Exploring the Lisbon & Portuguese Startup Ecosystem with Greg Sherwin
In the U.S., hearing the words “startup” or “tech” almost always leads to a mention of SF Bay Area or Silicon Valley. There is no doubt that these areas drive innovation and growth in the US tech ecosystem, but it is important to recognize the blind spots we develop to what else is going on in the rest of the world.
The Road to Discovering the Lisbon/Portuguese Ecosystems
While working as a controls software engineer at SLAC – a Stanford particle accelerator laboratory - I was on the team that launched the first website in the United States. This completely changed how I saw the future, so I left academia to join the “real world” of Internet startups in San Francisco in the mid-1990s. After working in Silicon Valley for over 25 years of insane growth and disruption, I opted to work instead within the Lisbon ecosystem to gain a new perspective and increase my global awareness.
“I sometimes liken the Lisbon ecosystem to driving out into the country a little, away from the bright city lights of Silicon Valley, so you can see a lot more stars.”
Why Portugal: Globalized, Cultural, and Human-Centered
Globalized. You also have to remember that for better and worse, Portugal arguably invented modern globalization some 500 years ago. Instead of expecting others to switch to their own, the curious Portuguese typically learned the languages of other cultures. This anti-exceptionalism mindset is critical to a global awareness of innovation and technology outside of one’s own ecosystem.
Cultural. As a national and cultural capital of Europe, Lisbon tends to emphasize entertainment, tourism, fashion, and the arts. Since Portugal’s debt crisis a decade ago, government programs have been instrumental in modernizing the economy and encouraging cultural and artistic growth.
“Government programs have been instrumental in modernizing the economy and encouraging cultural and artistic growth.”
The Portuguese government recognizes that cultural and artistic investments are just as important as any tech startup, and this year they introduced the “green visa” - which makes it easier for foreigners to establish residency by investing in organic farming, carbon neutrality, renewable energy, and ecotourism.
“Portugal is one of the best countries for women in technology, which is essential for our technology to better represent all of us.”
Human-Centered. Lisbon and Portugal are rooted in a vision of the future that is a little more human-centered, inclusive, sustainable, and not entirely focused on shareholder value. Portugal’s balance between growth-targeted futuristic thinking and maintaining deep social historical roots surprised me. They aren’t ones to immediately hop on the train of the latest techno-distraction, but instead look into the artistic and cultural added value of new innovations.
“Lisbon and Portugal are rooted in a vision of the future that is a little more human-centered, inclusive, and sustainable.”
My role as a second-year member of the board of advisors for The House of Beautiful Business – a global think tank community centered in Lisbon – provides a unique opportunity to explore our role as humans in an era ever more dominated by machines, which I don’t think is a conversation the current US tech ecosystem could fully facilitate. The House isn’t really a cultural fit for a place like Silicon Valley - where the reigning popular religion of tech-utopianism views any new technology as a universal good and the messy human stuff is left to just sort itself out.
“The reigning popular religion of tech-utopianism views any new technology as a universal good and the messy human stuff is left to just sort itself out.”
Take-Aways from Portugal’s Successful Resistance to Hypergrowth
The growing Portuguese startup ecosystem has the potential to learn from and avoid the mistakes of Silicon Valley’s hypergrowth. One aspect that facilitates Portugal’s ability for slow-growth experimentation is the difference in the cost of living. In most US tech hubs, high burn rates require startups to either immediately reach escape velocity or blow up on the launch pad. There is no time for anything in between. In Portugal, there generally seems to be more time to experiment, pivot, and try to figure things out -- even if the level of investment is a fraction of what you’d find in the US.
“In Portugal, there generally seems to be more time to experiment, pivot, and try to figure things out.”
Looking at Portugal’s ability to foster an environment for experimentation and long-term growth, American companies could learn that a healthy, sustainable business does not begin with window dressing and ethical shortcuts. Nor does it begin with rich investors who want to blitz-scale you to multiply their own investments at the cost of the viability of your business and society at large.
“American companies could learn that a healthy, sustainable business does not begin with window dressing and ethical shortcuts.”
In the Silicon Valley, we often mention how small the tech/startup community could feel sometimes because we often run into the same people at conferences, meet-ups, and even new companies. In Lisbon, we take this “small community feel” and intensify it. This makes for a tighter-knit entrepreneurial community, but it produces some different challenges. For example, ghosting an employer would be a CLM (Career-Limiting Move) here where everybody knows seems to know everybody.
The U.S. Sets an Ideal Example for Infrastructure and Customer Service
While Portugal consciously resists hypergrowth, as a young ecosystem, it lacks the strategic maturity and infrastructure you’d find in the US. The ecosystem still needs the deep-pocketed Limited Partners (LPs) of pension funds, university endowments, foundations, etc. that VCs need as co-investors. In addition, Portugal still needs the supply of angel investors to support the emergence and long-term stability of startups.
“The ecosystem still needs the deep-pocketed Limited Partners (LPs) of pension funds, university endowments, foundations, etc. that VCs need as co-investors.”
Portuguese companies could also learn more about taking risks and tolerating more safe-to-fail experiments. Portugal has room to improve their customer service segment. I swear there isn’t a government agency in Portugal that has ever heard of customer experience or service design.
Lisbon’s Emphasis on Personal Development with Theory U
Coming to Lisbon changed my perception of how a community could embrace personal awareness. The local community is abundant with workshops for personal development and philosophical movements concerning our inner-selves, our organizations, and our environment. One way I have seen it manifested in the community is through Theory U - a change management theory rooted in self-awareness, empathy, and connection. The global movement, founded by MIT Sloan Professor Otto Scharmer and engaged through u.lab, has numerous practitioners and five “Hubs” in Lisbon.
“The local community is abundant with workshops for personal development and philosophical movements concerning our inner-selves, our organizations, and our environment.”
Theory U builds on many of the themes of complexity science and emergent practice, incorporates an element of mindfulness, and weaves together one of the best narratives about our modern disruptive times and the challenges it produces. It quietly rails against so much reductionist thinking that has gotten us into our modern messes.
One of the great lessons I’ve learned from Theory U is that you will sense or feel the future before you can articulate it. We often overlook how the arts and humanities are our language of culture. Public art literally seeps out of the walls in Lisbon and provides fertile ground for interpreting our collective social complexity. Losing our ability to express and read these subliminal signals would be just one of the tragic outcomes of a STEM-only education. These are all skills an entrepreneur needs to communicate with employees, customers, partners, markets, and competitive environments.
“One of the great lessons I’ve learned from Theory U is that you will sense or feel the future before you can articulate it.”
Best Practices for Startup Growth, Scale, and Sustainability
Even if you have the right team in the right market with the right product, there is still no guarantee of success. Startups must recognize they exist less to build a product/service and more to probe and answer questions about their environment to the greatest extent possible. You must optimize learning before taking any infrastructure, growing, or scaling into consideration. Scaling requires constant readjustment because of the ever-changing environment. What brought you 10x growth last year may completely fail you this year because of new emergent patterns.
“Even if you have the right team in the right market with the right product, there is still no guarantee of success.”
When talking about “best practices”, I have to preface the term because they are constantly being rethought. The Cynefin framework suggests that problem solving approaches depend on whether the issue lies on a linear, complicated, or complex system.
Best practices belong in the linear case where the connections between cause and effect are rather clear. In complicated systems, singular best practices do not clearly exist, and rather multiple good practices are available to choose from. Complex systems have even greater ambiguity, so you work towards emergent practices – effective practices that can only emerge as you learn more about the uniqueness of your particular system and how it responds to different interventions.
“Best practices belong in the linear case where the connections between cause and effect are rather clear.”
Coming back to growth, scale, and sustainability, one of the most important aspects is considering who is on board your team. I've always preferred to hire people who demonstrate an ability to ask good questions, to learn new things quickly, and to execute effectively. More than their current skill set or recent roles, these characteristics are essential for the long-haul growth and success yet.
The Best Toolkit: Complex Adaptive Systems Thinking
What inspires me most is learning about and applying new perspectives to all the dramatic changes going on in the world. With an engineering mindset still at the base of my lizard brain, I risk trying to solve every problem with the latest toolkit that's enthralled me. But my favorite toolkit of late has been complex adaptive systems thinking. Applying complexity science and non-reductive systems thinking to intractable human challenges offers new ways to move forward in a VUCA (volatility, uncertainty, complexity, and ambiguity) world.
“What inspires me most is learning about and applying new perspectives to all the dramatic changes going on in the world.”
The 3 Truths of Entrepreneurship
Loneliness is inevitable. At times you will feel as if you are the only one holding the world together. You will face the prospect of collapse and ruin, often not long after an ecstatic high from a fleeting big win. If some of these resonate with you, you are experiencing the truth of entrepreneurship.
Take pride in your work. You are driven to bring your vision to life, and each day you can continue to do that is a good day.
Ignore the entrepreneurial cargo cults. There are countless business biographies and Forbes articles devoted the fetishized emulation of startup heroes. Certainly draw inspiration from some of these personal stories, however be wary of the mythical realm of “best practices.” Just because someone successfully pursued an idea in one business environment doesn’t mean it’s likely to succeed in another.
Diversify Your Perspective with The Port
Evidently, there is much to learn from ecosystems other than our own whether you are from the States, Portugal, or Greece. For the globally-minded resources and best practices you need for global growth, The Port is here for you. Subscribe to The Port newsletter for more insights like the ones above, and get in touch with our team to learn how we can assist with any of your marketing and business growth projects.