#Biz talk: The future of the startup industry in Luxembourg feat Philippe Linster
Philippe Linster, may be young in age but his wealth of knowledge and experience in startups and entrepreneurship is impressive. As well as working as an advisor for various organisations, he was also a board member at the Luxembourg Angels Network. Now as the CEO of House of Startups, we look forward to him taking the lead and steering a whole community of startups, including Everest, to the top! Home to Everest and Snapswap, House of Startups is a shared workspace that is also an innovation hub and business accelerator for new and growing businesses. We’re in good company here and invite members of Everest to pay us a visit to check out where we roll our sleeves up and get to work! First though, let’s sit down with Philippe, man of the moment, to ask him for some insight into the ever growing startup community in Luxembourg.
The startup sector is thriving, on a global scale, what makes Luxembourg a unique landscape for growing startup businesses?
In general, Luxembourg’s economy is very robust and diversified. Although small in size, Luxembourg has a thriving economy and is renowned for its standard of living.
The primary advantages of Luxembourg range from its strategic location in Europe and social and political stability, to its transportation quality, advanced logistics and telecommunication infrastructures, skilled and multilingual workforce, and open international environment. Luxembourg also offers one of the highest standards of living in the world.
Luxembourg has the highest level of real Gross Domestic Product (GDP) per capita in the world and has consistently ranked in the TOP 25 for competitiveness globally (WEF, IMD, European Commission, etc.).
Luxembourg is considered to be one of a kind owing to its location at the heart of Europe, the fact that it is home to 175 nationalities, the multilingualism of its population and its status as a Grand Duchy. Luxembourg has three official languages and 47.5% of residents do not have Luxembourgish citizenship.
Luxembourg’s economy is the most open in Europe and one of the most open in the world. The degree of openness is also indicated by the Open Markets Index produced by the International Chamber of Commerce (ICC). Luxembourg ranks third in this classification system, behind Singapore and Hong Kong and ahead of the Netherlands (2017 rankings).
What is the appeal, for those who don’t know, of a co-working space?
The definition of business incubator (or startup incubator), according to the Entrepreneur’s Encyclopedia, is an “organization designed to accelerate the growth and success of entrepreneurial companies, through an array of business support resources and services that could include physical space, capital, coaching, common services, and networking connections”.
There are several reasons to join an incubator: administrative support, facilities, mentorship and professional services, access to capital, network, inspiring environment, etc. A special thing about coworking spaces is the unique culture created by the diversity of working professionals. Because there’s so much variety within the different fields represented, the culture is more supportive and collaborative. Each coworking space also cultivates its own unique vibe.
Naturally, don’t expect miracles. The success of your business ultimately depends on your company developing products and services people care about and your ability to innovate, adapt, and deliver. But if you’re starting out and have very few resources, an incubator is definitely a good place to consider.
What do you think is the future of the startup industry and ecosystem?
Whilst Luxembourg’s history is rooted in agriculture, we established a booming steel industry in the 19th and 20th centuries. When the steel crisis hit in the 1970s, it was time to reinvent the country once again – this time creating a d ynamic financial centre and a highly prosperous service-based economy.
By the 1980s, financial services had replaced steel as Luxembourg’s number one export. At the same time, Luxembourg also entered the space sector with the creation of SES, followed by strong ICT development in the nineties. Luxembourg is no.1 amongst 128 countries for innovation efficiency ratio (Cornell, INSEAD & OMPI Global Innovation Index, 2017).
In late 2015, Luxembourg launched the Third Industrial Revolution (TIR) strategic study, in partnership with the team of US economist Jeremy Rifkin. This was the first stage of an initiative aimed at imaging the Luxembourg of tomorrow, bearing in mind current and future technological changes and the need to use the planet’s resources more responsibly.
Luxembourg has played a fundamental role in driving innovation and has invested substantial financial and organisational resources to power the transformation of specific sectors. New business is welcomed and looked after. Innovative start-ups are incubated, hosted and coached in publicly and privately-owned facilities to ease their early development and to provide access to services and support.
What are some trends to keep an eye out for in the sector?
Luxembourg’s economy is renowned for the strength of its financial sector (26.5% of value added and 10.9% of employment in 2018). But other sectors are also seeing rapid growth led by the Government, which is seeking to diversify the country’s economy.
The ICT (Information and Communication Technologies) services sector has grown faster than the Luxembourg economy as a whole. It expanded by 24% between 2010 and 2016. Luxembourg’s IT ecosystem is home to some highly successful names in e-security (e.g. LuxTrust) and high-speed internet (Teralink, Post Luxembourg, Data Center Luxembourg, Inexio and LuxConnect, etc.).
Luxembourg’s excellent logistics infrastructure helped the country secure second place out of 160 countries in the World Bank’s Logistics Performance Index in 2016. Furthermore, Luxembourg is committed to an administrative simplification strategy, which is having a positive impact on logistics activities. With excellent connections to global markets, Luxembourg is now considered an ideal operational base for high-value-added logistics activities.
Luxembourg’s biomedical ecosystem is led by a young, highly dynamic research community whose scientific excellence is recognised in key strategic fields such as cancer, s neurodegenerative diseases. The Integrated BioBank of Luxembourg (IBBL), a key pillar of the biomedical research infrastructure, provides support to the Luxembourg Institute of Health (LIH) and the Luxembourg Centre for Systems Biomedicine (LCSB), part of the University of Luxembourg.
Long dominated by steel, the industrial sector in Luxembourg has been the subject of major diversification over the past 30 years and is currently seeing renewed growth through numerous investments with the aim of expanding or modernising existing facilities, building new ones and fostering innovation. Much of this investment is made by international players drawn by Luxembourg’s location and infrastructure quality.
Last but not least, Luxembourg exhibits a marked interest in space-related activities. Today the sector encompasses around 30 active companies and has a total workforce of around 700 people. In 2016, Luxembourg embarked upon a new stage in its “conquest” of space with a strategy aimed at expanding the use of spatial resources, including rare metals found in asteroids. The strategy involves creating a legal framework, investing in R&D programmes and buying participating interests in companies within the sector. In September 2018, Luxembourg set up a national agency to define and implement its spatial strategy: the Luxembourg Space Agency (LSA).
Lastly, will the current working from home culture affect the way people work and the way they view work/life balance?
Some people love the idea of working from home, others hate it. There are plenty of advantages to working from home: no more commuting, saving time, saving money, comfortability, flexible working hours, more time with family and friends, autonomy, etc. But there are also a lot of disadvantages related to the home office like no human interaction, it’s hard to switch off, lack of productivity, unhealthy lifestyle, less communication and creativity, etc.
But don’t forget there are many businesses which will suffer when too many people will continue working from home: bars and restaurants, shops, transport, events, culture, etc. I’m sure that companies will adapt their remote working procedures but I’m also a firm believer in the concept of a living city and everything that goes with it.
You must have seen plenty of startups at HoST what do you believe is a defining factor to a successful startup?
There are so many factors that influence the success of a startup and all of them seem important. In my opinion, 2 factors are essential for a founder to be successful and motivated: the team and the “why”.
When launching a startup, you will live an adventure, but you’ll also suffer. If you don’t have a reason to live this dream, I don’t see how you can survive it. The “why” can be very different but it’s essential. Once have launched the company, don’t think you can all one your own. You cannot be the introverted tech guy and at the same time being the charming sales and networking person. So get out and find your team and look for people with other strengths and weaknesses as you do!