
Don’t worry, Europe: you’re about to get a new beginning - iProject
http://gigaom.com/europe/dont-worry-europe-youre-about-to-get-a-new-beginning/
======
Zenst
"Europe has trailed America for decades, partly because of a tricky
environment for entrepreneurs." Disagreeing with that from the start or the
article. It realy depends upon what industry you look at, many sucessful
entrepreneurs all around the World. Some countries are more suited to
enableing them in one area as apposed to other countries and also the feild.
Writting books, software and alot of inventions can be done with a extreemly
low startup cost. So without clearcut examples it is hard for me as a European
to understand. I will accept VC/finance may be easier or was easier in America
for some feilds and still is, but a entrepreneur is by definition somebody who
trancends the limitations that are normal and as such stands out.

Goverments with regards to getting involved in Buisness do it in many ways,
grants for research helps in a area that creates buisness's without directly
doing so. Buisness's that are well extablished and come to a country can deal
with goverments for TAX breaks, no startups/new companies can realy do that or
leverage that area of govermentale assistance, they get breaks like all new
companies.

As for the rest of the article is is realy just focusing lossly upon
technology and offers nothing tangable to highlight things. If it had a
interview with somebody who tried to setup a technology company in europe and
then endedup going to america to do things as it was easier, then the article
would have made more sence and of had a good example.

Given the author was involved with Messagelabs who's HQ is located in the UK
and not the USA, then I would of expected more references to the direction the
article takes. More so as that company would seem to highlight against the
article as it was started in the UK, grew well, sold to Symantic for large
pile of £'s and not $'s indicating a succesful startup in a country thats in
Europe.

So again can see why I disagree on many levels with this article, sorry.

~~~
omd
Investors are frustrated that they can't replicate the success of Silicon
Valley here in Europe, but our governments aren't the ones to blame. The
environment here is different because the people want it that way. It's a
different culture with different priorities and different goals.

Just as Hollywood could only have become what it is in the US because it fits
the (West Coast) American mentality, so too could a Facebook or Twitter or
Instagram only come out of the American way of doing business. I don't see
anything wrong with that and I've been able to do business here for almost 20
years. The trick is to not treat the environment here as something it's not
and has no intention to become.

~~~
im3w1l
>a Facebook or Twitter or Instagram only come out of the American way of doing
business.

I find this statement hard to believe. There are many successful companies
from other countries. What about F/T/I is different, and could only have come
from the US?

~~~
saurik
All three of these companies are built on a foundation of a bunch of users
frantically sharing lots of content with each other, as fast as possible, for
free; the result is something that may or may not actually have any value at
all, despite insanely high valuations from investments and acquisitions.

In a way, the question of whether these companies are even "successful" at all
is actually an important one to consider: they aren't terribly profitable (or
are even operating at a loss) and, like many other Web 2.0 companies, are
being held up by a promise that "with this many users, we will make money".

Yet, even when you reach the size of these companies--Facebook and Twitter are
both larger than the entire possible network connected market in 1998 when
these dreams were so horribly vivid--you _still_ are in a horrible position of
"ok, but how do we make money? we were told there was money :(".

Now, I'm not from Europe, but I get the impression talking with some people I
know from there (who may just be biased or romanticizing) that this sort of
insanity simply doesn't play as well in that market: that people think through
their monetary decisions a little longer, and are less likely to be tricked.

Meanwhile, people in Europe really do seem to care more about information
retention issues, and have passed numerous laws (sometimes ones that people
consider quite over-the-top) that indicate a mindset in opposition to this
"share everything about you as fast as possible so it can be monetized"
concept.

So, if you are wording your statement or in any way reacting to this premise
from a "how dare you insult other countries like that" mentality, you might
should attempt to recast the position as "what about these other countries
makes them better than us and less likely to waste their time building these
things?".

(The same argument applies to the other example: many people consider the
ideals that lead to Hollywood to be founded on a combination of narcism and
rent-seeking; a ton of people go there and spend their lives in pursuit of
something that will never work out for them, slowly violating more and more of
their personal morals and boundaries in the hope of getting a little closer to
their dream.)

~~~
geoffschmidt
> "we were told there was money :("

People invest in services like Twitter knowing that there is a chance that
they might not be monetizable, but believing that if they turn out to be, then
the payoff will be enormous. So the expectation value of the return is still
high.

Let's say I give you a box and tell you that inside is a social media company.
You know that the achievable revenue per user could be anywhere from, what, a
penny a month to a dollar a month -- two orders of magnitude of variability.
You know that the achievable audience could be anywhere from, say, 10 thousand
users to 1 billion users -- five orders of magnitude.

So if you want to determine how much you would pay for the contents of the
box, you should try to learn about the potential audience rather than the
potential revenue per user, because the former completely dominates the latter
in the expected value computation.

Put another way -- how much would you pay to flip a coin where heads you get a
billion dollars, and tails you get nothing? If you're allowed to purchase more
than one coin flip, and the coin flips aren't too correlated, and you have
access to efficient capital markets, probably close to half a billion dollars,
am I right? :)

~~~
dmorgan
> _People invest in services like Twitter knowing that there is a chance that
> they might not be monetizable, but believing that if they turn out to be,
> then the payoff will be enormous. So the expectation value of the return is
> still high._

Yes, this Casino capitalism, we don't like it much.

~~~
stickfigure
_Yes, this Casino capitalism, we don't like it much._

...and by failing to recognize that all human activity worth doing carries
risk, you have invented "bunker capitalism".

------
noelwelsh
Last time I checked Europe was not one country. The business environment in,
say, the UK is very much different to that in, say, Germany. It's hard to take
articles seriously that speak so broadly and vaguely about such a diverse
continent.

~~~
TazeTSchnitzel
There's a rather irritating trend to treat the EU and Europe as the same thing
(they aren't), and to treat the EU as if it's a country. While yes, some
things are similar across the EU because of legislation, there are still
significant differences between different countries.

~~~
TeMPOraL
The same applies, IMO, to India and China, both having twice the population of
Europe.

~~~
TazeTSchnitzel
I don't know about India, but it's a single country. So is China, but in
effect it isn't, because of Hong Kong and Macao having quite different laws.

------
lispm
I'm from Germany, where the 3.8 million SMEs are the backbone of the economy.
The famous Mittelstand competes worldwide and is considered in many areas to
be among the world market leaders.

It could be that many of these companies are not doing sexy web stuff, but
"uninteresting things" like machines and tools - with a lot of software to
support it.

~~~
radicalbyte
German work culture is very different from Valley culture. You have a very
strong hierarchy, to a point where it stifles creative thinking.

That works for certain problems - such as manufacturing and logistics (only in
Germany can they make a motorway 1-way for 4 hours in a day because there's a
big conference or football match on).

It's just terrible when you want to be innovative, and aren't sitting on the
"top".

The Netherlands is totally the opposite, it's very flat, creative, and people
spend all of their time arguing instead of Getting Things Done. Which explains
why there are a surprising number of Dutch start-ups here.

The UK is a little in between.

France.. I understand from a French colleague that they can be amazingly
creative and disciplined. Unfortunately the people are all to ready to strike
if they think that they're not getting their fair share of the income. Now I
don't understand why that's so different than the Valley - shouldn't they
accept their fair share of stock, as per all good start-ups?

All of Europe suffers from the staffing problems: people are really expensive,
and have a large number of rights. It's very hard to sack people, and when you
do you have little choice as to who goes (last-in-first-out).

~~~
sentenza
I think I have to disagree here. From my experience, working as a team is the
centerpoint of German work culture. This includes giving each member of a team
the oportunity to contribute in discussions and then also taking their
suggestions seriously. The hierarchy is there, but rather at the same level or
below the level of most other European countries.

In France, on the other hand, hierarchy is very strict, including within a
team. Supposedly, this is caused by the French higher education system.

Taken together, the German and the French model often produce horrible
failures when a French company tries to expand into Germany. If there is a
problem to be solved within a team, the German Engineers/Workers will expect
to hear the following at a meeting: "Listen guys, we have to change this and
that, how do you think we could do it?". A French manager, however, is trained
to walk into the meeting and say "We are now doing it like this.".

Generally, I would recommend to stop associating strict hierarchy with
Germany. Things have been changing for at least 40 Years now and in many
fields (probably not all however) the amount of hierarchy is "normal". Things
like pulling rank are observed rather seldomly in the technical fields. If you
want to see how these things used to be a long time ago, you might want to
look at Austria.

Also, if you want a reason for why there is no SV-like feel to any of the
German technology "hubs", I'd suggest risk-aversion as a reason. If you asked
me what the most central collective character trait of todays Germans is, my
answer would be risk-aversion. When you tell a German what he can gain, he
will ask you what he could lose.

On a side note, be careful when forming an opinion about Europe if your only
fluent European language is English. Things might look very different on the
other side of the language barrier. When talking about Germany, for instance,
even the most carefully written publication from the UK will have inaccuracies
in it. The way in which todays Germany and the Germanys past are convoluted in
public discourse in the UK will influence anybody living there, even if he
actively tries to avoid it. On the other side of the coin, natives or expats
that live in a European country and tell you about it also have narratives,
usually heavyly influenced by how they want to see themselves and their
nationality. You basically can't trust anyone.

~~~
radicalbyte
> Generally, I would recommend to stop associating strict > hierarchy with
> Germany.

I work for a French/German business, I live in The Netherlands but I'm
originally British. I work daily with a team from UK, Germany, Netherlands,
Denmark and France.

The German team is by far the most hierarchical. After living in The
Netherlands for the last several years it really makes an impression working
with Germans.

For example if there's a problem, and it's the responsibility of the manager,
but the manager is away: nothing is done. No-one criticises bad management.
They do what they're told. No questions.

In my experience of The Netherlands it's different: if someone makes a stupid
decision, you go drink a cup of coffee with them and explain it to them. You
don't hide behind organisational lines.

It could be a company thing: but I've worked with Germans in the past, and we
had the same issues then (granted, this was back when I only spoke one
language).

> On a side note, be careful when forming an opinion about > Europe if your
> only fluent European language is English.

Good point. I'm fluent in Dutch and English. Becoming fluent in your 2nd
language changes your perspective, broadens it.

For me it has stopped me making assumptions: experience first.

~~~
sentenza
Ah, I think I understand what is going on. I've never been in a situation like
you describe but I have heard from friends and family about such work
environments.

Here is my take on what causes the kind of behaviour you describe: The
flipside of German teamwork culture is that it is very hard to restore a
dysfunctional team back to how it "should be" once the trust between
engineers/workers and managers is lost. After a few instances of people who
tried to contribute getting burnt and a few seemingly random but destructive
decisions by management, people go into "bunker mode". This means: Serious
ass-covering and everybody just doing as they're told (the term for this last
symptom is "Dienst nach Vorschrift"). For practical purposes, this is
identical to a strict hierarchy, as you will have to go through official
channels to get anything done.

For a engineering team or engineering department, this can cause long-term
damage. People in Germany are much more reluctant to quit a safe job and
search for another than people in the US, so the disgruntled workers will just
stay there and perpetuate the bad situation.

There is actually a valuable lesson here for anybody that comes into a
managerial position within a German company: In any large organization there
is a team or two that has these kind of problems at any time. Hovever, if you
get the feeling that this is the rule rather than the exception, the culture
of that organization is dysfunctional and in nine cases out of ten that
organization is also underperforming.

------
codex_irl
What a load of entitled nonsense, this article is nothing but an unfounded
rant IMO. By generalizing "Europe" as a single market / country - which it is
FAR from in reality, the author has demonstrated that they really don't know
what they are talking about, no entrepreneur in Europe would generalize in
this way. Each country has its own set of unique laws, challenges as well as
opportunities.

I have founded companies in Ireland & never encountered any bureaucracy or red
tape which prevented us from following our plans or accessing markets.

In fact, one of the governments business development agencies gave us free
rent in an incubator for 2 years, connected us with business mentors, used its
connections to setup some key introductions which led to our first sales which
really helped get the business off of the ground. All for no commitments or
equity stake.

------
enki
I'm far less optimistic. I was one of the most vocal and active pro-european-
startup activists before I left for San Francisco in 2009. With no capital, I
started multiple companies. Some failed, some are still active and now do
combined multiple millions of annual revenue (e.g. mjam.net). I started
Europe's first YC-inspired accelerator (YEurope) in 2006 and helped put the
current global hackerspaces movement into motion so we'd have support
infrastructure. Back then I regularly talked to european politicians up to the
president level.

The point where I left for San Francisco was when I realized that no one there
realizes that there is a causal link between wealth creation and having
wealth. They don't know they have a problem, or even should they suspect it,
they don't know what causes it.

On a recent trip back I haven't noticed any change in that - so even if they
wanted to improve something, they wouldn't know what or how. The economic
crisis provides a convenient excuse for all problems, not an incentive to
explore what's wrong.

The easiest argument against Europe for startups is sadly on an individual
level: Statistics. If you're one of the best - but not the best - entrepreneur
in Europe (500 Million People), you know that almost no one more talented than
you ever succeeded. And almost no one less talented either. In San Francisco,
both people more and less talented succeed all the time.

So statistics. It's far more pretentious to think you're so much better than
the best among 500 million, than to think you'll do well among the 8 million
in the Bay Area.

~~~
mattmanser
I really don't understand the point you're trying to make. Given your
experience I would like to, can you expand it a bit? What's the problem?

~~~
enki
That help won't be coming from politicians, because they don't even remotely
get that wealth and wealth creation are linked. And despite what OP wrote, the
fundamentals haven't changed in any other way that was perceptible to me.

I can't tell you exactly what's wrong with startups in Europe. It's no one
thing. It's thousands of things.

Unless you've experienced the Bay Area, it's probably impossible to anticipate
what you're missing. I didn't. The stuff you get in the Bay Area is stuff that
doesn't transfer over the internet - so just by reading hackernews and
techcrunch you have no means to figure out what is or could be different.

I think Paul Graham's argument (paraphrased) that all startups die by default,
but in some environments they sometimes get saved, might come closest in
describing what's happening.

I think the statistics argument really is the most solid one (though
admittedly self-fulfilling, because it means the most driven entrepreneurs
leave). Unless something fundamentally changes, any improvements to the
ecosystem will have to be gradual over a long time.

------
arkitaip
Always hilarious when "experts" lump some 50 countries into a single entity
just to draw wildly inaccurate and speculative conclusions because they can't
be bothered to do the research required.

------
brazzy
What a load of ignorant, arrogant, pretentious, content-free nonsense....

~~~
Zenst
damit, in the time I spent explaining why I thought it was a bad article you
came up with a much simpler explanation.

------
GlennS
Silicon Valley is successful because it was successful in the past. That
attracts talented people looking to make it big, and it attracts money.

You can put a narrative spin on it if you like, pin it on West-Coast
entrepreneurial spirit. Everyone likes to believe that their kind are a cut
above, after all.

~~~
geoffschmidt
Sure, if you believe there are network effects to geography, then you can
predict that there would be a Silicon Valley _somewhere_ in the world.

But why did it end up being in Northern California? Do you think that was pure
accident? Could it have as easily been Tokyo? Frankfurt? Tehran? Oxford?

~~~
dmorgan
> _But why did it end up being in Northern California?_

Because at the time it started happening, and for other reasons, the US was
the top dog in the world economy?

The 2050 Silicon Valley will be somewhere else. Maybe China.

------
Atropos
While I agree with the opinion of the article, the content is quite
superficial. Some things that arent mentioned could have a much bigger impact
in the long run than some school programming project in Estonia: \- The
European Venture Capital Funds Regulation being finalised this year \- The
agreed enddate for SEPA, the harmonization of all European Payment
Infrastructures being set for 2014...

Especially in the area of mobile payments I see a huge market potential
because of the unique structure of the EU. If you travel through Northern
Europe for example, you have the Euro in Finland, the Danish Krone in Denmark
which is pegged to the Euro and then the Swedish Krone and the Norwegian
Krone... A mobile app that would allow you to pay anything directly in Euros
without having to convert into local currencies all the time would have huge
value for the tourists - and the people selling stuff to them as well. With
harmonized payment infrastructures and harmonized legal regimes this should be
trivial to implement...

~~~
akgerber
It's tragic that almost all of the benefits of a unified currency are becoming
easily replicated by technological solutions just as all the problems of
currency union without fiscal union have come to haunt the Eurozone.

------
Zenst
Before you read the article I may suggest looking at this (
<http://en.wikipedia.org/wiki/MessageLabs> )company the author was involved
with "Jos White is a partner at Notion Capital, a venture fund focused on
cloud and SaaS startups. He was previously a founder of three companies,
including MessageLabs, which was acquired by Symantec in 2008 for $700m". Then
the article become funny.

------
jisaacstone
For the curious, there is some actual data about this kind of thing over here:
<http://www.doingbusiness.org/rankings>

The United States does rank higher than any European economy (which surprised
me) in the aggregate ranking, there are categories where it is well behind.

