It's very anecdotal but at Spreedly (my company) we are integrated to around 90 different payment gateways globally and are payments infrastructure. So we have a lot of startup interest. In Europe Spain is second only to the UK in terms of prospects and customers. Sadly I've been told this is may partially because youth unemployment is so high that you might as well start something vs wait around. But either way a headline like this doesn't surprise me as we've clearly seen a large amount of entrepreneurial activity out of Spain.
...youth unemployment is so high that you might as well start something vs wait around
Not only youth. And there's the figure of the fake autónomo: companies force their employees to act as a provider to save taxes and regulations, threatening with firing them.
The worst cases are those in which the company first do this, then "fire" them anyway, avoiding the severance pay and letting the fired without unemployment rights.
I think the startup scene is growing quite rapidly here (Barcelona) however from my perspective it seems that a lot of founders are from abroad and it saddens me a little as there is a great wealth of talented people here that could be founders or technical founders they just don't seem to realise it!
Culture mix is not bad at all, and I think that's one of the key factors that differentiates Barcelona from other Spanish cities like Madrid or Valencia.
There're are many reasons why a large number of founders and developers end up in Barcelona, and the city in itself is a big one.
I think so and it is an incredible pity because I've met developers who are incredibly talented not have enough belief in their skills or to go it on their own. (Granted it's not for everyone).
Many of us just left, when we saw the difference in salaries between Spain and the alternatives, and the difficulty of marketing products for Spaniards: For instance, I'd not touch the B2B business in Spain, given the way people choose vendors.
In my case, I realized that US salaries were on a different level, for a very similar cost of living when outside of NY and the Bay area, and left. Every time I go back home, people try to recruit me, and then quickly give up when I mention what I make, salary, in the American Midwest.
But still, when I was still back in Spain, it seemed to me that the labor market was set up in such a way as to reward founders, and not so much their engineers. It's just that many of the successes I know started by having B2B customers before a single line of code was written. Very different from the idea of companies with venture capital that try to take off before running out of runway that you see in the US.
> Very different from the idea of companies with venture capital that try to take off before running out of runway that you see in the US.
That's how an extremely small number of businesses are started in the US. It represents such a tiny fraction of the total, as to be meaningless outside of half a dozen cities that dominate VC start-ups. 0.05% of businesses in the US get started via traditional venture capital.
Most software companies in the US are bootstrapped and funded from personal savings, or from small angel investments from family & friends. That goes the same for most of the successful software companies, they're not VC darlings (venture capitalists have absolutely no interest in your typical, small to mid-size software start-up).
I am in the same situation as you but what keeps me from going back to Barcelona are not the salaries, but the kind of uninteresting jobs that are offered.
I would go back home for the quality of life, not for the salary. But only if I could join a company that is actually creating something, instead of just using products created by others.
Have you ever considered remote work? I moved to Barcelona to work for a few companies but after a couple of years I wanted different challenges but still to stay here so I looked into remote work and it's the best of both worlds!
Can anybody comment on the impact the abysmal economy over there has had on the startup scene?
My hypothesis is that the absolute lack of jobs for young people would lead to more startups as necessity is the mother of invention, but it could be that the more immediate day-to-day of putting food on the table might distract from that.
It's an interesting question, and one that has not been quantified yet. However, here are a couple of thougts:
- I think there's no doubt that the financial crisis and lack of jobs has led many to start their own companies (tech or not).
- Simply starting a business in Spain is not as hard as many portray it to be (it's definitely harder than in the UK, for example), but taxes, lack of stock option plans (most companies here use what's often referred to as phantom options) and, in general a not-entrepreneur-friendly mindset from many in society, can make it hard to grow and scale. That said, many relatively successful startups like CartoDB, Typeform or even peerTransfer and Alienvault follow the m.o. of building engineering teams here and move marketing and sales to the US.
- Spain's current government has passed several pro-entrepreneur laws that, in essence, are just PR moves. Except, maybe, the launch of a new and simple entrepreneur visa. [0]
- This significant increase in VC financing has yet to reflect the more than €1.5 billion of public money that's being poured into VCs and private equity firms to invest locally, trying to mimic Israel Yozma's. [1]
- Barcelona has many interesting public and private initiatives going, and the city's good image all around the world benefits it when it comes to recruiting foreign talent. [2]
- It's not all fine and dandy, and there're definitely some hard challenges for the country and startups to tackle over the next few years.
- Hopefully (what looks like) success stories such as Scytl, will spark the next generation of tech companies in Spain. [4]
When you mention moving "marketing and sales to the US" is that simply so they can better target the US market? I imagine there is simply a larger opportunity in targeting the US, and in this day and age, there's no reason you need to start a locally-targeted business if your economy is in the crapper when there are other nations with much healthier economies.
Also, can you elaborate a bit further on the "not-entrepreneur-friendly mindset" you referenced?
Yup, mostly so they can target a bigger market and be closer to large clients. This does not apply to every company, but for SaaS and software companies, I think it is often the case.
I think running a business in Spain, what we call here being an 'empresario', can have some small-but-negative connotations for part of the population, who see the rich as a mere consequence of corruption forces instead of the financial result of providing value to customers. It's not like we haven't had our fair share of large cases of corruption over the last few yours, though.
I think this is also the case in other European countries.
This just scratches the surface of what could really be. Spain still is in general a hostile country for entrepreneurs with an anti-innovation government famous for awful decisions like:
- Regulating heavily crowdfunding rendering it unusable
- Taxing the sun in order to protect energy lobbies from solar energy. [1]
- Trying to get a cut from Google News because they're worth it, pass a law for it, and then trying to retract in only few weeks once they saw the page views metrics go south...
etc..
Hopefully things will get better once the current ruling party leaves the government in the upcoming December elections. Hopefully...
Also I think the autonomo fee is pretty crippling to entrepreneurs starting out, essentially you have to pay around 250 euros every month regardless of your income if you want to be freelance. It is so short sighted and means many people from different fields choose to conduct their business on the black market.
And let's not forget that one of the biggest (post dot com bubble) Spanish statups, Gowex, which was valued at 1.9B at some point, turned out to be a big fraud, a la Enron. [1]
27 comments
[ 4.5 ms ] story [ 63.4 ms ] threadSame thing in Portugal. You either emigrate or start your own company.
Not only youth. And there's the figure of the fake autónomo: companies force their employees to act as a provider to save taxes and regulations, threatening with firing them.
The worst cases are those in which the company first do this, then "fire" them anyway, avoiding the severance pay and letting the fired without unemployment rights.
There're are many reasons why a large number of founders and developers end up in Barcelona, and the city in itself is a big one.
I'm British so I'm not being nationalistic here or anything :)
Learned powerlessness.
In my case, I realized that US salaries were on a different level, for a very similar cost of living when outside of NY and the Bay area, and left. Every time I go back home, people try to recruit me, and then quickly give up when I mention what I make, salary, in the American Midwest.
But still, when I was still back in Spain, it seemed to me that the labor market was set up in such a way as to reward founders, and not so much their engineers. It's just that many of the successes I know started by having B2B customers before a single line of code was written. Very different from the idea of companies with venture capital that try to take off before running out of runway that you see in the US.
Can you elaborate a bit on that, please?
That's how an extremely small number of businesses are started in the US. It represents such a tiny fraction of the total, as to be meaningless outside of half a dozen cities that dominate VC start-ups. 0.05% of businesses in the US get started via traditional venture capital.
Most software companies in the US are bootstrapped and funded from personal savings, or from small angel investments from family & friends. That goes the same for most of the successful software companies, they're not VC darlings (venture capitalists have absolutely no interest in your typical, small to mid-size software start-up).
I would go back home for the quality of life, not for the salary. But only if I could join a company that is actually creating something, instead of just using products created by others.
King are hiring like crazy! I am curious to know how good must be working with them.
My hypothesis is that the absolute lack of jobs for young people would lead to more startups as necessity is the mother of invention, but it could be that the more immediate day-to-day of putting food on the table might distract from that.
- I think there's no doubt that the financial crisis and lack of jobs has led many to start their own companies (tech or not).
- Simply starting a business in Spain is not as hard as many portray it to be (it's definitely harder than in the UK, for example), but taxes, lack of stock option plans (most companies here use what's often referred to as phantom options) and, in general a not-entrepreneur-friendly mindset from many in society, can make it hard to grow and scale. That said, many relatively successful startups like CartoDB, Typeform or even peerTransfer and Alienvault follow the m.o. of building engineering teams here and move marketing and sales to the US.
- Spain's current government has passed several pro-entrepreneur laws that, in essence, are just PR moves. Except, maybe, the launch of a new and simple entrepreneur visa. [0]
- This significant increase in VC financing has yet to reflect the more than €1.5 billion of public money that's being poured into VCs and private equity firms to invest locally, trying to mimic Israel Yozma's. [1]
- Barcelona has many interesting public and private initiatives going, and the city's good image all around the world benefits it when it comes to recruiting foreign talent. [2]
- It's not all fine and dandy, and there're definitely some hard challenges for the country and startups to tackle over the next few years.
- Hopefully (what looks like) success stories such as Scytl, will spark the next generation of tech companies in Spain. [4]
0: http://tech.eu/news/spain-fondico-fond-ico-spanish-vc/
1: http://tech.eu/features/5155/rules-entrepreneur-visa-spain/
2: http://novobrief.com/barcelona-madrid-startup-ecosystem/
3: http://tech.eu/features/6139/9-spanish-entrepreneur-challeng...
4: http://novobrief.com/scytl-pere-valles-interview/
When you mention moving "marketing and sales to the US" is that simply so they can better target the US market? I imagine there is simply a larger opportunity in targeting the US, and in this day and age, there's no reason you need to start a locally-targeted business if your economy is in the crapper when there are other nations with much healthier economies.
Also, can you elaborate a bit further on the "not-entrepreneur-friendly mindset" you referenced?
I think running a business in Spain, what we call here being an 'empresario', can have some small-but-negative connotations for part of the population, who see the rich as a mere consequence of corruption forces instead of the financial result of providing value to customers. It's not like we haven't had our fair share of large cases of corruption over the last few yours, though.
I think this is also the case in other European countries.
- Regulating heavily crowdfunding rendering it unusable
- Eliminating stock options' fiscal incentives [0]
- Taxing the sun in order to protect energy lobbies from solar energy. [1]
- Trying to get a cut from Google News because they're worth it, pass a law for it, and then trying to retract in only few weeks once they saw the page views metrics go south...
etc..
Hopefully things will get better once the current ruling party leaves the government in the upcoming December elections. Hopefully...
[0] http://novobrief.com/stock-options-in-spain-startups/
[1] http://www.forbes.com/sites/kellyphillipserb/2013/08/19/out-...
[1] http://www.bloomberg.com/bw/articles/2014-07-17/spains-lets-...
[0] "The time has come, The kingdom of God has come near. Repent..." http://biblehub.com/mark/1-15.htm