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Comment by hodwik | Hacker News Reader

Why is that the more interesting question?

Is there anything you can add to the discussion of substance? Or, perhaps, is this drive-by FUD all you have in the content holster?

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Ok you have a valid point but since the article is full of kind of wishy washy questions I didn't feel guilty about adding some more into the mix.

The title 'Why is Europe Failing to Create More Unicorns?' has an implicit bias in it. The question is saying that Europeans should create more of these massive new companies.

10 smaller companies might be better than 1 big company. 100 companies worth $10 million dollars each might provide the same number of jobs and the same services to the economy.

Maybe?

Admittedly if you listen to European entrepreneurs you can't come away and believe that everything is rosy for new businesses.

>10 smaller companies might be better than 1 big company. 100 companies worth $10 million dollars each might provide the same number of jobs and the same services to the economy.

I'm not sure what point you're trying to make.

It's beneficial that Airbnb is so big because I can plan a cross-continent vacation using one website instead of searching for each city's/country's version of it (which may have poor customer service or be ran by scammers).

It's beneficial that Uber is so big because I can use one app to summon a car anywhere around the world instead of having to install a new app in every city/state/country.

Just because 10 companies could provide the same amount of service and jobs doesn't mean that it's beneficial to customers.

The question the OP is addressing is about growth limits in Europe, not about the moral value of large companies.

EDIT: I am not arguing for monopolies. Multiple companies with service around the world can and do compete.

While it is true that scale brings certain advantages, larger companies are not an unalloyed good. For instance:

- larger companies can leverage near-monopoly status to prevent meaningful competition, increase rates, etc. (e.g. Verizon/AT&T/Comcast)

- larger companies can collude to drive the price of labor down. (e.g. tech anti-poaching pact.)

- one large company, by being "more efficient", may in fact employ fewer people than your ten smaller companies combined, especially if they are able to invest in large-scale automation initiatives.

- larger companies have a wider view of your activity, making them a single point of failure for personal privacy. (e.g. national security letters, NSA datacenter tapping.)

To paraphrase the parent comment: just because one company can unite the services of ten doesn't mean that it's beneficial.

A large company doesn't equate to a monopoly. Multiple giant companies can duke it out (and they do). I'm arguing against the idea that small companies are objectively better.

I would certainly prefer a large mobile provider with service around the world (of which there are many) than a small provider operating out of my city. I would prefer a large ride-sharing app (of which there are at least two) with coverage in most major cities instead of installing 10 different local apps for the same purpose.

I'm not arguing that big companies are better, but I am arguing there are certain benefits to large companies that operate around the world (as long as there's competition).

If the ten companies interoperated, you could plan a cross-continent vacation using one website instead of searching for each city's/country's version of it. (And then you wouldn't be vulnerable to Airbnb, for example, demanding access to your Google Docs metadata in order to allow you to continue using their service.) You're making the argument that people used to make about how it would be impractical to have multiple long-distance phone companies or multiple long-distance computer networking companies.

This is nothing like the phone lines -- the FCC isn't going to come in and force them to play nice, and these companies are not going to do it out of the goodness of their hearts.

The big players will just starve out the little ones. AirBNB isn't infrastructure, it's a service. Without a complete socialist re-imagining of society, that will never happen.

The FCC isn't forcing Level3 or Global Exchange or AOL to "play nice" either. You're apparently arguing from a complete ignorance of history, and consequently your prescribed remedy is likely to make the situation worse instead of better.

The internet evolved over the phone lines, where providers were legally banned from blocking traffic. They were made to play nice. The fact we still have a free internet is the result of that legacy.

While I agree that common carrier obligations helped the internet significantly, your picture of history is still mostly wrong, and the particle of truth in it is drastically oversimplified. The internet didn't evolve over phone lines. Phone-line providers weren't legally banned from blocking traffic, and in fact did legally block data traffic over phone lines for decades. Common carrier obligations didn't exist in most of the countries where we have a free internet, and have never been relevant to most of the participants in the internet: not to AlohaNet, not to ARPANet, not to Mindvox, not to Netcom, not to UUNET, not to AOL, not to Level3, not to Global Crossing, certainly not to JANET, not to NSFNet, and not to The Little Garden.

Rather, the internet was created by an academic-military coalition that had sufficient political power to overcome the phone companies' and regulators' opposition to data networking.

It's plain that you weren't on com-priv then, you aren't on NANOG or equivalent now, and you haven't read the history.

> If the ten companies interoperated, you could plan a cross-continent vacation using one website

It's not easy. Why and how would they interoperate? What stops any one of them to grow and expand to other countries?

Thank you very much for actually trying to understand what I was getting at.

It's a thorny subject because it very quickly can turn into a political or ideological discussion. I was trying to avoid as much as possible because I think it needs some debate no matter what the conclusion might be.

So, essentially, you're arguing monopolies are the most desireable outcome of capitalism?

Thank you. The knee-jerk belief that small business is always better is profoundly un-historical.

Most of the greatest inventions of the past 100 years have come from large businesses that had the man-power and capital to invest in significant R&D departments.

Like I said below; AMD and Intel have a duopoly on x86 processors and have for ages. Intel's profit margins waver between 1/4 and 1/3 of revenue. Simultaneously, processors get better and cheaper every single year.

> Most of the greatest inventions of the past 100 years have come from large businesses that had the man-power and capital to invest in significant R&D departments.

Your narrative leaves out the huge sums of public dollars that underpinned those innovations.

Thats not what I am saying at all though. In fact I am very open in the essay to the question as to whether it's even something you would want.

But the fact is that they have an effect on the world outside the US. Perhaps you are fine with that, I would love to see some more Europeans get into the game if nothing else to boost morality and have more people try and create companies.

Your essay does suggest to me that you think that companies like Uber and AirBnb are a good thing though.

If a proportion of those europeans who could run startups hold back from following certain business models then you will get fewer startups overall.

I guess I can always keep rewriting it in every paragraph, but I tried to be up front because I knew some would interpret it like that. This is why I wrote:

Before you read on: This is a complex issue and I don’t claim to have the answers. In fact it’s going to ask more questions than it answers and I wasn’t even sure I wanted to publish it. It’s not even obvious why chasing unicorns is such a good idea.

In the beginning and:

Unicorns might not be what Europe want and we might all agree it’s an unsustainable model.

in the end.

Not sure how much more I could have done before someone started complaining that i was repeating myself :)

Little companies are rarely disruptive and disruption is what creates value and drives society forward.

Not true at all. Indeed, it's the little companies that often can be "disruptive" (I hate that word; why is disruption necessarily good?). Indeed, large companies are in practice often invested in ways that prevent them from pursuing profitable business that smaller business can. Their business model can prevent them from pursuing profitable business because it would involve biting the hand that feeds them. Large companies become entrenched in a certain set of ties and a certain status quo. The last thing they want is to disrupt. It's very much a question of trade offs.

Aside from that, your phrase "drives society forward". I always here this phrase thrown around in these discussions, but I have yet to receive a coherent explanation of what that means, or what this great lord of Progress consists of. I think one ought to remember what the aim is. Change is not the same as "better", chaos is also change (the article says we fear change at its core, which I think is stupid; we fear loss of something which change can entail; some are addicted to change for its own sake out of from psychological illness). There is the social dimension to consider, the psychological, the spiritual, the environmental, etc. The empty profit seeking and vacuous worship of tech or whatever is desolate.

Survivorship bias. Disruption isn't necessarily good. That's why most startups fail. The ones that thrive tend to be those that disrupted goodly.

Exactly, R&D requires capital. Capital comes from profits. Overly competitive markets destroys profits, destroying capital. Thus too much competition destroys R&D.

Look at the airlines. There doesn't need to be this much competition in the airline industry (https://en.wikipedia.org/wiki/List_of_airlines). They've had too many players for far too long, and it's caused them to compete to the bottom.

Sure, flights are "cheap", but not as cheap as they would be if these companies could afford to upgrade their infrastructure, invest in more modernization efforts, and so on. In fact, the average airline makes about 1% return, or $100 in profit for every $10,000 they spend. That's not a recipe for a healthy business, or a healthy industry.

By comparison, AMD and Intel have a duopoly on x86 processors and have for ages. Intel's profit margins waver between 1/4 and 1/3 of revenue. Simultaneously, processors get better and cheaper every single year.

Please don't be personally abrasive on HN.

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