On May 5th, the Handelszeitung has published an article which discusses why a success such as Facebook would never be possible in Switzerland. They summarized the following reasons:
1. Everything is way too expensive
Everything, ranging from rent, administrative and legal support as well as human capital is extremely expensive in Switzerland. For a startup, it is basically impossible to handle all these issues on a competitive and sufficiently professional manner without adequate funding.
2. A Lack of Cash
Despite the fact that Switzerland is the country of banks, there is little cash available for high potential startups. While you can easily get some "pocket money", the really big deals with double digit million CHF investments do not exist. But this is exactly what it takes to build globally competitive companies. The Samwer brothers with Rocket internet have shown, also if often under critique for their clone factory approach, that with sufficient money you can quickly grow a company to be successful. Of course, it needs to be paired with the right leadership!
So, if young companies aim big and want to build a global company, they only have the chance to look for money outside of Switzerland. A good example of this is Poken. Having started in Switzerland they had their initial funding on site and started growing the business. Just recently they announced that they will move their HQ to Palo Alto...
In order to change the trajectory Swiss internet startups can take, investors need to stop sitting on their money trying to incrementally multiply it, instead of hitting for the big shots and in turn take some risks...
Read the full article here (in German!).
1. Everything is way too expensive
Everything, ranging from rent, administrative and legal support as well as human capital is extremely expensive in Switzerland. For a startup, it is basically impossible to handle all these issues on a competitive and sufficiently professional manner without adequate funding.
2. A Lack of Cash
Despite the fact that Switzerland is the country of banks, there is little cash available for high potential startups. While you can easily get some "pocket money", the really big deals with double digit million CHF investments do not exist. But this is exactly what it takes to build globally competitive companies. The Samwer brothers with Rocket internet have shown, also if often under critique for their clone factory approach, that with sufficient money you can quickly grow a company to be successful. Of course, it needs to be paired with the right leadership!
So, if young companies aim big and want to build a global company, they only have the chance to look for money outside of Switzerland. A good example of this is Poken. Having started in Switzerland they had their initial funding on site and started growing the business. Just recently they announced that they will move their HQ to Palo Alto...
In order to change the trajectory Swiss internet startups can take, investors need to stop sitting on their money trying to incrementally multiply it, instead of hitting for the big shots and in turn take some risks...
Read the full article here (in German!).
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