The Spanish startup ecosystem, from an American point of view

This a guest post from Riley Maguire, who is originally from San Francisco and was previously based in Madrid working as COO for The Mad Video and as Senior Strategy Associate for StepOne Ventures. He was also the Managing Director for the Jóvenes con Futuro program and an Asst. Professor with the University of Navarra. Riley is currently the Program Director for Incubadora Sinergia in Montevideo, Uruguay. You can follow Riley on Twitter or on LinkedIn.

In 2010 I wanted to find a job in Madrid, so I looked in a place I didn’t think there would be much competition: Twitter. The results for “Madrid Jobs” were quite sparse back then, and buried within the top results I found a tweet from @StepOneVentures. They were looking to hire an analyst, with a good level of English, familiar with Silicon Valley, who would help Spanish companies expand to the US. I got lucky, I’m from San Francisco, and I know and love the tech industry. A couple of broken-Spanish interviews later, I was on my way to working full time in the Spanish entrepreneurial ecosystem.

For the next five years I got to work with over one hundred startups and with some of the best people and teams in the region. I also developed a program to identify and provide work opportunities for some of the best young Spanish technical talent. In the process, I acquired a pretty good idea about how Spain stacks up.

Nothing pleases me more than seeing how the sector has developed. Five years ago I assumed that San Francisco was the model ecosystem to break into and copy. This last year has demonstrated that Spanish tech can do just fine on its own. All of those founder and investor hours are starting to pay off.

At that same time, I´ve grown very critical of lo español: things that are uniquely Spanish that stifle and hurt the culture. There are harmful elements in the individual outlook and society that can be commented on. They lurk in the background, affect decision making, hold back the next generation, and even manifest themselves in the sector’s leaders.

Default to Fear

A couple years ago I was shown the results of a survey that has stuck in my mind ever since. The survey aimed to find the percentage of recent university graduates in different countries that believed they had no control over their professional destiny (i.e. their next job). In the United States the result was 17%, but in Spain it was 70%. It suddenly made more sense to me why so many graduates want to be funcionarios (government workers).

The survey was set up for students, but I wonder if the result would be much different if it were set up for businesses. Spanish students share something in common with the multinationals. Change is met with fear and the practice is to minimize risk at the expense of future potential. Innovation is something to pay lip service to, when in reality it just makes incumbents anxious.

Looking at it another way, I can’t recall many Spanish business people or entrepreneurs who really “stir the pot”. In fact, the names that do come to mind are usually expats. It’s a characteristic of leading ecosystems to have individuals who challenge accepted norms and dare to execute on big visions. This isn’t the case in Spain where there is a strong tendency to conform and to settle. It can be recognized up and down the society. Even when there is individual success it’s often met with mistrust and suspicion. Those same individuals that could be celebrated simply retreat.

If you look at the spectrum of risk taking in Spain, at one end you have new talent or startups and at the other the more established companies or references. Spanish culture seems to push both these extremities towards a “safer” center. It’s a default to fear, and the result has a negative impact on the incentives for businesses, employees, investors and founders.

Confidence First

I think the Spanish tend to consider themselves as the little sibling in the family. When they step out into a bigger stage, there is a tendency to think they can’t compete. They consistently sell themselves short, don’t expect success (and consequently don’t plan for it), and seem to be a bit surprised when things go well. Yet there is no reason to show a lack of confidence; Spanish entrepreneurial talent is just as good as anywhere else in the world.

Can someone from Spain compete at the highest levels? Absolutely. I’ve witnessed it many times. I’ve seen Spanish developers that are just out of university take internships and move to San Francisco. Prior to the move, there is an anxious worry that they won’t be able to hack it. After the move, they quickly realize their skills are just as good as anybody’s there.

This is a message that the next generation must hear and buy into. And it’s not unique to starting a company or looking for a developer job. If you are from Spain, and you want to learn or do something big, then you simply need to believe that “yes, you can”. A Spanish professor said it best: “American students are encouraged to ‘do,’ while Spanish students are taught to ‘know.'”

The international community has already recognized the noise that Spain is making, but it needs to be internalized further. Amid the news about new fundraising rounds and acquisitions, there has been talk that we are entering into a “Golden Age” of the Spanish startup. I’ve seen this pattern before in Spanish film, sports and history. Applying this framework is great for the short term, but it also implies that it will come to end. The same skill and drive that developed such an age is not going anywhere. It’s necessary to continually believe that your work will have an impact. Any Spanish founder already believes that. I hope the greater community matches that level of confidence.

Ambition Later

Ambition is severely lacking in Spain and many outsiders have made the same observation. Entrepreneurs need to be ambitious, especially considering all the fears to fight through and the knock-downs to get up from. It may well be that this is the defining characteristic of entrepreneurship. Ambition, however, will still require a certain level of confidence. Confidence can get more people out of the door, taking chances and making tough decisions. Ambition comes later, determining which of those individuals have the ganas to see things through.

It is a funny irony that since there is a Spanish deficit in ambition, it’s a bit easier to identify potential success. While at StepOne, this was one of the first things we would assess in a founder and I’d expect that today’s investment community is doing the same. Though potentially useful, I’d imagine this is an identifier that people wouldn’t mind seeing disappear.

Ambition in English does not mean exactly the same thing as ambición in Spain

There is another reason for such little ambition in Spain: semantics. Ambition in English does not mean exactly the same thing as ambición in Spain. In English, the meaning is tied to an individual’s desire to reach their goals, but in Spain, the connotation shifts that desire to acquiring wealth and power. While the difference is interesting, the semantics don’t get near the root of the issue. There must be a Spanish word for a desire to reach one’s goals, but the problem is that not enough Spaniards have it.

Culture works both ways. Having an outside perspective brings some distinction but also hard lessons. Due to my time in Spain the way I measure success has definitely shifted. It has taught me much about where to prioritize and focus. I’ve also had to grow more humble about picking battles for my Silicon Valley point of view. While I’m critical of parts of Spanish culture, there are aspects of it that I would love to see in San Francisco. Entrepreneurs in Spain are bridging those worlds, and I’ve had the privilege of witnessing that development these last five years. With more confidence, Spain’s next five years could be amazing.