The eye of the Silicon Valley on Luxembourg Startup Ecosystem
Originally published on PURE LAMBDA
There are many reasons why startups choose Luxembourg to grow and thrive.
It is also the perfect launchpad for reaching the EU market while offering entrepreneurs an international environment with a multicultural talent pool. Due to the size of the country, Luxembourg offers easy access to public and private decision-makers and high quality of life.
All those arguments are genuine and verified, but they still appear as coming from a sales brochure. That is why we sat down with Leo Benkel, Founder of PURE LAMBDA, a consulting company that provides consulting and advisory services to help startups, scaleups, and funds solve their challenges pragmatically.
After ten years spent in the heart of Silicon Valley, Leo decided to move back to Europe and choose Luxembourg, which had proven itself to be forward-looking, innovative, and a champion of startups.
1. What surprised you the most?
You arrived from Silicon Valley to Luxembourg more than two years ago, founding PURE LAMBDA to help create a dynamic, decentralized, innovative technology scene across a united world. What surprised you the most when discovering the Luxembourg startup ecosystem?
The most significant difference between the US and Luxembourg is that Luxembourg state is much more involved in the startup ecosystem, providing a lot of support to the startups at any stage of their development, from the University Incubator to the House of Startups, LBAN, if you need funds. And the Government backs all those public or public-private entities, so everybody is on the same page.
I am also a big fan of the circular economy that the Luxembourg Government has consistently put in place across all activities. It is refreshing to see people massively buying locally and be proud of what is done and built in Luxembourg. There is even a place to see what is grown in Luxembourg for each season.
In the United States, nationalism is expressed differently. In Luxembourg, it is like a “humble nationalism”. We are proud of what we do but don’t shove it in everyone’s faces. What surprised me the most in Luxembourg, in general, is that it is more about cooperation than competition. Whereas in the United States, startups would fight each other for survival. This “collaborative spirit” is true between startups, helping and supporting each other, making the competition a lot different than in the US.
It also strikes me that the Luxembourg government is here to help and support the startups, not positioning itself only as the regulator. Of course, there is regulation, and this is important, but the objective of Luxembourg as a whole is to create an active, innovative, burgeoning ecosystem.
2. The Luxembourg startup ecosystem
How is the whole country supporting the development of startups? How big is the startup ecosystem in Luxembourg?
Regarding numbers, we need to be honest: Luxembourg’s startup ecosystem is relatively small compared to other hubs. But quantity does not always mean quality.
In terms of supporting the ecosystem, Luxembourg is a great place offering solutions at every step of the way from public to private entities:
There are multiple public and private stepping stones that startups can use throughout their growth in Luxembourg.
That being said, I don’t think having an extensive ecosystem is always a good thing. A startup should have a small, catered community. If you are in a vast ecosystem when calling the Chamber of Commerce, you will have to wait 3 hours or have an appointment in 6 months. In Luxembourg, because it is a connected, small and efficient ecosystem, you call and have your appointment almost immediately. The ratio of support per startup is adequate.
The only downside of the Luxembourg ecosystem is the talent pool because the country is small, and the living costs are pretty high, making it challenging for startups to attract people to work and live in Luxembourg while remaining competitive.
There is a huge opportunity to build a model where startups embrace a remote-first working culture. Then the potential of the Luxembourg startup ecosystem could be quite enormous. We could imagine media headlines like “ Luxembourg is hiring 10 million employees worldwide”
Because, to be fair, on paper and in practice, it is the perfect place to land your startup regarding connectivity, support, localization, legal framework, and make it thrive.
3. Top Sectors and industries
What are the sectors and industries in which startups in Luxembourg thrive?
One of the sectors I knew about before moving to Luxembourg was the space industry and the satellite industry. When I was looking at countries to move to, I remembered asteroid mining companies such as Planetary Resources, now ConsenSys, and Deep Space Industries that moved to Luxembourg. I didn’t even know back then that SES is a Luxembourgish company!
Luxembourg is one of the only countries in the world with a legal framework for asteroid mining. Which is one of the reasons why I decided to move to Luxembourg when I was in Silicon Valley.
Then because I learned about the banking industry, I suspected Luxembourg was strong in the Fintech space, which The LHoFT confirmed.
What was more surprising for me was the strong presence of Luxembourg in EdTech, especially with languages-focused companies, because I did not realize until I moved in that Luxembourg had so many languages. Luxembourg is a great test bed for EdTech startups.
The GovTech aspect was also a surprise, but it kind of makes sense because a lot of European Institutions are based in Luxembourg, so there are the resources and the right decision-maker to innovate in this area.
4. Popular hotspot for startups
According to you, why is Luxembourg such a popular hotspot for startups?
If your solution or product works in Luxembourg, it will most likely work in the rest of the world because you have already tested with people with many different backgrounds.
Furthermore, because the Government is helping startups so much, it is the perfect landing spot for startups arriving from outside of Europe.
The localization of Luxembourg, in the heart of Europe, is a great entry point to locate. Your sales team can quickly go to Paris, Frankfurt, or Amsterdam to meet your prospect.
5. Tech Success Stories
Since you arrived, what are the best tech success stories you noticed?
One of my favorite stories is MaGrid, an effective pedagogical program to improve the development of mathematical abilities for children. They were very smart in leveraging everything Luxembourg has to offer. The Luxembourg Government embraced MaGrid’s technology; and the fact that MaGrid has been put directly in public schoolis a great story. Indeed since March 2021, MaGrid solutions have been available in all Luxembourg primary schools and specialist learning centers like the Logopedic center. It highlights how Luxembourg is innovative and not afraid of taking risks, whereas the education world is usually quite conservative.
Another great startup story is VestisLab. PURE LAMBDA is one of their advisors. VestiLab is a 3D product development platform for fashion brands/designers with a digital-first focus. It is another impressive startup aligned with the circular economy policy of Luxembourg. They successfully graduated from the Founder Institute program and Fit4Start and are now located in the Technoport incubator.
6. Differences with other capitals of the world
Would you say that the work you do with PURE LAMBDA in Luxembourg’s startup ecosystem won’t be the same if you were in London, Paris, or New York? What are the differences? What are the similarities?
The big difference between Luxembourg and London, Paris or New York is that the public institutions are accessible and open-minded. It was relatively easy for me to start working with the University, with ADEM, or with Fit4Start. Working with public entities in France or the US would be much more difficult.
One story that I like to tell is when I opened PURE LAMBDA at the very beginning, I received a phone call from the Chamber of Commerce. My first reaction was that I had done something wrong. But quite the contrary, they called me to inform me about the help they could offer: offering courses, and training. Coming from the US, I was very suspicious, thinking, “ what are they trying to sell me; How much do they want?; did I forget to pay something?”. But no, they just wanted to help, wishing success to my newly funded company. In the US, you are very often left alone, unless you made a mistake in your tax report of course!
7. Wishes for the future
What are your three wishes for the Luxembourg startup ecosystem in 3 years?
Luxembourg is a startup by itself. Luxembourg can take risks without the impression that it will lose everything. It is what they have done with the satellite industry, and it paid off.
I see Luxembourg as the “ Garage of Europe”, as Google and Apple, all started to innovate in their garage. You can create your company in Luxembourg and grow from there.
I also believe that Luxembourg has the potential and solid foundation to grow long-term sustainable companies rather than quick win, grow and burn ones.
Be bold. Don’t be afraid. Luxembourg has the resources to foster “weird and bold ideas” or reach out to unknown territories.
Look at the Maana company: printing solar panels out of moon dust!
Luxembourg also has the capabilities to bet on the Next tech.
My advice would be, “ do not follow the hypes and trends”. Because everybody does “multiverse” does not mean Luxembourg has to embrace it. In my opinion, the multiverse is a “trendy trend” but it will not fundamentally be the game changer of the next ten years as asteroid mining is.
Let’s prepare for the future by investing in Electromagnetic Cannon to propel satellites in space cheaply, a nuclear power plant on the moon, or warehouse-free shop with on-demand 3D printing, or large scale indoor aquaponics farms, or any crazy ideas that will make humankind thrive and grow sustainably.
Luxembourg has the resources to invest in the long-term future of Humanity rather than focus on small quick selfish wins like the rest of the world.
Let’s be the leaders of tomorrow and lead the way into the unknown paths of the future.
Overall, I am very pleased to be in Luxembourg!
And always remember:
“ Do not go gentle into that good night,
Old age should burn and rave at close of day;
Rage, rage against the dying of the light.”
Originally published at https://purelambda.com.