bit, as he does I guess every time he goes on stage. You need more people speaking to this crowd who actually take a stand and defend it. Trying to be politically correct on stage just makes for boring presentations. Presenters need to stir things up. Try something new instead of presenting the same talk you gave a week ago exactly the same way and simply in a different venue. The crowd also needs to ask good questions.

Use the opportunity to “talk” to a presenter when given the opportunity. Ask them what you want to know. If they are on-stage, they’ll have to at least try to answer your question, no matter how uncomfortable it may be. As is the case with me, a VC, stop me and say hello. Your chance of getting my attention for your business plan is significantly better if I can connect your email with a face. I’m more than happy to stop and have a chat when walking the floor of such events.

But, before I become too German myself, my ten positive take-aways from Next10:

1. The start-up scene is vibrant and start-ups in Europe are getting funded. I spoke to multiple companies who recently closed either initial or follow-on rounds.

2. You can make money focusing on Europe. You don’t need to necessarily be successful in the US. Europe is large enough. Add Russia to the mix and we’re talking about a real market.

3. Mobile is still where it’s at and it continues to be driven by the iPhone and app development. Android is coming quickly. Here and there I even heard some interest in what Microsoft is going to throw at us in Q4.

4. Enterprise software is back. As much as I personally feel that it’s extremely hard to successfully grow enterprise software companies in Europe, founders are having a go.

5. Software as a service is the preferred delivery model. Basically everyone is moving their product to “the cloud”. I do cringe ever more when using that buzzword though.

6. Lots of people are asking whether Spotify is the next big thing out of Europe. My take is that people think it’s potentially a Skype-like exit or a major flameout. I’m hoping for the Skype like exit. We need more of those in Europe.

7. London is still the strongest start-up scene but Berlin is putting it’s mark on Europe.

8. Women are coming into the tech scene. This is purely my subjective view but I had the feeling that I am finally seeing more women at events such as Next10 and they are doing more than PR.

9. Yes, there were a couple iPads around. Is anyone betting the farm on them? No but if you can take advantage of the device as a company, why not!

10. Europeans are damn good at copying successful US businesses. Yet, now we’re seeing copying in the US of successful European businesses such as Vente Privee.

What good would a post be without some tips on how to do things better at future Next events:

1. Tighten up the space at the Station, which I am presuming will be the venue next year. This will make the event a bit more intimate. People will talk with one another more instead of retreating into small, closed-off groups.

2. Get some controversial speakers on stage. Find people who will make the crowd uncomfortable or at least will engage them. Pay some of these speakers if you have to.

3. Pull in more people from other regions. Yes, some more speakers from the States would be good but Asia would be great too.

4. Have the evening event at another location. Standing around for two days at one venue gets tedious. You need a change of scenery.

5. DON’T make startups pay to pitch. I know you think this will screen out the poor companies but it’s exactly the opposite. Start-ups should not be paying to pitch at events. (This should actually be no. 1 above but I just remembered this!)

6. Don’t worry as much about getting many more people to this event. Worry more about getting good people to the event. If it’s worth my time to spend two days at this event, I won’t be as price sensitive as is the case otherwise.

In summary, I feel my time was well spent in Berlin. The Next10 has established itself and I believe this is one of the events you should attend if in this market in Europe. You can get some great insight into the EU market if you aren’t based here by spending a day or two attending. I am in no way associated with the event or the sponsors and still feel comfortable enough giving this recommendation. Well done to the organizers but do heed my tips for next year.

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