Originally published on LinkedIn March 1, 2018
Over a decade ago, I had the privilege of meeting the UK’s former Prime Minister Mr. John Major. I asked him, will the U.K. ever join the Euro? Although, I recall his response, I cannot divulge. It will remain confidential. I didn’t think there would be a need to reference the encounter years later. On a different day, at the same place, I also met a finance legend and missed a media mogul; details at the end of the article, guess or scroll down.
Firstly, I would like to thank my Portuguese partners, and StartUp Portugal a governmental organization which helps entrepreneurs realize their dreams. StartUp Portugal’s achievements should be commended, and its template; emulated by countries globally to improve economic activity and increase GDP.
There’s no need to startup Europe because the continent has always had a vibrant and enterprising history, filled with what we call Startups today. Although, not devoid of peaks and troughs; the continent’s economic plane is flying at a normal altitude. It is functioning with the occasional bumpy union talk, immigration policy and right wing ideology in several countries. The U.S. might be synonymous with modern-day startups, however, Europe has also churned out successful companies e.g. Skype, Shazam, Spotify and others. Given UK’s allure, language, infrastructure, market size (65 million) and financial history, it attracted tons of startups. A disproportionate number focused on FinTech. However after UK’s decision not to join the Euro in the 90s and its 2016 Brexit announcement, the landscape shifted and continues to shake. Germany is the economic power house of Europe, hence moving there makes economic sense. It’s cheaper and it’s part of the European Union. Ireland with 12.5% is the best location for corporate tax.
Country in Focus
Portugal is the country in focus, and as recent as 2010 it faced a debilitating financial crisis. It’s part of the PIIGS: Portugal, Ireland, Italy and Greece. Portugal is now on a success path. It is Portugal 2.0, post bailout and the austerity period. It’s the story of a resilient economy which bounced back from tough economic times. 8 years ago, the media showed and reported how young people fled the country in thousands, 13% of graduates. A huge brain drain. We all know a country without its millennials is one without a future. Fortunately, things changed rather quickly. Some countries that experience pitfalls do not climb out for decades. I would like to say a special thanks to Pedro Mendes, the CEO of Invoice Capture. He’s the provenance of this entire journey.
Some might say Portugal’s GDP is only $204 Billion, why not focus on larger economies? Yes that’s accurate, however a multitude of factors went into the analysis before selecting Portugal. To contextualize, the country’s population is10M people, which is the size of NY morning commuters. However, the lifestyle is great because income goes further. $20,000 per capita is a math function of $204B divided by 10M people. People do earn more than $20,000. Clicking on Google’s interactive chart shows an upward growth trajectory. A large part can be attributed to entrepreneurship activity.
How Did Entrepreneurship Help?
Small businesses are the back bone of all economies, including the U.S., a few years ago during their financial crisis, a Portuguese gentleman went to the government and said entrepreneurship will startup the economy. Thank God! the government bought the idea. The Startup community referred to him as the Minister of Entrepreneurship.
Awareness & Strategy
Portugal kicked-away the conference from Ireland, and the success story continues. Securing Web Summit, the world’s largest conference, further raises Portugal’s profile.
CNBC: Portugal’s Minister of Economy Manuel Caldeira Cabral says it was a “great achievement” for Lisbon to secure 2016’s Web Summit event, while commenting on the country’s technological ecosystem. Click to watch the video
Startup Portugal The Organization
Enterprising individuals apply to StartUp Portugal, once selected, they receive €850 which is equivalent to $1,000. It’s a monthly stipend to keep entrepreneurs from starving while they code away. This means a lot to entrepreneurs globally. They invest thousands of hours/years and sacrifice everything; relationships, family, health and more. Most important, success or funding is not guaranteed. In his younger days Steve Jobs purposefully attended conferences which served food, because he had no money. In 1972 both Jobs and Wozniak worked for $3 per hour at the Westgate Mall in San Jose, California, where they had to dress up as Alice in Wonderland characters. It’s all about dedication to the dream. Elon Musk had his share of not sleeping on a bed too. There are tons of inhumane stories and paths that entrepreneurs traverse to get their glorious destination, if it happens. A delegation of Startups along with their government envoy came to the US in Dec 2017, sponsored by StartUp Portugal. They also went to the West Coast. The government is definitely going above and beyond. There’s also a €5,000 voucher, to be used at any of IAPMEI‘s 135 certified incubators. See full infographic
(1) Albeit lingua franca is Portuguese, about 32 percent speak English fluently.
(2) Cost of living is lower than Western Europe.
(3) Normal Seed funding $500k to $2M or Series A investment goes much further.
(4) Easy to enter other big Portuguese markets e.g., Brazil with 209 million inhabitants.
(5) Corporate Tax is 21%
(6) Tax incentive and Tax Abatement
(7) The weather is warm, and it’s easy to get around European offices.
(8) The con: operating in Europe is not easy because different countries speak different languages and have cultural nuances. Meaning more marketing dollars and resource for different countries. Hence the allure of a huge market with one language, the U.S.
(9) A small population of 10.3 million people has both positive, and not so positive elements. If a company creates a frequently used mid-priced product or service, it could end up owning the entire Portuguese market. That equates to consistent revenue and easier expansion opportunities.
(10) Compared to the U.S., European lifestyle and sensibilities will keep entrepreneurs sane while they code and conceptualize new business models.
Entrepreneurs I Met, and Featured Startups
Pedro Mendes, the CEO of Invoice Capture, the Co-Founders of TheHuub CEO & CMO and too many names to mention. The Huub guys are working on an online logistics solution which saves time and money for big retail brands. If you’re interested in the latest innovation from Portuguese startups, click this link. The list consist of 150 companies selected by StartUp Portugal to attend the 2017 Web Summit conference.
European Tech Events
The Next Web, Web Summit, LeWeb and Mobile World Congress are some of the biggest events in Europe. They’re all within short traveling distance, as mentioned, Web Summit is now in Portugal. Unfortunately, LeWeb halted operations in 2015.
Conclusion of the First Paragraph Above
At the same place, but not on the same day; I met the UK Prime Minister Mr. John Major, Henry Kravis and Oprah Winfrey was the media mogul I missed. I met legendary Wall St. deal maker and LBO financier Henry Kravis. If you’ve ever heard about RJ Nabisco, the chances are you may have heard of him. There’s a movie and book about him called “Barbarians at the Gate.” Instead of “Entrepreneurs Startup Europe” this article could have been titled “European Startup Entrepreneurs” if you prefer the alternate title and there’s enough comments to change it, I will. Comment on the title you prefer.
Some European entrepreneurial shows below, click the link to watch them.