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I've posted this before, but since I think it's relevant here: People seem to forget that Europe is not a country. Europe does not have a single uniting langua

by donkeyd 11y ago

I've posted this before, but since I think it's relevant here: People seem to forget that Europe is not a country. Europe does not have a single uniting language. What happens, is that every country starts their own smaller versions and they stay mostly within that country. If they want to move to another country, there's often already a major player there, and they might not have the means to kick them out. I think the reason that silicon valley is so powerful, is that the initial market is 325 million people who all speak the same language. Once you get the US market, you have the size, name and means to easily start conquering European countries. It's always about scale...

ThomPete 11y ago
I really hope that I am actually addressing that in my essay.
- donkeyd 11y ago
  I commented before reading the article, as I was having trouble loading it. I've managed to read it and I see you did mention it. You other points do add some interesting ideas that I haven't considered before. Especially #3 is interesting.
pinaceae 11y ago
you're absolutely right. successful examples that started in europe soon moved to the us to take off. qliktech/qlikview as a swedish example. intercom being spread across ireland and SF. etc. the one market that could rival the US will be china. it is harmful to non-chinese investors though, but once they open it up a huge, homogenic market will pop up. wechat, baidu, alibaba already show what is possible there. apple and uber coming in with mature(rer) businesses. wonder when we'll see a mixed-background startup emerge in china. as someone from austria that moved to the bay area - you must be bonkers to try ramping up a startup in most of europe. if your desire/plan is unicorn-scale of course.
mattmanser 11y ago
More like 450 million when you include the UK, Canada and Australia.
bane 11y ago
So what, other than language, prevents somebody from starting only European-wide initiatives and reaping the benefits of the entire European market? I don't mean to sound like I'm minimizing the language issue, but it is surmountable. To contradict my devil's advocate question above: My guess and observation is that the ROI on certain localizations isn't good enough to justify the work needed to make a pan-European go at something. So people pick markets where the ROI will be good: England, Germany, France....maybe Italy, and then it all stops there. Neighboring countries with high ROI demographics usually have speakers of those major languages as a second language and can get by well enough with those offerings. And nobody really targets minor dialects for big offerings.
- mfoy_ 11y ago
  Well there are also different laws and different cultures to work around. The differences between the laws between states in the U.S. and between countries in Europe are probably orders of magnitude different. Trying to understand all those differences would probably be a lot of overhead that could crush a startup trying to tackle the broader market from the get go.
- jedrek 11y ago
  But it's not only language, there are real legal, logistical and cultural differences between countries. You negotiate for content rights in the US, and you have them in the US. Also, by the time you've gotten enough traction in your country, there's a me-too (or a dozen) in your other markets. Look, you're a start up, you're running lean, you're cranking out a MVP - are you really going to invest an extra 40% into trying to get into 3 other markets before you're able to get your head above water?
olavgg 11y ago
I absolutely agree with you. Currently I have a business where I import used computer and network components from US and sell them in the Norwegian market. (I can import pallets of equipment for less than what the total cost is for local shipping in Norway). While I do make some money on it, the market in Norway is so small that its just a few sales every week. But it's fun, and I'm learning a lot so I still think its worth it. I would love to sell to the rest of Europe, but I can't solve the logistic problem of transportation of heavy packages. It's hard enough inside Norway. Doing business in Europe is hard, you have currency issues, language issues, culture differences and then you have all the bureaucracy. All the paperwork, for every minor detail.. :(
- kuschku 11y ago
  And that’s why Germany has it so easy: DHL makes shipping out of Germany or to Germany insanely cheap, DB Schenker ships per rail even from Norway whole containers cheaply, etc. Germany has here the advantage of a low valued currency, extremely well done infrastructure, good interconnection, and easy access to other markets. Same with BeNeLux, France and Italy. In some regards, even Spain.
JamesBarney 11y ago
Most unicorns get so big from network effects so I suspect they play a similar role to language. The social connected graph is a lot less connected across Europe than across the U.S. Imagine starting a Facebook in Germany versus the U.S. Spreading from state to state is easy because there is a large amount of media and social overlap. If you have a successful startup in California its much easier to spread to Texas, New York, Florida, and Illinois than to spread from Germany to England, France, Italy, and Russia.
dheera 11y ago
About a quarter of the world speaks reasonably fluent English, so SV's initial market is even bigger than that. Having access to a similarly large initial market is also part of the reason China has a rapidly expanding and flourishing startup environment and culture.
- threatofrain 11y ago
  China's largest businesses are extremely state-connected, and it's hard to imagine any successful business in China not being deeply connected to the government. I basically consider those entities as extensions of the Chinese state. I don't know if China would look the same if they allowed western companies to just swoop in to extend monopolies.
  - dheera 11y ago
    This is irrelevant to the fact that a very large market and testing ground exists today among the Chinese-speaking and Chinese-cultural population, both inside and outside China. Most successful startups in post-2000 China are largely privately owned. While they are indeed subject to regulatory constraints, needing to work together with the government is largely a constraint to survive, not a reason for success. Their successes have very little to do with the government and much more to do with the market, rising economy, and better infrastructure (e.g. education, venture capital, incubators, startup "hotspot" cities, etc.) for startups to build upon, as well as the sudden explosion of a middle class that can afford the various things these new startups are offering. I'd say a large part can be attributed to the fact that China and USA both have similar market sizes and both countries are each reasonably homogeneous in culture compared to, say, Europe.
    - threatofrain 11y ago
      So you're saying that Google could come in and compete? If you're a foreign business in China, even if you are a Taiwanese business, if you don't have proper government relations, you'll find that business applications take so much longer. And that you have little hope with Chinese law before a Chinese judge and a favored Chinese company. It is a hostile atmosphere to even Chinese-speaking countries -- if you are not connected to the government. I'm saying it's very hard to discuss market forces from "free" market principles when the most successful companies in China shall be deeply connected to government. You wouldn't say Gazprom is a product of the Russian economic environment. Nor is Alibaba and Baidu.

by donkeyd 11y ago

ThomPete 11y ago

I really hope that I am actually addressing that in my essay.

donkeyd 11y ago
I commented before reading the article, as I was having trouble loading it. I've managed to read it and I see you did mention it. You other points do add some interesting ideas that I haven't considered before. Especially #3 is interesting.

pinaceae 11y ago

you're absolutely right. successful examples that started in europe soon moved to the us to take off. qliktech/qlikview as a swedish example. intercom being spread across ireland and SF. etc. the one market that could rival the US will be china. it is harmful to non-chinese investors though, but once they open it up a huge, homogenic market will pop up. wechat, baidu, alibaba already show what is possible there. apple and uber coming in with mature(rer) businesses. wonder when we'll see a mixed-background startup emerge in china. as someone from austria that moved to the bay area - you must be bonkers to try ramping up a startup in most of europe. if your desire/plan is unicorn-scale of course.

mattmanser 11y ago

More like 450 million when you include the UK, Canada and Australia.

bane 11y ago

So what, other than language, prevents somebody from starting only European-wide initiatives and reaping the benefits of the entire European market? I don't mean to sound like I'm minimizing the language issue, but it is surmountable. To contradict my devil's advocate question above: My guess and observation is that the ROI on certain localizations isn't good enough to justify the work needed to make a pan-European go at something. So people pick markets where the ROI will be good: England, Germany, France....maybe Italy, and then it all stops there. Neighboring countries with high ROI demographics usually have speakers of those major languages as a second language and can get by well enough with those offerings. And nobody really targets minor dialects for big offerings.

mfoy_ 11y ago
Well there are also different laws and different cultures to work around. The differences between the laws between states in the U.S. and between countries in Europe are probably orders of magnitude different. Trying to understand all those differences would probably be a lot of overhead that could crush a startup trying to tackle the broader market from the get go.
jedrek 11y ago
But it's not only language, there are real legal, logistical and cultural differences between countries. You negotiate for content rights in the US, and you have them in the US. Also, by the time you've gotten enough traction in your country, there's a me-too (or a dozen) in your other markets. Look, you're a start up, you're running lean, you're cranking out a MVP - are you really going to invest an extra 40% into trying to get into 3 other markets before you're able to get your head above water?

olavgg 11y ago

I absolutely agree with you. Currently I have a business where I import used computer and network components from US and sell them in the Norwegian market. (I can import pallets of equipment for less than what the total cost is for local shipping in Norway). While I do make some money on it, the market in Norway is so small that its just a few sales every week. But it's fun, and I'm learning a lot so I still think its worth it. I would love to sell to the rest of Europe, but I can't solve the logistic problem of transportation of heavy packages. It's hard enough inside Norway. Doing business in Europe is hard, you have currency issues, language issues, culture differences and then you have all the bureaucracy. All the paperwork, for every minor detail.. :(

kuschku 11y ago
And that’s why Germany has it so easy: DHL makes shipping out of Germany or to Germany insanely cheap, DB Schenker ships per rail even from Norway whole containers cheaply, etc. Germany has here the advantage of a low valued currency, extremely well done infrastructure, good interconnection, and easy access to other markets. Same with BeNeLux, France and Italy. In some regards, even Spain.

JamesBarney 11y ago

Most unicorns get so big from network effects so I suspect they play a similar role to language. The social connected graph is a lot less connected across Europe than across the U.S. Imagine starting a Facebook in Germany versus the U.S. Spreading from state to state is easy because there is a large amount of media and social overlap. If you have a successful startup in California its much easier to spread to Texas, New York, Florida, and Illinois than to spread from Germany to England, France, Italy, and Russia.

dheera 11y ago

About a quarter of the world speaks reasonably fluent English, so SV's initial market is even bigger than that. Having access to a similarly large initial market is also part of the reason China has a rapidly expanding and flourishing startup environment and culture.

threatofrain 11y ago
China's largest businesses are extremely state-connected, and it's hard to imagine any successful business in China not being deeply connected to the government. I basically consider those entities as extensions of the Chinese state. I don't know if China would look the same if they allowed western companies to just swoop in to extend monopolies.
- dheera 11y ago
  This is irrelevant to the fact that a very large market and testing ground exists today among the Chinese-speaking and Chinese-cultural population, both inside and outside China. Most successful startups in post-2000 China are largely privately owned. While they are indeed subject to regulatory constraints, needing to work together with the government is largely a constraint to survive, not a reason for success. Their successes have very little to do with the government and much more to do with the market, rising economy, and better infrastructure (e.g. education, venture capital, incubators, startup "hotspot" cities, etc.) for startups to build upon, as well as the sudden explosion of a middle class that can afford the various things these new startups are offering. I'd say a large part can be attributed to the fact that China and USA both have similar market sizes and both countries are each reasonably homogeneous in culture compared to, say, Europe.
  - threatofrain 11y ago
    So you're saying that Google could come in and compete? If you're a foreign business in China, even if you are a Taiwanese business, if you don't have proper government relations, you'll find that business applications take so much longer. And that you have little hope with Chinese law before a Chinese judge and a favored Chinese company. It is a hostile atmosphere to even Chinese-speaking countries -- if you are not connected to the government. I'm saying it's very hard to discuss market forces from "free" market principles when the most successful companies in China shall be deeply connected to government. You wouldn't say Gazprom is a product of the Russian economic environment. Nor is Alibaba and Baidu.