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

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

#71

Post by kuschku » Tue, Sep 15, 2015, 2:28 PM UTC

smcl wrote: post #44

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.

What part? Is the incorporation of a company complicated\bureacratic? I know here in Czech Rep you pretty much need to have a local Czech speaker setup\registered\licensed with a certain status before you can create a new company. Or is there some capital requirements ("you must have €x,000 in the company accts to operate"), or lawyers fees that make it either tough\impossible for the early "ramen" stage?

In Germany, only very few legal types of incorporation allow the owners to be free of risk. Usually they require a high amount of money to start such a limited (so, in case of bankruptcy, all debt can be paid).

There is now a mini-GmbH, essentially a type of Ltd. that can only handle a limited (pun not intended) amount of assets, but does not require you to have enough assets to pay back the debts.

Then there are GbR, etc, a lot of nice incorporation types, but these, while effective for a normal company, are not useful for a silicon-valley type of company, as the silicon valley relies on an investment bubble - and a GbR and similar place the liability completely with the owners of the company.

Then there are consumer cooperatives and so on, but while these, again, are useful for the normal economy, you can’t use them to make profit by scamming people (as they are effectively profit-less).

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

#72

Post by andreamazz » Tue, Sep 15, 2015, 2:30 PM UTC

kavabean wrote: post #70

I wonder if the following could be relevant. 1. In my experience, Europeans are less dominated by the "newer is better" desire to constantly get the latest gadget/technology. I wonder if others agree. 2. European money appears to be more dominated by old money / aristocracy and that these people like to invest within that network. Engineers are less likely to be part of the aristocracy and are treated more like commo…

As far as gadget goes, "newer is better" is a dominant factor in Europe too. The problem lays in the enterprise world. One time a client told me "you call this Visual Basic application old, but it's not. It's consolidated". Can't argue with that logic. As for the second point, you're right on the money. I can't count the amount of engineers that make less than 25/30k€ here.

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

#73

Post by ThomPete » Tue, Sep 15, 2015, 2:31 PM UTC

bsaul wrote: post #43

"The third reason I hear is that the US market is bigger and therefore it’s easier to get traction. Yet there are 503 million Europeans living inside the EU vs. 319 million US living in the US" Stopped reading after this line. So to this guy, a market is a geographic definition. Well, we're not in the 19th century anymore. We're not defined by hills and roads and river access. IT startups identify markets from cultur…

You should have continued reading cause I am actually addressing this :)

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

#74

Post by ThomPete » Tue, Sep 15, 2015, 2:32 PM UTC

bsaul wrote: post #60

realusername wrote: post #51

Earlier quoted context omitted.

It's indeed difficult to explain how diverse the countries are in Europe, you have the same kind of cultural differences that you have in the whole United States in just a single European country from one side to the other, it's pretty dense.

Yes, yet i would hope that someone that tries to address the fundamental flaws in parts of Europe economy has at least a minimal knowledge of that fact. To make such a fundamental mistake in an analysis, one has to have never had even one single business relation with two different european countries.

Read on from there, I am well aware of this but my point is a little different.

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

#75

Post by timonv » Tue, Sep 15, 2015, 2:35 PM UTC

kavabean wrote: post #70

I wonder if the following could be relevant. 1. In my experience, Europeans are less dominated by the "newer is better" desire to constantly get the latest gadget/technology. I wonder if others agree. 2. European money appears to be more dominated by old money / aristocracy and that these people like to invest within that network. Engineers are less likely to be part of the aristocracy and are treated more like commo…

It's not a single country. There's different ideas, ideologies and beliefs all around. Conservative Dutch versus conservative Italian is quite different.

> 2. European money appears to be more dominated by old money / aristocracy and that these people like to invest within that network. Engineers are less likely to be part of the aristocracy and are treated more like commodities than the enabling superstar athletes they are (at least the kind that make unicorns). I know quite a few engineers that make over $200k in SV but only one who makes over 100k GBP.

At least here in the Netherlands that seems to be pretty common. Generally, investors are more conservative, and rarely take major risk. Salaries are also just slightly above working for a consultancy, but not always.

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

#76

Post by cronjobber » Tue, Sep 15, 2015, 2:38 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.

If you want to be a cynic: German law is optimized for protecting the public from investment scams.

If you don't want to be a cynic: German law is optimized for protecting the public from investment scams---which makes it hard for startups that aren't investment scams but become victims of false positive identification by german law as possible investment scams.

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

#77

Post by notNow » Tue, Sep 15, 2015, 2:39 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…

It's worth mentioning that Italians also exhibit diglossia as well not only the Chinese. They speak in dialect at home or with friends and family within the community but in the official Italian in public.

We Arabic speakers also enjoy or suffer , it depends on your perspective, from this phenomenon as we mostly speak in dialect all the time but in formal contexts esp. in writing, we use the Modern Standard Arabic instead. However, writing in dialect or MSA derived languages is becoming more acceptable in literature and the press at least where I come from, that's Egypt.

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

#78

Post by adaml_623 » Tue, Sep 15, 2015, 2:50 PM UTC

hodwik wrote: post #66

adaml_623 wrote: post #12

A more interesting question is: 'Are unicorns good for the economy and good for society'?

Why is that the more interesting question? Is there anything you can add to the discussion of substance? Or, perhaps, is this drive-by FUD all you have in the content holster?

Ok you have a valid point but since the article is full of kind of wishy washy questions I didn't feel guilty about adding some more into the mix.

The title 'Why is Europe Failing to Create More Unicorns?' has an implicit bias in it. The question is saying that Europeans should create more of these massive new companies.

10 smaller companies might be better than 1 big company. 100 companies worth $10 million dollars each might provide the same number of jobs and the same services to the economy.

Maybe?

Admittedly if you listen to European entrepreneurs you can't come away and believe that everything is rosy for new businesses.

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

#79

Post by cronjobber » Tue, Sep 15, 2015, 2:51 PM UTC

cronjobber wrote: post #41

Europe had a crippling diversity deficit and so the US easily took the lead in tech, but under the guise of the so-called "refugee crisis" Europe is now executing a cunning Blitzkrieg assault on America's former advantage. D is for diversity, E is for EUgle!

Addendum: Note that I honestly think that it is basically true: Europe's capitalists will not only profit from the refugee crisis, but they will do so for precisely the same reasons US capitalists profited from diversity. I'm deeply sorry I can't discuss mechanism on this forum; it takes too much hard boiled cynicism to fully grok. Yet I'm serious: The refugee immigration will ultimately boost Europe's tech competitiveness.

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

#80

Post by ThomPete » Tue, Sep 15, 2015, 3:45 PM UTC

adaml_623 wrote: post #78

hodwik wrote: post #66

Earlier quoted context omitted.

Why is that the more interesting question? Is there anything you can add to the discussion of substance? Or, perhaps, is this drive-by FUD all you have in the content holster?

Ok you have a valid point but since the article is full of kind of wishy washy questions I didn't feel guilty about adding some more into the mix. The title 'Why is Europe Failing to Create More Unicorns?' has an implicit bias in it. The question is saying that Europeans should create more of these massive new companies. 10 smaller companies might be better than 1 big company. 100 companies worth $10 million dollars…

Thats not what I am saying at all though. In fact I am very open in the essay to the question as to whether it's even something you would want.

But the fact is that they have an effect on the world outside the US. Perhaps you are fine with that, I would love to see some more Europeans get into the game if nothing else to boost morality and have more people try and create companies.