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Comment by mschuster91 | Hacker News Reader

> Funding gaps remain larger in Europe than in the US.

Well, of course. Engineers in the US take home five-figure sums each month, which explains why there are so many startups largely funded by ex-Google/Apple/MS/FB employees.

In Germany, wages are so low, and taxes and rent so high, that you have to be either fucking good or fucking rich via inheritance to save enough money for your own startup.

Not to mention that failure is expected and financed in the US startup culture, whereas in Europe you can't even get a small loan without putting your car/house/... as collateral, and you will get shunned for failure. Therefore, many capable people (have to) choose not to enter the start-up world.

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Thats not really the problem though startups aren't paying engineers a lot in the beginning so thats comparing two different things.

While it's true that the funding gaps remail larger in Europe than in the US it's still the wrong question to ask.

The real question is why the funding gaps are there to begin with. I would claim 4 major reasons.

1. Disconnect between the needs of the European politicians and those of European startups.

2. Europe has no Silicon Valley or New York.

3. European startups ask for permission instead of forgiveness.

4. The EU seems to be fixing the problems that the startups could fix.

In other words a lot of the problems in Europe is the EU.

Go back 40-50 years and plenty of fortune 500 companies were European.

I am exploring it in more depth in this essay:

http://000fff.org/why-is-europe-failing-to-create-more-unico...

>The EU seems to be fixing the problems that the startups could fix.

and then

>In other words a lot of the problems in Europe is the EU.

Are the EU fixing or creating problems?

EDIT: okay, I'm reading the essay. Maybe they are creating problems for the creation of startups, but solving problems for the population.

It's a problem that the EU (read politicians) are fixing a lot of the problems that startups could have been fixing instead.

I.e. it's a bad idea that the EU is not trusting private enterprise more than they are.

The population needs private jobs not necessarily cucumbers being the right size or cookie laws :)

But sure you could make that argument, mine is that it has consequences that I am not sure is to the benefit of the population in the end.

> 3. European startups ask for permission instead of forgiveness.

Well, because everything else will destroy your reputation and company socially and legally for all eternity.

Say that to ex Uber and Airbnb plus a host of the other companies.

Well, Uber is taking a heavy beating in Europe (and thanks to our regulations, taxi service never has been as bad as in the US, so the market for "better taxis" isn't as large to begin with), and AirBnB already bows to regulator's pressure all over the world.

Thats not the point though.

The point is that they are the leader not a European company because they take that battle.

You can't disrupt most fields only by pure technology. A lot of the disruption is legislation.

Well, disruption is just not necessary. Uber competitors existed in Europe before Uber even did.

AirBnB is literally doing what people in Europe had done for decades, just with a neat web listing.

Uber competitors didn't exist in Europe before Uber did. You are talking about actual "sharing economy" like the french carsharing service but thats a very different thing.

Airbnb didn't really exist either you are talking about things like Novosol that functioned as a middle man apartment renter.

1. Uber competitors existed – although those were usually financed by the Taxi companies.

2. AirBnB competitors existed in the way that you could rent your apartment to others via such services. Renting out private apartments was standard for decades and centuries even.

Taxi companies are regulated which means there was there is a limit to how many taxi drivers are allowed. Uber doesn't have such a limit and is thus undermining the market. Uber is planning on replacing all drivers with automated cars, how many taxi companies you think are working on that right now?

What you are talking about is car-sharing which is something Uber also does but not what they do mostly.

With regards to Airbnb. If airbnb ish companies existed before why didn't they then outcompete airbnb? Why is Airbnb fighting fights and not European rentals.

Anyway we are getting away from the main point which is that american companies dare take up a fight with legislation very few european companies if any do that. Because of reasons I mention in the essay. Tesla, LendingClub, KickStarter and so many others have had to find ways through the legislation system.

US companies just have a better culture for challenging incumbents and legislation. A much richer culture for lobbying and so on.

Well, the argument is that we don’t need that kind of lobbying, because that kind of restrictive legislature doesn’t exist.

Anyone can start a service to drive other people around for money where I am as long as they have an appropriate drivers license and insurance, there’s no limit on how many drivers there are.

Uber only has to fight legislation because they want to get around the insurance.

Thats a wrong argument then given that the legislation is in fact in place to hinder too many drivers to flood the market. And so to get into the taxi market is very hard and politically controlled.

In most European countries european insurance isn't really a problem.

Ironically your view on this is proving my point by mixing your political view with what the discussion is about.

And so instead of European companies disrupting the American market you we have American companies disrupting the European.

There is no regulation at all regarding the amount of drivers where I am.

You need a drivers license of type P (same as bus drivers, chauffeurs, etc) and you need insurance, and you can start driving. It’s literally that simple, and we could have a million drivers by tomorrow and it would be legal.

And Uber isn’t disrupting anything in Germany. They’re just one cheap company under many, others of which provide better service.

You need medallions for things like taxi stands and hailing people off the street so it's just not true what you say.

Anyway your ideological view is getting in the way of the point of this discussion.

It wasn't a german company that created uber, wasn't a german company that created airbnb it wasn't even an european on and that is the problem.

> You need medallions for things like taxi stands and hailing people off the street so it's just not true what you say.

That’s not even part of the discussion, as uber isn’t trying to change that.

Fact is, uber isn’t disrupting anything.

Fact is, there were uber-competitors in Europe like mytaxi, some of which even existed before uber did. Exactly same business model.

The issue isn’t that these companies never get started in europe – because they do – the issue is that these companies expand slower than their US competitors, and therefore lose in this extremely volatile market.

But if the market crashes, these companies can continue to exist, while many of their US competitors would crash, too.

Uber is trying to change the rules that you have to have a license to be able to drive taxi. Thats the part you are missing here. Its not about the technology its about the legislation.

They dont just expand slower they get bought by american companies not the other way around that is part of the problem which is what this whole discussion is about.

There is nothing to back up your claim that they are more resistant to a down market. How many European social networks are left? How many European transportation companies are in the US? The list is long of american companies dominating the markets in the EU not the other way around.

That is the core of this discussion no matter your obvious ideological reasoning.

> There is nothing to back up your claim that they are more resistant to a down market. How many European social networks are left? How many European transportation companies are in the US? The list is long of american companies dominating the markets in the EU not the other way around.

Great, so companies based on making billions of losses a year were able to buy competitors that had to make profits.

That is more a sign for Silicon Valley being yet another investment bubble instead of a sign for SV somehow being "better"

Again you are confusing your political/ideological views with what this discussion is about.

I am pretty critical of ubers methods but thats not what we are discussing here. Uber is just one example out of many american companies that challenges legislation to disrupt an industry. European companies don't do that and thats one of the reasons why there are no European uber, airbnb etc.

You can think thats a good thing but thats not what we are discussing here.

Hum, maybe that's true where you live, but as another EU citizen, I can tell you it's not true everywhere - around here, there was no on-demand service beyond taxis, which are limited to a certain number of licenses. And as far as I know, the same is true in Madrid and Paris.

The thing is that both Uber and AirBNB are harmful companies, and EU legislation hasn't quite dealt with them yet. But it will.

Thats an ideological opinion, one you are not alone with. However it has nothing to do with the discussion we are having.

> 4. The EU seems to be fixing the problems that the startups could fix.

For example?

Taxis. When I hop into a German cab and want to be driven home, it always costs me the same amount (plus/minus variable waiting times), cab drivers generally don't fuck you over with the routes, the cabs are in perfect technological and optical conditions (BOTH are mandated and controlled by the government)...

And what’s the issue with that?

I’d argue it’s even better than Uber, as in this case the whole profit is locally spent. In contrast to uber, where it lands overseas in private pockets.

You are confusing your political views with what the discussion is about.

It's not whether it's right or wrong that this exist. It's about WHY European startups have such a hard time building really big companies in this field.

That's an interesting point. I wonder if the reason why startup culture thrives so much is because a lot of the VC's/Investors are ex-engineers who made their wealth from their own companies... and there is a better understanding in SV of what it takes to succeed (and how to handle failure).

Super strange for me to read that.

I'm freelancing web-dev in Berlin and I was always thinking that you work 24/7 in US for the same amount of money.

Here I enjoy a heart-of-the-city-center apartment for 800 Euro ( ~60 sq.m. ), beer for one euro, cheap health insurance and yes of course higher taxes.

On the same hand :D I'm working around 5-7 hours per day ( RescueTime tracked ) and definitely don't pick up my phone when it's saturday or sunday ( anyway nobody calls at that time for work ).

It's basic Maslow's Hierarchy of Needs. You aren't gonna create the next big breakthrough if you're struggling to put food on the table.

Yes. Your head has limited bandwidth. Europe manages to fill your head with issues from the Victorian era, leaving no room for "luxurious" thought.

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