As young high-tech companies increasingly look for a collegiate environment in which to grow, four European cities are leading the way with huge campuses designed to support fast growth and flexible working.
Every morning, a minor human stampede descends on a hulking concrete rail depot in the heart of Paris’s 13th arrondissement. The building is not much to look at: a wide, grey block overlooked by newly built towers, a short walk from the Seine. But as many as 1,000 businesses and organizations, from tiny start-ups to international corporates, have taken up residence in this 366,000 sq ft (34,000 sq m) campus, which was launched by French telecoms billionaire Xavier Niel in 2017, to give France – and Europe – its own rival to Silicon Valley. Two years in, it is working. Residents include Facebook, Microsoft, L’Oréal, 26 different start-up incubator programs and the French government.
Station F is not alone. This year, similar campuses are opening in Lisbon and Stockholm, hoping to kickstart the local tech ecosystem and build internationally recognized technology centers. Unlike the rise of ubiquitous co-working spaces such as WeWork, which cater for any company, these campuses are part of a concerted effort to bring companies together in a physical premises tailor-made for tech businesses – and, ultimately, to reshape their cities.
Though start-up megacampuses may not be a new concept in 2019, their expansion across Europe and the audacity of their scale and ambition show that it is an idea whose time has come. Here are four of the cities vying for your next start-up idea.
Paris: Station F
One of the most striking aspects of Station F, other than its sheer size, is the buzz. Events spaces line the central lower concourse, where train tracks once stood, and on a typical morning these are jammed with people listening to lectures from visiting guests, sharing their products with potential investors, or socializing. The caliber of visitors demonstrates quite what a stir it has created: “We’ve had visits from the Prince of Monaco, the Duke and Duchess of Luxembourg, Presidents of Chile, Argentina and Colombia, the Prime Minister of Norway, and more. We also enjoyed a surprise visit from Pharrell Williams for the launch of the Adidas [sports accelerator] program in January,” says Station F Director Roxanne Varza, who oversees the campus.
The facilities, which cost an estimated $281 million (€250 million), feel endless: as well as more than 3,000 desks, numerous meeting rooms, a café and a vast 1,000-seat publicly accessible restaurant, there is a ‘makerspace’, with 3D printers for the quick fabrication of prototypes. Just as important are the professional services hosted through companies on site, from accountancy to tech support (including Amazon Web Services) and visa processing. And there is housing: when finished, the towers overlooking Station F will contain 100 shared apartments for entrepreneurs. “On campus, we offer literally everything a young company could possibly need so they can focus on what matters the most: their ideas and start-ups,” says Varza.
The buzz is more than just a bonus: being so close to other companies creates a competitive advantage. Small start-ups can enter and benefit from accelerator programs offered by companies including Facebook, Ubisoft and Havas. The concentration of talent has attracted investors, too, such as Daphni, Kima Ventures and Ventech, all of whom have offices at Station F.
One of the aims of the hub is to change the view of France as being somewhere unwelcoming to start-ups and disruptive new business models. That view, once held in Silicon Valley, is changing – in part due to Varza and Station F backer Xavier Niel’s efforts, and changes brought in by the Macron government (the French President himself has visited the site). “The government is providing more and more resources and support to local entrepreneurs, including entrepreneurs from abroad who come to France, and this is really wonderful to see,” says Varza. A third of all Station F founders are foreign nationals, primarily from the US, UK and China. With tech cities such as San Francisco facing affordability issues for young founders, and the political climate in the US and UK becoming more challenging for foreign entrepreneurs, France is staking its claim.
Station F takes its name from the building’s original designer, the French engineer Eugène Freyssinet – but, Niel has joked, it could stand for another name that is just as fitting: “Station France”.
London: Founders Factory
Across the Channel, Founders Factory in London is taking a different approach. Established in 2015 by lastminute.com founder Brent Hoberman and Henry Lane Fox, the incubator and accelerator aims to generate 13 new companies every year and accelerate another 35. “The intention was to create 200 companies in the next five years,” says William Godfrey, Founders Factory Head of Product.
The campus model is not new to the British capital: Google opened a Google Campus in Shoreditch in 2012, helping to consolidate the tech cluster known as ‘Silicon Roundabout’ (Google also operates Campuses in five other cities: Madrid, Warsaw, Tel Aviv, São Paulo and Seoul). Though Founders Factory does have expansive floorspace, in Kensington’s Northcliffe House, it takes advantage of its network rather than focusing on physical infrastructure. Hoberman is well-connected in British and European tech sectors. His Founders Forum has become one of the UK’s most high-profile conferences, with guests ranging from Google’s Eric Schmidt to the Duke of Cambridge. “I don’t tend to think about how we set up the space in terms of the floorplan, or benefits,” says Godfrey. Instead, “I think, what things does everybody who builds a technology business go through?”
Founders Factory’s approach is to combine brand-new companies with established corporates that feel under threat from innovative, tech-enabled business models. Its industry-specific accelerator programs are backed by, for example, EasyJet (travel), the Guardian Media Group (media) and Marks & Spencer (retail). Each invests for a 3 percent to 10 percent stake. Start-ups selected for the accelerator programs, meanwhile, gain from having immediate access to not only early funding, but also corporate expertise and assets. “As a start-up, you want to get access to distribution and data sets – the things big corporates have in abundance,” says Godfrey. Sixty of its companies have engaged in pilots with corporate clients; many of those have led to contracts and some to investment.
Godfrey’s team works hard to leverage the advantages of having so many small companies together: Founders Factory holds regular meetings between businesses to share learnings and look for potential collaboration. “What we have is this massive accumulated knowledge of the 100-plus businesses we’ve had through here,” says Godfrey. “We can make connections between people having similar problems. A lot of it is softer-touch, emotional stuff, too. One of the common tropes of building a start-up is that it’s really isolating.”
Founders Factory’s ambition for London is only matched by its international plans. Last October, the company announced its first international effort – the launch of a new space in Johannesburg that is dedicated to African start-ups.
Lisbon: Factory Lisbon
In a disused pasta and bread factory once owned by the Portuguese Army, construction is well under way on Lisbon’s own campus to match Paris and London. Factory Lisbon, which is due to open in the autumn of 2019, will provide 129,000 sq ft (12,000 sq m) of workspace for start-ups, a publicly accessible restaurant, rooftop park and much more besides. Its roots, however, are not in Portugal, but in Germany: founder Simon Schaefer is also behind Factory Berlin, the coworking campus that has become an important part of the German city’s thriving tech ecosystem. Named after Andy Warhol’s famed creative hub in New York, it opened in 2014 and grew to attract some of Berlin’s biggest tech companies, including SoundCloud, 6Wunderkinder, the period and fertility-tracking app Clue and others. “Being a participant of the local ecosystem since the late 1990s, we saw there is a lot to be gained by bringing several companies of different stages into the same space,” he says. In 2015, in order to fund international expansion, Schaefer and his team sold the German rights to the Factory Berlin brand, though they continue to operate another campus in the city called Silicon Allee.
Now he is bringing the Factory idea to Lisbon, which has been making waves internationally with its attempts to lure entrepreneurs to the Iberian Peninsula. A Golden Visa residency program and a non-habitual residence tax scheme set up by the Portuguese government have attracted new talent, and the national StartUP Voucher, which gives 18- to 35-year-olds access to funding and mentorship for up to 12 months to pursue a new business, has created a thriving culture of entrepreneurship. Since 2016, the annual Web Summit conference – having moved from Dublin in 2016 – has brought as many as 70,000 international visitors to the city.
“The willingness here to embrace start-ups and think forward is unparalleled,” says Schaeffer, who is also helping to advise the Ministry of Economy on improving start-up-friendly legislation. “We have incredible support from the government, the city and the local community.”
For Schaeffer, the key thing about campuses, as opposed to coworking spaces, is the relentless focus on the needs of fast-growth start-ups. “The real problem for companies is how to grow from a Series A to a Series B and double the staff or more in a short period of time,” he says. With that in mind, the focus within tech on workspace perks – table-tennis tables, sleep pods and other such gimmicks – are just that. “I’m a bit wary of that,” he says. “We’re not trying to influence too much how people conduct their business. Spaces so you can do an all-hands meeting every week, phone booths where you can sit and hold a Skype conference – that’s the kind of stuff that you need.”
Stockholm: The Factory
In 2016, Spotify CEO Daniel Ek co-wrote an open letter to the Swedish government complaining that while Stockholm was thriving, the rising cost of being based in the capital threatened to force the company elsewhere. It was a common thread: Stockholm might be the star of the Nordic tech scene – producing Skype, Klarna, iZettle, Candy Crush-maker King and Minecraft studio Mojang, to name a few – but success creates challenges. “Start-ups are all trying to concentrate themselves in the city at the same time as prices are skyrocketing,” says Sïmon Saneback, of Stockholm-based investment and services group Wellstreet. “For me, it makes no sense for start-ups at such an early stage to be paying those bills with their investors’ money, rather than trying to build something bigger. So we need to remove this focus from the inner city.”
Wellstreet, which Saneback co-founded three years ago, combines an investment firm with a digital consultancy, providing services to its start-ups and several corporates, including digital design, human resources, engineering and marketing. “We realized that we have built this platform for entrepreneurship, but we needed a physical location,” Saneback says.
This spring, Wellstreet plans to open Factory (no relation to Lisbon’s or Berlin’s) in Sollentuna, 15 minutes by train outside the city limits. The 151,000 sq ft (14,000 sq m) space, Saneback says, will be “the Nordics’ largest tech hub”. It will house not only companies – including many Wellstreet investments – but public spaces, a gym and restaurant, and eventually a school. “We’re not doing this only for start-ups. We’re looking at a full physical ecosystem,” he says.
Wellstreet’s ambition is more than a physical ecosystem. If successful, it hopes to help shape an entire neighborhood. More than 1,500 residences are planned for the surrounding area, and Wellstreet is considering shuttle buses to the city and airport. The Swedish government has been broadly supportive (even if recent political turmoil in the country has hampered progress somewhat). “This will be a very important area for Stockholm,” Saneback says.
Therein lies the great appeal of this new breed of tech megacampus. They are not just the physical infrastructure for a city; if done correctly, they can create new communities. Silicon Valley’s corporate giants have shaped entire cities and suburbs: Apple in Cupertino, Facebook in Palo Alto, Google in Mountain View.
For Saneback, Wellstreet’s campus has the potential to not only become a hub for Sweden, but also help cement the country’s place at the forefront of European technology. “We [Sweden] are an innovation powerhouse. We’ve built a fantastic community. And we’ve built sustainable products that have an impact. Sweden has all the components that are needed to support an entrepreneur in their journey.”
Oliver Franklin-Wallis is a London-based writer specialising in science, technology and business. He is a Contributing Editor for Wired UK and has written for GQ, The Guardian and Men’s Health.
This article first appeared in the May 2019 edition of WERTE, the client magazine of Deutsche Bank Wealth Management.