Lisbon has been said to be the new San Francisco, but do we Really Need Another Silicon Valley?

A thriving entrepreneurial ecosystem together with constant promotion of technological development and innovation are just some of the reasons why Portugal has been distinguished by international institutions in the past few years. Lisbon, its capital, stands out at a European level for being home to a vibrant startup community. Many are the traits that Lisbon shares with San Francisco - from the cable cars and the suspension bridge to being home to disruptive tech companies. Some say Lisbon is set to become the European Silicon Valley, but do we really need another one?

City’s local governments around the world have been trying for years to claim the prize of being “the New Silicon Valley” - from London to Tel Aviv to Tallinn to Lisbon, it seems a race exists to replicate north-America most famous tech hub to lure not only the very best minds but also investors with the deepest pockets. 

Home to the very first large dot-coms that were born more than 25 years ago, San Francisco has been traditionally looked at as the golden temple of tech and innovation and has defined what a successful startup should look like. Despite the many upsides, positive examples and learnings we can take from SF, the city’s obsession with disruption has never gone hand in hand with a corporate culture reform to avoid gender and racial bias, online manipulation and data misuse. San Francisco has often grabbed headlines for having been rocked by several scandals in recent years - form Facebook’s Cambridge Analytica to Uber’s sexual misconduct investigation. 

It was in the wake of the Cambridge Analytica shock wave that Bärí A. Williams argued that many of the ethical issues that tech companies wrestle with, from data breaches to gentrification, could be solved with a more diverse group of people making decisions. And Silicon Valley-based tech giants are not doing so well in terms of diversity. 

Source: Wired

6 years have passed since Apple, Facebook, Google, and Microsoft first released diversity reports, one where Silicon Valley appears to be overwhelmingly male, and white or Asian. In 2019 things had not changed much: 92% of Facebook employees, 95% of Google employees, 89% of Microsoft employees, and 84% of Apple employees were white or Asian, according to company data. Women represented 21% of employees at Microsoft, 23% at Facebook and Apple, and 26% at Google. 

So why should we copy a flawed model when we can build improved versions of Silicon Valley that take into consideration local culture, diversity, lifestyle and available talent? 

LISBON, SAN FRANCISCO’S OLDER SISTER

“Surf, cable cars and golden bridges. Welcome to San Francisco in Europe ”. It was back in 2015 that Bloomberg’s Caroline Hyde traveled to Lisbon, one of the oldest cities in Europe, a year before the first edition of the Web Summit was hosted in the Portuguese capital. The result was a two-minute reportage that portrayed the growth of the local startup ecosystem. In fact, with both cities rising on the shores of a scenic gulf (the San Francisco Bay and the Tagus estuary), on hilly terrain and with strikingly similar landmarks, it is difficult not to compare them: 

• Ponte 25 de Abril and Golden Gate Bridge: Lisbon’s 25 April bridge, a remarkable span of red metal suspended on the Tagus river, carries a strong historical significance: completed in 1966, the bridge was named after Portugal’s dictator, António de Oliveira Salazar. In 1974, four years after his death, it was renamed to commemorate the day on which the Carnation revolution erupted to unshackle the country from almost half a century of authoritarian rule. Today, with so many similarities to the Golden Gate Bridge in San Francisco, it invokes yet another shift in the capital’s history as it is set to become one of Europe’s leading tech hubs.

• Sunshine and Surf: It is not by chance that worldwide famous surfboard shaper Nick Uricchio chose Ericeira (North of Lisbon) as his home, back in 1979. Portugal is a well-known surfers’ paradise and, due to its unique geographical position, picks up North, West, and South swells which means there is consistent surf for a good portion of the year. Closer to the city and located on the Cascais line, Carcavelos is also a renowned surf spot.  

• Cable cars: if you think about Lisbon, one of the most iconic images that come to mind is 28 tram, a yellow wagon traversing the oldest neighborhoods in the city. San Francisco’s cable cars, on the other hand, are not only the world’s last manually operated cable cars. They’re also the first — these cable cars were invented in San Francisco. 

Many are the other common traits between Lisbon and San Francisco - from being prone to earthquakes, to being a gateway to worldwide famous wine regions. 

Offering one of the best lifestyles in the world, and with a flourishing investment and startup scene, Lisbon has been slowly catching up with larger ecosystems in Europe and overseas, becoming a primary choice for establishing EU operations for some of the most innovative companies in the world. 

LISBON STARTUP ECOSYSTEM - A SMALLER, MORE DIVERSE SAN FRANCISCO? 

Portugal’s capital is in vogue: named as the Silicon Valley of the old continent by entrepreneurs, investors and international publications, Lisbon has been said to be a paradise for investors. The Web Summit, a prominent stage in the world of digital innovation and startups, promises to stay for many years to come. With a lifestyle that invites foreign entrepreneurs to stay, a safe environment and a talent pool that only gets bigger and better, Lisbon has a wild card in the race for human resources in Europe. Let’s face the hard truth though: being the capital of a country with only 10 million inhabitants and a market that is barely sufficient for proof of concept and MVPs, startups with a Portuguese DNA need to start thinking internationally from day one. However, the international-thinking attitude has only made local companies scrappier - in fact, such a mindset has contributed to some authentic success stories: Outsystems, a low-code application development platform; Talkdesk, an enterprise cloud contact center; Unbabel, an artificial intelligence-powered human translation platform; DefinedCrowd, a female-led crowd-as-a-service intelligent data platform intended to accelerate enterprise data training and modeling; Aptoide, an Android-based software marketplace application for installing mobile apps that famously went up against Google.

Lisbon is one of the main Portuguese and European clusters of entrepreneurship, classified as the 12th best-emerging ecosystem worldwide in Startup Genome's Global Startup Ecosystem Report 2020. 

Source: Startup Genome

Many are the international leading tech companies that have chosen the Portuguese capital as one of their bases in Europe - Amazon, Microsoft, Fujitsu, Siemens and Cloudflare to name a few. 

The city has been a leading tech hub in Europe for some years, and the public and private investments in the area of technology and innovation combined with entrepreneurs eager to conquer new markets, have contributed to building a solid reputation for Lisbon and Portugal. 

It was just last year that the European Innovation Scoreboard 2020 classified Portugal as the 12th most innovative country in the European Union, right after being highlighted as one of the top 40 countries to do business by the World Bank. With a wide network of specialized organizations and large university centers that continuously promote technological development, a workforce that is highly skilled and very proficient in English as well as in many other European languages, Lisbon keeps leading the race as one of the favorite destinations for expats and digital nomads, contributing to its diversity.  

The government plan to offer residency, and eventually citizenship, for anyone who invests at least €1 million in the local economy, buys property worth €500,000 or creates 10 jobs is only one of many available incentives: the golden visa scheme (available in Lisbon and Porto only until 2022), for example, has already drawn thousands of investors and has begun to catch on with the tech community. 

Historic, cultural and linguistic affinities with Brazil, where skilled programmers are not a rarity, Africa and Asia, make Lisbon a destination able to draw talent from anywhere, giving the city an edge at a time when Brexit and new restrictions on immigration are increasingly problematic for London, Europe's No. 1 tech destination. 

With such a dynamic ecosystem, Lisbon has all that is needed to become a reference in the innovation landscape worldwide, without abdicating its cosmopolitan and diverse soul. 

If you are an entrepreneur interested in entering the Portuguese market, get in touch today or download our step-by-step guide on how to open a company in Portugal.