Why haven’t European investors fully accepted the failure is good mentality yet? • Hacker News Board

Re: Why haven’t European investors fully accepted the failure is good mentality yet?

#21

Post by Dewie » Sun, Mar 02, 2014, 1:22 PM UTC

PakG1 wrote: post #18

To desire failure, this probably means you are trying to do something new. Below I am speaking purely on conjecture, no real sound theory. I get the distinct impression that Europe cares more about tradition and therefore less about disruption. As such, there is not as big a desire to try something new, and therefore no reason to consider whether failure is good. In fact, if the emphasis is on tradition, failure is f…

> My thoughts on this come from a chapter of Alan Greenspan's memoirs on his experience in Vienna and thoughts on cultural differences, especially when it came to Vienna's timelessness and beauty.

Then you're talking about Austria, not all of Europe.

Re: Why haven’t European investors fully accepted the failure is good mentality yet?

#22

Post by k-mcgrady » Sun, Mar 02, 2014, 1:22 PM UTC

ThomPete wrote: post #11

k-mcgrady wrote: post #9

Earlier quoted context omitted.

Most kids are (and have been for a while) taught English in schools. If you create your site with English as the first language you can target most European countries + the US. Regarding company types you set up your business in the country you're based in - you don't need a separate company for every country you operate it. I believe the same applies to tax. You pay it in the country you are based in.

Yeah good luck building a startup in europe with that view. There is a reason why ex. Facbook localized their content.

I's a strategy for getting the business going. Obviously you begin localising once you've got some traction.

Re: Why haven’t European investors fully accepted the failure is good mentality yet?

#23

Post by claudius » Sun, Mar 02, 2014, 1:23 PM UTC

logicallee wrote: post #10

k-mcgrady wrote: post #6

Earlier quoted context omitted.

>> "it's not as easy to build huge successes in Europe." Why? Could you explain this further?

It's cultural, Europeans don't believe in making something large from nothing. The idea of a kid with a laptop building an international business, as Zuckerberg was doing, is laughable to them. (And delusional.) They'd probably tell him to go back to school so he can get a real job.

I would argue that it not only matters how large you build your ‘business’ and how many billions you make eventually selling it, but also how much you care for your employees, provide value to society and, most importantly, what sort of business you’re building. Instant success is also not necessary, instead, building your business over the course of 150 years is perfectly acceptable.

Facebook is essentially a marketing company and time-wasting website, both of which are not exactly highly regarded as businesses go. On the other hand, there are many highly successful and innovative European companies building actual stuff, often founded decades ago as small family businesses and growing slowly and steadily until they firmly occupy some niche on a global scale.

And, yes, if you don’t have a PhD, how exactly are you going to be different from your secretary?

Re: Why haven’t European investors fully accepted the failure is good mentality yet?

#24

Post by k-mcgrady » Sun, Mar 02, 2014, 1:23 PM UTC

logicallee wrote: post #10

k-mcgrady wrote: post #6

Earlier quoted context omitted.

>> "it's not as easy to build huge successes in Europe." Why? Could you explain this further?

It's cultural, Europeans don't believe in making something large from nothing. The idea of a kid with a laptop building an international business, as Zuckerberg was doing, is laughable to them. (And delusional.) They'd probably tell him to go back to school so he can get a real job.

You're just repeating old stereotypes.

Re: Why haven’t European investors fully accepted the failure is good mentality yet?

#25

Post by disputin » Sun, Mar 02, 2014, 1:24 PM UTC

ThomPete wrote: post #7

k-mcgrady wrote: post #6

Earlier quoted context omitted.

>> "it's not as easy to build huge successes in Europe." Why? Could you explain this further?

Here is just a short list. a) Different cultures b) Different languages c) Different tax systems d) Different company types e) Different legality All these in combination creates a lot of friction that makes it harder. There are obviously exceptions (ex. skype) but in general it's just very hard to navigate compared to the US.

Different media organisations also a factor? A story on the BBC about a popular new thingy might not feature at all on France 24, whereas in the US it might be covered by east and west coast news, getting widespread exposure. Europe has news fire-breaks. High thresholds to jump the synaptic clefts.

Re: Why haven’t European investors fully accepted the failure is good mentality yet?

#26

Post by StavrosK » Sun, Mar 02, 2014, 1:26 PM UTC

logicallee wrote: post #19

H4U wrote: post #16

As a brit we do not fear failiure, its well known that Up to one fifth of the 400000 businesses that start up each year fail within the first 12 months of operation in the UK. investors dont write blank cheques is the main difference. we are blunt and dont flower up potential so monetry failiure is more relative to business size.

>we are blunt and dont flower up potential This nails it. You're not going to even investigate potential - your investors don't have that kind of vision (or interest). Not a snowball's chance in Hell a Brit VC would have acted as Peter Thiel did when he came on board with Facebook. Because that would have been "flowering up potential". Or as I like to call it, vision.

Or, as I like to call it, a stopped clock.

Re: Why haven’t European investors fully accepted the failure is good mentality yet?

#27

Post by PakG1 » Sun, Mar 02, 2014, 1:29 PM UTC

Dewie wrote: post #21

PakG1 wrote: post #18

To desire failure, this probably means you are trying to do something new. Below I am speaking purely on conjecture, no real sound theory. I get the distinct impression that Europe cares more about tradition and therefore less about disruption. As such, there is not as big a desire to try something new, and therefore no reason to consider whether failure is good. In fact, if the emphasis is on tradition, failure is f…

> My thoughts on this come from a chapter of Alan Greenspan's memoirs on his experience in Vienna and thoughts on cultural differences, especially when it came to Vienna's timelessness and beauty. Then you're talking about Austria, not all of Europe.

Just because the example that inspired the thought was drawn from Vienna, it does not mean I cannot extrapolate it to across Europe when I look at the beautiful and ageless cities and traditions that exist throughout Europe. And I put the disclaimer first that I am making conjecture only and nothing more.

Re: Why haven’t European investors fully accepted the failure is good mentality yet?

#28

Post by michaelochurch » Sun, Mar 02, 2014, 1:34 PM UTC

H4U wrote: post #16

As a brit we do not fear failiure, its well known that Up to one fifth of the 400000 businesses that start up each year fail within the first 12 months of operation in the UK. investors dont write blank cheques is the main difference. we are blunt and dont flower up potential so monetry failiure is more relative to business size.

A 20% failure rate in the first year, to me, doesn't seem that bad. My experience with jobs (granted, I've worked in some of the most volatile sectors of the economy) is that the median case outcome is that it's not worth coming in to work after 12 months. I achieve a lot quickly, but most companies don't really think they need much high-level work. I desperately want to find the 5+ year fit, but I'm not one for self-deception.

When I heard that only half of venture-funded companies live 5 years, to me that sounded like excellent odds. I would kill to find a job where there's a 50/50 chance that it's still worth coming to work after 5 years. My experience is that unless you can convince someone in upper management to take you on as a protege (and that's 95% luck, because they're usually not technical people) you are wasting time after one year. Internal mobility (i.e. the ability to self-allocate to something better suited to one's talents and shine) should fix this in theory, but in practice most large companies do a terrible job on that front: bad performers (whether they are actually bad, or just have a shitty manager) can't move because no one wants them, but good performers' managers won't let them. You have to be exactly 51st percentile to move internally at most companies.

Re: Why haven’t European investors fully accepted the failure is good mentality yet?

#29

Post by mbesto » Sun, Mar 02, 2014, 1:35 PM UTC

antr wrote: post #13

ThomPete wrote: post #7

Earlier quoted context omitted.

Here is just a short list. a) Different cultures b) Different languages c) Different tax systems d) Different company types e) Different legality All these in combination creates a lot of friction that makes it harder. There are obviously exceptions (ex. skype) but in general it's just very hard to navigate compared to the US.

None of these are issues that European entrepreneurs I talk to have ever had.

Hi. You're right, no European entrepreneurs talk about these topics, but they are very much implied barriers to entry. What is normally vocalized is the size of their markets - which implies that scaling out to a whole EU launch is much more difficult.

Re: Why haven’t European investors fully accepted the failure is good mentality yet?

#30

Post by RivieraKid » Sun, Mar 02, 2014, 1:36 PM UTC

I would hypothesise that there are two reasons for this.

1. The size of the US market is a huge advantage. Startups targeting and operating in the US market can grow bigger. China has the same advantage.

2. Americans are less risk-averse because Americans are mostly descendants of immigrants. And immigrants are more likely to have a less risk-averse DNA.