To compete with Silicon Valley, European startups need to grow fast
- 24 April, 2015 00:36
Europe is still lacking real tech giants like Google, Facebook or Amazon, but it looks like things are slowly changing. However, if European companies want to start competing with Silicon Valley, they have to start thinking internationally from the beginning, says BlaBlaCar COO Nicolas Brusson.
BlaBlaCar is a French ride-sharing startup. It has about 20 million users and is active in 18 countries, where its users can offer empty seats in their cars on a trip for a fee, allowing them to save costs while others can arrange a relatively cheap trip.
Brusson, who spent years in Silicon Valley and worked as a venture capitalist before co-founding BlaBlaCar, is responsible for the international growth of the company. At The Next Web Conference in Amsterdam on Thursday he gave fellow European entrepreneurs some tips on how to become a big company.
First of all, European startups have to understand they should use a different scaling model than U.S. companies, Brusson said. The U.S. is a large unified market with a single language and a single culture, which allows companies to grow big before they can start thinking of international expansion, he said.
"In Europe that doesn't work," he said, because France, Germany, the U.K. and other countries are just too small to focus on a single market. "If you define that as your market, you are never going to be able to be a big company."
Quickly scaling internationally worked for BlaBlaCar. The company defined its market as Europe and started looking at Europe as a unified market even though it isn't.
That plan helped it land bigger investments than if BlaBlaCar would have just focused on France as a market, he said.
As part of that quick expansion strategy, BlaBlaCar also acquired other European startups that were offering similar ride-sharing services in Italy, Germany, Poland and the Ukraine, Brusson said. These acquisitions helped enthusiastic entrepreneurs, who had knowledge of the local markets, join the company.
But why should anyone care whether Europe has big tech companies? "The reality is that it is pretty risky to be a small fish," Brusson said. If European startups keep getting acquired by companies outside of Europe, there will be no sustainable startup ecosystem, which is bad for the economy, he added.
The good news is the fish in Europe are getting bigger, with companies like Spotify, Skype, JustEat and payments company Adyen becoming high-profile companies in their fields, Brusson said. European startups looking to do the same should have the same international mindset as these companies, he said.
Loek is Amsterdam Correspondent and covers online privacy, intellectual property, online payment issues as well as EU technology policy and regulation for the IDG News Service. Follow him on Twitter at @loekessers or email tips and comments to firstname.lastname@example.org