[yardie]

Yes, the problem is capital. US has loads of it and Europe does not. So a lot of European startups have 3 options: remain niche, get bought out buy US investors, move the corporate seat/brain trust to the US.

There are many small European startups who do not have infrastructure to take on large European multinationals as clients. A lot of EU labor laws have hard requirements at 50 and 100 employees so startups stay below those lines and remain tech lifestyle companies.

[ericmay]

Well the other large advantage is that the US is one single market with one common language (English) and while there are variations by state, pretty much one set of rules. So by starting a company in the United States you of course have access to incredibly deep capital markets, but you also have access to 350 million people mostly operating under one set of rules with one common language and largely one common culture. It's the same market advantage that China has, by and large.

[ifwinterco]

It's one of the big ironies of the EU - every time it gets larger (good! increases market size) it also gets more fragmented in terms of languages, retained local rules etc. (bad, obviously).

Now up to 24 official languages and still potentially growing in the future (although this is a bit of an overcount because some of them are mutually intelligible to various degrees, it's still a lot).

It's interesting to think that at the time of original ECSC treaty there were only four languages (French, German, Dutch and Italian). That's just about manageable, now it is a bit of an issue

[epolanski]

I've been working with European companies for a decade, language is not a barrier for scaling, local laws are.

E.g. why eu has some laws in terms of data and privacy, local laws take precedence (unlike in e.g. agriculture that it's entirely EU's business). Scaling across borders is expensive and difficult for regulatory reasons.

[ifwinterco]

To be fair the US is not immune to that issue either, some states (looking at you CA) are very fond of making random extra state laws that don't exist at the federal level and affect commerce

[scottyah]

Also culture. I had a friend try with several German companies, but she said the leadership would default to "no", and every decision would need too much review. She even worked with some that opened offices in SF hoping to learn to move fast, but even those were way too cautious to succeed. Lots of premature optimization, and trying to establish structures and systems before any proof of concepts could be made. Obviously, this is just anecdotal but she had a real desire to have European growth in SF communities.

[epolanski]

I don't think capital is that much of a problem.

We have it, and it's been growing consistently.

What we lack is risk appetite, young people dreaming to be entrepreneurs, talent, a truly unified market, regulations and proper corporate law. Say what you want but stock options essentially don't exist in Europe, so you either give equity upfront or you don't at all.

[yardie]

My impression was that Europe had a lot of old money. A lot of traditional and family banks that were only willing to risk it on "a sure thing." The startups I did work at were the founders did a stint in SV after being recruited from Europe. Came back with the knowledge and culture of startups. Tried to replicate it there and ultimately couldn't climb out the bureaucracy.

The capital is locked up in traditional large multinationals. I've watched them launch one boondoggle after another. And it fail because of endless meetings and fearing to know their customers.

[caycep]

I kind of wonder, capital wise. the GDP isn't too far off US and there's def companies/families w/ insane amount of capital esp in luxury goods etc. Unless they're just hoarding it like Smaug and not investing it back into the economy, in which case the problem isn't capital but business culture.

[hunterpayne]

European per capita GDP is half of the US average. Total GDP is between 60-75% of the US with an extra ~15% population. I'm sure Europe does have enough capital to do this build-out but its a shrinking pool as Europe loses ground to the US every year.