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A startup doesn't need to be a unicorn

mattgiustwilliamson.substack.com

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Re: A startup doesn't need to be a unicorn

#31

Post by nottorp »

summarity wrote: post #9

Here's a model that exists in Germany, which I like: You can present a business plan to the state's investment bank and apply for several financial aides, including: * 1.5 years of universal basic income for you plus up to 2 other people. It's a tiny amount of money, but the point is to free you up to invest your actual time an money into the business. You do not have to pay this back. * up to 20k EUR in "consulting…

You still need the 25k to register a LLC or whatever the acronym is in Germany, right?

Re: A startup doesn't need to be a unicorn

#32

Post by [deleted] »

fastball wrote: post #19
summarity wrote: post #9

Here's a model that exists in Germany, which I like: You can present a business plan to the state's investment bank and apply for several financial aides, including: * 1.5 years of universal basic income for you plus up to 2 other people. It's a tiny amount of money, but the point is to free you up to invest your actual time an money into the business. You do not have to pay this back. * up to 20k EUR in "consulting…

And yet Germany still doesn't seem to have much more startup / entrepreneurial success than any other European country. What gives?

[deleted]

Re: A startup doesn't need to be a unicorn

#34

Post by summarity »

nottorp wrote: post #31
summarity wrote: post #9

Here's a model that exists in Germany, which I like: You can present a business plan to the state's investment bank and apply for several financial aides, including: * 1.5 years of universal basic income for you plus up to 2 other people. It's a tiny amount of money, but the point is to free you up to invest your actual time an money into the business. You do not have to pay this back. * up to 20k EUR in "consulting…

You still need the 25k to register a LLC or whatever the acronym is in Germany, right?

No that's for a full GmbH. You can start with an "UG", which realistically needs maybe 1500 EUR to get registered and up and running. Then, a certain percentage of the profit is contributed towards the 25k (of which in turn only 12.5k have to be deposited in cash) each financial year. If the threshold is met, you can convert from UG to GmbH.

Re: A startup doesn't need to be a unicorn

#35

Post by piva00 »

fastball wrote: post #19
summarity wrote: post #9

Here's a model that exists in Germany, which I like: You can present a business plan to the state's investment bank and apply for several financial aides, including: * 1.5 years of universal basic income for you plus up to 2 other people. It's a tiny amount of money, but the point is to free you up to invest your actual time an money into the business. You do not have to pay this back. * up to 20k EUR in "consulting…

And yet Germany still doesn't seem to have much more startup / entrepreneurial success than any other European country. What gives?

Entrepreneurial success they definitely have, it's just not in-your-face tech/digital stuff, it's lots of Mittelstand companies focusing on niches, like in high-precision machines that are then used for precision manufacturing (optical lenses, chemistry reactors, etc.).

What gives is that it isn't a primarily marketing-driven consumer-facing entrepreneurship so you don't hear about Peter Huber Kältemaschinenbau, or Rational AG-like companies[0].

[0] https://www.chargeurs.com/wp-content/uploads/2020/01/The-Bes...

Re: A startup doesn't need to be a unicorn

#36

Post by fastball »

summarity wrote: post #25
fastball wrote: post #19

Earlier quoted context omitted.

And yet Germany still doesn't seem to have much more startup / entrepreneurial success than any other European country. What gives?

What are you looking for in particular? The model is geared towards slow, sustainable growth. And that growth might also not need to exceed a certain level. So you're unlikely to hear about many of them. Not all are in tech or software, many are focused on German-only (or DACH region) research, industrial development, etc. I think that's fine.

Presumably you'd want to see that such initiatives are increasing the number of sustainable businesses created, per capita. Is that the case?

---

EDIT: Some quick searching indicates that the startup rate (per capita) in Germany is about 1.1%, while the USA is 1.5%. Not a huge difference, but the USA doesn't have any of those initiatives afaik.

Just wondering what actually moves the needle and how to better create a society that is entrepreneurial, and not just in a "billion dollar social media unicorn" kinda way, but businesses that provide actual tangible value. Definitely recognize that the "quality" of businesses being started in Germany could be higher, but I think you actually need to measure these things and understand what interventions actually make a difference. It is a similar issue with UBI in general: while it sounds nice and might be necessary if our "AI is the future" overlords get their way, you do actually need to back up the promise of "UBI will unlock human creativity" with some amount of hard data, imo.

Re: A startup doesn't need to be a unicorn

#37

Post by tiluha »

nottorp wrote: post #31
summarity wrote: post #9

Here's a model that exists in Germany, which I like: You can present a business plan to the state's investment bank and apply for several financial aides, including: * 1.5 years of universal basic income for you plus up to 2 other people. It's a tiny amount of money, but the point is to free you up to invest your actual time an money into the business. You do not have to pay this back. * up to 20k EUR in "consulting…

You still need the 25k to register a LLC or whatever the acronym is in Germany, right?

You need 25k€ to register a GmbH, but you can nowadays register a UG which only requires 1€ and can later be converted to a GmbH

Re: A startup doesn't need to be a unicorn

#38

Post by muzani »

fastball wrote: post #19
summarity wrote: post #9

Here's a model that exists in Germany, which I like: You can present a business plan to the state's investment bank and apply for several financial aides, including: * 1.5 years of universal basic income for you plus up to 2 other people. It's a tiny amount of money, but the point is to free you up to invest your actual time an money into the business. You do not have to pay this back. * up to 20k EUR in "consulting…

And yet Germany still doesn't seem to have much more startup / entrepreneurial success than any other European country. What gives?

Have you heard of Rocket Internet? It's one of the most successful models in the world. They may avoid the US market and such, but most of the unicorns in Malaysia are backed by Rocket. And most of the people who stay and start their own, backed by YC or whoever, are usually ex-Rocket. They hit 10% growth per week, even at unicorn sizes.

I would anecdotally put Germany at #3 globally just for Rocket alone, with US and China ahead of them.

There's lots of successful non-Rocket startups from Germany too, but most are boring stuff like agriculture, grocery delivery, pet stuff, etc. We normally don't take note of startups until they're Stripe-sized or something.

Re: A startup doesn't need to be a unicorn

#39

Post by senko »

Etheryte wrote: post #8

Well yes, that's called a regular company. Not sure if I'm missing something here?

Regular companies aren't given $1m they don't have to pay back.

They have to get loans and founders are usually on the hook if the venture fails.

This is different from what the article advocates.

Re: A startup doesn't need to be a unicorn

#40

Post by morgante »

ilrwbwrkhv wrote: post #3

Also the other thing that I realised after working with a bunch of VCs is that they are all incredibly dumb. Few VCs are founders themselves and you will have better luck with them but the majority of VCs have simply no idea about product and technology and they are simply pattern matching. What that means is that they will cargo cult everything and if your startup doesn't fit the mold they will not respond to you fa…

This is way too broad of a statement.

The smartest person and the dumbest person I've met professionally are both investors.

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