7 ms·

As a EU founder I think the article misses the two primary reasons Europe isn't doing well with startups. 1) Target market USA: natural target market of 320 m

by jd 13y ago

As a EU founder I think the article misses the two primary reasons Europe isn't doing well with startups. 1) Target market USA: natural target market of 320 million people with a very high level of (disposable) income. Established businesses are happy to buy products from startups. There is a positive feedback loop where businesses try to grow fast and therefore want to outsource the stuff they're not good at so they can focus on their core skills. This means startups can pop up to take care of everything else (HR/Invoicing/Data crunching/etc-as-a-service). EUROPE: you have to deal with dozens of languages and cultures. Although the and Germanic countries are OK with English-only products, the rest of Europe wants their products translated. Salaries are much lower here and businesses are much more conservative. Businesses that grow slowly have to care much more about operating expenses, which means they will try to do everything in-house to cut costs. As a consequence we get the vast majority of our revenue from the US, even though people all across the world try our software. 2) Culture A lot of people talk about starting a startup, but nobody seems to want it badly enough. Perhaps this is because there are so few success stories over here in the Netherlands. People tend to focus on the negative (what if you fail? what about work-life balance? what if you get sued?), but it's hard to say if that matters. The US has only one Silicon Valley. There is nothing comparable on the east coast, even though the east and west coast have a lot in common. If we figure out why Silicon Valley works and other places fail to really take off we should be able to create startup hubs all across the world.

tinbad 13y ago
I agree with most, except the last part. I came to SV from the Netherlands myself and i had the pleasure to meet Neelie Kroes (highly respected EU politician from Dutch origin) here in SF in the first month after I moved to the US. She was saying how Europe could learn from SV and how she was getting billions of EU funding to recreate SV in Europe and setup 'startup hubs' in places like Strasbourgh and Brussels. I think there's some flawed thinking here: you shouldn't want to recreate the success of SV by just copying it. It will fail. Europe should figure out what would work for them. It doesn't have to be the same as SV.
- kintamanimatt 13y ago
  Money is a part of it, but the bulk of the problem is a lack of a culture that celebrates entrepreneurship and embraces failure as a normal stepping stone to success. This is why there aren't Euro SVs. Culture is changed through the media and other social proof. An increase in money might make people feel comfortable enough to take some new risks, and some of those risks might pay off and spawn some companies that the European general and tech media can report on.
vidarh 13y ago
Why do you believe Europe isn't doing well with startups? It might be true that Europe isn't doing well with web startups reaching stratospheric valuations in no-time, but Europe is full of startups doing well, and starting companies in Europe is not particularly hard (co-founded several; been one of the early employees in a couple more). And in many countries you can practically get government grants thrown after you if you put in a minimum of effort into applying. You have some points with translation, but where you see problems, I see opportunities: Translations can be done cheaply enough that being aware of internationalization issues and cultural issues can create enormous benefits in the form of erecting barriers exactly against US companies. I've worked with a number of US companies on i18n issues, and I've yet to find a single one where the US team understood the European concerns (I still shudder to think of the one multinational who thought that it didn't matter if all their past invoices changed if they changed their invoice template, to, e.g., change their VAT registration number). I also don't agree with about culture. Well, sort of: What you say is true about the US too. Most people don't want to start companies badly enough. Or they would have. At least a huge number. Lots of people do though, we just don't have a single geographical area as small as the valley where it's all concentrated. There are hundreds of internet startups in London alone, for example. And I don't buy that you have so few success stories in the Netherlands, though perhaps you're not aware of them as they're not in "as hot" sectors. E.g. consider Bibit - a payment processor funded in Bunnik, that was acquired by RBS and merged with (London founded) Streamline/WorldPay (who has also acquired half a dozen other European startups in the payment space over the years), just to take one of the top of my head that I've personally dealt with. (And a bunch of the people from Bibit are now behind Adyen - another Netherlands based payment processor startup) Though there is definitively cultural differences. The "fail fast" approach that many in SV takes is definitively less popular, not least because in many countries here for many types of jobs, having a failed company on your CV, at least as a founder, is seen in a more negative light. And this probably explains a lot of the perception too: Many European startups takes longer to grow big and may never even aim to grow as big as an equivalent Valley startup, and so may often be seen as a medium to big established company by the time mergers and acquisitions happens - it's easy to fly below the radar for the entire lifecycle of the company as an independent entity.
nknighthb 13y ago
> the east and west coast have a lot in common We really don't. We (barely) share a language and are held hostage together in a room by dead white male slaveholders who a vocal minority have turned into a new American Pantheon. The west coast has some political common ground with the northeast, but there are still huge cultural gaps, and the "east coast" extends a long way south of Maryland and DC. This isn't some big mystery, just a big continent.
- nostromo 13y ago
  Compared to Europe, the US is very homogenous. Think about how many cultures you would encounter walking from Paris to Moscow. Now compare that with walking from New York to LA. Even though Paris is much closer to Moscow than NY is to LA, you'd experience much more cultural diversity along the european walk.
  - bowlofpetunias 13y ago
    Hell, you would experience much more cultural diversity of you would walk from one end of France to the other. Just like Europeans have difficulty mentally grasping the physical size of the US, Americans seem to have great difficulty grasping the internal cultural diversity of Europe.
  - nknighthb 13y ago
    In my state alone, I can encounter at least three very different cultures just within the English-speaking populace. I'd have to have some long conversations with people in the Spanish-speaking populace to establish a rough approximation of the real number. But something tells me you draw your own entirely subjective cultural lines in vastly different places than I do mine.
    - mtrimpe 13y ago
      We've had this argument here before and in some sense you're right in that culture is relative and 'more diverse' is essentially a meaningless phrase. What is true though is that Americans tend to underestimate the homogenizing effect a shared language, border, government and media apparatus has and the degree to which it helps in facilitating cross-country trade.
Hermel 13y ago
Yes, but the main point he makes is an excellent one that is normally missed everywhere else: namely the cultural one-way street that exists between the US and Europe. Europeans watch American TV, listen to American music, read American blogs, etc. But does that also work the other way around? No. This already fails at the language level, as most Europeans speak English, but not many Americans speak another European language. I would even go as far as saying that most European journalists read more US sources than they read sources from their neighbour countries. This is also mostly caused by language skills. As a consequence, when trying to gain attention as a European startup, you can either try to conquer the European countries one by one - or you can try to get American attention (e.g. techcrunch) and let the European tech journalists copy from there. This is a though choice US entrepreneuers don't have and its caused by the cultural one-way street.
- danmaz74 13y ago
  Agreed, and this is really a sore point.
gumby 13y ago
I agree with these points. I read Gründerszene and I find the companies described are mostly pretty dull -- selling shoes, or hotel bookings, or something like that. Not terribly technical, and not really moving the needle. There's still a lot of conservatism. You can make a physical product in the US and people (early adopters) will try it out. In Europe they will want it to be certified and proven and above all know that the founders are properly credentialed. This is probably one reason why all these companies have been formed in domains where credentials don't matter and people are willing to take a chance

by jd 13y ago

tinbad 13y ago

I agree with most, except the last part. I came to SV from the Netherlands myself and i had the pleasure to meet Neelie Kroes (highly respected EU politician from Dutch origin) here in SF in the first month after I moved to the US. She was saying how Europe could learn from SV and how she was getting billions of EU funding to recreate SV in Europe and setup 'startup hubs' in places like Strasbourgh and Brussels. I think there's some flawed thinking here: you shouldn't want to recreate the success of SV by just copying it. It will fail. Europe should figure out what would work for them. It doesn't have to be the same as SV.

kintamanimatt 13y ago
Money is a part of it, but the bulk of the problem is a lack of a culture that celebrates entrepreneurship and embraces failure as a normal stepping stone to success. This is why there aren't Euro SVs. Culture is changed through the media and other social proof. An increase in money might make people feel comfortable enough to take some new risks, and some of those risks might pay off and spawn some companies that the European general and tech media can report on.

vidarh 13y ago

Why do you believe Europe isn't doing well with startups? It might be true that Europe isn't doing well with web startups reaching stratospheric valuations in no-time, but Europe is full of startups doing well, and starting companies in Europe is not particularly hard (co-founded several; been one of the early employees in a couple more). And in many countries you can practically get government grants thrown after you if you put in a minimum of effort into applying. You have some points with translation, but where you see problems, I see opportunities: Translations can be done cheaply enough that being aware of internationalization issues and cultural issues can create enormous benefits in the form of erecting barriers exactly against US companies. I've worked with a number of US companies on i18n issues, and I've yet to find a single one where the US team understood the European concerns (I still shudder to think of the one multinational who thought that it didn't matter if all their past invoices changed if they changed their invoice template, to, e.g., change their VAT registration number). I also don't agree with about culture. Well, sort of: What you say is true about the US too. Most people don't want to start companies badly enough. Or they would have. At least a huge number. Lots of people do though, we just don't have a single geographical area as small as the valley where it's all concentrated. There are hundreds of internet startups in London alone, for example. And I don't buy that you have so few success stories in the Netherlands, though perhaps you're not aware of them as they're not in "as hot" sectors. E.g. consider Bibit - a payment processor funded in Bunnik, that was acquired by RBS and merged with (London founded) Streamline/WorldPay (who has also acquired half a dozen other European startups in the payment space over the years), just to take one of the top of my head that I've personally dealt with. (And a bunch of the people from Bibit are now behind Adyen - another Netherlands based payment processor startup) Though there is definitively cultural differences. The "fail fast" approach that many in SV takes is definitively less popular, not least because in many countries here for many types of jobs, having a failed company on your CV, at least as a founder, is seen in a more negative light. And this probably explains a lot of the perception too: Many European startups takes longer to grow big and may never even aim to grow as big as an equivalent Valley startup, and so may often be seen as a medium to big established company by the time mergers and acquisitions happens - it's easy to fly below the radar for the entire lifecycle of the company as an independent entity.

nknighthb 13y ago

> the east and west coast have a lot in common We really don't. We (barely) share a language and are held hostage together in a room by dead white male slaveholders who a vocal minority have turned into a new American Pantheon. The west coast has some political common ground with the northeast, but there are still huge cultural gaps, and the "east coast" extends a long way south of Maryland and DC. This isn't some big mystery, just a big continent.

nostromo 13y ago
Compared to Europe, the US is very homogenous. Think about how many cultures you would encounter walking from Paris to Moscow. Now compare that with walking from New York to LA. Even though Paris is much closer to Moscow than NY is to LA, you'd experience much more cultural diversity along the european walk.
- bowlofpetunias 13y ago
  Hell, you would experience much more cultural diversity of you would walk from one end of France to the other. Just like Europeans have difficulty mentally grasping the physical size of the US, Americans seem to have great difficulty grasping the internal cultural diversity of Europe.
- nknighthb 13y ago
  In my state alone, I can encounter at least three very different cultures just within the English-speaking populace. I'd have to have some long conversations with people in the Spanish-speaking populace to establish a rough approximation of the real number. But something tells me you draw your own entirely subjective cultural lines in vastly different places than I do mine.
  - mtrimpe 13y ago
    We've had this argument here before and in some sense you're right in that culture is relative and 'more diverse' is essentially a meaningless phrase. What is true though is that Americans tend to underestimate the homogenizing effect a shared language, border, government and media apparatus has and the degree to which it helps in facilitating cross-country trade.

Hermel 13y ago

Yes, but the main point he makes is an excellent one that is normally missed everywhere else: namely the cultural one-way street that exists between the US and Europe. Europeans watch American TV, listen to American music, read American blogs, etc. But does that also work the other way around? No. This already fails at the language level, as most Europeans speak English, but not many Americans speak another European language. I would even go as far as saying that most European journalists read more US sources than they read sources from their neighbour countries. This is also mostly caused by language skills. As a consequence, when trying to gain attention as a European startup, you can either try to conquer the European countries one by one - or you can try to get American attention (e.g. techcrunch) and let the European tech journalists copy from there. This is a though choice US entrepreneuers don't have and its caused by the cultural one-way street.

danmaz74 13y ago
Agreed, and this is really a sore point.

gumby 13y ago

I agree with these points. I read Gründerszene and I find the companies described are mostly pretty dull -- selling shoes, or hotel bookings, or something like that. Not terribly technical, and not really moving the needle. There's still a lot of conservatism. You can make a physical product in the US and people (early adopters) will try it out. In Europe they will want it to be certified and proven and above all know that the founders are properly credentialed. This is probably one reason why all these companies have been formed in domains where credentials don't matter and people are willing to take a chance