Personally, I'd say this point is the biggest factor to why Silicon Valley style innovation is rare here:
> For better or worse, here in Europe we are fond of business plans that somehow make sense. Blue sky “let’s launch this and I’m sure we’ll eventually find sufficient rent seeking or surveillance possibilities to one day make money” things don’t fly too well here.
As someone who once looked for investment in London, going to VCs and asking for money for consumer facing, million to one businesses aimed at 'revolutionising' the world will get the same reaction as having 3 heads. They do not have an interest in going for crazy moonshots at all, and are very unwilling to just give millions of dollars in funding to a startup in the hopes it could become the next Google or Facebook.
What they are willing to back on the other hand are 'boring' SaaS businesses usually aimed at the B2B market. Some sort of business inventory system or tax management one is more their speed/style, and something they'll probably back with tens of thousands of pounds instead.
So anyone who wants to make a world changing business or product will probably go to the US, or lose out to US based companies that can afford to pay millions in software engineer salaries and perks and marketing.
Of course, that's not to say the other factors aren't issues. People are very skeptical of those that go solo and try to setup their own business in Europe, especially if it doesn't involve some 'well known' field like a trade or retail establishment. And I guess there's probably a bit more ruthlessness in the states too, likely in part due to 'traditional' jobs not offering as much of a future as crazy moonshots.
But it's the funding that's generally to blame. VCs are way more conservative in Europe, and seem terrified of backing ambitious consumer focused businesses and products in the same way they are in the states.
Also if that happens, success rate is way lower. You actually have to break into several markets with different languages, customer behaviors etc.
US likes to pretend it's states are equal to different EU countries, but "osmosis" of people in different states is way higher. Also, in contrast to US, in EU mostly lower and highest class of people migrates - the middle class usually stays in home country.
The market is rational. European investors don't target global scale because of language/cultural barriers. And because the US specialises, Europe competes in industries where it has a specialisation. Basic economics is at play.
The US doesn't have a particularly unique or useful culture for founding businesses. It's actually an extremely poor place to do business.
The US has a lingua franca, and economies of scale. That's it.
> People are very skeptical of those that go solo and try to setup their own business in Europe, especially if it doesn't involve some 'well known' field like a trade or retail establishment.
In my experience that is a very European viewpoint. Some Europeans think that Americans are more free because society doesn't care what they do. In reality, as you probably can tell by US politics, that often isn't really the case. To the extent that Americans are more free it is more because they themselves don't care about what others think. Europeans that think American society is more supportive are mostly just saying that they themselves need more support.
This might seem like a weird distinction but it takes it from being a "hard problem" that is forced on you, to a "soft problem" that you can potentially change yourself.
> They do not have an interest in going for crazy moonshots at all, and are very unwilling to just give millions of dollars in funding to a startup in the hopes it could become the next Google or Facebook. What they are willing to back on the other hand are 'boring' SaaS businesses usually aimed at the B2B market.
That is, they are not venture investors, they are just normal, low-risk-stable-reward investors.
This neatly explains why runaway successes in risky areas do not normally happen in Europe: not enough risk appetite, and the size of the market is initially smaller because of language barriers. (Also, likely just not enough money.)
I think the difference in innovation financing between Europe and the US fits quite well the image of European Old Towns versus the Empire State Building. Europeans are just very conservative when it comes to financial decisions. If something does not fit the mold which you know is accepted by peers, it is not given serious thought.
To your point about the "mold" which society creates/accepts, this social aspect alone is likely the biggest factor. People aren't and can't break out of these social "holds" and what's ironic is that there's almost a financial/social/system level safety net built into most countries. It's socially irresponsible there?
I am curious how much regulation plays a part. I had a friend in Belgium running a 2 person indie game dev company. They needed to hire an artist and mentioned all the regulations in place making is very hard to actually hire.
Basically, it seemed like they were on the hook forever (very long) regardless of how well their company was doing. I don't know all the details and I'm not suggesting in any way that they should have tried to take advantage of anyone. Only that it would seem to me that they should be able to be up front with the artist (we're a small company, we have no income but some funding, there's no guarantee our product will be successful, we can pay you a reasonable and legal salary, but we can't guarantee your employment for more than 3 months. Do you except?)
But AFAIK that was not a option. If it was more like, if they couldn't guarantee employment forever then they were not allowed to hire.
That's an exaggeration as I don't know all the regulation. My only point was it sounded like it made it very hard to run a startup.
There are definitely options around that, though. For example, hire the artist as a freelancer. Alternatively, hire them through an employment agency. Or just give them a short-term contract. That could even be a zero-hour contract, meaning basically zero liabilities. A company going bankrupt of course voids any employment contract.
In general, the regulations make it harder for a company to screw over their employees at any moment they wish to do so. The employer is expected to assume certain risks and burdens in case of long-term employment. But there's not a lot you need to commit to for short-term work.
Not sure about zero-hour or short contracts in EU, but
> hire the artist as a freelancer.
this probably could be an issue due to investor's funding conditions (I've obly heard things like this, not experienced myself, so not sure).
> Alternatively, hire them through an employment agency.
This is super expensive, especially for the short contract like 3-6 months, easily could be around x2.5 comparing to hiring fulltime. So for a startup this is usually not an option, just because of the price.
> especially for the short contract like 3-6 months, easily could be around x2.5 comparing to hiring fulltime
Yes, when you hire people on short time contracts they quite naturally try to get paid enough to survive the gap until next contract, which makes the hour costs higher.
big tech is driven by vanguard/blackrock ppl (= apple/msft/google(alphabet)/mozilla(via google)/starbucks!/etc)
We are talking about tens of thousands of billions of $. They can sustain significant businesses without "making money" for decades (often for free), then extinguish/buy any competition on economics grounds: patience is virtue... which they can afford easily.
Namely, there is no competition on economics grounds here.
It is like with China and manufacturing: China does decides on the value of its money on the international markets, and has a "strongely driven" labor force, namely you cannot "beat" them on "honest and sane" economic and social grounds.
EU is mostly based on economics: they already "lost" unless they start to define strategic areas (for instance, leading-edge chip manufacturing, with the netherlands and germany at its core, similar to the mostly french-german driven airbus), and make it happen knowing perfectly that very probably, it won't "make money".
As a European this article is sadly just a lot of noise. It simply all comes down to investment capital.
1. The EU does not have a stock market that rivals the NYSE/NASDAQ. There are few exit strategies available to EU companies. This there is no perpetual money machine where the old generation funds the new. There is simply VERY little investment capital available. Companies tend to be self funded and thus growth is much slower. This is by far the most important factor everything else are just minor details.
2. The EU is a conglomerate of markets, cultures and languages. The cultural difference between Italy and Germany is larger than between any US state. The cost and effort to expand past your own borders is very high and a very small amount of companies are able to overcome. A company that can immediately sell to 350M users is going to be much more successful than one whose home market is 5M.
Running a startup in Europe, we needed to find some hospitals as customers. We went to Berlin, the capital of EU startups and it was a PITA to get to talk to decision makers in large hospitals. The arrogance, disinterest for tech and speed of answer left much to be desired. Then we got some contacts in the US and every major hospital decision maker was a phone call away with a very fast answer if they find use in us or not. Not soon after we incorporated in Delaware. While you might have two valid points, saying that this is all it comes down to is a gross oversimplification.
It is just an example, I have similar stories in other industries. European customers are very conservative, they won't even talk to you if you don't have several references in the same industry. Which is hard, when you are starting up. US customers, on the other hand, are not afraid to try new things and see for themselves, if they help them or not.
That's the reason, why there are products and services, that come from US, are used by Europeans, but only after they were success in US. The willingness to be an early adopter is simply not there.
It's not just an example, the EU public sector has much stricter processes to spend its budget than any private company. In particular, public contracts usually involve a design contest; a startup can't just phone a hospital and land a contract.
The majority are. I pay taxes to a hospital district which operates public hospitals, in Texas no less. Parkland, where JFK died, is a public hospital.
Sort of an aside: my experience is that most people who have no experience of the American healthcare system believe a lot of things about it that are not true. The one true thing is that overall, it isn't very good. But how it's not very good and why varies significantly in different contexts and different parts of the country.
You're not wrong looking at the big picture, but assuming the hospitals in Berlin would be technologically friendly is not how it goes. Quite the opposite.
(in the same way, the most prestigious hospitals in the US are not in SV)
Well Helios is there, the biggest hospital operator in Europe.
But they use the crappy Oracle Cerner i.s.h.-med SAP Add-On.
Then there is Asklepios not far away in Hamburg 2nd biggest operator in Germany, they develop their software inhouse (Meierhof).
And the big university hospitals use usually something they developed on their own (which is sadly nicer and usually more user friendly and useful than the vendor solutions).
I guess there's just not that much of a market left
Excellent essay, particularly like the dive into cultural differences, citizens relationship with state, employees relationship with employers, which alongside the more stringent regulations and weaker investment appetite are significant factors to explain the original claim.
Two observations, to add to the discussion:
Firstly, Europe does indeed innovate, but perhaps cannot scale as fast Chinese companies can with their massive internal market, or as fast as US companies can with their global reach. What seems to happen is European tech firms relocate to the US, or get bought out by US companies (Skype etc). Of course, European founders often relocate to the US at very early stage, so those companies in effect 'become' US companies even though founded by European founders.
Secondly, Europe has been highly Americanised over the past two decades; the Internet is a powerful cultural propagator - and it is a US internet. US ideas, concepts, values being readily adopted by European tech culture, and propagated throughout European society. The net effect of this, is that the cultural barriers to US tech adoption are close to zero at the consumer level - every website looks the same, every app follows the same UX etc. Contrast this with tech from East Asia, or India - there is a jarring difference. Hence, European tech companies are in direct competition with more mature, better financed, faster moving US tech equivalents and inevitably get swept aside, unless they can add unique value alongside their innovative service.
This is very true and also very interesting. One underappreciated effect of this is the speed of diffusion of ideas originating in the US.
Generalising and simplifying a great deal, it takes a couple of years, maybe 2-3 for an idea to become normalised in English speaking European countries, and then another few years before the idea becomes normalised in the non-English speaking countries. This has the effect that Europeans are always late to the party and that hampers competitiveness, b/c the US and China have already moved on. A really amusing instance is EU research funding. Cloud computing became a EU-fundable research theme when Amazon had commercialised AWS already.
yes, indeed, the cultural exchange is broadly mono-directional.
I think both Americans and Europeans are generally unaware of this phenomenon, but basically US is making the future values, habits and behaviours Europeans hold, so US companies will not only inevitably be ahead, but also have a decisive lead if / when a European competitor emerges. US internet is producing cultural convergence in Europe, with the 'centre' being Silicon Valley / New York, and the periphery being everywhere else
(fully aware of the irony / potential futility of posting a comment like this on a ycombinator website but... here goes)
This article conflates innovation with entrepreneurship. The two are not even correlated in reality, certainly there's no causal relationship unless we're discussing market innovation (usually in the form of net-negative-outcome disruption).
The points made in the article seem largely sound if you substitute the word "innovation" throughout, but the misapplication of that term does detract significantly.
A sibling commenter uses the term "Silicon Valley style innovation", which I guess is reasonably apt.
Personally I'm pretty thankful we Europeans seem to have a (slightly) smaller % of high-profile "innovators" like Bankman-Fried, Neumann, Holmes, Kalanick, et al.
As a French person who lives in SF and has gone through FAANGs and startups, I saw a few things that might be of interest:
- In France, people often complain about the cost to hire, and how hard it is to get rid of an employee once you hire one. While most employees like these labor laws that are supposed to protect them, I would guess a number of employers are annoyed by it and end up hiring mostly contractors.
- A lot of good engineers end up in large employers that are working on a lot of government money. Think airbus, tales, safran, etc. These places are quite depressing, far from any big city, and tend to innovate in non-directly-user-oriented products.
- The hustling, and overworking culture that's extremely prevalent in the bay (people don't stay up late, work hard most of the week, mostly talk about work) is not really a thing in France. I once heard "people in France work to live, and people in the US live to work" and I totally agree with it. Hell, my childhood friends back in France get an insane number of holidays compared to people here in the US. (Some of them are forced to take 3 consecutive weeks every year, on top of their other PTOs.)
- A lot of large companies/employers are also old families that got rich and have completely horrible/racist management and treat developers like low labor. Think telecoms, banks, etc.
- A number of good engineers leave because the US pays more. I wouldn't think that it's a huge number though, as I noticed that very few people are willing to leave the country to study/work in general.
As a French person living in Sweden this does not match my experience about overworking. Working hours can be unreasonable in France and people in startups hace a much better life/work balance in Sweden. I know plenty of engineers working 8-19 or so in France, whereas in Sweden it basically does not seem to exist at all. You do your 40 hours and not more. In France officially it is 35 but outside the big companies you actually end up more around 50-55.
One thing I noticed in France on the other hand is the importance of the diploma. In Sweden it has very little value, whereas in France it sometimes shapes your whole career. And the good students coming from a good school directly get high paying jobs in big comfortable companies so that does limit the incentive to risk it all in a startup instead.
Regarding the cost to hire I think it's a false issue. It actually costs more to hire in the US because salaries are higher. Job safety and how hard it is to fire people largely depends of your company culture as well, in my experience for startups it is a very secondary problem. Usually if an employee is a clear misfit they also feel bad and are happy to take an exit package and get a job somewhere else that fits better. It is however a concern for larger companies when you have an employee of 20 years that would never find another job at the same salary level, is without motivation, and is nearly not possible to fire (you have plenty of those in the big french companies, having worked their whole carreer there and just waiting for retirement while doing the minimum not to get fired with cause). But that should not really impact innovation as you wouldn't find those employees in a startup.
I don’t know where your French data come from… but I live in the French Riviera and no one here works overtime… my company office is empty by 5h30 (and the boss is the first to leave). And all my friends in the region share the same experience.
> One thing I noticed in France on the other hand is the importance of the diploma. In Sweden it has very little value, whereas in France it sometimes shapes your whole career. And the good students coming from a good school directly get high paying jobs in big comfortable companies so that does limit the incentive to risk it all in a startup instead.
That's interesting. A lot of the insanely good engineers I've worked with (and work with) either don't have diplomas or didn't even finish high school. Perhaps France is missing on this a lot by being pretty discriminatory when hiring.
Also, one thing I'm thinking about now, I think a lot of people in the US are on stimulants (e.g. adderall) whereas I doubt this is really a thing in France.
> Also, one thing I'm thinking about now, I think a lot of people in the US are on stimulants (e.g. adderall) whereas I doubt this is really a thing in France.
I've also read about many students in elite (mostly US) universities using stimulants. Presumably many of them also continue using them after graduating. Here in Finland, I've never heard of anyone taking e.g. ADHD medication for performance enhancement.
Yeah it’s hard to prove anything, I have some friends who tell me that everyone in crypto is doing adderall or others. I’m not, but I’d be willing to believe that a much bigger percentage of people do it compared to france
I wonder whether those views here are always a bit too software-biased. At least for germany, we do not have a competitive advantage in software (which I have to accept) but in other things. I can't fail to notice that quite a few important innovations for renewable energy have happened here (talking about both europe and germany now). The leaders for renewable energy production are (mostly) NOT sitting in silicon valley and as much as I love software it's not everything. From solar panels to wind turbines, those things do not come from a silicon valley startup.
I wonder how those "Innovation analysis" posts would look like if they would focus on everything but software.
This sort of myopia also extends to critiques of other countries. Japan is notoriously relatively backwards when it comes to software, yet has a universal reputation for being an innovative society.
Moving to Canada from Europe feels partly like time travelling back to the 90s. I get what the article means, but from a “every day user” point of view, there are many luxuries that I miss from Europe and that are downright strange in Canada. People here are still using faxes and paper cheques, there is no connected health care system. Financial and telecom apps are a joke. Phone calls are the dominant way of communication still it seems. Like companies will literally ask you to call them as opposed to emailing. Online booking systems for appointments are not that widespread.
Overall, while Canada has been a great place to live, in many ways I had to let go of the luxuries or EU tech.
(Oh and since moving to Canada I had to start using paper mail, like a post office, to send and receive government documents. Never in decades had to do so in EU)
Strange. One HN thread US users whining about not being able to transfer their own currency to others without either multi-hour delays or costs. Whereas in the EU we're able to transfer funds near-instantaneously using our bank's smartphone apps.
And yet in this article "innovation" seems to mean "creating companies that don't make a profit"
Meh, the article is just hogwash and/or clickbait trash. They never define "innovation" and it seems like they're complaining that we value something other than massive tech companies that barely create jobs or value.
This is a stupid measure (number of patents), but it's better than whatever nothing is in that article. Seems like the EU is doing fine. The EU has issues, but "Europe not being good at innovating" is quite the leap that I doubt they can actually base in fact.
I wonder what else the author will suggest in their next article. Loosening labor regulations?
Even worse than that, the article has absolute nonsense in it such as this:
> Should your startup go bankrupt, chances are you will as well, and you’ll have to live under a multi-year purgatory during which time your innovative abilities are severely curtailed. No bank will touch you also. It really is pretty bad
(For reference, limited liability companies exist and are the norm in pretty much all European countries)
Also, talking in general "Europe" terms as if things (culture, regulations, people's perceptions) are the same in the Netherlands and Spain, let alone Estonia and Romania.
> They never define "innovation" and it seems like they're complaining that we value something other than massive tech companies that barely create jobs or value.
American exceptionalism at its finest. If it's American, it's superior by default. Even if in their jobs market the weakest part (workers) is screwed over by design. I'd never work in the unregulated US.
Number of patents is a stupid measure and it's not better then common sense and common knowledge. You're writing this on a device produced in asia, and designed in the US, running an operating system made by a US company, using a browser made by a US company. But european companies have patents, so they're doing fine.
Linus Torvalds has been living in the US for a long time and is a US citizen. If [1] is accurate, the top Linux kernel contributor is Chinese, and almost all significant Linux contributors are outside of Europe. Arm microarchitecture is often designed in Austin, TX according to friends of mine at Arm. ASML and Zeiss are great, but, as a European, rather than gloating, I look, with great sadness, at the trajectory over the last half century, and see that the number European technology world-leaders has been steadily decreasing.
To tell the truth, ARM Holdings was founded by Acorn, a British company, and VLSI, an American company, with Apple, also an American company, investing some cash. Eventually the likes of Texas Instruments and other US companies joined, and a ton of smaller Eoropean companies was bought / merged in. So it's a truly cross-Atlantic venture.
OTOH ASML is definitely European, and, frankly, has no serious competition anywhere on the planet.
The most critical element of the EUV machine, the light source, was designed by an American company, Cymer (now a fully owned subsidiary of ASML). The second most critical element, the Zeiss optics, are European, but I’d consider that more precision manufacturing than high technology.
One can always play that game and find that actually almost any country is the only source of innovation by choosing the abort condition carefully (just as an example: the most important component of the light source is the high-power pulsed laser source, which is made by Trumpf - a German company).
Ya if you didn’t know what you were talking about or were lying you could say some other step in the value chain is the source of the critical IP. But in this case it’s pretty clear that the innovation took place at Cymer and Trumpf is the much more commodity component supplier.
Is it though? The laser needed for the laser-induced plasma EUV source are nothing you can buy of-the-shelve and is nothing trivial to design and Trumpf has lots of expertise in this area (since they are not just a supplier for lasers, but use the lasers themselves for machine tools). Could another company have made it? Probably! But the same is true for the whole EUV light source, since Cymer wasn't the only game in town after all (there were a number of other companies working on it in the US and in Europe) - with ASML also collaborating with several potential competing suppliers at the same time.
But no one really cares about anyone but the winners in the end, so only ASML and Trumpf are left standing in the end to bask in the glory.
Uh yes of course there were several competing potential suppliers of light sources (just as there were entire EUV systems) but all the other ones didn’t work and were not close to working. That is the definition of a critical enabling technology. Cymer was in fact the only game in town.
Only one that worked is patently incorrect, since early ASML R&D units shipped with non-cymer EUV light sources (some Philips collaboration iirc).
Best performance at the time maybe (be it reliability/output power/size/..), but not the only one that worked at all, so no..
I don't think that was true. Gigaphoton achieved similar numbers to Cymer roughly a year later with a very similar design idea (so unclear why they would have had no path forward? they are still on-par today with Cymer as far as I can tell), XTREME was not too far behind (within factor 3 I would say).
Having lived in both places - Italy and the US - there are good and bad things about both, and it's kind of maddening to not see the good stuff copied faster.
Here's an old post about window technology. Screens and shutters.
> US users whining about not being able to transfer their own currency to others without either multi-hour delays or costs
Never heard that in real life, everyone I know just uses Venmo. I occasionally use Zelle and Apple, too, but frankly I like having the money transfer service at arm's length from my real bank. Especially when I'm transacting with a stranger.
I really don’t think people in the US realise quite how far behind it is in banking services.
In the U.K. we’ve had online banking for 20 years now, and telephone banking before that. With most banks you can send an amount up to £25k to any account in the country and the money will be there pretty much instantly. All you need is the name of the person/business and their 6-digit sort code and 8 digit account number. Since about 18 months ago, it automatically warns you if the persons name doesn’t match on the name on the account. We’ve had chip cards and PIN rather than signature in Europe since the early 2000s, and contactless cards started being launched in 2007.
Honestly, outside of banking the U.K. is a 3rd world country digital service wise. A lot of countries in the EU have had digital identies for more than 15 years. The U.K hasn't even started.
You want to signup for a digital service from the government, your bank, your insurance company,.. . Well you need to send in a copy of a bill and your passport. And then they will give you a separate login for every service. And it is not even like there are many services you can use.
In Denmark, for example, all communication with the government has been digital for almost 10 years, unless you are exempt. In the U.K. I've experienced places where I had to send in a physical letter.
So yeah, banking is fine, but that is about it. In other places they are at least 10 years behind similar countries.
I really did not need to send a copy of a bill or passport to sign up with gov.uk. The Revolut app was happy with an emailed photo of my passport and a selfie taken from the app itself. Local banks all have their own apps. Store loyalty cards are mostly also apps, and you can ID them from a device with RFID.
And so on.
I find the EU and UK more or less on the same level for digital services. The UK is a little behind in some ways and a little ahead in others.
The US seems to specialise in making everything unnecessarily difficult. If I want an EIN and I don't already have an ITIN, it's a letter or a fax, and it takes months. If I want an ITIN it's an officially notarised copy of my ID documents - which usually requires a trip to an embassy - and a letter. And again it takes months.
If I want to set up an LLC I have to wade through the details of 50 states, all of whom have different prices, rules, filing requirements, and local tax rates, and hire a local agent, all of whom have different prices, rules, and filing requirements.
And then the IRS can fine me $25k per infringement if they think there's a mistake on my annual filing, even though I won't be paying tax on an LLC passthrough.
Except I will because if it's a passthrough I'll probably be hit with a personal withholding tax, unless I fill in the paperwork that proves there's a tax treaty which reduces it to zero.
If some tax has already paid I can probably claim it back but I'll get a paper cheque which my bank will look at and think "Huh? Why?"
On the upside if I was living in the US I'd have to worry about incredibly expensive health insurance and payroll taxes which would make starting a small business either non-viable or very risky.
>There's nominal UK resistance to ID cards because the right-wing fascist papers say there is. I'm not convinced the population is all that bothered...
I think you've got it the wrong way round. People who oppose a national ID card tend to be left-leaning, while those who are for it tend to be on the right.
In the UK there's a very strong cultural association [countless films, TV dramas] etc. equating national ID cards with humourless totalitarian officials demanding to see 'Your papers!'. Hence the inherent distaste for the concept of having to carry something that proves who you are to any officious git in a uniform, who cares to ask for it.
Of course the irony is that, outside of passports, the UK pretty much has acquired a de facto national ID card by stealth, in the form of the photocard driving licence.
It's almost always the 'other' document you can use whenever reuired to prove your identity, if you don't have a passport. And the government is trying very hard to get people still holding the older [non photo] paper driving licences to 'upgrade' to a new photocard driving licence. Not only by extolling its benefits, but by threatening heavy fines for anyone whose details have changed in any way on their old paper licence and who hasn't immediately updated it.
Yeah, this 100%. There's a genuine fear of government overreach/control here in the UK, and references to works like 1984 abound. That's not really a partisan thing either, you'd probably get very few people openly support the ID of a government ID card/ID system in general.
Maybe it's a trust thing. Countries where the government has made many of the right decisions and where people trust them (like Nordic and some other European countries) seem to be okay with the national ID thing, whereas companies where people fear (maybe rightly) the government screwing them over (like the UK and US) do not.
I don't think that's relevant to the point - you can't easily reproduce a nordics style e-identity system if you don't have a pre-existing national ID system.
> You want to signup for a digital service from the government, your bank, your insurance company,.. . Well you need to send in a copy of a bill and your passport.
This isn't generally the case; for the most part, a UK resident just answers some questions on application and won't be asked for ID to take out financial products. It's only normally if you fail to verify that you'd be asked that, which might happen if you've got no address/financial history here for e.g.
For online government services all tax/benefits are online and pretty seamless. The things that aren't seamless are much less common - for e.g. renewing driving license I remember being quite painful.
Exactly! And this is only describing UK. Paying from let's say the Netherlands to Greece or Sweden or Portugal, with my regular internet banking app from my real bank, I can transfer money within one business day without additional costs.
US banks have instant money transmission (with either Zelle, which is not a 3rd party service, or debit cards) and contactless cards.
We don't have chip and PIN because it's dumb. It's chip and nothing, not chip and signature. There's no reason for credit card users to spend time protecting the bank's money like that - credit cards are not your money and their security is not your problem.
> There's no reason for credit card users to spend time protecting the bank's money like that - credit cards are not your money and their security is not your problem.
Who do you think ends up picking up the bill for all the money the banks lose due to sloppy security? I can guarantee that no bank CEO was ever forced to buy a smaller yacht because they lost too much money to fraud. All of those costs get passed onto consumers in the form of crazy high transaction fees, up to 10x higher than the EU, and an insane list of bank fees for so much as sneezing wrong in a bank branch.
You might personally no care about protecting the banks money, but neither are they, because they’ll just find a creative way to collect new fees to cover the cost. Not a cent will come out of their profit margin.
By "bank" I mean the credit card issuer, which is a fairly competitive industry and isn't necessarily your main bank. I think people are pretty aware of what fees their cards have. (IME businesses that take cash are mostly doing it for tax evasion, not to save you the transaction fee on cards.)
And of course the responsibility for committing credit card fraud is on the criminal, not the bank.
The costs of fraud aren’t distributed evenly over a credit card companies customers. The ones that pay off every month obviously don’t pay extra, but those that fall into debt traps pay through the nose.
> IME businesses that take cash are mostly doing it for tax evasion, not to save you the transaction fee on cards.
Business don’t give a shit about saving you money on transaction fees. All of their competitors build it into their prices, so it’s price that drives up consumer costs pretty uniformly, so there’s little advantage in trying to keep that cost down. It not like the businesses customers can find a competitor offer substantially better prices due to lower transaction fees.
> And of course the responsibility for committing credit card fraud is on the criminal, not the bank.
That doesn’t change the cost involved. I personally don’t give a shite who’s responsible, I just know I’m not responsible, and I don’t want to pay the cost.
The current card network fee system is very similar to the US healthcare insurance system. Pharmaceutical companies can charge crazy high prices for medication, because the cost is paid for by insurance companies, the end user is never given the opportunity to shop around. As a result there is little competitive price pressure on pharmaceutical companies, there’s so many layers between them and actual price sensitive user, that they can basically just ignore the user, and rely on insurance companies to find a way to extract the rents the industry wants.
> There's no reason for credit card users to spend time protecting the bank's money like that - credit cards are not your money and their security is not your problem
(Not the person you replied to) It depends on the regulations. I don't think all countries have the same liability/protection laws regarding credit cards as the US.
I have no interest in giving a stranger my account number. Heck, for Zelle I'd have to give them my email address and that's already too much.
Chip & pin for most people is less convenient, so you'd not find too many Americans thinking they were behind in that regard. The PIN does give some added security, which is great if you are a bank because it's easier to justify denying any fraud claims.
About the only thing I might agree on that is a meaningful limit is sending money between my accounts at different institutions. Instant only if I do it at the branch, less instant if I want to make it happen through my smartphone.
The account number/sort code combination alone is not usable by a fraudster to withdraw money in any way in the U.K., so perhaps this is where the disconnect is. You’d need to physically go to a branch and present the bank card and enter the PIN number, or present photo ID with matching details to the account.
There are “direct debits” that allow companies to draw money from an account, but they can only be set up by businesses, there are special guarantees, etc. etc. that mean the bank is liable to reimburse you immediately under the “Direct Debit Guarantee” if you report a fraudulent transaction.
It prevents gas pumps from stealing credit card numbers, which up until chip and pin that was a huge problem.
Same with random non bank ATMs. General advice was either go to a bank ATM or you'd get your credit card # stolen.
> I have no interest in giving a stranger my account number. Heck, for Zelle I'd have to give them my email address and that's already too much.
Zelle's sending limits are way too low. Can't pay rent with it, in the USA, still have to mail a check in many places to pay rent. Sure the bank automates paying mailing the check, but here is the stupid process:
1. Renter tells bank to auto mail a check to landlord
2. Landlord receives paper check, uses mobile phone app to deposit check into their account
3. Bank makes funds instantly available, then at some point someone manually reviews the images of the check to make sure it is real.
3a. If the check is too large, funds are not immediately available.
Or, to put it another way, because neither of our banks don't allow online wire transfers, the easiest way for my wife and I to send each other non-trivial amounts of money is to write a physical check to each other! That is insane.
It's a crutch around your ancient banking systems. My country never had cobol on mainframes, so bank infra isn't build around daily batches. Also healthcare and insurance aren't total shit, just a normal level of shit.
1/3rds of US medical costs go to billing overhead.
In any given year of their career, Primary Care doctors earn less than software developers in a coastal city. (e.g. by the time a doctor graduates school and goes through residency, they may be in their 30s, at which point software devs are pulling down more $).
I had always assumed that healthcare had crazy high costs in the US because they have a middleman who is motivated to refuse payment as much as possible (insurance companies) so healthcare providers have to inflate costs to try and stay even.
It's much higher, there are fewer healthcare providers of all kinds, and Americans use more expensive healthcare services. It's not more expensive because insurance companies are charging you, their costs are passed through from providers.
Also, out-of-pocket healthcare spending as % GDP is lower in the US than in the UK. Expensive healthcare in $ doesn't matter when you're paid so much more.
I'm not sure what "out of pocket" is supposed to mean in this context. The UK's NHS has standardised fees paid at relatively standard rates out of taxes. Most care is free at point of service. Prescriptions aren't free, but it's possible to cap the annual amount spent on meds at a very low level. (Last time I looked it was somewhere around £100.)
Meanwhile the US has hundreds of thousands of medical bankruptcies every year.
Health care is more expensive because most insurance doesn't contribute much to out-of-network costs, and if you have an accident in the middle of nowhere you won't get directed to the nearest in-network facility.
Even if you're in-network copays, exclusions, and other scams can turn a medical emergency into a financial catastrophe.
It's a completely outrageous, exploitative, inhumane system.
"Out of pocket" means what you pay versus what your insurance company pays. By law, the most that can be per year is $18,200 per family in 2023 [1], though it is much lower for almost any employer health plan. My family is very healthy and so I get the crappiest coverage my employer offers for nearly free for my family (because the employer gets a tax break) and mine is $10,000. The limit resets on January 1 and insurance companies can try to weasel on what's covered, though they rarely win those appeals, but on the flip side, most medical expenses are negotiable in that kind of case.
The bottom line is that our healthcare system serves several percent of the population (but not the very bottom tier, who have medicaid and public hospitals) incredibly badly and for everyone else is normally just annoying. It's possible for an American software developer with reasonable spending habits to have a medical emergency turn into a financial catastrophe, but it would be really hard.
A lot of Europeans seem to believe that their healthcare costs make up for the salary differential. This is not a reasonable belief even before factoring in taxes and cost of living in most cities.
I imagine it covers dentists, specialists, traveling out of country or private coverage because it's faster. I know for a fact my healthcare spending would be higher in Australia than it is in the US despite it having free healthcare. (As in, I’ve paid it.)
>It's not more expensive because insurance companies are charging you, their costs are passed through from providers.
They fleece you solely through their existence. Polish government "single payer" had less than 200 million dollars spend on operating cost - 0.8% of overall costs. Just United Health spend 11 billion dollars on that, compared to 52 billion dollars spend on medical costs.
I can't understand how the banks in the US are so crappy. Here in Finland we've had instantaneous and free bank transfers for like 20-30 years. I used to wonder why the hell is Paypal so big, but then I learned that it's mainly because it provides functions that all the normal banks here provide, but none in the US do. The same goes for most of the fintech. There is much less market for these companies because the major banks are already doing what they are offering in some form.
It look like Dropbox-curlftpfs comparison. I've never used both but user experience would be different. I imagine that most traditional bank apps are crappy.
completely different experience. in the uk - bank transfers are instant. at most will take 2 hours, if there's major technical issues with your bank.
there's no asking if someone has paypal etc, give account number, sort code and done. money is there in less than 5 sec's in someone's account.
if the US had comparable system to the Uk - CashApp, PayPal, venmo, plaid etc wouldn't exist
According to its own website [0], it means "individuals and firms can transfer money between each other within seconds", and "TIPS offers final and irrevocable settlement of instant payments in euro, at any time of day and on any day of the year."
Most banks in the US use a free service called Zelle. Transfers take minutes [0], not hours. Apps like CashApp or Venmo take seconds (for on-platform transfers).
Zelle is effectively nothing more than a way for attackers to freely siphon all the funds out of your account if they gain access to your banks online system. There is nothing that can be done in that case because Zelle doesn't have any system for handling fraudulent transactions.
And you get to play the game of who has which app and who can proxy money around from one app to the other any time you want to organize a purchase amongst a group of friends.
There's a trading reddit that I sometimes visit where they all use Paypal Friends and Family which I gather is incompatible with Venmo despite being owned by the same company? The time or two I've used it, the guys on the other end took Square's Cashapp luckily. I do have Venmo because a former team used it. I also have Zelle because it's built into the Ally Bank app which came in handy to pay back my Uncle when he helped with some fence construction. If this is innovation, I'm pretty tired of it.
As opposed to a neutral protocol not controlled by any one entity. Think of it like email or the telephone network, versus the various instant messaging silos.
SEPA Instant Payments take Seconds and work with every Bank account in the SEPA Area. You also don't need one specific app for this, nor can you wire by accident the wrong person money because the Account Numbers contain Checksums
Zelle REQUIRES a banking app. It is not available through a web site or other electronic means.
Which means, among other things, you'd better have a locked down, stock OS image for your phone because without remote attestation banking apps simply will not work.
But it could at least let me to do SEPA payment from internet banking (as is usual in EU), instead of forcing me personally into a bank do it from there. Ridiculous. (BBVA in US)
I think the best illustration of this is Instacart: they basically re-invented what many supermarkets in Europe and Asia had been doing for 10+ years already, only with huge markups and gig workers exploitation.
FWIW, many grocery stores in the US had delivery many years before Instacart came around. Europeans have this really weird, ignorant understanding of America.
In the US, transfers within a bank, or within a cooperating group of major banks (e,g, via Zelle), are instant.
You can use services like PayPal, Venmo, Western Union, etc to quickly transfer money between card accounts, including across the world; not instant but within 10 minutes or so, and not for free.
Transfers and payments using more traditional infrastructure like credit cards are not instant, they have settlement time. That time is there not because the systems are technically slow, but because it's a mandated time window to revert transactions, either fraudulent or done by mistake.
Europe invented the printing press, the steam engine, the railroad, electric light, radio, the internal combustion engine, the airplane - plus a whole lot more!
Is that not being good at innovating?
BTW, I'm born, raised, and live in the U.S. It just strikes me as odd that someone would claim Europe isn't good at innovating seeing as how they created most of the elements comprising our modern world.
European companies like ARM and ASML dominate the chip industry. There are literally thousands of world leading companies in Europe that you have never heard of. Because they sell their products to companies you have heard of.
There were several powered flights prior to the Wright Brothers. The Europeans had already figured out lift and control surfaces. They had even figured out thrust, but they were using small steam engines so they could maximize the power to weight ratio, but it wasn't enough power for human flight. It was the Wright Brothers who used the internal combustion engine, another European invention, to solve the thrust problem. There's legitimate contention as to whether they were even the first to do that, but they're officially recognized as the first airplane for human flight.
My point being the Wright Flyer didn't just pop out of thin air (ha!). The Wright Brothers stood on the shoulders of giants, European giants.
Canada and Japan are also not good at innovating. Probably other places too. So this may be more of a question of why are the US (and China) above average currently.
One thing I'd speculate, US generally has more disparity than other places (that's the stereotype anyway, but it's what matters) So I bet there are way more horrible failures as well, and people in dire straights because of their decision to try and innovate. But what we see are the rare successes that come out the other end.
For the US, I think it is cultural. Americans are taught from a young age that it is do or die. And they do a lot, they die a lot too. It is evident with the relationship to money, in Europe, we are told to save money, never spend what you don't have, etc... In they US, you should invest until you have nothing left, and then live on a credit, not using money you have is seen as a waste.
I sincerely think that it is part of the reason why the US is so successful as a country. It has a population that is both hard working and efficient in a way that is unseen in other countries, mostly because it has no choice.
For China, I think the reason is much simpler: it is huge. It has twice the population of Europe, and four times that of the US. And they are just transitioning to becoming a developed country. India is a bit lagging as a country, but I expect it become a major force in the near future for the same reasons.
Canada innovates quite a bit. American companies just keep buying the Canadian ones who do so before they get big. The whole Canadian tech sector is like an incubator for the USA in some ways.
Although… the government invests almost nothing in starting new Canadian companies too, and instead focuses on luring American companies to open offices here, or else on giving money to existing medium and large Canadian businesses to convince them to increase hiring. This is a pet peeve of mine. It’s very short sighted
Europe is very good at innovation and really bad retaining the talent that produces. The companies based in this research end being created in US, for several different reasons.
While, true, we have good business models like Shopify, Canada has its fair share of places with, let me put it like this, "so what?" business models. Things that would look weird even if they were SV startups
What I've seen a lot of is "startups" that exist primarily to fulfill the role of "startup" in some kind of grant program that pays businesses to partner with startups. And if you are trying to start a tech company in canada, you end up bombarded with information about how to do this, it's all anyone really wants to talk about. Imo the while ecosystem is corrupted by government incentives or in some industries outright pretent and basically just bought with government money
One was a "make a cartoon" one, which I think got some investment but in the end closed
The other one was "pay your restaurant bill" app. Because apparently calling the waiter is too hard and I'm sure a low margin business will be very happy to have another intermediary with pretty much no value added.
These are old structural problems. My dad spent his career at the intersection between semiconductor science and industry in Germany and I spent my childhood listening to the exact same complaints the author has.
I've decided to spend my life in the US and I think the cultural differences are spot-on. However, as I'm reaching the end of my career and things haven't really changed on either side of the Atlantic I wonder: does it matter? Why not have two large economic superpowers with different approaches, excelling in different areas?
I don't mind the discussion, it is just more or less impossible to have when the premise is faulty. I can tell you exactly why Europeans think the US is better at innovation. It is because when Americans aren't satisfied with something they blame the US but still thinks the US is best country in the world. However when European aren't satisfied with something the blame Europe (or their country) and conclude that the US must be better. This has everything to do with US cultural influence.
Unconvinced. Europe simultaneously exists and does not exist, depending on whether one uses the term pejoratively or not, which makes it impossible to subject anything in it to criticism. It's like a Schrodinger continent.
If that was true I wouldn't see the same store chains in every city. There are some really minor differences, but mostly you see the same basically wherever you go in USA, in Europe most stores are different when you cross a border.
There is no Europe. It's just not a thing. European countries just work with some common framework that is better than nothing.
It's not even easy to employ people across Europe. You cant as a company in Denmark offer a normal employment contract to someone in Germany. You need a legal entity in both countries. There's also still european xenophobia and racism (ie not hiring someone because of their nationality).
Moving around in Europe sucks as well. Why should you move to country X and learn their language just because of a company/job? It makes no sense. A growing company in Berlin does not benefit anyone in Warsaw. There's no synergies.
As a European who did precisely that (living and working in multiple different nations) and has many transnational coorperations in the industries I worked in: I don't think the disconnect is nearly as pronounced as you make it out to be.
It could be better, sure. But everything, everywhere could be better, so this is not a valid argument.
Sure as a connected landmass the EU could become more connected, especially in law and regulation. But it is becoming just that with every year.
And if you e.g. compare how easy it is for me to work in another country with another history and culture, where in the world would you have that? A Mexican coming into the US certainly has it harder than a Spaniard coming to Germany.
When I first moved from Austria to Sweden for example, I could literally use my social health care card at the doctor without any questions asked and have exit with a bill of zero SEK and a recipe for medicine for the same amount — just like I knew from home.
This is kind of obvious for most if not all EU citizens. In practice, this is just a laminated piece of paper that you have to have on you when traveling in EU. All is in regulation and cross-border cooperation between countries.
I studied Dutch law, so I'm well aware of all kinds of 'freedoms' we have here in Europe and the (basic) rules around them. I'm more interested in the day to day shenanigans of these things, how do they work in practice. What kind of little annoying problems does one bump into when going to a doctor here or there, for example.
It depends on the country. Different languages could be a problem, but If both countries have an agreement, is basically painless. The healthcare system in the country that provided the service will bill directly to the healthcare system where the patient has the citizenship.
In some cases tourists are required to pay a small fee for minor interventions or treatments, and the major ones are covered.
In a third group the patient will be billed in advance and then can pass the bill to his/her own healthcare system to recover the money.
> You cant as a company in Denmark offer a normal employment contract to someone in Germany. You need a legal entity in both countries.
This is the same in the US, if you hire someone in a different state you need a legal entity in that state, and there may be different local laws around taxes, health insurance, pay, etc.
> There's also still european xenophobia and racism (ie not hiring someone because of their nationality).
Same in the US.
It's true that there are a lot of different languages, but I don't understand how you get from there to "Europe isn't real". I don't really know what you mean by synergies, but EU countries can easily trade with each other and citizens can freely travel between countries, so one country's growing economy certainly benefits residents of other countries.
>This is the same in the US, if you hire someone in a different state you need a legal entity in that state, and there may be different local laws around taxes, health insurance, pay, etc.
Incorrect. You dont need a separate legal entity in each state you operate.
>It's true that there are a lot of different languages, but I don't understand how you get from there to "Europe isn't real". I don't really know what you mean by synergies, but EU countries can easily trade with each other and citizens can freely travel between countries, so one country's growing economy certainly benefits residents of other countries.
Incorrect. Those countries are still in internal competition. One country grows more at the expense of other (brain and resource drain).
> This is the same in the US, if you hire someone in a different state you need a legal entity in that state, and there may be different local laws around taxes, health insurance, pay, etc.
While you have to register your business in the other state, you most certainly don't need a separate legal entity. I help run a small company with employees in three states, but we only have a single legal entity.
Ehm this is wrong. The only true thing you stated is that someone has to learn a new language if moving. But most international companies are speaking english anyway.
Its super easy to move and change job in europe. Sign the contract and its done.
The problem is each country has their own system but they are very similar.
Not as easy as in the us but easy.
And there is a shitload of synergy… can you prove your point? If I look at the countries export they are mostly exporting to europe.
Airbus etc are another examples.
> Its super easy to move and change job in europe. Sign the contract and its done
From what I've heard from Swedish friends that have moved to e.g Germany, it's almost impossible to setup a normal life without the help of german speaking friends. To get the pay check I need a German bank account, and then I need to fill out paper forms with tax agencies and stuff (all in German of course).
"Super easy" for me would be if I could sign a contract, move to Berlin, get an apartment, get payed to my Swedish bank account etc all without having to deal with the German government in a (to me) foreign language. Essentially that I'm a citizen where I would like to vote and have my "main presence", but that I then just can roam around EU and live/work anywhere.
But all that is not really possible, since different EU countries have wild varying tax schemes, and take different levels of responsibility for e.g health care, school, pension etc. It would be unfair for someone to pay Irish or Dutch taxes while living in Sweden and getting Swedish benefits.
I don't see any reason why a foreign bank account shouldn't work, maybe that was before SEPA-Times.
But it would be very stupid because Sweden hasn't adopted the Euro yet, so they would pay double the conversion fees (when they get money from their employer it would get converted to SEK, and when they buy stuff in Berlin in card it would be converted back to EUR)
The software market shows the same issues in regards to expansion. Multilingual support? A pain. Systems? A pain. How do you consolidate the idea that it is 'easy' when market expansion shows the very opposite?
No it is not. A legal entity in Germany cannot offer a contract to someone in Poland. As a german entity you need to create a legal entity in Poland and offer a polish contract.
Sure, but that’s not employment anymore. Because you are self-employed, you are missing out on a bunch of perks. Like… notice period? What notice period?
Yes, you can. But now it costs you a lot of money. Also, as someone hiring a contractor, I don’t care what arrangements you have in your own limited company. If I don’t like you, you’re out. Hopefully you have more clients.
at least in the uk running things through limited companies cost less money, not more. Again some contracts have notice periods - this goes for both sides. But yeah you dont get much protection so there is that disadvantage. I would say the biggest downside is that you dont get paid holiday (but you can simply add this to your rate) and it is harder to get mortgage.
You have a tax return to file as a private person, and as a company. I had a limited company in the UK.
No idea if the dividend tax is as low as it used to be. If it is, and you can go on through the fiscal year without claiming a salary, it sure will be cheaper. Assuming that there’s still no upper dividend limit.
Which european benefits? Everything is local. As a greek i would lose 44% of my income annually, and have mediocre greek insurance and hospitals. What’s the benefit of this?
I will sign b2b contracts with eu or us companies as long as i can.
Could you perhaps provide a link to some more information about it? Because I am reasonably sure my company uses neither, and as far as I can tell from the information provided by the Dutch government it is not a requirement either?
Employing people who live/work over the border is extremely common here, so I am having some trouble understanding how this could be done if such measurements were needed.
What does dutch government have to do with employment laws in Greece,Italy or Germany?
Labor laws are subject to national laws. If you are a cross border worker and commute from one country to another then technicall you are able to offer your country's contract.
European govermnents often have international regulations specifically to make this sort of stuff work more smoothly.
For example, a person living in Germany with German citizenship employed by a Dutch company will have to pay income taxes in The Netherlands. Similarly, they are granted social security under Dutch laws.
In some cases you fall under the employment laws of the country of residence, in other cases under those of the country of the employing company. In some cases it depends on where the work is actually done, and sometimes it even ends up being split between countries.
Fun fact: due to COVID in some cases work done in (for example) Belgium was legally considered to be work done in The Netherlands - as doing otherwise would have some nasty tax implications.
It is also not uncommon for companies to pay taxes in countries besides the one they are legally located in. For example, a webshop in Europe is required to pay sales taxes to the country and according to the laws of the country of the buyer - not the seller.
> You cant as a company in Denmark offer a normal employment contract to someone in Germany. You need a legal entity in both countries.
Are you just making stuff up in order to prove a point? Do you seriously think that companies in southern Jutland can't employ someone because they live on the other side of the border?
If you follow that guide you'll see that you can just employ a EU/EEA citizen - you only really need to do anything special if they are going to stay in Denmark for more than 90 days (which wouldn't be the case if it's a WFH deal)
The biggest hurdle is the requirement for the employee to have a NemKonto, which may be difficult and expensive (but not impossible) to find a bank that wants to setup for a foreigner, especially if they are not going to stay in Denmark.
> In theory you might have insurance, but while unconscious you might still ‘pick’ an out-of-network hospital or anesthesiologist and end up with huge bills. If you know the right people and can afford it, you could then negotiate this down. Maybe. I know several smart Americans that had to live from their car while they sorted out financial issues.
According to a sign at a hospital I read recently, this protection cannot be waived in the ER. The ER is simply not allowed to issue a “surprise” bill. (Which still permits outrageous bills, but insurance pays them per the usual rules.)
To my understanding they just give a paper now that you have to sign. It's an agreement that "they don't know the price yet because it's ER, and so they will tell you later"
According to the sign, it is simply not possible to sign away one’s right not to be surprise-billed.
Also, I’ve seen ERs that have patients sign little digital signature pads without ever showing the patients the legalese in question. I don’t see how that could possibly hold up in court.
Hm, ok. I had an experience when signed something like I said, and then a couple of weeks later they charged 7x of what I expected as a fair price. Don't know how that was possible then.
It was higher that the price on the website, which they supposed to provide. But they didn't care as they explained the website is simply outdated.
When we say "Europe is", what do we mean? If looking at different groups in europe, i think there 's a major distinction between age groups. At least in the south, young people are literally suffering because of the demographic divide that ensures that they have no wealth, no house, low wages, insecure jobs and work to pay pensions while they themselves will get little of them.
There are also very established public sectors and regulatory hurdles that are not goign to be removed as long as people > 50 are the dominant voting group. I believe there's a big divide in the appetite for risk in younger people, but it's impossible for it to manifest because they are a minority.
I always enjoy bert_hubert's writings, they are unique.
It seems in europe we know what the problems are, but not how to solve them.
The best way to make money in europe in the past decade+ is (was) to invest in US Tech Equity
Subsidies and grants are job creation programs, let's not kid ourselves.
The financing problem is a vicious circle: Europe is making it hard to become rich and treats you like a criminal for daring to make money (But it's fine if you have inherited it). Without rich people who have knowledge of industries, money is not reinvested into tech.
> we have a surplus of idle technologists that would love to program and make things if only someone asked them to do innovative things
And pay well. We have a lot of people remote working because they re not fools
The dynamics are similar here in New Zealand, although here is how I would summarise the problems here:
1. We need gamblers
There is a power distribution of returns. Even in the US the median profit for a startup founder is $0, and 95% of VC investments do not beat their market risk. In NZ the risks are higher and the rewards are less.
2. Founders lack of business skills
Founders start unprofitable businesses and most New Zealanders are poor at marketing. There is also usually a lack of certain skilled employees because the pool of people with a particular skill is often small and the most skilled often move overseas. There is a limited culture of successful startups, and very limited access to experienced founders.
3. Investors are fucked.
In New Zealand investors seem to me to actively sabotage their investments. Cause is probably lack of skills/experience, although it could be misalignment of incentives. Also investment amounts are puny - $100k is a sizeable investment. Infrastructure like standard legal terms is lacking.
4. Limited access to market.
The NZ market is small. We create a lovely tech business, but then sell the business to a US owner because (a) NZers lack skills/knowledge to sell in a large “foreign” market, or (b) a US owner has access to customers, or (c) tariffs or other protections make it difficult to sell to US market (agricultural, Rocket Lab)
5. The easy life.
Founder’s goal is often a business that nets you a few million to buy a holiday home and some toys. Few keep repeatably betting everything to win a unicorn.
6. Real estate.
Property has been a reliable investment. Why do a high risk tech investment (founder or investor) when there is a low-risk easier road.
7. Government is mostly clueless.
Government focuses on stupid non-commercial outcomes. Government is hopeless at encouraging enterprise. Comparatively little red tape compared to many other countries, but still too much (e.g. first employees are extremely high risk due to employment laws).
A real job offer for working in an European Project in the Systems area of CESGA EGI-ACE (Supercomputation Center of Galicia, Advanced computation platform for open science based in data), October 2022. North Spain.
Requisite for the job: Speaking Galician language, or a signed compromise to learn it
Enough said.
EU often seems clueless about were to look or how to attract talent. The job offers sometimes seem redacted by clowns. Example: "We want somebody to work in our L.A headquarters, Requisite, Not living in L.A. for the last three years" (example based in a real case, I had seen also the opposite).
If they have a hiring problem this damage is a totally self-inflicted one.
For example, in The Netherlands we have the "vrije vergoeding van extraterritoriale kosten". Long story short, if a Dutch company recruits an expert worker from outside The Netherlands, they are allowed to pay 30% of the salary tax-free for 5 years. Considering the salary tax at that level is nearly 50%, it's a significant difference.
I would not be surprised if other countries have similar methods to recruit foreign high-quality workers.
As for the former: it might be the case that the position is funded by an institution requiring a certain percentage of people employed by the project to speak the language. Stuff like that is not at all uncommon for subsidies.
Alternatively, it might simply be the working language for the company. If you're going to develop a platform which will be used solely by people in Galicia, with an interface in Galician, it is not too weird to expect the people creating them to understand the language as well.
But yeah, Europe is a diverse continent. You can't really work with a one-size-fits-all model.
I was unable to find the salary anywhere (It seems that nobody though that it could be an interesting data for the candidates, so I assume that is subpar). Most documents written in Galician only, Spanish seems totally absent and only a few pages were translated to English.
Having all of this in mind, this phrase was not a big surprise:
"En 06/06/2022 quedou deserta esta praza por falta de candidatos que cumpran
os requisitos, polo que resulta necesario facer de novo esta convocatoria para cubrir o posto"
If you speak Galician can read: "Due to lack of candidates to comply the requirements in 06/06/2022 it is necessary to make this call again [October] to cover the position."
(It means also that the EU money granted for hiring somebody in this period of time has vanished and can't be recovered so the job offer is now for 8 months, instead a full year).
Qua the USD global position as reserve currency, the US has access to much cheaper capital than the rest of the world. That is why entrepreneurs flock to the US.
It is not "innovation" that is the difference; but the ability to scale up via cheap and risk-willing capital.
Not really. There's simply not enough Euro debt to make this work. You'd need a major increase of EU funding to even start creating a market like treasuries.
The US does have those unicorns, and while its great for the people that got rich off of it, I don't think its been a net societal benefit. People are conditioned to expect all software to be free. This kills the ability of long term stability for a company - and forces them to spy on the users or the usual vendor lock in. How many SMBs in the US are making decent money selling software?
A fair while back a startup in Rome that I am very familiar with had lots of fun setting up there. They were a highly scrupulous group, and besides they were going after government contracts, so they paid all of their taxes and regulatory fees, which in Italy is both a financial and incredibly complicated bureaucratic mess that, to be honest, many people and startups simply, um, avoid.
They also had to deal with all sorts of absurdities. For example, they needed high speed landline internet: at the time the only option in their area (Trastevere) was Telecom Italia (TI, now TIM), the government-associated telephone monopoly. To get internet service, you had to start paying TI as if you had service, and then when they got around to it they'd come by and hook you up. So they did this. Three months later they were still paying and still hadn't gotten service. They complained to TI and were told that someone had come out but couldn't find their office because "Trastevere has twisty streets and is complicated". TI said this. They were then put in the back of the queue and had to wait for another three months, until the same thing happened again. As I understand it, it took them almost nine months to get internet service. All along they ran the entire company on cell phone internet plans.
> governments should not haunt founders for alleged tax crimes over paper valuations
> Our banks don’t like startup founders and neither do many of our tax agencies, who often consider paper wealth to be real wealth. While they consider the paper wealth to be real, the tax agencies want to get paid with actual cash.
> Banks, tax agencies and even family members distrust startups and will make life difficult for you.
And on top of that the insane, purely insane, amount of paperwork. And if you mess up, it's fines, fines, more fines, then fines over the fines for not having paid the fines soon enough.
The problem in most of the EU countries is that there's an ever growing public sector and administrations that always inflate in size full of people producing hardly anything besides rules and crazy paperwork that those who want to actually work have then to fill.
You have IRS public servants coming to your place and saying stuff like (this happened to me): "Had I opened your file before I'd have noticed there was no money to take". I was clean but this gives the mindset: these guys come knocking at your door with the mindset: "There's money for the state to seize".
I've literally seen a public servant, while I was very polite, not answering me, taking a paper from a pile of paper, the only pile of paper in its office, and slam it on the desk, without saying a word while she was... Playing minesweeper. For the role of that one public servant was to "serve" that one paper (some stuff you had to fill to require the right to prevent other people from parking in your street when the moving truck comes: of course this requires one dedicated servant only for that in every single town hall in Belgium? WTF...).
It's a never ending Brazil (the movie) dystopia infernal circle of paperwork leading to more taxes being paid, leading to more public servants being hired, leading to new taxes.
As the saying goes: *"In France you plant public servants and taxes grow" ("En France on plante des fonctionnaires et il pousse des impots").
I looked up once how one starts a business in a few European countries and what taxes are. The processes I found were really expensive, and many companies weren’t allowed to exist except by meeting some pretty weird criteria. Then, taxes were insanely high. There were some business types that I could not figure out how to even met the criteria — you needed to be approved by some council who thought your venture was worthwhile and necessary
I remember thinking, “no wonder there are no startups.”
But maybe my research was low quality? It really may have been.
> But maybe my research was low quality? It really may have been.
Creating a company is the smallest of barriers in many countries in the EU27 this can be done in a couple of hours and a few forms and a few hundred euros. In some countries you can even do it online.
Now the ability to secure investors funding now that is a much bigger challenge, which is why you end up with European startup incorporating in Delaware, or New York to increase their success rate with US VCs.
You've referenced by far two of the most innovative countries in Europe. What about all the rest? Is it easy to start a small business in Spain and Italy?
There are 2 ways to find a company in Estonia through E-residency:
1- Create it yourself (using your E-residency and various e-services)
2- Use a service provider that handles all the steps. Note that this method may have some limitations. Service providers can be found at marketplace[6]
For the method 1, here are the costs:
Finding company:
- Creating a sole-proprietor company (FIE): 20 euros, one time [1]
- or, Creating a limited company (OU): 200 euros, one time [2]
Accounting:
- Using Estonia's e-financials (yourself): free for first year, 5 euros starting next year [3]
- or, using an accounting company. I used to pay once a year hourly rate for end of year taxation (R-Form) ~60euros a year. See marketplace [4] for other accounting companies.
Other requirements:
- An Estonian contact address is required to find a company. There are companies providing this service in E-residency Marketplace[5]. Last I checked it was from 5euros/month.
- An Estonian contact person, if you are not a resident of Estonia. Same E-residency Marketplace[5] has some service providers.
Doing taxes is probably the worst part and off-putting to people who are thinking to be entrepreneurs. Between accounting for differnt levels of VAT, reporting every 3 months etc, it becomes a huge hassle and every mistake is a fine.
Regulation mostly reduces profits because of so many rentseekers
> This article has highlighted the stark differences between the US and Europe, and why innovating in the US is a way for an individual to reduce their risks and improve their outlook. Meanwhile in Europe, a non-innovative job offers the best expectation value. Plus there are our old fashioned expectations of well costed innovation plans where we know up front how we’re going to make money
Maybe innovation isn't all that great afterall?
Societally, you'd expect innovation to deliver better quality of life to all it's people.
In that sense, I'm not sure it's fair to say that Facebook is the kind of innovation society needed.
If the EU can in fact provide better quality of life with less effort and less need for risk taking, to the people of Europe, I'm not sure why you'd want to change the system?
That's a big "if" though. But I think that dimension needs to be addressed as well.
I don't know that Facebook or Uber really brought major innovation from an impact point of view. Lots of "innovation" in the US is more about market entry or taking over a market. It's not always delivering true life improvements, but innovating on ways for shareholders to capture more money.
Meanwhile, BioNTech, which delivered the COVID vaccine, is a European company.
I'm not saying EU is better than US, but I think we need to go a bit deeper in this analysis, define what we mean by "innovation", what inherent benefits does it have, are there different kinds of innovation, and are all kinds desirable?
This article (and previous ones by the same author on the same issue, and the discussions that always follow these articles on HN) make me even more pessimistic about the future of innovation in europe. Europe is less innovative because it's too pleasant and europeans are too moral. If only such explanations are allowed, is there any chance for improvements? Is it possible in europe to admit that even one thing works better in some other country?
Heh. Let me enumerate a few examples of inventions made in Europe:
English. You know the language we are speaking right now. Radar, Shares, Stock Markets, Democracy, the Jet Engine, the Industrial Revolution, Double Entry Book Keeping, modern Banking, most religions etc. There is a very high chance that whatever tech or culture you are thinking about was invented in Europe.
And today look at companies like ARM and ASML that dominate the chip industry. Or world class innovative companies like Airbus, Maersk, Porsche, Mercedes etc. Germany alone has thousands of world leading companies that you have never heard of but nevertheless are crucial for most products you have heard of.
And let’s talk Google, Facebook etc. They are ad companies. And the ads business has been around for a long time. So it could be argued that those companies are not at all innovative. Yes there might be cool things they have done at the operational level to support their ad serving business and get more clicks. But the computers they run on would not have the power they have today without innovative European companies like ASML.
To say Europe is not "good at innovating" seems to fly in the face of history of technology. It is possible this article is a European's way to deal with the fact that social mobility is the elephant in the room. It is possible that the issue is European establishment's (social/economical/political) reluctance to having to deal with newly minted tech titans in their midst?
Family members giving founders grief is also a telling sign: a mild form of enforcing a social taboo.
Both of those were created decades ago, and by the British (albeit TBL worked in Switzerland at the time he created HTML). A lot of people in EU countries say Europe when what they mean is EU member states. The EU leadership itself does this all the time and the practice spreads. The author may believe that Britain is not European for the purposes of this essay. For instance he says there's no AI innovation, which ignores DeepMind (the question posed by the article is about innovation not ownership, so the fact that they sold to Google shouldn't matter).
The UK does OK but many of the same cultural issues are present. Some are misidentified as European vs American culture when in reality they are more like tech vs non-tech culture, I think. He talks a lot about outsourcing and contractors. Companies created/run by non-programmers often have no intuition for the large range of experience that can be found inside the job class of software developers, nor what can or can't be done with technology, and therefore can't see why you shouldn't just outsource it all to the lowest bidder. I had to face that regularly at my last employer. It was founded by Americans but they came from finance. All the tech work was done in the UK. "Why can't we just ship this all to India/eastern Europe" was a common question from the US management even though the product required fairly complex technical design work. It was the Brits pushing back and arguing for well compensated and equity incentivized devs (who came from all over Europe). There were other cultural differences around hiring as well.
It may seem like this problem is more prevalent in Europe but I think that's just because more companies here are older and therefore not run by developers. If you look at what we mean by tech firm or tech startup, and what defines this, it's hard to come up with a consistent marker beyond "a company founded by engineers or otherwise highly technical people". If you look at US tech firms, every single one is founded by a programmer. Moreover their board of directors may be made up of former developers too! It gives them an intuition for software and how to make it work that you just struggle to get otherwise. It's not impossible - one reason Goldman Sachs is so respected/feared in the finance world is that they managed to do a good job of their internal software platform early on. But it's a bit rarer.
Still, the cultural issues are real. I remember my mother once asking me why I didn't found YouTube. This was many years ago. I replied, "because their business model is insane, you can't pay for that much bandwidth with banner ads". And it was kinda true, but back then I hadn't understood just how plausible selling to a competitor even if you lost money actually was. Also an issue - top question for startup founders from family will be, "when will you be earning your old salary". Creating a company can be seen as almost a self-indulgent wastrel thing to do vs just earning a salary.
"American culture encourages the process of failure, unlike the cultures of Europe and Asia where failure is met with stigma and embarrassment. America’s specialty is to take these small risks for the rest of the world, which explains this country’s disproportionate share in innovations." - Nassim Taleb, The Black Swan
I think the main reason is startup costs. Due to what little I know about Europe, I suspect it is due to regulations that protect employment and the environment (which I think is real good). For Tech, employment is the big one, but a startup may want the ability to fire someone without having to spend time dealing with Gov. Regulations. In the US, a small startup can fire you without even notifying any Gov agency (or the notification extremely simple).
In the US, once heavy environmental regulations started going in, many companies started moving Manufacturing off to Asia. Now that the US is now allowing more pollution, you see some Manf. is coming back.
I can't vouch for how European Countries labor laws influence start up culture over there, and I'm sure its definitely a thing, but I quibble strongly with the idea that US manufacturing was moved to Asia because of environmental regulations.
Its generally accepted that its due to a one two punch of lower labor costs and a lack of willingness to invest back into factories due to de-regulation in the 80s and 90s which favored financialization of corporations[0].
This lead to a self-perpetuating cycle where American manufacturers struggled and couldn't make the investments needed to stay competitive in most markets where there wasn't regulation (such as car tariffs). This in turn lead to situations where, for instance, if you needed specialized manufacturing Asia ended up farther ahead on both price and quality than the typical US manufacturer.
In short, it was de-regulation that lead to structural favoring of financialized corporations which in turn lead to a downward investment in manufacturing in the US while investment in manufacturing sectors in Japan, China and other countries soared[1]
> Now that the US is now allowing more pollution, you see some Manf. is coming back.
The bigger factor is that in some manufacturing areas, labor no longer dominates the costs. If you are using "robots" and other automation, then the cost of labor might not significantly impact unit economics.
There are consequences for making decisions in any direction, and the oligarchy that dominates a particular geographic area gets to decide which values to prioritize.
It's anarchy on an international scale and it's glorious.
More like European VCs are very risk averse when compared with their US counterparts. Raising money in Europe seems mostly either about knowing "old money" or having connections state-side and skipping the local scene, sadly.
How much of this has to do with LPs? From my cursory knowledge of EU VCs, they seem to managing much of their own capital, rather rather than investing on behalf of a large, driverse group of institutions and high-net-worth people. With the US based VCs (which probably have global LPs), they are looking for not just good returns, but also investments which maximize the efficient frontier of their portfolio. They explicitly are looking for non-correlated positive returns. Without LPs with that kind of mindset, I got to imagine the VCs would be much more risk-adverse.
If understand the article right according to the author high tech === software.
I would say this is far from the truth. The first covid vaccine was developed in Europe. Europe plays a big role in green energy. I would say Europe can innovate.
That doesn't mean that Europe hasn't many problems and disadvantages.
1. Lack of money for startups. Less venture capital and subsidies for startups.
2. Bad interplay between military research and startups. This basically created Silicon Valley, and it seems to be a big part in the Israeli startup scene.
3. A big part of scientific research is removed from universities => less potential founders get in contact with cutting-edge innovation.
4. No unified customer base to start with. The big home markets of China and the US seem to be a key advantage, at least for Internet/social media startups.
Selection effect: All the people interested in high-risk, high-reward outcomes emigrate to the United States. This has been ongoing for the past 100 years at least.
There is no Europe but a myriad of small countries when it comes to innovation. If we could incorporate true english-speaking european companies with european legislation, SV would shit its pants :)
It's just a matter of critical mass. 12 european Larry and Sergei in a room get laught at. We need a hundred european Larry and Sergei to be to good of a demography to be ignored.
This is a great idea. Europe wide incorporation with reporting to a single EU agency, all in English. They’d have to figure out how to split the taxes up between countries, but besides that it would be amazing for startups in Europe.
(disclosure: American. I've dealt with a lot of European companies over the years. They're just as sharp as Americans if not more so.)
This is an excellent article by a European, especially its honesty when concentrating on Europe, which they're familiar with. The parts about how you can't get a mortgage if you're a startup founder, worrying about your pension (!), horrible consequences from bankruptcy, and tax prosecutions from the government are things that many Americans wouldn't think of. Going to a startup here is not seen as a life-risking decision.
It goes off the rails when it falls for the touristy "but we have free health care and college!" trope:
> It may be good to realize how much of a dystopia the US has become already. Most well-educated Americans leave college under Absolutely Crushing Debt. And this is no ordinary debt – it survives bankruptcy!
"Most well-educated Americans"?? What, did you read that "somewhere on the Web"? Stick to what you know.
But he is not wrong. In some states the average student debt is $40k [1] and APR is 5%. Anecdotally I have friends (and family members) who seem to be resigned to never paying back their loans or doing so very late, when they are 50 or something like that, and some of them are in well-paid tech jobs.
Average UK student loan debt is actually greater than in America and, even worse, was even accumulating 12% interest rates earlier this year before the government finally woke the fuck up and did something about it. The loans are better than their US counterparts in that you don't have to repay them until you hit a certain income threshold but once you do, you will then be paying 9% of all your earnings above the threshold on them. Oh and they do eventually get written off - but only after 30 years. Meanwhile the English speaking world scratches its head and wonders why everything is going to shit.
> "Most well-educated Americans"?? What, did you read that "somewhere on the Web"? Stick to what you know.
Well, what do you know? You're not giving any arguments or data.
What I know is that there's about 45M Americans who're out a cool 1.7T USD, and that both POTUS and Congress passed a bill called the "American Rescue Plan" to adress this situation.
Yeah, it seems to affect most well-educated US adults.
Let's look at the data: according to [1], 27.5z of Americans 25 or older have a bachelor's degree. The population, according to Google, is 329.5 million. That gives us 90.6 million with a bachelors.
According to [2], we get 38.1 million older than 25 who have some student debt. That works out to 38.1 million, giving us 42%. (I excluded the 24 or younger cohort, only because the Census Bureau did as well).
Calculations are shown below.
So the statement "Most well-educated Americans" is factually wrong. Isn't it? Whatever you think "most" means, it has to mean "greater than half."
I agree that "most ... with crushing" is a poorly worded hyperbole. It does seem to be about a half, however.
"Among the class of 2020, 55% of bachelor’s degree recipients took out student loans, graduating with an average of $28,400 in federal and private debt."
"poorly worded" is one way of putting it. Throw out a ridiculous figure to get attention, and then back off when it's challenged and say "well, it's still a problem!" is a shady tactic.
"of recent college grads, 55%" would be more accurate, I guess.
Lastly, mean vs. median is a worthwhile topic. The mean debt can be inflated by a cohort of highly-indebted people. The median debt would be more interesting.
Hey do you think kings and queens and other established interests are innovative?
But more seriously, while US is great at technical innovation, Europe is great at innovating a better society, better healthcare longer vacations faster trains more support for humanities.
I find it very strange that the word "non-compete" does not occur in the article. Having California style non-compete legislation sounds like it would be one of the easiest steps to improve European competitiveness.
This is anecdotal but in my experience in large parts of Europe, this already practically exists.
From what I understand, in Germany at least, companies can demand that employees sign a non compete. However, once an employee departs the company, if the non compete agreement prevents the former employee from finding suitable work, the company must pay your salary until it can either prove that the non compete agreement is not the issue or until it releases the former employees from the agreement. Given those conditions, companies very rarely enforce their noncompete agreements and they’re functionally toothless.
I don't think what you describe is functionally equivalent. I suspect the main benefit of non-competes is not that you can move around from bigcorp A to bigcorp B (although that's also useful for spreading know-how and utilizing talent efficiently), but rather that ex-employees of bigcorp A form new startups without fear. Would you either fund, found or join a startup if you knew that the threat of a non-compete hangs over you or a founder?
Globalization and the associated outsourcing has always been a contested issue. A lot of people who tried to pretend it wasn't were either trying to make a buck or willfully ignorant (see Germany's intentional utter dependence on Russian gas).
if you read the article, it also talks about outsourcing software production. In the broad sense, if one outsources both hardware and software production, what is one even left with? Does one produce anything besides putting one's name on fashion apparel?
Managing a distribution system, such as a sales and marketing organization is itself a feat. Plenty of tech companies no longer really innovate and just buy startups ... yet they still provide value (to their investors at least) by cross-selling the products to their clients, at a scale the startup might not have been able to reach organically (within the time window of their product remaining sufficiently innovative before it in turn in disrupted).
I discussed income tax with a US colleague a few years ago and when we had included medical insurance costs and risks, copay, etc., the US total tax burden really wasn't so very much lower.
But most Europe has. Replace the value by the local VAT paid in your country and you will be able to pick the idea. In Europe you pay the normal taxes and then you pay "the other" taxes.
Saying that you "only pay X% of your income in taxes" is not the whole picture
Don't focus in the percentage, is not the important concept here.
Is a luxury to replace the oil in your car? We pay a 21% more.
You can see it from a point of view of privilege and pay less, let say 4%, so you don't care to think about it, but this does not change the problem. The problem is that you are paying 4% more, without receiving anything for it.
>In addition, European investors and entrepreneurs don’t tend to see their ventures as ’lottery tickets’ that might pay off. We like to see things costed with at least a theoretical path to profits
Strange if true. Venture capitalists don't buy lottery tickets anywhere. They build a portfolio of them where the expected value is positive. From an investment standpoint, there is no difference.
Europe is more keen on stability. That and protectionism through bureaucracy means things are moving at a slow pace. Some like it that way. And to spicy things up a bit, european countries enjoy dominating one another with petty politics. There is some cooperation for show but by and large it’s mainly driven by old age colonialism without wars. Cross border cultural friction means slow adoption of innovation between countries. Just look at east europe where innovative tech companies do better on the us market than its own eu home market.
Well it also doesn't help that European startup founders are in my experience almost exclusively arrogant self righteous pricks whose only bit of knowledge is ayn rand novels and expect serious results yesterday on a legacy codebase. I find it impossible to work for them so I will not make this mistake again, no matter that I would like to do something innovative. So much better working in corporate environments or for the government than for small business.
Haven't read the article yet but personally I think the number one reason is culture. Europe is so conservative it is unreal - it still has kings, queens, and aristocracy ffs. You've got centuries of antiquated customs, old boy networks, and oppression to overcome. America was literally built on the backs of people who had had enough of that restricting nonsense and broke off for a better life.
Tech scares the European elite shitless because they don't understand it, it's the complete opposite of what they stand for and it threatens to destroy the tools they use to maintain power. It distributes knowledge among the people rather than concentrating it with the few, it is egalitarian rather than classist, and it favours competence over traditional customs.
Europe is not good at innovating because the elites don't want to innovate. They want things to remain as they are. The selfishness is astounding and they can only get away with it because the US military gives them protection. Take away US aid to Ukraine and a substantial portion of Europe would most likely be under Russia control right now and the rest would be engaged in a war for the continent. Europe need to wake up, stop being lazy as fuck, rediscover self sufficiency in energy and security and toss out all the old bullshit that is not fit for the 21st century and holding them back. Otherwise it will end up like the UK currently is, sliding into oblivion because of delusions about its capabilities, its traditions and its standing in the world.
One counter point to my tirade above: the US only gets away with what it does because the dollar is the world's reserve currency. They can subsequently fund moonshot start ups in a way that is not possible elsewhere in the world.
> For better or worse, here in Europe we are fond of business plans that somehow make sense. Blue sky “let’s launch this and I’m sure we’ll eventually find sufficient rent seeking or surveillance possibilities to one day make money” things don’t fly too well here.
As someone who once looked for investment in London, going to VCs and asking for money for consumer facing, million to one businesses aimed at 'revolutionising' the world will get the same reaction as having 3 heads. They do not have an interest in going for crazy moonshots at all, and are very unwilling to just give millions of dollars in funding to a startup in the hopes it could become the next Google or Facebook.
What they are willing to back on the other hand are 'boring' SaaS businesses usually aimed at the B2B market. Some sort of business inventory system or tax management one is more their speed/style, and something they'll probably back with tens of thousands of pounds instead.
So anyone who wants to make a world changing business or product will probably go to the US, or lose out to US based companies that can afford to pay millions in software engineer salaries and perks and marketing.
Of course, that's not to say the other factors aren't issues. People are very skeptical of those that go solo and try to setup their own business in Europe, especially if it doesn't involve some 'well known' field like a trade or retail establishment. And I guess there's probably a bit more ruthlessness in the states too, likely in part due to 'traditional' jobs not offering as much of a future as crazy moonshots.
But it's the funding that's generally to blame. VCs are way more conservative in Europe, and seem terrified of backing ambitious consumer focused businesses and products in the same way they are in the states.