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Europe's Software Problem

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Re: Europe's Software Problem

#221

Post by amadeuspagel »

thu2111 wrote: post #142
amadeuspagel wrote: post #129

The author's explanation for the lack of european tech companies is that almost all software relies on business models other then charging money, and for various reasons european companies aren't able to use these business models. This doesn't seem sufficient. For three of the five big US tech companies - Microsoft, Apple and Amazon - the main business model is charging money. If the author's explanation is correct,…

Microsoft Apple and Amazon date from a time before saturation internet access, Amazon being created right at the start. Back then internet advertising wasn't a plausible business model. Even when Google was new it wasn't taken seriously in America. Google tried to sell to Yahoo for $1M and they said no because everyone knows you can't monetize web search. Once it became clear that ads were a bit more profitable than…

> Microsoft Apple and Amazon date from a time before saturation internet access, Amazon being created right at the start. Back then internet advertising wasn't a plausible business model.

That doesn't explain why even that time, no such companies were founded in europe. I guess your thoughts on profitability are an attempt to explain that? I can't find data on when these companies became profitable, but at least for Microsoft it seems likely that they became profitable after three years[1].

[1]: https://www.quora.com/When-did-Microsoft-become-profitable

Re: Europe's Software Problem

#222

Post by myfavoritedog »

fvdessen wrote: post #213
pilsetnieks wrote: post #25

I take offense at such massive overgeneralizations as "Europe lacks imagination." What it lacks is freely flowing funding such that risky enterprises can be funded even if 1 out of ten or 1 out of hundred actually are successful. This kills business models which cannot show any profit whatsoever, and a large portion of the remainder are killed by data regulations forbidding "alternate paths of monetization" (to put i…

The reason the US has freely flowing funding is because the VC has an immense amount of cash from the previous generations of successful Unicorns. So why was it (and still is) easier to raise unicorns in the USA ? The thing that separate the internet economy with the traditional is the massive network effects that makes it a winner take all game. And at that game the USA has a massive home advantage with a huge cultu…

As another comment pointed out, the small countries vs US Network effects excuse doesn't really fare well when you look at the successful startup environment of Israel.

The USA is perfectly aware of this dynamic because faced with TikTok, their first reflex was to try to ban them.

And this take is just hot garbage.

Re: Europe's Software Problem

#223

Post by 3GuardLineups »

jimmyvalmer wrote: post #136

Once again, proof that no good deed goes unpunished. It's a credit to Europe's social values that they find themselves prey to the profit-first institutions of Silicon Valley. And lest we forget, the world-changing beneficence of the internet and Linux originated from a Swiss lab and a Finn.

ignore the fact that Linus is now an American citizen

Re: Europe's Software Problem

#224

Post by thesimon »

MatthewMcDonald wrote: post #55
imNotTheProb wrote: post #34

Earlier quoted context omitted.

They don't have LLCs?

I don't know about the bankruptcy laws, but Germany's GMBH (similar to an LLC) requires 25k in capital to get started.

UG requires only 1ct, though extracting profit is a bit more difficult until you get to 25k.

Re: Europe's Software Problem

#225

Post by oytis »

> The remaining non-trivial challenge is how to turn such EU funding into quality software

This is not a trivial challenge though. It's basically about creating a business climate that would allow startups grow fast and capture dominating positions on both European and worldwide markets.

Funding, with all its importance (look at what DARPA funding has enabled) can only give a first impulse, help a team create a prototype of something innovative. The rest is on legislation, investing culture, taxation etc.

Re: Europe's Software Problem

#226

Post by rapsey »

jillesvangurp wrote: post #179

I'm a European, living in Europe, developing software. Lack of imagination is not our problem. It's so good that we supply our best talent to the US where it does extremely well revolutionizing AI, designing hardware for Apple, developing games, stream online music, etc. E.g. Amazon's CTO is Dutch. Basically the person that has been running AWS. The people and the education system are fine. Europe does have a few iss…

While all this is true, a huge reason is also the lack of available funding. This is the worst problem imo.

Re: Europe's Software Problem

#227

Post by DelightOne »

oftenwrong wrote: post #172
DelightOne wrote: post #133

> what Europe also doesn't have is a true single market. It has fractured markets, each with a different language, different legal requirements and so on. I agree with this from a commenter below. In US you have so many more customers that speak your language and have your culture. You can move around and find common issues. One government. One law. So different from the EU. I do not see a fix until government, law a…

The US has one dominant language and one dominant culture, but the legal system is complex. There are national laws. There are also 50 states, each with their own sets of laws. There are also laws at lower levels (county, city, etc). There are similarities that hold true, more-or-less, across the nation, but also differences that are relevant to businesses. For example, the recent battle in California over how "gig e…

US legal system seems less complex than the EU. Thought I admit that I do not have a complete overview of US law.

I see it like having many small US countries at the same time, while the EU law above just directs these smaller US countries to implement custom laws for their own backwater. I chose the example because for each country, all the levels you describe also seem to exist.

Re: Europe's Software Problem

#228

Post by zozbot234 »

fvdessen wrote: post #213
pilsetnieks wrote: post #25

I take offense at such massive overgeneralizations as "Europe lacks imagination." What it lacks is freely flowing funding such that risky enterprises can be funded even if 1 out of ten or 1 out of hundred actually are successful. This kills business models which cannot show any profit whatsoever, and a large portion of the remainder are killed by data regulations forbidding "alternate paths of monetization" (to put i…

The reason the US has freely flowing funding is because the VC has an immense amount of cash from the previous generations of successful Unicorns. So why was it (and still is) easier to raise unicorns in the USA ? The thing that separate the internet economy with the traditional is the massive network effects that makes it a winner take all game. And at that game the USA has a massive home advantage with a huge cultu…

> Once you have a Facebook, you can't have a second one, even with all the VC cash, talent & creativity in the world.

That's not how it works, just look at MySpace. Even sites with a lot of market share are sometimes overtaken by a competitor.

The best alternative to Facebook in a fragmented market like Europe is federation across multiple social "hosting" sites with a regional focus, based on standards that are either in place already or being worked on. This can exploit even stronger platform effects than a conventional one-size-fits-all solution like Facebook.

Google and YT are in a different position since they're actually solving hard resource problems (Video streaming at scale is hard; building a usable crawl of the Web is also hard); much of their success comes from addressing these in a way that is compelling for users.

Re: Europe's Software Problem

#229

Post by varjag »

DrBazza wrote: post #139
varjag wrote: post #103

Earlier quoted context omitted.

Skype. And really, i18n is a minor issue.

Agreed, but i18n of your software isn't really what I'm talking about. There's other things like GDPR, local taxation, many cross border laws, and by culture I mean a variety of things: you'll see university graduates flogging themselves to death in Silicon Valley, but a start up in London will be slightly more relaxed by comparison. In the US, "free VC money" means there's an incentive to get to market asap, monetiz…

Fortunately most of the above mentioned is harmonized in the EU. Culture is a fair point, but I suspect much of it is chicken and egg problem. Thin VC money, less lively M&A market, fewer reasons for gold rush.

Re: Europe's Software Problem

#230

Post by fvdessen »

MangoCoffee wrote: post #42
pilsetnieks wrote: post #25

I take offense at such massive overgeneralizations as "Europe lacks imagination." What it lacks is freely flowing funding such that risky enterprises can be funded even if 1 out of ten or 1 out of hundred actually are successful. This kills business models which cannot show any profit whatsoever, and a large portion of the remainder are killed by data regulations forbidding "alternate paths of monetization" (to put i…

>risky enterprises can be funded even if 1 out of ten or 1 out of hundred actually are successful correct me if i'm wrong, Europe is dominated by legacy business/banks that normally won't take such risk. legacy business like BMW. European and Asian want to see you have some success or already making money before they invest. while American will throw money into something that just an idea.

It's dominated by businesses where network effects are not in play; commodities, specialist equipment, medicine, biotech, hardware, etc. If there's a cultural, legal, or network element to the business, then the fragmentation of the European market puts it at a massive disadvantage. Investor knows it and thus avoid investing in those sectors because they don't want to fight uphill battles
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