TechCrunch Disrupt, the legendary pitch event from Silicon Valley, landed in Berlin for two exciting days this week. Beyond showcasing the most innovative up-and-coming startups out of Europe, the event brought together international investors, big industry players, and of course Berlin tech scene regulars to talk about the issues facing ventures on both sides of the pond. We were on the scene – here’s what we brought home with us:
1. All eyes are on blockchain, but the killer applications are still at least a few years out
A big chunk of the program focused on the buzzword-of-the-moment: blockchain. What is it, where is it going, how is it going to change things? Unfortunately, current answers to these questions are as varied as they are vague, because use cases for blockchain beyond cryptocurrencies are still in their kid shoes.
Blockchain is a foundational technology, which makes it possible to store value (monetary or virtual) and log transactions in a hard-linked, transparent, distributed record that’s near impossible to fake. Beyond its most visible use as the technology behind bitcoin, it’s seeing first applications in the advertising space as a way to trade inventory, prevent fraud, and flip the business models surrounding online advertising (check out Brave, XCHNG by Kochava and NYIAX for some examples).
The consensus during the many panels around blockchain is that initial coin offerings (ICOs) are mirroring the dotcom bubble. Essentially, it’s possible right now to make big profits on ICO startups that eventually fail. Not the most sustainable situation. Moving past this kind of speculative business model, investors are looking for companies developing the future basic infrastructure of blockchain in various industries. This infrastructure will lay the foundation for individual applications.
Speaking of apps: the other big roadblock to more mainstream blockchain adoption is UX. this kind of broad market acceptance is only likely to happen when applications emerge that people can use without needing a deep understanding of the “guts” of the technology.
Of course we’ve got our eyeballs on the marketing industry first and foremost, and we’re really excited about the potential here for applications that will change the space for the better – more transparency, less fraud, and hopefully happier brands and happier consumers. Time will tell!
2. Bitcoin may or may not be a bubble, but it’s probably not the Google of cryptocurrency
Getting more concrete about the blockchain topic – what’s going on with bitcoin? If you’re one of the lucky ones with a fat bitcoin wallet, do you sell it or save it? We don’t want to burst your bubble, but even the top minds of cryptocurrency investment are split. Half say bitcoin will reach 50K, the other half are ready to cut and run soon.
The bitcoin bubble is making people nervous, but the upside is the visibility – bitcoin’s astronomical rise in value has made it impossible for traditional players like regulators and banks to ignore. The conversation around cryptocurrency has long since passed its niche phase and is now happening around boardroom tables.
Even if the bubble bursts, experts agree there’s a real possibility the giants of the industry (future Googles and Amazons), might emerge from the rubble. It just might not be bitcoin, with its serious inefficiencies in transaction times and costs. The theory is, as soon as a player comes along that can achieve fast transactions and can work together with tax and regulatory systems, then we’ll have our cryptocurrency-Google.
3. Women are big tech consumers, and the industry is missing out on the opportunity
Another big focus at Disrupt was femtech. From Berlin hometown favorite Clue, to hardware startup Elvie, to pitch champion Lia – there was an impressive presence of technology developed by women, for women. When women drive far over half of all purchasing decisions (between 65 and 80%, depending on which study you read) and represent over half of the global population, they can hardly be considered a minority group. Still, even today, female founders face investors who “just don’t get it” or “think it’s too niche” – these are quotes from the personal experience of some of the amazing female founders onstage, and this is 2017.
In tech especially, women have been historically ignored as a consumer group, certainly in part due to the male-dominated scene of investors, product guys and engineers, who don’t have this target group’s needs at the front of their minds. Luckily this is changing. With more female founders, software developers and investors leading the way as role models, businesses are emerging with truly high-tech, elegant products that take women seriously as early adopters. And it’s not just out of a sense of social responsibility (though this should be enough) – the money talks, and so does the growing success of these ventures.
4. The Berlin tech scene is finally coming into its own
The last time TechCrunch Disrupt hit Berlin was four years ago. In those few years, the tech scene has seen rapid development, transforming with it the face of the city as we know it. Rents have risen with foreign real estate investments, and English is the first language of choice in the hippest cafes and bars of Mitte. These changes are not exactly making the startup diaspora popular with the old guard in the city, but the upsides of economic growth are equally hard to ignore.
The tech scene seems to have reached a critical mass where available venture capital and experienced founders are finally hitting a shared stride. Part of why more capital is available, according to Earlybird investors on the TC stage, is that more founding teams are aiming for big exits instead of the first 100€ million offer from a big corporation (500€ million and up is where it starts getting exciting for the investors).
This growth is also about available knowledge and skills. Berlin founders, some of whom are onto their second or third venture, are now becoming the angels, the accelerator founders and the mentors. So far, say TC panellists, Berlin’s sexiness as the place to be is not suffering under the rising rents yet, and it’s still easy to convince international talents to relocate.
Perhaps the most significant change is the way the scene is diversifying in what investors are calling “the Rocket shift” – diverging from the path paved by trailblazers Rocket and Zalando, which led to an initial focus on easy-to-understand, revenue-first e-commerce businesses. We’re now looking at more globally-minded, B2B and pure tech consumer plays coming out of Berlin, and further afield at other national hubs, interesting projects that cooperate with Germany’s traditional industry may get interesting very soon.
We can’t wait to see what happens in the next four years!