Is the Web Summit the next Coachella?
By Vera Costa Pereira, VP of Business Development at Green Innovation Group A/S
The title of this article can be confusing. In reality, they are very VERY different events so how come Web Summit can be moving towards the Coachella vibe.
That’s simple, Coachella represents the ultimate trending summer concert, where every digital influencer wants to be and where every service provider wants to promote their brand – hashtags, paid ads, etc. – and the Marketing buzz is so loved that it oversahdows music and artists.
You can see half the world traveling to Los Angeles, but are they the ones that matter for the music industry?
It seems to me that Web Summit has lost the essence that got our attention in the first place. Yes – Start-ups, Entrepreneurs, Investors, Private Equity Funds, Venture Capitals, Business Angels… Are they or are they not a catalyst for economic growth and investment in Portugal? Are they attracting enough capital? Or is Portugal actually buying an 11 million€ year product serving Marketing and Tourism purposes for the next nine years?
We know that from the 3rd to the 10th of November 2017 and the 2nd to the 9th of November 2018, Airbnb guests only spend around 50 million euros in Lisbon – on accommodation, services, and meals – accordantly with Airbnb data.
We also know that we do not remember most of the start-ups that participated in 2017 and 2018, at least I don’t. But for the sake of argument, let us focus on 2017, what are the start-ups doing now?
Well, I decided to check 4Geo – announced at the time as one of the top 12 favourites, a small look at their social media, and you can see nothing has changed for them. They are still fighting the start-up fight but investment? Opportunities?
Farmcloud is one of the participants that I had the pleasure to meet before, a lot of talent and a super cool concept. When I asked about their participation, the answer was clear, loads of Marketing and PR, but the business itself, nothing happened.
They still believe in Web Summit; so they will be present again in 2019.
So, where is the investment promised to Start-ups?
When asked about the topic in an interview to Público (a national newspaper), Ricardo Lima, responsible for the team that follows the start-up growth at the event, confirmed that the KPIs for investment have been achieved but that Web Summit nor any other event part of the group can claim credit for it.
The financial results from the Portuguese investment in the ecosystem are not clear, at least not to me.
Start-ups have the same struggles as before, most of the capital invested does not stay in the country for long (5 years top), and the job opportunities that Web Summit itself creates are mostly at a volunteering level.
So what is Portugal gaining by hosting Web Summit every year? The answer is very, very simple, more than 45 million of pure earnings from taxation in only four days and loads of free PR – the catalyst for the Portuguese tourism growth in the last few years. According to Deloitte’s study for the Lisbon Tourism Association, in all 2017, just the city of Lisbon received more than 13,7 million with tourists (direct or indirectly).
Due to the influx of foreigners, the Real Estate industry has skyrocketed with more and more demand for temporary rent at very high prices, building a new revenue stream for owners.
And you are probably thinking to yourself at this point what about the ordinary Portuguese citizen that has a regular job with an average salary? What about them? How has this economic growth affected them?
Well, the average salary in Lisbon is 1.000 euros per month, while on other hand rent, in a not such a good location, for a small one-bedroom is on average 830 euros per month. The maths here is quite simple, and we can now see entire families living in a one bedroom flat or shared house.
Web Summit indeed put Lisbon in the Start-up community’s radar growing from 2.193 in 2016 to 3.214 in 2018 according to Startup Portugal data creating more job opportunities (+24 % in 2018 ) and Hubs/Accelerators (153 in 2018). It is also true that Web Summit is not what the ecosystem needs; it is what the country wants to showcase.