Partner Sites


Logo BusinessBecause - The business school voice
mobile search icon

MBA Entrepreneurship: Europe's Start-Up Scene Still Far Behind Silicon Valley

Europe’s entrepreneurial scene is far short of Silicon Valley's offering. Tech City in the UK offers MBAs some hope, but a lack of venture capital funding is hampering Europe's development.

Mon May 26 2014

BusinessBecause
Europe’s entrepreneurial scene is not always a happy place. In April, when the Eurozone recovery was being trumpeted, one serial European entrepreneur felt compelled to ruffle a few feathers.

Sina Afra, CEO of Turkish flash sales site Markafoni, has been hoping for change for years. But every time he visits Silicon Valley, his dreams are dashed.

“Every time I visit… I recognize how little of a role Europe plays,” says Sina. “Europe has big potential… but the biggest challenges for Europe are a lack of an entrepreneurial ecosystem and a strong investment infrastructure,” he continues.

Sina, who co-founded Markafoni in 2008, believes Europe sits below the United States and even Asia in the entrepreneurial pecking order. His company, based in Istanbul, was the first Turkish internet company to expand outside of the country. The site has six million customers and employs more than 35,000 people.

Critics argue that a lack of venture capital and a subsequently weak ecosystem have hampered Europe’s development. The US’s Silicon Valley is the preferred start-up destination, particularly for technology companies.

Sina shares this view. A few months ago, he took lunch at one of the big venture capital firms in San Francisco. It was a relatively mundane affair until a guest stood up and announced a new Turkish micro fund, of about $80 million.

“I was realizing that the entire early-stage venture capital [market] in Turkey is about $100 million,” says Sina. “At this lunch, one guy was just sharing that he has raised 80% of the entire Turkish venture capital [market] in two weeks.”

He adds: “Europe in general is missing a strong investment infrastructure.”

The UK and Germany have a notably bigger finance offering than Turkey. “But compared to Silicon Valley, they are also still small,” says Sina.

Most believe that the stronger the VC industry in Europe is, the stronger European start-ups will become.

A bevy of US venture capital firms have since moved to European shores. Atomico, Lakestar and White Star Capital have beefed-up the amount of capital available. Yet start-ups in the US still receive significantly more funding than those in Europe.

“[The] entrepreneurial ecosystem is one big white spot in Europe,” says Sina. He adds: “[It] is still small and not visible that much in the society around it.”


Some City of London workers were in uproar. Heron Tower, one of London’s tallest skyscrapers on Bishopsgate in the City, had just been renamed the Salesforce Tower London.

But it represented a milestone in London’s and the City’s transition into tech. Salesforce, the cloud computing company headed in Silicon Valley, snapped up 50,000 sq ft of the Tower to expand into the European market.

London’s Tech City is set to become one of the dominant European start-up hubs. MBA graduates already see it as the region’s answer to the States.

Tech City’s latest report claimed that between 2009 and 2012, East London’s tech sector accounted for 40% of all job growth in the industry in Britain. It counted more than 88,000 digital businesses in the capital.

“There is incredible momentum in the UK tech and digital sector. The Government has created a policy landscape that’s transformed the UK’s start-up scene,” said Joanna Shields, the former CEO of Tech City UK who stepped down in January this year.

It is a different approach to the US, however, where the state takes more of a hands-off approach.

But investment in the zone has flooded in, led by tech giants Google and Microsoft. In 2012, the UK government pledged £50 million in funding to build Europe's largest workspace for tech start-ups.

Yet commentators say property prices have soared as a result. Many Brits have since taken flight, attracted by Silicon Valley's relatively low costs. The problem is a particular concern for business school graduates, many of whom are saddled with thousands of dollars of debt.

“Many countries have tried and failed to reproduce Silicon Valley’s unique combination of energy and excitement about technological development, a seemingly endless supply of talent, and apparently easy availability of venture capital,” says Jim Hall, executive director of the Entrepreneurship Centre at Oxford Saïd Business School.

David Zelniker was of a similar mind when he visited Silicon Valley earlier this year. The Canadian-born Oxford MBA candidate claims the area is the best place for entrepreneurial graduates.

“It wouldn’t be unusual for me and my fellow Oxford MBAs to meet with a 25 person start-up in the morning, a VC firm for lunch and a behemoth like Google in the afternoon. The ideas are here, the builders are here, and most importantly – the money is here,” says David.

Other North American MBAs echoed these comments. Karl Loo says VCs in the Valley are more likely to take a punt on wild start-up ideas.

“The [business] schools in the Valley are tightly wound into the ecosystem and provide a steady supply of talent into the local businesses,” adds Karl, also an Oxford MBA student. “While many study in Oxford, relatively few remain after graduation, instead branching out to take on challenges and opportunities in all parts of the world.”

Other tech entrepreneurs in the UK have lambasted the internet offering in Tech City. First revealed by The Sunday Times, slower broadband connections were not their only concern. Broadband providers have been accused of prices that are prohibitively costly.

The areas local MP (UK Member of Parliament) said: “Some connections to premises are not economic… because the return is too small. That’s why businesses are quoted high prices, and for start-ups this is a huge cost.”


Matthias Ummenhofer had just flown into London from Luxemburg. The head of venture capital at the European Investment Fund had come to convince the capital that Europe was open for start-up business.

Last year alone, they committed €1.5 billion into more than 60 VC funds. Yet that is seemingly not enough. Eyebrows are still raised at the prospect of start-up funding – lambasted as “Mickey Mouse funds” – in Europe. Matthias’s pitch smacked of defeat.

“Unfortunately in Europe still, in many cases, if we wouldn't be the cornerstone investor in a fund… funds don't happen,” he deadpanned. “People have a very hard time raising money.”

He suggested some funds are “not really financially sustainable” and went further: “It will be very tricky for these guys [entrepreneurs] to actually be successful.”

But he added that Europe’s VC industry was on a par with the US, despite concerns that the region has fallen woefully behind.

Other MBA entrepreneurs, however, see London as a viable start-up hub. “It’s the best ecosystem at least in Europe and maybe the world for a start-up like ours,” says Bernhard Niesner, an IE Business School MBA graduate and CEO and co-founder of London-based start-up Busuu.

The online learning community started as an MBA project. Since its foundation in Spain in 2007, it has grown into a 25 million user base, figures from 2012 show.

The company recently moved to Tech City. “There is a big talent pool [in London] and a lot of people with similar experience in what we are trying to do,” says Bernhard.

Bennie Johnston, head of APIs at the tech arm of Just Eat, says being near other start-ups in Tech City makes doing business easier. Just Eat floated on the London Stock Exchange last month at a valuation of £1.5 billion.

The business is expanding and the tech arm is on a hiring drive. Bennie says it is easier to find talent in the East London area. “It’s a growing company and we’re struggling to find good people in the market.”

Meanwhile, Markafoni boss Sina remains unconvinced. His business raised more than $7 million in funding, and was valued at $200 million when multimedia juggernaut Naspers bought a 70% stake in the company in 2011.

But he remains part of the minority. The overwhelming voice of entrepreneurs is that Tech City and Europe needs to up its game to compete with the Valley.

“Entrepreneurs are creating jobs, they drive innovation and they change old structures,” says Sina. “Whenever Europe will have a stronger entrepreneurial ecosystem and a stronger financial investment infrastructure, it will reach the next level.”

Student Reviews

IE Business School

Student

Verified

8/11/2023

On Campus

My Review

Madrid Is incredible, I've had a fantastic time at IE University. I've had some excellent lecturers overall. They sincerely want the students to flourish and are concerned about developing a personal relationship with them. Having said that, students typically must fulfil their half of the contract by putting in the necessary work and demonstrating a desire to achieve success.

Student

Verified

6/11/2023

On Campus

Coming Master

I spent 1 semester on my Erasmus during my BBA trip. This was the great experience and after that I decode to enroll for the master program there. I must say that the only disappointing fact is connected to distribution of the students. Master students are being connected to the old campus what is not fully fail.

Student

Verified

6/11/2023

On Campus

Former BBA

As the former BBA student I can say that the level of the learning is quite high. In addition the place (IE Tower) is probably one of the most innovative and networking-support place in the Europe. I totally recoupment this Uni for business students.

Rebecca

Verified

5/11/2023

On Campus

International focus

IE university has a global perspective and attracts a highly diverse student body, with students from all over the world. This international environment fosters cross-cultural understanding and prepares students to work in a globalized world. This is same for the faculty members as well, the university's faculty members are from diverse parts of the world and are reputable. they are not only experts in their fields but are also often actively engaged in research and industry. Their practical experience and academic expertise create a stimulating learning environment.

Milena

Verified

31/10/2023

On Campus

Loved it

IE University, in my experience as a student, stands out as an outstanding institution for higher education. Its international perspective is a major strength, evident in the diverse student body that represents a multitude of countries and cultures. Interacting with such a global community has broadened my horizons and deepened my understanding of various subjects, providing a rich and comprehensive educational experience. The quality of the faculty at IE University is exceptional. Many professors bring real-world experience to the classroom, making the learning process more practical and relevant. This approach not only enhances engagement with coursework but also ensures that students are well-prepared for their future careers. The accessibility of professors and their willingness to engage with students personally fosters a collaborative and supportive learning environment. Practical learning is another significant advantage at IE University. The integration of real-world projects, internships, and case studies bridges the gap between theory and practice. This emphasis on hands-on experience equips students with practical skills and industry insights, making them more competitive in the job market. IE University offers a wide range of programs across various fields of study, making it a versatile choice for both undergraduate and postgraduate students. This diversity ensures that individuals can find a program that aligns with their academic and career interests. However, like any institution, IE University has its challenges. The cost of attending can be a major concern for some students, as tuition fees are relatively high. While scholarships and financial aid are available, not all students may qualify for them. This financial aspect is an important consideration, particularly for those with budget limitations. The competitive nature of some courses and programs can create a high-pressure environment. While competition can be motivating for some, it may also lead to stress for others. Maintaining high academic standards can be demanding, and students should strive for a balance between excellence and well-being. The workload can be quite challenging, especially for students undertaking double degrees or heavily involved in extracurricular activities. Effective time management is essential to manage academic demands while maintaining a healthy work-life balance. In conclusion, I would recommend IE University to prospective students with specific considerations. If you value an international perspective, practical learning, and a diverse educational environment, IE University is an excellent choice. However, it's crucial to carefully weigh the tuition costs against the benefits and to be prepared for the competitive nature of some courses. Students should also be ready to handle a demanding workload. IE University has provided me with a rich and globally-focused education, equipping me for a career in an interconnected world. Ultimately, it's important to make an informed decision based on your educational and financial goals, along with a willingness to confront the challenges that may arise.

Jose

Verified

26/10/2023

On Campus

Rather Exciting

As a student at IE University, enrolled in the Business Administration program, I can confidently say that my experience at this institution has been overwhelmingly positive. IE University's innovative approach to education stands out as one of its most remarkable features. The interactive classes and focus on critical thinking, particularly through the use of case studies, have significantly enhanced my ability to apply theoretical knowledge to real-world business scenarios. Additionally, the global perspective at IE University, fostered by the diverse student body and international faculty, has broadened my understanding of global business practices, which is crucial in the field of Business Administration. The university's strong industry connections have proven to be invaluable. These connections provide students with numerous internship opportunities and networking prospects, allowing us to gain practical experience and build professional relationships while still studying. Moreover, the comprehensive career support services offered by IE University, such as resume building, interview preparation, and job placement assistance, have been instrumental in preparing us for the job market. On the flip side, it's important to mention that tuition costs at IE University can be relatively high, which may pose a financial challenge for some students, even though there are scholarships and financial aid options available. Additionally, the programs at IE University can be intensive, demanding a significant time commitment, which might not align with everyone's preferences. In conclusion, I wholeheartedly recommend IE University to individuals considering a degree in Business Administration. The innovative teaching methods, global perspective, strong industry connections, and comprehensive career support make it an excellent choice for those aspiring to enter the world of business. However, prospective students should be aware of the financial considerations and be prepared for the intensive nature of the programs. If you're willing to invest in your education and are dedicated to your studies, IE University offers an exceptional and enriching educational experience in the field of Business Administration.

Tatiana

Verified

22/10/2023

On Campus

A Decent Experience

I've had the privilege of being a student at IE University, where I've been pursuing a degree in arts. My experience at IE University has been highly rewarding and unique. One of the aspects I appreciate the most is the university's strong emphasis on interdisciplinary learning. The opportunity to collaborate with students from diverse fields, including business, technology, and social sciences, has enriched my artistic endeavors. This cross-pollination of ideas has added depth and diversity to my creative work. IE University's international perspective is another significant advantage. The institution's diverse student body and faculty from various corners of the world have broadened my artistic horizons and encouraged me to think more globally. In the field of arts, where cultural influences play a pivotal role, this global outlook has been invaluable. The university also invests in modern resources and technology, providing students with access to cutting-edge software, creative tools, and state-of-the-art facilities. These resources have allowed me to explore new mediums and techniques, pushing the boundaries of my creativity. Furthermore, IE University places a strong emphasis on practical experiences. This practical orientation has given me insights into the professional art world and how to navigate it effectively. Opportunities for internships and collaborations with art institutions have been instrumental in bridging the gap between academic learning and real-world application. On the downside, tuition costs at IE University can be relatively high, which may pose a financial challenge for some prospective students. Additionally, the university's programs are quite intensive, demanding a substantial time commitment and strong time management skills. In conclusion, I would wholeheartedly recommend IE University to students seeking an arts education with an interdisciplinary and global perspective. The institution's innovative resources, practical experiences, and international approach have significantly enriched my artistic journey. Nevertheless, it's crucial to consider the financial aspect and be prepared for the demanding nature of the programs. If you're willing to invest in your arts education and are committed to hard work, IE University offers a truly unique and rewarding artistic experience.

Juan

Verified

18/10/2023

On Campus

A Great Experience

As a student at IE University studying architecture, I have a unique perspective on the institution. Let me share my thoughts on this university: Overall, my experience at IE University has been quite positive. The university's commitment to a holistic education, combined with its innovative approach to learning, has made my time here rewarding. Here are some key aspects I appreciate: Interdisciplinary Approach: IE University places a strong emphasis on interdisciplinary learning. In the field of architecture, this means I've had the opportunity to collaborate with students from various backgrounds, such as engineering, business, and design. It's been enlightening to work on projects that integrate different disciplines, mirroring the real-world scenarios architects often find themselves in. Faculty and Industry Connections: The professors at IE University are experienced professionals in their respective fields, and they bring a wealth of practical knowledge into the classroom. This has greatly enriched my architectural education. Additionally, the university's strong connections with industry professionals and firms provide students with valuable networking opportunities and potential internships. Global Perspective: IE University's international approach to education is a significant advantage. I've had the chance to collaborate with students from all over the world, which has broadened my cultural awareness and global perspective. This is particularly important in architecture, as it's a field where global influences and trends play a significant role. Innovation and Technology: The university's commitment to staying at the forefront of technological advancements is impressive. In architecture, this means access to cutting-edge software, tools, and resources, which have been instrumental in my academic and design work. On the flip side, there are a few aspects that might not suit everyone: Tuition Costs: IE University is a private institution, and as such, tuition can be on the higher side. This might be a challenge for some students, but there are scholarship opportunities and financial aid options available. Intensive Programs: The university's programs are often quite intensive, requiring a significant time commitment. While this can be beneficial for learning, it can also be demanding, so time management skills are crucial. In conclusion, I would certainly recommend IE University to those interested in studying architecture. Its unique approach to education, international perspective, and strong industry connections have enriched my architectural journey. Just keep in mind the financial considerations and be prepared to put in the effort, and you'll find a stimulating and rewarding academic experience at IE University.

Student

Verified

16/09/2023

On Campus

A Global and Innovative Learning Experience

IE University is a dynamic and innovative institution that has gained recognition for its unique approach to education. There are several aspects that make it stand out, and while it may not be the perfect fit for everyone, it certainly has a lot to offer. One of the notable strengths of IE University is its commitment to fostering a global perspective. The university attracts a diverse student body from all over the world, creating a rich multicultural environment. This diversity enriches the classroom experience and prepares students to thrive in an increasingly interconnected world. The emphasis on international exposure through study abroad programs, exchange partnerships, and a global network of alumni further enhances this global outlook. IE University is also known for its focus on entrepreneurship and innovation. The institution places a strong emphasis on practical, real-world learning experiences that encourage students to develop an entrepreneurial mindset. This approach aligns well with the demands of the modern job market, where creativity and adaptability are highly valued. Furthermore, IE University's faculty is often comprised of professionals with extensive industry experience, providing students with valuable insights and connections in their respective fields. The small class sizes enable more personalized attention, fostering a close-knit community and facilitating meaningful interactions between students and professors. However, no university is without its drawbacks, and IE University is no exception. One potential downside is the cost of tuition, which can be relatively high compared to some public institutions. While scholarships and financial aid options are available, this cost may still be a barrier for some prospective students. Another consideration is the intensity of the academic programs. IE University is known for its rigorous curriculum, and students often find themselves facing a demanding workload. While this can be an advantage for those who thrive in a challenging environment, it may not be suitable for individuals seeking a more relaxed college experience. In conclusion, IE University is an excellent choice for students who are looking for a globally oriented, innovative, and academically rigorous education. Its emphasis on entrepreneurship, international exposure, and practical learning experiences can prepare students for success in a competitive job market. However, the high cost of tuition and the demanding nature of the programs should be carefully considered. Ultimately, whether IE University is the right fit depends on the individual's goals and preferences, but for those who are up to the challenge, it can be a rewarding and transformative educational experience.

Paula

Verified

9/01/2024

On Campus

The liquid learning method

I do like my program so much, since it gives me the possibility to develop my own personal skills while building a strong professional cv with plenty of extracurricular material. The amenities are extraordinary and the campus is super professional and convenient for networking!

RECAPTHA :

fe

85

74

3e