by SandB0x on 12/6/15, 8:31 AM with 87 comments
by CM30 on 12/6/15, 10:39 AM
1. European laws are too restrictive. It's especially notable with stuff like the hilariously stupid online tax laws the area has (having to apply different tax rates based on the location of the user rather than the business makes it hugely more complex than it has to be) or the right to be forgotten, but it just feels we're too restrictive here in general.
2. Culture. People in the US seem more ambitious and more willing to risk everyone for the small chance of becoming a millionaire/billionaire at the end of it. People in European countries on the other hand seem to be encouraged to avoid risk and avoid anything that might lead to less job security in the short term. Probably because failure in the US is seen as a minor bump in the road, whereas failure in Europe is seen as the worst possible thing imaginable.
3. Money. Not just in the form of venture capital (though that's a huge reason), but also because US startups tend to pay their employees more, whereas their European equivalents stick to the average local wages. Hence the best programmers, designers and other such people usually either find employment in a more stable company (read, one where there's a work/life balance) or move to the US to work in Silicon Valley.
If we want a 'European Google' or European startups in general, we need to become less risk averse, more willing to reward the types of people needed to work in those companies and less obsessed about regulations.
Oh, and fix the issues certain areas have with internet connection speeds. The fact that a lot of areas in large cities like London can't get fibre internet and the likes is not helping our tech businesses compete with their US counterparts.
by vlehto on 12/6/15, 10:40 AM
There is a Finnish service called irc-galleria.net. It's a service that was created to let irc users to share pictures of themselves to other irc users. It got really big in Finland. They even had big screen in center of Helsinki to show new pictures uploaded to the service. They had this paid feature which let you keep a list of friends in there. Everybody talked about irc-galleria stalking.
Then Facebook came. The major difference was that facebook let you make friends for free. Year later nobody remembers irc-galleria.
Dislodging a platform is easier than ever. It's enough to make better or cheaper product, then just get lucky. Previously you had to also take distribution and marketing into account and then get lucky.
by knz42 on 12/6/15, 10:27 AM
In Europe, we have wealth redistribution. A few companies with so much concentrated financial power is not healthy.
by x5n1 on 12/6/15, 10:12 AM
How many American startups are a result of a pissed off employee working at a successful company going off and creating the same thing his or her employer did but better? And this cycle feeding on itself.
Or university students with an idea getting all the financial, technical, and managerial support necessary to create the next big thing.
You have to understand the process and then try to replicate the process. And each component of the process is as important as the other. You need the whole pie. Not a piece for it to succeed.
You can seed this with massive capital expenditure, tens of billions basically poured into private coffers of Caplists, but the process has to be very similar for it to actually work.
by nabla9 on 12/6/15, 11:37 AM
Homegrown American, Chinese or Japanese Internet company can have hundreds of millions in revenue before it even starts to think about localization and adjusting to other countries, cultures, languages, payment system and advertising biz.
Network effect rules in the Internet business and US based business had huge upper leg in this regard in early 2000s.
by jacquesm on 12/6/15, 10:48 AM
by randomsearch on 12/6/15, 10:52 AM
by dmoo on 12/6/15, 11:01 AM
by CM30 on 12/6/15, 11:16 AM
How many tech company founders met at university? Now, how many studied the exact same things? I'd say a lot less of them.
by ThePhysicist on 12/6/15, 11:10 AM
They should instead look in China, where there already is not only a second Google but also a second Facebook, Amazon, WhatsApp, Stripe, ...
So, why did the Chinese succeed where Europe failed? Here are my thoughts:
* Regulation: With its strict censorship and great firewall, the Chinese government effectively shut out most American IT companies from their market, giving local companies enough time to grow.
* Culture: Chinese culture is much more different from American than European culture is, hence it is also much more difficult to adapt an American IT service to the Chinese market than to the European.
* Market size: With 1.3 billion people, 900 million of which speak Mandarin the market size for any IT service is enormous, even taking into account that many people still do not have reliable Internet access or a lot of money to buy services / products online. Likewise, the market growth is much higher than in the US or Europe.
Personally I believe that the main competition for American IT companies will not come from Europe but from China. Right now, most Chinese IT startups only follow in the roots of their successful American idols, but with so many well-educated young entrepreneurs this should change soon, and I predict that we will see more and more disruptive Internet startups "made in China" very soon.
by Scarblac on 12/6/15, 11:13 AM
by jokoon on 12/6/15, 11:49 AM
It's hard explaining to people what exactly google does for so much money. Europe is more "feet on the ground" when it comes to business in general. What does google sells by the way ? Ads, android (which is mostly open), internet services... it's hard to really tell. In europe, technologies and research will often rather belong to the public sector than the private sector.
The silicon valley is a typically american thing because US business laws and the culture allow it. In europe it just won't. The only way you can really thrive as a programmer in europe, is by doing open source, and Torvalds is a good example of that, so by a loose definition it's only accessible to people who spent a lot of time in universities. There are no other way you are going to do business and getting money typing code in europe. It just won't happen.
by frik on 12/6/15, 11:22 AM
The main source of disagreement was the format of the search engine, with German engineers favoring a text-based search engine and the French engineers favoring a multimedia search engine. Many German engineers also balked at what they thought was becoming too much of an anti-Google project, rather than a project driven by its own ideals."
https://en.wikipedia.org/wiki/Quaero
https://www.exalead.com/search/
The project failed to deliver. Though the Exalead web search engine survived and got bought by Dassault Systems (CATIA 3D CAD). Next time they should open source the public funded projects...
by lumberjack on 12/6/15, 11:02 AM
by jkaljundi on 12/6/15, 12:41 PM
by IkmoIkmo on 12/6/15, 11:19 AM
So what else then... Taxes, here tech companies are notorious. Stories of FB paying a few thousand in total taxes in the UK, Apple leaving its cash abroad to avoid taxation, Google channeling its revenues through a royalty-scheme between Ireland and the Netherlands that goes virtually untaxed (Dutch Sandwich) etc... tax wise these companies contribute little to the place of their main business (e.g. the US for the above three companies).
Then, employment? Here too, tech companies are known for providing relatively little employment compared to the size of the business, versus other industries. To take an extreme example, walmart (a company which pulls the vast majority of its revenues from the US alone) has up til recently had more store locations, than FB has employees. FB doesn't even have 12k employees, Walmart has literally a couple million. The article mentions Whatsapp as an example, it just had 55 employees when it was sold for almost $20b Compare that with say Vente Privee, a French online retailer that has 2500 employees and close to $2b in revenue and a slightly higher valuation, that nobody talks about. Which would you rather have in your country, creating jobs? You may still (likely) say Whatsapp, but it wouldn't be an obvious answer. Instagram is similar, 18 employees, who cares whether they're in the US or not? It's a meaningless figure for employment alone. And again, ownership wise the billion dollar valued company is in the hands of international investors, and tax wise it's likely little to nothing.
So what's the contribution of these US companies to the US then? What is Europe really missing? It profits from all the international innovations (I happily use Google's services), while it taxes the above companies for doing business in the EU.
If tech was shitty in Europe, sure, all of this would be alarming. But we have great research (e.g. hadron collider), IT/ICT infrastructure is very solid, if I look at my own country we have digitised and modernised everything from insurance to banking to tax filings, at the supermarket I pay via NFC, as I do in a bus, metro, train or tram. I don't live in some outdated world without technology.
There are very obvious counterarguments to make... in particular political and cultural control and influence that large companies like Google have and the power that wields, that Europe thereby doesn't have, can be or become an issue. Reinventing our own industries the next few decades without inspiring tech companies, is trickier. Seeing talent trained at great European universities with great startup ideas fly to the US for various reasons, is an issue. I appreciate all of that, and yet I feel the importance of companies like FB's contributions to the US as opposed to the rest of the world, is overstated, and that we're not missing out all that much by not having a European FB, for example.
At the end of the day there are 3 superlarge markets, the US, Europe and China. Then a number of very large ones like India or Japan. But of those first three, the EU is merely a partial economic, political and legal union, with a wide range of languages, laws, cultures and systems. While the US and China certainly have internal diversity, it's nothing like the EU. It's why we have tons of companies with a few billion dollar valuations, that capture a substantial portion of the EU but far from all of it. The biggest first language market in the EU is German, and it stands at 18% of the EU as a first language, see what I mean? In the US or China, you can pretty much roll out tech products nationally in many cases, not without any friction, but in a way that's much more natural than in the EU. That doesn't mean tech sucks here, that we have little value, no jobs or shitty digital/online services, it's just fine here (find me digital/online services that the US has that we simply don't have access to, that's missing in EU markets completely), but we have fewer ultralarge unicorns like Google or Facebook, and I'm not all that convinced that this is as big a problem as it's made out to be.
by mark_l_watson on 12/6/15, 12:36 PM
by danmaz74 on 12/6/15, 12:03 PM
by sqldba on 12/6/15, 11:02 AM