Adrià Hernández

@hc_adria

Barcelona Startup Ecosystem: An Insider’s Look

Honest thoughts & tips for newcomers

Photo by Enes on Unsplash

In the last years I’ve met and helped many international entrepreneurs and investors who felt somewhat lost or misinformed upon arrival to Barcelona.

Here you’ll find some observations and advice from my years as a local startup founder to help newcomers interested in the southern capital of Europe.

The Spanish bureaucratic nightmare

One of things that most often surprises foreigners is how ridiculously long and expensive could be the process of incorporating a company.

It’s not uncommon for the registration of a new company to take a month to be completed (and I’ve heard of cases that took up to 3 months…).

Basically, everything that has to go through the public office takes forever here, and on top of that complications are not uncommon.

Of course lawyers are very happy to help you, so are notaries (which you will have to get used to visit).

That said, the worst part is probably all the taxes you have to pay from the first day you register your startup. Yep, the laws are not entrepreneur friendly.

To sum it up, creating a company is tedious and expensive, so bring in extra patience and get ready for a lot of upfront costs from the very beginning.

Photo by Isaac D. on Unsplash

The talent magnet

I still remember the facial expression (of disbelieve and surprise) from the country manager of a Swiss company that was opening a new office in Barcelona when I told her that it won’t be easy to hire local developers.

She told me they came to Barcelona because they expected to have an easy time recruiting local software developers.

Yes, it’s true that Barcelona has a great and growing community of developers, but so is they have more job offers they could care about.

That’s without mentioning that many of the best software developers in the city often choose to work in dev shops or as freelancers.

The recommendation I gave to her was to leverage the attractiveness of Barcelona to recruit young developers from the EU and overseas.

With such a beautiful city near the sea and an awesome quality of life, who can resist to move to Barcelona when the right opoortunity presents itself?

The copycat, short term investor culture

“I only invest in entrepreneurs with a good ‘pedigree’”

Followed by this explanation: someone who’s parents are successfull business owners or someone coming from a wealthy family.

“First in, first out. My goal is to be the first to invest in a startup and then to divest as soon as possible”

Followed by his complains about all the money he could have made if he had waited for his most successful portfolio startups to be acquired.

Both are real affirmations made by two of the most well known Spanish VCs (who are regarded as role models by local investors) in a business lunch.

In other words, don’t expect investors neither to make decisions based mainly on objective business criteria nor to be long term partners.

Another very common habit VCs and angel investors share alike is to invest on what they call ‘proven business models’ (aka copycats).

Most often (if not exclusively) they invest in local clones of USA startups, hoping the originals will buy them when trying to expand in Spain.

This leaves most founders without any real chance of raising private capital, being public loans the only viable funding option.

Of course there are notable exceptions among the local investor community, but they are few and far between.

Photo by Gokhun Guneyhan on Unsplash

Lack of pay it forward business culture

Sadly, unlike more developed tech ecosystems like Silicon Valley, it’s still not very common to see the pay it forward culture.

Between fellow startup founders is somewhat easier to find peers open to help you, but with everybody else you’ll probably only be helped if they can see a benefit in the short term (or of course, if you become a client).

It’s also common for people to say they’ll do something when networking face to face, to later find some excuse via email or not getting back to you at all.

Thankfully, this situation has been improving and is getting better every year, mostly thanks to the effort from entrepreneurs who lead by example.

One final tip

If you want to get a good grasp of the local tech scene and start building some good relationships, Startup Grind Barcelona is your go to event.

Every month Àlex Rodríguez, Carlos Cruz, Marc Miralda and all the volunteers in the team organize a kickass event that brings together the local startup community in an awesome athmosphere.

You won’t find a more welcoming and helpful experience in the city.

So that’s it, I hope you found this article interesting and that it’ll be useful when it’s time to pursue your business in Barcelona.

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