German start-up scene – copycats or innovators, enough or not enough VC money?

Fred Wilson published an interesting post today about the start-up scene in Berlin. Having founded my own start-up in Germany (JustBooks, later acquired by Victoria’s AbeBooks), being currently invested in a successfull Internet start-up based in Berlin (Tripsbytips, an online travel community) and working with one of the leading German VC’s (Munich-based Acton Capital / Burda Digital Ventures) on building up a portfolio of consumer Internet companies in the Pacific NorthWest, I was extremely happy that one of the best known US VC’s had a closer look at my home countries’ entrepreneurial state of things. Having said that I must disagree with two points Fred makes. First of all, I don’t think that there is a mismatch of high energy/high quality tech start-ups and the amount of capital available to fund them. When we planned to raise our first institutional round for Tripsbytips last May, we had offers from 4 VC’s before we even went out and pitched the business. Germany has a very active angel scene around Spreadshirt founder Lukasz Gadowski, some of the most aggressive early-stage investors with the Samwer brothers, two major media companies (Burda and Holtzbrinck) that very actively push digital investments and tons of other (lesser known) VC’s – rumor has that quite a few of them struggle to get deals at all. So I would argue that the problem is not a lack of money. What I consider lacking in Germany are on the one side a critical mass of serial entrepreneurs who know how to successfully build and scale a business and on the other side true innovation. Which brings me to the second point where I disagree with Fred: I don’t think that we have seen many innovative Internet business models coming out of Europe, most activity is still being generated by the copycat approach which has gotten even more aggressive during this latest (Web 2.0) boom compared to the late nineties. The only area where I have seen true innovation coming out of Germany is in the mobile space – Jamba (also founded by the Samwer brothers) or recently acquired Plazes are some of the examples. I think that the Germany’s start-up scene has greatly developed over the past ten years but there is still much to do – and most importantly, we need more innovation and more (serial) entrepreneurs.

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