People are also much more risk averse in terms of business model. For instance, the idea of loss-leading to gain market-share will play much better in the US than Germany, where it seems people would rather settle for modest revenue but stay in the black the whole time.
Another factor is the concept of work and work-life balance. In Germany holidays are sacred, and you won't generally find people putting in tons of overtime to get a product off the ground. That's great when you're a worker, but it does mean a slower pace than I saw in the US.
In Germany at least it’s conservatism and a failure of imagination.
The average German Engineering student doesn’t dream of flying to Mars, he dreams of buying an expensive BMW.
The German economy doesn't run on individuals going to Mars, it runs on process innovation, optimisation, and decentralised development between research facilities, a good university system, and companies.
On average the German worker productivity is very high. That's a measure of good allocation of resources, not software unicorns or Mars rockets. If German engineers would just be dreaming about holidays and luxury watches that wouldn't be the case.
If you look at the increase in total factor productivity (comparing how much aggregate outputs you get out of aggregate inputs, basically measuring technological efficiency), the last decade has been anaemic. SV venture capital software culture is good at capturing markets and shifting economic rent from markets towards centralised platforms, it's not driving innovation and we don't really need to emulate it.
Then don't emulate it and the US will continue to own nearly everything in tech that isn't inside of China.
I've been reading sentiment like that out of Europe for over two decades now, with predictable results that just keep going around in a circle and getting the Europeans nowhere.
SV and the US tech industry are great at creating markets as well, which you entirely ignore. What did the global cloud services market look like before AWS built it (even Alibaba's cloud offering is a mere intentional clone of AWS)? In terms of sales it barely existed. Every major tech market has been established by SV money and US tech companies, not European companies.
There's no evidence that Europe has been more innovative with their approach. It's quite the opposite given the vast majority of major technologies have come out of the US dating back to the 1950s. Europe's contributions pale by comparison, and that's why their companies pale by comparison.
Even ARM - one of Europe's few innovators in tech - had to be started by two US companies, with one of the partner companies being European. It's only fitting the US own that company again considering.
The leader in AI and quantum computing is the US, with China a close second, and Europe a distant third. And if you narrow that down to the EU, it's even worse now that Britain has left.
And when it comes to scaling, you get things like vast numbers of lucrative jobs, high paying engineering salaries from creating global giants. You get an immense virtuous cycle from it, including for seed funding start-ups and larger VC activities. Microsoft will grow its revenue more in the next two years than the total size of SAP (which is Europe's largest softare company and most valuable tech company). The revenue gap between them used to be more like 3 to 1 (circa 2001), now it's over 5 to 1 and persistently expanding.
AWS is on its way to being an $80-$100 billion sales global juggernaut, while SAP runs in slow motion. There's no reason Europe couldn't have done that, in theory; in practice, it has been two decades and Europe hasn't been able to do it.
"Innovation" is a gloriously worthless word (you can tell because Bill Gates was so very fond of throwing it around while he was at Microsoft, it's a dodge word). If something can't be supported with actual results, people jump to proclaiming things about innovation or the lack of it.
Besides, where is the supposed innovation in Europe's tech scene over the last four or five decades? What innovation? Where are the hundreds of amazing, innovative, successful European tech companies that are supposed to stand as a counter to Silicon Valley & Co.? They don't exist. Europeans will claim that's because they're all being acquired by richer US tech companies, which is false; that certainly happens occasionally, and it's happening at a small scale, because there aren't very many of those companies to purchase.
Virtually every industrial machine on this planet has made something in it build in Europe. France builds high speed rail at a third of the cost of the US. Europe has countless of pharmaceutical giants.
Again, I put it simply. The per capita income and productivity in Western Europe is roughly as high, maybe 10% lower than in the US. If Europe had 'no tech', how is Europe rich?
You have a myopic view of technology that excludes the majority of the economy, which is everything outside the world of bits as Thiel puts it, which constitutes 90% of the actual national GDP, including in the US by the way.
'AI' or 'Quantum computing' isn't some sort of economic super weapon. The German economy is 4 trillion dollars large, what is the market for quantum computing, or even 'AI'? By the way we have heard this accusation for decades. In the 70s and 80s we were accused of living in the industrial stone-age, while Britain becomes rich on being a leader in the sector of the future, finance. Where is Britain now? At a national productivity level 30% below France and Germany, turns out in the long-run finance wasn't as hip as people thought, particularly not for anyone living outside of the city of London.
I'll start to get worried about lacking in tech when software is delivering historical economic growth, rather than becoming a tool for social engineering and reshuffling money from the bottom 80% to the top 20%.
That's not to say by the way that there's not genuinely innovative aspects to software, cloud computing actually is something that Europe could catch up on if only for security and geopolitical reasons but the overwhelming majority of software giants in the US contributes nothing to innovation. Facebook and Twitter destroy democracies and heat the planet up with datacenters, nothing more. If there was a word for de-innovation, that's what I'd label those companies.
Where you got that number? UK has higher GDP per capita than France and it's lower than Germany but not by 30%. Also the UK is just coming out of a messy divorce. I'll give it 5-10 years to figure stuff out.
because you're not looking at output per hour worked. The Brits work about ~1670 hours per year. The French about ~1470, and the Germans ~1360. If you look at the output per hour, The UK comes in below Euro average, roughly on a level with Italy and Spain.
Expensive BMWs are equally silly. The company generally produces nice vehicles, but they also make hideous atrocities like the X4 and X6. What's worse is that Daimler followed suit and that every car company is producing SUVs now, that aren't any good off road and have lots of aerodynamic drag on road.
German Engineering students work on interesting projects like swarm drones playing team games. I suspect these are quite obviously projects with military applications or space exploration.
Hmh. That’s only 10% slower if you assume Americans never take holidays (which is probably not true at all).
I don’t really believe startupers work as much as they claim to however, because you are usually useless at 16 hours a day for a month.
How much did it take Elon Musk to go callig people pedos of working heavy hours and sleeping in the office?
Don't get me wrong, I think the German way of working is way healthier and more sustainable, but everything has a trade-off, and the leave-it-all-on-the-table mentality of American startups seems more conducive to getting an innovative project with difficult technical problems off the ground in my experience.
He described French risk aversion as such “In Europe, if you took investor money and your idea failed, you would be seen as a failure. It’s amazing that in the US you could raise $1M, lose it all and then go out and raise money again for another idea.”
US laws leave a lot less to the imagination, they are hyper-constrained in general, and there's a large body of work on how to bypass them. Like, Romania may use GDPR to hunt down journalists and company bosses but you know California won't use CCPA that way, so you're cool.
US-based companies face the same challenges when trying to reach European customers, so this is an equal playing field as far as I can tell.
As always, depends on where. Sweden has (or used to, at least before) basically a website where you can create a company, and it's mostly free to start the company as an individual (at least the basic form) so you can't really complain that it's hard.
In Spain, it's also relatively easy, just have to go sign some papers (and depending on company type, invest some money into it), but it's hardly "really hard".
Not sure about the rest of Europe, but can't imagine it's a lot harder than these two examples (counter examples incoming surely).
Although, if you with "it's really hard to start a company" mean "it's really hard as a unknown startup to raise funds from VCs", then yes, European investors do way more due diligence and are more risk averse, compared to US investors. But there are more things than startups :)
It's like that. I don't know what sort of laws you guys have there but just the paperwork is going to kill me, probably. And then any time you want to do anything, the paperwork will kill you, the regulators will be on your case, and all that. And that's the way Europeans like it. It's culturally normal there to be like "Oh, well why do you think you should be allowed to do that".
For instance, they would say "Maybe it isn't right that a company can just target ads to people without a comprehensive affirmative opt-in" and that would be the dominant view. "Maybe some guy in a garage shouldn't be allowed to hold a million people's personal data". There's a trade-off there: you don't get tracked but you don't get Google. And that's fair, but it means no business models that rely on things like that which count on low transaction costs can't happen, and lots of unicorns count on that.
Come on, really? It's hardly that much paperwork. Sure, it sucks, but compared to building a business, filling out paperwork doesn't come close to being the hardest thing.
Sounds like what you describe here is that it's more paperwork in the US than in the European countries I'm familiar with, so kind of goes against what you're arguing here.
> And that's the way Europeans like it. It's culturally normal there to be like "Oh, well why do you think you should be allowed to do that".
I'm not sure where you are from, but I hardly get the feeling you're "European". Throwing blanket statements like "that's the way Europeans like it" is impossible, it's a huge and diverse area, so you can't generalize like that. Plenty of people here wants things to improve/change and depending on the location, you're right or wrong. Rules in Sweden are seen as "must follow" while rules in Spain is mostly seen as "advised to follow but if you must, do what you want, as long as you don't harm others".
You don't need something to be harder than building the business. You just need it to be hard enough to interfere with the process.
It isn't too hard (thankfully) to get finance for a moderately viable idea.
Thats not true. Many companies are in Europe, much more than in the US: https://www.nationmaster.com/country-info/stats/Economy/Micr...
In Europe we have more companies of all sizes instead of accumulating into few mega-companies. But that has nothing to do with risk tolerance.
It's easier in e.g. Finland, Sweden, Estonia (which actually have produced some nice startups like Spotify, Skype, etc.). IMHO given the relatively small populations, places like that are actually remarkably successful when it comes to startups and technology companies. Finland has a mere 5 million people. I mean, Nokia for whom I used to work came from that tiny country and dominated the smart phone market for a while.
However, the real issues are more related to securing investments and funding and the inevitable process of having to shut down a company in case it fails. Which with a startup is more likely to happen than not. Failing fast is hard in a legal system that is purposely designed to make this hard.
It's also risky. You take a personal risk when you start a company and when a company can't pay its bills, it's the managing directors who are on the line with their personal capital. Limited liability is not so limited in Germany and it prevents companies from taking risks. There are all sorts of tricks to prevent that from escalating of course but they all involve the use of accountants, lawyers, and other middle men that are costly. And given that it is hard to raise seed capital in Germany, very little gets off the ground here.
Berlin where I live is a bit unusual in the sense that despite all this, there are loads of startups here and a density of capital and talent that is hard to find elsewhere in Europe. I always joke that this is despite the German government rather than because of their policies. It's basically a weird side-effect of the place being pretty much bankrupt. Local government here is basically just moving paper around and tends to be very hands-off because they have no budget for basically anything; including going after pesky startups taking liberties with the rules and regulations. Everything in this country is regulated to death but Berlin seems to be reasonably relaxed and informal.
For better or worse, people just showed up here from all over the world and started doing stuff after the wall came down. Lately, big German corporations that are trying to look hip are opening startup accelerators all over Berlin. Like all of them: Bosch, Siemens, VW/Porsche, etc. all are present here. Silicon Valley also moved in: MS, Apple, Tesla, Google, etc. all have offices here. And of course Tesla is building a Giga factory.