Europe’s Online Super-Heroes

Super-hero metaphors is how Techcrunch (the mother of tech blogs) presents the European Commission’s “Entrepreneur 2020” framework. But even if the Com were Batman, can Europe really become Silicon Valley? Best intentions aside, the Northern California has a venture capital community that Europe can only dream of. That would explain why client services rather than consumer services is the focus for the Euro-IT-sector: without VC, work-for-hire is the answer. And even with the Single Market, the US has a home-audience of 300 million who speak the same language (most of them at least), plus another few hundred million speakers overseas. That will never be the case for Europe (except we too can speak English, obviously).

But is it true that Europe has no successful online services besides Skype? You have only to look to the entertainment sector to prove that wrong. With more than half a billion downloads, Candy Crush Saga is the biggest digital game ever and has a user base on its way to rival Facebook (1 billion+ active users). Music streaming service Spotify has 25 million users, which is nothing compared to Itunes 500+ million, but Spotify grows rapidly as new territories are added and odds are the streaming model will beat download, at least that has been the case so far. Yes, both of those are Swedish companies. Finland’s Facebook game phenomenon Supercell’s stock value is greater than its US rival Zynga. And Germany’s Bigpoint counts over 330 million registered players. The list goes on, but the pattern is that these are entertainment services with sophisticated business models that go beyond the ad-based economy that dominate Silicon Valley. Advertising spend will always be limited, with channels competing for a bigger piece of the pie. Real consumers spending their own money on stuff like virtual goods: endless.

Sure, there are problems: many of these companies are owned by investors outside Europe. Many of them use Silicon Valley platforms to deliver their content. But it is probably a good idea not to try to copy the US success factor, but rather build on European fortés: diversity, quality, content, SME’s and monetisation of content rather than users. In the global online market, the winner takes all and niche monopolies are everywhere. The way forward is not to try to beat the monopolists at their own game, but to make something completely different.

Oh, and Batman on the silver screen – Christian Bale – is Welsh.