[jd]

As a EU founder I think the article misses the two primary reasons Europe isn't doing well with startups.

1) Target market

USA: natural target market of 320 million people with a very high level of (disposable) income. Established businesses are happy to buy products from startups. There is a positive feedback loop where businesses try to grow fast and therefore want to outsource the stuff they're not good at so they can focus on their core skills. This means startups can pop up to take care of everything else (HR/Invoicing/Data crunching/etc-as-a-service).

EUROPE: you have to deal with dozens of languages and cultures. Although the and Germanic countries are OK with English-only products, the rest of Europe wants their products translated. Salaries are much lower here and businesses are much more conservative. Businesses that grow slowly have to care much more about operating expenses, which means they will try to do everything in-house to cut costs.

As a consequence we get the vast majority of our revenue from the US, even though people all across the world try our software.

2) Culture

A lot of people talk about starting a startup, but nobody seems to want it badly enough. Perhaps this is because there are so few success stories over here in the Netherlands. People tend to focus on the negative (what if you fail? what about work-life balance? what if you get sued?), but it's hard to say if that matters.

The US has only one Silicon Valley. There is nothing comparable on the east coast, even though the east and west coast have a lot in common. If we figure out why Silicon Valley works and other places fail to really take off we should be able to create startup hubs all across the world.

[vidarh]

Why do you believe Europe isn't doing well with startups?

It might be true that Europe isn't doing well with web startups reaching stratospheric valuations in no-time, but Europe is full of startups doing well, and starting companies in Europe is not particularly hard (co-founded several; been one of the early employees in a couple more). And in many countries you can practically get government grants thrown after you if you put in a minimum of effort into applying.

You have some points with translation, but where you see problems, I see opportunities: Translations can be done cheaply enough that being aware of internationalization issues and cultural issues can create enormous benefits in the form of erecting barriers exactly against US companies. I've worked with a number of US companies on i18n issues, and I've yet to find a single one where the US team understood the European concerns (I still shudder to think of the one multinational who thought that it didn't matter if all their past invoices changed if they changed their invoice template, to, e.g., change their VAT registration number).

I also don't agree with about culture. Well, sort of: What you say is true about the US too. Most people don't want to start companies badly enough. Or they would have. At least a huge number. Lots of people do though, we just don't have a single geographical area as small as the valley where it's all concentrated.

There are hundreds of internet startups in London alone, for example.

And I don't buy that you have so few success stories in the Netherlands, though perhaps you're not aware of them as they're not in "as hot" sectors. E.g. consider Bibit - a payment processor funded in Bunnik, that was acquired by RBS and merged with (London founded) Streamline/WorldPay (who has also acquired half a dozen other European startups in the payment space over the years), just to take one of the top of my head that I've personally dealt with. (And a bunch of the people from Bibit are now behind Adyen - another Netherlands based payment processor startup)

Though there is definitively cultural differences. The "fail fast" approach that many in SV takes is definitively less popular, not least because in many countries here for many types of jobs, having a failed company on your CV, at least as a founder, is seen in a more negative light. And this probably explains a lot of the perception too: Many European startups takes longer to grow big and may never even aim to grow as big as an equivalent Valley startup, and so may often be seen as a medium to big established company by the time mergers and acquisitions happens - it's easy to fly below the radar for the entire lifecycle of the company as an independent entity.

[Hermel]

Yes, but the main point he makes is an excellent one that is normally missed everywhere else: namely the cultural one-way street that exists between the US and Europe. Europeans watch American TV, listen to American music, read American blogs, etc. But does that also work the other way around? No. This already fails at the language level, as most Europeans speak English, but not many Americans speak another European language. I would even go as far as saying that most European journalists read more US sources than they read sources from their neighbour countries. This is also mostly caused by language skills.

As a consequence, when trying to gain attention as a European startup, you can either try to conquer the European countries one by one - or you can try to get American attention (e.g. techcrunch) and let the European tech journalists copy from there. This is a though choice US entrepreneuers don't have and its caused by the cultural one-way street.

[danmaz74]

Agreed, and this is really a sore point.

[tinbad]

I agree with most, except the last part. I came to SV from the Netherlands myself and i had the pleasure to meet Neelie Kroes (highly respected EU politician from Dutch origin) here in SF in the first month after I moved to the US. She was saying how Europe could learn from SV and how she was getting billions of EU funding to recreate SV in Europe and setup 'startup hubs' in places like Strasbourgh and Brussels. I think there's some flawed thinking here: you shouldn't want to recreate the success of SV by just copying it. It will fail. Europe should figure out what would work for them. It doesn't have to be the same as SV.

[kintamanimatt]

Money is a part of it, but the bulk of the problem is a lack of a culture that celebrates entrepreneurship and embraces failure as a normal stepping stone to success. This is why there aren't Euro SVs.

Culture is changed through the media and other social proof. An increase in money might make people feel comfortable enough to take some new risks, and some of those risks might pay off and spawn some companies that the European general and tech media can report on.

[gumby]

I agree with these points. I read Gründerszene and I find the companies described are mostly pretty dull -- selling shoes, or hotel bookings, or something like that. Not terribly technical, and not really moving the needle.

There's still a lot of conservatism. You can make a physical product in the US and people (early adopters) will try it out. In Europe they will want it to be certified and proven and above all know that the founders are properly credentialed. This is probably one reason why all these companies have been formed in domains where credentials don't matter and people are willing to take a chance

[nknighthb]

> the east and west coast have a lot in common

We really don't. We (barely) share a language and are held hostage together in a room by dead white male slaveholders who a vocal minority have turned into a new American Pantheon.

The west coast has some political common ground with the northeast, but there are still huge cultural gaps, and the "east coast" extends a long way south of Maryland and DC. This isn't some big mystery, just a big continent.

[nostromo]

Compared to Europe, the US is very homogenous.

Think about how many cultures you would encounter walking from Paris to Moscow. Now compare that with walking from New York to LA. Even though Paris is much closer to Moscow than NY is to LA, you'd experience much more cultural diversity along the european walk.

[bowlofpetunias]

Hell, you would experience much more cultural diversity of you would walk from one end of France to the other.

Just like Europeans have difficulty mentally grasping the physical size of the US, Americans seem to have great difficulty grasping the internal cultural diversity of Europe.

[nknighthb]

In my state alone, I can encounter at least three very different cultures just within the English-speaking populace. I'd have to have some long conversations with people in the Spanish-speaking populace to establish a rough approximation of the real number.

But something tells me you draw your own entirely subjective cultural lines in vastly different places than I do mine.

[mtrimpe]

We've had this argument here before and in some sense you're right in that culture is relative and 'more diverse' is essentially a meaningless phrase.

What is true though is that Americans tend to underestimate the homogenizing effect a shared language, border, government and media apparatus has and the degree to which it helps in facilitating cross-country trade.

[nknighthb]

I'm sure there's a substantial effect there. I have no idea how to estimate or measure it, and I don't really care, either. I also don't really care whether the US has larger or smaller cultural gaps than Europe, and I wasn't talking about that. I spoke of present reality in the US as I observe it, not long-term trends.

Present reality is that anywhere east of the Rockies may as well be a foreign nation. I am far more comfortable with many foreigners, even non-Western foreigners, than with most people in the eastern US. Present reality thus leaves me utterly unsurprised that Silicon Valley remains relatively unique in the US.

Edit: Incidentally, I'm amused by the strongly negative reaction I'm getting from Europeans who wish to tell me, an American, what America is really like. What would be your reaction, exactly, if I started telling you what Europe is really like?

[mtrimpe]

The negative reaction is probably because while you can argue this position from a perspective of wisdom (re impossibility to quantify cultural differences) many Europeans have plenty of prior experience with arguing this from a perspective of ignorance (i.e. failing to consider even basic things like the implications of language differences making you resort to sign language a few 100km from where you live.)

Technically your argument didn't necessarily show any signs of such ignorance, but statistically speaking it would have been quite likely.

[tokenadult]

Present reality is that anywhere east of the Rockies may as well be a foreign nation.

As an American who lives in the central region of the United States, I call baloney on that statement. My HN user profile discloses that I have been to all fifty states of the United States and some of the other territories of my country. The United States really is startlingly homogeneous, all over the country. One illustration of this is the role of English as a national interlanguage unifying all ethnic groups. Only about one-fourth of Americans have ancestors who were speakers of English before arriving in North America. (Sure enough, strictly less than one-fourth of my ancestors were English speakers, even though my family name is English.) Two of my four grandparents (all of whom were born in the United States) received the entirety of their schooling in German rather than in English, but both were perfectly able to communicate with me in English. (Another grandparent grew up in a Norwegian-speaking household, although all of her school lessons were in English.) The United States has a great deal of cultural, ethnic, and even today linguistic diversity, which is a blessing to the country, but the United States also has a great deal of shared culture and ability to communicate in one language from east to west and from north to south that is quite amazing in other countries. Only a little more than half of the people in China even have a common language for conversation.[1] By contrast, people in the United States can use a common language that takes them not only all over their own country, but increasingly all over the world.

[1] http://www.bbc.co.uk/news/world-asia-china-23975037

http://news.xinhuanet.com/english/2007-03/07/content_5812838...

[eli_gottlieb]

I grew up in the Northeast, and what is all this? What's this bizarre East Coast Culture that you West Coasters have nothing in common with?

[davidw]

I'm an American who lives in Europe, and, without any antipathy, I think you're very wrong in your relative assessments of the two places.