Berlin: Start-up Valley

It's no surprise that Berlin is being touted as the Silicon Valley of Europe, with some of the hottest sites and start-ups, like Soundcloud, Amen and Spreadshirt, in the city - as well as incubators, like Team Europe.

The German capital is also host to NEXT Berlin - Europe's leading digital technology conference - where top digital journalists, investors and technology companies do the network thing.

This year, in addition to keynotes, workshops and panel discussions, there was a track for start-ups to pitch to an international jury. Out of 100 applicants, twelve made it to the final round. There were ideas for cloud computing, search engine optimization, tools for data organization, music apps, digital customer loyalty, and a new sharing economy.

Start-ups pitch their ideas at NEXT Berlin

The conference is literally abuzz with ideas and people getting their network on. In the start-up track, the twelve that made it to the final round got the opportunity to pitch their ideas to a jury of international investors and decision makers. One of the most popular start-ups was Meine Spielzeugkiste ("My Toy Box").

"Meine Spielzeugkiste is the first online toy rental for families who are moving to cities who have less room but want to care about the development of their children," Florian Spathelf, the company's CEO and founder, told DW. "With our service they can rent recommended educational toys, give them back whenever they want to, and have more room, more flexibility and at the same time, they even save money."

Don't worry, the toys arrive shrink-wrapped, thoroughly cleaned and insured against breakage. In addition to being a practical service, according to Spathelf, Meine Spielzeugkiste is also motivated by a concern for the environment.

"What drives us is we can seriously reduce waste that's been caused by so many toys. Once you get used to the model that you don't have to possess the things, but you have the access to them, then I think there's room for more collaborative consumption models in Germany," said Spathelf.

Charlie O'Donnell, partner at Brooklyn Bridge Ventures in New York, said collaborative consumption sounds good in theory, but for customers, the bottom line is usually money and convenience.

"I go back to when I walked into the store and bought the fluorescent light bulb. It wasn't because of the carbon footprint or the energy usage. It was because right there on the box it said 'lasts for five years.' And I was like 'Great! I don't have to change the light bulb for five years!'" said O'Donnell.

"If 'collaborative consumption' makes you deliver a better product more cheaply, that's awesome. But the consumer for the most part doesn't care."

Tryvertising

One of the other start-ups pitching at NEXT Berlin was Kjero, a tryvertising platform, where consumers get to try products like chips, drinks and toothpaste for free and then rate them.

Thomas Metzler, founder and CEO of Kjero, has a background in psychology, with a focus on advertising and marketing. He says the problem is people generally tend to ignore conventional advertising.

"A normal consumer changes his toothpaste every 10 years or something like that," said Metzler.

As a result, the toothpaste market is a tough nut to crack. Even if a company advertises how good their toothpaste is, consumers are often reluctant to switch brands. This is where Kjero comes in.

"We give them the product," Metzler said, "and say, 'Ok, you try it. If you like it, then buy it again. If you don't like it, don't.'"

People get to try the real product first hand. It becomes a real thing. And who doesn't like free stuff?!

All consumers have to do is give the products a star rating and fill out a short questionnaire. It's also a win for the companies because they get real feedback on their products.

Charlie O'Donnell from Brooklyn Bridge Ventures says Kjero faces a couple of challenges.

"I think the key is matching the people that are most likely to like and use your product. So, their challenge is making sure that the people [who get] the product are absolutely pre-disposed to liking what you have and that they want to talk about it," said O'Donnell.

After success in Austria, Kjero launched in Germany on Day One of NEXT Berlin.

The NEXT big thing?

But what everyone wants to know is what will be the next big thing.

O'Donnell says there is a tendency for people to look at successful start-ups and try to pull patterns out of them.

While he is hesitant to predict overall trends, O'Donnell says more and more people are interested in making a positive difference in the world.

Etsy, for instance, has started a revival in hand-made, vintage items, and the fund-raising platform Kickstarter also feeds into the custom-made market and provides some great stories about the products themselves.

"This is why Kickstarter has taken off," said O'Donnell. "I bought a set of speakers where the engineers emailed me every week saying 'we've got a smaller battery in it' or 'bigger speakers' or 'look at the new colors we've added' and when I finally get this thing nine months later I'm going to have a story to tell. I could've just bought it from Sony, but there's no story there."

Interestingly, successful start-ups like New York's Etsy and Berlin's DaWanda are not products of Silicon Valley.

Mike Butcher, European Editor of TechCrunch, says Berlin is moving beyond the hype into its own unique ecosystem.

"There's a continuing improvement in the quality of start-ups coming out of Germany and particularly Berlin," said Butcher. "What we've seen in the last couple of years is a continuing interest in more innovative business models, new ideas, new implementations, new innovation and its taking on a life of its own."

That new life has already given rise to a world leader in SoundCloud. And with other exciting new start-ups coming out of the German capital, like Amen and Gidsy, Berlin is well on its way.

Author: Cinnamon Nippard, Berlin
Editor: Zulfikar Abbany