European Tech’s Forgotten Stories

Today: We’ve lost too many memories of what happened in European tech in the past. That’s a problem.

Credit: Anita Jankovic

The Agenda 👇

• We Europeans don’t know much about the history of our tech industry

• Americans know more about their own, and that’s a strength

• How Europe can catch up in telling its own tech history

• What stories are worth telling? Where should we start?

In January 2019, my colleague Pietro Invernizzi (now with Stride VC) and I did a tour of Italy that included discovering local startup communities in Milan, Rome, and Naples. When I came back, I wrote an essay to share my impressions of entrepreneurship in Italy:

Italy [has] the heritage of a great entrepreneurial tradition. I mean, Italy invented modern banking. It gave birth to some of the most potent trade and maritime powers of their era. In the 19th century, Naples was one of the five European capital cities that were home to the Rothschild family. And in the 20th century, Italy gave birth to a major European carmaker (Fiat, which now owns Chrysler), prominent entrepreneurial figures such as Giovanni Ferrero, Leonardo Del Vecchio and Giorgio Armani, and a thriving ecosystem of small businesses and suppliers. For a time, Italy even had a leading movie industry and somehow became the center of European disco culture (you REALLY should listen to the extraordinary tribute that Daft Punk paid to Italian composer Giorgio Moroder).

I immediately received one particular reaction multiple times: my essay didn’t include a single line on Olivetti, once the crown jewel of the Italian tech industry! The name was familiar, of course, but I didn’t know anything specific about that once iconic brand. So I did some research and discovered that indeed, Olivetti’s was quite the story:

Under Adriano Olivetti’s guidance, the company grew from an establishment of under 900 employees to a multinational corporation with nearly 80,000 workers in 10 factories in Italy and 11 abroad (including US, Argentina, Brazil and Japan). The company evolved its production from mechanical calculators and typewriters to computers, printers and several other electronic devices, particularly for businesses.

It made me reflect. How many inspiring stories from the European tech world were lost along the way, with adverse consequences from an ecosystem perspective? Those stories represent good practices that weren’t diffused, experience that didn’t compound, a lack of platforms on which new generations of entrepreneurs and investors could “dance” (to borrow a term from Bill Janeway).

I was reminded of that idea earlier this week with this excellent article by Moritz Mueller-Freitag about Lutz Kayser, the German Elon Musk of the 1970s—who came too early:

The rise and fall of OTRAG is one of the strangest, and most remarkable, startup tales I’ve encountered to date. It’s an almost surreal story of entrepreneurial adventure and ambition that bears an astonishing resemblance to Werner Herzog’s Fitzcarraldo. In Herzog’s 1982 movie, Klaus Kinski plays an obsessive dreamer who manually drags his massive steamship over a steep hill in the Amazon jungle. Unfortunately for Fitzcarraldo, this astonishing engineering feat doesn’t translate into his mission’s overall success (Herzog later went so far as to call it a “conquest of the useless”). The same could be said about OTRAG. Despite a number of successful test launches, OTRAG was a spectacular failure. The company burned through massive amounts of funding and eventually ran afoul of Cold War politics. Its demise is a case study in what happens to startups when their timing is wrong, their technology speculative, and their market unwilling to embrace disruptive innovation.

If we compare ourselves to the situation in America, Europe is clearly at a disadvantage:

• Sure, most tech people in Silicon Valley or elsewhere in America are (proudly) ignorant of large swaths of history. But that history is nonetheless passed on through the entrepreneurial ecosystem in the form of capital, experience, and good practices.

And those who are curious about history have many sources to which they can turn. Business history is an eminently American discipline: you can find well-written, well-researched biographies of almost every major business figure (and I assure you, that is not the case in European countries). 

• There are also books dedicated to entire industries and ecosystems, such as Tom Nicholas’s VC: An American History, Margaret O’Mara’s The Code, C. Stewart Gillmore’s Fred Terman at Stanford, and many others.

More recently, a dawning realization that the growth of the tech industry has been a major development both historically and in terms of business has led an army of bloggers and podcasters to document the whole story down to its last details. A very interesting example is the masterful Secret History of Silicon Valley by Steve Blank—a collection of blog posts that mix personal stories and historical background, which I compiled and highlighted in my Evernote here.

And finally, there’s the category where America really makes a difference: movies! Here are a few business-  and/or Silicon Valley-related movies or series that I love:

• Margin Call, a masterpiece about Wall Street

• The Founder, about Ray Kroc and McDonald’s

• Pirates of Silicon Valley, about Apple and Microsoft

• Halt and Catch Fire—such a great series!

• The Social Network—obviously (make sure to read Byrne Hobart’s take)

And there are all the others that I have yet to see, like the General Magic documentary.

Like in many fields, I know that many people in Europe are determined to catch up. Here’s a random collection of attempts at revealing the history of Europe’s tech industry to itself:

• Gonz Sanchez’s excellent Seedtable is full of gems about recent tech history in Europe. Check out his takes on Klarna (which was founded in Sweden) and Allegro (from Poland).

• The book European Founders at Work, which I discovered via Saul Klein of LocalGlobe, is a good collection of interviews, the European ‘equivalent’ to Jessica Livingston’s Founders at Work.

• Sometimes  you’ll see attempts by journalists to revisit the history of a particular company or a particular ecosystem, as in The story of London's tech scene, as told by those who built it, this profile of Skype and its legacy or the inspiring The Oral History of Travel's Greatest Acquisition Booking.com. 

But I still think we can do a thousand times better—and that, as proven by the likes of Steve Blank, we don’t need Hollywood or the publishing industry to lead the charge. Where’s the comprehensive story of Rocket Internet, for instance? Why isn’t there work dedicated to typically European tech powerhouses such as SAP in Germany, Ingenico in France, or, again, Olivetti in Italy? Why is it so hard to learn anything about those large incumbents that seem to be somewhat succeeding at repositioning in the Entrepreneurial Age, such as Maersk, Bertelsmann, and many others? Why did we learn all the details about Wirecard and its background only when it collapsed following widespread fraud?

And why is Lego the rare exception? There are many books, articles and movies about this incredible company, which I covered myself in my 11 Notes on Lego.

Obviously it’s a rhetorical question. We know why Europe sucks at this:

• There’s the fragmentation, and not just in terms of languages. Even if there was a great book about SAP and a proper translation in French, French people still wouldn’t care...because it’s a German company. As a result, it’s difficult to find the critical mass, from an audience perspective, for proper work on the history and legacy of European tech. (If you write or speak in English, like Moritz, Gonz, and me, it makes things somewhat easier, but you’re still missing a big chunk of the audience which only consumes content in their native language.)

There’s also the fact that Europe doesn’t revere business figures and organizations as much as in America. Even extremely successful business people in Europe are not as well-known, admired, and researched as their American counterparts.

Finally, I’d say that the history of European tech has simply suffered too many interruptions. Great things happened in the 1970s, but it didn’t keep rolling (as in the case of Lutz Kayser), and so we had to start again in the 1980s. Then great things happened in the 1990s, with the European version of the dotcom bubble, but when the bubble burst it was all wiped out  (and, to a large extent, forgotten) in an instant. We then started again, almost from scratch, following the 2008 crisis.

• Today it’s easier, because what’s happening is effectively documented in real time by our own army of bloggers, writers, and podcasters. But it will take years before it all compounds and contributes to truly making Europe stronger.

Here’s a lesson I learned from Lee Kuan Yew,  the Founding Father of Singapore: You can’t succeed if you don’t know who you are and where you come from. And when it comes to European tech, we still don’t have answers to these questions!

Can you help? What chapter of this history would you suggest should be written? And if you have specific ideas, can you put me in touch with the people who were there so that they can tell their stories?

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From Munich, Germany 🇩🇪

Nicolas