Comparing Paris and Berlin as Entrepreneurial Cities

If you were an entrepreneur, which city would be a better location to launch your startup � Paris or Berlin?

It�s a trick question, because, as I have previously explained, a question like �Paris or Berlin?� presupposes that entrepreneurship is a zero-sum game, a World Cup match where one loses and the other wins.

That being said, cities have strengths and weaknesses in entrepreneurship, and I noticed a marked contrast in the entrepreneurial energy of two cities I visited recently, Paris and Berlin. Admittedly my observations are anecdotal, but I think their implications are worth further discussion.

Paris is a beautiful city with a ton of history. I haven�t spent much time there before, and I was taken aback with what the French have accomplished. The Parisians have built something truly remarkable in its beauty and scaled it (case in point is the Louvre, which would take a week to get through!) and maintained it for generations � something any entrepreneur would be proud of. I can see why it is such a popular city for visitors.

There was a growing entrepreneurial ecosystem in the city and some strong advocates who will make it happen, which is extremely encouraging. And there were a lot of very smart and well-educated engineers everywhere. The French are very proud of the Polytechnique, though very few of their graduates have become entrepreneurs.

Two observations were worrying to me. First, I did not see many immigrants in the workforce, but instead I got a sense that the French were trying to protect their culture that they are so proud of from outside influence. French support for a series of laws aimed at restricting religious expression in public seem to bolster this notion. Second, it seemed that for Parisians, life was good and there was much more to life than work. There was very little pain or struggle evident. Pain and struggle are often motivators for entrepreneurship.

Berlin, by contrast, has a gritty feel to it. On the way in, observing that the median strip on the highway was overrun with tall grass and weeds, it was clear that this was not Paris. It reminded me more of the East Village in New York City whereas Paris was Fifth Avenue uptown.

Last time I saw Berlin, in 1981, it was surreal � West Berlin propped up artificially to be a beacon of Western capitalism, and East Berlin�s desolation and bareness, like something out of Planet of the Apes. While the city is thriving now, and it is more difficult to distinguish between West and East Berlin, Berliners seemed to be starting with a relatively clean slate, essentially rebuilt since 1989 (especially East Berlin).

The entrepreneurs I met with relished their underdog status. One proudly called Berlin, �The Home of Dumpy� and another referred to it as �The Home of Europe�s Misfits.� They seemed to fit with the mindset of �creative irreverence� very well.

The city is so heterogeneous, it is mind-blowing. People come from countries all over � Russia, the United States, Denmark, England, Italy � to live, not just as tourists. Heterogeneity was evident throughout Berlin�s startup landscape. The arts scene, for instance, seemed broader in range and more inclusive than that in Paris.

Berlin seemed to have much more angst, that there was a lot of work to do and they needed to work hard to get it done.

When an individual entrepreneur is choosing between these two cities, or making any location choice, they should be taking into account their industry, founding team, personal values, market costs, and more, not just a high-level view of strengths and weaknesses of the cities. But if you ask me where the growth will be over the next five years, I would have to say Berlin. The extremely heterogeneous population, the palatable youthful forward-looking energy, the very low-cost real estate and technical talent, and the presence of a strong designer community bode well.

And most importantly in the end to see who is more likely to be an entrepreneur, it is about commitment. Who wants it more? Who needs it more? It is much harder to be a great entrepreneur on a full belly.

Bill Aulet is the managing director of the Martin Trust Center for MIT Entrepreneurship and a senior lecturer at the MIT Sloan School of Management. His first book, Disciplined Entrepreneurship: 24 Steps to a Successful Startup, is due out in August. You can follow him on Twitter at @billaulet.