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I've often wondered if one of the (many) reasons why there are so few successful startups coming out of Europe is due to the copying. I visited Berlin a while

I've often wondered if one of the (many) reasons why there are so few successful startups coming out of Europe is due to the copying. I visited Berlin a while back and my buddy was telling me about a bunch of guys who've built a successful business (dozens of engineers) just cloning 'hot' American products. It's got to reduce the number of people working on brand new ideas. (I'm not suggesting that you can't build a great business by copying somebody else's work, but you won't build a world-changing, super innovative company doing so)

gaius 15y ago
Heh, that may be a factor, but I doubt it's the main one. Lots of American HN users seem to be pretty Liberal in their political outlook, and that's fine. But consider Germany, with a welfare state that looks after you from cradle to grave. If you want to start a startup there then you'd better have your EUR 20,000 in capital minimum, and you'd better do all the paperwork and comply with all the regulations and have the right certificates and diplomas... The activation energy is just so much higher in Europe, two guys hacking in their garage can't just go for it without a lot more preparation. If you fail you won't starve of course, the State will look after you but that's a two-edged sword - not only is it harder to get started, there's less hunger to succeed, and everyone will be used to working only 35 hrs/week...
- justwrote 15y ago
  We actually have an idea in an area which is - if I read posts on HN - pretty well funded. VCs and Angles have a lot of interest. But in Germany, people don't see it - the ones with money even less. And its really hard to start a business, as you already summed up. We even think about moving to the US, but as a foreigner it's also not "easy" (well, noone said it would be easy to start something on your own - but you get what I mean)
  - pmjordan 15y ago
    Almost all the promising startups in Vienna move to London, either entirely or moving the HQ and maintaining only a development office back home. I wonder if hiring good developers is easier/cheaper in mainland Europe than in the tech centres where there seems to be a shortage right now.
- kjetil 15y ago
  This argument doesn't make sense to me. Better wellfare lowers the risk of working at a startup, which would make more people try it. I guess work regulations and employee rights are make things harder in Europe than in the US, though. According to Inc., "Norway has more entrepreneurs per capita than the United States": http://www.inc.com/magazine/20110201/in-norway-start-ups-say-ja-to-socialism.html http://www.inc.com/magazine/20110201/in-norway-start-ups-say... (Disclosure: I am indeed Norwegian.) I think the more interesting question is how to create the next Google or Facebook outside the US.
  - mhd 15y ago
    I don't think this is just about startups in that case, it's about big corporations. Most European ones have been around for quite a while, I think it's not as common for newcomers to join those ranks here. I'd be hard-pressed to name big companies that arose just recently. We do have a bit more middle-class companies, or at least so it seems. As with almost everything, the US is more about extremes than Europe.
- njs12345 15y ago
  I don't see any causative link here between the welfare state and excessive bureaucracy starting a company - would you mind explaining your thinking?
  - gaius 15y ago
    There is no causative link, you're right. But if you look at any of the major welfare states in Europe - Germany, France, Sweden, for example - then you will find that they are also highly bureacratic. That it is a mere correlation doesn't make it any less true!
  - metageek 15y ago
    A state that incurs high welfare costs when a company fails has an interest in reducing the number of failing companies. One way to do that is to require new companies to have capital, hire qualified employees, etc. (No, I'm not taking a position on whether that's a good idea. I am not an economist, and I try not to play one on the Net.)
    - njs12345 15y ago
      That is true, but one can certainly envisage such measures harming the state in the long run - increased bureaucracy might prevent some companies from starting which would succeed and therefore deprive the state of tax revenue. One Google would cover the costs of a lot of failed startups :) (Not really an economist either, although I do have a little training in the area..)
- mhd 15y ago
  Wow. Is this "everything I need to know about Germany, I learned from Fox News"? Let me pick apart the pieces 1) 20k minimum for startups You're confusing a few things here. The costs to form a company depend on what kind of legal form you want it to have. What you're talking about is the GmbH (basically a LLC), where you actually need 25k of capital. This is by far not the only form a company can take. If you just want to make sure that every founder gets its part, you've got a name for the company etc, you can form something like a UG. If you don't have more than three founders, you can use some standard forms and everything's done within a few days at most. And even if you want limited liability and don't have the capital, you can choose from several other legal forms available in Europe. The British limited company is quite popular, as you need less capital. This is hardly a problem for most IT-based startups, who rarely have a lot of founders or actually trade something (where limited liability is quite welcome). 2) Diplomas/certificates are required There are several cases where this is true, but I don't see any that would affect startups. Yes, if you want to become a hairdresser or want to open your own carpentry shop, you need to have the proper papers. For a web-based startup? What kind of papers would those be? 3) 35 hrs/week That's France. Never mind that the difference between a regular job and startup hours doesn't have to be that different. And even if you're doing the stereotypical 100+ hours a week, the difference to a regular job in any country will be quite high (well, South Korea excluded). 4) Less hunger because of welfare Hows is that particular to startups? If this were true, people would drop out of almost any job because it would be easier otherwise. Germans on the dole don't live in limitless luxury. I'm not saying that there isn't a tendency to copy things here. The whole Facebook vs. StudiVZ affair is pretty embarassing. But that's basically one market niche some companies are filling, it's not really representative of the whole German startup scene. Yes, there's no equivalent to the venture capital-backed silicon valley startup scene. But that's pretty unique in the US, too.
  - cdavid 15y ago
    Concerning the 35 hrs/week: it is the legal duration for work above which you are supposed to pay a higher hourly rate. It is NOT a maximum, and many people work more than 35 hrs/week (the figures for working hours are pretty similar between France, UK and Germany, with UK having the lower on average IIRC, but I cannot find the figure ATM).

gaius 15y ago

Heh, that may be a factor, but I doubt it's the main one. Lots of American HN users seem to be pretty Liberal in their political outlook, and that's fine. But consider Germany, with a welfare state that looks after you from cradle to grave. If you want to start a startup there then you'd better have your EUR 20,000 in capital minimum, and you'd better do all the paperwork and comply with all the regulations and have the right certificates and diplomas... The activation energy is just so much higher in Europe, two guys hacking in their garage can't just go for it without a lot more preparation. If you fail you won't starve of course, the State will look after you but that's a two-edged sword - not only is it harder to get started, there's less hunger to succeed, and everyone will be used to working only 35 hrs/week...

justwrote 15y ago
We actually have an idea in an area which is - if I read posts on HN - pretty well funded. VCs and Angles have a lot of interest. But in Germany, people don't see it - the ones with money even less. And its really hard to start a business, as you already summed up. We even think about moving to the US, but as a foreigner it's also not "easy" (well, noone said it would be easy to start something on your own - but you get what I mean)
- pmjordan 15y ago
  Almost all the promising startups in Vienna move to London, either entirely or moving the HQ and maintaining only a development office back home. I wonder if hiring good developers is easier/cheaper in mainland Europe than in the tech centres where there seems to be a shortage right now.
kjetil 15y ago
This argument doesn't make sense to me. Better wellfare lowers the risk of working at a startup, which would make more people try it. I guess work regulations and employee rights are make things harder in Europe than in the US, though. According to Inc., "Norway has more entrepreneurs per capita than the United States": http://www.inc.com/magazine/20110201/in-norway-start-ups-say-ja-to-socialism.html http://www.inc.com/magazine/20110201/in-norway-start-ups-say... (Disclosure: I am indeed Norwegian.) I think the more interesting question is how to create the next Google or Facebook outside the US.
- mhd 15y ago
  I don't think this is just about startups in that case, it's about big corporations. Most European ones have been around for quite a while, I think it's not as common for newcomers to join those ranks here. I'd be hard-pressed to name big companies that arose just recently. We do have a bit more middle-class companies, or at least so it seems. As with almost everything, the US is more about extremes than Europe.
njs12345 15y ago
I don't see any causative link here between the welfare state and excessive bureaucracy starting a company - would you mind explaining your thinking?
- gaius 15y ago
  There is no causative link, you're right. But if you look at any of the major welfare states in Europe - Germany, France, Sweden, for example - then you will find that they are also highly bureacratic. That it is a mere correlation doesn't make it any less true!
- metageek 15y ago
  A state that incurs high welfare costs when a company fails has an interest in reducing the number of failing companies. One way to do that is to require new companies to have capital, hire qualified employees, etc. (No, I'm not taking a position on whether that's a good idea. I am not an economist, and I try not to play one on the Net.)
  - njs12345 15y ago
    That is true, but one can certainly envisage such measures harming the state in the long run - increased bureaucracy might prevent some companies from starting which would succeed and therefore deprive the state of tax revenue. One Google would cover the costs of a lot of failed startups :) (Not really an economist either, although I do have a little training in the area..)
mhd 15y ago
Wow. Is this "everything I need to know about Germany, I learned from Fox News"? Let me pick apart the pieces 1) 20k minimum for startups You're confusing a few things here. The costs to form a company depend on what kind of legal form you want it to have. What you're talking about is the GmbH (basically a LLC), where you actually need 25k of capital. This is by far not the only form a company can take. If you just want to make sure that every founder gets its part, you've got a name for the company etc, you can form something like a UG. If you don't have more than three founders, you can use some standard forms and everything's done within a few days at most. And even if you want limited liability and don't have the capital, you can choose from several other legal forms available in Europe. The British limited company is quite popular, as you need less capital. This is hardly a problem for most IT-based startups, who rarely have a lot of founders or actually trade something (where limited liability is quite welcome). 2) Diplomas/certificates are required There are several cases where this is true, but I don't see any that would affect startups. Yes, if you want to become a hairdresser or want to open your own carpentry shop, you need to have the proper papers. For a web-based startup? What kind of papers would those be? 3) 35 hrs/week That's France. Never mind that the difference between a regular job and startup hours doesn't have to be that different. And even if you're doing the stereotypical 100+ hours a week, the difference to a regular job in any country will be quite high (well, South Korea excluded). 4) Less hunger because of welfare Hows is that particular to startups? If this were true, people would drop out of almost any job because it would be easier otherwise. Germans on the dole don't live in limitless luxury. I'm not saying that there isn't a tendency to copy things here. The whole Facebook vs. StudiVZ affair is pretty embarassing. But that's basically one market niche some companies are filling, it's not really representative of the whole German startup scene. Yes, there's no equivalent to the venture capital-backed silicon valley startup scene. But that's pretty unique in the US, too.
- cdavid 15y ago
  Concerning the 35 hrs/week: it is the legal duration for work above which you are supposed to pay a higher hourly rate. It is NOT a maximum, and many people work more than 35 hrs/week (the figures for working hours are pretty similar between France, UK and Germany, with UK having the lower on average IIRC, but I cannot find the figure ATM).