Over the weekend, Neil Rimer, a founding partner of Index Ventures wrote an opinion piece
for the Financial Times, asking the question – what will it take to build Europe’s first tech titan – is it capital or people that Europe lacks? His conclusion – the singular focus must be talent, talent, talent. Sadly, if this veteran is to be believed Stockholm can not win that race.
Rimer is from London, and doesn’t mention Stockholm amongst his peer group of Berlin, Copenhagen, Barcelona and Paris as European cities in the running. However, he does cite Skype and Spotify as two European success stories, so presumably he knows its there. But that is not hugely relevant, as the article isn’t a ranking within Europe, but rather a call for all of Europe’s cities to lift their game to compete with China and America.
According to Rimer “the good news is there is no shortage of capital for truly ambitious founders. There are more venture capital firms today in Europe than ever before, and many of them are flush with funds and eager to invest.” Three times as many today as there were 4 years ago. “Whether you are in Tallinn or Tel Aviv if you have a shot at building a global tech company you will find willing investors. The main issue is the ability to attract and retain world-class talent.”
And, so what determines whether you’re city has the right environment in Rimer’s world? Education, visa policies, use of employee stock options, cheap restaurants, shopping, and entertainment. Presumably if he thought further, he would include accommodation too. Sadly, despite its excellent head start against many peers, Stockholm is not doing enough. Stockholm would receive an outright fail grade for housing, visas and stock options. The problems with the housing market are society wide, and therefore hard to fix. But the visa issue has been around for more than 2 years and the government moves at a snail’s pace on it. Meanwhile innocent talent is kicked out for really no reason at all (our background article on work permit rejections, ‘Lex Tayyab‘, is available in the Mundus Store
). And for stock options the solution is too little, too late
Somehow the Löfven government believes that if they allow favourable treatment of options for companies of less than 50 people that this is an acceptable solution. Does the government believe that you can grow a global company with 50 employees? Presumably not, so what is it thinking?
Arguably Stockholm would do OK on the shopping and entertainment measures, but one doubts that these are core to attracting young talent, and any benefits here are offset by the cost of eating and partying. Our conclusion is that Sweden, and Stockholm are going to struggle to pull ahead of European peers, although as Rimer argues, Europe is not the competition. As Spotify’s expansion of operations into London and New York appears to show, whatever its attractions as a base to found a start-up, Stockholm is not the location for a global tech titan.