Germany, land of ad managers

The country that gave the world the combustion engine, the printing press and, not to mention, MP3s, could be helping to shape the future of technology. Instead, it proudly presents its latest innovation: yet another D2C brand selling oat milk via Instagram ads.

Is this the future of our country? Hopefully not. But it is very clearly our present.

The sock problem

Recently, at a tech meetup in Berlin, I asked a few people what they were working on. ‘Marketplace,’ ‘e-commerce,’ ‘performance marketing,’ ‘influencer platform’ – as if Silicon Valley had never existed. Somewhere between Leibniz, who invented the binary system, and today, we have collectively decided that Germany’s contribution to the digital age is to optimise click-through rates for shoe retailers.

Don’t get me wrong: you can make money with socks. With ads, too. And with overpriced iced tea with a YouTuber’s face on it, even more so. But is that really what a nation of engineers feels called to do? To be the service layer on someone else’s platform?

Because that’s exactly what most of ‘German Tech’ is. It’s not technology. It’s a distribution function. We don’t build platforms, we rent them. We don’t develop algorithms, we feed them with budget. Google builds the engine, Meta builds the social graph, and we, the proud heirs of Siemens and Bosch, build the landing pages.

The great outsourcing of ambition

What happened? For decades, Germany’s small and medium-sized enterprises, the backbone of the economy, built physical things of exceptional quality. Machines that last forever. Cars that often last a long time. Chemicals, optics, precision instruments. Real engineering.

But when the internet came along, something broke. Instead of applying the same engineering ambition to software, infrastructure and platforms, Germany collectively shrugged its shoulders and said, ‘Let’s just hire an agency.’

And so the German tech ecosystem essentially became an agency ecosystem. Performance marketing, SEO, CRM implementation, Shopify themes. Thousands of companies helping other companies sell stuff online, while the actual technology underneath – cloud, compute, AI models, developer tools – is being built in San Francisco, Seattle and, increasingly, Beijing.

Rocket Internet perfectly captured this dynamic at the time. Why invent when you can copy? Why build a platform when you can clone one? For years, the Berlin start-up scene was basically a localisation service for American business models. Take a proven US concept, slap a .de domain on it, raise money from the Samwer brothers and pray for an exit before the original even hits the market.

The figures speak for themselves

Germany’s digital advertising market is worth over 13 billion euros. The e-commerce market is approaching the 100 billion mark. Impressive figures, until you realise that almost all of it flows through infrastructure built by American companies. Every euro that flows into Google Ads is a euro to Mountain View. Every Shopify subscription enriches Ottawa. And every AWS instance pays Seattle.

We have built a €100 billion digital economy on rented land.

And actual German tech products with global reach? SAP (founded in 1972), DeepL, Celonis. You can count them on one hand and still have fingers left over. For Europe’s largest economy and the world’s third-largest exporter, that’s not a balance sheet, it’s embarrassing.

The influencer-industrial complex

Perhaps nothing captures the absurdity better than the influencer scene. Germany has an entire industry segment that specialises in paying people with ring lights to hold products up to the camera. There are conferences for it. There are specialised agencies for it. There are probably consultants who help other consultants optimise their influencer consulting strategies.

And the products being advertised? Another protein bar. Another sustainable sneaker. Another ‘clean’ energy drink that, on closer inspection, is just sugar water with better typography.

Time to remember who we are

Here’s the thing: there’s no shortage of talent. German universities produce first-class engineers, mathematicians and computer scientists who then immediately move to the Bay Area or start working at Google Munich to work on someone else’s platform. The brain drain is not only geographical (although it is that too). It is primarily aspirational. We have trained an entire generation to believe that the upper limit of German tech ambition is a successful Series A for a ‘verticalised marketplace’.

It’s time for emancipation!

Germany has almost everything it needs to build real technology companies: the engineering tradition, the education system, the industrial base and the capital (if only German banks could be convinced that software doesn’t physically rust). What’s missing is the audacity to aim higher than the next Shopify plugin and a European single market.

An initiative called EU-Inc

This European single market, which is not a single market for tech companies, could be about to receive its biggest update since the introduction of the Euro.

The initiative is called EU-Inc and initially sounds as unsexy as only a regulatory proposal from Brussels can: a uniform European company form for start-ups and scale-ups. No new funding pot. No innovation summit with cheese cubes. But something that is actually missing: a legal structure that allows a company to be founded in Tallinn, hire people in Munich, serve customers in Amsterdam and take on investors in Paris without having to set up a separate company in each country, marry a local tax advisor and survive three notary appointments.

EU-Inc is being driven forward by a coalition of founders, investors and policy makers who understand that Europe’s tech problem is not just a cultural problem, but an infrastructure problem. Not infrastructure in the sense of fibre optics (although that too), but in the sense of: why does a start-up with 15 employees and customers in four countries have to deal with the regulatory burden of a multinational corporation?

The initiative is supported by prominent European VCs and start-up associations, among others, who have been grappling with the absurd fragmentation of the single market for years.

And this is where we come full circle.

Because one reason why German founders so reliably end up with sock marketplaces and oat milk brands is not just a lack of ambition, but rational self-preservation. Anyone who founds a limited company in Germany and then wants to expand into France enters a parallel universe of different company law, different employee regulations and the vague feeling that some notary somewhere still needs a certified copy.

In the US, you set up a Delaware C-Corp and sell in 50 states the next day. In Europe, you set up a limited company and spend the next six months figuring out whether you need a B.V. in the Netherlands or whether a branch office is enough, and whether your ESOP will even work there.

EU Inc would not completely eliminate this madness, but it would drastically reduce it. One legal form. One set of rules for employee participation. A framework that allows European start-ups to view a market of 450 million people as their home market from day one, rather than 27 separate foreign markets, each with its own bureaucratic personality disorder.

And that changes the equation. Because suddenly it’s worth building platforms instead of landing pages. Suddenly, the addressable market is big enough to compete with the Americans. Suddenly, the rational argument of ‘stay small, stay local, sell socks’ is replaced by a new one: ‘build big, scale European, and maybe – just maybe – build the damn platform yourself.’

Conclusion

Germany and Europe do not have a talent problem. They have a scaling problem. Too many start-ups deliberately remain small, too many ideas end up in distribution because growth here does not feel like growth, but like running the gauntlet through 27 legal jurisdictions. If you want to build platforms, you need a market that behaves like a market and rules that do not turn every expansion into a new bureaucratic project.

Will EU-Inc turn Germany alone into the next Silicon Valley? Of course not. That still requires bolder investors, less risk-averse founders and the collective realisation that an exit to an American corporation is not a European success, but a capitulation.

But it would be a start. A real, structural start. Not another summit, not another white paper, not another digital pact that mainly consists of politicians inserting the word AI into speeches. Instead, the simple, long-overdue idea that Europe should finally treat its own internal market as it was intended: as a single market. This includes those who build software and not just cars.

The country of Leibniz, Gutenberg and MP3 has the engineers. It has the ideas. It would even have the market, if only it were unlocked. EU-Inc is the key to opening the door a little wider.

Notes:

Do you want to develop your company in a way that truly inspires users, customers and developers? Then simply connect with Benjamin Igna on LinkedIn and find an approach that suits you and your context perfectly. Alternatively, you can also contact Stellar Work.

Would you like to discuss the aspirations and obstacles in Germany or the EU-Inc initiative as an opinion leader or catalyst? Then feel free to share this post in your network.

Benjamin Igna has published more articles on the t2informatik Blog, including: