
Why Is Europe Failing to Create More $1B Startups? - ThomPete
http://000fff.org/why-europe-is-failing-to-create-more-unicorns/
======
e5india
There are a couple things missing from this article that really need to be
fleshed out:

1\. You're comparing the unicorns which is like comparing the top of the
pyramid without measuring the base. In other words, where are the figures for
seed-round startups? What is the amount of capital available to startups at
the different stages in the business life cycle? Without those numbers we
can't really tell if this is a matter of investors in the EU being less
efficient in their investments or if its simply a matter of scale.

2\. The other mistake that people I think when making this comparison is in
comparing the success of the US market compared to Europe as a whole. First of
all, you have to keep in mind that much of the success in the tech sector is
highly localized. Now obviously the definition of 'tech sector' can vary
wildly but generally when we talk about The Tech Sector we mean Silicon
Valley. Almost every other state not named California has tried to replicate
Silicon Valley and met with the same lack of success you're speaking about
here. The major two exceptions are New York and Texas in that order. The rest
of the American States see the same kind of out migration of tech chasing
money that the essay sees among foreign tech entrepreneurs.

3\. Expanding on the above: on a national level we don't care if the tech
sector concentrates in California or Texas or wherever as long as it is in the
US. The EU might refer to itself as a union, but are the French willing to
invest in a tech sector centralized in Romania for the benefit of a Europe as
a whole? Not likely. Silicon Valley, as much as we celebrate the free market
aspect of it's success, also benefited from massive federal government
spending in that region that played a huge rule in establishing its tech
ecosystem back in the 50s and 60s.

edit: I've been editing for grammar.

~~~
humanrebar
> we don't care if the tech sector concentrates in California or Texas or
> wherever as long as it is in the US

Hmmm... I'm not sure that's true. For some definition of "we", it would be
tautologically true, I guess. Many states complain about paying more in taxes
than they get back in spending. California, Texas, and New York all pay more
in taxes than they get back in spending, though Delaware takes the biggest
hit, per capita:

[https://en.wikipedia.org/wiki/Federal_taxation_and_spending_...](https://en.wikipedia.org/wiki/Federal_taxation_and_spending_by_state#Tables_of_federal_taxation_and_spending_by_state)

~~~
exelius
IMO the EU is too protective of its economy to allow the kind of innovation
Silicon Valley is famous for. The EU has a default assumption of "you have to
prove that this will not be harmful before you can do it" where the US has a
default assumption of "someone else has to prove that this will be harmful
before we will stop you". The important part is that this burden of proof in
the US is not placed on a company at a time before they have revenue to prove
it. By the time they're big enough to have to defend themselves from an attack
on regulatory grounds, they have the means to do so.

Something like Uber could never have come out of Europe. A large company that
is breaking the law while competing with regulated taxis and remaining
unregulated themselves? That would _never_ fly in the EU, and Uber has met a
lot more resistance there than the US. They're only able to address the EU
market because they have a large, profitable base in the US.

In any measure, the regulatory culture in the US is much more laissez-faire
than the EU. In the US, you can do whatever you want as long as it's not
explicitly illegal. In the EU, you can do whatever you want, as long as you
prove that it's not illegal first. It's a huge difference, and it's one of the
biggest cultural differences between Europe and the US.

~~~
Silhouette
_Something like Uber could never have come out of Europe. A large company that
is breaking the law while competing with regulated taxis and remaining
unregulated themselves? That would never fly in the EU,_

This is a feature, not a bug.

We do tend to regulate some areas more in Europe than the US, but from various
on-line discussions about Uber in recent months, I have come to the conclusion
that the original problem they are trying to solve is much worse in the US
than the EU.

Meanwhile, I have no problem with requiring any service competing with regular
taxis to be held to the same standards in terms of vehicle maintenance,
insurance, checks on drivers, standardised metered pricing so passengers know
what to expect, etc. Being able to beat the incumbent because you broke the
law and took shortcuts that could affect safety is not impressive.

Also, I don't know where you got the idea that in the EU you need to prove
what you're doing is not harmful or illegal before you can do it, but you're
completely wrong.

~~~
t1lthesky
I dont know about this. I've used uber in multiple cities in the US and taken
cabs in multiple cities across the EU, and the uber experience beats cabs
hands down. Everything is more convenient - some cities you can only get cabs
in certain areas, or its really hard to find a cab, or some cab drivers are
very unfriendly, and if you dont know the city the ability to specify a
destination on the map is great. Not to mention the price is usually cheaper,
but even if it was the same price I'd still say hands down uber wins in terms
of customer experience.

~~~
Silhouette
_I 've used uber in multiple cities in the US and taken cabs in multiple
cities across the EU, and the uber experience beats cabs hands down.
Everything is more convenient_

You didn't mention which cities you've experienced in the EU, and in any case
I've no reason to doubt your experience, but all I can say is that some places
with traditional/regulated taxis don't seem to have the same problems. I'm in
the UK and I can't remember the last time I had trouble getting a taxi at
quite short notice even at a busy time of day, booking in advance is pretty
much 100% reliable around here these days, and I've never heard of someone
finding they can't get a cab in their area (unless you mean somewhere rural
where there isn't a local taxi firm, I suppose).

~~~
tluyben2
I agree with the parent; I live in the EU and use both Uber and taxis a lot in
Paris, Amsterdam, Malaga (and other cities in Spain), Faro, London; these are
all quite heavily regulated and the normal taxi drivers are definitely
generally unfriendly (sometimes they actually smell bad, will act annoyed
because the ride is too short for their taste and cough without blocking their
mouth and at one time a cab driver in Amsterdam had a baseball bat in his car
because he got robbed too many times), the cars are far worse than Uber black
cars and they are more expensive generally. In London I have been beside the
road trying to get a cab for > 10 minutes while Uber takes less than 5 in most
of the city. And I rather sit in an Audi a8 or Lexus than in a one of those
uncomfortable London black cabs for _less_ money (and free bottle of water
which just makes it even better).

Edit: in NYC & Orlando I have the same experience by the way; unfriendly cab
drivers, no seat belts, crap cars and generally more expensive. But I guess
that's not well regulated?

------
donkeyd
I've posted this before, but since I think it's relevant here:

People seem to forget that Europe is not a country. Europe does not have a
single uniting language. What happens, is that every country starts their own
smaller versions and they stay mostly within that country. If they want to
move to another country, there's often already a major player there, and they
might not have the means to kick them out.

I think the reason that silicon valley is so powerful, is that the initial
market is 325 million people who all speak the same language. Once you get the
US market, you have the size, name and means to easily start conquering
European countries. It's always about scale...

~~~
bane
So what, other than language, prevents somebody from starting only European-
wide initiatives and reaping the benefits of the entire European market?

I don't mean to sound like I'm minimizing the language issue, but it _is_
surmountable.

To contradict my devil's advocate question above:

My guess and observation is that the ROI on certain localizations isn't good
enough to justify the work needed to make a pan-European go at something. So
people pick markets where the ROI will be good: England, Germany,
France....maybe Italy, and then it all stops there. Neighboring countries with
high ROI demographics usually have speakers of those major languages as a
second language and can get by well enough with those offerings. And nobody
really targets minor dialects for big offerings.

~~~
jedrek
But it's not only language, there are real legal, logistical and cultural
differences between countries. You negotiate for content rights in the US, and
you have them in the US.

Also, by the time you've gotten enough traction in your country, there's a me-
too (or a dozen) in your other markets.

Look, you're a start up, you're running lean, you're cranking out a MVP - are
you really going to invest an extra 40% into trying to get into 3 other
markets before you're able to get your head above water?

------
andreamazz
Unicorns? Ha! It's hard to survive, let alone be successful. No investors,
convoluted laws, high taxes and complete lack of startup mentality. I'm a
cofounder of an italian startup, and the road is on an unbearably steep slope.
The bureaucracy is insane, the cost of running a small business is daunting.
Other companies refuse to work with you because in their eyes you're a scrub
(I heard so many times bullshit like "I don't know if you'll be alive in a
year or two, so I can't adopt your technology"). You can't hire someone else
because you simply can't afford it, and the best people go to the USA anyway.
It's immensely frustrating, the only thing that keeps us going is passion, but
passion won't pay the bills. Before talking about unicorns we should talk
about creating an healthier business environment.

~~~
IndianAstronaut
>I'm a cofounder of an italian startup, and the road is on an unbearably steep

Pardon the question, but I have read that organized crime is making a strong
resurgence in Italy. Does this factor into your startup or affect it in any
way?

~~~
hobo_mark
And where did you hear that?

~~~
IndianAstronaut
[http://www.economist.com/news/europe/21636046-italian-
mobste...](http://www.economist.com/news/europe/21636046-italian-mobsters-
have-spread-south-northward-mafia-middle)

------
SneakerXZ
It is quite easy question actually.

In short, US is unified market with one language, laws for business are same
across all states, one currency, one culture, low taxes, no social system and
a lot of money.

In EU you have 28 countries, 24 languages which equals to same amount of
cultures. 11 currencies. Every country got own laws so once you make business
across many countries, you have taxation and law hell. EU tries to improve it
so it is getting better but it is still very bad. You basically need a lawyer
and a translator for every country where you operate. We have quite big taxes,
social system and health system. All these needs to be payed for every
employee and it increases the operation cost.

The country that I am from, we had better search engine than Google before
Google, we had Uber before Uber and many other. Unfortunately they didn't
expand because of problems I mentioned and nobody gave investment that would
overcome all these problems. At the end when big name comes to our market they
just buy established local competitor and rename it.

Also Silicon Valley is a bubble. In Europe we never heard about most of
startups from there and we have local competitors that are established here
and do basically same things.

~~~
KaiserPro
There is one currency, there are no import taxes, VAT is per country.
(assuming EEC) This ofcourse assume that you are operating in one country and
providing goods to another. Employment is another issue.

Thats almost the same as in the US(excluding employment).

The issue of low taxes is frankly utter bollocks, yes the US's taxes might be
lower but so is your life expectancy, and productivity.

The main issue with startups is that most of europe is based on trade. What
can I sell to you for a profit, what can I invest in that will give a decent
return with a balanced risk?

Most tech startups fail. Most tech startups are clones of another well
established startup. Those startups do not make money.

Why would I invest in something with such a terrible likleyhood of return?

~~~
tosseraccount
"productivity is lower" ??? wtf?

[https://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28PP...](https://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28PPP%29_per_hour_worked)

We're Number 3 !!!!

Life expectancy appears to be about what is the European Union. U.S. is 79
years ( source:
[https://en.wikipedia.org/wiki/List_of_countries_by_life_expe...](https://en.wikipedia.org/wiki/List_of_countries_by_life_expectancy)
) ( Euro stats:
[https://en.wikipedia.org/wiki/List_of_sovereign_states_in_Eu...](https://en.wikipedia.org/wiki/List_of_sovereign_states_in_Europe_by_life_expectancy)
)

Europe doesn't have import taxes? what?

Did you fact check _any_ of your statements?

~~~
bpicolo
To be fair, all that Norwegian GDP is big oil.

------
atmosx
Lack of investors. Simple as that. Companies that run on deficit for 5-10
years can not survive in Europe. Facebook, twitter, etc. Wouldn't be able to
survive in Europe, simple as that.

ps. I hate the word 'unicorn'.

~~~
ThomPete
I hate the word unicorn too, but it's shorter than private market companies
with a valuation of more than $1 billion :)

With regards to lack of investors I don't think it's as simple as that. If it
was only a matter of investments then surely US investors or Asian investors
could just come in with the money. There is something that makes European VCs
risk averse and keep american investors out of Europe IMO.

~~~
Vexs
Unicorn just pokes my brain the wrong way, like bad kerning. On the other
hand, it does describe how rare these things are, which I feel does make it an
accurate term- it also explains how companies like this are essentially
legends.

It's an annoying term, but it works (unfortunately)

~~~
notahacker
I like the term because it implies some of the valuations might be mythical...

One of the differences is European investors tend to think on the basis that
if it walks like a horse, neighs like a horse and only actually does the same
job as a horse ....

------
kavabean
I wonder if the following could be relevant.

1\. In my experience, Europeans are less dominated by the "newer is better"
desire to constantly get the latest gadget/technology. I wonder if others
agree.

2\. European money appears to be more dominated by old money / aristocracy and
that these people like to invest within that network. Engineers are less
likely to be part of the aristocracy and are treated more like commodities
than the enabling superstar athletes they are (at least the kind that make
unicorns). I know quite a few engineers that make over $200k in SV but only
one who makes over 100k GBP.

~~~
timonv
It's not a single country. There's different ideas, ideologies and beliefs all
around. Conservative Dutch versus conservative Italian is quite different.

> 2\. European money appears to be more dominated by old money / aristocracy
> and that these people like to invest within that network. Engineers are less
> likely to be part of the aristocracy and are treated more like commodities
> than the enabling superstar athletes they are (at least the kind that make
> unicorns). I know quite a few engineers that make over $200k in SV but only
> one who makes over 100k GBP.

At least here in the Netherlands that seems to be pretty common. Generally,
investors are more conservative, and rarely take major risk. Salaries are also
just slightly above working for a consultancy, but not always.

~~~
pluma
Here in Germany a lot of the public debate is still about "new media". The
Internet largely gets thrown in a single bin with telco and TV. The most well-
known startups are in e-commerce.

Good luck founding GitHub in 2008 Germany.

------
bitL
There is no Delaware. Taxes are paid regardless of whether the company hits
$1M revenue or not, salary taxes are high, health/social insurance is
mandatory and paid for the most part by the employer, there is a minimal
salary, extensive bureaucracy and you can't sign away most of your rights if
necessary for company survival. Moreover, some countries impose rules which
make starting up with little to no money impossible (Germany).

~~~
s73v3r
"and you can't sign away most of your rights if necessary for company
survival. "

I don't believe for a second that someone signing away their rights is
necessary for company survival. Maybe you as a company leader need to do a
better job so you don't come to that point, and if you have, then maybe you
aren't fit to run a company.

~~~
bitL
This doesn't have anything to do with my preferences; frankly I am disgusted
by it, but it's a common practice in the US to sign away the rights if you
want to get funded by many VCs. So those VCs obviously prefer US as they can't
(if "necessary") do the same shady moves in Europe (yet).

~~~
ianstallings
What rights do I sign away when I bring in VC as investors? I've never seen
this as "common practice" here in the states so I'm genuinely baffled. The
most aggressive thing I've seen them is to demand a part in future rounds via
prorata rights.

------
dovereconomics
Okay, everybody will hate me.

But, why are more unicorns a good thing? Yes, there are less VCs willing to
throw money at 'SOCIAL APP n', but most startups will tend to have something
more concrete.

Plus, assuming unicorns are 'natural forces of free market' is ignorance and
hurts the economy in the long-term. These 'natural monopolies' use/abuse a
financial system created by government. In a free market(no government
intervention), they'd never be able to raise as much money and takeover as
much market cap as they currently do.

Less monopolies is not a signal of a interventionist economy. Quite the
opposite.

------
vonnik
Not sure that the premise of this article is even correct.

I can think of a lot of successful European startups -- Minecraft, Spotify,
Skype, DeepMind, the list goes on... -- and just as many startups led by
Europeans that have succeeded in America (Lending Club, etc.).

But if Europe has trouble supporting "unicorns", there are probably a couple
reasons: 1) Gaps in the funding ladder. 2) Talent flight. 3) A preference for
regulation. 4) Countries, like France, that combine technological
conservativism with social rigidity.

~~~
qiqing
The article also doesn't mention an obvious bias, that is, if a startup starts
in Europe, there are a lot of incentives for that startup to move to the U.S.
early in its life cycle.

In that scenario, the startups who become successful (and who originated
elsewhere) all get counted as U.S. successes. This would vastly undercount
both the total number of startups elsewhere as well as the number of
successful startups.

~~~
ThomPete
This is entirely correct and I know several founders who did so, but thats not
really the point I am trying to make (which admittedly I didn't make well)

The question that still stands is why they are moving the the US.

~~~
Marazan
Because the network effect of Silicon Valley is profound.

Investors are looking to fund companies with global reach that will break down
communication barriers, render national boundaries meaningless and bring us
all close together. . . as long as they are located in California.

~~~
ThomPete
Yes and so the question is why does Europe not have anything like that. It
does have some places liked London, Berlin and Stockholm but they are all
missing a few things.

This is what I am trying to explore.

~~~
Marazan
You're looking at a power law. Just like Cities in a country follow a power
distribution of population (I just doubled checked that rule for UK and they
indeed follow an almost perfect power distribution) so "Start up" areas will
also follow a power distribution - but due to the extreme mobility of start-up
founders and capital that will be applied globally not nationally.

Silicon Valley being the pre-eminent location for start-ups is a positive
feedback loop which puts it at the extreme tip of the power distribution.

------
adaml_623
A more interesting question is: 'Are unicorns good for the economy and good
for society'?

~~~
adventured
Of course they are. Dramatically so.

Are: eBay, Amazon, Google, Facebook, Uber, Priceline, Expedia, SpaceX, Tesla,
PayPal, FirstSolar, GoPro, Salesforce, Workday, FireEye, Splunk, Netflix,
Yahoo, Twitter, DropBox, Palantir, Pandora, etc. good for the US?

They were all the equivalent of small unicorns once. So the question is: as
opposed to what? All of those companies existing somewhere else, and most of
the benefits going to other nations instead (jobs, taxes, investment,
innovation)?

------
wellboy
Speaking for Germany, which is probably the "best" country after the UK, here
are a few reasons

1\. Almost no investors who have built a tech-company before

2\. Investors are very risk averse and want business models that monetize from
day 1, because that's what a business is and those are good German values.
This way, there is a strong incentivization by investors of e-commerce
businesses and strong disincentivization of startups that want to build a
great product first and focusing on scale.

3\. In the same vein, investors simply don't know the idea of growing first
and delaying monetization, which is what made the majority of "unicorns"
possible. This is because there are no German examples for that, so they could
not experience it themselves and German investors don't know or don't care
about what happens in the U.S.

4\. Fundraising takes double the amount of time here at half the valuation. I
have seen 3 companies of close friends shut down after having raised Series A,
because of exactly this.

5\. Because of all that, there is little courage or idealism of the generation
of first-time German entrepreneurs left. We have enough talent, there is just
not the mindset baked into our ecosystem what makes the U.S. so successful.
That's why most founders have to revert to building copycat e-commerce shop,
but very few of the founders (maybe 3% of those that I have met) have the goal
and the idealism to build something new that can really improve our world.

However, that's why there is a big opportunity to take the market of early
stage seed investments that is focused on high risk bets only. If you want to
do it really well, you announce that e-commerce ideas are not allowed.

------
trgn
I'll speak for Flanders, where I've lived. I presume it's not unlike some
other large metropolitan mega-regions in Europe.

Something that may contribute is that life is fairly predictable in Europe,
and by many accounts prosperous. This may sedate the entrepreneurial spirit.

Selling your labor to make a living is an entirely respectable choice. A
comfortable life all the way to the end is more or less guaranteed. Labor
protections are much more generous as well. In the US, starting a company is
partly an attempt to escape wage slavery and toxic work environments. Somewhat
exaggerated perhaps, but in the USA, the entrepreneur is celebrated while the
salaried employee is pitied. (Unless when it's election season and all suitors
crow about jerbs, jerbs, jerbs).

There is also an enormously amount of stored wealth in the existing
infrastructure and built environment, much of it owned by families or
collectively, and people enjoy continued long term robust family relations and
social support structures nearby, cradle to grave. Generations of prosperity
and fairly modest lifestyles see to that. This is lost to many Americans, when
comparing snapshot measures like average yearly income or per capita GDP. But
wealth - the measurable money kind and immeasurable chicken-soup-for-the-soul-
kind is accumulated over time and regions like Flanders are positively rich
with both. America - somewhat a cliche - MUST be sustained by growth, because
the recurring costs of the necessities are so high. The built environment in
America is basically a gigantic liability, only supported by a promise of
future revenue. And the constant geographical movement of labor breaks apart
families and existing support structures, constantly in need to be
reconstructed. In this context, the promise of a fat payout after an IPO is a
soothing balm.

------
atemerev
Why everybody is so obsessed about unicorns? You can get your own in a few
minutes: [http://unicornify.me/](http://unicornify.me/)

------
petercooper
Combine lots of languages with lots of regulatory areas and you end up with
numerous smaller communities. Add this to Metcalfe's Law and you have
disproportionately smaller opportunities for company size when social effects
are important (as they are to most Internet-based unicorns, though not to
companies Europe _does_ do well at - like car companies and manufacturing,
say).

Mathematically, say one network with size 100 has opportunity of 10,000. Ten
networks of 10 have opportunity of 100 each - totaling a far lower 1,000.

Note how several of the top "unicorns" are from China (Xiaomi, Lufax, Didi
Kuaidi, DJI, Zhong An, Dianping) or India (Flipkart, Snapdeal) - other
countries with (mostly) unified languages (formally, if not in practice) and
vast middle class populations (due to their overall gigantic populations).
Other unicorns outside of big territories are Atlassian and Spotify - but
they're valued so highly _because_ they work in the US market almost as if
they were US companies.

~~~
shas3
I think you are overstating the importance of languages. As a counter example,
one has to only look at large European companies, like Seimens, Airbus,
Philips, Volkswagen, etc. Their multinational spread transcends language
barriers. Why would this be a problem for start ups? India has several
languages and is insanely diverse. In this way it is different from China. But
what works for companies trying to scale up in India is that most people have
a functional knowledge of English.

But I think you are right on the money about regulation. For better and for
worse, the regulatory framework is far more liberal in the US compared to
Europe. Even though Indian regulations are much worse than Europe and often
more draconian, the Indian unicorns have flourished in niches where regulation
doesn't matter or are more rational because they came about more recently.

~~~
kazinator
Volkswagen doesn't need to speak Chinese in order to have a plant cranking out
parts in China for approximatelythe same reason why a computer user doesn't
have to know a programming language to read their e-mail.

A small management team at the top of the org chart above the workers just has
to be able to communicate with the parent company and "program" the
organization below in their native language, to produce the required results.

------
bsaul
"The third reason I hear is that the US market is bigger and therefore it’s
easier to get traction. Yet there are 503 million Europeans living inside the
EU vs. 319 million US living in the US"

Stopped reading after this line. So to this guy, a market is a geographic
definition. Well, we're not in the 19th century anymore. We're not defined by
hills and roads and river access.

IT startups identify markets from _culture and language_ first and foremost.
And you obviously won't market a product the same way in germany, france, or
greece. It's the biggest issue with euro so far: same currency, 25 different
cultures.

~~~
realusername
It's indeed difficult to explain how diverse the countries are in Europe, you
have the same kind of cultural differences that you have in the whole United
States in just a single European country from one side to the other, it's
pretty dense.

~~~
bsaul
Yes, yet i would hope that someone that tries to address the fundamental flaws
in parts of Europe economy has at least a minimal knowledge of that fact.

To make such a fundamental mistake in an analysis, one has to have never had
even one single business relation with two different european countries.

~~~
ThomPete
Read on from there, I am well aware of this but my point is a little
different.

------
neuronic
German law makes the "out of the garage + Angel investor" start-up culture
impossible. The only possible way is to make money AND start out with a huge
amount of cash. I can't speak for other Euro countries.

~~~
smcl
What part? Is the incorporation of a company complicated\bureacratic? I know
here in Czech Rep you pretty much need to have a local Czech speaker
setup\registered\licensed with a certain status before you can create a new
company. Or is there some capital requirements ("you must have €x,000 in the
company accts to operate"), or lawyers fees that make it either
tough\impossible for the early "ramen" stage?

~~~
kuschku
In Germany, only very few legal types of incorporation allow the owners to be
free of risk. Usually they require a high amount of money to start such a
limited (so, in case of bankruptcy, all debt can be paid).

There is now a mini-GmbH, essentially a type of Ltd. that can only handle a
limited (pun not intended) amount of assets, but does not require you to have
enough assets to pay back the debts.

Then there are GbR, etc, a lot of nice incorporation types, but these, while
effective for a normal company, are not useful for a silicon-valley type of
company, as the silicon valley relies on an investment bubble - and a GbR and
similar place the liability completely with the owners of the company.

Then there are consumer cooperatives and so on, but while these, again, are
useful for the normal economy, you can’t use them to make profit by scamming
people (as they are effectively profit-less).

~~~
dublinben
Unsurprisingly, Soundcloud is actually incorporated in the UK. They might be a
"German" company, but they seem to not find German business law sufficient or
favorable.

~~~
kuschku
UK means you can save taxes – London is the Bahamas of Europe. Many companies
do so. Not necessarily a legal issue.

~~~
smcl
That is really only true for some Banks if they're registered\based in the
City of London (i.e. not where SoundCloud are), but "the Bahamas of Europe"
moniker is probably more applicable to Liechtenstein, Switzerland,
Jersey\Guernsey or even Ireland.

------
fleshshelf
6 unicorns out of Sweden since 2000 alone. The problem to me seems we don't
seem to have the ability to sustain Google/Facebook sized companies.

------
veb
Awesome read, but you write that Europe has no SV or NYC. I'd say that it does
have a NYC: London.

London is the centre of finance in Europe. It utterly dominates.

~~~
Cthulhu_
Plus I don't think location really matters that much; startups don't need an
environment with thousands of hip enterpreneurs, all it takes is a small team
with a good idea.

~~~
gaius
London actually has no "startup scene", the dirty little secret is there is no
silicon in Silicon Roundabout. Lots of ad brokers, social media strategists,
hairdressers and bakers with Twitter accounts, but no actual tech is developed
there.

~~~
justincormack
That is a lie that the Register likes. There is actually lots if real tech.
Perhaps less actual silicon than Cambridge but lots of tech. Some decent exits
in real techn prove it.

------
KaiserPro
Because investors in Europe are less optimistic.

Why would I invest a lot of money in a company that for it to succeed will
have to burn through anywhere between $10-$250 million, before they even think
about breaking even?

even as a seed fund, the rate of attrition is genuinely terrible. The only way
unicorn can survive is to bend reality long enough so that people are willing
to gamble on the pyramid scheme that is behind all non profit making pre-IPO
startups.

Think about it. Uber is only in the position it is because it keeps on taking
funding. That funding is used to

A) expand at a massive loss

B) Inflate the current valuation

C) pay off previous investors.

If uber were for what ever reason not able to raise any more capital, they
would literally collapse over night. They are unable to make a profit without
making massive structural changes, changes not scheduled for years. Yes they
have cash reserves, but they'll be convertible if some investors need them.
More importantly, if an investor decides to sell for a lowerprice, the only
thing that makes Uber Uber, its valuation will disappear.

Let me be very clear, There is nothing special about uber. Unlike netflix,
amazon, or facebook which either have unique content, or many thousands of
hours of personal content, Uber is just a service which can be swapped out at
will. It is just a taxi service, one that is cheap because its being
subsidised by not paying health care, and the many investors.

It is the very embodyment of the south sea bubble.

~~~
aianus
I highly disagree. Uber is like Amazon; it could stop expanding and investing
tomorrow and immediately start turning a huge profit.

They charge 10% of all taxi rides with a marginal cost of maintaining some
server software and a mobile app. No cars, no human dispatchers, no
medallions, no nothing. It's a great business.

~~~
ThomPete
Just not for the uber drivers exactly because there is no medalions :)

------
verybitter92
Why is there no Silicon Valley of Europe?

Because programmers and other IT professionals are paid laughably low wages
and shown even less respect than they are in the US. It's a similar situation
in Japan and Australia. Yet whenever politicians talk about the need for
startups to compete with Silicon Valley, you never hear them say a word about
the insultingly low wages that are the norm in Germany, France, UK, Belgium,
and others.

Want to create a Silicon Valley of Europe? Then pay Silicon Valley wages, you
cheap bastards!

The Irrlicht guy wrote about this:

[http://www.irrlicht3d.org/pivot/entry.php?id=1295](http://www.irrlicht3d.org/pivot/entry.php?id=1295)

~~~
verybitter92
Why was I downvoted? Everything I said is the truth. Why would someone want to
be a programmer in Europe when the pay and respect is so bad, and with what
money can a programmer be expected to start a startup when they're only being
paid a €3000 a month salary?

~~~
mschuster91
Upvoted you, I agree. Also, for the non-Germans, take-home cash (after taxes
and mandatory medical insurance), depending on your tax class, may be as low
as 1.800€ from said 3.000€.

------
robk
Those lists are often incomplete sadly because the actual underlying data on
startups is much worse here in Europe. For whatever reason people don't submit
data to places like Crunchbase and the media channels here are far less
consistent covering things, particularly outside the English-speaking domain.
My partner has been compiling his own list here. Feel free to edit.
[https://docs.google.com/spreadsheets/u/1/d/1cWhizlf_KU7KOsw8...](https://docs.google.com/spreadsheets/u/1/d/1cWhizlf_KU7KOsw8RamL4jaQ7uCHLDbyvsjBmEsTDzA/edit?usp=drive_web)

~~~
ThomPete
Thanks for the list!

------
paulsutter
Exits are the key to a successful startup ecosystem. Scarce exits at low
valuations means scarce venture capital, and less enthusiasm among potential
employees and even founders.

Silicon Valley is dense with natural acquirers. China has a market for exits.
Other aspiring startups hubs around the world just do not. I realized this
from spending time in Tokyo and Singapore. People commonly think "everything
would be different if we just had a few more VCs", or some such. But really,
it's not complicated. Investors want exits, and when they dream, they dream of
big exits. They're not in the business to lend a helping hand, or reward the
deserving.

------
scrollaway
Site is struggling.

Mirror: [https://archive.is/qBEfh](https://archive.is/qBEfh)

------
brooklyndavs
I think asking this question without addressing the overall cost/benefit to
society is not very productive. The overall goal, I think, is to allow
startups to grow and thrive while at the same time being a net plus for
society. I would argue that "ask for permission later" mentality of some US
based startups is a net minus to society overall. While I don't have any love
for the taxi industry the regulations around cars for hire were put in place
for consumer protection. These are some of the same regulations Uber is
currently trying to get around (surge pricing in particular). Similarly, while
I don't have any love for the hotel industry the regulations around short term
housing exist to allow ample housing supply for long term residents of that
city.

While inconvenient for the entrepreneur/investor/1%class most regulations
exist for the common good of society. If a startup can prove that the
regulation is outdated and doesn't make sense in the context of a new
technology they should be able to convince the regulators that the regulation
needs to be adjusted.

~~~
ThomPete
I don't disagree with a word you are saying but I don't think I was implying
that you shouldn't do cost benefit. It just wasn't what the article was trying
to explore. I am saying both in the beginning and the end that I am not even
sure it make sense to focus on unicorns for Europe.

But given it's importance on many things after all I wanted to understand why
Europe didn't have more than they do.

------
PythonicAlpha
In my opinion, the EU has failed (still) to be an open big market, where
companies can grow without restrictions.

One current big example are the new VAT rules in the EU for non-physical
products. They just do the opposite, what a free market should be. There are
already companies that say on their website, that they will sell to their own
countries people and happily even to people outside of the EU, but not to
people living in other EU countries. The total opposite what the EU once
should be. The new VAT rules also should limit the possibilities of big
companies like Amazon to circumvent VAT. In reality it become a big stumble
block for smaller companies.

The EU is a big market, with many, many rules. To many rules and to few
thoughts on the effects particularly for smaller companies. (instead, the big
corporations are effectively writing the rules)

When smaller companies do not get the chance to come up (what is happening)
than the chances for Unicorns are also greatly limited. Instead the same big
players are winning again and again and are doing the same dinosaur stuff
again and again.

~~~
pvaldes
VAT has become a big problem for commerce, yes.

~~~
PythonicAlpha
It's not about VAT, but about the new VAT rules in the EU particularly for
non-physical goods. The problem is not the VAT amount, but that small
companies potentially have to deal with all the finance offices (and special
rulings) of all EU countries. That is ridiculous!

~~~
pvaldes
VAT is a problem for a small company because you have two works and one of
them (tax recolector) is unpaid and eat lots of hours that you'll need to blow
some life in your startup.

If your client is a big company they can blackmail you to have a "VAT
discount". If you want to do business with them, you'll need either to eat
their VAT with a percentage of your expected benefits, or you are obliged to
cheat to survive. You end figthing with your clients for paying the damned
VAT. Always. With each one.

If you take in mind all the lost work hours, angry clients and nuissances that
causes to everybody it is clear that is worthless and hurts the economy, but
the problem is that VAT is like cocaine for the government. Is wonderful and
they always want more. With VAT you can bill taxes to children and to elders
for the privilege of buying something in your city but you are not obliged to
provide them with a future pension, or any other service instead.

And like any other drug, you raise and raise the doses until finally all
collapses. You want to raise VAT and bill 21% for a book or a film? Not
problem, people can survive without going to cinema or buying a book. Now you
have a 21% of 5 tickets, instead a 4% of 500 tickets and so.

~~~
PythonicAlpha
I did not want to speak in favor of VAT. I agree, that VAT can be a problem in
general for smaller companies. Small companies are often fighting against the
wall. And I also don't like VAT.

But I wanted to make the point that the new VAT rules in the EU regarding non-
physical goods that are sold over the internet (for example downloadable
products or also any internet-services) are even more destroying, particularly
for very small companies and startups.

So, without a good reason, they just destroy those companies, that are the
future and whose counterparts in the US are so successful.

With such stupid regulations, they just kill innovation!

VAT is bad, but the new EU VAT rules are pure insanity.

(btw. did you know, that those rules also apply for US companies that want to
sell in Europe? -- just with the difference, that US companies have a big
enough market themselves -- something that EU companies don't, because the EU
is destroying this market with over-regulation and stupidity)

------
unabst
If these valuations are based on funding rounds, then aren't they the direct
consequence of VC funding and VC math? If this is the case, then More VCs
should equal More Unicorns, because they are the one's creating them.

If EU vs US VC funding is about 1:8, then the ratio correlates with the output
of unicorns. If is even less, then that would imply EU actually may be
outperforming the US in unicorn output per VC head. As it turns out, the EU
numbers are booming this year, so it's tough to compare, but the numbers do
seem to back this somewhat [0] [1].

\--

[0] [http://blogs.wsj.com/briefly/2015/04/27/european-vc-
investme...](http://blogs.wsj.com/briefly/2015/04/27/european-vc-investment-
in-q1-2015-the-numbers/)

[1] [https://www.cbinsights.com/research-venture-
capital-q1-2015](https://www.cbinsights.com/research-venture-capital-q1-2015)

------
OJFord

        > The third reason I hear is that the US market is bigger and therefore it’s easier to get traction.
        > Yet there are 503 million Europeans living inside the EU vs. 319 million US living in the US.
    

That's a really dodgy reason to discount the "third reason".

Britons are not to Belgians what New Yorkers are to Californians!

~~~
ThomPete
And if you read on you will realize that I am adressing it :)

~~~
OJFord
Whoops, sorry. I didn't realise that was your "people think the answer is .."
\- I skipped over your response to it because of the subheading "What is the
European market?" :p

------
jamisteven
Because they understand the definition of the word "Bubble"

------
rubidium
first thought: not enough horns to go around and add to the horses. second
thought: europe=continent. US = country. third thought: what good does this
question do us?

~~~
fennecfoxen
Since you bring it up: the US is a $18-trillion economy. Europe is a
$19-trillion economy, of which about $18 trillion is from states in the EU. In
that respect, it's the only comparison that makes sense. (Well, maybe that and
something like the UK and Germany vs California and Texas, roughly $3T vs $2T
each).

------
highCs
Many EU countries got startups during the mass consumption revolution. US
however is the only country to have not missed the micro revolution. US got
micro startups in 1975, 1983, 1995 and so on. Hard to beat 40 years later as
no one has experience nor tech money. Its not that we dont have hackers in EU,
its that we dont have Paul Graham. I dont think this - tech experience and
tech money - is easily relocatable as it is stated in the article.

------
erdevs
We need a new term for "unicorn" ... "Paper unicorn", perhaps.

A better comparison would remove the confounding variable of valuation.
Instead, it'd be interesting to look at start-ups in each region with >$200M
in annual recognized revenue. Valuations fluctuate based on investor sentiment
and market conditions. Revenue is more fundamental.

------
tschellenbach
1.) Lack of seed stage investors 2.) Lack of exit scenarios and later stage
investors. This makes seed stage investing less attractive. 3.) Few
experienced engineers, designers etc. There is plenty of talent, but it's hard
to build up experience without successful startups. 4.) Part of the talent
leaves Europe 5.) A vicious circle of those factors

------
csomar
_The third reason I hear is that the US market is bigger and therefore it’s
easier to get traction. Yet there are 503 million Europeans living inside the
EU vs. 319 million US living in the US. If the size of the market was any
indication of how many unicorns a market could create, Europe would be in the
lead. So size of the market alone isn’t an explanation either at least not by
comparing the numbers._

I really don't find the EU market to be bigger than the USA market. The US
already has tech giants that no other country has (China is starting to have
some). So if we are starting from here, the US market is much bigger since
it's usually these big/giant companies that drive the VC/Startup market.

The tech industry in the US took the lead. Why? It's complicated to tell.
Countries emerge from poverty to richness but there is little correlation how
that happens. And if we know how it works, shouldn't we be all rich now?

~~~
fsloth
Lots of the modern giants like Google are based on software and computers.
Computing, electronics and semiconductors benefitted from being heavily
invested in by the US government long before commodization of the technologies
took place in the form of military applications and the like. Cultural and
technological headstart in computing is one good explanation.

Most of Europe was in ruins after 1940:s, whereas the USA emerged from the war
mostly unscathed and with a freshly mobilized manufacturing industry.

------
tim333
Recent take from Reid Hoffman:

>Many parts of the world now have the necessary ingredients to create start-
ups. There are brilliant technical graduates everywhere. Venture capital has
gone global.

>Why does Silicon Valley continue to produce a disproportionate share of
industry-transforming companies like Google, Facebook and LinkedIn? Or the
next generation of companies like Airbnb, Dropbox, and Uber? The answer, which
has been hiding in plain sight, is Silicon Valley’s ability to support scale-
ups.

[http://www.ft.com/cms/s/0/39001312-4836-11e5-af2f-4d6e0e5eda...](http://www.ft.com/cms/s/0/39001312-4836-11e5-af2f-4d6e0e5eda22.html#axzz3lZpkJz9X)

------
xacaxulu
I think comparing cities against cities might be a more apt comparison,
especially normalized for available investment amounts, population, etc.
Remember that a number of US states rival single European nations in GDP,
population, physical size, etc. I'd rather talk about Berlin vs Austin, London
vs Manhattan, Paris vs Boston.

Second, is '# of $1B startups' even an important metric? Just like some
employees prefer Europe for worker protections, smaller work weeks, paid
maternity leave, healthcare unattached to employment status, etc, so some
startups might find that their success has more to do with the markets they
find themselves operating in and serving, rather than total income.

------
OJFord
I certainly agree that "Europe has no Silicon Valley", but I'm not so sure
about "or New York".

What part of "the full stack entrepreneurial ecosystem and access to funding"
does London lack that New York has?

(Genuine question - I don't know NY well)

~~~
raverbashing
Or you know: Paris, Amsterdam, Berlin.

~~~
OJFord
Sure, sorry - I wasn't trying to add London to a very exclusive list, I'm just
not as familiar with others.

------
tsotha
There's a huge network effect in startups. Once the financing structure, the
management skills, and technical know-how are in a place, companies start (or
move) there, which in turn brings in even more skilled work force and VCs. How
many articles have we seen about governments trying to create The Next Silicon
Valley and failing after dropping loads of cash?

And over the short run the talent picture is a zero sum game - Europeans who
moved to SF to start their company are potential founders Europe doesn't have
any more.

Also, don't underestimate the draw of US universities. We get people from all
over the world coming to the US for their graduate degrees and many of them
stay.

------
jleyank
I would think that the (mandatory) benefits required for companies in Europe
(or even outside the US) raise the bar for startups. More $$ is required, more
paperwork to ensure compliance, ... On the good side, this might/should act as
a filter. On the bad side, money flows along the path of least resistance.

I guess this is an argument for accepting remote work. There are lots of
talented people in places where they like living. How (new) companies deal
with this will determine how the talent pool is used. As everybody argues
there's insufficient talent, by definition there's insufficient talent
wherever you are.

~~~
wpietri
In Paris a few years back I met an entrepreneur whose business was in
California. He liked living in Paris, and really wanted more of his team
there, but the regulations around hiring employees were a big issue for him.
If I recall rightly, it wasn't so much the paperwork or the benefits, but the
extra burdens around firing. So he was hiring all his new people in CA.

Here in California, most employment is at will, meaning that either party can
end the relationship immediately. I can quit without notice; I can be fired
without notice. (In practice, notice is generally given, but that's custom,
not a legal right. One can also write an employment contract with other
terms.) But from what he said, it was very difficult to get rid of
underperforming employees, and also hard to reduce staffing levels if the
business needed fewer people.

~~~
vorador
To contrast with what you said, it’s very common in french contracts to be
able to fire an employee in the first 8 month of her employment. This isn’t
really « at-will » employment but it’s pretty close, especially for Europe.

------
icc97
The University system certainly has something to do with it. Compare the
startups from those who've graduated at Stanford/Harvard [1] with Cambridge
[2]

[1]: [http://minimaxir.com/2013/07/alma-mater-
data/](http://minimaxir.com/2013/07/alma-mater-data/)

[2]:
[http://www.theguardian.com/technology/2013/dec/01/cambridge-...](http://www.theguardian.com/technology/2013/dec/01/cambridge-
university-internet-tech-startup)

------
digi_owl
The impression i have is that European (if there is such a singular entity)
tech development is more oriented towards system wide efficiencies and
disability assistance than producing the next stock market rocket.

------
lumberjack
>These are of course mostly older companies and not part of the Unicorn
category, but at the end of the day that’s just semantics.

No, it's not just semantics. Look at the history of Siemens or any other of
these old European companies. There's one aspect that is present all their
history and that's government involvement. One could even say that their first
venture capitalist that gave them a chance was the government. They all pretty
much started out by getting contracts for building infrastructure or military
hardware.

~~~
ThomPete
You bring on a good point, but thats not what I meant with that so sorry if
that was imprecise.

My point is that in the historical context most large companies made it big
with or without government help both in the EU and in the US.

So whats changed and thats what I am trying to explore and one of my
conclusions is that it might have to do with how Europe is implementing laws.
Keep in mind that the EU still have many government supported companies so if
thats all it takes then there might be more.

But it's a complex issue which is why I wrote it because I was hoping for
discussion like these and points like yours to surface. So thanks.

------
thetruthseeker1
India has 7, 1 less than Europe, that is very interesting from many accounts.
GDP of Europe ~20 Trillion $. GDP of India is 2 Trillion $ - I wish there were
more studies like this, but not just at the billion $ evaluation, but say 100
million $ evaluation, I think reaching the mark of 1 B$ also requires
significant amount of luck(in addition to great execution), a smaller number
like 100 M$ may be a more consistent measure

------
tim333
Interestingly Stockholm does almost as well as Silicon Valley

>on a per-capita basis, Stockholm is the second most prolific tech hub
globally, with 6.3 billion-dollar companies per million people compared to
Silicon Valley with 6.9

[http://www.ft.com/cms/s/0/e3c15066-cd77-11e4-9144-00144feab7...](http://www.ft.com/cms/s/0/e3c15066-cd77-11e4-9144-00144feab7de.html)

------
allendoerfer
Aside from the obvious fact, that you cannot compare 500 million Europeans
that speak plenty of different languages to 300 million US Americans (have you
been to Eastern Europe?), it is because the PC, the internet etc. were
invented in the US, thus SV was formed and the start-ups there still reap the
benefits (exit opportunities, investors, etc).

------
ksherlock
Those that don't remember history are doomed to repeat it. Maybe you guys
learned something from that tulip episode?

------
dschiptsov
The same reason as why almost all the activity is on the Everest and there are
orders of magnitude less expeditions on K2 and almost 0 on Kanchendzunga.

Because it requires Silicon Valley (the Everest region) and US-style financial
institutions (free money) and bankruptcy protection laws.

------
known
You need Cash/Caste to succeed as an Entrepreneur in India;
[https://en.wikipedia.org/wiki/Varna_in_Hinduism](https://en.wikipedia.org/wiki/Varna_in_Hinduism)

------
loourr
Because they're further downstream from where all the money is being printed.

------
oldmanjay
If you develop a culture of risk-averse comfort that you feel needs legal
barriers to protect, you can't be surprised that you have a population
addicted to risk-averse comfort.

~~~
Scarblac
You say that as it risk-averse comfort is a bad thing. I'd much rather have
comfort than a unicorn that happened to start in my country.

------
Shivetya
Over regulation. He talks all around that word but its key to why. The barrier
to entry becomes much more difficult to surmount.

~~~
kuschku
Over regulation is not really a thing – the US has under regulation,
especially in regards to data safety.

Over regulation is what the US does with taxis. Which is why in Germany
companies that do essentially the same as Uber (but legal[1]) already existed
before Uber was even founded.

What I see the "issue" is that as soon as some size is reached, we don't
really care about expanding further. Why take a risk when you already have a
pretty nice market?

[1] In Germany, where UberPop is currently banned, you can start a taxi
company if your drivers are insured with commercial insurance. To make profit,
your drivers need to have a 55€ license as taxi driver. Simple as that.
UberPop is only banned because they did not want to insure the drivers (the
license is less of an issue).

~~~
aianus
> UberPop is only banned because they did not want to insure the drivers.

Do you have a source for this? Uber insures its UberX drivers in both Canada
and the U.S. so I don't see why they would be opposed in Germany. There must
be something else.

~~~
mschuster91
Yes there is, the fare is regulated - no matter the demand, the area of the
source or destination, or how drunk the passenger is.

Uber does heavy demand-based price adjusting, and well, fuck that. Better have
the assurance of always paying 20€ for my trip home, than the variability of
an Uber with 10-50€.

~~~
aianus
> variability of an Uber

You know when booking the trip what the cost is, it's not a mystery.

> the fare is regulated - no matter the demand, the area of the source or
> destination

Does Germany not have supply problems caused by this policy?

I know it's impossible to get a cab in Toronto on New Year's, whether you're
coming home from a party or your wife is going into labour. I'd personally
rather know for sure there is a ride available if I need it than be stranded
by the side of the road because nobody is allowed to take my money.

~~~
kuschku
There are almost never supply problems, but this is to make sure taxi
companies don't scam people as it's usual in southern europe.

------
dayone
i have been to europe. trust me, the so-called stars of european tech
community are definitely overhyped. Not only do they solve much smaller
problems, their beliefs and thoughts are really small too. The engineers they
attract are very average not rockstars at all.

------
cm2187
In a couple of years, when this tech bubble have burst we will laugh at this
kind of headlines

------
raverbashing
On that subject, how many Unicorns Canada has?

~~~
briandear
Canada only has about 15 people though.

~~~
yxhuvud
It is not as if Sweden has more.

------
mapgrep
I have trouble accepting any of the conclusions in this piece when it has
significant factual errors or at least false implications.

Here are some of the EU rules listed in an apparent attempt to show Europe has
more onerous regulations than the U.S.:

>There are rules for the curve of the cucumber to the bendiness of bananas.

This hasn't been the case since 2008.
[http://www.nytimes.com/2008/11/12/world/europe/12iht-
food.4....](http://www.nytimes.com/2008/11/12/world/europe/12iht-
food.4.17771299.html)

Also, according to the U.S. Congressional Research Service, "U.S. imports of
some fresh fruits and vegetables also are subject to federal marketing orders
that... create mandatory grade, size, quality and maturity requirements that
apply to domestic and imported products."
[https://www.fas.org/sgp/crs/misc/RL34468.pdf](https://www.fas.org/sgp/crs/misc/RL34468.pdf)

Just to take one example, here is one document where the USDA regulates
potatoes for their air cracks, bruises, dirt, enlarged lenticels, external
discoloration, flea beetle injury, sunburn, and growth cracks, among many
other things.
[http://www.mipotato.com/CMDocs/MPIC/usda%20grade%20standards...](http://www.mipotato.com/CMDocs/MPIC/usda%20grade%20standards.pdf)

>Recently large vacuum cleaners and incandescent light bulbs were banned.

The EU has not banned incandescent light bulbs but is phasing out many types
of incandescents. As it happens, so is the U.S.
[https://en.wikipedia.org/wiki/Phase-
out_of_incandescent_ligh...](https://en.wikipedia.org/wiki/Phase-
out_of_incandescent_light_bulbs#European_Union)
[https://en.wikipedia.org/wiki/U.S._Lighting_Energy_Policy#In...](https://en.wikipedia.org/wiki/U.S._Lighting_Energy_Policy#Incandescent_phase-
out) Here is a recent map of all the nations in the world phasing out such
bulbs. Notice the U.S. and EU are listed at the same level of prohibition:
[http://blogs.scientificamerican.com/plugged-in/the-overly-
dr...](http://blogs.scientificamerican.com/plugged-in/the-overly-dramatic-
demise-of-the-light-bulb/)

>Recently the EU was looking into banning cinnamon used in cinnamon rolls
because of a too high amount of coumarin, known to be causing liver damage if
consumed too extensively.

Wildly incorrect, although there have been some misleading headlines so
perhaps forgivable. What happened is that the Danish authorities ruled that a
type of cinnamon swirl ("kanelsnegle") was not a specially exempt traditional
or seasonal food. This meant it was subject to EU recommended daily limits on
the ratio of coumarin per kg of dough. The Danish Food Administration had done
a survey and found half of the nation's fine baked goods were probably over
the line. Cue hysteria about the beloved rolls being banned (never mind that
bakers could just cut back on coumarin, for example by changing quantity or
type of cinnamon). Anyway what ended up happening is that the rolls were
reclassified as a traditional national treat and thus exempt from the
recommended limits.

[http://www.npr.org/sections/thesalt/2013/12/25/256602581/whe...](http://www.npr.org/sections/thesalt/2013/12/25/256602581/when-
is-cinnamon-spice-not-so-nice-the-great-danish-debate)
[http://www.theguardian.com/world/2013/dec/20/cinnamon-
intake...](http://www.theguardian.com/world/2013/dec/20/cinnamon-intake-food-
argument-denmark) [http://www.eubusiness.com/news-eu/denmark-
food.wo7](http://www.eubusiness.com/news-eu/denmark-food.wo7)

FWIW the FDA regulates how much yeast, citric acid, Sarsaparilla, Sassafras,
tallow, green walnuts, unmodified starch, and vanilla can go into foods, among
many other ingredients. (see
[http://www.fda.gov/Food/IngredientsPackagingLabeling/FoodAdd...](http://www.fda.gov/Food/IngredientsPackagingLabeling/FoodAdditivesIngredients/ucm091048.htm))

------
dang
Since there's much evidence we're not the only ones here who cringe at this
use of "unicorns", we replaced it with "successful startups" in the title. If
anyone thinks of a better substitution, we can change it again. (Edit: we
changed it again.)

~~~
harperlee
But OP makes an interesting case for it in
[https://news.ycombinator.com/item?id=10220546](https://news.ycombinator.com/item?id=10220546)
: this is more specific than "successful startups". Perhaps we should coin a
new term in HN. Something with cosmic rays in it might be appropriate.

~~~
dang
Ok, we replaced "successful" with "$1B". I forgot that we'd used that in the
past.

------
pinaceae
on the legal argument - remember that is easier for a wealthy US citizen to
break the law internationally and even at home than say a German trying to
break the law in Germany.

get a local conviction on your personal record and you're toast.

------
afsina
State intervention on innovation is considered harmful.

~~~
wpietri
Yes, I'm so upset that the government funded all the initial development of
the Internet, crushing things like Compuserve and AOL and AT&T's videotex
offering. Who knows where we could be today if only those had been allowed to
flower. (Well, I know the planet would be 3 inches deep in AOL promotional
mailers. But besides that.)

~~~
marcoperaza
One example of successful state investment doesn't really say anything about
what the ideal level of overall state economic intervention is. Research
spending like DARPA isn't even representative of how Western governments
regulate and tax.

~~~
wpietri
But one example does prove that a general rule like "state intervention on
innovation is considered harmful" is too shallow to be useful.

------
cronjobber
Europe had a crippling diversity deficit and so the US easily took the lead in
tech, but under the guise of the so-called "refugee crisis" Europe is now
executing a cunning Blitzkrieg assault on America's former advantage. D is for
diversity, E is for EUgle!

~~~
cronjobber
Addendum: Note that I honestly think that it is basically _true:_ Europe's
capitalists will not only profit from the refugee crisis, but they will do so
for precisely the same reasons US capitalists profited from diversity. I'm
deeply sorry I can't discuss _mechanism_ on this forum; it takes too much hard
boiled cynicism to fully grok. Yet I'm serious: The refugee immigration will
ultimately _boost_ Europe's tech competitiveness.

~~~
mamon
"The refugee immigration will ultimately boost Europe's tech competitiveness"

I don't think so. Most of the immigrants are uneducated people, with no
willingnes of finding a job. They want to go to Germany because that's the
country with highest benefits for unemployed. How would we benefit from THAT ?

~~~
pluma
Here's a thought: these people went through hell in order to get out of the
misery they lived in. That's not exactly what I have in mind when I think of
underachievers with no work ethos.

~~~
mamon
Here's the thought: if they really went through hell they would appreciate
stay in any decent EU country. But most of them really wasn't in danger when
they decided to travel to Europe. In fact, such a travel, as organized by
people smuggling gangs costs about $10k so it's obvious that they were pretty
wealthy before they decided to come here. Also, most of them openly admit that
they are here for economic reasons, not running from war. Please, get some
info before posting such stupid comments.

Also, if this was really about finding safe haven from war, there are rich,
muslim countries like Saudi Arabia or Turkey, which are much closer and would
be much better place for them anyway, due to similar cultural background, but
for some reason they prefer EU with it's social benefits.

~~~
pluma
I'm deeply concerned about your view of humans. This kind of misanthropy has
been used to justify the death of millions throughout all the past century.

You're not even consistent. First you portray refugees as lazy welfare hogs,
now you say they are wealthy because they can afford the smuggling gangs. If
they are so wealthy, what makes you think they only want to come to Europe to
collect unemployment benefits?

Someone applying for asylum in Germany can be stuck in limbo for years before
being rejected and deported. This happens fairly frequently. Throughout that
waiting period they're not allowed to work and are stuck in refugee camps that
are getting less and less hospitable as the number of refugees grows (simply
because the communal governments asked to take care of them don't have any
money and often only learn how many they have to accommodate when the buses
arrive). Refugees _don 't_ have an easy time.

If you think all of the "Muslim world" is one big cozy community you haven't
been paying attention. The "Muslim world" is about as united as Ireland during
the Troubles. The civil war in Syria is fought between a totalitarian dictator
and Islamic extremists. Saudi Arabia is an Islamic fundamentalist
dictatorship. This is the last place you want to go if you don't agree with
either side in the conflict. Yet Saudi Arabia has accepted thousands of
Syrians into the country (although they don't treat them as refugees, which is
what led to the claim that they don't take any Syrian refugees).

And Turkey? Tons of refugees are going to Turkey. And many of them have hopes
of being able to return to their home country when the war is over. To quote
Wikipedia: "As of April 2015, there are 2,138,999 estimated Syrian refugees in
Turkey." \-- that's an order of magnitude more than any EU country (and Turkey
isn't that big of a country nor that wealthy).

Heck, many places outside of Europe have granted actual residency permits to
Syrians. That means they're not even treating them as refugees but as
perfectly ordinary legal immigrants -- a far cry from the temporary shelter
and perpetual "Duldung" (i.e. promise not to get deported _yet_ ) they would
get in Germany.

You're pretending the EU countries are the only places accepting Syrian
refugees. That simply isn't true. The reasons we hear more about refugees
coming to the EU than those being accepted in other places is simple:

1\. Most of Europe shares a common border (Schengen), so "our borders" span
more than just our own country.

2\. There are a ton of countries in Europe, so each country accepting a lot of
refugees adds up to a very big number.

3\. We live in Europe (or in the US: you're closely related to Europe) so we
pay more attention to what's going on here.

Stop listening to AfD/NPD/BNP bar-room clichés and pay attention to what's
actually happening outside the Western World.

Some reading material:

[http://www.cbc.ca/news/world/for-many-syrian-refugees-
fleein...](http://www.cbc.ca/news/world/for-many-syrian-refugees-fleeing-to-
europe-isn-t-the-answer-1.3228052)

[http://www.irishtimes.com/opinion/lebanon-struggles-to-
shelt...](http://www.irishtimes.com/opinion/lebanon-struggles-to-shelter-and-
feed-over-a-million-syrian-refugees-1.2351044)

[https://en.wikipedia.org/wiki/Refugees_of_the_Syrian_Civil_W...](https://en.wikipedia.org/wiki/Refugees_of_the_Syrian_Civil_War#Refugees_accepted_by_country)

------
Asbostos
He mentions the multiple languages. I don't understand why Europeans stick to
their local languages when they all know English anyway. Are they trying to
keep foreigners out? Surely they realize there's a huge social cost of having
your own minority language. This problem exists in China too but most people
recognize the need to learn the standard Mandarin so they're largely
bilingual. Dialect at home and Mandarin talking to everyone else even if it
comes with a funny accent.

~~~
atemerev
No, not everybody in Europe speaks English. Not in France, not in Germany, not
in Spain, not in Italy.

~~~
cosarara97
And even if we did, we wouldn't just let an essential part of our culture die
like that.

