

Why Germany should copy Silicon Valley's culture rather than their startups - LouDog
http://medien.nrw.de/apollo-m/2012/03/01/thanks-for-ignoring-them-homework-for-a-european-startup-ecosystem/

======
ThomPete
It's a European cultural issue. Denmark is not any different.

There are big discussions in Denmark right now about how to create growth. So
the following can be applied to Germany as well I think.

I am saddened to see that most politicians thinking is:

1\. Education 2\. Green Tech (Wind Mills and Wave Mills primarily with
government funding. Yes you heard that right) 3\. Upgrading your education 4\.
Education 5\. Innovation

All completely useless. And here is why:

1\. Less than 5% of people with higher education in Denmark starts companies.

2\. Green tech is not a thing. It's a term a vague one like UX. Let it go on
record that the next bubble will be the green tech bubble.

What we should be talking about is technology, chemistry, biology, physics and
various combinations of those.

Instead as seem to be the case in most of Europe eager to ditch nuclear (an
actually fairly environmentally friendly energy source) governments are
betting on specific technologies. Completely disregarding that it's impossible
to get any proper economy into them anytime soon.

What can I say, sigh...

3\. Denmark has a fairly large group of blue collars. Of course it makes some
sense to try and upgrade them and I am sure it helps with some of them. But
the battle to get a proper production industry up and running is simply futile
and wont work.

First of all, the danish salaries are some of the highest in the world. Danes
have some of the most protecting laws to the blue collar worker (no I am not
at all against that, just trying to explain why it wont work) That means we
are loosing to Germany and Poland and Sweden.

Danish Engineer ca. 40.000 DKK Polish Engineer ca. 15.000 DKK Indian Engineer
ca. 5.000 DKK (if not less)

Just to show you the difference here. Anyone having done outsourcing knows
that the quality can be different but it really depends on what kind of
project we are talking about.

Second. The US lost 4 million jobs to the Chinese between 98-04. In the same
period of time the chinese lost 18 million jobs to ... the robots.

Everything that can be automated will be automated and believing that we can
somehow resurrect an industry that never really where that competitive is just
pure insanity. Even engineers are loosing jobs.

4\. Yes education once again. This is just to illustrate how much the
government believe in this. Recently a study was done that showed that
companies with most Phds had the highest revenue. This was then used as a
proof to show just how important education is for the future of this country.

Now anyone who have spent just a couple of days on HN knows one of the biggest
fallacies gets called out here.

"Correlation != causation"

Of course the other take on this story could be. The companies with the
highest turnover had the most Phds hired.

The report made no attempt to claim connection between the number of Phds and
the financial success of the company. No. Leave that the to the politicians.

5\. According to our politicians we are supposed to grow from the experience
economy and through innovation. Our cultural minister even have made a "task
force" of cultural celebrities from around europe who are to travel around
europe and find out how to use art as a vehicle for growth and innovation.

Yes you heard it right. This is the kind of insanity we are dealing with here.

Never mind that saying we need innovation has as little effect on the ability
of a country to innovate as saying green tech creates green technology. The
politicians actually believe that they can intellectualize growth and
progress.

In other words. Everything that is right about SV is wrong about Denmark and
my guess most places in Europe.

~~~
_delirium
My impression (foreigner in Denmark) is that visibility and what "counts" is
some of the problem as well. For example, university masters programs track
employment statistics of their graduates, but the statistics, in many cases,
count people who start their own businesses as basically in the "not employed"
bucket, so there's no incentive for universities to promote entrepreneurship,
and to the extent they do, they get no credit for it anyway. The statistics
are basically looking for, "graduated, got a job at Maersk".

I don't think the salaries are _the_ issue, though, because Danish engineering
salaries, while nice, are slightly lower than Silicon Valley, so they can't be
the main difference.

Another complaint I've heard is that there are some issues around
entrepreneurship and the social-welfare system, because if you start a company
and it fails, you aren't eligible for the same benefits as an employee who
joins a business and then gets fired. That's also true in the U.S. (no
unemployment insurance for entrepreneurs), but the U.S. social-welfare system
is weaker so it's not as big a differentiator; losing the a-kasse is a bigger
deal. On the other hand, the fact that Danish startups get free healthcare for
themselves and employees is a plus.

~~~
ThomPete
Salaries are not _the_ issue for engineers. But for production blue collar it
kind of is. That plus the fact that automation is really starting to kick in.

I mean in 30 years from now, can you see construction workers build houses the
way they do today in most modern societies?

I certainly can't and yet some young guys today is going to choose to work in
that field because that is what they think they can manage.

I mean hell even the creative industry is feeling the heat in many ways.

Danish healthcare is a plus but I think it's only a matter of time before we
will see the end of it.

It's unsustainable because you can never put enough money into healthcare.
100% taxes arent enough to compensate.

The US system is broken in many ways but so is the Danish. It's just not
visible yet.

------
derda
I am a German engineering student. I will try to describe the situation as I
see it from here.

1\. Start-Ups are lacking incentives:

Germans are obsessed with evaluating risks and will almost always go for the
safe bet, rather the risky way. Its somehow ingrained in our culture. So the
college grad has two options: 1- Land a safe job in the industry (eg.
automotive), company benefits maybe even a company car. Thanks to relatively
good job security and the good state of the economy you can probably work
there for a long time, maybe not the highest income but good for suburban life
+ 2 spain vacations a year. 2 - You have that Idea. But there is a high chance
you will fail. You will have to spend alot of time learning company laws, tax
problems, etc. And while there is a chance that you can be a wealthy man while
building you dream product. You will spend most of your time thinking about
failure (even if you dont even have wife and kids to support). - By the time I
finished building product x (and then probably fail), I will have reached a
higher position and a company car a bigcorp - why bother the risk. Also talent
acquisitions are rarely head of, we don't have Google or Apple who will aquire
a small media/tech company for the people. Big money is in other industries
that have a higher barrier of entry than web-startups.

2\. Germans don't get the valley VC investment strategies:

Throwing millions of $'s on company's that dont have a business plan, just
because it may be the next google/facebook/...? Considering failure as the
norm, just because one of 100 company's you fund will go public. Germanys
company culture is built around long time growth and substitutability. Big
companys like Bosch ( €51billion revenue, 300k employees) are family owned
(and 92% goes into a charity). Try to explain your SV funding business model
to a german business person and he will shake his head and dont even try to
get a bank loan.

3\. Lack of entrepreneur networks:

SV is described in the way of "you can bump into a VC guy in a coffee shop and
pitch him on your idea". Everyone know everyone, several events, money
everywhere. I am not 100% up to date with the berlin scene but I dont think it
is quite there. Although universities try to built networks and encourage
students to start a company its nowhere near the possibilities of SV

4\. Perfection mentality

Also known as "Ingenieurs-Mentalität". Its also a cultural thing I guess,
especially at technical institutes / universities. If it isnt perfect you dont
even think about bothering someone else with it. Never ship something that is
half baked.

That said I consider myself an entrepreneurial person but also struggle with
those points. (Like most people on HN, I guess) I have a long list of ideas. I
sometimes start to build but stop when I realize how long the way to
perfection will be. I set myself a goal for this year to complete one project
and release it just for the heck of it. I will report when I reach this goal.

~~~
rwmj
Your first point raises an interesting issue: For an individual, working for a
start-up is almost certainly a bad bet. Most likely the company you start will
go out of business. Moderate upsides are rare. Massive gains are incredibly
rare (although obviously they're the ones everyone points to and remembers).

However for the German (US, etc) _economy_ , having a start-up culture is
valuable. That's where the future technologies are incubated and future
companies formed.

I suspect most people in the US who choose start ups and entrepreneurialism do
so because of US culture and because they wilfully ignore the personal risk.

So how does the German government overcome that?

~~~
rdl
Working for a startup is low risk in terms of getting to work with decent
tech, with smart people, etc. It also raises your employability in general.
It's higher risk financially, sure, but for a funded company, you still get
paid a decent wage while working, so that's not as big a risk.

------
endymi0n
Writing from a German startup right now, I can't quite follow the author here.
Granted - German copycats and especially the Samwer Brothers have brought some
bad feelings into the community... but Berlin is getting better and bolder
every day. It's basically almost all the goodness from Silicon Valley, but
without the hype and craze. It's a friendly, crazy and green city with great
work ethics - you don't live for working, you work for a living. Contrary to
the article, accelerators, VC funding and the war for talent have long arrived
here for sure - but it's all still pretty calm and well-thought out. Maybe
there's still a little less innovation here, but on the other side, it's much
harder to get funding without a business model that makes sense. Color
definitely wouldn't happen here. We got all the cool things and conferences,
but I'm pretty glad we're doing it the German way: No hire and fire, health
insurance for everyone and the income disparity feels just so much more just
compared to the states. I once thought of moving over to Silicon Valley, but
by now I'm pretty glad that everything I want has moved over here without
bringing the TSA, mass surveillance, corporate politics, discussion about the
validity of evolution, a deadlocked two-party system and a growing
helplessness over the unstoppable and unlimited capitalism that's ruining
society already over there. All the best from Berlin - and if you feel the
same, maybe it's time to come over? Dom

~~~
davidw
There are no corporate politics in Germany? That's pretty awesome.

In all seriousness though, you're cherry picking some of the bad stuff about
the US. I'm sure if you wanted, you could do the same thing about Germany or
anywhere else. For instance: the weather, the lack of anything remotely
resembling a mountain near Berlin, and, most importantly, the lack of good
Mexican food.

~~~
zalew
> the lack of anything remotely resembling a mountain near Berlin

Bavaria and Switzerland are not _that_ far. Polish Sudety even closer and much
cheaper.

> most importantly, the lack of good Mexican food.

Tex-mex is an American obsession. In Europe we have mediterranean. A doner-
kebab is for us what a taco is to you, and say what you want, but kebab is a
snack there's no shortage of in Berlin.

~~~
davidw
Perhaps I've been conditioned by living in Europe, but my definition of "not
far" means I can ride my bike to it!

Kebabs are great (we have them here too in Italy), but sorry, I'll take good
Mexican food any day:-)

~~~
derrida
The kebabs are something else in Berlin. Much more like a Taco than those
greasy things you see elsewhere in the world.

~~~
zalew
Greesy kebabs with a lot of sauce 'spicy, mild or mix?' are a European
invention I think. I've been to a few middle-eastern countries including
Turkey and haven't seen sauce in kebab _ever_ (still they give sauce in
Berlin).

~~~
derrida
That is because they are Shwarma's and are completely different again. The
kebab is a Berlin invention (according to TimeOut Berlin). Which makes sense,
a marriage of the German sausage + bread culture with some dish from the
middle east.

~~~
zalew
> The kebab is a Berlin invention

Wait, wat? Kebab is middle-eastern food with hundreds of years of history.
'Doner kebab' (the popular one in a bread) is Turkish. German sausage has
nothing to do with it.

There are lots of ways you can serve kebab/shoarma and none of them are
'wrong' per se. The popularity of doner and roll is probably just a matter of
convenience for customers and business owners. The sauce thing was just an
observation, and frankly I don't know how what local influence made it served
that way in Europe.

~~~
derrida
_according to Time-Out Berlin_. Yeah, according to Wikipedia, I'm wrong. Never
trust a travel guide. I've been to the Emirates and what they have there is
entirely different to what they have in Germany. Australia, France and the
Czech Republic have something different, which is 'the greasy thing'.

~~~
zalew
and that's what I said. cultures mix, cuisine is imported, adapted to local
preferences, exported again around other regions, that's how it works. You
were only wrong saying that kebab was _invented_ in Germany, it's just that
there's where the modern well-known in Europe Turkish doner started do gain
broad popularity - that's probably what your guide meant. I assume it was the
saucy thing we have all around Europe.

------
toyg
One main difference between Europe and the US is that wealth concentration in
America is much, much higher than in Europe.

This is one of the main forces behind the VC scene: for a multi-millionaire,
throwing a few hundreds here and there to some young gun is nothing, even if
you lose them all you'll still have your Porsche and your boat.

In Europe, wealth is more distributed, which means that, for many, a bad
investment of a few hundred thousand euros can make a real dent in the family
fortune. We have less poor people, but less uber-rich people as well, it's a
trade-off; it so happens that this trade-off works well with heavy industry
but less with the super-dynamic "business at the speed of light" of this new
millennium.

This is not to say we should cut some slack to the uber-rich (most of them
come from aristocratic families and don't deserve to be where they are
anyway), but rather that we need to find different, _european_ ways of
generating seeding resources for startups, and that's a bit of a bitch.

~~~
gaius
I would say _liquid_ wealth. There are plenty of very, very rich people in
Europe, but their wealth is tied up in land, property, art, etc that can't
easily be "invested".

~~~
Drbble
Goldman Sachs can securitize those for you, easy. The US economy was entirely
built around _houses that no one lived in_

------
NameNickHN
If US based startups would start globally instead of only nationally, they
wouldn't have the "problem" of copycats. It's the same with movies. If the
movies would come out globally, people would have less incentive to pirate
them.

And even if there are copycats, so what. I didn't hear ebay complain when they
bought their German equivalent. It saved them a lot of time and know how, if
not money. And Facebook certainly doesn't complain about their German
"competition".

I'd say live and let live. Also: If you can't beat them, just buy them.
Otherwise ignore them.

------
blumentopf
Tell HN:

I participated in a German Government startup program in 2004/2005 called
EXIST-SEED (nowadays called EXIST Gründerstipendium). I wouldn't recommend
this to anyone. The funding I got was relatively modest (35 kEUR in my case --
as a consultant I now earn more than that within 4 months) and I was drowned
in bureaucracy. To this very day, I am arguing with the German IRS because
they do not want to treat a failed startup as a business and thus refuse to
deduct the expenses I had. I literally ended up spending more time with
bureaucracy than doing real work.

If you compare the modest startup funding provided by the federal government
to the amount spent on the German cash-for-clunkers program in 2009
("Abwrackprämie"), which was 5 billion Euro, you get an idea what the
government's priorities really are: Firstly big (automotive) corporations,
then a lot of nothing, then the Mittelstand, again a lot of nothing, and then
as an also-ran the startup scene.

You're ultimately fighting an uphill battle as a founder in Germany: A tiny
private VC scene, meager support from the government and a mind-boggling
bureaucracy.

I don't see this changing so I drew the frustrating conclusion to become a
consultant fleecing fucking big corps.

~~~
pgeorgi
And then there's the other issue that a failed founder in Germany is pariah.

From reading here and elsewhere, in the US you seem to get a reasonable chance
(and maybe even some recognition) for having tried to start a company (and
managed to keep it alive for some time).

Here, you failed, so you will fail, so why should anyone employ you?

~~~
route66
In a (possibly flawed) attempt to cheer you up: be aware that you basically
say

\- failing is frowned upon in Germany

\- I do not want to run that risk

\- so I will not try to start a company

Thereby effectively continuing the mantra "do nothing you could fail in".

I think that entrepreneurship has got a lot to do with "acting in spite of"
and would not assume the situation in the US (I don't know personally) to be
like there are happy parties where people are celebrating crashed
businesses...

~~~
stdbrouw
Definitely agree. Belgium has a similar culture to Germany and despite mucking
around quite a bit, none of my friends or family has ever made a disparaging
remark about my entrepreneurial vagabondry. They probably think it's weird for
me not to just go work for BigCorp, and it's not like I get a ton of support
from them, but they do try to be encouraging even in the face of failure and
they certainly don't frown upon it.

There's probably a kernel of truth to the idea that Americans are more
entrepreneurial and less judgmental than your average European, but the idea
that, in Europe, failure turns you into a pariah seems like a nasty myth that
becomes real simply through repeated mentions.

------
chaostheory
"People in SV are not afraid to fail. In fact, having failed before is
considered a great quality. If you haven’t failed, you’re either inexperienced
or suspicious. Startups try, fail, try again, pivot, fail and try again."

I think aside from maybe regulation, this is the biggest issue that Germany
has and it's also the same one that Japan faces. The fear of failure and
losing face. I'm not even sure that you can change this short of a few
decades.

~~~
alan_cx
In the UK, if you fail, its pretty much game over. You get black listed and
pretty much, that's the end of it. If you fail and go bankrupt, then set up
again, you are almost seen as a fraudulent criminal. In the US, it seems to me
that you can try and fail as much as you like, as long as you keep trying and
don't get criminal. Trying seems to be enough to get some level of respect. It
is absolutely one of the things the US does so much better than here in the
UK, possibly all of Europe.

(I'm normally critical of the US, so its nice to take the opportunity to offer
praise!!!)

~~~
mjw
No doubt there are some differences with the US here; the start-up career path
perhaps isn't necessarily so widely known about and recognised outside the
tech community, nor is it quite as breathlessly cheerled as in the bay area.

But still, this isn't really the UK (or at least the London tech scene) which
I know. A failed tech startup is very different to personal bankruptcy or some
shady business operating on the edges of the law. And I think a lot of the
tech sector here see it as a positive thing if you've learnt from it.

~~~
ukd1
+1 to this; failing is very different to bankruptcy of you or your company.
Knowing when to quit is a good skill.

------
Jun8
As a first order of approximation, I think there are two important dominant
factors affecting proliferation or lack thereof of startups in a country:

1) _Social Rule Obey Factor_ : This signifies how the people in the country
are willing to follow social and legal rules, even when they appear frivolous.
This factor obviously is hard to quantify, but an easy heuristic to compare
countries in this dimension is to look at their traffic pattern: In countries
like India, China, Russia, Turkey the traffic is mess, due to the fact people
do not really care about the rules, e.g. "if other people obey the rules I can
get ahead with not obeying". Having a high SROF, i.e. "follow the leader type
society" is an impediment to innovation because innovators and entrepreneurs
are by their very nature anti-authoritarian and like to go against the rules
(e.g. Feynman's safe breaking adventures at Los Alamos), this is sometimes
called the "hacker culture". On the other hand, too low a SROF leads to
anything goes type societies which may be detrimental to developing important
aspects of the entrepreneurship culture, e.g. IP.

2) _Entrepreneurial Spirit Factor_ : This is what people have discussed in
their comments here, a lack of fear of failing, taking risks, etc. The ESF of
a society correlates highly to historical factors, e.g. in the US it's high
due to the "pioneer spirit", in Israel due to the sense or urgency (surrounded
by enemies). It's very hard to boost up ESF in the short term. As Adam Shand
has put it: "We can't create a culture of freedom and innovation, but we can
build a network which fosters its growth", i.e. you can only try to nourish
ESF by creating secondary tools (e.g. VCs, entrepreneurial networks), you
can't increase it directly.

So, I divide countries (again, simplifying things, of course) as follows:

    
    
        |------------|--------------|---------------|
        |            |   High ESF   |    Low ESF    |
        |------------|--------------|---------------|
        | High SROF  |  US          | Most of Europe|
        |------------|--------------|---------------|
        | Low SROF   | India, China |               |
        |------------|--------------|---------------|
    

The US is in the best spot, having both factors high; however, its SROF is
just at the Goldilocks point, neither too high as to stifle innovation or too
low to lead to chaotic behavior. This is achieved by the existence of very low
SROF cultures, i.e. SV in an otherwise high SROF country. Countries like India
and China (also Russia, Turkey, Brazil, etc.) have a high ESH but low SROF,
which makes things chaotic and slows down the set up reliable entrepreneurial
institutions. As mentioned in most of the comments here, Europe has to get
over it culturally induced low ESF. Again, I think, the reason is cultural:
Most European society historically had rigid class-based societal structures
(e.g. even today people are generally classified by their vocation) so there
may be an instinctive aversion to people who want to shake the structure and
cannot be classified easily. This, of course, doesn't explain the success of
India, with its rigid caste structure. I think the very strong _jugaad_
culture (<http://en.wikipedia.org/wiki/Jugaad>), which is also prevalent in
countries like Russia and Turkey may explain this. As raganwald emphasizes,
"At either end of the educational spectrum, there lies a hacker class".

Who is in the bottom right cell? An example would be most Arab countries, with
dismal levels of ESF (not needed due to oil money).

------
andreasklinger
Context: I founded companies in CEE and moved to London.

Many people mention mindset and cultural attitude in the comments. To me
"mindset and culture" are just symtoms. The reason is very simple:

The markets in europe (compared to the US) have: Same downside. Smaller
upside.

This leads to less risk friendly and safer (slower) patterns and systems.
Incorporated over centuries this leads to cultural attitude and mindset.

It's not that this is the best attitude for doing startups. But it is a
(market) selected attitude for doing business within these markets. The best
ways to break this: Minimize your downside (skip problem-solution phase by
copycating) or don't be limit to the market (by far harder due to media (and
ultimately network) bubbles).

------
Roritharr
June 1.-3. i'm organizing a Startup Weekend in Frankfurt Germany, to get a
strong Startup culture and community started here, and this will include more
events in the future. I set out to do this not to copy the culture of silicon
valley, rather the culture of the Amsterdam Startup scene and especially the
Appsterdam Initiative.

When i was at Startup Weekend Amsterdam and got to meet Mike Lee and others it
occured to me that this was a concept that was much more realistic for a
european and especially german city.

In Germany getting VC Money is not easy and you have to be very careful how
the deal is done because of Tax issues. Taking risks is very unpopular in
Germany and failed startups are viewed upon as wasted money and time, failed
founders are looked upon as pariahs.

To combat this all that helps is a very strong community that has a common
denominator where people share their point of view which is different from
most of the people around them and help them with problems that are common
only to startups in germany.

Non-Startup-event-wise our city isn't bad. Our Webmondays draw >100 people,
our Barcamps over 200. We've got a local Hackerspace which offers 3D Printing
Workshops among other things. We have a strong web culture, although Co-
Working spaces are still being set up and are still more expensive than i
would like them to be.

Frankfurt is known mostly as a banking city and some Venture Capital Groups
are based here. It's not ideal as office space doesn't come as cheap as
elsewhere, but the infrastructure in Frankfurt is superb and I've never met so
many qualified Freelancers as in the Rhine-Main-Area.

The founder of one of the current YC Company Popset, Nicolas Bös, is from
Frankfurt and very excited that we're building something here, which comes to
show that we have the potential here.

------
ecaradec
As a french, I get very strange feeling reading comments here. Germany is
presented as an example by French gov for it's better industry (presidential
elections are in May ).

Does that means that Germany is not better, or that France is even worse ?

~~~
DasIch
There is a huge difference between the state of the economy in general and the
state of the startup scene.

That being said if we compare by economic growth I'd expect Germany and France
to lead in Europe at the moment. Speaking as a German I have the impression
that the people in France are underestimating there economy somewhat.

------
ukd1
I think one of the reasons there are more copycats in Europe, mainly non
English speaking Europe, is because of the low number of US startups making
their product multi-lingual, marketing or attempting to support those markets.

------
DasIch
I'm currently in the 12th grade of a Gymnasium in Germany and while we get a
lot of information on jobs, possible areas of study and things you can do
after studying at a university creating or joining a startup is not even
considered.

The risk is generally considered to be so high that you have to be
unbelievably good at what you are doing, insane or most likely both to take it
under consideration.

~~~
thomasbachem
That's exactly why I and a friend go into schools and talk about
entrepreneurship for some years now. They won't ask for it, so we call them.
But only in Cologne right now.

------
UK-AL
I think the culture is too different, I also think their education system has
something to do with it, relatively few go the gymnasium and then to
university(thus study formal computer science) where as in the US, university
is something everyone is expected to do. I am not sure how their vocational
education is for computer science, or even if their expected or encouraged to
start up on their own.

------
zalew
cache, since it's down:
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for-ignoring-them-homework-for-a-european-startup-
ecosystem/&hl=en&client=iceweasel-a&rls=org.mozilla:en-US:unofficial&strip=1)

