(CS) The reputation of Luxembourg abroad is haunted by the country's financial centre and infamous tax regime, but a growing community of entrepreneurs is turning the Grand Duchy into a start-up hub, and it's only just the beginning of the ecosystem.
According to Luxinnovation, the number of new start-ups has steadily increased over the past five to six years. While exact statistics are difficult, since not every new enterprise qualifies as a start-up, around 30 to 40 innovative businesses were launched last year, the national agency for innovation and research said.
One of them is Silicon Luxembourg, founded by Charles-Louis Machuron last October – a start-up for start-ups that helps new businesses with media and PR, as well as running events and helping create a local community of entrepreneurs, for example by hosting an interactive map of the Luxembourg start-up ecosystem.
Working together with other start-up platforms, such as The Impactory, Machuron is keen to see Luxembourg develop its full potential. “We have all these interesting people in Luxembourg,” he said. “It's really cosmopolitan and people bring new ideas. The government should take care of these entrepreneurs.”
Aspiring business owners can get help from a number of different sources, from the Chamber of Commerce's 1,2,3 GO business plan help service and Luxinnovation's start-up department to public funding or accelerators and incubators, such as the "lux future lab" or Technoport in Esch/Alzette.
Luxembourg needs new ideas
There is still room for improvement, however, according to Machuron. For one, start-up capital of 12,500 euros to create a company is off-putting for many budding entrepreneurs unwilling to take financial risks. Ideas such as the 1-1-1 company (one person, one euro, one day) could offer inspiration to facilitate creating businesses in the Grand Duchy and initiate a promising future, Machuron said.
“In Luxembourg, we need new ideas and companies that don't exist yet,” he explained.
One of the key challenges is making ideas and money meet, the 31-year-old entrepreneur added. Venture capital companies interested in start-ups and local entrepreneurs need to be brought together, Machuron said – something Silicon Luxembourg is working on through matchmaking and speed-pitching events.
Individual investors should also be encouraged, Machuron added. “There are people with a lot of money looking for investment opportunities,” he said. While a crowdfunding platform for Luxembourg – nubs.lu – was launched earlier this year, the inability to provide cash-back returns is a hindrance to the scheme, he said.
Changing the rules of crowdfunding could put Luxembourg ahead of the game, Machuron added.
Attracting young entrepreneurs
These more administrative matters, however, cannot change the fact that Luxembourg also needs more young entrepreneurs and professionals to sustain the start-up ecosystem. IT developers, for example, are needed, Machuron said, adding that many young people are drawn by big cities abroad, such as London or Paris. Creating high-standard business or technology schools could help prevent the brain-drain, the entrepreneur suggested.
“It's an image problem,” he said. “Everyone knows Luxembourg for its financial place, but it's also a nice country to live in and new things are happening in the city.” The advantage of attracting young people? They can take more risks, according to the entrepreneur.
“Risk and entrepreneurship go hand in hand. If you don't take a risk, you cannot create a company,” he said. “Ninety-nine percent of entrepreneurs fail once or twice.”
Creating additional safeties for failed projects could also be a way to encourage more entrepreneurial spirit, according to Machuron. “When someone fails you have to consider what they did. Was it a super-innovative project with high technological costs, or was it not innovative with a bad business plan? Maybe you have the right kind of entrepreneur who could do other projects and deserves a second chance.”
Machuron's advice for aspiring entrepreneurs? Trust in your project, build a network, share your ideas and listen to what others have to say, create a solid business plan, think beyond the borders of Luxembourg and be in it for the long haul.
“It takes time and it's not easy to start a company. We are still waiting for the big success stories from Luxembourg, despite some successful start-ups in their fields,” Machuron concluded. “We really are at the beginning. Everything is possible.”