
Why Can’t Europe Do Tech? - pen2l
https://www.bloomberg.com/news/features/2018-08-16/inside-europe-s-struggle-to-build-a-truly-global-tech-giant
======
no1youknowz
I'll probably get Uber down voted for this, but this is my experience from the
last 2 years in preparing to get a startup of the ground.

Here's some relevant data points:

1) I have contacted over 400 service providers in multiple sectors to provide
services to the startup.

* Yes that's not a typo. 400 companies have been emailed, then called. I don't mind picking up the phone and talking to someone.

2) Of the 12 service providers that were selected, only 1 company is from the
UK. All others are from the US.

3) All of the EU companies that were contacted, I later found out were
either:-

\- Lacking in terms of functionality compared to the US competitors.

\- Had no roadmaps or no visibility of when they would reach parity with US
competitors.

\- Were much more expensive than US competitors.

\- Many EU companies had no US focus and more focused in EU, ME and Africa.

4) Of the US companies that I selected. I had interacted initially with the EU
offices. Being in the UK, their systems always forwarded the contact form to
the EU/UK office.

The sales individuals located in the EU office were always SUB PAR!

\- They didn't know their product as well as they could have.

\- Simply made up bullshit in order to backup their claim that the
functionality that I required was not possible. Even though I knew it was.

\- As soon as they realised that I was a startup, they were not interested in
the sales lead.

\- In some circumstances, I knew the industry, regulatory issues and their
competitors better than they did.

\- One further point. I remember contacting Skrill's London office and then
speaking to an Italian woman and her shouting at me with respect to their
functionality. She didn't know the product and was telling me that a certain
feature was not available. The more I described to her that it was possible.
The louder she got. Despite it being on their website.

\- I have many emails from UK/EU individuals informing me that they can't do
[functionality X] because of regulations/etc. However, other companies were
able to do it perfectly fine. Again, this boils down to the employees of the
company not knowing their product/industry.

\- I won't mention who said this. It's a well known US service provider to
SaaS companies. When I was speaking to a UK sales manager. I outlined what the
startup was doing. The sales person informed me that there would be NO WAY
that I would be able to get my first 100 users. To quote him: "You won't get
100 users". Needless to say, the conversation didn't last long.

5) What's worse than all this? Every single German company that I have spoken
to were not startup friendly in the least. In fact, every single German
company would tell me that I had no chance of success and that I should go and
do something else.

Here's a typical exchange:

Me: Hi, I am interested in your product offering and would like to know if [X
functionality] is available and what you pricing is.

Them: What is your current turnover.

Me: I'm a startup.

Them: Please come back to us when you are doing 7 figures a year. Good bye!

6) The difference with US companies.

\- Knew the product inside and out. Knew their competitors and could inform me
how they were better than [competitor X].

\- In many circumstances. Once I had spoken to the initial sales employee or
they had read my email and PDF attachment of the startup. I was immediately
forwarded to the Sales VP and they wanted my business. Instead of pitching my
startup to the service provider. They were pitching their company to me.

\- In many circumstances, there was a program to help startups get off the
ground. There would always be a requirement to be part of an accelerator or be
VC backed. In my case, this was always waived.

\- A few times, the sales employee commented that this was obviously a
"billion dollar" startup and that they wanted to be part of it. That is, be a
partner service provider. The more revenue that I generated, the more they
would generate as well!

\- In all cases, they were startup friendly. Being a startup with 0 in revenue
and 0 sales and months away from launch. No problem in discussing their
product with me.

\- In some cases, where a service provider could not help. Due to missing
functionality or regulatory issue. Would even forward me to a contact in a
competitor that could help!

\- In a couple of times. Would even offer their own development team to build
some tech that I mentioned I was having issues with. For FREE! Gratis! Of
course, I always declined, but I thought was very nice of them.

There's probably more positive items, but I can't think of more right now.

The bottom line is. I now only deal with US companies and when I send an email
out. I always append the preference to deal with US sales teams.

The outlook and behavior of US companies is vastly different than EU
companies:

\- More positive outlook.

\- More willing to work with startups.

\- Acknowledge that, the better the client does, the more revenue they will
earn. (yes this point is lost with EU companies)

Disclaimer: I'm a solo technical founder. I'm bootstrapping the company with
just $1,000 (on purpose). I am not getting any FFF funding nor any VC funding
as well.

~~~
buboard
As a solo founder i also found it easier to deal with american companies. I've
had payment processors offering free consultation how to increase our revenue,
and in general it feels like there is more trust among businesses there. In
addition, being a non-US citizen actually makes it easier for me, as I avoid
the cumbersome tax compliance. Europe can have its positives as well, e.g. i m
very pleased with Hetzner's offerings but for most things you are left to
figure out things on your own. There 's also an entrenched culture of EU-
subsidized startups which are basically shell companies for academics etc,
that rarely progress beyond that stage.

------
nunobrito
We do tech. There are more startups on my city (which is small) than what the
article is mentioning as average.

The article assumes that "doing tech" needs to be something like a facebook or
google and sell customer data like there is no tomorrow.

It's a bit different around here, we like it that way.

~~~
close04
The title is clickbaity, as is the norm these days. The reason it's so blunt
and "polarizing" is that Bloomberg is a US publication. You think they'd ever
dare publish an article asking "Why can't the US do civil rights?", an
arguably more important topic than tech?

Europe can do tech but they don't really make it an important target. Also
many of the good people in tech choose to go Silicon Valley (which is now ~60%
foreigners) so this depletes the pool of EU talent. The bigger SV gets, the
harder it is for person in tech to resist the temptation to go, and for local
EU startups to find the proper resources.

And the EU doesn't yet act like a single body with a unified strategy when it
comes to developing the tech sector, unlike the US or China. It's hard to
mount an offence against an already established leader when everybody is
pulling in another direction.

~~~
candiodari
Mind if I inquire, what civil rights does a European have that an American
doesn't ?

~~~
Beldin
Privacy. In the EU, there's the GDPR with such rights as the right to be
forgotten, the right to access and correct any data a company has in you, etc.

In the US, the FCC recently made it possible for ISPs to sell data on browsing
behaviour from their clients to anyone that pays.

Neither is perfect, but they are worlds apart in this respect.

~~~
candiodari
Ok let's split up this argument:

1) Privacy from government snooping

a) targeted/with court order (sort of, as in many cases in the EU this does
not actually require a court order. Quite a few states just give police the
authority to do this by themselves with little to no oversight). Perhaps this
should be called "lawful intercept" or perhaps non-mass surveillance.

US: privacy held up:
[https://en.wikipedia.org/wiki/Fifth_Amendment_to_the_United_...](https://en.wikipedia.org/wiki/Fifth_Amendment_to_the_United_States_Constitution)

EU: no privacy:
[https://en.wikipedia.org/wiki/Key_disclosure_law#Legislation...](https://en.wikipedia.org/wiki/Key_disclosure_law#Legislation_by_nation)

b) without

US: no privacy
[https://en.wikipedia.org/wiki/Mass_surveillance_in_the_Unite...](https://en.wikipedia.org/wiki/Mass_surveillance_in_the_United_States)

EU: no privacy
[https://en.wikipedia.org/wiki/Mass_surveillance#Germany](https://en.wikipedia.org/wiki/Mass_surveillance#Germany)
[https://en.wikipedia.org/wiki/Mass_surveillance#United_Kingd...](https://en.wikipedia.org/wiki/Mass_surveillance#United_Kingdom)
etc ...

2) privacy in the sense of forcing companies to drop personal data

US: complex, and varies from state to state, in most cases you should be able
to get it deleted
[https://uk.practicallaw.thomsonreuters.com/6-502-0467?transi...](https://uk.practicallaw.thomsonreuters.com/6-502-0467?transitionType=Default&contextData=\(sc.Default\)&firstPage=true&comp=pluk&bhcp=1)

EU: also complex, but generalized:
[https://en.wikipedia.org/wiki/General_Data_Protection_Regula...](https://en.wikipedia.org/wiki/General_Data_Protection_Regulation)

Relating to debts:

US: standardized, and regulated

EU: complete and total chaos

So, I would say that the situation is not quite so clear cut. In terms of your
rights to prevent state spying on you, clearly the US provides superior tools
to it's citizens. In fact the EU is worryingly bad. In the private sector it
would be fair to say the EU is superior, except when it comes to information
about debts, where again the US is superior.

Doesn't seem to me to be such a clear-cut situation. But perhaps I'm wrong.
Why do you think one is superior to the other ? If you're falsely accused of
something, I assure you the US is far superior. If you want your mcDo to stop
sending you email, you're going to find the EU is superior. Of course, spam
was mostly illegal before the GPDR, and I suspect that nothing will change in
practice.

------
l0b0
Maybe because most Europeans are happy with a good work/life balance, and
don't constantly obsess about pipe dreams that come through for one in a
million people? Obviously such obsessives exist, but I bet they are a lot less
common than in countries with a, let's say, get big or go home attitude. Also,
state funded safety nets means it's less urgent to have $lots saved up to
survive the next crisis.

~~~
sparkling
> obsess about pipe dreams that come through for one in a million people?

Speaking as someone from Europe...

I don't have any first hand experience, but when browsing HN or Reddit,
developer salaries above $150k seem to be the norm [1], not the "one in a
million people" exception. As you may know, such salaries are unheard in
Europe. It seems to me that becoming financially independent in the US is a
matter of years [2], not decades. Sometimes it really makes me depressed. Also
you seem to overestimate the safety nets. Putting 3-4 months of US paychecks
away in a savings account will put you ahead of any safety net in Europe.

[1] Yes, i know, cost of living in places like NYC or SF are not comparable to
major European cities, but even when factoring higher costs of living,
becoming a millionaire seems rather doable.

[2] If you don't spend your money lavishly.

~~~
Fnoord
You can't compare a US salary with a EU salary 1:1. In the EU you get
retirement money, you get health insurance, and all kind of other benefits.
You need to calculate all these positive and negative and _then_ compare. And
that's a lot of work!

~~~
Roritharr
The problem with this is that neither retirement nor health insurance has a
guaranteed quality level, if the government reaches a slump or decides to
refocus on other things, you can't get a refund/reinvest.

If I look at my governmental retirement projections, although i have been
working and paying into it since age 20 it's depressing how little inflation
adjusted retirement money I'll receive, although I earn a good tech-salary for
our region.

Same with healthcare, in my city, Frankfurt/Germany, it's very hard to find a
cardiologist that accepts patients that are publicly insured and even then the
wait times can be scary for this type of situation. Hospitals have started
rejecting patients that want to circumvent this by going to the emergency
room.

The biggest issue for me is one of age-restriction. I'm fairly certain that my
possibilities to earn this much more elsewhere will shrink over time and then
I won't have a comparable cushion my US counterpart could have built, although
we do the same thing. That is the equation that keeps me up at night at the
moment.

~~~
zaarn
If your issue isn't an emergency then yes, you'll be thrown out of emergency
rooms because frankly they have much more important issues to deal with than a
stubbed toe or a persistent cold.

~~~
AstralStorm
Or required cardiac surgery, unless you're actually dying. Even if you cannot
make a meter on an ergometer.

------
fermigier
Not so sure about the data presented in the article.

There are, according to the graphics, "4 startups per million people in
Paris". There are 2.2 million habitants in Paris (source:
[https://en.wikipedia.org/wiki/Demographics_of_Paris](https://en.wikipedia.org/wiki/Demographics_of_Paris)),
and we have hundreds if not thousands of startups (source:
[http://www.techonmap.fr/](http://www.techonmap.fr/)). The numbers don't
match.

~~~
flipp3r
Same with Amsterdam, which is <1M people. The building I work in in Amsterdam
has literally more startups in it than the article describes.

------
carlesfe
Oh, Europe can do tech indeed.

The article is spot on: imagine two startups, one in Barcelona and another in
Boston, developing a very similar product. The first one raises €2M, the
second one $50M. Which one is going to beat the other to market?

Yes, there are other factors; work/life balance, heterogeneous
markets/languages, collaboration vs competition mindset, etc. But here in
Europe we also have workaholics that give 200% to their startup and launch
internationally. And without cash injections, which are a by-product of
ecosystem maturity, they will always lose against their USA competitors.

Disclaimer: am European founder in seed stage

~~~
rapsey
> The first one raises €2M, the second one $50M. Which one is going to beat
> the other to market?

Also which one has a domestic market with a single language of 325 million
people.

~~~
BerislavLopac
Well, at least in the sheer number of native speakers of the language, the
first one has a slight advantage. You're right with regards to the domestic
market, although my understanding is that various US states often have
incompatible legislations.

------
kwhitefoot
Trains are tech. Cities that are liveable are also technology. What does
"tech" actually mean? Bloomberg seems to mean it to mean "Internet, shopping,
and communication related stuff". There is more to life than that.

------
jayachdee
I'm Irish, almost all of my friends work for American companies in Dublin.
This article has decided to count the ~100,000 Irish devs in American
companies as American and then wonder why European companies aren't as big.
Which is doubly funny when you realise that most of the American companies
mentioned are "Irish" for most of the world.

~~~
shady-lady
> This article has decided to count the ~100,000 Irish devs in American
> companies as American

Where are you seeing that?

------
mnm1
Who cares? Why does this article assume that giant corporations like fb and
Google are even desired? For everyone but their founders, they are a cancer to
society. Europe's cultural barriers are a net positive, preventing these
cancers from growing and spreading. It makes it a better place to live for
everyone. It's such an American centric point of view to want big companies,
almost always monopolies, to thrive at the expense of everyone else. Europe
does tech just fine. Maybe the question is why can't America control its
cancerous companies? Now that is an interesting topic.

------
bassman9000
Is this article satire? Conflating inflated valuations, VC, and tech? I
thought Bloomberg was a serious source.

[https://www.epo.org/news-
issues/news/2017/20170307.html](https://www.epo.org/news-
issues/news/2017/20170307.html)

 _Europe 's potential in terms of innovation and technology is also
highlighted by the number of European patent applications filed relative to a
country's population. Switzerland again topped the ranking in 2016, with 892
applications per million inhabitants. Second and third place went to the
Netherlands (405) and Sweden (360), followed by Denmark (334) and Finland
(331). The first non-European country was again Japan in ninth place (166),
which was above the EU average of 122._

~~~
asutekku
The problem is not the amount of innovations or technologies created in EU.
The point in the article was that many of these innovations are merely
regional products and it’s really hard for European companies to make them
appeal to the people outside the continent.

~~~
ahartmetz
Even that isn't true for Germany. While too much does depend on cars, there is
also a lot of business to business stuff that few people know about.

~~~
Fnoord
This article is just a prime example of Americans living in their own bubble.

------
blattimwind
Tech (Bloomberg): smartphone apps, funded by VC and ad money.

Not Tech (Bloomberg): making software and machines used to build billions of
units across hundreds of sectors per year, and also building billions of units
across hundreds of sectors per year, developing new t̶e̶c̶h̶n̶o̶l̶o̶g̶i̶e̶s̶
things (since this isn't tech) and spending god-knows-how-many billions on R&D
and so on.

------
ggm
... yea because the industrial design inherent in ARM holdings or the original
iPod or iPhone or Olivetti design or SAP... (Sigh)

Why can't Bloomberg do real research?

~~~
dejv
Also like half of the all manufacturing equipment, tons of medical/laboratory
devices and what not. The only thing that Europe lack behind is home grown ad-
fueled consumer startups.

~~~
kazen44
this is really the invisible giant.

Things like machines which manufacture machines for instance.

a good friend of mine works at a glass blowing company which makes beer
bottles, the machines used to create bottlecaps at an insane rate are
apparantly dominated by a german manufacturer. (this factory produces over
15mil bottles a day).

producing 15 million bottle caps in a single 24h shift is hard, producing
stuff this quickly at suchs a scale is a hard problem to fix.

------
dejv
So what is tech? It seems like for author of this article it means highly
scalable software startups (prefably consumer) which are highly visible and
you have it on your personal devices. On this turf the US is clear leader at
least for people living outside of China.

But tech is everywhere and there are huge amounts of billion /100s of M
dollars companies you never heard off anywhere in (at least developed) world.
In my small town (~ 300k of people) there are at least three pure tech
companies that were build from nothing to 1B of valuation and I am sure you
can point finger anywhere on map and it is going to be same.

------
eloisant
Because the best European startup move to US early, and they become US
companies.

Because they can't find as much funding in Europe as in US.

~~~
LoSboccacc
No large founds to sustain aggressive growth, a fragmented market with lot of
regulations and tax codes to abide, small pool of high quality developers and
high cost of work

That’s about it.

------
stunt
There are many factors. Culture, Market, Tax system etc.

One of the major factors is the environment and building the culture. Many of
US tech success companies are founded or driven by European(and Asian) expats.

So there is nothing wrong about Europeans themselves. It is rather the
environment.

That is why Berlin is doing a better job because they could make a better
environment comparing to most of the European cities.

Europe is not paying enough attention to how they are lacking there,
considering how tech is going to play a crucial role in industries and the
future economy.

Europeans are also really busy with the political mess that US is building
around them (ex. Middle East, Russia, Immigrants coming from conflict zones)
and for a society that is just recovered after WW, that means not being
prepared to accept expats as it used to be in last few decades for Silicon
Valley. Therefore they don't have diversity factor which is one of the biggest
advantages for Silicon Valley.

------
knbknb
I'm from Europe, and I like the Paul Graham Essay from 2006,
[http://www.paulgraham.com/siliconvalley.html](http://www.paulgraham.com/siliconvalley.html)
, where he claims there are 3 necessary conditions to build a startup
ecosystem in any city or region:

1\. A large city or metropolitan area with high quality of life according to
nerds and their preferences

2\. excellent universities or career opportunities, so young gifted people are
motivated to move there from 1000s of miles away

3\. Capital availability (Venture capital, private equity, unspent cash
looking for investment)

Most European Cities fail to provide all 3, and even then these conditions are
not sufficient to build a successful hightech startup.

~~~
AstralStorm
Generally 3 begets 2 - the universities are mostly there yet no good startup
scene.

Most large cities do 1 right.

The thing is, investors around here are either small or risk averse and indeed
hiring is harder.

------
synthmeat
Bureaucracy, market heterogeneity, risk-aversion, and brain-drain to places
where there's less such limits. Not all is on us to blame, of course. USA has
had a huge historical developmental advantage in tech space.

From sibling comments, I see there's a lot of content with the way of life in
Europe, so I guess there's that too. I don't see it myself.

------
Annatar
Silicon Valley veteran here. Europe does tech, but we Europeans are far more
focused on scientific solutions, fintech and sustainability, long term
solutions for our continent and the world at large than creating overvalued
startups like "Facebook" or "Twitter" whose only sole purpose is to go IPO and
generate vast sums of cash for what amounts to little more than a pasttime.

We have lots of small startups and most of those are financed with the
founders' own money, in stark contrast to venture capital in the States.

Silicon Valley has such a concentration because of climate and infrastructure.
Climate is mild year round and the weather great. This, coupled with venture
capital and plentiful job opportunities draws more qualified people.

Unfortunately only a handful of countries in Europe, like Spain and Portugal
have that kind of weather, the rest is frigid temperatures during Winters and
sweltering heat during Summers. Although Spain has started to pick up momentum
in tech startups, it's still at the beginning and the economy there will
require at least two more decades to pick up. Then there is Switzerland, a
tech startup paradise, but startup companies there are focused on solving
scientific problems and fintech.

One of the major differences between Silicon Valley and the European mentality
is this: we don't have enough venture capitalists and those that we do have
aren't the kind that would invest in companies like "Facebook" or ones that
don't have a solid business model to begin with. On top of that, the founders
don't want to just get rich overnight, they want their company to be
sustainable at least until they're 65 and beyond, and they want the decision
making power that a startup under venture capitalists wouldn't have.

In summary: a difference of mentality, and different goals, since the standard
of living in Europe is much higher, focus is on different priorities.

------
Fnoord
Because Europe has more strict privacy laws such as GDPR.

EDIT: Well, that isn't the sole reason, but it is _a_ reason the gap may
become wider. The GDPR is a compromise I -as European- am more than happy
with.

------
jondubois
As someone who lived and moved around Europe for the past 2 years, I think
that Europe can do tech but the problem is that they are not very well placed
in terms of marketing. They don't have influence over the global media like US
companies do. Maybe that explains why the Blockchain sector is thriving in
Europe... It bypasses the typical media funnel that companies nornally have to
go through to acquire users.

------
avaika
Why is it still important?

The world borders are becoming thinner and thinner (de facto there are no
borders between first world countries at all). The companies (especially huge
tech) employ and operate internationally for years.

Even though the head quarters might be based in a specific country, it's not
fair to call the company American or European.

------
phobosdeimos
Does it matter? My country's economy is trucking on nicely. And we do tech,
ASML for one.

------
blablabla123
Most highspeed train manufacturers are European, same is true for their
deployment. Similar also holds for other „irrelevant“ technologies like Solar
Cells. We‘re sourrounded by tech, Smartphones and Laptops are just one piece

------
k__
Met a bunch of entrepreneurs in Germany.

They are either too conservative or too liberal.

So they don't do much really new or drown in chaos.

But well, being a founder probably needs extreme traits.

------
ehudla
How many tech startups were acquired by the tech behemoths ?

------
scoom
They picked GDPR instead.

~~~
jlangenauer
Imagine prioritising the privacy of ordinary people over the need for
exceptionally wealthy investors to become even wealthier.

What a sick society.

~~~
scoom
GDPR used "privacy" to get passed, but it sure doesn't protect it.

------
sbuk
I dunno; why can't the American press do subtlety, nuance and fact checking?

