[e5india]

There are a couple things missing from this article that really need to be fleshed out:

1. You're comparing the unicorns which is like comparing the top of the pyramid without measuring the base. In other words, where are the figures for seed-round startups? What is the amount of capital available to startups at the different stages in the business life cycle? Without those numbers we can't really tell if this is a matter of investors in the EU being less efficient in their investments or if its simply a matter of scale.

2. The other mistake that people I think when making this comparison is in comparing the success of the US market compared to Europe as a whole. First of all, you have to keep in mind that much of the success in the tech sector is highly localized. Now obviously the definition of 'tech sector' can vary wildly but generally when we talk about The Tech Sector we mean Silicon Valley. Almost every other state not named California has tried to replicate Silicon Valley and met with the same lack of success you're speaking about here. The major two exceptions are New York and Texas in that order. The rest of the American States see the same kind of out migration of tech chasing money that the essay sees among foreign tech entrepreneurs.

3. Expanding on the above: on a national level we don't care if the tech sector concentrates in California or Texas or wherever as long as it is in the US. The EU might refer to itself as a union, but are the French willing to invest in a tech sector centralized in Romania for the benefit of a Europe as a whole? Not likely. Silicon Valley, as much as we celebrate the free market aspect of it's success, also benefited from massive federal government spending in that region that played a huge rule in establishing its tech ecosystem back in the 50s and 60s.

edit: I've been editing for grammar.

[humanrebar]

> we don't care if the tech sector concentrates in California or Texas or wherever as long as it is in the US

Hmmm... I'm not sure that's true. For some definition of "we", it would be tautologically true, I guess. Many states complain about paying more in taxes than they get back in spending. California, Texas, and New York all pay more in taxes than they get back in spending, though Delaware takes the biggest hit, per capita:

https://en.wikipedia.org/wiki/Federal_taxation_and_spending_...

[exelius]

IMO the EU is too protective of its economy to allow the kind of innovation Silicon Valley is famous for. The EU has a default assumption of "you have to prove that this will not be harmful before you can do it" where the US has a default assumption of "someone else has to prove that this will be harmful before we will stop you". The important part is that this burden of proof in the US is not placed on a company at a time before they have revenue to prove it. By the time they're big enough to have to defend themselves from an attack on regulatory grounds, they have the means to do so.

Something like Uber could never have come out of Europe. A large company that is breaking the law while competing with regulated taxis and remaining unregulated themselves? That would never fly in the EU, and Uber has met a lot more resistance there than the US. They're only able to address the EU market because they have a large, profitable base in the US.

In any measure, the regulatory culture in the US is much more laissez-faire than the EU. In the US, you can do whatever you want as long as it's not explicitly illegal. In the EU, you can do whatever you want, as long as you prove that it's not illegal first. It's a huge difference, and it's one of the biggest cultural differences between Europe and the US.

[chimeracoder]

> They're only able to address the EU market because they have a large, profitable base in the US.

Uber is only able to address any market because they have a ton of outside venture funding.

Don't get me wrong - I agree that the EU is overly protective and that this harms their startup economy, but Uber is not a good example of that point.

[exelius]

That's true of any startup. But I guarantee you in one of those venture funding pitches someone asked them "So most cities have taxi regulations that make what you're trying to do illegal. How are you dealing with that?"

Their answer was basically "Fuck 'em, we'll flood the market with cheap product, make consumers love it and the regulators will cave." That would not have worked in Europe if they hadn't already done it in a bunch of cities across the US.

[001sky]

"That's true of any startup"

no, not really. its only true specific contexts. which was the point of the previous comment. but you're right in the second part, that's sort of a confidence game...success begets success.

[eli_gottlieb]

If Uber is so great, when are they gonna make a profit?

[tim333]

Indeed. There were a load of London based taxi apps eg http://www.thisismoney.co.uk/money/bills/article-3057608/Six...

The thing Uber has which I think it would only get in Silicon Valley is about $8bn of funding. The biggest UK company I think is Hailo which raised about $100m. It'll be interesting to see how they do in China where the competitors have raised similar vc - Kuaidi raised $950 and I think Uber are spending a billion or so in China.

[ThomPete]

So why aren't there more US investors in Europe if it's purely a matter of funding. The answer IMO is that it's not.

[rospaya]

> Something like Uber could never have come out of Europe.

https://en.wikipedia.org/wiki/BlaBlaCar

[boreas]

BlaBlaCar is actually owned by SNCF, the French state-owned railway company. So Blablacar is actually part of the government monopoly on all long-distance travel (even highways cost money to use). I don't think it's the best standard-bearer for the European startup scene.

[SilasX]

Wait, what? The Wikipedia page says it's private. Even the French version makes no reference to SNCF. The closest I could find was SNCF being one of many investor-owners. [1]

Even if it were so owned, its entire history looks like a startup (lots of financing rounds, building out the product, about having to raise capital), so even if there was a buyout, it overcame whatever regulatory hurdles should have prevented this kind of thing in France.

Where are you getting this information?

[1] http://bfmbusiness.bfmtv.com/entreprise/la-sncf-investit-28-...

[tim333]

Turns out SNCF set up a Bla Bla competitor / rip off which it owns - idvroom.

[ThomPete]

But the way BlaBlaCar work is as far as I understand very different from the Uber model no?

[pyb]

Not at all.

[jonknee]

> The startup's economic model is designed for long distances and geared toward motorists looking to fill empty seats during journeys they would have been making anyway.

So, not like Uber at all and not something that takes on the heavily regulated taxi industry.

[Silhouette]

Something like Uber could never have come out of Europe. A large company that is breaking the law while competing with regulated taxis and remaining unregulated themselves? That would never fly in the EU,

This is a feature, not a bug.

We do tend to regulate some areas more in Europe than the US, but from various on-line discussions about Uber in recent months, I have come to the conclusion that the original problem they are trying to solve is much worse in the US than the EU.

Meanwhile, I have no problem with requiring any service competing with regular taxis to be held to the same standards in terms of vehicle maintenance, insurance, checks on drivers, standardised metered pricing so passengers know what to expect, etc. Being able to beat the incumbent because you broke the law and took shortcuts that could affect safety is not impressive.

Also, I don't know where you got the idea that in the EU you need to prove what you're doing is not harmful or illegal before you can do it, but you're completely wrong.

[t1lthesky]

I dont know about this. I've used uber in multiple cities in the US and taken cabs in multiple cities across the EU, and the uber experience beats cabs hands down. Everything is more convenient - some cities you can only get cabs in certain areas, or its really hard to find a cab, or some cab drivers are very unfriendly, and if you dont know the city the ability to specify a destination on the map is great. Not to mention the price is usually cheaper, but even if it was the same price I'd still say hands down uber wins in terms of customer experience.

[Silhouette]

I've used uber in multiple cities in the US and taken cabs in multiple cities across the EU, and the uber experience beats cabs hands down. Everything is more convenient

You didn't mention which cities you've experienced in the EU, and in any case I've no reason to doubt your experience, but all I can say is that some places with traditional/regulated taxis don't seem to have the same problems. I'm in the UK and I can't remember the last time I had trouble getting a taxi at quite short notice even at a busy time of day, booking in advance is pretty much 100% reliable around here these days, and I've never heard of someone finding they can't get a cab in their area (unless you mean somewhere rural where there isn't a local taxi firm, I suppose).

[tluyben2]

I agree with the parent; I live in the EU and use both Uber and taxis a lot in Paris, Amsterdam, Malaga (and other cities in Spain), Faro, London; these are all quite heavily regulated and the normal taxi drivers are definitely generally unfriendly (sometimes they actually smell bad, will act annoyed because the ride is too short for their taste and cough without blocking their mouth and at one time a cab driver in Amsterdam had a baseball bat in his car because he got robbed too many times), the cars are far worse than Uber black cars and they are more expensive generally. In London I have been beside the road trying to get a cab for > 10 minutes while Uber takes less than 5 in most of the city. And I rather sit in an Audi a8 or Lexus than in a one of those uncomfortable London black cabs for less money (and free bottle of water which just makes it even better).

Edit: in NYC & Orlando I have the same experience by the way; unfriendly cab drivers, no seat belts, crap cars and generally more expensive. But I guess that's not well regulated?

[kagamine]

That doesn't address any of the safety issues from the post you replied to. Convenience will not save your life in an accident, should an accident happen. Convenience doesn't prove the driver is who he says he is. Regulation in the taxi trade was probably built up over many years to tackle the issues that arose over time, Uber will eventually fall foul of the same or similar regulation, eventually pushing prices up. What Uber are probably doing is refroming the taxi trade and eventually the two services, Uber and traditional cabs, will find a middle ground and merge into one service.

Is there a reason why a black cab driver in London, Manchester or Edinburgh couldn't register as an Uber driver and play for both teams?

[exelius]

> This is a feature, not a bug.

I actually don't disagree with you; but my original point is that the US actively prioritizes giving companies space to operate without government intervention over protecting the rights of its citizens.

It generally makes the US a worse place to live, but a better place to start a business.

> Also, I don't know where you got the idea that in the EU you need to prove what you're doing is not harmful or illegal before you can do it, but you're completely wrong.

Maybe poorly worded, but in the US the prevailing attitude is that it's better to ask for forgiveness than for permission. Because our government is generally underfunded (domestically anyway), it doesn't usually go out looking for problems anyway. So you can often get away with disregarding regulations as long as you don't make too much noise while doing it. And even if you get caught, you hire lawyers to negotiate the penalty down to 10% of what it would normally have been.

[walshemj]

I think those working in online poker etc would disagree - the local monopoly was protected very strongly.

And there are the non tariff barriers look how hard it is to import eu cars

[exelius]

Poker just has an image problem - you don't see anyone getting in trouble over the "fantasy football" sites that are thinly-veiled online sports books. Hell, they even advertise on national TV during football games, so it's not like they're flying under the radar at this point.

[spacehome]

> could affect safety

Be careful about what you're saying here. Conformance to regulations is not at all the same as safety. My (anecdotal) experience is that Uber drivers are consistently better in anything that could be considered related to safetey - namely having functional seatbelts and paying attention to the road.

[Silhouette]

Be careful about what you're saying here.

I meant what I wrote.

Regulated taxis and private hire vehicles here in the UK are typically required to be serviced and tested much more often than regular cars, for example. Something like not having a functional seatbelt would mean an immediate failure at a test.

All such vehicles and their drivers are also required to display identification, so anyone who is not happy with the state of a vehicle can also report it themselves to the local licensing authority or even the police.

[spacehome]

Our experiences are in different countries. In the U.S. it's not even uniformly the law that you have to wear a seatbelt in the back seat.

[DanBC]

> In the US, you can do whatever you want as long as it's not explicitly illegal.

That feels wrong. Maybe it's just a distorted picture I get from outside the US.

https://news.ycombinator.com/item?id=3171665

http://www.forbes.com/sites/erikkain/2011/08/03/the-inexplic...

[ghaff]

In all fairness, that's a news story precisely because it is a "man bites dog" situation. It's not the norm for every lemonade stand and bake sale to be shut down by overzealous regulators.

That said "In the US, you can do whatever you want as long as it's not explicitly illegal" is somewhat hyperbolic. Certainly there are things like zoning regulations and other laws that limit what you can do with your property, for example. However, I do think that there is a greater presumption of being able to do and say things in the US so long as they aren't specifically prohibited in some way. (Obviously private parties have the ability to govern a lot of behaviors on their own property.)

[rayiner]

I'm not sure whether the U.S. actually has less regulation or it's just a matter of the fact that most regulations that affect small businesses are handled at the state level, and the states are pretty lax about enforcement.

[ThomPete]

A very good point.

[ionised]

> The EU has a default assumption of "you have to prove that this will not be harmful before you can do it"

This is bad for big business, good for citizens. As a citizen I hope it stays this way. Regulation is our friend and it's the reason so many in the EU are against TTIP.

A race to the bottom of common regulation on either side of the Atlantic is something that will only be harmful to the average EU populace.

Suddenly we'd have growth hormone in our meat and shit like this;

http://www.theguardian.com/environment/2015/may/22/eu-droppe...

[jessaustin]

...Delaware takes the biggest hit, per capita

Does this have anything to do with the fact that many many companies are incorporated in Delaware but don't do much business there? It seems possible that the federal taxes paid by such companies are counted as being "from Delaware" even though they mostly aren't, really.

[e5india]

Oh I absolutely agree. That's why I meant to limit that to the national sense of 'we'. Of course internally we still have our debates about spending and certainly other states would prefer if Silicon Valley where part of their local economy. But ultimately California's success is still part of our national success and so ultimately the spending happens however much we would prefer it be spent differently. And the complaints you mention in our own country which does have such a strong national sense of identity makes it even less likely in the EU.

Is the sense of being 'European' so strong that member states are willing to spend billions of their own taxpayer euros to build up a tech sector largely centered in some other member state? I dont think so.

[hkarthik]

Curious which Texas startups are considered unicorns? Last article I read didn't mention any.

Google only pulled up this recent article: http://www.bizjournals.com/austin/blog/techflash/2015/09/sor...

Are there unicorns coming out of Dallas and Houston, but not Austin? I find that hard to believe.

[adventured]

BigCommerce probably is at this point, or very close to it.

[nandemo]

Indeed.com?

[brc]

+1 for mentioning the cold war spending which is what put the 'silicon' in silicon valley.

In many peoples minds, Silicon Valley sprung fully formed to it's current state sometime in the 70s, when that is far from the truth. And I don't mean that just in the tech sense, but also the VC & funding model sense.

Arthur Rock wasn't just some rich guy that dropped from the heavens when he invested in Apple - that money came from much, much earlier and was already following a specific way of investing.

Worthwhile reading :http://steveblank.com/category/secret-history-of-silicon-val...

[happyscrappy]

>The major two exceptions are New York and Texas in that order.

Umm. Boston(MA)?

[exelius]

Boston is a second-tier startup city along with Pittsburgh, Chicago, Seattle, etc. It's too expensive, it's hard to recruit good talent (too cold, too far from everywhere, etc), and there's not a ton of VC. You can do it, but you'll have an easier time of it in NYC or Texas.

Texas has a warm climate, cheap housing and low taxes, which draws a lot of startups there. Raising money can be a problem, but you also don't need nearly as much - a good engineer in SV costs $250k; the same engineer in Austin costs $110k, and it's entirely possible to live on $10k a year while bootstrapping a startup. There are also a half dozen internationally-recognized engineering schools within 2 hours of I-35.

New York just has a ton of people and a ton of money. Also, the global media machine is based there as well, which is why you see a lot of media and advertising startups coming out of NYC. NYC is also attractive to people who weren't born there.

[seibelj]

It's cool that you like Texas and all but the stats speak for themselves. It's SV way ahead of Boston which is a little ahead of NYC. And Boston has tons of enterprise VC which is unique. I have no problem hiring talent in Boston, and the numbers I snag engineers for are high, but nothing like the "500k salary and 2 million in stock" articles I hear about happening in SV.

Also, the whole argument that it's harder to raise money if you are in [insert any place except Silicon Valley] is suspect. My company raised money from investors in Boston, SV, and overseas, as investors were most concerned with our business, not where we were located.

As long as you can hire good talent and have a solid business, you won't have trouble raising money as long as you can jump on a plane. The issue is when you are chasing dollars for a failing business, or have no revenue.

[crdb]

> nothing like the "500k salary and 2 million in stock" articles I hear about happening in SV

Amusingly, the only American software engineer I know who is certifiably taking more than 500k USD a year in base (i.e. cash, pre-bonus) salary lives and works in Boston.

[zump]

Pray tell, what industry?

[bsder]

You are dramatically underestimating Boston and over-estimating Texas.

Boston is one of the hot spots. It's actually really easy to recruit talent as there are a ton of students, it's an interesting, old city, it actually has mass transit, and not everybody is bothered by cold (some people even like it).

San Diego is way better than Austin (just look at the jobs postings and employer numbers), and some people would regard San Diego as second tier. Admittedly, they both probably qualify as the top of the second tier.

[eropple]

Boston isn't NYC or SF, but I think your buckets are kind of hosed. It's hard to recruit good talent and it's certainly not cheap, but there's a lot more going on in Boston than a city like Pittsburgh and to me Seattle seems choked-out by the big companies in the area.

[afarrell]

Subjectively, Boston feels like it has more startup activity than Austin to me, as someone that moved down here for cost-of-living reasons.

[adventured]

Boston is a first tier startup city, clearly.

It ranked above New York for total VC dollars raised in 2014, to go with its 371 deals, versus New York's 395.

It's basically third in deal activity nationally. It's four times larger than Seattle, and perhaps ten times larger than Pittsburgh when you account for deals + money.

http://nvca.org/pressreleases/u-s-venture-capital-investment...

[refurb]

Your source includes all VC funding, not just tech start-ups. Boston is #1 in biotech funding (SF is almost tied), so the numbers are skewed if you're just referring to tech funding.

[happyscrappy]

http://blog.startupcompass.co/the-2015-global-startup-ecosys...

[e5india]

I stand corrected on Boston! I'm in SF so maybe I'm showing my lack of awareness a bit here. I'll definitely be paying more attention to Boston. Thanks for the correction.