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Daniel Ek commits to investing €1B in European ”moonshots”
- pb7 6y agoGood. It’s about time Europe started producing global software products. We need competition in the US and China dominated spaces.
- kzrdude 6y agoWhat's a global software product?
- cpach 6y agoStuff like Gmail, Basecamp, Datadog, etc?
- speedgoose 6y agoAre these products a thing in Asia?
- ebalit 6y agoDatadog founders are french and they have a big R&D presence in Paris. Europe brain drain is a known problem for its tech sector but still underestimated in my opinion.
- patagurbon 6y agoCreative Cloud, 95% of social media, Google/Bing, Office, Autodesk stuff, Windows. The biggest European global(ly consumed) software is probably Spotify right?
- kabes 6y agoProbably SAP
- makapuf 6y agoLinux?
- dmitriid 6y agoSomeone already mentioned SAP. Also Booking.com. But also ARM (though it's hardware, not software). Europe also produces 20% of world's research in the field [1] The big question though is: do we measure success correctly? The vast majority of "great American companies" are either vaporware with inflated valuations, or produce zero innovations [2] [1] https://www.sciencemag.org/news/2020/05/european-rd-review-finds-lagging-high-tech-performance-despite-major-science-investment https://www.sciencemag.org/news/2020/05/european-rd-review-f... [2] https://news.ycombinator.com/item?id=24460504 https://news.ycombinator.com/item?id=24460504
- barry-cotter 6y agoBooking is a wholly owned subsidiary of Priceline and has been for most of its existence since they bought it after it went bankrupt.
- alexchamberlain 6y agoFacebook, Google, Netflix, Amazon, eBay, WhatsApp, WeChat...
- pb7 6y agoAny software product that has significant market share internationally.
- abc-xyz 6y agoThen why would you put China alongside USA? It’s not like their software has been an international success. China pretty much only have TikTok, while EU have Spotify. You might be tempted to include WeChat and games that Tencent brought, but if we lower the bar to that then the list of EU companies would grow a lot as well, such as SoundCloud, Shazam, last.fm, Viber, King, Mojang, Rovio, Supercell, Kiloo, Dailymotion, Criteo, SAP, ASOS, Skyscanner, Wix, GoCardless, Adyen, Kaspersky Labs, Yandex, Transferwise, Badoo, etc.
- ganzuul 6y agoHe isn't talking about just software products. "Ek mentioned machine learning, biotechnology, materials sciences and energy as some of these areas." Material science in particular has endless promise. With the new XFEL infrastructure there is lots of potential too. Some examples of what we could do is replace plastics with bulk metallic glass, save energy in transport with low density steel, and more broadly with eutectic systems.
- disown 6y ago> We need competition in the US and China dominated spaces. China dominates what in the global software industry? Desktop OS? Smartphone OS? Office Suite? Database? Web server? But I agree that we do need more competition.
- gkoberger 6y agoIt's interesting he's jumping straight to "moonshots". Not a lot of companies come out of Europe, and I don't get the impression that's due to a lack of ambitious ideas. Rather, it's really hard to start a company in Europe – the tolerance for risk just isn't there (legally or otherwise).
- sveme 6y agoI believe it‘s rather an issue with the size of the market. It‘s just so much easier to internationalize when you are already the dominant player in the world‘s largest market, the US. Scales matter, see China.
- d_silin 6y agoEU is not a small market, but lack of unified culture/language is a bit of limitation.
- skohan 6y agoI see no reason a web-based product of European origin could not succeed in the US or Chinese markets. TikTok for example has done phenomenally in western markets despite the large cultural differences the development team likely has from many of their users.
- solarkraft 6y agoI see 2 (but am not sure how problematic they really are on a larger scale): The GDPR and upcoming upload filters/required user identification due to the copyright reform.
- skohan 6y agoWould those affect a european-based company hosting and serving users in the US or Asia? US-based companies face the same challenges when trying to reach European customers, so this is an equal playing field as far as I can tell.
- yholio 6y agoThe European Union should devote some of the untold billions they rain on farming subsidies and bailouts, and provide a EU-wide venture fund. YC model, other alumni and successful tech leaders select the most promising startups in a competitive bid for a fixed share ratio. This would do more for EU tech innovation that any other bureaucratic and academically driven initiatives had thus far.
- speedgoose 6y agoThe EU already grants a lot of money for research and innovation. You have the horizon 2020 and horizon Europe programs for example. It's not perfect of course but it works. https://en.m.wikipedia.org/wiki/Framework_Programmes_for_Research_and_Technological_Development https://en.m.wikipedia.org/wiki/Framework_Programmes_for_Res...
- Lionga 6y agoShow any unicorn financed by the horizon billions the EU wastes on these programs. Never was never will be one. It just does not work
- merightnow 6y agoThe scope is not to produce "unicorns" but to drive innovation and R&D for all different kinds of projects. Those funds should not act as VC with the only purpose of growth, but it should fund sustainable innovative companies or open source foundations. Lately I've been seeing the EU founded logo on more and more extremely useful open source programs that everyone uses and which had no funding sources because of the lack of "extreme profit" in the horizon and that should be the results that this grants achieve.
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- jariel 6y ago"it should fund sustainable innovative companies or open source foundations." Show material examples of this. Also, the EU needs 'big companies' that employ a lot of people, pay high salaries, can afford to sustain complicated projects with know-how, to acquire and integrate other projects. A nice batch of 'open source' projects that some people might use will not move the needle.
- ilamont 6y ago“We all know that one of the greatest challenges is access to capital. And that is why I’m sharing today that I will devote €1bn of my personal resources to enable the ecosystem of builders” He's made his billions on the backs of builders, the musicians who can record music all day long but will be lucky to receive pennies for a million listens. The 98.6% of artists outside of Spotify's top tier are making an average of $12 per month (https://www.rollingstone.com/pro/features/spotify-million-artists-royalties-1038408/ https://www.rollingstone.com/pro/features/spotify-million-ar...). Why can't Ek share his largesse with the builders who make it possible for his service to exist?
- devmunchies 6y agoHistorically, artists never made much money selling music. Artists made most of their music going on tour, selling merch, or monetizing their likeness. I see spotify more like as an audio-based customer acquisition channel, like the radio. Maybe it could build in some kind of "donate" patreon-like feature into the app. I wish Soundcloud had this.
- ilamont 6y agoHistorically, artists never made much money selling music. Artists made most of their music going on tour, selling merch, or monetizing their likeness. In the early 1990s I worked for Jimmy Cauty and Bill Drummond's record label, back when they were dominating the UK and European pop charts as The KLF (https://www.npr.org/sections/therecord/2017/07/20/537708922/how-three-austrian-unknowns-misunderstood-klf-s-the-manual https://www.npr.org/sections/therecord/2017/07/20/537708922/...). They never made a pound touring. Their success and much of their impact was tied to European club playlists, the sales of singles, album sales, and the media. You can talk to many other artists from that era who did depend on touring and merch, but also used distribution and sales of singles and albums (and advances on record deals) to establish themselves. While plastic media was doomed long before Spotify, this "audio-based customer acquisition channel" is, by design, set up to benefit Spotify, record labels, and top artists, in that order. Everyone else in the 98.6% tier gets the scraps.
- ResearchCode 6y agoMight have to pay "talent" more than $40k a year before aiming for the moon.
- toomuchtodo 6y agoIt's a complicated issue. Facebook pays well but their product is toxic to society. Google, Amazon, and Apple pay well but they can because of their moats and the lax US regulatory environment. Would FAANG be able to pay as well when anti competition regulations start to kick in and chip away at their revenue streams? Euro pay is definitely much lower (and needs to rise to meet the value technologists deliver), but perhaps its unrealistic to expect US tech comp (that's likely to compress anyway with remote work normalizing). TLDR SV pay is likely too high and unsustainable in the long term. Equity moonshots are already lottery tickets, and you can't set public policy based on lottery tickets.
- blocked_again 6y agoLeave US pay. Europe pay is low even in Indian standards.
- marvin 6y agoThe reason EU companies don't pay US tech salaries is that there aren't enough super profitable companies, and also, related, that the most profitable companies don't properly have to compete for the best engineers. I think we would move in the direction of US tech companies if we managed to create five world-class tech behemoths, but I don't see that happening. Taxation will necessarily affect things; some places have an employer tax that approaches 100%. (Half the salary to the employee and half to the state, then tax the employee's share again afterwards).
- pyrale 6y ago> (Half the salary to the employee and half to the state, then tax the employee's share again afterwards) Can't think of a single country having that. This money which you count as tax goes into retirement, healthcare and stuff like that. Would you consider US packages including healthcare to be taxed ?
- jonplackett 6y agoMaybe he means he wants to pay for Boris Johnson’s coronavirus testing scheme?
- kabes 6y ago"We all know that one of the greatest challenges is access to capital". I don't recognize this. If I look around, there's enough money looking for an investment. Being risk-averse, lots of regulations and fragmented market are way bigger issues.
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- lawrenceyan 6y agoWho popularized using the terminology of "moonshots" in VC / investing? Started seeing it a lot post 2015 or so.
- notadog 6y agoAlphabet's X (formerly Google X) may have helped popularize the term, as they have commonly been referred to as the "moonshot factory".
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- blocked_again 6y agoEuropean tech ecosystem is a bit weird. I went through hundreds of job openings and pretty much all of them ask for experience with language X and framework Y for N years. I have yet to seen a description that doesn't care about what languages the candidate know. Its almost as if companies don't belive that engineers are capable of learning a new language or framework Also I noticed there is too much focus on agile, scrum, DDD, etc. And the pay is too low compared to living expenses. There are a lot of software engineering jobs that pay higher even in India. Only good thing is you get to live in Europe and travel.
- yxhuvud 6y agoThere is no such thing as a European tech ecosystem. It is very different depending on exactly which country you look at. Where did you focus your investigation?
- blocked_again 6y agoBerlin mostly which is one of the major European tech hubs. I think the biggest one in EU.
- iso8859-1 6y agoBerlin is just one city, and that city only has a few million people. Population wise, it ranks behind Moscow, Istanbul, London, Paris, Madrid, Milan and the Ruhr area. All of those have at least one million more inhabitants. How is "major tech hub" measured?
- nemothekid 6y agoPopulation is a poor proxy. San Francisco's metropolitan area isn't even top 10 by population in the US. Including Santa Clara (San Jose, Sunnyvale), put it at #10.
- blocked_again 6y ago> How is "major tech hub" measured? reply By number of tech companies or tech jobs.
- Pandabob 6y agoGood for him. I'm a little amazed at how little the Y Combinator model has been copied in Europe. Now, obviously any new incubator wouldn't come even close to being able to offer what YC does right now with the extensive network etc. But hell, just offering 10-15 startups €120k every six months for ten years would be worth a shot. Maybe fly those companies to Berlin or London or Stockholm. Help them out with whatever you can, but mostly let them figure it out themselves. Maybe focus on startups from the EMEA region. The costs would consist of the fund (€36M) plus the cost of operating the program (perhaps a €1M/year). That would still amount to below €50M. Idk. There are probably plenty of reasons why this would be a bad idea, but if I'd ever have 50 million to spend, this is what I'd try.
- jariel 6y agoThe YC model has not been copied anywhere, and FYI there have been a zillion attempts at incubators in Europe. The problem is generally not money, it's a wide array of other things.
- langitbiru 6y agoA couple of days ago, there was a discussion about why the YC model were really hard to be copied elsewhere. https://news.ycombinator.com/item?id=24590401 https://news.ycombinator.com/item?id=24590401
- chillacy 6y agoEven in other US cities with local incubators and seed funding, startups all face the prospect of needing to visit SF for serious VC rounds later. If these companies are going to need investment from SF, why not just incorporate in Delaware and walk the well-worn path from startup to the NYSE?
- aty268 6y agoYeah good luck with that. There's a reason so few giant tech companies come from Europe, and it isn't cash.
- mkl95 6y agoAs a software developer in a southern European country, the current scenario is just appalling. Salaries have receeded to the levels of the worst years of the previous decade, and we are now forced to make less money with worse conditions than at our previous jobs, because there is nothing better available. This is good news, but we need investment two orders of magnitude higher before we think about fixing this situation. If you are an American or Australian thinking of moving to southern Europe, consider moving to a developing country somewhere else instead. The job market will be similar and life will be much cheaper.
- jariel 6y agoThe problem in Europe is definitely not money, there is plenty of that. Also - 'moonshots'? They are big, failed R&D projects that may or may not pan out. Europe needs their own 'Salesforce' (i.e. 100 000 high paying jobs, massive revenues and value creation) not 'Drone Balloons'. The issues are many and they are often at odds with other things, like 'quality of life'. From lack of large centres of innovation, not quite the right immigration system and attitudes towards migrants, a lack of hyper competitive attitude towards business (easy to see how this could be corrosive from another perspective), taxation and payroll taxes / inability to let people go (i.e. France), really closed business systems all over Europe, smaller markets, lack of risk taking everywhere from buyers, to investors, lack of big, cash-flush acquirers like Oracle, MS, etc. that eat up a lot of startups, a lack of 'flexible 1->n workforce' - ie the kinds of staffers that know how to go with a growing company and help it get established (this is a big ingredient of 'secondary domain knowledge' missing everywhere outside the Valley), to more sophisticated kinds of financing, and finally even just the right cooperative kind of attitude. Despite the competitiveness, there is definitely a 'goodwill' in the Valley that doesn't exist in most parts of the world. Elk would be much better in trying to help Europe understand and overcome structural limitations because they already have the money.
- aty268 6y agoYep, very sad to see this at the bottom.
- somerandomboi 6y agoPositive article. Ek is correct when he states the entrepreneurial spirit in the United States is quite absent in Europe. In fact, investing in "deeptech" startups is a preferable action in relation to this net worth. On the topic of net worth, why did he remark "We all know that one of the greatest challenges is access to capital." His net worth is $ 4.5 billion. Still, it is a noble venture of his to promote entrepreneurship in Europe(quality it substantially lacks).
- Ericson2314 6y agoIMO the whole VC model is totally ass backwards. Spend money on infra (direct thing we want) or UBI, and let actual demand drive the investment. Whether it's innovation grants or QE-driven VC, this is just supply-side bullshit making Frankenstein unprofitable hypeups. If materially content Europeans don't wanna buy more money, that's great! Just keep on reducing working ours until it's clear what needed to be automated, and send the engineers to work on that. FAANG envy is depressing and pathetic.
- pyrale 6y agoThis thread's comments are depressing. So many people commenting about how Europe should emulate the US system to be "competitive"... I seriously suggest those people to look at the society they have created, and do some soul searching.
- thom 6y agoSad that I had to scroll down so far before seeing someone make this point.
- remir 6y agoAccess to capital is only one part of the equation; having a culture that favors innovation is the other part.
- mensetmanusman 6y agoThat’s awesome, I hope it doesn’t get sucked up by unions and legal battles with countries that will fight your right to work overtime.
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- Proven 6y agoNot my money, but a better ROI could be obtained by investing in bringing down the EU. Or simply run a relocation service to move those startups to the UK. The EU has created a highly bureaucratic environment in which governments do not compete in a positive way (they compete in destroying taxpayer wealth). He seems to think there is something other than statism that makes European founders less successful than their counterparts elsewhere. There's no lack of money, there's too much State.
- langitbiru 6y agoToo bad there is no website yet for his European moonshots investment venture. A couple of months ago, Sam, Max, and Jack Altman built something similar, "Apollo - Funding for moonshots" (https://apolloprojects.com/ https://apolloprojects.com/).