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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?

#161

Post by happyscrappy »

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…

>The major two exceptions are New York and Texas in that order.

Umm. Boston(MA)?

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

#162

Post by e5india »

humanrebar wrote: post #155
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,…

Oh I absolutely agree. That's why I meant to limit that to the national sense of 'we'. Of course internally we still have our debates about spending and certainly other states would prefer if Silicon Valley where part of their local economy. But ultimately California's success is still part of our national success and so ultimately the spending happens however much we would prefer it be spent differently. And the complaints you mention in our own country which does have such a strong national sense of identity makes it even less likely in the EU.

Is the sense of being 'European' so strong that member states are willing to spend billions of their own taxpayer euros to build up a tech sector largely centered in some other member state? I dont think so.

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

#163

Post by egwor »

ThomPete wrote: post #152
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?

According to the fortune web site, the fortunate 500 only covers companies that "are incorporated and operate in the US." I think it was probably cheaper and easier to do this in the past, but now regulatory and tax reasons make it more difficult and more expensive.

> Companies are ranked by total revenues for their respective fiscal years. Included in the survey are companies that are incorporated in the U.S. and operate in the U.S. and file financial statements with a government agency. This includes private companies and cooperatives that file a 10-K or a comparable financial statement with a government agency, and mutual insurance companies that file with state regulators. It also includes companies that file with a government agency but are owned by private companies, domestic or foreign, that do not file such financial statements. Excluded are private companies not filing with a government agency; companies incorporated outside the U.S.; and U.S. companies consolidated by other companies, domestic or foreign, that file with a government agency. Also excluded are companies that failed to report full financial statements for at least three quarters of the current fiscal year. Percent change calculations for revenue, net income, and earnings per share are based on data as originally reported. They are not restated for mergers, acquisitions, or accounting changes. The only changes to the prior years' data are for significant restatement due to reporting errors that require a company to file an amended 10-K.

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

#164

Post by bobthechef »

briandear wrote: post #133
adaml_623 wrote: post #78

Earlier quoted context omitted.

Ok you have a valid point but since the article is full of kind of wishy washy questions I didn't feel guilty about adding some more into the mix. The title 'Why is Europe Failing to Create More Unicorns?' has an implicit bias in it. The question is saying that Europeans should create more of these massive new companies. 10 smaller companies might be better than 1 big company. 100 companies worth $10 million dollars…

Little companies are rarely disruptive and disruption is what creates value and drives society forward.

Not true at all. Indeed, it's the little companies that often can be "disruptive" (I hate that word; why is disruption necessarily good?). Indeed, large companies are in practice often invested in ways that prevent them from pursuing profitable business that smaller business can. Their business model can prevent them from pursuing profitable business because it would involve biting the hand that feeds them. Large companies become entrenched in a certain set of ties and a certain status quo. The last thing they want is to disrupt. It's very much a question of trade offs.

Aside from that, your phrase "drives society forward". I always here this phrase thrown around in these discussions, but I have yet to receive a coherent explanation of what that means, or what this great lord of Progress consists of. I think one ought to remember what the aim is. Change is not the same as "better", chaos is also change (the article says we fear change at its core, which I think is stupid; we fear loss of something which change can entail; some are addicted to change for its own sake out of from psychological illness). There is the social dimension to consider, the psychological, the spiritual, the environmental, etc. The empty profit seeking and vacuous worship of tech or whatever is desolate.

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

#165

Post by kragen »

hodwik wrote: post #129
kragen wrote: post #89

Earlier quoted context omitted.

If the ten companies interoperated, you could plan a cross-continent vacation using one website instead of searching for each city's/country's version of it. (And then you wouldn't be vulnerable to Airbnb, for example, demanding access to your Google Docs metadata in order to allow you to continue using their service.) You're making the argument that people used to make about how it would be impractical to have multi…

This is nothing like the phone lines -- the FCC isn't going to come in and force them to play nice, and these companies are not going to do it out of the goodness of their hearts. The big players will just starve out the little ones. AirBNB isn't infrastructure, it's a service. Without a complete socialist re-imagining of society, that will never happen.

The FCC isn't forcing Level3 or Global Exchange or AOL to "play nice" either. You're apparently arguing from a complete ignorance of history, and consequently your prescribed remedy is likely to make the situation worse instead of better.

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

#166

Post by KaiserPro »

Because investors in Europe are less optimistic.

Why would I invest a lot of money in a company that for it to succeed will have to burn through anywhere between $10-$250 million, before they even think about breaking even?

even as a seed fund, the rate of attrition is genuinely terrible. The only way unicorn can survive is to bend reality long enough so that people are willing to gamble on the pyramid scheme that is behind all non profit making pre-IPO startups.

Think about it. Uber is only in the position it is because it keeps on taking funding. That funding is used to

A) expand at a massive loss

B) Inflate the current valuation

C) pay off previous investors.

If uber were for what ever reason not able to raise any more capital, they would literally collapse over night. They are unable to make a profit without making massive structural changes, changes not scheduled for years. Yes they have cash reserves, but they'll be convertible if some investors need them. More importantly, if an investor decides to sell for a lowerprice, the only thing that makes Uber Uber, its valuation will disappear.

Let me be very clear, There is nothing special about uber. Unlike netflix, amazon, or facebook which either have unique content, or many thousands of hours of personal content, Uber is just a service which can be swapped out at will. It is just a taxi service, one that is cheap because its being subsidised by not paying health care, and the many investors.

It is the very embodyment of the south sea bubble.

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

#167

Post by exelius »

humanrebar wrote: post #155
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,…

IMO the EU is too protective of its economy to allow the kind of innovation Silicon Valley is famous for. The EU has a default assumption of "you have to prove that this will not be harmful before you can do it" where the US has a default assumption of "someone else has to prove that this will be harmful before we will stop you". The important part is that this burden of proof in the US is not placed on a company at a time before they have revenue to prove it. By the time they're big enough to have to defend themselves from an attack on regulatory grounds, they have the means to do so.

Something like Uber could never have come out of Europe. A large company that is breaking the law while competing with regulated taxis and remaining unregulated themselves? That would never fly in the EU, and Uber has met a lot more resistance there than the US. They're only able to address the EU market because they have a large, profitable base in the US.

In any measure, the regulatory culture in the US is much more laissez-faire than the EU. In the US, you can do whatever you want as long as it's not explicitly illegal. In the EU, you can do whatever you want, as long as you prove that it's not illegal first. It's a huge difference, and it's one of the biggest cultural differences between Europe and the US.

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

#168

Post by verybitter92 »

Why is there no Silicon Valley of Europe?

Because programmers and other IT professionals are paid laughably low wages and shown even less respect than they are in the US. It's a similar situation in Japan and Australia. Yet whenever politicians talk about the need for startups to compete with Silicon Valley, you never hear them say a word about the insultingly low wages that are the norm in Germany, France, UK, Belgium, and others.

Want to create a Silicon Valley of Europe? Then pay Silicon Valley wages, you cheap bastards!

The Irrlicht guy wrote about this:

http://www.irrlicht3d.org/pivot/entry.php?id=1295

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

#170

Post by [deleted] »

KaiserPro wrote: post #166

Because investors in Europe are less optimistic. Why would I invest a lot of money in a company that for it to succeed will have to burn through anywhere between $10-$250 million, before they even think about breaking even? even as a seed fund, the rate of attrition is genuinely terrible. The only way unicorn can survive is to bend reality long enough so that people are willing to gamble on the pyramid scheme that is…

[deleted]
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