Lisbon Startup Success
09 July 2014

Lisbon: a Startup Success Story?

There is a bridge in Lisbon that reminds everyone of San Francisco’s Golden Gate. But it isn’t – it was not even constructed by the same company. And it is not the only reason why Lisbon gets sometimes compared to the world’s startup capital: there is a entrepreneurial movement, even noticed by international media like Financial Times or Bloomberg, going on there.

At EYIF we also think there are good reasons to watch out Lisbon as a startup hub: in fact, Lisbon was recently distinguished as an entrepreneurial region by the European Comission. 

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– There is space (and support) for local startups. One building in downtown, the other just half an hour walking far from there and a third one coming soon. Startup Lisboa is the incubator of the city, where entrepreneurs (digital ornot!) gather together to create and build products once they are accepted to get in.  It is not a coworking space, it is an incubator program that supports and connects startups with partners and investors. Opened in 2012, it now claims to have the highest density of startup incubation in Europe (if that’s a way to measure it!): it is the home for 80 startups and around 250 people. 20 of them, they say, have already expanded to international markets.

– Investment is growing. If we compare Portugal with other European countries, venture capital investment remains low. In 2013, 20 $ million dollars were invested in companies – while in, let’s put the neighboor country, Spain, there were almost 150 (this is data from OECD, which does not represent all the investment done but does an approach, specially if we want to compare).

But… still. As reported by Bloomberg, “venture funding is also growing. Portugal Ventures plans to invest 20 million euros in 2013”, while the fund had 600 millions under management to keep investing. Again and again: of course it’s not all about money, but access to finance – specially to this kind of financing for innovative companies – is important to develop a startup ecosystem.

– Crisis, and youth unemployment, have hit hard. 16,9% of the youth people face unemployment. We have heard this before in countries affected by the economic crisis, such as Spain or Greece: lack of opportunities leads to a general message of encouraging people to try and create their own ones. Or at least that’s what Beta-I cofounder, Pedro Rocha Vieira, also said in an interview. “The crisis is forcing a highly skilled workforce that used to work for other to build their own companies”.

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– Failure is embraced. Unbabel is a human-edited translation machine, a platform whose ultimate goal is to translate “all the content of the internet” (by combining machine-learning autotranslation with crowdsourced human edition). Not only that. Unbabel – backed by YCombinator, one of the most respected accelerators in the USA – is the fourth startup of Vasco Pedro, a 37 year old entrepreneur that in 2006 decided to work in their own projects rather than in big companies.

He launched Mindkin, a gaming and networking website, in 2006. Closed it after a year and a half. Started Begifter, to suggest clothes online, in 2007. Closed it in 2008. Launched Bueda, a semantic matching engine that enables the creation of smarter applications, in 2009. Bueda raised about $200,000, but the product never succeed. By that time, another company was about to buy it but it never happened. Pedro Vasco was in the USA and decided to return to Portugal. Then he went for a weekend to the beach with three more friends – John Grace, Hugo Silva, Bruno Silva and Sofia Pessanha – and from that reunion the fourth startup was born: Unbabel. It is now growing 40% per week.

The whole story was featured in El Observador, Portugese newspaper. What’s different this time? The team, he says, and the experience from the rest of the projects. “The projects were well developed, there was great effort on them but did not result for reasons unrelated to the founders. I think failure contributes to personal growth and increases the likelihood of success”.

And Pedro Vasco is not the only entrepreneur who talks openly about failure. Just to give another example: João Romão is the founder of GetSocial, a platform that was born from Wishareit. “Wishareit failed. I failed”, he writes. “Yes, failing sucks: your energies get drained, your motivation levels hit new lows and everything is grey, rainy and sad. However, I honestly believe that failure (or having failed) can work in your favor and help you see, think and feel clearer across your paths and journeys”. Apart from sharing the experiencia of failure, Romão shares  mistakes, so others can learn from that.

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– Portugal still needs a success story, but has a lot to offer to startups. So there’s space, there’s people looking forward to do things – there’s good weather and cheap prizes compared to other startup capitals. There is not fear of failure (or at least there is not as much as in other european countries). There is support, and some money flowing. “We don’t know how to accelerate startups and we don’t have capital to finance these companies. What we do have is plenty of land and empty buildings for companies”, says the city mayor.

What others have noticed in Lisbon is humility to pitch their story out. Chad O’Connor is a writer who traveled along european startup hubs to compare how they are doing.In his Portugal storyhe writes that “I was frequently told by those I talked to here that Portugal has not done a very good job of getting its story out there, that its people are humble and need to do a better job of pitching all  that the country has to offer, especially when it comes to a vibrant international and welcoming culture with a strong quality of life”.

Will Lisbon place its pitch out there and become a relevant startup hub? As always, this needs time and the entrepreneurial culture in Europe in general is kind of starting up (as well!). “Perhaps the growing influence of this newly emerging startup culture will help to get some of that story out there on its own, or perhaps more investors need to be courted to come see the opportunities that are here on the ground”, notes. “In either case, one thing is certain, Portugal seems well on its way to becoming a fine place to launch and grow a startup”.