Consumer/Analysis/ Insider view: surfing startups on Porto’s beach Portugal's coastal city is becoming an international hub for startup founders, digital nomads and venture capitalists, says Porto's startup expert Shadi Mahassel. By Carly Minsky 30 April 2019 \Consumer European vet techs are in good health for 2023 By Adam Green 16 February 2023 Consumer/Analysis/ Insider view: surfing startups on Porto’s beach Portugal's coastal city is becoming an international hub for startup founders, digital nomads and venture capitalists, says Porto's startup expert Shadi Mahassel. By Carly Minsky 30 April 2019 Shadi Mahassel, cofounder of Porto’s startup for startups, SURFnCODE, doesn’t believe in work-life balance. Instead, since moving to Porto, the former Skype and Microsoft senior product manager has decided it’s all about “work-life harmony” — the attitude that work and personal life must both be exciting and as important as each other, and mostly inextricable. In practice, this means that knowing the best fishmonger is as important as knowing the leading angel investors in town, and startup teams can be spotted putting their heads together for idea generation meetings on surfboards. “The lifestyle is also a huge attraction: Porto has a city beach and everybody surfs.” His work helping Porto’s most promising entrepreneurs transform their business ideas into market-ready products, recruit stellar startup teams, and connect with the right investors, has taught him all the city’s secrets. He tells Sifted everything we might want to know about Porto’s chilled-out startup scene, except for one secret he keeps to himself: which fishmonger is the best in town. Insider view What is the region’s biggest strength as a startup hub? Porto is surrounded by a number of universities within a 90-minute drive, which has made it the industrial and business hub of Portugal, whereas Lisbon is very much the creative and tourism hub. Portugal has a large crop of super qualified, highly intelligent, English-speaking, motivated, hungry young kids, but they don’t have access to the huge world-class companies here. Some large companies have moved their back-office operations here, but those aren’t the exciting jobs that the young smart graduates want. So that makes Porto an important area to produce entrepreneurs and startup founders. The lifestyle is also a huge attraction. Porto has a city beach, and everybody surfs. You can leave the office and in 10 minutes be on the water with your board. Digital nomads love it, so recently Porto has become a very important hotspot for the digital nomad community too. What is the biggest challenge? This ecosystem is new and relatively nascent. Even though we are seeing brand new startups popping up over here, it is not anywhere near as vibrant as London. That means opportunities in the pipeline for venture capitalists or investors are more scarce. We’re paying a lot of attention to the local founders community here, and the challenge is that there’s no history of very successful first or second-generation startups in Porto. To build an ecosystem you really need a homegrown company to become a unicorn and then the employees of that company, who have seen how a successful startup works, can then go on to become that first generation of founders. And that creates a second generation company and so on. That kind of richness and heritage is yet to be built because Portugal is still young in the startup space. In what ways has it changed over the last five years? The Porto that I visited when I made the decision to move here is so different to the one I see today, especially in terms of the people and culture here. When I first moved here and people discovered I was a foreigner, it was a novelty for them and they would try really hard to help and me and welcome me. There were hardly any tourist spots here; you could walk around downtown and not see any brand that you’d recognise. Now there are so many foreigners living here, which is great because they are all coming for that welcoming culture and opportunities here. But it does mean that locals are more familiar with foreigners who live and work here, and the upsurge in tourism has also brought a lot of investment which has been poured into the infrastructure. Dilapidated buildings that were abandoned have been turned into amazing new properties with all kinds of services. Increases in income levels have created more of a culture of going out and doing recreational activities. How easy is it to hire people? It is easy to hire in Porto, but it depends what your needs are. As a startup founded by foreigners, it was harder to find the right talent than I imagined. Bigger companies might find it easier, but we were looking for people with perfect English who were willing to accept cultural differences in the way a startup works. We believe in empowering teams, but this is different from the traditional way of doing things in which people expect to be told what to do and gladly follow instructions. In the end, you can definitely find the right people in Porto, but in our experience we had to interview a lot more candidates than we thought. How easy is it to find funding? The good news is that there is a lot of money funnelling into Porto to invest in startups, now that the potential is really obvious with, for example, Farfetch being listed and several Portuguese startups hitting unicorn status, like Unbabel and OutSystems. There’s a really good small venture capitalist community here, and a fast-growing angel community looking into startups. The amounts that they have to invest are small, but that’s fine because the startups here are generally at an earlier stage than the startups you’d find in the UK. I just heard about a Porto startup — a subscription service for dog-owners — raising €1.7m from a new VC fund called Indico, run by the former managing director of another Portuguese VC firm, Caixa Capital. There’s definitely a drive now to build better startups, support founders and arm the entrepreneurs with better stories. That will unlock some more cash. There’s also more and more foreign investment; Lisbon startup Uniplaces attracted funding from Atomico, and a very early-stage startup called dashdash which raised from some prominent VCs. International firms are starting to realise that there is a real opportunity to be had by looking at Porto’s startups. What are some of the daily frustrations? Not having exactly the right fresh fish that you want! It’s only partly a joke; fresh fish is such a part of the culture here that it does become an obsession! But the biggest frustration for me as a founder of a startup, i.e. a company that is not a traditional local business, is the government bureaucracy. All the paperwork filings, but also working out how to translate our policies, like unlimited vacation, into local contracts, dealing with the payment systems here. There is a lot of room to improve. What is the social side like? There are lots of meetups for founders of startups, Python communities, data science groups and so on. There are almost daily meetups happening all over Porto. The coworking hotspots are attracting the digital nomads, so there are a lot of activities associated with that. “I’m encouraging our team to surf for an hour and then go back to the office. We’re about to start Wetsuit Wednesdays.” There’s a lot going on for young founders, and some multinational companies have set up offices here, like Germany social networking company Xing, so we all interact. The City of Porto runs events like ‘Start and Scale’ week in April which is a group of events, hackathons, and panel discussions for the startup community. It’s a very valuable event and bigger companies participate too. Surfing is also key to the social life. I’m encouraging our team to surf for an hour and then go back to the office. We’re about to start Wetsuit Wednesdays. I look forward to the day we do one-to-ones on our boards, or a few people go have a breakaway in the water to refresh their minds. 10 quick questions: Where is the best place to meet people? Coworking spaces in downtown Porto, especially Porto i/o. There are three coworking spaces around Porto and then more specialised coworking spaces, like CRU Cowork in the artistic quarter, for creative industries. What is the best event/meetup to attend? I have to plug our SURFnCODE Founders Day in June! We’ll be announcing the next cohort of startups, presenting the results of the previous cohort. We invite our network over here — angels, VCs — and also our contacts in the UK, including ‘deep tech’ academics from Imperial College London and UCL to see if they could benefit from our product expertise. Who are the important people you need to know? Well, your fishmonger and butcher are right at the top of the list, I’m not kidding! Also there are some new emerging leaders among the founders — influencers in that community in the sense that they are really driving the roadmap to make Portugal a key tech hub. Cristina Fonseca is one example: she’s the founder of Talkdesk startup and now a VC partner at the new fund Indico. Also António Murta, CEO of Pathena Investments, which is a great venture firm over here. Where is the best location to work? I’m biased but I would say Matosinhos, around 4km northwest of downtown Porto. I personally prefer it to downtown Porto, even though there’s now a hub there anchored by Farfetch. But Matosinhos is less hectic from a tourism perspective, so there are fewer traffic jams, we’re 100 meters from the beach and surrounded by lots of great food. It’s very convenient to get from Matosinhos to anywhere else in the city by Uber or bus. Which are the companies everyone wants to work for? Farfetch stands out because their recruitment is huge, they have around 1,500 employees in the area. Otherwise, there are exciting startups scaling up, like Veniam for connecting autonomous vehicles, and Huub — a Porto-based startup doing logistics for fashion brands, which raised a €2.5m seed round. Biggest startup success story from the region? The most recent one is Huub, particularly because they have been profitable for a while, and built their business diligently and then raised a fairly large amount to continue growing the business. Also dashdash, what they are doing is really amazing. They’re taking the coding out of app development so you build an app using just a spreadsheet. I also recently came across HypeLabs, building a peer-to-peer mesh networks to connect IoT devices even without internet. Which are the most exciting companies to watch? Okay I’ll be subtle about this… SURFnCODE is most obvious one! It is something totally different for Porto; we are world class startup-builder, and the cofounders have all been in senior roles at Skype and Microsoft, including Koen Vos, who wrote the codec which is standard across web-based voice communication services, and John Chang, who was the tech lead working on the Skype app for iPhones, and stood next to Steve Jobs on stage when they demoed that a Skype call would keep going when the app was running in the background. Having this expertise totally focused on Portugal is unique. Which newsletters or websites are the ones to follow? The City of Porto runs a website, Porto Digital, for understanding everything in the startup community. It is the centralised way of connecting with employees and potential employees, finding grants and events. Which online communities are the ones to join? Facebook groups: Porto Expats, and Expats Portugal. Which corporates are influential in the city? Sonae, one of the largest conglomerates in Portugal, which owns a lot of real estate, fashion brands, retail and supermarket chains. They also have their own VC fund. Related Articles Another kind of marketing strategy By Carly Minsky Click here to read more Barcelona needs to embrace Uber, says Manuel Valls By Michael Stothard Click here to read more List: Europe’s coolest femtech companies 2019 By Mimi Billing Click here to read more Most Read 1 \Healthtech Is Daniel Ek’s new body scanner worth the hype? Sifted tried it out 2 \Venture Capital VC diversity needs to change — and white men need to take responsibility 3 \Venture Capital New €3.75bn European Investment Fund pot to back late-stage VCs 4 \Sustainability Counteract closes £15m fund for carbon removal solutions 5 \Mobility Was the $5bn that VCs plugged into escooters worth it?