Unless things have changed recently, Berlin still has fairly low rents and low living costs going for it -- giving people a fair amount of marginal space: http://www.paulgraham.com/marginal.html
Alexander Young (of Soundcloud) speaking about Berlin: "The atmosphere and culture in Berlin is very unique. Since the costs for living are still low, people can afford to only work a few hours per week, and do the stuff they want the rest of the time."
http://blog.twingly.com/2010/05/18/from-stockholm-to-berlin-...
I agree Berlin is ultra-cheap, but the Nordic capitals are still pretty cheap compared to other startup hubs. When I moved from the US to Copenhagen, people warned me about expensive rents, but I was actually surprised at how much cheaper it is here than in major American cities. I pay about $1400 (€1000) for a centrally located 2bd in a nice area near the metro, which is a kind of price it's totally impossible to find in SF, Boston, or NYC. Not to mention in other startup hubs like London...
I pay an overall tax rate around 35-40% in Denmark. A flat 8% of that is for healthcare coverage, which is comparable to the percentage of my salary I paid for healthcare in the U.S., so the "non-healthcare" part is more like ~30%. Which is about what California taxes are like, after you add federal income tax, payroll taxes, and state income tax, so I'm not seeing much of a difference. My disposable income after "necessities" (taxes, healthcare, groceries, transportation, and rent) is a considerably higher percentage of my nominal income, all told— although that part really varies depending on where in the U.S. you live (e.g. Pittsburgh is much cheaper than the Bay Area).
True, but VAT is pretty trivial as a percentage of my overall expenses. Completely swamped by other factors, like the difference in rent, and the fact that the transit is so good I don't have to pay to own/maintain/insure a car. I would guess I spend $500-1000/mo on VAT-applicable goods and services, so we're talking a difference of $80-160/mo compared to CA sales tax.
This might be a common myth. The tax levels in the nordic countries might be higher than the US but not by that much. We also have free health care and education (university attendance is free) and other benefits included in our taxes.
Earning $100k in Norway you'd pay around 32% tax.
Edit: We have progressive taxes. To pay over 50% taxes in Norway you'd have to have a regular salary above $551k, with no deductibles. Capital gains are taxed at 27%.
Not so in Helsinki. In Helsinki, $100k would be in the 40% tax bracket. But the problem in Helsinki is the tax bureaucracy; you have to estimate your income for the year, and the tax office gives you a tax rate. Anything above that level gets taxed at an exorbitant amount (>50% for the 100k$ salary). Plus, yes, there's free healthcare in Finland, but it's only really available for you if you're poor (if you're not a citizen). If you make money, you're expected to use your private insurance, which will be covered by the company. Salaries in Helsinki are about 60% of what they are in SF, but costs are about 80-90%.
> you have to estimate your income for the year, and the tax office gives you a tax rate. Anything above that level gets taxed at an exorbitant amount (>50% for the 100k$ salary)
The higher tax rate is a safety mechanism in case you would fall into a tax bracket with a higher percentage. This does not mean you are necessarily taxed at a higher rate; you are just saving in case you earn so much that your tax bracket will change.
If you don't fall into a higher tax bracket, you will get the money back when the tax office checks the numbers afterwards.
This system is in place so that you wouldn't get surprised by huge tax deficit when you fall into a new bracket at the end of the year.
Yes, I had the same thing due to failing to file any kind of form when I first moved to Denmark— they withheld at the top tax rate by default, but then gave me the money back at the end of the year. I didn't have to go through any sort of process to request a refund; it was just automatically deposited in my bank account. They even tacked on 0.5% interest onto the over-withheld amount.
In Finland, your income tax rate only depends on your total yearly income. If you estimate your income too low and too much money gets withheld, it will be returned to you the next year. You can also adjust your estimate at any point during the year.
There's also 25% VAT, compared to 0%-8% sales tax in the US (varying by state).
I'm not sure why included university attendance is always thrown into the pitch in these conversations -- someone looking for a place to work probably isn't trying to pick up a philosophy degree on the side.
Because if you're not a single 20-something, you might be thinking about saving for your children's education.
Being sited in a country with free university education means that when you're paying your staff, you don't have to assume that they need to be putting away several thousand a year for a college fund.
It would also mean that people who are 20-something and educated locally are less likely to have large student loans to repay too. They would pay more tax compared to the US, but need to spend less money after tax so it should even itself out.
This is not necisarilly true. As a student in Sweden I can explain how our system works.
The university is free for swedes and europeans (might only be free for schengen countries). In Sweden we have a government agency that controlls student loans and subsidies (the agency is called CSN, Central Study Board). As a Swedish citizen you have the right to a ~2000 SEK (around 300 USD) per month subsidy. So just by attending university you get 2k SEK each month (this is limited to I think 12 terms in total, i.e 6 years), this is something you don't have you pay back.
We then also have the right to a student loan which will push up your monthly "earnings" to ~8000 SEK (1200 USD). This loan you obviously have to pay back. The current plan is that every student that took a loan before 2001 have 25 years to repay it.
Students that live at home during the duration of their study time can get away with only taking the subsidy. But most student (at least those that I know, including me) have to take the student loan.
Interesting, that's something that's different in Denmark. The Statens Uddannelsesstøtte (SU) is 5500 DKK (around 1000 USD) per month. You can additionally take loans, but most students don't; they just live within the SU amount, often by living in one of the fairly cheap university dorms. It's getting more common for students to supplement their SU with freelancing or a 1-day-a-week job, though, especially masters students in areas like tech or design.
Healthcare is basically free (trivial costs for a visit) and that's for everyone with a work permit, no exceptions.
VAT is 24% and food is expensive. Salaries are lower than other big cities but not much and it depends a lot on the exchange rate if making a comparison. When the dollar was getting you €0.63 our salaries looked fine; at €0.73 they look a bit light.
Agreed, but if you're spending 5-10% of your income every month on repaying student loans that has the same effect as a tax. I think the cost of healthcare is a much better example though.
However, the employer also pays taxes from an employee's salary, bringing the actual tax rate closer to 50% - if not for those taxes, they could play the employee more in the first place.
Americans have a perception that Europeans pay much higher taxes than we do. It's perhaps true in certain countries in certain times for certain kinds of income but generally speaking the rates are quite comparable.
What's worse is: Europeans get way more for their taxes: namely medical which is 18% of the American GDP. In other words even if our taxes were way lower than their's (which they aren't) the medical piece likely would make up for it.
The key reason our taxes are so high compared to their's (I believe) boils down to military spending. I think you can make an argument that America's massive (more than everyone else combined) military spending is benefiting the whole world's stability and in that sense Americans subsidize the whole world through our taxes. But this means our taxes are inherently quite high.
I just came back from Berlin (awesome couchdb conf @ co.up co-working space) and must say that the energy in a place like Kreuzberg is pretty intense.
The area around Rosenthaler Platz and Rosa-Luxemburg-Platz in Mitte also seemed kind of interesting but more akin to what I'm used to here in Vienna (neat and tidy).
I only had five days to experience the city but I do have thought about moving there already!
But yeah living in Vienna is so damn comfortable that it really is a difficult decision to go anywhere else.
We have a lot of co-working spaces too and I often meet local devs at coffee shops by coincidence (another strength of a rather small place). So everything being so nice is both a good and a bad thing I guess.
How necessary would speaking fluent German be to live/work in Berlin or Vienna? I've heard that most young people and tech people speak English, but that it can be a problem, if you don't know good German, to interact with the civil service, banking, business registration, and those kinds of things. But I have no personal experience there.
One thing that makes it easy to stay in Scandinavia is that I've been rather spoiled by how easy it is to do everything in Denmark in English. Official government forms are available in your choice of Danish or English versions, all my banking is in English, doctors all speak it, and every government office I've been to will switch once they realize you're a foreigner. Heck, even many public lectures at universities and museums are in English. The language is good to know for social reasons, but there aren't really any formal/official situations where you have to interact in Danish.
There were certain areas in Berlin where speaking English seemed almost mandatory, especially in Bars and Cafes but that said I don't know how the situation is with gov institutions etc.
I would guess though that it can't be such a big deal as there seemingly are a lot of non German speakers everywhere (in the mentioned areas it felt like German native speakers actually were a minority) and consequently at least some of the local businesses were owned by non Germans too.
Vienna is definitely less pronounced international but telling from my experiences at coffee shops as well as the "Wien" subreddit at least there must be a thriving expat community.
Sorry for not having more info about the official lang requirements in Germany/Berlin but do check out the cities' corresponding subreddits:
Most expats I know here have done well, sometimes 5+ years, without ever properly learning German. So language is not an issue.
That said, you do need help when dealing with the bureaucracy. It can be complicated, and they often do not speak English. But it's trivial to get this help from colleagues or expats.
90% of those I work with are German, and yet I can get by speaking only English as 1) they will switch to English, like I suspect most German developers can and would, and 2) our CTO and a few others in the office are not German either.
Agreed! I moved to Berlin almost two years ago from Amsterdam (not a bad city either!) and I'm still happy to be here. If you're a RoR developer or front-ender needing work and a push to come here, hit me up :).
Two of my favorite products are from Sweden, my OP-1 synth and Reason.
I've often wondered if a social safety net, such as the one in Sweden, takes a risk burden off of entrepreneurs and therefore allows for more experimentation with products like these. They require more lead time to develop (years vs. months) and target music making, which isn't an obviously lucrative market. However, the companies behind both products seem to be doing quite well.
Linux would have never happened if Linus Torvalds didn't have a chance to "slack off" in Helsinki University with taxpayer money. The whole thing started as a hobby project.
Unfortunately, the times are changing in Finland, too, as politicians are pushing for legislation to force students to finish their studies within tighter time frames.
There was a legislation about a maximum period of 7 years for doing both the bachelor's and the master's degree. This would mean a student could lose his permission to be enrolled in the university as a student and graduate:
I couldn't find an English source for this, sorry. Perhaps Google Translate will help.
There is a caveat in the law, which is that universities can give extensions to the studies as they wish, and most students who request it do get it. But it's still a strong message from the government and there are ~400 students at the moment that have their studies interrupted because of this law.
Also Anita Lehikoinen from the Ministry of Education says that "funding to universities are partly decided by the amount of students who achieve 45 study points (points awarded for completing parts of the curriculum) in a given year" ( http://ylioppilaslehti.fi/2010/02/pitka-ura/ ) So there is a clear incentive for universities to push students into graduating quickly.
I'm a student at Aalto.
There is promise, there are some communities with really, really smart people. But this article feels like it hypes the government.
Personally I do not agree with the government throwing a bunch of money at things, it creates a loop of nonsense, people milking the cow while the fun lasts. This can be seen and heard on the ground level here. Throwing money at companies is something Tekes has done for ages with established companies in Finland, like Nokia. The startups are just the hot thing now so money is flowing there.
This leads to the fact that the startup scene is hyped in general.
Please note that this comment is quite specific to Finland.
I've heard bad things on HN (possibly from yourself) about government startup funding in Finland - something along the lines of there are a small number of entrepreneurs favoured by the government who receive investments and produce some mediocre product doomed to fail and repeat semi-regularly.
Is this anything close to the truth or did I misunderstand/mis-remember this?
As far as I know there is no "favoritism" for goverment grants . Like any fundraising, there are those are better / more experienced with it and those who aren't.
But the real problem is that the government officials are not investors. Steve Blank said this well on his visit:
Ironically one of the things that’s holding back the Finnish cluster is Tekes, the government organization for financing research, development and innovation in Finland. It’s hard enough to pick which existing companies with known business models to aid. Yet Tekes does that and is trying to act like a government-run Venture Capital firm. At Tekes, government employees (and their hired consultants) – with no equity, no risk or reward, no startup or venture capital experience – try to pick startup winners and losers.
I'm from Finland, from what I have heard and seen about the government funding companies is that they usually fund companies with a clear plan and with founders with a lot of experience in their field (that is have worked their whole life in the field/phds).
Running a software company in Stockholm, Sweden is a blast. It is a great place to live, plenty of good people to recruit, a decent domestic market, e.g. many big companies willing to try out services from startups. There is a vast number of small tech companies here, most of them completely unknown. Every week I learn about some cool new company doing their thing just around the block from us, without ever having heard of the people involved.
There are some major caveats: Income taxes are extremely high and tax rules makes it almost impossible to share ownership in a rational way, e.g. it is very hard to setup stock option programs etc. Also, the domestic venture capital market is extremely underdeveloped - a great opportunity for foreign investors!
I am a firm opponent of all government programs to stimulate entrepreneurship. My view is that the government should simply get out of the way. And in fact, except for the taxes, this is by and large what the Swedish government is doing. For example, there is very little bureaucracy around running a business, e.g. starting an incorporated company is now done easily over the internet, often the whole process can be completed in a matter of days.
Out of interest, do you think it’d be easy to get into the startup scene with minimal Swedish? My wife is Swedish and we have in the past considered a move to Stockholm but my Swedish is absolutely not fluent (although were we to do it I’d enrol in an evening course as soon as we moved).
Getting by in Stockholm won't be a problem: you can safely assume that people within the start-up scene are fluent in English. You'll be met with a slightly different kind of problem: as communicating in English is so effortless, you'll have few opportunities to really practice your Swedish.
Hah, yeah, I know the Swede’s proclivity for English :) Just wasn’t sure that it’d be acceptable to speak it in a business context. That’s interesting for sure.
I've been in Stockholm for 1.5 years now. When I arrived, I didn't know a single word of swedish (I've taken classes since, but not in a very productive way), and things have been just fine. Like another said, I'm not improving so much because I have very few incentives to do so.
Our monthly Python meetings in Gothenburg are almost always in English. In part because it was founded by two native English speakers, in part because there are other non-Swedish speakers who come, in part because many of the software courses are in English, and in part because almost all of the literature and documentation is in English.
And of course, in large part because this is effectively a bilingual country. In the years I've been here, I've only talked with a handful of native-born Swedes who did not speak English. Those were older people who had learned German as a student. (There are non-native-born Swedes, like immigrants from Chile who speak fluent Spanish and Swedish, whose English can be poor.)
I agree with Matti - doing business in Stockholm without knowing Swedish is no problem. Swedes are generally fluent in English and most often they enjoy speaking it. I know several foreigners who run startups here without bothering to learn the local language.
I had to go to Stockholm a few years ago. It was somewhat short notice, so I didn't have time to brush up on my Swedish. I knew how to say "thank you", and "Sweden", and that was that.
On the first evening I had a bit of difficulty operating the keycard outside the hotel. A chap came up to me and started talking, presumably explaining how to use it. "Murgle burgle burgle wurgle furgle", he said, or something like that. I must have looked blank for about 0.1 seconds before he slipped, with barely a beat, into flawless, unaccented English. And the first English words out of his mouth were, "Oh, sorry..." :)
(This was not a unique experience. Even the petrol station attendants spoke great English. You don't even get that in England.)
It's crazy hard in Gothenburg, at least for some place I wanted to live. I've heard that Stockholm is worse. If you're a single person, willing to share an apartment with someone else, then you can rent just a room ("inneboende"). That's likely the easiest. You can also look for a sublease ("andrahandskontrakt"). But getting a lease ("förstahandskonrakt") is hard. Parts of town require you to be on a waiting list which can be up to 5 years long. For Gothenburg, I was on the list for 1.5 years for a lease before we gave up and moved to the smaller city of Trollhättan.
No startup scene, but a 1,300 sq. ft. apartment in the center of town (3bd, 1.5 ba) goes for only $1,500/month, and the commuter train to Gothenburg takes about 45 minutes.
If you have money you can get a "business apartment" for about 2x the normal rate. Those are pretty easy to find. But you'll need to have a business first (even one in the US) to rent it.
You can get an idea of what's available using the aggregator http://kvalster.se/Stockholm . When a place is "1 rum" it means studio, "2 rum" means "living room and bedroom", etc. As a decent approximation, 1sq meter is 10 sq. feet.
Rates in the tech area of Kista look about $700 for a shared room/studio. In Södermalm I see prices more around $800 for a room/studio, though you can pay a lot more. (350 sq. ft studio apartment, furnished, for one month rental while the owner is overseas, $1264 for the month.)
Förstahandskontrakt is more like 17 years in the most popular parts (Vasastan in Stockholm).
It is possible to get a sublet or such but it tends to be expensive and quite time consuming. A lot of scams going around as well so one has to be careful. Prices indicated above seem quite accurate.
17 years? Wow! Last I read was a couple of years ago, and it was definitely only about 5 then.
But when I first moved to Gbg it was easy to get a 2nd-hand contract. Now it's nearly impossible. I read that there was a change ~5 years ago in the law to make it financially better for the Bfr to switch from rental to co-op, so I can see how that would also affect Stockholm.
Well, if I want my children to retire in Vasastan then I should put their name on the list soon. (And have children, but that ruins the joke.)
The market for apartments is not a strong point for Stockholm. You can get an apartment rather easily, but it is not cheap compared to similar cities in Europe.
Some current listings from the Swedish equivalent of Craigslist:
I'm involved in the startup scene in Norway, and it seems to me that there are mainly two sources of real money; oil (gas/offshore/etc) and fish, considering both private and public funding. It doesn't look to me like unrelated tech startups gain any special advantages by being in Norway.
I grew up in a community in the North of Scotland that was dominated by fishing (more oil these days) and most boat-owning skippers were pretty much risk-seeking entrepreneurs - with pretty big rewards possible (certainly well into F-you money).
The chapter on Iceland in Boomering Michael Lewis where he describes how the risk seeking fishermen were maybe not the best choice to become investment bankers reminded me a lot of people I knew when I was younger.
I partially agree. Norway is a pretty small country - and folks here, it's seems, would rather sit on cafés drinking coffy and "solving the problems of the world" rather than getting into the hard world of entrepreneurship. There's just not that many good ideas to fund here (?) There's some gov. initiative, and now they are also open sourcing more (of our) data (and even throws in a competition: www.apps4norge.no)
Also IMHO, Scandinavians needs to stop blaming the "law of Jante" all the time - maybe we should take a look at ourself instead? :)
I'm from Lithuania (that is Baltic state, but http://www.arcticstartup.com/ includes Baltic states in their news coverage). I'm constantly getting offers from various startups without looking for them.
EDIT: basically if you want to start company here you can get help from forming team, getting training, getting a little bit money and etc.
I've been around the scene about 5 years (one of the founders of ArcticStartup which was mentioned in the article).
I think the Economist is pretty accurate on the fact that there is lot of bubbling but takes time and experience to actually build something big and successful. SV has had the mindset, experience and infrastructure for decades. We are just starting now.
Lund, Sweden, here. Currently doing a SaaS mobile project in my startup.
Malmö has a great startup scene with Foo Cafe and other gatherings. In Lund you have LTH, Ericsson, Ideon, etc so there's a lot of tech talent there as well.
Anyone, feel free to hit me up for free coffee in our Malmö office :)
How is the immigration process in the region? I might not be able to get permanent residency soon enough in the US, and so it might be worth checking out other countries (I am also eyeing Canada). This is speaking as a graduate from one of the top 3 CS schools in the US, former "Big Company" employee and currently doing a startup.
It depends if you are a citizen of EU, a Nordic country or Switzerland or not. I assume that you are not so in that case you would need a job offer first, apply for a work permit, then come and work. The process is described here:
If you are self-employed or moving with your company it might be trickier. Here at $MEGA_CORP we have hired tons of non-EU citizen, mostly Russians, and it seems to work pretty well.
I helped host a delegation of Finnish startups that came to Bloomberg in NYC. The Finnish Consul throws networking events in his apt as well. Everyone appears very driven and there are some great startups coming from the country. A lot of ex-Nokia guys need something new to do... :)
Alexander Young (of Soundcloud) speaking about Berlin: "The atmosphere and culture in Berlin is very unique. Since the costs for living are still low, people can afford to only work a few hours per week, and do the stuff they want the rest of the time." http://blog.twingly.com/2010/05/18/from-stockholm-to-berlin-...
That can't be said about Stockholm nor Helsinki.