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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

by e5india 11y ago

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 11y ago
> 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_by_state#Tables_of_federal_taxation_and_spending_by_state https://en.wikipedia.org/wiki/Federal_taxation_and_spending_...
- e5india 11y ago
  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.
- exelius 11y ago
  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 11y ago
    > 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.
happyscrappy 11y ago
>The major two exceptions are New York and Texas in that order. Umm. Boston(MA)?
- exelius 11y ago
  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.
  - happyscrappy 11y ago
    http://blog.startupcompass.co/the-2015-global-startup-ecosystem-ranking-is-live http://blog.startupcompass.co/the-2015-global-startup-ecosys...
  - eropple 11y ago
    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.
  - adventured 11y ago
    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-spanned-160-cities-2014/ http://nvca.org/pressreleases/u-s-venture-capital-investment...
hkarthik 11y ago
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/sorry-no-unicorn-sightings-in-central-texas-report.html 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 11y ago
  BigCommerce probably is at this point, or very close to it.
- nandemo 11y ago
  Indeed.com?
brc 11y ago
+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-valley/ http://steveblank.com/category/secret-history-of-silicon-val...

by e5india 11y ago

humanrebar 11y ago

> 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_by_state#Tables_of_federal_taxation_and_spending_by_state https://en.wikipedia.org/wiki/Federal_taxation_and_spending_...

e5india 11y ago
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.
exelius 11y ago
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 11y ago
  > 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.

happyscrappy 11y ago

>The major two exceptions are New York and Texas in that order. Umm. Boston(MA)?

exelius 11y ago
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.
- happyscrappy 11y ago
  http://blog.startupcompass.co/the-2015-global-startup-ecosystem-ranking-is-live http://blog.startupcompass.co/the-2015-global-startup-ecosys...
- eropple 11y ago
  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.
- adventured 11y ago
  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-spanned-160-cities-2014/ http://nvca.org/pressreleases/u-s-venture-capital-investment...

hkarthik 11y ago

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/sorry-no-unicorn-sightings-in-central-texas-report.html 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 11y ago
BigCommerce probably is at this point, or very close to it.
nandemo 11y ago
Indeed.com?

brc 11y ago

+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-valley/ http://steveblank.com/category/secret-history-of-silicon-val...