Don’t believe the hype? Meet the people who are harnessing Berlin’s startup scene to change the world.
Louise Thomson, April 2016 Associate, writes about London Associates and Fellows visiting Berlin in November, where they joined Friday training and enjoyed a whistlestop tour of the city and its social enterprise ecosystem.
For years Berlin has been synonymous with creativity, but these days it’s the business rather than the art world that’s in the spotlight. Decades of cheap rent and progressive politics have helped to shape the city as a space for experimentation and innovation. Now, as London agonises over the government’s Brexit strategy, Berlin is tipped to replace the UK capital as Europe’s top tech hub. If you’ve ever used SoundCloud, Hello Fresh! or Clue, then you’re already familiar with just a few of the 2,500 startups which are now based in Berlin.
In the words of one investor, “first came the artists, then came the DJs, and then came the entrepreneurs”. But – in the city that has lately become the centre stage of Europe’s refugee crisis – what about the social entrepreneurs? In the last few years Berlin has increasingly become a hub for sustainable and social businesses. This November we were lucky enough to meet face-to-face with some of the organizations that are riding the wave of the city’s startup scene to drive social and environmental innovation..
“Fighting for a digitalization that benefits humanity” is how Betterplace.org – a platform allowing users to donate money or time to over 25,000 projects in 180 countries – describes its mission. What makes Betterplace unusual is that 100% of the €37 million it has fundraised to date has been transferred to the NGOs managing the projects. Unlike other crowdfunding or donation platforms like Kickstarter or JustGiving, Betterplace.org doesn’t charge fundraisers transfer or banking fees. So how does it fund itself?
Betterplace.org’s model is possible because the site is funded by revenue which is generated by two profit-making sister organizations. Betterplace Lab carries out research and analyses digital trends (such as 3D printing, data security or ‘drones for good’) for clients who are at the intersection “where innovation and the common good meet”. Betterplace Solutions creates digital CSR strategies for companies who want to integrate social engagement into their core business. One example is an insurance company that created a function encouraging employees to automatically donate brokerage commissions to charity.
One of Betterplace.org’s most successful fundraising campaigns of 2015 was Kiron, a social startup making higher education accessible for refugees in Germany, France, Turkey and Jordan. Kiron’s ‘blended model’ of learning combines online content from MOOCs (Massive Online Open Courses) with ‘offline’ learning at partner universities. These universities – including Sciences Po in Paris – will provide accreditation for the students at the end of the course, meaning that they graduate with a prestigious name on their CV.
Kiron’s model removes common financial, practical and legal barriers for refugees who had their education interrupted back home and want to continue their studies in a new country. The courses are free and mainly in English, which refugees are more likely to speak than French, German or Turkish. Students can register onto the online part of the course without having to provide lengthy bureaucratic documentation, allowing them to make a start on their studies while they are in the process of applying for asylum.
In Germany the startup also aims to remove longer-term barriers to employment by providing courses in subjects that are in demand by German employers: business, computer science, engineering and social studies. Kiron’s value proposition to the German government is that investing now will lower the long-term cost of refugees not being in education and employment. The German Ministry of Education and big German corporates have already sponsored Kiron, which bodes well for the startup’s business case.
It seems natural, in a country which has received over 1 million migrants and refugees (whom many Germans refer to as ‘newcomers’) since 2015, that many social enterprises focus on this group as beneficiaries. Co-working space Migration Hub, for example, is entirely devoted to startups developing innovative solutions to the refugee crisis. But given that newcomers themselves are probably best-placed to understand their own problems and needs, some social entrepreneurs have decided that the best way to help refugees is to empower them to set up their own business.
One example is On Purpose Berlin Associate Sophia von Bonin (February 2016), co-founder of Re:Start. In 2017 Re:Start will run a 6-month incubator for refugee entrepreneurs in partnership with Singa, a grassroots organization promoting interaction and integration between newcomers and locals. Sophia believes that young, tech-driven refugees in particular can take advantage of the Berlin startup scene to develop scalable business models with very little capital.
There are several examples of Syrian entrepreneurs in Berlin who have successfully launched tech-based solutions to daily problems faced by newcomers. MigrantHire is a recruitment platform which helps refugees with legal issues and interview preparation. Bureaucrazy, an app designed to help newcomers navigate German bureaucracy, has proved so popular that even locals are reported to be using it.
In 2004 Berlin’s mayor famously described the city as “poor but sexy”. To paraphrase impact investing expert Nina Cejnar, Berlin’s social finance ecosystem could be described as “underdeveloped but exciting”. Nina, founder of impact investment advisory and social enterprise consultancy Golden Deer, believes that the market in Berlin is immature compared to the UK as it lacks investors and intermediaries, know-how and benchmarks, and a supportive regulatory environment.
This hasn’t stopped Nina from working with some of Germany’s more innovative and intriguing social businesses. Since starting Golden Deer in 2013 she has advised Auticon, a social enterprise that trains people with Aspergers to become software testers (they work twice as fast and detect five times as many bugs), as well as a clinic which employs blind woman to screen patients for breast cancer (they have higher rates of detection from manual examination).
Nina explained that one difference between the UK and Germany is that Germany has a strong and distinct welfare state. The traditional division between the welfare state and the private sector makes it culturally and practically harder to combine social and commercial ways of thinking. And despite growing signs of support from the Social Democratic Party (SPD), the German social enterprise sector hasn’t yet benefitted from a surge in political support – as with David Cameron’s vision for a ‘Big Society’ in the UK in the early 2010s.
Like many of my fellow Londoners, I left Berlin with a reinvigorated spirit and a whirring mind. The trip served as an important reminder that here in the social enterprise sector in London and the rest of the UK we are not the only ones thinking through these challenges. More than just getting to know our Berlin colleagues in person, it was a valuable opportunity to observe how local dynamics, histories and infrastructures affect social enterprise on a global level and a chance to look back on our own sector with a critical eye.
On the eve of the US election result, with the threat of growing protectionism and isolationism hanging over us, it felt more important than ever to connect across borders. As national governments increasingly move away from international collaboration, it is critical that on a grassroots level we continue to exchange and collaborate and learn from each other – and nothing beats meeting face to face.
Bring on the next trip – who’s up for Paris 2017?
Special thanks to Julian Müller-Schwefe and Mark Fliegauf for having us, and to April 2016 Associate Jara Kortmann for making the whole trip possible.
Photos courtesy of Meng Jiang and Danilo Costa.