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

mertbulan.com

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

#131

Post by tonyedgecombe »

fhennig wrote: post #63
albertzeyer wrote: post #37

There are a lot of such companies already in Germany. Basically most small/medium sized IT companies in Germany fit that classification. So I don't really see how this is now a new approach. And I'm also not sure what is proposed here to be done now. Invest more into IT infrastructure? That's a goal that many parties claim to do since many years. Many people fully agree with this. However, currently, the main topic i…

> And I'm also not sure what is proposed here to be done now. The article lists 4 things under "What Should Be Done Next?" - Given your don't I think I can also be a bit snarky and ask: Have you read the article?

>Have you read the article?

From the site guidelines:

"Please don't comment on whether someone read an article."

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

#132

Post by ForHackernews »

pembrook wrote: post #74

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 areas where they can contribute to the world, than their system isn’t as clever or morally righteous or fantastic as they think it is.

I don't think it follows that unprofitable things are by definition not clever, righteous, or fantastic. This seems like a blinkered, American-capitalist viewpoint.

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

#133

Post by milesrout »

impossiblefork wrote: post #126
pembrook wrote: post #74

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…

Yes, but what if the big-software type economy isn't actually that useful? Maybe you can grow it to 30% of GDP if you start doing a bunch of bad stuff, but if it can be replaced by open source local stuff-- if it's possible to simply kill facebook, Microsoft etc. and replace them with Linux together with a couple of not incredibly expensive software packages developed to provide a substitute, then why should we have…

Firstly, Linux isn't made for free by hobbyists. The biggest contributors are profitable, largely American tech companies. Intel, AMD, even Microsoft is now a contributor.

Secondly, the idea that you can just replace the entire software industry with Linux is... Are there even words to describe this? Linux is just an operating system. You can't replace a whole industry with "a couple of cheap packages."

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

#134

Post by pembrook »

impossiblefork wrote: post #126
pembrook wrote: post #74

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…

Yes, but what if the big-software type economy isn't actually that useful? Maybe you can grow it to 30% of GDP if you start doing a bunch of bad stuff, but if it can be replaced by open source local stuff-- if it's possible to simply kill facebook, Microsoft etc. and replace them with Linux together with a couple of not incredibly expensive software packages developed to provide a substitute, then why should we have…

You might be right.

The US might always dominate software (which could turn out to have no moat) and China might always dominate manufacturing.

But neither industrialized manufacturing or software even existed 200 years ago. I'm pretty sure we haven't hit the final destination in human history where there's no problems left to solve.

There's this one weird "AI" thing people are talking about. Could be something people find useful you could work on?

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

#135

Post by raxxorraxor »

albertzeyer wrote: post #37

There are a lot of such companies already in Germany. Basically most small/medium sized IT companies in Germany fit that classification. So I don't really see how this is now a new approach. And I'm also not sure what is proposed here to be done now. Invest more into IT infrastructure? That's a goal that many parties claim to do since many years. Many people fully agree with this. However, currently, the main topic i…

Nothing digitally can currently really prosper in Germany if it isn't an already completely finished consumer product (preferably as dumb as possible). There is capitalism, but there is no venture here. Although investors probably still see it differently, the average user has some form of primordial fear while engaging with any digital technology.

Exception is R&D for the most part, but here these tendencies seem to be growing as well. Insane amounts of money are wasted to evade tech as much as possible.

This has changed from only a decade ago where there was much more enthusiasm for tech. Now people are annoyed by it.

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

#136

Post by milesrout »

ForHackernews wrote: post #132
pembrook wrote: post #74

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 areas where they can contribute to the world, than their system isn’t as clever or morally righteous or fantastic as they think it is. I don't think it follows that unprofitable things are by definition not clever, righteous, or fantastic. This seems like a blinkered, American-capitalist viewpoint.

Profitable and valuable are synonymous. If something is more valuable than the inputs used to make it, then it is profitable to make it.

Things being clever, or righteous, or "fantastic" (whatever that means) doesn't mean that people actually value them. That isn't what value means. Something is more valuable if you would give up more to have it. It is less valuable if you would give up less to have it.

Basically, no, it is in fact definitionally true, not blinkered, and has nothing to do with America. All of Europe is just as capitalist as America, Britain, Australia, New Zealand, etc.

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

#137

Post by Zanfa »

pembrook wrote: post #122
Zanfa wrote: post #117

Earlier quoted context omitted.

That’s a bit naive. There are a lot of markets that are effectively impossible to enter without massive amounts of capital and current players are selling below cost.

The vast vast vast majority of companies do not sell a product below-cost. And if the customers are not willing to pay more, it sounds like they're actually happy with the current offering and that's not an area that your fellow humans would find useful for you to work on. Yes, one of the responsibilities of a founder is fundraising. If you can't sell people on investing in your vision that is...a somewhat bad sign.

> The vast vast vast majority of companies do not sell a product below-cost.

Maybe in terms of the number of companies, but in terms of percentage of market size, I'm not sure. Literally the entire social media adjacent market at the moment, including instant messaging is about offering a service below cost, killing any chance of non ad supported platforms.

> And if the customers are not willing to pay more, it sounds like they're actually happy with the current offering and that's not an area that your fellow humans would find useful for you to work on.

Not necessarily. This would be true in a world of spherical cows and rational consumers, but that's never going to be the case. There's other considerations like walled garden lock-in and network effects that consumers have no control over.

> Yes, one of the responsibilities of a founder is fundraising. If you can't sell people on investing in your vision that is...a somewhat bad sign.

So it's not about "just go out and build a competitor", but something much more complex, as reality usually is. Even access to venture capital can differ by orders of magnitude between markets.

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

#138

Post by tonyedgecombe »

yorwba wrote: post #83

The recommendations here don't seem very Mittelstand-specific. Salary grants, less bureaucracy, VAT exemption and English support would help a grow-or-die startup just as well. I think the more interesting aspect is funding: if you tell a VC that you're aiming to become market leader in a small niche, they hear "no outsized returns" and go looking for riskier ventures. But there is an existing funding ecosystem for s…

>But there is an existing funding ecosystem for small businesses that don't expect to get big

I would guess it's mostly relatives and/or savings. Banks aren't interested unless you have some kind of guarantee you can borrow against.

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

#140

Post by herbst »

milesrout wrote: post #133
impossiblefork wrote: post #126

Earlier quoted context omitted.

Yes, but what if the big-software type economy isn't actually that useful? Maybe you can grow it to 30% of GDP if you start doing a bunch of bad stuff, but if it can be replaced by open source local stuff-- if it's possible to simply kill facebook, Microsoft etc. and replace them with Linux together with a couple of not incredibly expensive software packages developed to provide a substitute, then why should we have…

Firstly, Linux isn't made for free by hobbyists. The biggest contributors are profitable, largely American tech companies. Intel, AMD, even Microsoft is now a contributor. Secondly, the idea that you can just replace the entire software industry with Linux is... Are there even words to describe this? Linux is just an operating system. You can't replace a whole industry with "a couple of cheap packages."

You can easily replace simple apps like Facebook, WhatsApp or Snapchat with a couple of cheap packages.

Somebody remember elgg? Or buddypress? None of these mega cooperations have software that can't easily be copied.

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