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I wonder what it would take to create the set of conditions for another "Silicon Valley / SF Bay Area" to appear in Europe. It seems like inevitably, any tech c

I wonder what it would take to create the set of conditions for another "Silicon Valley / SF Bay Area" to appear in Europe. It seems like inevitably, any tech companies that are successful always end up getting bought out and leave to the U.S. instead of staying. What are the primary issues? Lack of VC funding, culture, government policy? On the surface, it doesn't seem like there's anything particularly lacking, at least from my superficial understanding as an American viewing in from the outside.

rapsey 8y ago
There is very little VC funding and the culture/language barriers between countries are huge.
- thecleaner 8y ago
  I suppose a look east policy will make sense here atleast for the VC funding. Language barrier problem is honestly an opportunith but also a stupid problem to have. I dont understand why atleast language of business is not English throughout the EU (for sectors besides IT). For example, quite a lot of businesses in China use English. Same is the case for most of south east Asia and also India.
  - jamesblonde 8y ago
    The language of business in the EU is now English. At least in IT, it's all English.
    - thecleaner 8y ago
      I guess then in IT its probably VC funding thats causing problems.
      - oblio 8y ago
        The culture/language barrier is still there, for serving customers. You can't do that English-only.
moonhorse 8y ago
there is already another Silicon Valley. And that is China. Alibaba is a Chinese company...
- thecleaner 8y ago
  China is definitely quite a competitive economy in the technology space. I wouldnt say its the next SV. Rather would group it as its own class. Most of the businesses grew out of protectionism offered by thr Chinese govt but noe they seem to have made it.
  - zorked 8y ago
    The protectionism was/is there in the US too. I unfortunately can't remember the details but there is a video in the Computer History Museum that tells a story about how computers from Germany were blocked in the US and the impact it had on both countries. And just last year the US blocked Qualcomm being sold to a Chinese company: https://qz.com/1227509/trump-just-blocked-broadcoms-attempt-to-buy-qualcomm-because-china/ https://qz.com/1227509/trump-just-blocked-broadcoms-attempt-... Of course, as the US now has a extraordinarily strong advantage in the sector it doesn't have to flex that muscle as often. But it does flex it when needed.
Roritharr 8y ago
It's mostly generations of VC Funding. There's a genuine lack of experience on both sides so only the 0,01% of Entrepreneurs and VCs are capable of playing at an international level. It's getting better, but not fast enough so that "just raise elsewhere" is a common answer, of course that's a route also most can't take for one reason or another.
Rainymood 8y ago
It's attitude and sheer luck. People in the US seem to take more risk, this leads to huge rewards (start-ups) but also leads to an insane amount of inequality in wealth. I have never seen more in-your-face wealth inequality than in America (and yes, I've been to China and Asia in general quite often). Then a second component is the sheer amount of people trying their luck. Imagine that winning in a startup is like tossing a coin with a p=1e-7 probability of landing on "win". The Netherlands has 2.000.000 people aged 20-30 and the US has 40.000.000 people aged 20-30. Imagine that all these people start a startup we have a probability of P(X>0) with n=2.000.000, p=1e-7 is given by 0.18 and the probability for P(X>0) with n=40.000.000, p=1e-7 is 0.98. The point I'm trying to make is that a lot or more people in the US try to start something, this leads to many more failures, but also to some singular huge successes.
- lawrenceyan 8y ago
  Doesn't the European Union have around 500 million people though in it's population? America is only like 325 million people I think.
  - oblio 8y ago
    Those 500 million are on average quite a bit poorer than the average American (regarding disposable income and therefore the willingness to risk a long period of 0 income to start a business). Especially in the Eastern part. Mississippi (!) has higher GDP per capita than most EU countries.
nraynaud 8y ago
I think that ship has sailed, Europeans see what SV has become and are thankful that they failed in replicating the model.
- ionised 8y ago
  I certainly am. I don't want a European Google or Facebook popping up. I want the existing Google and Facebook to go away.
  - eunos 8y ago
    I must say I am quite disturbed by this mindset. Just imagine if European countries back then rejected Industrialization due to massive externalities (Pollution, child workforce, etc), they would not survive the Great War (WW1). In addition, while big tech companies might be not very appealing in terms of security and privacy, you better have those which can be easily influentable and molded. That wont be possible without indigenous tech giants
  - growlist 8y ago
    Facebook at least seems to have caused more human misery than happiness.
    - eunos 8y ago
      Better have something that caused human misery yet profitable and globally used tgat you can control than you cannot control
  - moosey 8y ago
    I desperately want Europe to replace most services I'm using, because I prefer their regulatory environment. Primary examples would be gmail and google (I'm using qwant and it doesn't compare, but I use it before I switch to google). I do not use facebook anymore, and although I have a twitter account I do not use it. Based on my daughters phone usage, I don't think that facebook is the thing anyways. It's all private chat rooms with her friends, which seems like a much healthier online interaction than what FB is. I just want to see that kind of thing primarily incubated and hosted in the European regulatory environment, because I don't trust the U.S. one where I live.
l5870uoo9y 8y ago
If you look at how China managed to build up an impressive tech sector the conclusion is clear: protectionism, else Europe will keep being sold off and lose its best talent to large companies abroad. This is the missing piece, not all these arbitrary number crunching or ill-informed cultural studies. Indeed looking at history many European countries have build up large innovative industrial and scientific sectors. Naturally, if Europe starts to protect its tech sector the US will react aggressively and it will have major political repercussions. It is nonetheless necessary.
- rapsey 8y ago
  Protectionism is how every country on earth developed. There are no exceptions.
wastedhours 8y ago
> On the surface, it doesn't seem like there's anything particularly lacking, at least from my superficial understanding as an American viewing in from the outside. My personal opinion is that, whilst we (still, just...) live in a "single market", Europe isn't a "market" just by itself. Sure, you can do business cross-borders quite easily, but there's not the same critical mass of language, culture, business environment, and confidence as there is in the States. The US is a bunch of loosely connected areas that at least have language, currency, and to a lesser degree, culture that permeates them. The differences between the UK and France when launching a product are substantial - and whilst it's technically "easy" (a bit of i18n here, a Stripe GBP-EUR transaction there), unpicking user needs and behaviours across language barriers can be hard. If you incubate a product in SV, you can roll that out to the rest of the US with only slight changes in approach. If you incubate a product in Portugal, you have your work to cut out from the get-go to reach more than just 10m people. My stretch is that it encourages companies to try and "dominate" their home market rather than trying to do the harder thing and spread - that slows the hockey-stick as you try and wring the last few dollars out of a mature environment and makes investment outcomes less tasty. Combine all of that with a generalised point about Europeans being less "work-driven" and so probably a less % of people trying.
dependsontheq 8y ago
It’s not just funding - valley startups have a big group of experienced talent that knows how to scale in exactly the right moment. Startups and growth can die by small mistakes not making these small mistakes can compound quickly. The other side is that the Valley is not a US place it’s a global tech place, the amounts of international money are staggering and additionally the number of international talent is staggering. A third thing is that markets are not rational, if your investors are from the network they will hype you in that network, so your valuation is only partially dependent on product.
worldsayshi 8y ago
I feel that there is quite a buzz around Amsterdam being the new tech nexus. Not sure how you would measure its SV-rating though.
- eunos 8y ago
  I thought it is towards more Eindhoven instead of Amsterdam?
marcinzm 8y ago
The US lacks labor laws which means hiring people is a low risk activity since you can easily fire them. You can also work them for 60 hours a week and 52 weeks a year. The labor laws that do exist, for example in California, are about workers being able to switch companies versus them not losing their jobs. That means you can quit your job, start a startup, hire people, shut down the startup and then find another job with ease. When you need to give two months notice to just leave a job that whole process slows down significantly.

rapsey 8y ago

There is very little VC funding and the culture/language barriers between countries are huge.

thecleaner 8y ago
I suppose a look east policy will make sense here atleast for the VC funding. Language barrier problem is honestly an opportunith but also a stupid problem to have. I dont understand why atleast language of business is not English throughout the EU (for sectors besides IT). For example, quite a lot of businesses in China use English. Same is the case for most of south east Asia and also India.
- jamesblonde 8y ago
  The language of business in the EU is now English. At least in IT, it's all English.
  - thecleaner 8y ago
    I guess then in IT its probably VC funding thats causing problems.
    - oblio 8y ago
      The culture/language barrier is still there, for serving customers. You can't do that English-only.

moonhorse 8y ago

there is already another Silicon Valley. And that is China. Alibaba is a Chinese company...

thecleaner 8y ago
China is definitely quite a competitive economy in the technology space. I wouldnt say its the next SV. Rather would group it as its own class. Most of the businesses grew out of protectionism offered by thr Chinese govt but noe they seem to have made it.
- zorked 8y ago
  The protectionism was/is there in the US too. I unfortunately can't remember the details but there is a video in the Computer History Museum that tells a story about how computers from Germany were blocked in the US and the impact it had on both countries. And just last year the US blocked Qualcomm being sold to a Chinese company: https://qz.com/1227509/trump-just-blocked-broadcoms-attempt-to-buy-qualcomm-because-china/ https://qz.com/1227509/trump-just-blocked-broadcoms-attempt-... Of course, as the US now has a extraordinarily strong advantage in the sector it doesn't have to flex that muscle as often. But it does flex it when needed.

Roritharr 8y ago

It's mostly generations of VC Funding. There's a genuine lack of experience on both sides so only the 0,01% of Entrepreneurs and VCs are capable of playing at an international level. It's getting better, but not fast enough so that "just raise elsewhere" is a common answer, of course that's a route also most can't take for one reason or another.

Rainymood 8y ago

It's attitude and sheer luck. People in the US seem to take more risk, this leads to huge rewards (start-ups) but also leads to an insane amount of inequality in wealth. I have never seen more in-your-face wealth inequality than in America (and yes, I've been to China and Asia in general quite often). Then a second component is the sheer amount of people trying their luck. Imagine that winning in a startup is like tossing a coin with a p=1e-7 probability of landing on "win". The Netherlands has 2.000.000 people aged 20-30 and the US has 40.000.000 people aged 20-30. Imagine that all these people start a startup we have a probability of P(X>0) with n=2.000.000, p=1e-7 is given by 0.18 and the probability for P(X>0) with n=40.000.000, p=1e-7 is 0.98. The point I'm trying to make is that a lot or more people in the US try to start something, this leads to many more failures, but also to some singular huge successes.

lawrenceyan 8y ago
Doesn't the European Union have around 500 million people though in it's population? America is only like 325 million people I think.
- oblio 8y ago
  Those 500 million are on average quite a bit poorer than the average American (regarding disposable income and therefore the willingness to risk a long period of 0 income to start a business). Especially in the Eastern part. Mississippi (!) has higher GDP per capita than most EU countries.

nraynaud 8y ago

I think that ship has sailed, Europeans see what SV has become and are thankful that they failed in replicating the model.

ionised 8y ago
I certainly am. I don't want a European Google or Facebook popping up. I want the existing Google and Facebook to go away.
- eunos 8y ago
  I must say I am quite disturbed by this mindset. Just imagine if European countries back then rejected Industrialization due to massive externalities (Pollution, child workforce, etc), they would not survive the Great War (WW1). In addition, while big tech companies might be not very appealing in terms of security and privacy, you better have those which can be easily influentable and molded. That wont be possible without indigenous tech giants
- growlist 8y ago
  Facebook at least seems to have caused more human misery than happiness.
  - eunos 8y ago
    Better have something that caused human misery yet profitable and globally used tgat you can control than you cannot control
- moosey 8y ago
  I desperately want Europe to replace most services I'm using, because I prefer their regulatory environment. Primary examples would be gmail and google (I'm using qwant and it doesn't compare, but I use it before I switch to google). I do not use facebook anymore, and although I have a twitter account I do not use it. Based on my daughters phone usage, I don't think that facebook is the thing anyways. It's all private chat rooms with her friends, which seems like a much healthier online interaction than what FB is. I just want to see that kind of thing primarily incubated and hosted in the European regulatory environment, because I don't trust the U.S. one where I live.

l5870uoo9y 8y ago

If you look at how China managed to build up an impressive tech sector the conclusion is clear: protectionism, else Europe will keep being sold off and lose its best talent to large companies abroad. This is the missing piece, not all these arbitrary number crunching or ill-informed cultural studies. Indeed looking at history many European countries have build up large innovative industrial and scientific sectors. Naturally, if Europe starts to protect its tech sector the US will react aggressively and it will have major political repercussions. It is nonetheless necessary.

rapsey 8y ago
Protectionism is how every country on earth developed. There are no exceptions.

wastedhours 8y ago

> On the surface, it doesn't seem like there's anything particularly lacking, at least from my superficial understanding as an American viewing in from the outside. My personal opinion is that, whilst we (still, just...) live in a "single market", Europe isn't a "market" just by itself. Sure, you can do business cross-borders quite easily, but there's not the same critical mass of language, culture, business environment, and confidence as there is in the States. The US is a bunch of loosely connected areas that at least have language, currency, and to a lesser degree, culture that permeates them. The differences between the UK and France when launching a product are substantial - and whilst it's technically "easy" (a bit of i18n here, a Stripe GBP-EUR transaction there), unpicking user needs and behaviours across language barriers can be hard. If you incubate a product in SV, you can roll that out to the rest of the US with only slight changes in approach. If you incubate a product in Portugal, you have your work to cut out from the get-go to reach more than just 10m people. My stretch is that it encourages companies to try and "dominate" their home market rather than trying to do the harder thing and spread - that slows the hockey-stick as you try and wring the last few dollars out of a mature environment and makes investment outcomes less tasty. Combine all of that with a generalised point about Europeans being less "work-driven" and so probably a less % of people trying.

dependsontheq 8y ago

It’s not just funding - valley startups have a big group of experienced talent that knows how to scale in exactly the right moment. Startups and growth can die by small mistakes not making these small mistakes can compound quickly. The other side is that the Valley is not a US place it’s a global tech place, the amounts of international money are staggering and additionally the number of international talent is staggering. A third thing is that markets are not rational, if your investors are from the network they will hype you in that network, so your valuation is only partially dependent on product.

worldsayshi 8y ago

I feel that there is quite a buzz around Amsterdam being the new tech nexus. Not sure how you would measure its SV-rating though.

eunos 8y ago
I thought it is towards more Eindhoven instead of Amsterdam?

marcinzm 8y ago

The US lacks labor laws which means hiring people is a low risk activity since you can easily fire them. You can also work them for 60 hours a week and 52 weeks a year. The labor laws that do exist, for example in California, are about workers being able to switch companies versus them not losing their jobs. That means you can quit your job, start a startup, hire people, shut down the startup and then find another job with ease. When you need to give two months notice to just leave a job that whole process slows down significantly.