I know every founder and VC thinks their city is the best in the world. But why can’t we all be right? As locals we bear witness to the benefits, opportunities and challenges of the homes we chose. And with that comes a responsibility: to sing the praises of our ecosystem in the interest of making it richer, more diverse and far-reaching.
Our investment platform just opened an office in the heart of Madrid, and for me, it was a dream come true. Not just because I could show my community the historic and modern beauty of my hometown and the unique inspiration it offers entrepreneurs; but because it meant I could work on elevating Spain’s capital as a startup haven, from the inside.
Spain has been taking strides as a newer hub of tech and innovation, with the government recently announcing the “Spain Entrepreneurial Nation” plan to promote entrepreneurship, and pledging €2 billion to the ambitious public-private startup fund Next Tech - an initiative we participated in. Barcelona is a honeypot of startup activity, and Madrid recently ranked 6 of 76 "Tech Cities of the Future" in Europe, alongside up-and-coming hubs like Munich, Stockholm and Bucharest.
As we watch a wave of emerging startup cities birth unicorns and launch new funds, it’s up to the locals to build the bridges standing between their city and their full potential. We alone can generate those honest calls to action and keep our ecosystem healthy as it attracts more diverse interest.
This isn’t about looking into a crystal ball for the next Silicon Valley. It’s a love letter to all the cities that can become power engines for a more global, interconnected era of startups. No capitals, just networks. For Madrid, I want to be one of those sparks. Here are the city’s promises and dreams for its future, with learnings that ring true for so many other blossoming startup cities around the world.
Having the dream and the capital
Today, we have the privilege of being able to choose where we want to live and work, perhaps like never before. As people relocate, they will bring their dreams to the cities where they see potential for that dream to take root. Not just because they’ll be surrounded by a talented workforce and an inspiring niche community, but because they can tap into the channels to secure capital.
That means either that investors are present, or looking in their direction.
Historically, the investors on San Francisco’s Sandhill Road made it clear they wouldn’t put money into companies that weren’t a bike ride away. They’ve now outsmarted that mantra, and as they look further afield (US VC investment in Europe is at an all-time high), local investors in emerging markets are also becoming more active.]
In Spain alone, VC and private equity investments totalled $6.3B in 2020, with 60% going into Madrid. And the size of investments is growing at every round. Madrid has also been seeing foreign VCs relocate to the city, from Starlight Ventures to TheFund.
As the spotlight moves away from Sandhill Road, it can be hard to know where to look. That’s why the presence - virtual or physical - of investors in a city can imbue it with optimism, or make it feel ignored. It’s up to globally-minded entrepreneurs to capture the attention of the world’s investors, through conventional outreach, events, and especially exits, while national governments must ease the way for international money to flow in. But perhaps even more importantly, local governments must incentivize home-grown funds to invest in their own ecosystems - Next Tech is doing just that. The same needs to happen in promising but so far capital-hungry places, like Miami.
Foreigners are using the city to land and to launch
As foreigners move into Madrid, it is positioning itself as a landing pad for global businesses to grow internationally, as well as a launch pad for local businesses establishing their presence abroad. Madrid has strong international transport networks as a key bridge to Europe and Latin America, and 20% of the population is foreign-born - many from South America. It’s more common than ever to see people moving to Madrid while they work for foreign businesses. I was Facebook’s first employee for Spain in 2008, and I chose Madrid as the place from which to grow.
Our growing network of startup cities have this exciting new distinction. As they become more interconnected and break down barriers to internationalization, the most promising cities will be those that propel companies from anywhere in the world, to anywhere in the world. Miami, for example, has risen in popularity because it acts as a bridge for people in Latin America and Europe looking to land in the United States, and those in the United States looking towards Latin America and Europe.
This exchange starts with culture, and nourishing a vibrant, diverse business community interested in enabling the success of other countries (often people’s own home countries). But in a place like Madrid, it also needs governments to reduce the bureaucratic hurdles that make getting a business visa and setting up a business notoriously complex and time-intensive for a foreigner.
Nourishing our passions is key in remote world
Workers are people. We need to have all our life needs met. The usual benefits - affordable cost of living, a good job, and quality of life - play a central role. But we also need places that stoke our passions, and inspire us to become better creators and innovators.
When I walk out of our Madrid office, I stroll under Puerta de Alcalá, built by a neoclassical Italian architect, I breathe the fresh air at the three-century old El Retiro Park, and am drawn in by the buzz of every hole-in-the-wall restaurant tucked away in the city streets. A few blocks apart, the renowned Prado Museum with its Goyas, Rubens, Rembrandts; the Stock Exchange; and the Royal Spanish Academy, home of the Spanish language, mark the harmony of old and new. Old money, new money. Traditional language, and the new coding languages defining our modern world.
As entrepreneurs, we are constantly writing that new story, and we can look to the past and the present to learn and build upon. From time to time, I go to the Prado Museum with a notebook, sit in front of the works of art, and allow my mind to wander. A painting might lead me to reassess beauty and what “appeal” really means. An artist’s anguish may help me understand the weight that comes with creativity.
And, every time I return to Madrid I’m reminded that we truly need a fun, relaxed environment to thrive healthily.
Cities can aid their entrepreneurs by nourishing their culture while always encouraging new expressions and creations. It’s important to fuel international events, an active tourism sector, and create spaces for the open exchange of knowledge for all the public.
City offering value to a newly forming ecosystem
With the UK leaving the EU, the sands are shifting in Europe. People are looking for accommodating places to do business, recruit talent, and set up shop. The most attractive locations will be those that are tapped into the global startup ecosystem by establishing connections with other hubs worldwide, and offer value to others in the network.
Cities can offer value by cultivating a flourishing, emerging niche. Madrid is producing numerous world-class companies in cybersecurity, fintech, and climate tech, all addressing some of the planet’s most pressing issues. That expertise will feed other startups and talent as the industries progress. A city’s value also comes with having established, global companies willing to provide startups with a leg up. Allying with corporations makes young companies more resilient and exposes them to more high-level business opportunities fast. Madrid is HQ for many of the world’s biggest companies in energy, banking, transportation and health.
Cities like Madrid can nurture their value in the global ecosystem by growing genuine, strong communities around startups. Corporations bear a large responsibility to welcome younger companies making waves in their industry (which will also keep them relevant rather than turning into dinosaurs in the long term). A smart community will also take advantage of its older generations of builders and innovators. While we tend to reach out to people the same age as us, mixing in diverse minds for an intergenerational, international collective wisdom makes ecosystems far more large-minded and enduring.
Each city is unique. Some have world-class engineers from underrated universities, others are creating founder communities around critical world issues. The most important thing is that these cities open their doors and share their unique piece of the puzzle with fellow cities. I love Madrid, I miss Madrid, I feel Madrid, and I want to share that love with you too.