Dear all,

Last Thursday evening in Berlin. The Delta Campus in Berlin is packed. The mayor of Berlin steps on stage to launch a new ecosystem initiative BAD1. Berlin is Europe’s number-one innovation hub. Munich, he says, is nice for a weekend—but too conventional and not where the future is built. Laughter in the room. The home team applauds. Not long before, Bavaria’s prime minister Markus Söder fires back: “Every Bavarian village has more common sense than the Berlin government quarter.”

I understand why politicians do this. Drawing circles—building in-groups and out-groups—is one of the oldest and most effective tools to mobilise people. But should we do this within Europe’s tech ecosystem? 

The answer, surprisingly, is yes, we should. There may be competition within Europe, but the real competitors sit in Silicon Valley and Shenzhen—not in Munich, Paris, Warsaw, Stockholm, London, or Berlin.

And yet, in builder settings, drawing circles has clearly worked.

Intel’s legendary “Crush Motorola” mantra unified the company around a single competitive threat at a moment when Intel was pivoting from memory chips to microprocessors. The fintech N26 framed its fight against incumbent banks with: “It’s not the big fish that eats the small fish, but the fast fish that eats the slow one.” Reed Hastings (former CEO of Netflix) dismissed Blockbuster with brutal clarity: “Late fees are the worst experience in entertainment.” Some of you might recall that Netflix, famously, started by mailing DVDs with generous return policies. 

Science explains why this works. Decades of social psychology show that people work harder and persist longer when their efforts benefit their own team. This stems from trust: experiments consistently find that people take more risks and require fewer safeguards with those they consider "one of us". A strong shared identity also speeds up coordination. When norms and mutual expectations replace constant monitoring, teams can ditch the rulebook and simply get to work.

Critically, the boundary must be behavioural, not identity-based. The most effective “us vs. them” lines are drawn around actions and models, not people: builders vs. bureaucracy, software vs. paperwork, reusable rockets vs. expendable ones, customer obsession vs. margin obsession. These circles cut across nations, genders, and backgrounds because it is defined by intent, not identity—an “us” worth defending.

In the classic book Built to Last, Jim Collins and Jerry Porras describe how visionary companies deliberately build strong in-groups through what they call “cult-like cultures.” They highlight three mechanisms. 

McKinsey institutionalises this through a firm-wide Values Day. Spotify runs fail-fikas, where teams publicly share failures over coffee to ritualise learning and psychological safety. Valve takes it to the extreme structurally: no managers, employees choose what to work on, and desks are literally on wheels—autonomy as a lived constraint. Amorelie, a Berlin-based sex-positive company, went even further: employees regularly participate in a collective, playful, sex-positive dance at company events, deliberately breaking taboos around bodies and intimacy. If you can’t embody the values, you don’t just disagree—you self-select out.

This will likely not fit every team. But comfort rarely builds great companies. So ask yourself: have you recently drawn enough circles of trust, and where are you avoiding it?

To a week of building circles of trust—no sex dances required,

Martin

P.S.: If you want a strong example of a company's values document, write to me ([email protected]), and we’ll share how we’ve approached it.

Rasmus Rothe is Co-Founder & General Partner at Merantix Capital. Over the past years, he has worked at the front line of applied AI, turning cutting-edge research in computer vision and machine learning into companies across healthcare, industry, and defence-adjacent sectors.

At the same time, he operates at the intersection of technology and policy. As a founding member of the German AI Association (KI Bundesverband) and elected Chairman of the Board in 2025, he sees firsthand how regulation, capital, and geopolitics are reshaping the AI opportunity space in Europe.

Merantix Capital just published 10 trends for 2026, ranging from 'World Models' to 'AI for Science.' Out of these ten, which trend is your personal strongest bet?

Our call is that 2026 will be the “year of AI ROI.” Over the past few years, we’ve seen “AI” mentioned on just about every earnings call. Now, companies are under pressure to truly quantify AI performance, productivity gains, and revenue uplift. As AI integration into real workflows accelerates, measuring it will become increasingly easy, and AI ROI will become a real benchmark as it spreads across industries. Importantly, companies that can demonstrate AI-driven performance gains can reinvest those savings into further automation. 

You argue that the lack of a direct Berlin-SF flight cripples our competitiveness in the battle for talent and capital. When you land in San Francisco today, what is the single conversation happening there that is completely absent in Berlin?

BER Airport’s lack of global connectivity is a pet peeve of mine (see my rant to the Berliner Morgenpost). International carriers want to operate more long-haul flights to Berlin, but are prevented from doing so due to lobbying from established interests.

Nevertheless, we have the same kinds of conversations in Berlin as in SF. We just need to make sure that it’s not unnecessarily difficult for capital to flow into Berlin. Existing scale-ups, for instance, should want to put European branches in Berlin, but they probably won’t if there’s not a direct flight from the HQ.

With 10 AI use cases in focus for the Merantix Capital Venture Studio, how do you distil real opportunity from hype? Specifically for 2026, what is the one indicator that tells you a concept—and a founder—will successfully bridge the gap from vision to execution?

We look for teams that have deep domain knowledge and really understand the problems of an industry because they have lived it. We also assess whether a team has the technical capability to be agile and inspire talent. The other big piece is defensibility. We look at a company and say, “OK, if AI accelerated quickly enough where everyone shared the same technology, would this business still exist?” To invest, we need to build conviction as to why this venture can establish a moat and deeply integrate with customers.

➔ First prototype (HS-1) reportedly exceeded Mach 6 and flew roughly 300 km in its initial test.

➔ Their catchy claim: “The world’s first containerised single-stage orbital system.”

➔ Two-time winner of the DTM100 Acceleration Prize

➔ Arkadia Space operates a privately managed orbital engine Test Centre at Castellón Airport, the first of its kind in Europe. 

➔ Alpha Impulsion has patented autophagic propulsion technology in 48 countries.

27 national markets and a level of fragmentation that is hindering investment, raising costs, and reducing efficiency. That is what Europe’s energy system looks like. Poor cross-border planning, limited data sharing, and uncoordinated grid development are increasing system costs and slowing the deployment of renewables and infrastructure. 

Without stronger coordination at the EU level, Europe risks higher energy bills. We’ll also be slower on decarbonisation and weaker in competitiveness. 

So what to do about it?

The brief Better coordination for a more efficient European energy system, published by the Brussels-based economic think tank Bruegel, tears open the problems and tries to give answers. 

Here are the five most important takeaways:

We’re opening a few additional seats for a closed mentoring session with Merantix’s Rasmus Rothe on what it actually takes to build venture-scale AI companies in Europe.

In this session, the AI-pioneer and investor will unpack:

This will be a small, focused discussion — not a broadcast. We’re limiting it to 5 additional participants to keep the exchange open and high-quality.

➔ If you want in, reply with “BUILD”.

Last Week’s Winner: Congratulations to Ute Theel, who won a copy of the book AI, Automation, and War: The Rise of a Military-Tech Complex.