Berlin's startup scene expands into science

Long saturated by hype, the German capital's startup scene is fostering a wave of disruptive, science-based companies.
Written by Shannon Smith, Correspondent (Berlin)
Ijad Madisch 2.jpg
 BERLIN -- At EyeQuant headquarters in the German capital, Fabian Stelzer is visibly excited about his work.

The company's cognitive-scientist co-founder draws on a whiteboard as he speaks, skillfully illustrating the ins and outs of the visual cortex -- namely about how cognitive science is learning to predict visual attention patterns. Stelzer and his co-founders at EyeQuant have worked with three university laboratories to develop software that predicts how users experience a website visually within the critical first ten seconds.

When asked about the company's place in the Berlin startup scene, Stelzer said focusing on product has given the company the relative quiet it needs to grow sustainably:

"We've never mingled hardcore in the startup scene here. We're doing more of it now, because there's certainly some merit to it. But you won't find us hanging out at the rooftop parties. We're usually busy building cool stuff."

In a city saturated with hype about everything from its fabled party scene to its status as a global tech hub, substance can be hard to discern from hyperbole. An onslaught of high-profile investors such as Ashton Kutcher drew attention to numerous Berlin startups in recent years, several of which have since folded or been absorbed by other companies. But a growing number of science-based startups in Berlin are leveraging Germany's reputed tradition of science and research culture to grow on a steady trajectory.

EyeQuant appears to be on solid footing with clients such as Google, Spotify and Nokia -- a good thing since most technology startups have a hard time fundraising in Berlin, as local investors still tend to favor e-commerce or other consumer-facing business models.

The latest sign of a largely turning tide, however, might be growing interest in Berlin-based ResearchGate, a collaborative platform often described as "Facebook for scientists," which has already enabled scientists on separate continents to pinpoint a new deadly strain of yeast infection through access to one another's work.

ResearchGate grew from an ambitious twinkle in founder and virologist Ijad Madisch's eye to a scientific community of more than three million users in five years. June saw the platform garner $35 million in funding from none other than Bill Gates and Tenaya Capital -- a significant move by the Microsoft founder, who rarely invests in startups.

“I was always dreaming of a potential investment from him because I admire what he has done, what he has built and switching his attention to eradicating disease,” Bloomberg quoted Madisch as saying. “What he’s trying to do is perfectly aligned with what we’re doing.”

Tech journalist David Meyer has criticized hugely successful former startups, among them Google and Amazon, for having lost touch with users and playing by different rules. He says the Gates investment reiterates the disruptive power of such an industry:

"This makes me happy –- not only because it’s a shot in the arm for the scene in Berlin, where I live, but also because I’ve been feeling quite down recently about the tech industry and the capacity of some elements to destroy rather than create value."

Health science entrepreneurship has picked up steam too, with plenty of room for larger German firms such as Bayer HealthCare to tap into the action. The pharmaceutical giant will open its CoLaborator incubator space in Berlin-Wedding this fall, which is intended to house an initial ten startups "working in complementary areas to its own research and development," according to VentureVillage.

Bayer described its interests as patient compliance, diagnosis of medical conditions, patient empowerment and several others.

Malte Prien of Deutsche Telekom's deutsche startups blog weighed in that the German healthcare industry is ripe for disruption -- especially following publication of the 2011 public health care expense report, which was criticized for identifying how much providers spent on hospital visits, but failed to identify how much was spent on unnecessary or erroneous treatments.

Some 40 to 45 percent of those who underwent a spinal disk operation, for instance, were not in need of the procedure. Prien cites examples abroad where private providers of a "second opinion" have alleviated this problem to a degree by responding to the market.

"The [second opinion] concept shows a great need for new solutions in the healthcare industry," Prien writes. "Startups active in the 'second opinion' market represent a threat to the establishment. The health care industry will change radically, making it an ideal focus for startups."

PHOTOS: Martin Misera / ResearchGate

This post was originally published on Smartplanet.com

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