The EU Startup Scene: Mapping the Hotspots & Recreating Startup Success
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Over the last couple of decades, startups have taken over the world of business with innovative ideas, industry disruption and a new way of working that is kicking old fashioned corporate companies to the curb. In particular, tech startups have captured our imagination and changed our way of life in a hugely positive way, with the provision of simple and efficient solutions that change our daily habits and solve our problems.

The global hub of tech innovation has historically been the San Francisco Bay area - the so-called 'Silicon Valley', but many other epicentres for tech startups have begun to spring up, shifting the focus across the Atlantic and away from the west coast of the US.

Europe is fast becoming the global hotbed for tech startups who want to push the boundaries of the industries they operate in, and grow and scale rapidly.

Where are the main European centres for tech startups and innovation?

Of course, not all cities in Europe have managed to enjoy the same level of startup success as others. There are a few key cities which have become centres of the European tech startup scene, and are home to many companies that are fast becoming some of the biggest, most disruptive and most popular in the world.

Five of the top European destinations for a vibrant startup culture are:

  • London

  • Amsterdam

  • Berlin

  • Stockholm

  • Paris

All of the above cities have seen hundreds of tech startups successfully grow and scale in recent years, which is no mean feat - given that somewhere in the region of 90% of startups end up failing.

So what is it about these cities that have made them such a rich breeding ground for exciting startups that find a place in their chosen market and capitalise on their funding to become profitable? Here are some of the main reasons:

  • They are able to recruit skilled and qualified talent who want to move to these cities for the vibrant and exciting lifestyles available there. What's more, many of these cities are major university towns, and so it is easy for startup businesses to recruit interns and entry level workers who already live in the close vicinity.

  • Startups can offer young and ambitious professionals amazing career opportunities. They give workers the valuable chance to upskill themselves, continually develop their business acumen and experience, and earn decent and fair wages. These opportunities can be hard to come by with larger corporations, and so people are keen to join and grow with startup businesses, and stay with them for a long period of time.

  • The above mentioned cities can all be considered global cities given the fact that they are very much cosmopolitan areas with many different nationalities in one place. This means that startups can generally draw on many different skills, experiences and languages when they recruit people for their businesses.

  • The thriving financial landscapes in these cities mean that they are fertile places for financial investment from venture capital firms. Investment is an essential part of the life cycle of any startup, and so being in these locations with highly developed and historic financial importance can encourage startups to locate here and seek investment in the same cities.

  • Startups have a huge emphasis on creating a fantastic company culture, and so they are able to attract and retain the best talent. With bustling, up-and-coming districts with trendy bars and restaurants in these cities that help startup culture to thrive, startups are more likely to locate there so that they can share this culture with their employees.

What are some of Europe's most successful startups?

Many successful startups undergo a period of rapid growth fueled by investment before becoming profitable, and then a select few go on to become household names that truly disrupt their industries and change the day-to-day lives of their millions of happy customers.

Here are four European startups that have been massively successful in what they do:

Delivery Hero

There are plenty of online food ordering sites and apps out there, and Delivery Hero is one that has proven a big success in the lucrative German market, and has subsequently expanded its operations worldwide. Based in Berlin, it has a network of over 100 restaurant partners globally, and processes hundreds of millions of dollars every year in online food orders. It has so far raised 2.6 billion US dollars in funding.

Klarna

Taking the payments world by storm with their unique 'Buy now, pay later' philosophy, Klarna is a Stockholm-based tech startup that has become Europe's most valuable FinTech, with a valuation of over 5 and a half billion dollars! With financial backing from none other than rapper Snoop Dogg, Klarna has brought a new level of cool to the world of FinTech! Klarna has raised over 1.2 billion US dollars in funding.

TransferWise

The money transfer industry has changed dramatically thanks to services moving online to web platforms and smartphone apps, and TransferWise has led the charge. It is a London-based FinTech startup that lets its users send money abroad with low fees and no hidden charges, bypassing traditional transfer methods like high street banks or remittance outlets. TransferWise has received just over 772 million US dollars in funding.

Farfetch

Farfetch is an online luxury retail platform based in London. Like many other startups - and particularly important to the fashion industry - it champions sustainability as one of its core pillars. Farfetch has currently received just over 700 million US dollars in funding.

Startups that don't get things right

It is vitally important to remember that not all startups go on to be famous businesses like the ones mentioned above. The vast majority do not manage to successfully sustain profitability, and end up shutting down almost as soon as they start.

Here are four startups that have not survived, with some of the reasons why:

Laurel & Wolf

Laurel & Wolf was an online interior design marketplace which tried to make professional interior design affordable and accessible for everyone. They received 35.8 million dollars in overall funding, but operational and management challenges including unhappy employees and unforeseen operational costs meant that they weren't able to survive.

Shyp

Despite raising 62.1 million dollars in funding, Shyp was a startup that couldn't make the most of its good fortune and has recently crashed into obscurity. The business tried to shake up the personal logistics industry by making it easy to order delivery services from a customer's smartphone. The company had a 'growth at all costs' mentality and weren't able to successfully scale and shape the business to keep up with their growth, and eventually, as consumer growth slowed, profits soon ran out.

Stimwave Technologies

After receiving 54.7 million dollars in funding, Stimwave Technologies tried to disrupt the medical industry with wireless, microsize medical devices for neurology. Unfortunately, they hadn't spent enough time matching their product with their audience, and when they launched their product, it was met unenthusiastically and with low demand, and so the company bombed.

Beepi

Beepi was a used car marketplace which managed to make a big splash when it was first founded. In a world of exploding on-demand marketplaces, Beepi's future looked very positive to both consumers and investors. In 2015, Beepi secured an impressive $60 million Series B funding round. However, poor management, including huge salaries for executives and aggressive negotiating for a higher valuation, meant that it lost investors and blew through its funding quickly.

Top tips for startup success

Although there is no one simple solution that all startups can use to make sure that they end up like the former companies mentioned compared with the latter, there are certain best practices that they can follow to try to make it more likely that they will succeed. These are:

  • Collaborating with fellow startups
    One of the best things about the European start-up scene is that there is a definite community feel to it, meaning that other startups will often be keen to collaborate with you and help you out when you need it. Startups by their very nature are agile, flexible and opportunistic, and are constantly on the lookout for new partnerships to add additional expertise to their products and solution. Make sure you are always looking for networking opportunities with other European startups.

  • Counting your costs
    Making the most of your money from investment is key if you are going to be a success, become profitable, and keep the faith of your investors. This means limiting unnecessary costs to reduce your overheads, and prioritising what you spend your capital on. Make sure that you have a sound economic mind in your business that can help you to make good financial decisions, and streamline your costs wherever possible. Any expenditure that is not essential to achieving profitability should be cut straight away.

  • Outsourcing projects
    An incredibly simple way of streamlining your business processes and bringing vital expertise into your company is by outsourcing certain projects using external agencies. This means that you don't have to internally hire experts for every aspect of your growing business; rather, you can hire teams to help you out as and when you need them. Outsourcing will cut your overall operating costs and give you specialised skill sets for difficult tasks, increasing efficiency right across the business.
  • Being a solution to a problem
    One of the easiest mistakes to avoid is making sure that you have a product or service that solves a problem for people. If you think you have a solid idea that will work, you still need to conduct extensive research to make sure that there is a gap in the market that you will be able to fill. If not, then your business will be doomed to fail. All of the successful startups mentioned towards the beginning of this article all had in common the fact that they have identified a problem in their respective markets, and engineered a fantastic solution to alleviate this problem, and that's what all startups must do.

  • Championing diversity
    Startup culture goes hand in hand with diversity of all kinds, and drawing experience from all over Europe and the rest of the world plays into this notion. As we have said before in this article, there are a number of startup hubs all over Europe that have helped small businesses to grow and become immensely successful for a number of reasons. If you have a startup that is looking to grow, then you can benefit from the experience and expertise available all over Europe. So look to diversify your team by hiring people not only from your country, but who have life and work experience from different locations and cultures across Europe.

  • Giving back to the community
    A key hallmark of successful and much-loved startups is that they give back to the community and environment in a way that their customers are proud to buy products and services from them. Being a morally good startup will help you to strike a chord with customers in multiple markets, and will drive your startup towards profitability and success. In particular, the increasingly affluent millennial generation have a great desire to make purchases from startups that are socially and environmentally good. So if you are a startup owner, you should make sure that your business earns a reputation for having a positive impact locally and globally.
To sum up, Europe has several locations which encourage startup culture, and provide an amazing platform for entrepreneurs to begin their business journey and turn their amazing ideas into a profitable reality. Having said that, the road is not easy by any stretch of the imagination, and they must work hard to manage their budgets, provide a valuable service to their target market, and create a harmonious team culture that allows the startup to scale and evolve.
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This document was last updated on July 28, 2020


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The right to object to processing


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Data protection rights under GDPR


If you are a resident of the European Economic Area (EEA), you have certain data protection rights and Red Lab LLC aims to take reasonable steps to allow you to correct, amend, delete, or limit the use of your Personal Information. If you wish to be informed what Personal Information we hold about you and if you want it to be removed from our systems, please contact us. In certain circumstances, you have the following data protection rights:


- You have the right to request access to your Personal Information that we store and have the ability to access your Personal Information.

- You have the right to request that we correct any Personal Information you believe is inaccurate. You also have the right to request us to complete the Personal Information you believe is incomplete.

- You have the right to request the erase your Personal Information under certain conditions of this Policy.

- You have the right to object to our processing of your Personal Information.

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- You also have the right to withdraw your consent at any time where Red Lab LLC relied on your consent to process your Personal Information.


You have the right to complain to a Data Protection Authority about our collection and use of your Personal Information. For more information, please contact your local data protection authority in the European Economic Area (EEA).


California privacy rights


In addition to the rights as explained in this Policy, California residents who provide Personal Information (as defined in the statute) to obtain products or services for personal, family, or household use are entitled to request and obtain from us, once a calendar year, information about the Personal Information we shared, if any, with other businesses for marketing uses. If applicable, this information would include the categories of Personal Information and the names and addresses of those businesses with which we shared such personal information for the immediately prior calendar year (e.g., requests made in the current year will receive information about the prior year). To obtain this information please contact us.


How to exercise these rights


Any requests to exercise your rights can be directed to Red Lab LLC through the contact details provided in this document. Please note that we may ask you to verify your identity before responding to such requests. Your request must provide sufficient information that allows us to verify that you are the person you are claiming to be or that you are the authorized representative of such person. You must include sufficient details to allow us to properly understand the request and respond to it. We cannot respond to your request or provide you with Personal Information unless we first verify your identity or authority to make such a request and confirm that the Personal Information relates to you.


Privacy of children


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We may use cookies to collect, store, and track information for statistical purposes to operate the Website and Services. You have the ability to accept or decline cookies. Most web browsers automatically accept cookies, but you can usually modify your browser setting to decline cookies if you prefer. To learn more about cookies and how to manage them, visit internetcookies.org


Do Not Track signals


Some browsers incorporate a Do Not Track feature that signals to websites you visit that you do not want to have your online activity tracked. Tracking is not the same as using or collecting information in connection with a website. For these purposes, tracking refers to collecting personally identifiable information from consumers who use or visit a website or online service as they move across different websites over time. How browsers communicate the Do Not Track signal is not yet uniform. As a result, the Website and Services are not yet set up to interpret or respond to Do Not Track signals communicated by your browser. Even so, as described in more detail throughout this Policy, we limit our use and collection of your personal information.


Advertisements


We may permit certain third party companies to help us tailor advertising that we think may be of interest to users and to collect and use other data about user activities on the Website. These companies may deliver ads that might place cookies and otherwise track user behavior.


Affiliates


We may disclose information about you to our affiliates for the purpose of being able to offer you related or additional products and services. Any information relating to you that we provide to our affiliates will be treated by those affiliates in accordance with the terms of this Policy.


Email marketing


We offer electronic newsletters to which you may voluntarily subscribe at any time. We are committed to keeping your e-mail address confidential and will not disclose your email address to any third parties except as allowed in the information use and processing section or for the purposes of utilizing a third party provider to send such emails. We will maintain the information sent via e-mail in accordance with applicable laws and regulations.


In compliance with the CAN-SPAM Act, all e-mails sent from us will clearly state who the e-mail is from and provide clear information on how to contact the sender. You may choose to stop receiving our newsletter or marketing emails by following the unsubscribe instructions included in these emails or by contacting us. However, you will continue to receive essential transactional emails.


Links to other resources


The Website and Services contain links to other resources that are not owned or controlled by us. Please be aware that we are not responsible for the privacy practices of such other resources or third parties. We encourage you to be aware when you leave the Website and Services and to read the privacy statements of each and every resource that may collect Personal Information.


Information security


We secure information you provide on computer servers in a controlled, secure environment, protected from unauthorized access, use, or disclosure. We maintain reasonable administrative, technical, and physical safeguards in an effort to protect against unauthorized access, use, modification, and disclosure of Personal Information in its control and custody. However, no data transmission over the Internet or wireless network can be guaranteed. Therefore, while we strive to protect your Personal Information, you acknowledge that (i) there are security and privacy limitations of the Internet which are beyond our control; (ii) the security, integrity, and privacy of any and all information and data exchanged between you and the Website and Services cannot be guaranteed; and (iii) any such information and data may be viewed or tampered with in transit by a third party, despite best efforts.


Data breach


In the event we become aware that the security of the Website and Services has been compromised or users Personal Information has been disclosed to unrelated third parties as a result of external activity, including, but not limited to, security attacks or fraud, we reserve the right to take reasonably appropriate measures, including, but not limited to, investigation and reporting, as well as notification to and cooperation with law enforcement authorities. In the event of a data breach, we will make reasonable efforts to notify affected individuals if we believe that there is a reasonable risk of harm to the user as a result of the breach or if notice is otherwise required by law. When we do, we will post a notice on the Website.


Changes and amendments


We reserve the right to modify this Policy or its terms relating to the Website and Services from time to time in our discretion and will notify you of any material changes to the way in which we treat Personal Information. When we do, we will revise the updated date at the bottom of this page. We may also provide notice to you in other ways in our discretion, such as through contact information you have provided. Any updated version of this Policy will be effective immediately upon the posting of the revised Policy unless otherwise specified. Your continued use of the Website and Services after the effective date of the revised Policy (or such other act specified at that time) will constitute your consent to those changes. However, we will not, without your consent, use your Personal Information in a manner materially different than what was stated at the time your Personal Information was collected.


Acceptance of this policy


You acknowledge that you have read this Policy and agree to all its terms and conditions. By accessing and using the Website and Services you agree to be bound by this Policy. If you do not agree to abide by the terms of this Policy, you are not authorized to access or use the Website and Services.


Contacting us


If you would like to contact us to understand more about this Policy or wish to contact us concerning any matter relating to individual rights and your Personal Information, you may send an email to contact@redlab.dev


This document was last updated on July 28, 2020


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You may not use the Website and Services to engage in activity that is illegal under applicable law, that is harmful to others, or that would subject us to liability, including, without limitation, in connection with any of the following, each of which is prohibited under this Policy:


- Disclosing sensitive personal information about others.

- Collecting, or attempting to collect, personal information about third parties without their knowledge or consent.

- Threatening harm to persons or property or otherwise harassing behavior.

- Purchasing any of the offered Services on someone else's behalf.

- Misrepresenting or fraudulently representing products or services.

- Infringing the intellectual property or other proprietary rights of others.

- Facilitating, aiding, or encouraging any of the above activities through the Website and Services.


System abuse


Any User in violation of the Website and Services security is subject to criminal and civil liability, as well as immediate account termination. Examples include, but are not limited to the following:


- Use or distribution of tools designed for compromising security of the Website and Services.

- Intentionally or negligently transmitting files containing a computer virus or corrupted data.

- Accessing another network without permission, including to probe or scan for vulnerabilities or breach security or authentication measures.

- Unauthorized scanning or monitoring of data on any network or system without proper authorization of the owner of the system or network.


Service resources


You may not consume excessive amounts of the resources of the Website and Services or use the Website and Services in any way which results in performance issues or which interrupts the Services for other Users. Prohibited activities that contribute to excessive use, include without limitation:


- Deliberate attempts to overload the Website and Services and broadcast attacks (i.e. denial of service attacks).

- Engaging in any other activities that degrade the usability and performance of the Website and Services.


Enforcement


We reserve our right to be the sole arbiter in determining the seriousness of each infringement and to immediately take corrective actions, including but not limited to:


- Suspending or terminating your Service with or without notice upon any violation of this Policy.

- Disabling or removing any content which is prohibited by this Policy, including to prevent harm to others or to us or the Website and Services, as determined by us in our sole discretion.

- Reporting violations to law enforcement as determined by us in our sole discretion.


A backup of User's data may be requested, however, we may not be able to provide you with one and, as such, you are strongly encouraged to take your own backups.


Nothing contained in this Policy shall be construed to limit our actions or remedies in any way with respect to any of the prohibited activities. We reserve the right to take any and all additional actions we may deem appropriate with respect to such activities, including without limitation taking action to recover the costs and expenses of identifying offenders and removing them from the Website and Services, and levying cancellation charges to cover our costs. In addition, we reserve at all times all rights and remedies available to us with respect to such activities at law or in equity.


Reporting violations


If you have discovered and would like to report a violation of this Policy, please contact us immediately. We will investigate the situation and provide you with full assistance.


Changes and amendments


We reserve the right to modify this Policy or its terms relating to the Website and Services at any time, effective upon posting of an updated version of this Policy on the Website. When we do, we will revise the updated date at the bottom of this page. Continued use of the Website and Services after any such changes shall constitute your consent to such changes.


Acceptance of this policy


You acknowledge that you have read this Policy and agree to all its terms and conditions. By accessing and using the Website and Services you agree to be bound by this Policy. If you do not agree to abide by the terms of this Policy, you are not authorized to access or use the Website and Services.


Contacting us


If you would like to contact us to understand more about this Policy or wish to contact us concerning any matter relating to it, you may send an email to contact@redlab.dev


This document was last updated on July 28, 2020