Barcelona's growing tech industry

Since 2008, when the financial crisis first gripped the country, the Spanish economy has suffered stunted growth and rising unemployment, reaching its peak in 2012 with 4.98 million people out of work. Finally, it seems the tide is beginning to turn. According to the Ministerio de Empleo y Seguridad Social, unemployment figures have been declining since May 2013 and in April of this year, the total number of unemployed stood at 4.3 million. Economic growth is predicted to reach 2.8 percent in 2015, which could make Spain one of the fastest-growing economies in the Eurozone.

Despite positive changes, the economy still has a way to go before it makes a full recovery, but Spain’s financial crisis hasn’t been totally without opportunities. In fact, some believe it’s played a major role in starting a revolution––a startup revolution. Professor Javier Santiso from the Barcelona ESADE Business School wrote in a letter to El País in 2013 that there has been an explosion of unprecedented entrepreneurship across the country––a sign of vitality during economic downturns. It’s a trend reflected by the number of startup accelerators and incubators that have popped up in recent years. These organisations provide training and resources to startups, like business model and product development, and access to advisors and big corporations—sometimes for a financial return. Thirty-eight of these accelerators opened in Spain between 2008 and 2013. In Barcelona, the rate of entrepreneurial activity (the number of people per 100 who set up their own business) is 6.7 percent, which is considerably higher than those of Spain, Germany and France. In just five months at the beginning of 2014, more than 3,400 trading companies were launched in Barcelona, giving the city the highest business creation rate in the country during that period.

“There’s so much momentum and potential here,” said Scott Mackin, founder of the Barcelona tech and start-up outlet, Barcinno. Mackin has been writing about Barcelona startups since 2011 and has firsthand experience starting a business in Barcelona, so he’s familiar with the city’s changing startup ecosystem. He agreed that the crisis has helped fuel the fire for Barcelona’s entrepreneurs. “The crisis made the decision to set up a company easier,” he said. “If you don’t have an alternative, it’s not so risky.”

As Mackin explained it, many feel that they have few choices––they can leave Spain or create their own opportunities, and with nothing but time to lose, many of them opt for the latter. The 2014 State of the Economy Report of Barcelona also found that while 65 percent of entrepreneurs in the city were motivated by business opportunity, 30 percent became business owners from lack of alternative. Spain also has what’s been called ‘the lost generation’ of long-term unemployed youths under 25. Currently, that rate still stands at nearly 51 percent, a number lower than in previous years.

As Albert Mikkelsen put it, “kids without jobs make their own jobs,” and that’s exactly what he did. He founded WEJ in September 2014, a mobile app that allows users to collaboratively create playlists in real-time by voting through their phones. At 24, Mikkelsen is the senior member of WEJ’s five-person team. “It’s the weirdest team ever,” he laughed. The project’s co-founder is 18-year-old entrepreneur, blogger and developer Pau Argelaguet, and the rest of the team isn't any older, but what the group lacks in years, it makes up for in skill and motivation. “We’re all entrepreneurial spirits who believe we can create something really cool that will eventually pop and explode,” Mikkelsen said.

For now, the app is still a beta version, a complete app that may still have a few kinks to work out, but Mikkelsen and his team are hoping to further develop their project with the help of a startup incubator. They’re now in the process of applying for programmes.

On top of this, WEJ isn’t Mikkelsen’s only project––along with another new tech startup, he also freelances on the side. “In startups, you have to be very agile,” he explained––ready to bounce from one idea to another, or to adapt, if things aren’t panning out. He’s part of a new group of workers with a business education who are increasingly drawn towards the burgeoning startup economy. “Before people wanted to do consulting and banking, but now tech and startups are competing sectors,” he said. “Now Goldman & Sachs is competing with Uber.”

In recent years, the local government has been trying to propel the tech industry, funding efforts to brand the city as an international hub of entrepreneurship, innovation and technology, offering training and funding to new businesses through programmes like Barcelona Activa, Start-up Catalonia and mStartup. In 2014, those efforts helped Barcelona win first prize and €5 million in former New York City Mayor Michael Bloomberg’s top innovative cities competition for 2014. The Ajuntament also reported that new startups in 2014 were far more innovative than in previous years of the crisis, incorporating more new technology and product innovation.

Psious is one of those cutting-edge tech projects. Launched just last year, this innovative startup, founded by Daniel Roig and Xavier Palomer, uses augmented and virtual reality technology to treat anxiety, mainly phobias, through gradual exposure. The treatment method itself isn’t a new one. In fact, professionals have used virtual reality for 20 years to treat anxiety, and it has proven to be quite effective––certainly more effective than older methods that relied on the patient’s imagination and two-dimensional images. What’s innovative about Psious isn’t the method, it’s the delivery. Until Psious pioneered a way to deliver virtual reality through a mobile app, the equipment options available to professionals were too large and expensive to be accessible to the majority of patients.

“We made our prototype two years ago with a 3D printer,” said Roig. They used the 3D printer to make a unique set of virtual reality goggles in which a smartphone is inserted to give wearers their virtual experience. “It was so new at the time that we had to print our own goggles,” he explained. “But now big companies like Samsung are making their own.”

They’ve only been delivering products for eight months, but so far they have more than 90 users. “It’s actually quite easy to end a phobia. In ten sessions you can overcome it,” said Roig. But of course it’s easier when you have access to the right tools. “It’s been used to treat Post Traumatic Stress Disorder in U.S. soldiers, but there are only two machines in the United States, and they’re very expensive,” he said.

With Psious’s product, therapists only need a smart-phone, the goggles (which can now be purchased quite affordably) and an internet connection to connect to the mobile app. Then the app and website communicate, allowing therapists to control the patient's experience. For example, for a patient who struggles with a fear of flying, Roig explained, a therapist controls the level of turbulence, the weather, the captain's announcements, where the patient looks and even how the patient virtually responds (hyperventilation, dizziness, etc.), and it all gets recorded electronically into a patient file. Using biofeedback sensors, a doctor can then see what provokes a patient's fear and how they progress through the data.

From the very start, the business concept was enthusiastically received by mental health professionals. Not long after launching, the whole Psious team spent five months in Baltimore, Maryland, working with Johns Hopkins University, one of the most prestigious medical institutions in the Unites States. The university liked their idea so much, they decided to invest in it. Later, Stanford University, Hospital Clínic and Hospital del Mar also invested. They're also entering their second accelerator programme, River, the first ever virtual reality business accelerator based in California.

Despite the early success, Roig pointed out that Spain still isn't the best place to start a business, but he added that Barcelona has many programmes that help budding businesses get their feet off the ground. Mackin, a Boston-native who has had experience starting businesses in Spain and the United States, agreed that potential business owners still face too many unnecessary obstacles in starting out, such as the autónomo  fees and exit taxes and barriers to foreign investors.

“In the United States, I literally started a business in 30 minutes online,” he said, but starting a business in Barcelona took 60 days and a lot of paperwork. The city in many ways is an attractive place for potential business owners, with its great weather, low cost of living and droves of skilled, unemployed workers. “Spain is improving, but it has a way to go,” he said. For him, there's no doubt that Spain could be among the top five startup cities in Europe, but the problem is time––startups inherently move quickly, but the government, for the most part, moves slowly. Despite the slow pace, the current efforts are making it easier all the time to open a business in Barcelona. “Slowly but surely the government is creating avenues to start businesses,” he said.

Angel Garcia, managing director of the Barcelona branch of Startubootcamp, the largest accelerator programme in Europe, agreed that there's still far too much red tape for new business owners in Barcelona.

“In London, you can create a business entity in 24 hours with £250. That's not something you can do in Spain,” he said. “We have a lot more difficulty with the legal stuff––the paperwork.” The process should be cheaper and easier than it currently is, he added, but the entrepreneurial community has to push for positive changes while continuing to work with what it has got.

“This might be a limitation, but if you want to start a business, it's going to be one of the smaller problems you'll have,” he said.

Over the past few years he's noticed a good deal of improvement in the Barcelona startup ecosystem––the entrepreneurs, schools, businesses, policies, services and investors—but the city’s entrepreneurs could still use more investment and a more global, scalable approach.

Though, for Garcia, neither of these are unattainable. In fact, the city already has both, he explained, but it needs more to grow into the mobile, smart city hub so many want it to be.

With more and more technological developments all the time, borders are disappearing, and people are realising that they can work from just about anywhere. With so many young, tech-savvy millennials out of work and the relatively low price of tech devices, Garcia explained, many of the unemployed have turned to technology for work.

“When I was young, if you didn’t have a job, you stayed home or hung out on the streets. Now you can create a business with just a laptop,” and with the click of a mouse, turn your idea into reality, joining the city’s growing ranks of entrepreneurs.

Sixth Time’s a Charm: Interview with business owner Gregory Adam

From the looks of the Sharemyclick Advertising office, you'd never know that France native Gregory Adam is the boss. His small desk is mixed in among desks of the company's 15 employees, and that's exactly how he wants it. He and co-founder Jeremy Skelland started Sharemyclick, an online marketing agency, in 2013. For Adam, who always wanted to have his own business, the marketing agency was his sixth attempt at setting up a new venture, and it seems that for him the sixth time was the charm. At first Skelland and Adam worked on the seed of their idea together over meals, until Skelland proposed making it into an official business. “I told my bosses that I was really sick and worked on it for two weeks,” said Adam. “I couldn’t let it go.” Adam can attest that starting a business means long hours and a lot of hard work, but it can start to pay off. “Our biggest achievement was when we managed to get paid for the first time,” he laughed.

After setting up their office in June 2014, the space is now full with busy workers––and the staff is an impressively diverse group. They’re from all over the globe, from Catalunya and France to Peru and Serbia. The company’s quickly growing staff is proof of its success. Though it’s an asset to the business, it has also been difficult to get everyone on the same page. “It was our first obstacle, getting everyone working on the same project,” he said, but Adam and Skelland’s unique management approach has helped make the team-building process a bit smoother for everyone. Walking into the agency’s breakroom, you can spot two unexpected features––a wii system and an acoustic guitar––two things that Adam says help people relax at work. Adam runs his business, but he doesn’t want his staff to notice. It’s a popular, new management style that gives the impression that nobody’s the boss. “We try to give people autonomy, otherwise people will leave and go to other companies,” he said. So far, this method has been working, and Adam himself is quite please with his new company and lifestyle. For him, it’s not about making millions or about keeping the business open at all costs. “It’s not about the finality. It’s about the adventure,” he said. For him, it’s enough to be content with what he’s doing. “I never wake up and say ‘I don’t want to go to work today’, and that’s a luxury.”