Portugal is a country in a hurry to leave behind its recent economic troubles. One way it is doing this is by promoting a startup ecosystem in Lisbon. In this third instalment of our Portugal series, we explore a few reasons why we think startups are flocking to Lisbon.
Lisbon scored a major win in 2016 when the city hosted the lucrative Web Summit, one of the world’s highest profile technology conferences. The event featured artificial intelligence (AI) powered CGI babies, lots of drones and a ‘cleantech’ startup seeking to generate sustainable energy from soil.
Web Summit, an annual event launched in Dublin in 2009, attracts a critical mass of startups, investors, thought leaders and tech enthusiasts. Celebrity spotters might even recognise a few high-profile CEOs, Hollywood actors and millionaire footballers all buzzing about the latest technology trends.As Lisbon hosts Web Summit 2017, the city’s profile as a hub for tech startups is set to trend upwards.Click To Tweet
Naturally, the mind leaps to make comparisons between Lisbon and the ‘spiritual home’ of tech startups, San Francisco. For starters, both cities have look-alike suspension bridges. Both also have beaches, hills, trams and a reasonable amount of year-round sunshine.
However thrilled Lisboetas might be about comparisons to Silicon Valley, they are quick to highlight their city’s uniqueness as it becomes the preferred hub for Europe’s technology scene.
Following a recent visit, we identified five reasons why startups are flocking to Lisbon.
#1: Startups are flocking to Lisbon for the low cost of living
Portugal’s economy is emerging from the doldrums following a Eurozone debt crisis and bitter austerity measures that were put in place as a result.
Klaus Regling, Managing Director of the European Stability Mechanism recently said that despite recent signs of recovery, ‘markets remain nervous about Portugal’s debt level, high unemployment, and competitiveness’. Consumer spending remains low and economic growth sluggish.
While this may read like bad news to some, it is a situation that actually plays in Portugal’s favour.
Affordable housing and transportation and reliable broadband infrastructure are the sort of things that attract budget constrained startups whose businesses often have no revenue in their initial phases of operation.
Recent results from data comparison site Numbeo, indicate that rent prices in Lisbon are almost 70% lower than in London and overall cost of living is almost 50% lower in Lisbon by comparison.
While Portugal’s government is working hard to improve the country’s economic situation, startups and digital nomads are seizing the opportunity to thrive.
#2: Startups seek to leverage the power of community
“The idea we want to promote is that we also have an economy based on knowledge and an entrepreneurial community that is growing.” – Manuel Caldeira Cabral, Economy Minister (2016)
Lisbon’s growing startup scene offers an eco-system where techpreneurs are co-located in the same city as angel investors, venture capitalists, incubators and accelerators. This presents opportunities for the sort of symbiotic relationships that drive creative economies.
Startups need a place to work and often prefer the type of work space which creates a sense of community and naturally promotes opportunities for interaction, collaboration and creativity.
Access to tech talent from top universities and the fact that many younger Portuguese are bilingual and speak English (among other languages) suddenly makes Lisbon a lot more attractive for companies seeking to set up European outposts for entrepreneurship.
#3: A diversity agenda that encourages women in technology
The 2016 Web Summit offered discounted tickets to female entrepreneurs interested in attending the event. While some where enthused by this, others were not.
According to one prospective attendee, “The problem is that even if it were free I could not go. I have a 9-year old…my partner would need to be free to be on standby while I am off. Women with young children find it hard to combine business trips with family life, unless you have hired help.”
Diversity is one of the key catalysts in driving innovation. While discounted admission tickets to tech conferences are a noble attempt to tackle the issue, the effort falls short of dealing with some of the root problems affecting gender balance in the industry.
There is some good news though. According to the Startup Genome Report 2017 report, Lisbon (featured in the report for the first time) has the highest rate of female founders in Europe. However, the roots of this promising development appear to have been born out of necessity rather than by design.
When Portugal was hit by its recent economic crisis and the jobs market ground to a halt, there was a significant rise in the number of women taking on more active roles in business as a way make a decent living.
This spirit appears to be a factor that continues to attract female techpreneurs to found startups in Lisbon.
#4: Innovation inspired by history and culture
Although the references to Portuguese history are not always positive, Portugal has a rich heritage of discovery.
Kevin Benedict, senior analyst at Cognizant Technology Solutions writes about the relationships between Portugal’s ‘Age of Discovery’ and enterprise mobility.
He describes how Portugal gained competitive advantage through maritime innovation. The ability to efficiently sail large cargo ships across oceans transformed markets, globalised trade, opened new sales channels and displaced competitors.
During our travels through countries including Sri Lanka, Zanzibar and Morocco, it was remarkable to discover examples of Portuguese innovation intertwined with each country’s history.
The culture of innovation is evident in Lisbon’s architecture. Although much of the city was destroyed in the great Lisbon earthquake and resulting fires of 1755, Lisbon rose from the ashes through an innovative regeneration program beginning in the 19th century.
During a walking tour through Alfama, Bairro Alto, and Baxia, our imagination came alive. Every alleyway, historical building and monument seemed to have a story to tell.
Our tour ended at the impressive Praça do Comércio, Lisbon’s grandest square. The inspiring image of the setting sun over the Tagus River, with the 25 de Abril bridge and the Christ the King statue in the far distance, fuelled our desire for adventure.
Inspiration sparks curiosity, which leads to discovery which leads to innovative solutions. This is a typical cycle for startups and techpreneurs. With inspiring examples from Portuguese history and culture, Lisbon seems like a natural home for startups.Inspiration sparks curiosity, which leads to discovery which leads to innovative solutions.Click To Tweet
#5: Decent quality of life without breaking the bank
During our visit, we stayed in at the ‘Radio House’, an Airbnb in Graça, one of Lisbon’s oldest neighbourhoods.
The owner, a foodie named João, had the flat decked out with random 60s memorabilia. We woke up each morning to spectacular views, of the sun lighting up the red clay rooftops and the Tagus River in the distance.
We found Lisbon easy to navigate using a combination of walking, trams, metro and Uber. From the centre of Lisbon we had quick access to the coast within minutes.
As foodies, we felt right at home in Lisbon! We did not realise how many innovative dishes could be made from the simple codfish (which seemed to be on every menu!).
Street food is quite popular as are food and beer festivals. A journey to Belém to sample the famous Pastéis de Belém (custard tarts) was worth the trip. In Alfama, the smell of roasted chestnuts and grilled sardines invited us to open our senses and truly experience the city.
At Mercado de Ribeira, the city’s oldest fresh produce market located in the Cais do Sodré neighbourhood, we entered ‘gastronomy heaven’ where we enjoyed high quality, affordable dishes from some of the city’s leading chefs including Henrique Sá Pessoa and Alexandre Silva.
Nightlife did not disappoint either. In Alcântara, we danced kizomba at a night club called Mwangolé, a melting pot for Angolan, Mozambican and Portuguese cultures.Lisbon provides the perfect balance of work and play for hardworking entrepreneurs.Click To Tweet
Shaping the future
In 2016, Lisbon was featured by Wired magazine for the first time in their round-up of Europe’s hottest startups.
Portugal’s government is keen to encourage more growth. With more tax breaks for angel investors and less government red-tape, the outlook for Lisbon’s young startup ecosystem is optimistic.
Take your next step to entrepreneurship
Why not join a group of 13 creative entrepreneurs on the island of Maderia, Portugal in May 2017 for the perfect combination of work and relaxation?
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