This post first appeared at Joining Up The Dots
- A blog created by Neil Murray which focuses on the various startup communities and ecosystems that have formed. The purpose of his blog is to give exposure to these communities and provide them with a global voice.
This coming December will mark my third year living and working in beautiful Barcelona. My wife and I love it here and have no plans to head back to my hometown of Toronto anytime soon. I’m fully committed to doing my part in seeing Barcelona reach the potential it should in the startup world.
When I first arrived and started to get settled in I created a Meetup group called Barcelona Internet Startups
. The group is now a thriving community of 1600+ members with many events all to do with entrepreneurship and startups. What is interesting to note is the composition of the membership – 60% Co-Citizens (expat) and 40% Spanish. This group has allowed me first hand to get ensconced in the startup community – Thanks Meetup! ( If you are wanting to create a hub in your city, I highly recommend you do the same)
Barcelona has many of the ingredients necessary to build a successful and sustainable ecosystem for startups.
Some relevant criteria needed:
- The population count is 1.7 Million – Good population density – For comparative purposes Boulder,Colorado, the home of Brad Feld has but 100,000.
- Top ranked Business and Technical Schools globally: IESE , ESADE, UPC BarcelonaTech , The Artificial Intelligence Research Institute and many other remarkable institutions of higher learning.
- Industry sponsored Incubators and Accelerators: The Telefonica sponsored Wayra, and the Barcelona Government run Barcelona Activa. Many other private initiatives are available for startups to reach out to. ( It has become very hip and cool to have an incubator or accelerator globally, hence the quality of such is suffering. Buyer beware)
- A plethora of talented coders,developers and designers eagerly looking for work at very affordable rates.
- Ample and inexpensive coworking space.
- Many startup and entrepreneurship events throughout the year for learning, exhibiting and networking. The expat community tends to take advantage of these events much more than the Catalan community. Locals would benefit greatly by participating much more.
- VC Firms – Barcelona needs to attract foreign VC firms who have a much higher risk tolerance level.
- Angel Investor Community – Many like to call themselves angel investors as it is fashionable. The vast majority will not invest as they don’t have the means. Those that do have the wherewithal to invest need more coaxing to take risk. The entrepreneur must learn how to sell their story such that qualified angel investors takes action.
- Barcelona is home to the Mobile World Congress - Barcelona gets on the map in a big way during this conference but needs to exploit the story throughout the entire year.
- Tremendous foreign capital influx as assets are cheap.
- Tremendous local wealth that needs to be tapped into.
- Supportive local Government.
- Inexpensive cost of living comparatively speaking to other established hubs like London or Berlin.
- A wonderful lifestyle – Beaches, climate,culture,food and so much more…
So why is Barcelona not yet on the map?
Risk Aversion: The Catalan culture does not lend itself to “taking a shot” or “rolling the dice”. Their very nature is to be conservative. Many entrepreneurs with good and viable ideas do not get funded due to the almost non existent risk culture. This extends from early seed stage to A or B rounds.
Afraid to sell: No matter where a startup is based, the entrepreneur must be selling like there is no tomorrow. I recently witnessed this in Israel where startup entrepreneurs take this to heart as they never know what tomorrow may look like. They have no fear of communicating and networking to reach as many potential investors as possible. The Catalan culture is very reserved.
Evangelists: Barcelona needs many more evangelists shouting from the hills proclaiming how Barcelona is a hotbed for startups. Like other movements, with enough action and less talk this would become a self fulfilling prophecy.
Less Government or Bank Funding: Government or bank loan programs have no place in the startup world. It only scares off smart money down the road. Entrepreneurs in Barcelona and everywhere for that matter, must learn to sell their idea and raise their own initial capital to build their MVP. The Spanish startup community in general must stop looking to the Government or banks for financial help.
Where the Government can help:
- Easier fast tracking process for setting up special purpose vehicles for startups.
- A quick and easy visa program to retain and attract talent.
- Introduction of tax breaks or incentives for high risk capital.
And my favourite that would be so incredibly beneficial for Barcelona…
- Set up a Venture Stock Exchange to fund startups. The Barcelona Stock Exchange resides in a beautiful building on the remarkable Paseo de Gracia. Sadly next to nothing goes on there to speak of. Barcelona should follow the lead of the immensely successful Toronto Venture Exchange
, where billions of dollars are raised for speculative high risk, high reward ventures. The economic spin-off from this initiative would be simply resounding.
All in all, Barcelona can become a global player. Less talk, more action and greater risk taking and in a few years the local coffee shop will be humming with the sound of entrepreneurs making their pitch.