
Zombie Startups in Europe - seapunk
https://threader.app/thread/1047037881892655106
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HugoDaniel
I got to pt4 with my solo startup/project

`The first step is inevitably to raise money from dumb/ignorant investors who
couldn't care less about your startup: that would be the government /
unemployment benefits in France / tax-incentivized angel investors in the UK.

It buys you 12-18 months of runway.`

After it I realised it has no market and no interest from anyone.

Now I am in a mixed bag of thinking that I did well in stopping it at an early
stage and dealing with the feelings of having failed/wasted a lot by pouring 2
years in it.

Such is life :/

~~~
lifeisstillgood
Who are these tax incentivised angels in the UK??

~~~
beejiu
The UK has two tax-efficient schemes for investing in startups: SEIS and EIS.
For some perspective, if an 'additional rate taxpayer' invested £10,000 into
your startup, they are only actually risking £2,750 due to tax relief (source:
[https://www.crowdcube.com/pg/seis-tax-
relief-42](https://www.crowdcube.com/pg/seis-tax-relief-42)). They get
additional relief on capital gains tax.

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ttoinou
Nicolas Colin :

    
    
       everyone knows them in town because they're spending
       their time speaking about entrepreneurship to ignorant
       people gathered in salons
    

Well isn't that what TheFamily is ? [https://www.thefamily.co/about/nicolas-
colin](https://www.thefamily.co/about/nicolas-colin)

~~~
Nicolas_Colin
The problem is not the salon itself. Rather it's zombie entrepreneurs being
all over it, and non-zombie entrepreneurs wasting time in it trying to catch
up.

Neither is happening at The Family: our portfolio entrepreneurs are busy
working on their product/their customers and are on stage only when it makes
sense from their roadmap's perspective.

As for the zombie "entrepreneurs de salon", they are not allowed as speakers
at The Family.

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franciscop
This is brutally true in Spain as well. I used to love everything I read about
startups, being lean, iterating, etc. But seeing Valencia/Spanish startup
ecosystem... yikes

I have only seen up close one startup (out of dozens) with actual profit that
could sustain itself if VC money was to withdraw. From my University friend
who I always though he could do it.

------
dvfjsdhgfv
It's not just in Europe, it's mostly the same everywhere, with very minor
modifications. I'd even risk saying that most startups are like this, i.e. at
one of the stages described in the article - only a small minority are
actually successful.

~~~
tumetab1
Unsuccessful startups, for me, are not the problem. The problem is:

a) venture capital coming from government which have very low incentives to
not waste money (their goal is usually only to have X amount of start ups) -
which leads that capital and talent is diverted to this bad startups

b) since they are zombies, they don't die quickly enough, the resources waste
keeps going on (capital, talent, office space, bandwidth, etc.)

~~~
charlesdm
Governments have secondary returns -- VC coming from government generally has
restrictions (i.e. the money has to be spent on employees). Employees pay
taxes. Those people spend their money mostly locally. Even if every euro
invested is lost, it'll still be profitable in most cases (because everything
eventually flows back into the local economy).

~~~
stickfigure
This sounds eerily like the broken windows fallacy.

~~~
charlesdm
Yet this is how these things are set up. I know a VC fund manager solo
managing a €50m fund, of which €20m came from the European Investment Bank,
and €20m came from the local government. He put in €200k. Just €9.8m came from
HNWIs.

So he's getting 2% on €50m for 7 years, to invest €40m government money with
pretty much no expectation of any return. Not bad, not bad at all. I'm sure
"the people" would be outraged if they knew. But they don't.

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tw1010
So glad people are talking about the deceptive strategies EU companies uses to
mimic those in the US. It's as if there's a deep cultural force against acting
like US startups here in the EU, which I frankly don't like and would like to
see some push against, and I think all parties will be happier once we've gone
through the phase shift.

~~~
k__
I don't think this is a special EU force.

Only the fact that most people can't deliver.

Sometimes it's the dev and you end up with crap instead of a product.

Sometimes it's the CEO and you end up with a consultancy instead of a product
business.

~~~
jacquesm
And sometimes it works.

------
raulgalera
"The first step is inevitably to raise money from dumb/ignorant investors who
couldn't care less about your startup: that would be the government /
unemployment benefits in France / tax-incentivized angel investors in the UK."

I have seen many entrepreneurs who just kept repeating step #1 for years. They
would hop from one startup accelerator to another, joining as many government
grant programs as possible (Startup Chile et al.) without ever really building
an actual business.

There's one particular case I know of someone who managed to get more than
$300,000 in grants in just a couple of years.

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mmjaa
This is so true of the Austrian startup scene, I had to double-check that it
wasn't written by someone I know.

IMHO, the worst thing a startup can do in Austria is get involved with AWS
funding .. state funding of tech. Its just so deflating, it removes the
incentive to actually be productive and work on the needs of the end-user; the
customer. This is not something Austrians, at least the startup generation,
get right .. and I feel very strongly that its a consequence of the welfare
generation, who equate "got free money from the government" with 'success'.

I'd love to see the funding dry up in the scene. There are so many innovative
groups here in Austria, but they're just not hungry enough. They don't have
the drive, or the motivation, to launch in their markets and do what needs to
be done to _service_ people. Service is not a part of Austrian culture. But, I
feel, it never will be for as long as state welfare is the first handout
expected by founders.

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shokunin
This is cargo culting, is it not? Going for the form, but not the essence.

~~~
mmjaa
_All_ startups go through a cargo cult phase. What differentiates the
successful ones from the non-successful/zombie ones is that it is recognised
as a phase, and people work damn hard to get out of the cargo-cult zone.

When you have a handout to keep you fat, this isn't really conducive to
recognising the cargo cult fallacy. It 'feels' like you're successful at your
cult, because after all: money is there, and people have given it to you, i.e.
the planes arrived and cargo fell out of the sky.

But this is so deceptive. The only way to escape the cargo cult phase is to
actually build the real things which real people - strangers, beyond the
horizon - actually want. Not, those things your local government bureaucrat
wants but rather the things that non-native, out-of-scope _real customers_
want.

Recognising the cargo cultism takes real balls. Not a lot of people have the
balls for it, alas.

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antpls
Hey ! I live in Paris and I went to some presentations at The Family some
years ago. I heard Sam Altman speaking there, thanks for organizing it.

Regarding the state of software startups in France, how could you compare it
to the Silicon Valley? I guess the same phenomenon is happening in the USA.

Startups arent only about softwares, entrepreneurship already existed in other
sectors. Correct me if I'm wrong, but The Family is exclusively about
softwares.

------
DoreenMichele
_[Note that nobody has paid for a product yet.]_

If you don't have "paying customers" in some fashion, you aren't really in
business. The rest is just window dressing, basically.

 _An even longer runway!_

There's your "Universal Basic Income" right there: Money for nothing (and your
chicks for free, no doubt). See, also, _Duke Nukem Forever,_ where they
basically didn't ship until they had to because they were running out of
money.

I think an essential source of friction in the world of business is there are
two ways to make money:

1\. Add real value such that if someone pays for your product, you both walk
away better off. The world is enhanced by the existence of your
company/product.

2\. Milk people for money in some social/commercial variation of strip mining
where you extract resources for yourself and don't really make the world a
better place. There are externalized costs of some sort where the world is, in
the aggregate, worse off because you got your needs met in the short term.

Real startups are the first thing. Zombie startups are the second thing. And
friction over "Yes, but am I paying for something that genuinely makes life,
the universe and everything better or am I paying for some blood-sucking piece
of shit?" is the essence of a lot of criticisms of business, capitalism, etc.

~~~
guicho271828
Ended up spending 30 minutes of my life for reading
[https://en.wikipedia.org/wiki/Development_of_Duke_Nukem_Fore...](https://en.wikipedia.org/wiki/Development_of_Duke_Nukem_Forever)

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imAsking9836
This seems like a good place to ask: What does it mean for a startup to go
into a Series A, B ,C? Is it like some kind of IPO? I have never understood
how all the finances around startups work

~~~
lingz
It usually means that they raised a new significant round of investment from a
new group of investors at a new valuation.

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bambax
All true! but "the healthier the ecosystem" should read "the richer the
ecosystem / the more money there is in the system", which is different than
"health".

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arkadiytehgraet
On a completely unrelated note, why does this website have to change the way
my scroll works, making it unbearably slow? I wonder, what is the motivation
behind this decision?

