7 ms·

As someone who has worked in both US and German-based startup, I agree that risk tolerance is a huge factor. Everyone from VC's to employees here seem to be wa

by skohan 6y ago

As someone who has worked in both US and German-based startup, I agree that risk tolerance is a huge factor. Everyone from VC's to employees here seem to be way more hesitant to invest in an idea which hasn't been proven elsewhere in some form. That's a pretty bad recipe for moonshots, which by nature need to break the mold a bit. People are also much more risk averse in terms of business model. For instance, the idea of loss-leading to gain market-share will play much better in the US than Germany, where it seems people would rather settle for modest revenue but stay in the black the whole time. Another factor is the concept of work and work-life balance. In Germany holidays are sacred, and you won't generally find people putting in tons of overtime to get a product off the ground. That's great when you're a worker, but it does mean a slower pace than I saw in the US.

heavenlyblue 6y ago
> In Germany holidays are sacred, and you won't generally find people putting in tons of overtime to get a product off the ground Hmh. That’s only 10% slower if you assume Americans never take holidays (which is probably not true at all). I don’t really believe startupers work as much as they claim to however, because you are usually useless at 16 hours a day for a month. How much did it take Elon Musk to go callig people pedos of working heavy hours and sleeping in the office?
- skohan 6y ago
  It's not about the hours as much as the attitude toward work. The pace of work is just slower in general in Germany in my experience: when there's a conflict between a deadline and capacity in Germany, the deadline gets pushed. In US, capacity gets increased. Don't get me wrong, I think the German way of working is way healthier and more sustainable, but everything has a trade-off, and the leave-it-all-on-the-table mentality of American startups seems more conducive to getting an innovative project with difficult technical problems off the ground in my experience.
  - username90 6y ago
    Sweden manage to create quite a lot while keeping above average European worker protections. We say that having lots of protections makes people more willing to take risk since worst case they will have to live on state aid for a while. Likely Daniel Ek want to make the other European countries as good at creating successful companies as Sweden is.
konschubert 6y ago
I don’t think it’s that Europeans don’t want to work weekends. If that were the case you would see South Korea and Japan run circles around silicon valley. In Germany at least it’s conservatism and a failure of imagination. The average German Engineering student doesn’t dream of flying to Mars, he dreams of buying an expensive BMW.
- deleted 6y ago
  [deleted]
- Barrin92 6y ago
  >The average German Engineering student doesn’t dream of flying to Mars The German economy doesn't run on individuals going to Mars, it runs on process innovation, optimisation, and decentralised development between research facilities, a good university system, and companies. On average the German worker productivity is very high. That's a measure of good allocation of resources, not software unicorns or Mars rockets. If German engineers would just be dreaming about holidays and luxury watches that wouldn't be the case. If you look at the increase in total factor productivity (comparing how much aggregate outputs you get out of aggregate inputs, basically measuring technological efficiency), the last decade has been anaemic. SV venture capital software culture is good at capturing markets and shifting economic rent from markets towards centralised platforms, it's not driving innovation and we don't really need to emulate it.
  - adventured 6y ago
    > it's not driving innovation and we don't really need to emulate it. Then don't emulate it and the US will continue to own nearly everything in tech that isn't inside of China. I've been reading sentiment like that out of Europe for over two decades now, with predictable results that just keep going around in a circle and getting the Europeans nowhere. SV and the US tech industry are great at creating markets as well, which you entirely ignore. What did the global cloud services market look like before AWS built it (even Alibaba's cloud offering is a mere intentional clone of AWS)? In terms of sales it barely existed. Every major tech market has been established by SV money and US tech companies, not European companies. There's no evidence that Europe has been more innovative with their approach. It's quite the opposite given the vast majority of major technologies have come out of the US dating back to the 1950s. Europe's contributions pale by comparison, and that's why their companies pale by comparison. Even ARM - one of Europe's few innovators in tech - had to be started by two US companies, with one of the partner companies being European. It's only fitting the US own that company again considering. The leader in AI and quantum computing is the US, with China a close second, and Europe a distant third. And if you narrow that down to the EU, it's even worse now that Britain has left. And when it comes to scaling, you get things like vast numbers of lucrative jobs, high paying engineering salaries from creating global giants. You get an immense virtuous cycle from it, including for seed funding start-ups and larger VC activities. Microsoft will grow its revenue more in the next two years than the total size of SAP (which is Europe's largest softare company and most valuable tech company). The revenue gap between them used to be more like 3 to 1 (circa 2001), now it's over 5 to 1 and persistently expanding. AWS is on its way to being an $80-$100 billion sales global juggernaut, while SAP runs in slow motion. There's no reason Europe couldn't have done that, in theory; in practice, it has been two decades and Europe hasn't been able to do it. "Innovation" is a gloriously worthless word (you can tell because Bill Gates was so very fond of throwing it around while he was at Microsoft, it's a dodge word). If something can't be supported with actual results, people jump to proclaiming things about innovation or the lack of it. Besides, where is the supposed innovation in Europe's tech scene over the last four or five decades? What innovation? Where are the hundreds of amazing, innovative, successful European tech companies that are supposed to stand as a counter to Silicon Valley & Co.? They don't exist. Europeans will claim that's because they're all being acquired by richer US tech companies, which is false; that certainly happens occasionally, and it's happening at a small scale, because there aren't very many of those companies to purchase.
refurb 6y ago
In terms of being risk adverse, I can remember talking to a fellow student from France (yes, it’s an anecdote). We were both taking a class on private equity. He described French risk aversion as such “In Europe, if you took investor money and your idea failed, you would be seen as a failure. It’s amazing that in the US you could raise $1M, lose it all and then go out and raise money again for another idea.”

by skohan 6y ago

heavenlyblue 6y ago

> In Germany holidays are sacred, and you won't generally find people putting in tons of overtime to get a product off the ground Hmh. That’s only 10% slower if you assume Americans never take holidays (which is probably not true at all). I don’t really believe startupers work as much as they claim to however, because you are usually useless at 16 hours a day for a month. How much did it take Elon Musk to go callig people pedos of working heavy hours and sleeping in the office?

skohan 6y ago
It's not about the hours as much as the attitude toward work. The pace of work is just slower in general in Germany in my experience: when there's a conflict between a deadline and capacity in Germany, the deadline gets pushed. In US, capacity gets increased. Don't get me wrong, I think the German way of working is way healthier and more sustainable, but everything has a trade-off, and the leave-it-all-on-the-table mentality of American startups seems more conducive to getting an innovative project with difficult technical problems off the ground in my experience.
- username90 6y ago
  Sweden manage to create quite a lot while keeping above average European worker protections. We say that having lots of protections makes people more willing to take risk since worst case they will have to live on state aid for a while. Likely Daniel Ek want to make the other European countries as good at creating successful companies as Sweden is.

konschubert 6y ago

I don’t think it’s that Europeans don’t want to work weekends. If that were the case you would see South Korea and Japan run circles around silicon valley. In Germany at least it’s conservatism and a failure of imagination. The average German Engineering student doesn’t dream of flying to Mars, he dreams of buying an expensive BMW.

deleted 6y ago
[deleted]
Barrin92 6y ago
>The average German Engineering student doesn’t dream of flying to Mars The German economy doesn't run on individuals going to Mars, it runs on process innovation, optimisation, and decentralised development between research facilities, a good university system, and companies. On average the German worker productivity is very high. That's a measure of good allocation of resources, not software unicorns or Mars rockets. If German engineers would just be dreaming about holidays and luxury watches that wouldn't be the case. If you look at the increase in total factor productivity (comparing how much aggregate outputs you get out of aggregate inputs, basically measuring technological efficiency), the last decade has been anaemic. SV venture capital software culture is good at capturing markets and shifting economic rent from markets towards centralised platforms, it's not driving innovation and we don't really need to emulate it.
- adventured 6y ago
  > it's not driving innovation and we don't really need to emulate it. Then don't emulate it and the US will continue to own nearly everything in tech that isn't inside of China. I've been reading sentiment like that out of Europe for over two decades now, with predictable results that just keep going around in a circle and getting the Europeans nowhere. SV and the US tech industry are great at creating markets as well, which you entirely ignore. What did the global cloud services market look like before AWS built it (even Alibaba's cloud offering is a mere intentional clone of AWS)? In terms of sales it barely existed. Every major tech market has been established by SV money and US tech companies, not European companies. There's no evidence that Europe has been more innovative with their approach. It's quite the opposite given the vast majority of major technologies have come out of the US dating back to the 1950s. Europe's contributions pale by comparison, and that's why their companies pale by comparison. Even ARM - one of Europe's few innovators in tech - had to be started by two US companies, with one of the partner companies being European. It's only fitting the US own that company again considering. The leader in AI and quantum computing is the US, with China a close second, and Europe a distant third. And if you narrow that down to the EU, it's even worse now that Britain has left. And when it comes to scaling, you get things like vast numbers of lucrative jobs, high paying engineering salaries from creating global giants. You get an immense virtuous cycle from it, including for seed funding start-ups and larger VC activities. Microsoft will grow its revenue more in the next two years than the total size of SAP (which is Europe's largest softare company and most valuable tech company). The revenue gap between them used to be more like 3 to 1 (circa 2001), now it's over 5 to 1 and persistently expanding. AWS is on its way to being an $80-$100 billion sales global juggernaut, while SAP runs in slow motion. There's no reason Europe couldn't have done that, in theory; in practice, it has been two decades and Europe hasn't been able to do it. "Innovation" is a gloriously worthless word (you can tell because Bill Gates was so very fond of throwing it around while he was at Microsoft, it's a dodge word). If something can't be supported with actual results, people jump to proclaiming things about innovation or the lack of it. Besides, where is the supposed innovation in Europe's tech scene over the last four or five decades? What innovation? Where are the hundreds of amazing, innovative, successful European tech companies that are supposed to stand as a counter to Silicon Valley & Co.? They don't exist. Europeans will claim that's because they're all being acquired by richer US tech companies, which is false; that certainly happens occasionally, and it's happening at a small scale, because there aren't very many of those companies to purchase.

refurb 6y ago

In terms of being risk adverse, I can remember talking to a fellow student from France (yes, it’s an anecdote). We were both taking a class on private equity. He described French risk aversion as such “In Europe, if you took investor money and your idea failed, you would be seen as a failure. It’s amazing that in the US you could raise $1M, lose it all and then go out and raise money again for another idea.”