I came to Berlin roughly 5 years ago before the investment started pouring in and most startups were existenz grundungs, this is when you get 50k from the government and you underpay some interns to build your MVP. It was pretty shabby back then, and things have changed dramatically in the intervening years, but most people came for this vague idea of living cheaply and doing what they want - you could say they washed up here as tourists and stayed. Not that there's anything wrong with that, but these people are being replaced with people coming here for startup jobs that pay real salaries. It used to be that ~500 euros a month was a good startup job, now it's more like 4-5k.
All of this change is happening while Berlins administration is still the bureaucratic and slow machine that it always has been, they haven't built affordable housing in 25 years, there's no plan on how to reduce congestion or prevent gentrification from wiping out existing communities. Registration takes ~3-5 months to get an appointment, god forbid you're a foreigner and have to also register at the ausländerbehörde and wait from 3am for the 1 of 50 tickets available that day.
It's nice that people still see a future here, but i take an issue with such a rosy picture of what it's like to live here, because it really isn't the case.
"Existenz grundung" just means "founding a company". It doesn't imply anything about grants being taken. What you're probably referring to is a "Gründerzuschuss", which is a form of unemployment payment which gives you about 60% of your former salary with a fixed amount of time to get out of unemployment benefits via founding your own company. It's only available to those that were previously full-time employees.
Also, it's horseshit that €500/month was a good salary 5 years ago. More like €3500/month. Rent is also still far cheaper in Berlin than virtually any other western European major city.
Apologies i meant eXist Gruenderstipendium [1]. I'm aware of the Gründerzuschuss but it's not what most tech startups at that time were funded on, specifically not the one i worked for during my initial 3 months in Berlin.
I should have mentioned the 500 was from a eXist funded startup and i worked at as an "intern" although i was qualified, i just wanted to keep myself fed until i found something that paid, but for internships that was a lot as most got ~300 or nothing, with 500 a month + coffee I could rent by day a bed off of WG gesucht and subsist on falafel. Back then the number of jobs in berlin was really minimal, i struggled to find anything so i moved to Munich.
My first registration was in Bürgeramt Wedding - appointment was scheduled one month before via Internet. There were lots of people waiting. Later on when I moved and had to register again, I tried to make an appointment, but it was impossible. My co-worker went to the Bürgeramt without appointment one hour before opening. Then he had to wait 3-4 hours. I went to Bürgeramt Pankow on Friday around 10:00 and there in 30 minutes it was done. It was not crowded. Later on when I asked around at work how is that, they told me that people seem to prefer to go to the nearest office (with hope that it will be quick enough) and wait several hours, than take 20-40 minutes of journey more and wait 0.5 an hour.
I got there at 7am, finally got sent 8 hours later. It's a mess and everybody knows it. The lady said everybody has quit or the desks were shut. You can't get an appointment in less than a 7 weeks and if you aren't angemeldet then you can't do anything. Life is on hold.
>Registration takes ~3-5 months to get an appointment, god forbid you're a foreigner and have to also register at the ausländerbehörde and wait from 3am for the 1 of 50 tickets available that day.
Your bureaucracy makes American bureaucracy seem amazingly efficient in comparison. I did not know such a thing was possible outside defunct communist states.
You can still make an appointment at the Ausländerbehörde (foreigner's office) a couple months in advance, and then you just have to show up on time. And as recently as a year ago, the last time I needed something same-day, showing up two hours before they opened (6 a.m.) was still enough to be at the front of the line. There were at that time not a fixed number of tickets for the day. Historically (meaning over the course of the decade I've lived in Berlin), if you needed an appointment same day, at any time, you'd usually wait less than two hours, no matter when you showed up. Much of this has worsened recently because of the refugee crisis, but it's a temporary overload of the system, not a systematic failure.
Where those figures come from is the time my gf had her wallet stolen with her blue card inside, she was travelling outside of the EU and needed to replace it or get a note asap otherwise she would have a lot of trouble re-entering the country. We queued up from 3am on monday morning at the Ausländerbehörde and were turned away by the administrator because my gf was officially registered in mecklin-vorpommmern and she had to travel there to get this temporary pass. Problem is, she could only take the first train on tuesday morning so she got there at ~9:30am, she was ticket 51, and the office only deals with 50 tickets a day. i kid you not. she was the last in the line as turned away at just pass 17:00, and told to come back tomorrow and try again.
in part it's since the refugee crisis, there just aren't enough skilled administrators in germany to handle the number of people migrating here. That said, once you've got the paperwork, things are relatively easy.
What i mean by registration is that you have to register where you live, to do that you'll need your passport, copy of the contract and a letter from the landlord saying you have the right to live there. Sounds easy, but then not many landlords will rent to you if you're not planning on staying a long time or you don't have a permanent contract for your job...
you need the registration for everything here, you don't really exist without it, you can't get health insurance, you can't pay tax, you can't be paid your salary by a company, and you'll find it hard to open a bank account.
This is a recent issue particular to Berlin caused primarily by a terrible "grand coalition" city government (which is about to be replaced), and then exacerbated somewhat by an influx of refugees. It should be gradually fixed in the near future.
The DMV is a pain as an American. Even if every worker in the DMV is diligent, helpful, and courteous, the DMV somehow conspires to make the whole process difficult. Go to the front desk. Fill out this form. Stand in that line. Get a stamp on the form. Stand in another line. Get another stamp, pay $5. Go stand on another line, get yet another stamp. Go back to the previous line, get photo taken, get endorsement on license. It's crazy.
Yes, but I was under the impression that getting a driver's license was kind of optional in Germany, with good public transport. Being a foreigner is not :)
The benefits she mentions are legitimate, even though two of them have nothing to do with Berlin and could be obtained by moving to any new city. (no distractions, and changing environment equals greater creativity)
So it really boils down to this for her: Berlin is affordable and it has a good meetup scene. Affordable is relative, salaries are lower in Berlin than in many other cities and the cost of living has been on a rise as more people move in, but at the moment she is absolutely right about this much: cost of living is still significantly lower in Berlin than in London (https://www.numbeo.com/cost-of-living/compare_cities.jsp?cou...) [1]
Depending on your product Berlin can be good or bad. I think its almost always a great fit if your product targets the German market initially and you want to eventually expand out from there. The other way around will be much more difficult, mainly because you're sitting in Germany and you're whole business side of operations must be run in German, under German law, rules, and regulations.
Having said this, as far as her specific product idea goes, I could see Berlin being a good fit for her. The super young hipster culture is pervasive throughout Berlin, and it seems like an idea that would work well in that market.
1. I worked on a German startup for 3 years in Berlin
Thanks - I agree with everything you've just said. The thing I didn't mention is that I love the Berlin culture. I knew I'd feel at home here. So there's a subjective reason too.
"My business is called The Echo Chamber Club — we curate articles that counter a traditional metropolitan viewpoint and send them to our hundreds of subscribers. It makes sense that I remove myself from London to understand new points of view and communicate them with my subscribers."
With regards to "liberal metropolitan" viewpoints, Berlin won't challenge you anymore than London did. It's just another global city where inside your group of people you are likely to meet (given what you work in) they will more than likely be liberal and metroplitan.
Hmmm I kind of disagree there. I'm having to make new friends and get out of my comfort zone. In time I'm going to start exploring other areas. I'm really keen to get collaborators on board for instance.
Nothing is perfect - this was just the best move for me at the time :)
Oh, you'll meet loads of great people and it is an experience getting out of your comfort zone and leaving behind old friends in the city you grew up in.
I was just meaning in regards to differing opinions to liberal metropolitanism it will be very similar to London. Best of luck in your endeavour!
I'm planning on moving from London to Berlin within 6 months (I'm British), and mostly for the same reasons (RIP fabric). I have a couple of German citizens as friends who are also seriously considering doing the same. My main concern is how to avoid joining the English-speaking bubble. Although nothing has charged my motivation for learning German more than the recent government responses to Brexit. It does feel a bit ironic that I'm fleeing to Germany from a fascist government.
Not exactly. But there are definitely overtones of nationalism and anti-liberalism in what ministers were saying at the Conservative party conference and in recent anti-immigration proposals. They're also insisting on denying MPs and the public a vote on the exact terms of our withdrawal when many people are calling the referendum irresponsible and the result a flippant protest. So currently "respecting" this vote is not exactly the height of liberal democracy either.
Why Western Europe if you want to get cost of living down and move somewhere ? Eastern Europe is 1/3 cost of living, usually has very good tax rates (Bulgaria has 10% flat tax on income + local tax for example, Hungary is close AFAIK) and there are startup accelerators trying to take advantage of that.
If you're using your own money to fund it and have customers who don't care about your location you'll have much easier time finding employees, especially non-technical staff like art/marketing/sales/customer support.
How do you define "very good tax rates" though? Is it the same thing as "low taxes"? Are high taxes in Northern Europe "bad taxes"?
Taxes are not theft you know, they're supposed to buy you and your fellow citizens things (health care, infrastructure, cheap education, services, etc), some of them highly beneficial to a startup.
Depends on what you need, but from a startup perspective they are stiffing and offer very little in return, if you're not dependent on the local market you're just increasing costs.
Proper health care, good infrastructure, all those sorts of thing can make a difference if the startup wants to have local employees - or even if the founder wants to benefit from them.
If we're talking about supporting a family then having subsidized nurseries, good pediatric care, schools, social support structures etc. are definitely worth it.
If we're talking about single healthy people working for equity trying to cut cost of living in hope of big payout down the road then the difference between 40% and 10% income tax is huge and you're not really getting much out of your taxes.
That said I would certainly consider Bratislava if I was moving East. Its proximity to Austria (Vienna in particular) means that you can, in many ways, have the best of both worlds.
I think in most capitals I've seen quality of life isn't that much worse, don't get me wrong it's not really on the same level as Paris or London (rural areas on the other hand - just don't make any random country trips on your own), but at the same time it's not like moving to Syria or something like that - for example I find Vienna to be quite unsafe and unappealing, compared to say Zagreb (related to that I actually know a guy who commutes from Bratislava to Vienna for work - the rent difference alone covers the commute).
It depends on what you want, but you can actually compete for staff even if you have < million € in seed capital, rent and office space is cheap, etc. if your goal is to bootstrap your company then moving to Eastern Europe can help you with that.
While the author makes good points about the relative affordability of Berlin, one does have to wonder what the general plan for newsletter profitability is.
Hey! I'm the author! This is pretty cool to be number one on Hacker News. The idea behind the newsletter is to build a brand which makes liberal metropolitans comfortable with hearing viewpoints outside their own. Then I can monetise it! :)
No offence intended as I enjoyed reading your article and it wasn't really about your business, but if a liberal metropolitan wanted to experience viewpoints outside their own, couldn't they just browse to dailymail.co.uk? It's free and monetised already.
If the idea is something more highbrow, again, surely they could just subscribe to the Telegraph? Or watch Fox News?
Or heck, just use reddit? Lots of different viewpoints there.
Providing people with news that violates their own political biases and then getting them to pay for it seems very difficult. The more open minded ones who are willing to pay for views different to their own have lots of places they can seek out such views already.
I would say that my target market aren't really familiar with twitter - let alone Reddit. Also it's just a time thing - I spend about 15 - 20 hours researching each newsletter.
It is affordable compare to London where the same thing it is probably 3 times more expensive.
There are other cities with more affordable prices (Athens) but obviously the startup environment is not the same there. But Berlin it is catching up with London, so it is worth to consider.
I've actually just moved offices in London, so I can say that it actually isn't much different. There's plenty of offices that are very comparable to that price.
Ah, my mistake. Though her estimate of £1300 is still a lot more than she'd actually have to pay. My room is in a central location and costs around £670pcm with bills. It's a pretty reasonable place, it's just not 5 minutes from a tube station, which is where they'll get you on the price.
From what I've heard Lisbon is about the same cost as Berlin. But the economy is worse, the tax system seems more complex and it's less accessible to foreigners. I guess the weather is nicer, but the location is worse. To legitimately compete with Berlin I think one really has to offer something special, otherwise Berlin wins by default in the low-medium cost category. Lisbon would still be on my shortlist for European bootstrap cities, but there are also at least half a dozen other cities that could be equivalent.
For people to choose something it first have to be a realistic option. Berlin is much more established as an international and "tech" city. You hear about people moving there all the time. For whatever problem you'll face there's bound to be someone else who has done it. When it comes to moving you don't want to be a pioneer and spend thousands of euros finding out if it's doable and ending up not liking it. Being in the same boat as other people helps with that uncertainty.
From what I could quickly find [1] there is nothing more expensive than London in Europe. And there is not a lot that is significantly cheaper than Berlin. At least in case of office space rent in major cities.
It's also very overpriced. I just moved into a new apartment and I am paying 9€/sqm cold in a very central location. This is very cheap. 11-14€ is more realistic, but even with utilities included you would never have to pay 24€/sqm.
That's extremely expensive for Berlin. 24 per Meter. 8 to 12 is considered expensive. 6 was the old standard. I pay 15 but I have top floor with balcony and skylights
Prices are obviously catching up. My 6-year old lease is about as much for 60m^2 (turn-of-the-century building in the center). But I fear the day when I need more space for children...
Dresden is even better. I moved from Houston, TX to Dresden and I'm very happy with my choice. Technically it's more interesting, as the University and high tech companies here are much more advanced (i.e the l4 microkernel is from here), prices are the same, and Dresden is a much more beautiful town than ugly Berlin. Lots of English speaking foreigners, and people are more friendly. For startup's there's only one or two meetup points and helpers/investors but still better than Houston or Austin.
If going for cheap, Wroclaw or Prague would be better.
> Dresden is a much more beautiful town than ugly Berlin.
That is certainly subjective (and offensive). I have not been to Dresden but I found Berlin to be quite an interesting aesthetic environment and hardly sore on the eyes. It has huge, lovely green parks and I find the wide open spaces throughout the town rather refreshing.
It's a big city, there are ugly parts, and there are pretty parts. Same for Dresden, it has some really lovely buildings, but anything that was built after the 50s is ugly as sin.
How much of Dresden was rebuilt 45-60 and how much was rebuilt later? I presume most land was made usable pretty quickly however I can't imagine they were high quality long term buildings.
He's probably talking about the side of Berlin that used to be under DDR rule. It's no secret, and certainly not offensive, to say that architecture during the Iron Curtain days was pretty horrible.
It's a highly vocal racist/xenophobic/sorta-nationalist movement that is based in Dresden. It started out as EU-criticism and has now grown more into a right-wing-fringe/anti-immigrant/anti-establishment movement focused on hating the media, the government, and anyone who doesn't side with them. They're famous for having invited speakers from the neonazi scene at their regular street rallies. The name literally translates to "patriotic europeans against the islamisation of the occident" (yes, really)
They are more dangerous than that. There are straight neonazis in there, but it is a broad spectrum from straight Nazi to the "besorgter Bürger" (concerned citizen), which is a meme in Germany for the new right and far-right. For obvious reasons it was previously socially unacceptable to voice these viewpoints out loud. Pegida and the AfD party changed that a bit and like everywhere else in Europe the right is on the rise in Germany.
Nevertheless I would not count on them surviving. The AfD constantly has to fight the Nazis in there, split itself in one German state (Bawü), wants to get rid of their subdivision in another state (Saarland) and has members from Nazi parties they have to exclude of all over the place. Meanwhile Merkel and the established parties already moved to the right and the refugee crisis is largely over - at least in Germany. Lately Merkel is even gaining in popularity polls again.
There is an important difference in that they don't act like neonazis typically do. Nevertheless I think it's even more important to keep in mind that despite what names people may assign to them, ideologically there is no notable distinction.
These are people who don't value freedom or equality. They are driven by hatred of anyone different from themselves and accept as moral only what confirms that hatred, sometimes bastardizing religion in the process.
They're not special. They are no different than the people so many have fought throughout human history to get the freedom and the approximation of equality we have reached today.
The only noteworthy thing about them is that they've shown that many people are too comfortable in their human rights. Those rights aren't natural and they aren't self-evident only our belief in them is. Human rights do require work not just to acquire but to maintain, wherever and whenever you are.
Genuine question, Whats the business model for The Echo Chamber Club? I've always seen newsletters as a marketing tool for a business, rather than a business itself. Very interested to how you'd make money with it as a standalone business.
Hey Tam - thanks for your question. So my target market don't generally want to hear the topics I'm posting. They have to trust that I'm as liberal as they are before they start taking me seriously.
So it became clear that the most important part of the ECC was to create a trusted brand.
Otherwise, I spent about a year trying to figure out a solution to the filter bubble. I was looking at RSS feeds, new types of algorithms, and it was all very complicated. The idea of a newsletter MVP made sense.
After I get to about 5k subscribers I'll be putting on events - with the aim of creating a B2B qualitative research firm. But that's a long way off - who knows where the journey will take me.
Feel free to add me on twitter so we can discuss more - would love your thoughts! @alicelthwaite
She must learn German. The thing with Berlin is that there are a lot of startups with foreign people, and a lot of Germans speak English. But when you want to do normal day things as going to the market you need German to understand what are you buying and to talk with the people. It is not like other countries where you cannot get a job or life if you don't speak the language. You can get a job in Berlin as a English speaker but you must learn the local language for the day to day things.
I agree, my experience after a week of work in Berlin was that a lot of the restaurants I visited, the waitress couldn't speak English at all. Or taking a cab was sometimes quite an effort to communicate as well.
Even more strange, Berlin (and perhaps much of Germany, I don't know), places much greater emphasis on cash than on electronic payments like credit cards. I gave a credit card to a vendor once and they looked like they couldn't figure out what it was. In fact, as they were trying to understand it, I motioned that they were in fact studying it upside down! Other restaurants would tell me it was the first credit card they had seen in weeks, and the owner simply hadn't bothered to bring the credit card machine in from his house in a long time. Not a problem, just a bit strange to me.
Berlin is a neat place, though, and I love German food (and beer) a lot, but it cannot be overstated how you quickly come to realize that you currently take for granted speaking the same language as everyone around you, and unless you know German already, that convenience will evaporate immediately upon moving there. Even all the Holywood movies and U.S. TV shows are dubbed into German -- it is the largest overdub market in the entertainment industry, because Germans generally place low emphasis on learning other languages (just like Americans do).
Cash is much more popular however another big factor is that credit cards aren't really a thing. Instead Germany has its own system of EC cards which are directly tied to your bank account (which most people get as a child here) and work more like debit cards.
The only reason to have a credit card as a German is for buying this outside of Germany.
I've just moved to Netherlands and noticed this. Cash & Maestro (Debit) cards are the norm here.
Credit cards aren't any more popular in the UK, but our debit cards tend to be Visa/Mastercard and we use them the same way. I think mainland Europe has some catching up to do to London as far as being a cashless society :)
Do we really need to put Visa/Mastercard in front of every transaction if we already have model working exactly the same way from a customers point of view?
I would say the opposite is true: If you need Visa/Mastercard, your country's banking system is broken. Sending cheques via physical mail is something nobody would even think of over here. I think I have never even seen one.
I live in Germany, and I always wondered: how Germans buy online and/or book hotels/tickets online, if most of them don't have credit cards and only have this EC-Karte?
This differs quite a big on the size of the respective business (of sales).
Amazon.de e.g. offers the choice of
* credit card (as internationally)
* direct withdrawal (meaning you give them your bank account details and they withdraw the amount directly - sort of sketchy from the customer's point of view, but no different from credit cards - if anything goes awry, you just challenge the charge directly with the bank instead of the card issuer)
* bill-based (generally only for small amounts or trusted customers - might involve a "credit score" check from Schufa (https://en.wikipedia.org/wiki/Schufa) to deter fraud)
I have a credit card for that, but if I have the option, I always use Paypal. There are often other payment options though, like "Sofortüberweisung", paying on account or SEPA bank transfers (the last two more typically for b2b though).
> because Germans generally place low emphasis on learning other languages (just like Americans do)
I agree with everything you say, except that. Older people form Eastern Germany obviously did not learn English in school.
In Germany it is not like the Netherlands or the Nordic countries, but I would say in Western Germany you have a much higher chance to meet people who can speak English or French at a decent level than you have in France or Italy to find someone speaking English or German. And that is inspite of the German market being much bigger and people from Eastern or Northern Europe also often being able to speak German.
Of all highschool student exchanges to France or Britain I know of, the students ended up speaking the other language, not German. I remember a neighbour had an exchange student from England over at his home. He supposedly learned German in school, but just repeated his sentence "Um 5 Uhr fährt der Zug nach Berlin.". This really changed my perspective on the foreign language education in Germany.
Learning enough German for daily things is probably not a problem at all, but can you deal with authorities (business licenses, taxes, mandatory reports etc) in English or very broken German?
Many speak english (except, for some reason, those at the immigration desk). Other stuff can be done online, in English. If people are really nervous, they usually find someone to come along and translate, or they meet someone in the waiting room.
To be honest, those things can be pretty involved here even for me as German, so it probably makes sense to just use someone who does that as a service (obvious for taxes, but most likely also available for business registration etc) rather than investing your time in understand bureaucratic German.
Hi there - I'm the author of this piece. I don't actually speak German. I'm trying to improve - however, I wouldn't say it's required in Germany to start something on your own. Many of the meetups are in English and everyone I've spoken to is fluent. I think it's another story if you're trying to get a job though...
Registering a business is literally going to the "Gewerbeamt" and answering their questions about what you want to do. You will then be contacted by the tax authorities. I would then just search for a tax adviser, who speaks English.
If you want to incorporate a business, you do not necessarily have to do it in Germany, it is the EU after all.
Why not start a business in Central or South Eastern Europe? Most cities are even cheaper than Berlin and still open to young people. Plus people are fluent in Englush, except maybe in Hungary.
Generally the cities tend to be too small, too expensive (for what you get) or not international enough. More than anything "even cheaper" doesn't necessarily matter, around €750 is pretty much the sweet spot in terms of cost of living. Ljubljana seems pretty nice though.
Before I click the link: Berlin is cheaper than London.
Edit: And I was right, haha.
While London is one of the most expensive cities in the world, Berlin is cheap for German conditions. At least the parts that haven't been gentrified yet ;)
Berlin is really cool and has lots of alternative people and seems to be the only german city with a bigger start-up scene, but it's poor AF. I'm living in Stuttgart and while I prefer to hang in Berlin, the money is in the south.
The benefit of "cheap" in that context isn't just that you save money - it allows people much more freedom. There are lots of people working on "interesting project" up to "wild idea of a madman" because they don't have to work 60h/week to pay rent. That creates a pretty good mood, even for people choosing a more traditional career.
The peculiarity of Berlin is that it has lower cost than many other German cities.
This is unusual, because typically you pay a premium for working in the capital of the nation. In Berlin, that is explained by the history (West Berlin was an enclave within DDR and the capital of BRD was in Bonn; Berlin was subsidized and had lots of relatively cheap housing which is not yet fully priced up 25 years after German unification).
If your customer is a German business, and you would like to visit them, it's very likely their headquarters are in West Germany, which is far away. So you don't have much country offices of multinational companies in Berlin. It's very different from other countries' biggest cities.
I guess it works better for pure internet companies that sell directly to consumers.
This is true, but I expect the situation will slowly change, and more business will concentrate in Berlin, because the federal administration is a big customer now that more of it is relocating in Berlin.
I came to Berlin roughly 5 years ago before the investment started pouring in and most startups were existenz grundungs, this is when you get 50k from the government and you underpay some interns to build your MVP. It was pretty shabby back then, and things have changed dramatically in the intervening years, but most people came for this vague idea of living cheaply and doing what they want - you could say they washed up here as tourists and stayed. Not that there's anything wrong with that, but these people are being replaced with people coming here for startup jobs that pay real salaries. It used to be that ~500 euros a month was a good startup job, now it's more like 4-5k.
All of this change is happening while Berlins administration is still the bureaucratic and slow machine that it always has been, they haven't built affordable housing in 25 years, there's no plan on how to reduce congestion or prevent gentrification from wiping out existing communities. Registration takes ~3-5 months to get an appointment, god forbid you're a foreigner and have to also register at the ausländerbehörde and wait from 3am for the 1 of 50 tickets available that day.
It's nice that people still see a future here, but i take an issue with such a rosy picture of what it's like to live here, because it really isn't the case.