Berlin’s Hype Cycle
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The one startup that comes to mind most notably when talking about the hype around Berlin as the new Silicon Valley is “Hollywood”-funded Amen. In fact, it got acquired by Berlin’s Tape.tv for an undisclosed amount in August of this year. Amen received backing from a handful of US angels and venture capitalists as did another German startup called Moped.com (actually funded by US angel investor Dave Morin of Path).
As reported by TechCrunch recently the technology behind Moped will be integrated into Wunderlist of 6wunderkinder, the team though will not join the company as only the tech has been sold. It had already been pretty silent around Moped for the previous months as their most latest blog and Twitter posts indicated (mid of August). Interestingly, news broke around the same time that “Deadpooling Gidsy got acquired by GetYourGuide in Berlin Insiders Deal”.
It so seems that Berlin as the all-new hot-bed for startups in Europe has “jumped the shark" to put it bluntly in a heretic kind of way. But let me paint a more proper picture by using the Gartner Hype Cycle methodology: Berlin is going through the midst of its “Trough of Disillusionment”.
“Trough of Disillusionment”? Well, everyone in technology comes across Gartner’s Hype Cycle research methodology at some point. It is a graphical tool from research firm Gartner for “representing the maturity, adoption and social application of specific technologies.” (Wikipedia) Adopting it for our case of Berlin as the EU startup hub, it implies where the city has been for the past few months: Grounded in reality. The city has been on a deep fall down to the Valley Of Clear Sight that uncovers the fundamental learning that press releases about $1 million seed rounds done by better known entrepreneurs or funded by Hollywood actors do neither make for national nor international success alone. The aforementioned very public failures are a pretty good sign of this.
But I think Berlin is past the “darkest” point on the Hype Cycle. The aforementioned negative developments paired with the more recent news that 6wunderkinder has raised a $19 million Series-B round may very well be the very first sign that Berlin has crossed the valley bottom at which it is coming out of its “Trough of Disillusionment” and slowly climbing up the “Slope of Enlightenment”. Among the early investors in 6wunderkinder like Atomico and Earlybird is reportedly Sequoia Capital, one of the most well-known VC in the Valley. Another very positive sign for the slow uprising is the fact that SoundCloud is now reaching more than 250 million people per month as Alex Ljung publicly announced on TechCrunch Disrupt Berlin end of October. Moreover, TechHub’s London foremost proponent Mike Butcher is expanding his UK-based initiative to Berlin in order to “connect with the high-growth Berlin startup ecosystem, both to add to the city’s own development and to act as a gateway for international connections, bringing something unique to Berlin.” (TechHub article here)
I am pretty sure it will not take long for Berlin to get up on its feet. Though this time exchanging “hype-talk” for more “straight-talk” on all levels.
Thanks for reading.