In a couple of years, when this tech bubble have burst we will laugh at this kind of headlines
Why Is Europe Failing to Create More $1B Startups?
191–200 of 338 posts
Re: Why Is Europe Failing to Create More $1B Startups?
#192Earlier quoted context omitted.
Plenty of companies can incorporate offshore though. That's probably easier than in the US.
You could incorporate offshore but good luck getting a local bank account or even an offshore one. To do anything in France you have to be incorporated in France and pay French taxes.
Typically you'd create the topco in the UK or offshore and create an operating company in France for that purpose.
Re: Why Is Europe Failing to Create More $1B Startups?
#193Earlier quoted context omitted.
> 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…
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,
This is a feature, not a bug.
We do tend to regulate some areas more in Europe than the US, but from various on-line discussions about Uber in recent months, I have come to the conclusion that the original problem they are trying to solve is much worse in the US than the EU.
Meanwhile, I have no problem with requiring any service competing with regular taxis to be held to the same standards in terms of vehicle maintenance, insurance, checks on drivers, standardised metered pricing so passengers know what to expect, etc. Being able to beat the incumbent because you broke the law and took shortcuts that could affect safety is not impressive.
Also, I don't know where you got the idea that in the EU you need to prove what you're doing is not harmful or illegal before you can do it, but you're completely wrong.
Re: Why Is Europe Failing to Create More $1B Startups?
#194Earlier quoted context omitted.
China's largest businesses are extremely state-connected, and it's hard to imagine any successful business in China not being deeply connected to the government. I basically consider those entities as extensions of the Chinese state. I don't know if China would look the same if they allowed western companies to just swoop in to extend monopolies.
This is irrelevant to the fact that a very large market and testing ground exists today among the Chinese-speaking and Chinese-cultural population, both inside and outside China. Most successful startups in post-2000 China are largely privately owned. While they are indeed subject to regulatory constraints, needing to work together with the government is largely a constraint to survive, not a reason for success. Thei…
So you're saying that Google could come in and compete? If you're a foreign business in China, even if you are a Taiwanese business, if you don't have proper government relations, you'll find that business applications take so much longer.
And that you have little hope with Chinese law before a Chinese judge and a favored Chinese company. It is a hostile atmosphere to even Chinese-speaking countries -- if you are not connected to the government.
I'm saying it's very hard to discuss market forces from "free" market principles when the most successful companies in China shall be deeply connected to government. You wouldn't say Gazprom is a product of the Russian economic environment. Nor is Alibaba and Baidu.
Re: Why Is Europe Failing to Create More $1B Startups?
#195It 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 sta…
There are 11 currencies in the European Union.
Re: Why Is Europe Failing to Create More $1B Startups?
#196Speaking for Germany, which is probably the "best" country after the UK, here are a few reasons
1. Almost no investors who have built a tech-company before
2. Investors are very risk averse and want business models that monetize from day 1, because that's what a business is and those are good German values. This way, there is a strong incentivization by investors of e-commerce businesses and strong disincentivization of startups that want to build a great product first and focusing on scale.
3. In the same vein, investors simply don't know the idea of growing first and delaying monetization, which is what made the majority of "unicorns" possible. This is because there are no German examples for that, so they could not experience it themselves and German investors don't know or don't care about what happens in the U.S.
4. Fundraising takes double the amount of time here at half the valuation. I have seen 3 companies of close friends shut down after having raised Series A, because of exactly this.
5. Because of all that, there is little courage or idealism of the generation of first-time German entrepreneurs left. We have enough talent, there is just not the mindset baked into our ecosystem what makes the U.S. so successful. That's why most founders have to revert to building copycat e-commerce shop, but very few of the founders (maybe 3% of those that I have met) have the goal and the idealism to build something new that can really improve our world.
However, that's why there is a big opportunity to take the market of early stage seed investments that is focused on high risk bets only. If you want to do it really well, you announce that e-commerce ideas are not allowed.
Re: Why Is Europe Failing to Create More $1B Startups?
#197Earlier quoted context omitted.
>10 smaller companies might be better than 1 big company. 100 companies worth $10 million dollars each might provide the same number of jobs and the same services to the economy. I'm not sure what point you're trying to make. It's beneficial that Airbnb is so big because I can plan a cross-continent vacation using one website instead of searching for each city's/country's version of it (which may have poor customer s…
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…
> If the ten companies interoperated, you could plan a cross-continent vacation using one website
It's not easy. Why and how would they interoperate? What stops any one of them to grow and expand to other countries?
Re: Why Is Europe Failing to Create More $1B Startups?
#198Earlier quoted context omitted.
In Germany, only very few legal types of incorporation allow the owners to be free of risk. Usually they require a high amount of money to start such a limited (so, in case of bankruptcy, all debt can be paid). There is now a mini-GmbH, essentially a type of Ltd. that can only handle a limited (pun not intended) amount of assets, but does not require you to have enough assets to pay back the debts. Then there are GbR…
Unsurprisingly, Soundcloud is actually incorporated in the UK. They might be a "German" company, but they seem to not find German business law sufficient or favorable.
UK means you can save taxes – London is the Bahamas of Europe. Many companies do so. Not necessarily a legal issue.
Re: Why Is Europe Failing to Create More $1B Startups?
#199Earlier quoted context omitted.
> 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…
> In the US, you can do whatever you want as long as it's not explicitly illegal.
That feels wrong. Maybe it's just a distorted picture I get from outside the US.
https://news.ycombinator.com/item?id=3171665
http://www.forbes.com/sites/erikkain/2011/08/03/the-inexplic...
Re: Why Is Europe Failing to Create More $1B Startups?
#200The impression i have is that European (if there is such a singular entity) tech development is more oriented towards system wide efficiencies and disability assistance than producing the next stock market rocket.