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Why we chose Berlin over London

Earlier this year my wife Michelle and I were living in Manila, Philippines – I’d been having an amazing time running Zendesk’s Asia business for the past three years. When I told a Canadian friend of mine, Stephen Jagger of PayrollHero, that we’d decided to move to Berlin he said something like “But why Berlin?  That’s so random!”

This is how it happened…

Once we’d made the decision that I’d leave behind a fantastic position in a successful company (a story for another day) and start my own business the next logical question was, where should we base ourselves?

Our loose criteria

  • Had to be a ‘western’ country (North America, Europe or ANZ) – as they comprise the majority of the early-adopter market for SaaS it made sense to be in one of those regions.
  • An established technology hub with all the benefits a local ecosystem can bring.
  • A nice place to live/good quality of life.
  • Cost.  The lower our cost of living, the more money we’d have available to spend on building the product and business.
  • Be relatively fast and painless to obtain any necessary visas. Michelle is South Korean and I’m British.

We quickly reduced the best two options down to either London or Berlin (while there are many advantages to being in SV, the time and costs involved in securing visas for an early stage startup made it an unviable option at this stage).

These were the Pros and Cons of each as we understood them back in June:

London

Pros

  • I’d lived in London and loved it, I have family and friends there and an existing network.
  • It’s a big tech-hub, has a large talent pool, plenty of early adopters, a media with a global reach and is in close proximity to a lot of financial capital.
  • Heathrow Airport – in London you are usually a direct flight away from anywhere you need to go.
  • Ease of doing business – I was already familiar with many of the aspects of incorporating and running a business in the UK.

Cons

  • Costs are very high, particularly housing.
  • Visas – Despite being a British citizen myself, obtaining a UK visa for Michelle would be a slow and painful (if you’re not a fan of bureaucracy) process and involve us travelling to Korea, applying at the British embassy in Seoul and then waiting for ~3 months to (hopefully) be approved.
  • Quality of life – while London is culturally very rich and can be a lot of fun, it doesn’t have a particularly high quality of life when compared to many other cities in the developed world.

Berlin

Pros

  • Costs – renting an apartment is approximately 1/3 that of London and many other costs like transportation are also much lower.
  • Tech hub – I’d heard from TechCrunch and elsewhere that there was a vibrant tech scene in Berlin, I knew SoundCloud, 6Wunderkinder and Point9 Capital (Christoph Janz was an early investor in Zendesk) were based there.  I wasn’t sure what it would really be like though and some reviews were actively off-putting.
  • Quality of life – When we visited Berlin for the first time we both fell in love with it instantly.  While it’s no Vienna or Melbourne, Berlin still regularly ranks in the top 20 best cities globally for quality of life and I’d encourage anyone to visit.
  • Visas – as a British citizen I can live in Germany without a visa.  Amazingly it turned out that securing a residency for Michelle would be far easier in Germany than in my native country, and we could fly to Germany together and apply when we got there (a huge bonus).  In the end the total cost turned out to be just 28 Euros (yes seriously!) for a 5 year residency visa, and the paperwork requirements were reasonable.
    • While this is a somewhat rare situation to be in it does hint that we might not have too much trouble when the time comes to relocate overseas candidates to our Berlin office.

Cons

  • It’s smaller than London – not in itself a bad thing, but there are benefits to being in a large metropolis when doing business.
  • No Hub Airport – that means no direct flights to San Francisco.
  • I couldn’t (and still can barely) understand a word of German (luckily 9/10 Berliners seem to speak English)…the biggest obstacle this poses is filling out forms.
  • Lack of an existing network – although thanks to Point9 and their family of companies, who’ve been incredibly open and supportive since we arrived, this hasn’t turned out to be such a problem…and other local founders have also reached out to welcome us to the startup community in Berlin.

In the end the pros of Berlin (or perhaps the cons of London) tipped Berlin in our favour and we’ve never looked back.

We did decide (like SoundCloud) to incorporate in the UK while staying headquartered in Berlin in order to benefit from the regulatory framework and ease of doing business that the UK does score higher on.

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Michelle and me feeling Korean!
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