In Berlin, a New Tech Megaclub Emerges

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Five years ago – five years and four months, to be precise – two American entrepreneurs organized a morning meet up in a cafe in Berlin’s bustling heart. Little did they know then, that not only would the monthly event become a fixture on the calendar of the world’s most exciting startup hub – but that it would become a metonym for the very scene itself.

Not that Travis Todd or Schuyler Deerman, co-founders of Silicon Allee, thought their California-inspired name would be any more than a catchy in-joke when they set up in the trendy, two-tiered Sankt Oberholz cafe. “We coined it as that,” he told Red Herring, in a cafe just down the street from his 7,000sq m planned megaspace in Berlin’s central district, Mitte. “It was some American guys starting a tech meet up. We didn’t think it’d stick this long.”

Deerman and Todd are sitting on a pretty ubiquitous trademark (they registered the name soon thereafter): Silicon Allee has become the local scene’s nom de jour, and has been quoted by everyone from national broadcasters and the US ambassador to German leader Angela Merkel – though Todd can’t find that particular direct quote online. “We always keep this document of where the name Silicon Valley has been mentioned,” he said, “and it’s wild.”

But a name alone, despite what some might say, isn’t enough in tech – let alone 2011 Berlin, which was, Todd admitted, not the hottest place to be. “Now it seems crazy but back then there really wasn’t much happening in the Berlin startup scene.”

Even then it had been the best part of a decade since Berlin mayor Klaus Wowereit declared his city “poor but sexy”, and his words were beginning to sound a little old. The secret of Berlin was very much out: creatives poured in from all over the world, rents rose and bars, restaurants and cafes abounded.

In tech, money was beginning to flow. Companies like Soundcloud and Rocket Internet were winning global acclaim – and cash to boot. For Silicon Allee’s founding duo the timing was perfect.

“We had both moved to San Francisco to do the whole Valley thing – networking, making connections – and we both simultaneously came back, mostly because we had better opportunities in Berlin than the Valley,” Todd said. “We both said, now that we’re back what piece of the American startup scene can we bring back?” The pair held their meets in the morning “to weed out stragglers who just want to come along for a free beer.”

He added, “There had been meet ups but nothing American-style, where you go to share ideas with no agenda and network. People here were really worried people would steal their ideas. But sharing is the best thing to do. People will give you feedback, experience – help you. We wanted to twist young entrepreneurs out of their comfort zone, get them to network and in English.”

The language was important. Until then almost all German startup content was written in the local tongue, while leading investors were based mostly in the US and UK. Todd and Deerman employed Dave Knight, a freelance journalist, to write news about Berlin’s Gründerszene (‘Founder Scene’).

“I think it really helped expose the Berlin tech scene,” he said. “The international business language is English. So if you’re not doing things in the international business language, you’re not doing international business – it’s as simple as that.”

Silicon Allee was wound up as a news site in 2014. But its biggest move was still to come. Todd and Deerman, who have both founded companies, looked to an esteemed neighbor for inspiration. Factory Berlin’s big, brown-bricked block, formerly a brewery, stands beside the Berlin Wall’s notorious ‘death strip’, where dozens lost their lives trying to escape from East to West Berlin. Google and Takeda have joined Factory’s networking club, whose membership runs at around €120,000 ($135,000) per year.

Silicon Valley, which is currently based in a Factory office across town nestled among the regional headquarters of tech powerhouses like ResearchGate and Nokia, wants to create its own brand of networking similar to Factory’s, where the mixture of established and young companies is key.

“It’s serendipity by proximity – you get the best of the best in one space, build the space in a way that allows them to interact, then you create the serendipity,” Todd said. “Our first meet ups did that on a micro level, but you can do it every day.” Silicon Alley still holds the monthly meets at Sankt Oberholz. But to that it has added a conference, the Startup Europe Summit, to be held June 9-10.

Across from the team’s current, modest digs (“We’re 3.5 people right now, I’d say”), is a mammoth, 7,000sq m block that will become the beating heart of Silicon Allee’s vision. Built on seven floors it will include offices, a cafe/restaurant, apartments and penthouse terrace. ResearchGate, which in 2013 won investment from Bill Gates, will occupy two whole floors. The idea, Todd said, was to mix startups with big corporates and “local heroes” to spur on the scene. “In Factory it was Soundcloud, then Wunderkinder,” he added.

Todd and co are also offering short-term leases, to make it easy for young firms to scale: “Most real estate companies will want a lease signed that is for five years, but we allow for that flexibility, short lease terms that allow for that. That’s another little disruption we’re trying to throw into the real estate game.

He added, “I think what you’re seeing now is that more and more companies are able to scale in Berlin because of the influx of capital and talent. They’re just better able to grow now.”

Another building, which will bring Silicon Allee’s floorspace to around 13,000sq m, will follow. But the first building will open its doors at the end of this summer – hopefully, Todd said, by August. Will it be bigger than Factory? Todd blushes. “Factory would probably claim they have more spaces,” he said, cracking a smirk.

That aside Todd is nothing if not modest. And despite his upcoming tenure as landlord of some of Berlin’s most prime real estate, he puts Silicon Allee’s success down to timing as much as his obvious hard graft: “We were just really lucky in that we hit a nerve at the right time.”

Not that a few royalties from the name would go amiss – especially if he can find that Merkel quote. “We definitely thought about it,” he laughed, pausing for a moment to ponder it. “But no…no, it’s all good.”