Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Switzerland government raises investment funds to support Swiss startups

swissinfo.ch

Post reply on HN
Print view View original

11–20 of 68 posts

Re: Switzerland government raises investment funds to support Swiss startups

#11

Post by siscia »

fla wrote: post #6
siscia wrote: post #5

Earlier quoted context omitted.

I dont think that Switzerland is more expensive than say San Francisco... While it is true that is one of the most expensive European countries the cost of living is very close to the one in the bay area...

It is not much a matter of cost of living but rather cost of the Swiss Franc versus other currencies. Currently, the swiss Franc is very strong, therefore making any Swiss product expensive to the exterior. It can become a huge problem for an economy based on trading with neighbors.

Actually, the Swiss franc is at one of its lowest points in the 10Y view [1]

A Swiss franc is traded at roughly 1.09 Euros, I would say significant, sure, but not a deal breaker in high-tech industries. If we were talking about commoditized products I would have to agree but in our industries this is just not the case.

[1]: http://www.xe.com/currencycharts/?from=EUR&to=CHF&view=10Y

Re: Switzerland government raises investment funds to support Swiss startups

#12

Post by csomar »

mschuster91 wrote: post #3

The main problem for Switzerland is not a lack of venture capital, but rather the Swiss Franc. Cost of living in Switzerland is extremely high, which means a company has to pay huge salaries, and thus command bigger prices for its product. While that works fine when the product is luxury watches, diamonds or highest-quality cheese, it does not work out for "mass production goods" as any product (be it a physical prod…

This is not correct. Internet services are considered high yield businesses and their ROI is very high. Google, Facebook, Apple, etc... pay high salaries even comparing to swiss standards.

The problem is that a startup is, eh, a start - up. You are using mainly your skills and as much resources you have to start. An expensive place should not be ideal for that, but hey, san francisco is super expensive and is still the startup hub.

So maybe there is something else...

Re: Switzerland government raises investment funds to support Swiss startups

#14

Post by geff82 »

siscia wrote: post #5
mschuster91 wrote: post #3

The main problem for Switzerland is not a lack of venture capital, but rather the Swiss Franc. Cost of living in Switzerland is extremely high, which means a company has to pay huge salaries, and thus command bigger prices for its product. While that works fine when the product is luxury watches, diamonds or highest-quality cheese, it does not work out for "mass production goods" as any product (be it a physical prod…

I dont think that Switzerland is more expensive than say San Francisco... While it is true that is one of the most expensive European countries the cost of living is very close to the one in the bay area...

Relative to the average income, Switzerland has rather unexpensive rents. Of course, in absolute terms, cost of living might still might make your runway on the same budget shorter compared to Berlin.

Re: Switzerland government raises investment funds to support Swiss startups

#15

Post by tmsldd »

Although it is nice to have more funds available, which increases the competition among VCs, the main point is not lack of funds. I used to say that a good VC brings you two important things: money and market. Money alone doesn't bring you much (don't get me wrong ..). In my eyes that is the main issue in the startup scenario in Switzerland: lack of market. Having a population of about 8 million people means that your startup has to focus in exporting products & services since the beginning... which adds some layer of complexity/bureaucracy ... Startups tend to establish themselves as close as possible to the client market to simplify as much as they can their initial operation..

Re: Switzerland government raises investment funds to support Swiss startups

#16

Post by s3nnyy »

mschuster91 wrote: post #3

The main problem for Switzerland is not a lack of venture capital, but rather the Swiss Franc. Cost of living in Switzerland is extremely high, which means a company has to pay huge salaries, and thus command bigger prices for its product. While that works fine when the product is luxury watches, diamonds or highest-quality cheese, it does not work out for "mass production goods" as any product (be it a physical prod…

Switzerland and Zurich is cheaper than you think, here my two-year-old blog post about living costs here: https://medium.com/@iwaninzurich/eight-reasons-why-i-moved-t...

From a employer's perspective there are advantages in Switzerland compared to the rest of Europe: Labour laws are not as strict, so it is possible to fire people (unlike in Germany or France where employees are like your children, you can't get rid of them). Although salaries are high, in Switzerland you pay 20% on top of the salary of the employee to the state, in Germany like 40%.

Re: Switzerland government raises investment funds to support Swiss startups

#17

Post by remline »

mschuster91 wrote: post #8
fla wrote: post #6

Earlier quoted context omitted.

It is not much a matter of cost of living but rather cost of the Swiss Franc versus other currencies. Currently, the swiss Franc is very strong, therefore making any Swiss product expensive to the exterior. It can become a huge problem for an economy based on trading with neighbors.

> It can become a huge problem for an economy based on trading with neighbors. Exactly. Switzerland has just 8.5M people living there, while the US has 322M and Germany 82M. If Germany were expensive, for example, it'd still have a sizable inner-country market while Switzerland does not.

It changes what you try to do, but Switzerland and Germany isn't all that different from Silicon Valley and the US.

You use premium resources in Switzerland and try to sell German (or EU) resources back upon lower markets at a high enough volume and mark up to make the high market costs incidental.

Re: Switzerland government raises investment funds to support Swiss startups

#18

Post by bontoJR »

tmsldd wrote: post #15

Although it is nice to have more funds available, which increases the competition among VCs, the main point is not lack of funds. I used to say that a good VC brings you two important things: money and market. Money alone doesn't bring you much (don't get me wrong ..). In my eyes that is the main issue in the startup scenario in Switzerland: lack of market. Having a population of about 8 million people means that you…

> Although it is nice to have more funds available, which increases the competition among VCs, the main point is not lack of funds.

I agree on that, on the other hand I don't see the lack of market as a big problem. I like to take Spotify as example, it started in Sweden, which is a market comparable to the Swiss one in terms of size, but after the first prototypes and early versions, it went global almost immediately.

Schneider-Ammann said that a change of mentality is required in Switzerland. He noted that while in the US, business failure is greeted with a “better luck next time” or with a similar attitude, on the other hand, in Switzerland, “if you fail with your business idea here everyone points the finger at you. You are branded a looser”. This seems to be the main goal and I totally agree with him.

IMHO, a company can move to a global scale from the start with the right plan, but it's the mentality and the fact that Swiss VCs care more about patents and product protection preventing Swiss Start-up to compete with the rest of the world, instead of caring about quality of the actual product and picking the right time to enter the market.

I heard some stories about companies collecting 500-800k in seed investment, spending 50% of it in legal fees protecting a product they still have to develop, failing later in execution for lack of cash... this is what, I think, needs to be fixed in Switzerland.

Re: Switzerland government raises investment funds to support Swiss startups

#19

Post by remline »

geff82 wrote: post #14
siscia wrote: post #5

Earlier quoted context omitted.

I dont think that Switzerland is more expensive than say San Francisco... While it is true that is one of the most expensive European countries the cost of living is very close to the one in the bay area...

Relative to the average income, Switzerland has rather unexpensive rents. Of course, in absolute terms, cost of living might still might make your runway on the same budget shorter compared to Berlin.

Average ongoing rents are relatively ok, but bringing in new people often means paying top market prices, they can be double to quadruple an average ongoing rent.

Re: Switzerland government raises investment funds to support Swiss startups

#20

Post by [deleted] »

geff82 wrote: post #14
siscia wrote: post #5

Earlier quoted context omitted.

I dont think that Switzerland is more expensive than say San Francisco... While it is true that is one of the most expensive European countries the cost of living is very close to the one in the bay area...

Relative to the average income, Switzerland has rather unexpensive rents. Of course, in absolute terms, cost of living might still might make your runway on the same budget shorter compared to Berlin.

[deleted]
Post reply on HN