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

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

#151

Post by Marazan »

ThomPete wrote: post #111
qiqing wrote: post #96

Earlier quoted context omitted.

The article also doesn't mention an obvious bias, that is, if a startup starts in Europe, there are a lot of incentives for that startup to move to the U.S. early in its life cycle. In that scenario, the startups who become successful (and who originated elsewhere) all get counted as U.S. successes. This would vastly undercount both the total number of startups elsewhere as well as the number of successful startups.

This is entirely correct and I know several founders who did so, but thats not really the point I am trying to make (which admittedly I didn't make well) The question that still stands is why they are moving the the US.

Because the network effect of Silicon Valley is profound.

Investors are looking to fund companies with global reach that will break down communication barriers, render national boundaries meaningless and bring us all close together. . . as long as they are located in California.

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

#152

Post by ThomPete »

SneakerXZ wrote: post #148

It is quite easy question actually. In short, US is unified market with one language, laws for business are same across all states, one currency, one culture, low taxes, no social system and a lot of money. In EU you have 28 countries, 24 languages which equals to same amount of cultures. 11 currencies. Every country got own laws so once you make business across many countries, you have taxation and law hell. EU trie…

Europe has more Fortune 500 companies on than the US according to what I am linking. If it was just a matter of language then how come they USED to be able to create global players but aren't able to as much any more.

Whats changed thats holding Europe back?

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

#153

Post by allendoerfer »

Aside from the obvious fact, that you cannot compare 500 million Europeans that speak plenty of different languages to 300 million US Americans (have you been to Eastern Europe?), it is because the PC, the internet etc. were invented in the US, thus SV was formed and the start-ups there still reap the benefits (exit opportunities, investors, etc).

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

#154

Post by throwaway859876 »

raverbashing wrote: post #125

On that subject, how many Unicorns Canada has?

Prehistoric times: Nortel, Mitel, Corel, RIM

Recent times: possibly Shopify, one other moved to USA

Most money in Canada is controlled by civil pension funds, who don't like smallish investments for big risks.

Thus a large percentage of software engineers move to USA, and are active in Silicon Valley.

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

#155

Post by humanrebar »

e5india wrote: post #145

There are a couple things missing from this article that really need to be fleshed out: 1. You're comparing the unicorns which is like comparing the top of the pyramid without measuring the base. In other words, where are the figures for seed-round startups? What is the amount of capital available to startups at the different stages in the business life cycle? Without those numbers we can't really tell if this is a m…

> we don't care if the tech sector concentrates in California or Texas or wherever as long as it is in the US

Hmmm... I'm not sure that's true. For some definition of "we", it would be tautologically true, I guess. Many states complain about paying more in taxes than they get back in spending. California, Texas, and New York all pay more in taxes than they get back in spending, though Delaware takes the biggest hit, per capita:

https://en.wikipedia.org/wiki/Federal_taxation_and_spending_...

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

#156

Post by ThomPete »

Marazan wrote: post #151
ThomPete wrote: post #111

Earlier quoted context omitted.

This is entirely correct and I know several founders who did so, but thats not really the point I am trying to make (which admittedly I didn't make well) The question that still stands is why they are moving the the US.

Because the network effect of Silicon Valley is profound. Investors are looking to fund companies with global reach that will break down communication barriers, render national boundaries meaningless and bring us all close together. . . as long as they are located in California.

Yes and so the question is why does Europe not have anything like that. It does have some places liked London, Berlin and Stockholm but they are all missing a few things.

This is what I am trying to explore.

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

#157

Post by EdiX »

ThomPete wrote: post #5
atmosx wrote: post #3

Lack of investors. Simple as that. Companies that run on deficit for 5-10 years can not survive in Europe. Facebook, twitter, etc. Wouldn't be able to survive in Europe, simple as that. ps. I hate the word 'unicorn'.

I hate the word unicorn too, but it's shorter than private market companies with a valuation of more than $1 billion :) With regards to lack of investors I don't think it's as simple as that. If it was only a matter of investments then surely US investors or Asian investors could just come in with the money. There is something that makes European VCs risk averse and keep american investors out of Europe IMO.

>If it was only a matter of investments then surely US investors or Asian investors could just come in with the money

Apparently US investors don't even like going out of Silicon Valley, why would they go all the way to Europe?

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

#158

Post by dheera »

donkeyd wrote: post #31

I've posted this before, but since I think it's relevant here: People seem to forget that Europe is not a country. Europe does not have a single uniting language. What happens, is that every country starts their own smaller versions and they stay mostly within that country. If they want to move to another country, there's often already a major player there, and they might not have the means to kick them out. I think…

About a quarter of the world speaks reasonably fluent English, so SV's initial market is even bigger than that.

Having access to a similarly large initial market is also part of the reason China has a rapidly expanding and flourishing startup environment and culture.

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

#159

Post by npizzolato »

andreamazz wrote: post #56

Unicorns? Ha! It's hard to survive, let alone be successful. No investors, convoluted laws, high taxes and complete lack of startup mentality. I'm a cofounder of an italian startup, and the road is on an unbearably steep slope. The bureaucracy is insane, the cost of running a small business is daunting. Other companies refuse to work with you because in their eyes you're a scrub (I heard so many times bullshit like "…

> I heard so many times bullshit like "I don't know if you'll be alive in a year or two, so I can't adopt your technology"

I'm not sure why you think this is bullshit. Most startups fail. It seems like good sense to be wary of taking a dependency on another business that might not be around in the near future instead of an alternative that has already proven itself in the market.

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

#160

Post by KaiserPro »

SneakerXZ wrote: post #148

It is quite easy question actually. In short, US is unified market with one language, laws for business are same across all states, one currency, one culture, low taxes, no social system and a lot of money. In EU you have 28 countries, 24 languages which equals to same amount of cultures. 11 currencies. Every country got own laws so once you make business across many countries, you have taxation and law hell. EU trie…

There is one currency, there are no import taxes, VAT is per country. (assuming EEC) This ofcourse assume that you are operating in one country and providing goods to another. Employment is another issue.

Thats almost the same as in the US(excluding employment).

The issue of low taxes is frankly utter bollocks, yes the US's taxes might be lower but so is your life expectancy, and productivity.

The main issue with startups is that most of europe is based on trade. What can I sell to you for a profit, what can I invest in that will give a decent return with a balanced risk?

Most tech startups fail. Most tech startups are clones of another well established startup. Those startups do not make money.

Why would I invest in something with such a terrible likleyhood of return?

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