When SoundCloud.com first began, founders Eric Wahlforss and Alexander Ljung decided that Berlin would better serve the aims of the startup more so than their native Sweden. Berlin is well known in the international music and arts scene and this, in addition to the fact that the pair already had some professional contacts there, propelled them to make the move to the German city.
After running things in Berlin from cafes and friends’ apartments, SoundCloud has grown today to over 1.2 million users who include Madonna, Bruce Springsteen, Michael Bloomberg, and Nicolas Sarkozy. Not only are musicians using SoundCloud, but public companies are as well putting earnings calls up on the site.
The Berlin Journey Begins
Choosing Berlin was natural for his the startup, says Ljung, although during the beginning he says he found issues in the bureaucracy of setting up a company, and not speaking German. Ljung says it’s easy to get by speaking English in Berlin even though the company actively recruits from all over the world. In addition, Ljung notes that even though it’s more difficult for someone to commit to working at SoundCloud because they are not from Berlin or Germany, Berlin has something magical that has already attracted innovators.
Ljung says, “Berlin has an attraction power that works quite well with people.” In addition, Ljung says that for him it doesn’t make sense to be in Silicon Valley full-time even though they have offices there. In fact, Ljung says that SoundCloud will “never leave Berlin.”
Benefit of Berlin Vs Silicon Valley
“If you’re trying to start a company and you want to hire engineers there, it’s a total nightmare. There’s a overvalue of the market.” He adds, “I think we get a good balance between the world of Berlin which has more culture and the world of San Francisco that has more tech.”
That intersection of art, culture, and technology was the reason Ljung and co-founder Wahlforss decided in one day and moved the next to Berlin. Ljung says Berlin makes sense because, “We feel like we’re creating tech for creative people.”
Ljung believes that Berlin is and will continue to be a tech startup powerhouse because “Berlin is very much a city of counter culture and do things your own way and that’s very startup.” He also sees the recent expansion and construction of Berlin also reflective of startup culture, “One of the things of why it’s good for startups to be in Berlin is because the whole city is a startup. Everything is moving really fast and it’s moving in a good direction. It’s definitely in a build up phase.”
On A Feeling
“We came here because it felt good. We were here for one day and we just felt that this place was really creative, vibrant, different, and cool.” says Ljung. While there are benefits to being in London as a European center, London may prove too expensive for an early stage consumer startup. Ljung also believes that in London many in the startup culture have become too focused on larger companies or potential partnerships even before startups have taken care of the basics.
Sometimes getting ahead of yourself can get you distracted and cause issues for the real tasks at hand, believes Ljung. “You should be focusing on product and user experience and for us that was a lot easier to do in Berlin” says Ljung.
Berlin may continue to grow as the premier European startup hub. London has already established itself easily enough but we’re all curious to see what infrastructural and cultural movements the city of Berlin will create in order to support its already innovative cultural scene.