A short status quo, from inside tech entrepreneurship by Simon Schaefer.

1. A short status quo, from inside tech entrepreneurship
Berlin, Septmber 17th

2. This presentation is written from the perspective of an
entrepreneur, an advisor and angel investor to many
young companies.
One result of my experience is the Factory Campus in
Berlin, in a very early stage Ecosystem, not only
bringing together Startups at various stages, but also
policy makers, academia and corporations to more
directly develop innovative products.
This diversity and interaction is designed to positively
impact the local and eventually the European economy.
www.Factoryberlin.com

3. Assumptions

4. Innovation Through Entrepreneurship (ITE)
The transformation of society and innovation in the
digital industrialization is largely driven by the
consumer’s choice of products, and the immediate
iteration through direct interaction with its creators.
Innovation therefore is happening in an “open-heart-operation”:
small and agile companies have the means
to create better products successfully gathering
immediate feedback for faster and more targeted
business development.

5. The verticalisation of the digital
economy is changing: ITE in the future is not
in social, hardware, or health tech alone,
it is where all these things are being
interconnected.
The rise of the “Internet of Things” and
“Industry 4.0” as a result is an early
indicator for this change in the ITE
landscape.
Entrepreneurship is the driving
mechanism connecting verticals

6. Successful ITE is a question of scale: thousands of companies need to be created
and most of them will fail in order for the unicorns of tomorrow to succeed.

7. S.W.O.T.
On the ITE Ecosystem

8. Strength
The cultural diversity of the European Union
can positively impact building truly global
companies.
Entrepreneurs require support and
incentives to understand that early
internationalization in Europe is an
opportunity to build global companies in a
very large home market. Europe, currently
recognized as a challenge in
Entrepreneurship, could be redefined as its
most significant strength.

9. Weakness
The most apparent EU weakness is the
lack of an integrated market.
A successful European rollout of a
product and addressing a European
market from start is not today`s priority
when scaling a fast
growing business.

10. Opportunity
A strong focus and support for early stage (scale!)
and incentivizing cultural diversity as an
opportunity to build businesses inside Europe that
can then easily scale globally is the real
opportunity at hand.
Utmost innovative policies can make that possible,
and the political awareness of the need of a strong
European Digital Ecosystem as a continental
counter balance has never been greater in the
member states.

11. Threat
The current privacy uproar in member states and a
lack of understanding in the political sphere of the
digital economy could lead to a nationalization of
the Digital Economy activities.
This could even gather local support from national
tech players such as telecommunication
companies, prohibiting innovation at scale in
Europe as a continent.
“The Open Internet” and “One European Market” -
as visionary as they still seem - are a prerequisite
for all activities in the future of ITE in Europe, and if
not successfully implemented the
most immanent threat.

12. ITE Ecosystem
The three key contributors and their roles

13. Policy
Policy can make or break the future of the ITE Ecosystem: creating a legal and social
framework that not only supports but increasingly incentivizes all stages of
Entrepreneurship individually is a huge opportunity.
The first requirement is for policy makers to understand the Digital Economy, to not
overregulate the Internet, and prevent nationally containing activities in the member
states. The speed for implementation of new ideas in policy making for the ITE
Ecosystem needs to be highly intensified.

14. Academia
The academic world has the task to not only educate people in becoming
Entrepreneurs, but also for Scientists to open up their magic box of potential products
in research status to Founders.
The Academic Institutions need to become more entrepreneurial in that: not only
moderating the aforementioned process but also participating in risk and thus
generating additional funding at scale.

15. Entrepreneurs & Corporations
Successful Entrepreneurs have to take the time for extensive exchange with policy
makers, to help design a functioning framework with their knowledge. Founders need
to be incentivized, but also actively accept the challenge of early internationalization of
their products in a culturally diverse and huge market: Europe.
Large Corporations in Europe have the responsibility to participate in the ITE Ecosys-tem:
not only to adopt to the changing landscape, but to support innovation for their
home market and actively further support an intercontinental balance, with a long term
Return On Investment strategy.
Our society has to adopt culturally for people to undertake the challenge of founding a
business more often, for the ITE Ecosystem to function at scale.

16. Conclusion

17. If anything by 2020 we could hear investors globally say to Founders: “If you want to build a global
company, start in Europe.” Today you hear: “Move to the Valley, or find local money.”
We believe scale at early stage and thus Innovation Through Entrepreneurship not only creates the jobs
we need, but has the potential to transform our European society responsibly, creating wealth and
distributing knowledge.
To positively influence the development of ITE one has to think outside of the box like an innovator,
have the guts to experiment like a Founder, and iterate like an Entrepreneur along the path of
success.
One has to “eat your own dog food”.

18. Further Readings & Publications

19. Policy Brief on the Startup Ecosystem from Germany
A key finding of the group Forum Digitale Agenda is, that creating a regulatory definition in law textbooks to define
startups, similar to the definition of SMB‘s that has widely been adopted by the member states, would significantly
boost early stage growth and thus Innovation Through Entrepreneurship.
The policy brief has been published here: http://www.stiftung-nv.de/152485,1031,111427,-1.aspx
1 A startup can defined as every lawful business, that
1.1 is funded at least 80% by its own capital or similar matters
1.2 (i) does not have more that [30] employees and was not
founded more than five years ago; or (ii) shows a significant
growth in employees, volume of sales, or profit with in a
period of 24 months
1.3 has increased its volume of sales or profit by a minimum of x%

20. Policy Brief on Fostering a Startup Ecosystem by Up Global
While supporting thousands of community leaders over the past six years, UP Global has consistently found itself
at the center of larger conversations about what makes entrepreneurial ecosystems thrive.
Fundamentally, the goal is to provide a global framework for these conversations, that can be adapted to support
the unique efforts of the community leaders and entrepreneurs - wherever they may be.
The white paper has been published here:
http://blog.up.co/2014/09/08/white-paper-announcing-5-ingredients-fostering-thriving-startup-ecosystem/
Talent Density
Programs like the proposed US “Startup Visa” and
Startup Chile, the government’s successful pilot
program to bring global innovators to contribute to
their economy, are ways governments can invest
in human capital.
Supporting innovation hubs as we have seen in
New York and Berlin, driving private sector invest -
ment in Tech City in London, and creating physical
hubs such as iHub in Nairobi can foster startup
density.
Culture Capital Regulatory Environment
By celebrating failure through conferences like
Failcon, opening a dialogue between entrepre -
Israel’s subsidized incubator programs provide
neurs and policymakers like the breakfasts at 10
access to capital, which is critical for new and
Downing Street have done, and promoting jobs for
growing businesses.
startups, governments can help create an entre -
preneurial culture.
Finally, a stable, predictable, and supportive reg -
ulatory environment is crucial to creating the nec -
essary conditions for a thriving startup ecosystem.
Tax policies can help companies start and grow,
safe harbors allow companies to flourish, the free
flow of information enables companies to com -
pete globally, and intellectual property protection
with flexible limitations to copyright and patent
protections support innovation.

21. Study on german ecosystem by KPMG BvDS
The study DSM has been published here:
http://deutscherstartupmonitor.de/fileadmin/dsm/dsm-14/DSM-2014.pdf

22. Study on Berlin ecosystem by McKinsey
The study „Berlin Gründet“ has been published here:
http://www.mckinsey.de/berlin-gruendet
Berliner Arbeitsmarkt – mit Gründungsinitiativen die von „Berlin 2020“ prognostizierten 500.000 Arbeitsplätze erreichen
Erwartete Arbeitsmarktentwicklung in Berlin
Zusätzliche sozialversicherungspflichtig Beschäftigte seit 2010
QUELLE: Bundesagentur für Arbeit; McKinsey
100.000 neue
Jobs durch
Initiativen
2010 2020
Ziel:
500.000
+3,1% p.a.
430.000 neue
Jobs durch
Fortschrei-bung
der
aktuellen
Wachstums-dynamik
Rund 40.000 neue
Arbeitsplätze in inno-vativen
Branchen durch
1. Erhöhung der Neu-gründungsquote
2. Senkung der Liqui-dationsquote
bei
Start-ups
3. Beschleunigtes
Mitarbeiterwachs-tum
in neuen und
bestehenden Start-ups
Rund 60.000 neue
Arbeitsplätze über
Multiplikatoreffekt1
1 Jeder neue Arbeitsplatz in einer hochproduktiven Branche schafft die Basis für 2 - 3 weitere Arbeitsplätze

23. Thank you.
Contact simon@factoryberlin.com