Portugal: A Conversation with Angel Investor and startUP Portugal CEO Simon Schaefer

I had the opportunity to speak with Simon Schaefer, a German angel investor and serial entrepreneur who is currently the CEO of startUP Portugal. We spoke about what’s going on in Portugal in terms of startups, how easy it is to become an expat there, and the general awesomeness of living Portugal. Click a link below to jump to a section. 

What is startUP Portugal
startUP enviornment in Portugal
How welcoming are the Portuguese to foreigners?
Work permits/paper work in Portugal
Why Portugal is a hot startup environment
Work culture in Portugal
Common impressions people have of Portugal
startUP Europe Summit

What is startUP Portugal?

I think what is important to know is how startUP Portugal came about because it also kind of explains what it is. There is one guy here, who is now in government, by the name of João Vasconcelos. He is an entrepreneur and startup guy whom I met before he joined government when he was running startUP Lisboa, which is an accelerator for startups.

The mayor of Lisbon at the time was António Costa. Vasconcelos and Costa had a tremendous amount of success in Lisbon around startups and created an environment where an enormous volume of entrepreneurs were starting companies left and right. They really figured out how relevant startups were to the city and to the city’s development and GDP.

About a year ago António Costa came into power as the Prime Minister of Portugal. As Prime Minister, António Costa went to João Vasconcelos again with the idea that they would do what they did for Lisbon with startups and do it with Portugal as a whole. They wanted to start working on how they could help support future-compatible entrepreneurships better from the government side. The idea was to ensure that these policieswere not ill-targeted and functioned to serve entrepreneurs and tech companies and ultimately help society in Portugal be more future comparable.

João called me up and told me he was starting an association, startUP Portugal, that would be responsible for the strategy of entrepreneurship in Portugal. We would be benchmarking initiatives and building international relationships and advertising Portuguese entrepreneurship more broadly in Europe and across Portugal. He asked me to lead it because of my experience in startups in Berlin and my international connections. And for me, someone who has been building companies and products for a long time, I was excited to have the chance to lead a project like that.

What is the startUp environment like right now in Portugal and what are you expecting in the next couple of years?

So, if you look at the unemployment rate, it has dropped in the last couple years from 18% down to around 10%. And it is still going down so we are expecting continued good news in the near future.  I think that is really important to note that the majority of the jobs that have been created have been created by companies younger than 5 years.

Any company right now in Europe that is trying to sell digitally or work lean or distribute online is running into challenges in Europe. There are so many companies right now that might not necessarily fall under a venture capitalist’s definition of what  a “startup” is, but all new companies are either involved with technology or are adjacent to startups in some way or they are internationalizing early.  

Whatever the case may be, most of these companies are touching on the issues of fast scaling companies. So in my book, any company that is starting now falls under the definition of a startup. Under that definition, a lot is going on. I believe startups are the new normal and not a contemporary phenomenon. I think the whole movement and how we want to work and the tools we work with are all part of that new normal.  

We are far out there trying all the new stuff and people like us are adaptive and ready to try new things, but everyone needs to use these tools down the line. So startups are really forming a foundation for a future compatible economy here that embraces technology and isn’t afraid of it.

How receptive are the Portuguese to foreign workers working with startups?

I was flabbergasted how open everyone is, especially coming from Germany, I am used to the opposite phenomenon. You have to be open and internationally minded to become a startup hub and attract that international talent. Even look at the cultural stuff like music, art, fashion, and media. All of these businesses, and projects share one thing: if they are successful and interesting and pushing the envelope, they think outside of the country and the city that they are in, and that is true for Lisbon as well.

The city of lisbon has become more expensive because of increases in tourists and AirBnb and what not, but, the waiter on the street, as a simple example, will still say it is so awesome you [entrepreneurs] are here because the city was not nice like it is now 10 years ago. Now it is all awesome.

So it is very open and there is no real need to speak the language. Of course you will hit barriers with cab drivers or shopping but there are lots of touch points and, really, if you are a decent human being, you should be learning at least a little bit of the local language.

And how hard it is it to work in Portugal as far as work permits are concerned?

Super easy. I was able to found a company inside three hours here. I needed a Portuguese translator because the incorporation authorities do not work in English but I opened a single person entity inside of three hours including a bank account. If you look at taxation and the other official stuff government is doing, it is super oriented towards having people come here and work here. You have flat taxation for expat non-residence of 25% of income, which is low compared to 56% in Germany, and just the ease of setting up stuff. I needed to provide documentation and prove I am not a criminal, but if you can do that then it happens inside a couple hours.

Why is Lisbon a hot startup hub do you think?

You know, you don’t want to go to the US to start a company because you have a horrible CEO running the country there. The UK has a serious Brexit issue obviously with complete uncertainty. I would say that isn’t necessarily future-compatible. Ireland has a tax issue, they have thrown a gazillion issues at Apple so that really isn’t beneficial to any type of startup environment. If you look at Germany it is pretty saturated and rich at this point.

Innovation is important but the chancellor refers to it with a German word that means “unknown territory” which I think is a horrible term 20 years into the development of the startup ecosystem. Then look at Paris, they have a cultural thing, they had their own internet not long ago (Minitel).

So I am super bullish about Portugal and the southern countries. Greece, Spain and Italy. Last year Portugal had the fastest growing economy in Europe. And Portugal has a bridge to Latin America. There is a lot of positive indicators.

What about landing a job at a startup as an employer aside from developers. Are companies interested in hiring international talent? Are there any skill gaps I can take advantage of?

Look at it this way. The language skills, the knowledge, the know how. It is still a pretty early stage ecosystem in Portugal. It is like any other startup ecosystem, we need all the skills. We need growth hackers and front end programmers and deep tech and UX people and sales and business developers and CEOs and everything in between. Bring it all! All the merrier! There is no way there isn’t a job for you if you know what you are doing in terms of startups and entrepreneurship.

And what is the work culture like in Portugal?

It is very much more laid back compared to Germany and Japan. I think not necessarily when it comes to startups because of course startups share a similar culture of work ethic, you are online anyway most of the day so if you get an email you deal with it, but that may not be a Portuguese trait as it is a startup trait.

And of course, in Portugal, there are tons of distractions. Sensational food, there is a very delicious beer that comes in tiny entities and super cold which is a problem, and the weather. But I try not to talk about all that stuff because everyone talks about that stuff. The weather and beer and food isn’t the reason that Portugal is functioning as a startup ecosystem, that is just one factor and it isn’t the most important. There are a lot of factors that make it work.

What is most people’s general impression of Portugal?

Super open, loving, fun, sometimes hard to crack and hard to understand in terms of language but one thing you have to see if you come to Portugal is that it is a city that is reshaping neighborhoods right now in a matter of months. That is what happened in Berlin in the 90’s and 2000s. In Berlin, it was huge in creating communities and creating vibes and you know if you have that kind of context in a city where a lot of things are shifting or changing, that provides the chance to positively impact. You can be a part of that and you can engage and be active in shaping or transforming things. That is one thing about Lisbon, it is full of potential. The potential is almost endless.

Any final thoughts you want to share?

One thing your readers might want to look up around the work we have been doing in Berlin, where I have done most of my work before Portugal, is the StartUP Europe Summit. The Europe Summit is a conference where we bring together the European commission, stakeholders, entrepreneurs, all the way down to freelancers and actually build bridges between two pretty complex and not necessarily complementary worlds: super fast moving entrepreneurs and policy makers. So that might be something to look into if you are interested in the European startup scene.



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Aaron Horwath Written by:

Since graduating from the University of Portland in 2014, I have worked abroad. Currently, I live and work in Da Nang, Vietnam as the Head of Global Training at an international technology company. Through my blog, I share my experiences of working abroad to give others a glimpse into international life and help them decide if working internationally is right for them.