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We don't need startups, we need Digital-Mittelstand

mertbulan.com

101–110 of 244 posts

Re: We don't need startups, we need Digital-Mittelstand

#101
post #68

The mythical German "Mittelstand" again. This word is absolutely meaningless. It has been used to describe small businesses, but also companies like Robert Bosch GmbH which has 400,000 employees. "Mittelstand" is nothing but a vague idea Germans cling to, so they feel special.

I personally have never seen Bosch listed as Mittelstand. By definition, SMEs have less than 500 employees. Are you mistaking the concept with something else?

Bosch is a bit of an outlier due to its structure and age. But there are definitions that would include Meta as Mittelstand, like this one: https://www.ifm-bonn.org/en/definitions/mittelstand-definiti...

Re: We don't need startups, we need Digital-Mittelstand

#102

The authors examples of “Digital Mittelstand” companies are not businesses at all but tiny “creator economy” side projects. These do not scale to 30% of GDP in the same way high value B2B industrial equipment does (in manufacturing you happily pay $100,000 for a piece of machinery because it can turn inputs into more valuable outputs at scale). Instead of coming up with incorrect ideas about what the government shoul…

> If Europeans can’t figure out new valuable things to contribute to the world, than their system isn’t as clever or morally righteous or fantastic as they think it is.

Most Europeans have access to some kind of comprehensive public health offering, food that isn't killing us quite as quickly as American food does, etc. It is a system which requires thought and design that markets can't offer, since they're innately uncoordinated (the exception being oligarchies).

The idea that the market can be described as regular people deciding things is, by the way, fairly funny. We don't get to choose what gets made, and have to select from a buffet of often pretty poor options served up to us by people who are by and large not interested in anyone's wellbeing but their own.

Most of Europe recognises on some level that not everything that counts can be counted. That's the real difference. Regulation of new, high risk industries makes perfect sense from that perspective.

Re: We don't need startups, we need Digital-Mittelstand

#103
post #98

I'd say the biggest issue with this article is that it only suggests solutions which are already underway. 1. Salary Grants => SEED / EXIST stipends 2. Simplify Bureaucracy and Regulations => Who doesn't want that? 3. Expand VAT Exemptions => Council Directive (EU) 2020/285 will bring this law: "For SMEs conducting cross-border transactions, a cumulative turnover cap of €100,000 across all 27 EU member states applies…

> 2. Simplify Bureaucracy and Regulations => Who doesn't want that? European leadership and a fair chunk of the population. They're the ones who bought it in, if they didn't think it was worth the trade off they wouldn't have instituted it. It seems like just yesterday we had people lining up to praise their bureaucratic takeover of iPhone charger design, for example. If the EU bureaucracy has time for that, what mat…

The EU is a market optimising machine in many ways, and the bigger the market, the more interested they are. It made perfect sense for them to intervene there because it affected a huge number of people.

Similarly, I expect user serviceable batteries to come to an iPhone near you at some point, in the name (quite reasonably) of environmental regulations.

Re: We don't need startups, we need Digital-Mittelstand

#104
> However, if you’ve ever used a product marked “Made in Germany,” you’ll understand what German culture truly values: mastery of a craft and uncompromising quality. You won’t find many Germans willing to sacrifice their health or personal milestones—like the birth of a child—for work, or to forgo their well-earned vacation in Mallorca. They’re not the kind to release half-baked products and patch issues later, nor are they likely to push for higher prices just to fatten shareholders’ returns.

Self-serving prattle if you ask me.

German cars have notoriously bad and buggy infotainment centers. Germans do of course release half-baked products (like literally every other country). German cars don't even get patched. The built-in navigation system is useless and broken the day you buy your shiny new BMW and it will still be broken and useless by the time car goes to the scrap heap a decade or two later.

When BMW decides to a subscription model for heated seats is that not shameless profit seeking? Or is BMW somehow not German?

> Basic Law of Germany begins with “Human dignity shall be inviolable.” The entire culture fundamentally opposes many hallmarks of the typical startup ethos.

Germany is unable to build first rate tech businesses because -- wait for it -- Germany has superior culture. Give me a break.

> If you’ve ever worked with Mittelstand companies, you’ll know that many have a long queue of customers waiting for their products. It’s not uncommon to wait months—or even years—for an order.

This attitude is why the German economy has been shrinking for two years straight. Chinese businesses also do high precision machining and they do not make their customers wait for years. The belief that you can coast because competitors will never catch up is pure German arrogance.

The reality is Germany will loose badly if attitudes don't change.

Re: We don't need startups, we need Digital-Mittelstand

#105

I think Mittelstand is perhaps misdirecting away from a more interesting conversation. Reading between the lines, this highlights an inherent bias in the majority of American companies to provide service to extract value as opposed to providing service for public benefit. Simply put, it's "move fast and break things" versus "WE DO NOT BREAK USERSPACE." If you want to dig deeper, this is a consequence of America begin…

> "move fast and break things" versus "WE DO NOT BREAK USERSPACE."

I think this is a great analogy to explain the issues to this crowd, although I think there's also a lot of people here who would happily break userspace. And it's successful in a financial sense.

Re: We don't need startups, we need Digital-Mittelstand

#106

This is a great read and exactly where I think the global economy is going - instead of large companies you'll have millions of medium sized businesses run by small teams still making a bit of a dent in their own niche universe. I do disagree with the work-life balance part, I struggle to see how you can build something (and maintain it at such a high level) without intense focus and commitment.

I suspect the winner takes all nature of the economy might lead to a lot of those smaller companies getting borged, if they're even a little bit interesting and profitable.

Re: We don't need startups, we need Digital-Mittelstand

#107
post #98

I'd say the biggest issue with this article is that it only suggests solutions which are already underway. 1. Salary Grants => SEED / EXIST stipends 2. Simplify Bureaucracy and Regulations => Who doesn't want that? 3. Expand VAT Exemptions => Council Directive (EU) 2020/285 will bring this law: "For SMEs conducting cross-border transactions, a cumulative turnover cap of €100,000 across all 27 EU member states applies…

> 2. Simplify Bureaucracy and Regulations => Who doesn't want that? European leadership and a fair chunk of the population. They're the ones who bought it in, if they didn't think it was worth the trade off they wouldn't have instituted it. It seems like just yesterday we had people lining up to praise their bureaucratic takeover of iPhone charger design, for example. If the EU bureaucracy has time for that, what mat…

The charger situation is much better than GDPR or CE marking, in that it clearly mandates what should be done. The other two get bogged down because it's so unclear what has to be done to be compliant while actually shipping a service or product.

Re: We don't need startups, we need Digital-Mittelstand

#108
post #52

The startup model works where there is capital specifically large upfront capital available. Large upfront capital automatically means you chase profit or growth. Just like McDonalds. Which is really what the SV model is if you scrape away all the whizbang tech bullshit. There is a reason McDonald inspite of "scale" and "low price" cant feed the world. Because of the cost of opening a new store and initial capital in…

> There is no German/Chinese/Indian version of McDonalds.

Local businesses tend to get consolidated. There used to be lots of local sodas, now there's Coke/Pepsi. There used to be a variety of food companies, now there's Unilever vs Mondelez.

Re: We don't need startups, we need Digital-Mittelstand

#109
Europe is the world's sick man. Merz is talking as if he is going to spite the US by having Germany fund their own defence, but in reality, whether Germany will be able to fund anything at all is very much in question as its economy is in full collapse and there is no way Merz will pull it together, he will just put pedal to the metal in a car that has already gone over the cliff.

Germany needs to stop reinventing the wheel, clearly they don't understand how it works. They should instead just try doing what the US has done. In Norway our politicians are now talking about increasing our tax burden even more, and raising the cost of living even more so more money from middle-class and poor people in Norway can be used to shore up the failing German economy because they can't be bothered to pull themselves together. It's an embarrassment. All while Europe is still playing graduated escalation games with Ukrainian lives.

Re: We don't need startups, we need Digital-Mittelstand

#110
post #102

The authors examples of “Digital Mittelstand” companies are not businesses at all but tiny “creator economy” side projects. These do not scale to 30% of GDP in the same way high value B2B industrial equipment does (in manufacturing you happily pay $100,000 for a piece of machinery because it can turn inputs into more valuable outputs at scale). Instead of coming up with incorrect ideas about what the government shoul…

> If Europeans can’t figure out new valuable things to contribute to the world, than their system isn’t as clever or morally righteous or fantastic as they think it is. Most Europeans have access to some kind of comprehensive public health offering, food that isn't killing us quite as quickly as American food does, etc. It is a system which requires thought and design that markets can't offer, since they're innately…

> The idea that the market can be described as regular people deciding things is, by the way, fairly funny. We don't get to choose what gets made, and have to select from a buffet of often pretty poor options served up to us by people who are by and large not interested in anyone's wellbeing but their own.

Is Europe more communist than I thought? You do realize if you aren't happy with the options on offer in the market, that's an opportunity for you to provide a valuable service to your fellow humans...and yes improve your own wellbeing at the same time...which is the point of a market?

Who do you think started all of the German Mittelstand companies in the first place?

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