| People sometimes fails to realise that sometimes little things stand in the way of big things. A small startup has no momentum and little power. The smallest obstacle can block progress. Having to file endless forms and being unable to take on staff due to restrictive hiring regulations can stop a small company dead, unless they cheat at the regulations. Most people don't understand that, and just say 'why can't they just submit the forms?'. Sure, some companies have enough momentum and funding they roll right over those things. Those were always going to succeed. What people don't see is all the promising ideas that stop dead at little blockages, and either die or go elsewhere. Maybe 1/10th of startups are destined for success, no matter what. Maybe 8/10ths are destined for failure, no matter what. The remaining 1/10th is a fragile new thing, and needs help to get rolling. Killing that 1/10th through bad regulation is enough. Many people talk about the SV advantage being the networks of people and the can-do attitude towards building things. Just that little bit more fertile ground for startups has a big flow-on effect. |
I'd also like to say that the cost of earning money is higher here. €10k takes one year to save for a very good employee. There are so many taxes when you earn something... I've once calculated that adding 10€ in my LTD sales provides me 3.20€ for personal spendings. So it's just much harder to reach a Unicorn valuation when it takes that much to gather money.