Why Is Europe Failing to Create More $1B Startups? • Hacker News Board

Re: Why Is Europe Failing to Create More $1B Startups?

#31

Post by donkeyd » Tue, Sep 15, 2015, 1:56 PM UTC

I've posted this before, but since I think it's relevant here:

People seem to forget that Europe is not a country. Europe does not have a single uniting language. What happens, is that every country starts their own smaller versions and they stay mostly within that country. If they want to move to another country, there's often already a major player there, and they might not have the means to kick them out.

I think the reason that silicon valley is so powerful, is that the initial market is 325 million people who all speak the same language. Once you get the US market, you have the size, name and means to easily start conquering European countries. It's always about scale...

Re: Why Is Europe Failing to Create More $1B Startups?

#32

Post by ThomPete » Tue, Sep 15, 2015, 1:58 PM UTC

donkeyd wrote: post #31

I've posted this before, but since I think it's relevant here: People seem to forget that Europe is not a country. Europe does not have a single uniting language. What happens, is that every country starts their own smaller versions and they stay mostly within that country. If they want to move to another country, there's often already a major player there, and they might not have the means to kick them out. I think…

I really hope that I am actually addressing that in my essay.

Re: Why Is Europe Failing to Create More $1B Startups?

#33

Post by copsarebastards » Tue, Sep 15, 2015, 1:59 PM UTC

ThomPete wrote: post #5

atmosx wrote: post #3

Lack of investors. Simple as that. Companies that run on deficit for 5-10 years can not survive in Europe. Facebook, twitter, etc. Wouldn't be able to survive in Europe, simple as that. ps. I hate the word 'unicorn'.

I hate the word unicorn too, but it's shorter than private market companies with a valuation of more than $1 billion :) With regards to lack of investors I don't think it's as simple as that. If it was only a matter of investments then surely US investors or Asian investors could just come in with the money. There is something that makes European VCs risk averse and keep american investors out of Europe IMO.

> I hate the word unicorn too, but it's shorter than private market companies with a valuation of more than $1 billion :)

Small-cap companies is shorter than that too and it actually means something. Don't give excuses for using stupid terminology.

Re: Why Is Europe Failing to Create More $1B Startups?

#34

Post by wpietri » Tue, Sep 15, 2015, 1:59 PM UTC

afsina wrote: post #4

State intervention on innovation is considered harmful.

Yes, I'm so upset that the government funded all the initial development of the Internet, crushing things like Compuserve and AOL and AT&T's videotex offering. Who knows where we could be today if only those had been allowed to flower. (Well, I know the planet would be 3 inches deep in AOL promotional mailers. But besides that.)

Re: Why Is Europe Failing to Create More $1B Startups?

#35

Post by Vexs » Tue, Sep 15, 2015, 1:59 PM UTC

ThomPete wrote: post #5

atmosx wrote: post #3

Lack of investors. Simple as that. Companies that run on deficit for 5-10 years can not survive in Europe. Facebook, twitter, etc. Wouldn't be able to survive in Europe, simple as that. ps. I hate the word 'unicorn'.

I hate the word unicorn too, but it's shorter than private market companies with a valuation of more than $1 billion :) With regards to lack of investors I don't think it's as simple as that. If it was only a matter of investments then surely US investors or Asian investors could just come in with the money. There is something that makes European VCs risk averse and keep american investors out of Europe IMO.

Unicorn just pokes my brain the wrong way, like bad kerning. On the other hand, it does describe how rare these things are, which I feel does make it an accurate term- it also explains how companies like this are essentially legends.

It's an annoying term, but it works (unfortunately)

Re: Why Is Europe Failing to Create More $1B Startups?

#36

Post by fennecfoxen » Tue, Sep 15, 2015, 1:59 PM UTC

Shivetya wrote: post #22

Over regulation. He talks all around that word but its key to why. The barrier to entry becomes much more difficult to surmount.

Europe historically had a problem where powerful nobility owned massive portions of the economy outright. Competition? Maybe with an army.

Today, it's a lot better than it was, but in many places the powerful noblility have been replaced by other powerful interests and some industries still operate like they have the God-given right to supply automobile tires to the French people and all good men must express solidarity to expel these upstart invaders... :(

Re: Why Is Europe Failing to Create More $1B Startups?

#37

Post by vorador » Tue, Sep 15, 2015, 2:00 PM UTC

wpietri wrote: post #28

jleyank wrote: post #9

I would think that the (mandatory) benefits required for companies in Europe (or even outside the US) raise the bar for startups. More $$ is required, more paperwork to ensure compliance, ... On the good side, this might/should act as a filter. On the bad side, money flows along the path of least resistance. I guess this is an argument for accepting remote work. There are lots of talented people in places where they…

In Paris a few years back I met an entrepreneur whose business was in California. He liked living in Paris, and really wanted more of his team there, but the regulations around hiring employees were a big issue for him. If I recall rightly, it wasn't so much the paperwork or the benefits, but the extra burdens around firing. So he was hiring all his new people in CA. Here in California, most employment is at will, me…

To contrast with what you said, it’s very common in french contracts to be able to fire an employee in the first 8 month of her employment. This isn’t really « at-will » employment but it’s pretty close, especially for Europe.

Re: Why Is Europe Failing to Create More $1B Startups?

#38

Post by SyneRyder » Tue, Sep 15, 2015, 2:01 PM UTC

neuronic wrote: post #14

German law makes the "out of the garage + Angel investor" start-up culture impossible. The only possible way is to make money AND start out with a huge amount of cash. I can't speak for other Euro countries.

Berlin seems to be bursting with startup culture, between all the co-working locations & Soundcloud & 6Wunderkinder acquisition. Are the German startups focusing more on profit & bootstrapping approaches rather than Angel funding then?

Re: Why Is Europe Failing to Create More $1B Startups?

#39

Post by vixen99 » Tue, Sep 15, 2015, 2:02 PM UTC

atemerev wrote: post #19

Asbostos wrote: post #16

He mentions the multiple languages. I don't understand why Europeans stick to their local languages when they all know English anyway. Are they trying to keep foreigners out? Surely they realize there's a huge social cost of having your own minority language. This problem exists in China too but most people recognize the need to learn the standard Mandarin so they're largely bilingual. Dialect at home and Mandarin ta…

No, not everybody in Europe speaks English. Not in France, not in Germany, not in Spain, not in Italy.

Anecdotal of course but for what's it's worth on the basis of around twenty cross-Europe trips by car I would say very few speak English. We live in bubbles and tend to believe they're shared by all.

Re: Why Is Europe Failing to Create More $1B Startups?

#40

Post by roelvanhintum » Tue, Sep 15, 2015, 2:02 PM UTC

Asbostos wrote: post #16

He mentions the multiple languages. I don't understand why Europeans stick to their local languages when they all know English anyway. Are they trying to keep foreigners out? Surely they realize there's a huge social cost of having your own minority language. This problem exists in China too but most people recognize the need to learn the standard Mandarin so they're largely bilingual. Dialect at home and Mandarin ta…

The languages are also a problem for Europeans, because it's a big threshold for finding a job outside your own country. For example The Netherlands is very small, but German or French are to hard to speak. It's Dutch or you'll have to move to an English speaking country. Most Dutch people speak English, so there is that.