Why Not to Set up a Tech Center in Barcelona [Interview]

Danish company Trustpilot on why they chose to set up a development team in Vilnius, Lithuania instead of Barcelona

If you’ve ever read any of our posts, you’ll know that we’re all for Barcelona. We believe that it’s a city full of opportunities for startups and tech companies of any kind, local or foreign. But, even we have to admit that each case is unique, and Barcelona may not be the right choice for everyone. As the tech map of Europe is constantly evolving, some companies are bound to write their own success stories elsewhere. And even though we’re speaking against ourselves here as advocates of Barcelona as the ultimate European tech hub, we’ve brought you a counterexample that shows just how important it is for companies to focus on their own needs instead of following trends when it comes to location scouting. We had a chat with Sabina Notkin, VP Tech Employee Experience at the Danish tech company Trustpilot, about why they decided that Barcelona was just not a good fit for them, and why they picked Vilnius, Lithuania instead.

A Story of Growth

Trustpilot has been steadily treading the path of growth for quite some time now, right?

Yes, the company has been growing constantly for the past five years: when I was hired as a recruiter in 2012, we were around forty people, and now we are over five hundred. We have an office in Copenhagen, two offices in the US (Denver and New York), one in London, one in Berlin, one in Melbourne, and now we’re starting up the seventh office in Vilnius.

So you have plenty of experience with expanding to unknown territory.

Yes but actually, this case is slightly different, as all the other offices that we have outside of Copenhagen are commercial offices. We had some Engineering in the US that we decided to close down so at this point Vilnius is the only office outside of Copenhagen where we have product development.

Why Not to Set up a Tech Center in Barcelona - Sabina Notkin, VP Tech Employee Experience at the Danish tech company Trustpilot
Sabina Notkin, VP Tech Employee Experience at Trustpilot

What made you start thinking about setting up a development center outside of Denmark?

In Denmark, we’ve established ourselves as a very strong brand: we are seen as a great employer for Product & Development. The main reason is our very strong tech culture. We work agile, provide our employees with “20% time” (which means that they can spend 20% of their time working on whatever they want – it’s a practice inspired by Google), we invest in education, send employees to conferences, and so on. Our way of working is attractive, so in Denmark, where we have a strong brand presence, it’s not too difficult for us to get people. But, as we all know, the demand for technical people is increasing, and the talent pool is not deepening fast enough. We have very high standards, and there is only so much local talent that you can hire, especially in a small country like Denmark, so, of course, we’ve been having to relocate people to Copenhagen. And then we started thinking about how we could do something in parallel to that.

What were your main priorities when your started looking for a location?

Our most basic requirements were: a talent pool of skilled developers, and easy transportation to/from, with short and recurring flights. A lot of the research was simply about checking how many daily direct flights there were to locations of interest from Copenhagen. We had to make sure that we can jump on a flight of no longer than one to two hours and have a face to face meeting whenever we need to.

Barcelona: 0, Vilnius: 1

In your opinion, what are some of the pros and cons of setting up an office in Barcelona? Why did you end up picking Vilnius instead?

We wanted to make sure that the market is not overheated. This is one of the things that made us a bit hesitant about Barcelona, because, while it’s a fantastic city – I personally would love to have an office there –, it’s tremendously popular to open up hubs there, and we had to take into account what our competition would look like. In Barcelona, there are just way too many companies that are looking for the same type of talent.

In Lithuania, a lot of foreign companies are within the banking and consulting industries. We believe that Vilnius has less companies like ours, that we’ve found a sweet spot. Also, the government is investing very heavily in technical education. During the last couple of years, they have doubled the amount of available seats for technical courses in universities. They see that there is investment coming from abroad, and that an increasing number of tech companies are moving there.

Another thing that would be a challenge for us in Barcelona is getting local tech talent. It is a city where everybody would gladly move, for sure. But what does the local talent market look like? If we opened an office in Barcelona, we’d still have to relocate people, which would mean a huge added cost for us. Salaries are lower in Lithuania, like in other parts of Eastern Europe, but they are increasing, as more companies are opening up offices there.

Your timing is really good then.

I think we are lucky to have done this now, and not in, say, two years. We looked into Tallinn, Estonia as well, and I think if we had decided to go there, maybe it would have already been too late.

Mindaugas_Bridge_at_Vilnius_in_night - Why Not to Set up a Tech Center in Barcelona - Danish company Trustpilot on why they chose to set up a development team in Vilnius, Lithuani
Vilnius, Lithuania. Photo Credit: Mantas Volungevicius

New Location, New Opportunities

Were there any other countries that you seriously considered?

We looked into quite a few. We talked about Madrid, Lisbon, Berlin… It would have made sense to open an office in Berlin, as we already have one there, but we think that the market is very tough there. We also looked into other Eastern European cities, like Bucharest. The ones that were not easy enough to fly to didn’t make the cut.

What does the tech community look like in Vilnius? How will you be contributing to it?

Spreading the startup culture, sharing knowledge and hosting meetups are things that we do a lot here in Copenhagen, and we want to be part of the tech community in Vilnius too. We feel that in Vilnius, we can fill an important function, we have a higher purpose, because we can share our experience as a high growth company, and therefore help other companies.

Did you have a contact in Lithuania who helped you get all the information you needed to get started?

We received some insights from our investors, and we have a former Trustpilot colleague who now lives in Vilnius. I had a chat with him about what the tech scene is like there. It was great to talk to someone who knows the company, and can give you insights on the country as well. Also, there is a government organization called Invest Lithuania: they have been extremely helpful and quick at responding to all our questions, giving us contact details for recruitment agencies, legal offices, anything we needed.

How far along are you?  

Everything went faster than we thought: we already have a team of twelve employees in Vilnius. A fellow company had to shut down operations there, and we were lucky enough to be able to interview their employees, and we actually ended up hiring all of them. They started a few weeks ago, so we’re just in the start of the onboarding process. Some employees from our office are in Vilnius right now, and we’re making sure that they all come to Copenhagen as well, to get to know the company.

Are you expecting all your future employees to be from Lithuania?

Actually, I was just talking about this with a local agency before our chat. They said as there has been an increase in foreign companies investing in Lithuania, they’re expecting to get more and more foreign workforce, mainly from other Eastern European countries. As a company, we’re all for diversity and hiring different nationalities. It’s an advantage for the company in many ways. The fact that mixed teams use English as a common language is important for us because that’s the company language. The level of English spoken by young people in Lithuania is excellent, that is definitely a big plus.

Leave a Reply