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Not regulations, incompatible regulations. If you create a startup in SV, you can easily sell to the whole US. In the EU, you’ll need to obey 28 different law
by kuschku 9y ago
Not regulations, incompatible regulations.
If you create a startup in SV, you can easily sell to the whole US.
In the EU, you’ll need to obey 28 different laws, 28 different standards, and file 28 different tax forms. This is currently the single biggest hurdle for startups in the EU.
The second, of course, is that people seem less willing to throw billions at risky concepts just so one maybe gets big enough.
- matthewmacleod 9y agoWell, that’s not regulation. In general, to sell across the EU, you have to comply with the regulations of the single market. That’s largely harmonised; there’s some friction, but it’s not anything like dealing with 28 totally independent countries. It’s surprisingly easy to sell so the whole EU market. Different social attitudes to risk, and a language barrier, are no doubt much more pressing concerns.
- kuschku 9y agoIf the field you’re selling in is already harmonised, if you only have employees in one country, and if you have someone else do the VAT for you. All these can be potential roadblocks that make it harder.
- ocdtrekkie 9y agoGiven how much of EU's economic law is managed centrally, is this drastically more significant than say... the 50 different states' regulations that US companies have to follow and contend with?
- kuschku 9y agoI’m not quite sure, but I know that in the US many companies "forget" about sales tax if they’re located in a state without, without much trouble. In the EU, VAT compliance can definitely become an issue, especially with small projects. Not so much an issue for VC startups, but definitely one for bootstrapped ones. The only way to get a large enough market to survive is to sell to the entire EU, but that means much more work with VAT compliance, and translations.
- lovich 9y agoThis happens in the US with state regulations already. The federal government creates floors on behavior, the states can add regulations on top of those. The real difference is that the EU and it's member nations actually enforce their regulations and don't let situations happen like Uber/ISPS/AirBnB just ignoring laws until they had enough money/influence to force changes to the regulations
- kuschku 9y ago> The real difference is that the EU and it's member nations actually enforce their regulations and don't let situations happen like Uber/ISPS/AirBnB just ignoring laws until they had enough money/influence to force changes to the regulations I mentioned this in a sibling comment – a good example is the EU enforcing VAT laws actually, vs. in the US many online stores simply being located in a state without sales tax and not paying any in the state where the customer lives either.