Hamburg has long been a wealthy city, going right back to the times when it headed the Hanseatic League. Much of this wealth remains in the possession of long-established companies and old families. Adhering to values going back generations, this inner circle of elders is said to be sworn to a codex of honesty and honour, is characterised by understatement, favour action over words, and tend to be sceptical of new ideas and people from outside their ranks. Against that background – the old money, scepticism of lofty ideas in favour of tried and tested solutions, the inner circle of trusted friends – it might seem implausible for Hamburg to become a paradise for startups, or a hive of disruption and innovation. People from abroad might be especially wary.
A city of paradoxes
But Hamburg is a city of paradoxes: this city of no-nonsense sailors, tradespeople and port-workers is also Germany’s media capital with its ad agencies and media empires who deal not in goods but the very words, ideas and imagery that ought to bring Hamburgers out in a rash. Or take the fierce rivalry between its football teams HSV and St. Pauli, and the beers that they drink according to their allegiance (HSV fans drink Holsten, St. Pauli supporters choose Astra). Or the city that prides itself on its understatement, but claims to be “the most beautiful city in the world”. I met with two ladies who have dedicated themselves to squaring that circle: Sina Gritzuhn and Sanja Stankovic. Together with Korean-born Tim Jaudszims, they founded Hamburg Startups this year because they feel that Hamburg’s startup scene is being denied its fair share of attention. I was keen to find out from them why people should think again about Hamburg as a startup city, and what role international people play in the scene.
Sanja Stankovic is a Hamburger born and bred. Sanja has worked for several years in digital media and online PR for companies such as Nordpol + PR Division, segmenta PR and Navigon. She is a founding member of the Digital Media Women, a network of female digital media professionals that promotes the visibility of women in digital industries by organising networking events and seminars and calling for better representation of women on panels at tech conferences. The network has grown beyond Hamburg and now has representations in all major German cities. She initiated the startups@reeperbahn pitching competition in her role as Strategic Curator and Advisor to the Reeperbahn Festival (a longstanding music festival along Hamburg’s red light district), which led her to jointly found Hamburg Startups with Sina Gritzuhn and Tim Jaudszims. I know Sanja through my work for the Social Media Week Hamburg when she served on the Advisory Board.
Sina Gritzuhn came to Hamburg in 2001 to work as a management assistant at the Financial Times Deutschland. She went on to study Journalism and Communications at the University of Hamburg, after which she worked for various startups as a PR and Social Media Manager. Sina has long since written about startups on her personal blog, Sina’s Welt, describing herself as an evangelist for Hamburg’s startup scene. She wanted to start an inventory containing regularly updated information about Hamburg’s startups in order to help the startup scene achieve the visibility that it was lacking, but this meant she had to give up her day job and make her hobby into her profession. Since co-founding Hamburg Startups early this year she has been chiefly responsible for the Startups Monitor and is their “roving reporter”, writing most of the social media updates and blog articles.
Why Hamburg Startups?
Finding an exact definition of a startup is like trying to nail jelly to a wall. But the “elephant test” would appear to apply to the identification of startups: it’s difficult to describe exactly what one is, but you know one when you see one. Some of the elephants of the Hamburg startups scene are Jimdo, which enables people without technical knowledge to create websites; Xing, a business networking application that is extremely successful in the German-speaking world; and Protonet, which recently set a world record for raising one million dollars in the shortest time via crowd-funding. Then there are BigPoint and GoodGames, two games producers who have achieved considerable international success. For Sanja and Sina, innovation – whether in the business model employed, in the product itself or the means of delivering it – is the essence of a startup. Sanja said:
Startups are in some way disruptive, are geared towards growth, and are young. They are as important to the economy as art is to society generally.
The Startup Monitor, a crowd-sourced database of Hamburg’s Startups for which Sina is chiefly responsible, keeps the definition as loose as possible so as not to exclude startups. Sina had the idea for creating an inventory of Hamburg’s startups when she was working full-time as a PR and Social Media manager. She had worked at several startups after gaining a degree in Journalism and Communications in Hamburg, which piqued her interest.
I blogged about startups in Hamburg in my free time and had the idea for a startup monitor, which I spoke to Tim about. We decided that it would need to be updated regularly – we are planning to do so every three months – and this would realistically be a full-time job.
Around the same time, Sanja and Tim were working together on the startups@reeperbahn project, a pitching competition that takes place during the Reeperbahn Festival. The Reeperbahn Festival is a music festival that has been extended to include a conference about topics surrounding digital media, which Sanja curates. When they found out about each other’s ideas, they decided to throw in their lots together and founded Hamburg Startups. Besides maintaining the Startup Monitor, Sina, Sanja and Tim promote Hamburg’s startup scene in order to give it the visibility they think it deserves and to facilitate networking between founders. Mixer events and pitching competitions are aimed at doing just this and they use online media such as the blog to report on new developments and important players within the scene.
Startups, says Sanja, are to the economy what artists are to culture: they are on the cutting edge of new technology and practices, challenging and redefining accepted norms:
If you look at startups like Jimdo or Goodgames, they are completely different from traditional companies. Their ways of working, even their offices are completely new.
Sanja says that disruption of old structures within the music industry has led to democratisation and, at management level, proceeds are distributed more fairly than before. Hamburg Startups bridges the gap between “old Hamburg” and the budding entrepreneurs, who have the education and ideas but not necessarily the capital to put their ideas into action. They tell me that investors from Hamburg are typically cautious about investing money and want to see solid business plans that demonstrate how their money will yield a return. This kind of tough love perhaps explains why Hamburg’s startups are said to enjoy more long-term success than those elsewhere.
In terms of the number of newly-founded companies, Hamburg is Germany’s second most prolific city, both per person and in absolute terms. But many people say that Hamburg is the place where successful, sustainable startups are founded, citing the examples I mentioned above. Sanja explains:
Tradespeople in Hamburg like to say “nicht lang schnacken, einfach machen” – don’t waste time talking, just do it. Perhaps that’s why Hamburg’s founders eschew hype in favour of concrete results.
As a city with high living costs and high business costs – the markets for labour, office space and living space is more competitive than elsewhere – Hamburg would at first sight seem a difficult place to start a business. Add to this the comparative lack of financial support for startups in the form of public subsidies. As Sina says:
If you start a company in Hamburg, you really have to want it because of the high costs and the difficulty of getting investment from Hamburg’s elders. But it means that Hamburg founders are determined and ultimately successful.
The startup scene that Sanja, Sina and Tim are fostering is generally welcoming and supportive. Sina says:
There is a Facebook group for startups in Hamburg and people are very willing to help each other there. You always get an answer if you ask for help and people are genuinely happy when others succeed.
Despite the relative lack of public finance for startups, there are a number of initiatives at universities encouraging graduates to start companies. These include the Startup Dock at the Hamburg Technical University, of which Hamburg Startups co-founder Tim Jaudszims is the director. Offering support and encouragement to young people to take the leap into uncertainty and start a company is their central role. But from what Sina and Sanja told me, the startup scene’s greatest asset is the startup scene itself. The networking, mutual support, sharing of knowledge and the loyalty that mirror the modus operandi of Hamburg’s more established elite.
A topic that is mentioned in many other Why Hamburg? interviews cropped up here as well: diversity. This is no surprise, given Sanja’s role as founder of the Digital Media Women. It is also a topic that is sorely neglected in the startup hubs across the world and in the tech industry in general. Largely thanks to the influence of the Digital Media Women, it is becoming very uncomfortable for conferences in Hamburg to host discussions involving only men. Although the investors in the startup scene appear to be mostly male (of the 14 investors listed in the “Who’s who?” section of the Hamburg Startups website, only one is female) the scene itself is more diverse (roughly 25% of the “All Stars” in the same section are female). What is it about the Hamburg approach that promotes diversity? Sina answered:
Because Sanja and I are female, we are more able to reach out to women and engage them. An all male team would not be able to do that.
Sina told me about the problems that women in Germany still have in starting companies. Society here is quite old-fashioned in its views on the role of women, meaning that there is still less acceptance of women starting companies. And at the moment there aren’t enough female role-models in the tech industry, although initiatives like AppCamps are changing that by encouraging girls to code. It has to be said that Silicon Valley has a severe gender issue, so if anything with organisations like the Digital Media Women, Hamburg is leading the way. But diversity isn’t just about gender diversity. Readers of this blog will be interested in the role of internationals too. For international people, Hamburg may be a difficult place to get a foot in the door. The number of events in English is far lower than in Berlin, Sanja and Sina admitting that the scene is still quite German. Add to that the impenetrable circles of power in Hamburg. That’s not to say it’s impossible. Ana, whom I interviewed for this blog, shows that there are startups with very international teams and it’s not all bad – Sina tells me about another another Hamburg dichotomy:
Hamburg is a difficult place to make friends but when you find them, you have friends for life.
Having said that, Hamburg’s scene could be made more penetrable for internationals. This would be positive because diversity of a team, especially the breadth of skills and experience present, is crucial to a startup’s success. As Sanja says:
The reason that most startups fail is a lack of diversity. For example a team of great engineers needs someone who knows about marketing. Investors are usually more interested in the team than the idea.
Two banks of the same river
At the start of this article, I described a number of Hamburg’s apparent contradictions. I mentioned the city’s two most famous beers, Astra and Holsten. Astra is the tipple of more unconventional, outgoing, and left-wing St. Pauli supporters; Holsten, the preserve of down-to-earth, more conservative HSV fans. The tongue-in-cheek Astra advertising campaigns are characterised by tattooed, scantily clad women and by toothless down-and-outs, and are mostly set around the red light district. The Holsten ads revolve mainly around football, are relatively humourless and appeal to straight-laced men who don’t like talking about their feelings. But guess what? Astra and Holsten are brewed by the same brewery and the same ad agency is responsible for these wildly different campaigns. Apparently polar opposites, but in some ways two banks of the same river. Where rivers are concerned, Hamburg has something else up its sleeve: more bridges than Venice. Yes, Hamburg is a tough place to start a business, and yes, to some degree you are left to sink or swim here. But people like Sina and Sanja are two of those many bridges that maintain a steady flow of traffic between the two banks of a dichotomous and sometimes ideosynchratic Hamburg.