What can Portugal expect from WebSummit?

I’ve read a series of articles on what WebSummit will bring to Portugal, some of them extremely optimistic and others very pessimistic. I think there is a good balance and different nuances to consider before assessing the implications of this event. I propose to look at four dimensions:

- Portugal as a Brand

- Funding of Startups

- Tech Ecosystem

- Everyday Life

Portugal as a Brand

As I mentioned in a previous article, Portugal is finally coming back on the front scene with a positive image. The beautiful landscapes, the incredible quality of life, the affordability and the warmth of the people have all contributed to change the perception of travellers. The Ministry of Tourism has perfectly taken advantages of all these factors to craft the positioning of the brand: a beautiful and affordable place.

Attracting WebSummit is a (expensive) hack into the future. Until recently very few people outside of Portugal would have considered it as a tech country despite some great unrecognised successes. With such an event, Portugal can now brand itself as a (future) tech development center for Europe and use this notoriety to engage discussions with new partners is Asia and North America.

However I hope this will not just be a nice package with nothing inside. Public investment should support the new brand dimension by locking new partnerships, funding research centres, simplifying tax and regulation etc… Without a follow up, it’s like throwing money through the window and the Portuguese people won’t see any long term value.

Funding of Startups

I can’t count the number of discussions I had around the availability of money for young startups. As of today there are a lot of ways to get seed funding including VCs and Angels. As far as I see it: if you have a good idea with a good team you’ll find an investor to help you build your MVP and test it in Portugal. The problem is (as often in Europe) on the Series A+. Portuguese VCs can’t fund a startup with a global vision for different reasons: reduced experience at this stage (there is a lot of experience in PE but not at scaling point), lack of strong contacts with international investors to syndicate with and shortage of resources to cover bad bets.

The WebSummit will partially solve this by bringing a 1000 investors in Lisbon at the same time. This will be a very good opportunity to build a network where future deals can be shared with international investors who have knowledge or experience in a relevant area. If more deals get international support, it will be easier to explain to LPs the rational of investing in Portuguese funds while also accessing new channels for exits.

The key for this vision is a continuous support on the tax and legal side to simplify as much as possible the legal framework around investment and give strong incitation to LPs to support investment.

Ecosystem

During the last 5 years, Portugal has seen the rise of the entrepreneurs with young people more willing to take risks into an unstructured career than following the foot steps of their parents. Accelerators and Incubators have flourished everywhere and some of them (eg. Beta-i) have reached international recognition.

Even though the whole country is not at the same level than Lisbon (or Porto) in terms of tech companies, Portugal is now considered as part of the European startups hubs.

What’s left now is to attract more tech companies to Portugal to build their tech teams locally. Why it is important? Because it will consolidate the tech reputation of Portugal, because it will create permanent jobs, because it will fuel the economy and support education. But mostly because whatever how good the ecosystem ends up to be, it will reach a limit: the size of the Portuguese economy. No massive business can exist only in Portugal, it will need to internationalise fast which means moving ressources to larger markets. The tech team however can stay in Portugal and take advantage of the quality of the local developers.

That’s where WebSummit can add a layer by showing the great aspects of Portugal to larger companies who are thinking to come to Europe or looking for post-Brexit options. This is usually supported by governments but it comes with tax incentives that can hurt public money and / or create conflicts with the European legislation (eg. Ireland)

Everyday life

Until now Portugal is recognised as one of the best place to live in Europe with a cost of living way below European capitals like London or Paris. In a post-WebSummit world with new companies setting up their offices in the country, and importing talents from all around Europe, we can imagine that overall costs will increase for locals. This is already the case for accommodation in Lisbon (due to tourism mainly) where the prices have skyrocketed. With a massive rise in demand and a constrained supply there will be a negative impact for the ones who have been living there for a while.

However more companies coming to Portugal will also create more jobs and more revenues in adjacent sectors: more requests for the construction industry (building new offices or to rehabilitate some of those abandoned beautiful buildings), more clients for the hospitality industry, larger wallet size for the retail industry etc… The net effect should be positive and help raise the salaries in different branches while reducing unemployment even though part of the population might not see the benefits directly.

So what’s the conclusion?

WebSummit is not an end in itself, it’s just the beginning of a new period of fast growth for Portugal. It will serve as a catalyser for the tech industry as well as for the whole economy until the next phase. However the event itself is just a tool, if not leveraged properly the results will be disappointing. Every actor (public, private, startups, investors) should use WebSummit with a long term vision to make Portugal an innovative and dynamic economy that supports entrepreneurship, technology and youth without cutting on its cultural heritage.

On my side, I’ll be coming back to Lisbon after 9 months abroad to meet with old friends and discuss innovation, digital and startups. Feel free to get in touch and we’ll catch up for a coffee or an imperial.

PS: Originally published on Medium