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One consequence is that this will continue to keep European tech valuations low. Silicon valley startup valuations allow some crazy and amazing ideas to be trie

One consequence is that this will continue to keep European tech valuations low. Silicon valley startup valuations allow some crazy and amazing ideas to be tried, but it's all based a premise that startups may one day become a unicorns. This also supports Silicon Valley level wages, which are almost non existent in Europe. Now not only has the EU declared unicorns unwelcome, but also European users will be discounted, and perhaps even become a liability, if an EU startup seeks an exit to a US buyer. That's a huge problem since all major EU exits are sales to US buyers. It's pretty clear the Silicon valley innovation model didn't work for Europe. But Europe still needs to figure out how to get money circulating back into productive capital. Negative interest rates mean you can park your money in real estate and ride the stagflation. The current model seems to be for the government to fund all R&D, but please trust me as someone who spends way too much time writing grant applications that this model sucks.

imiric 6y ago
As a consumer I can't see that as anything but positive. Most SV unicorns are overvalued and their technology is not nearly as important to the world as they think it is. Once they reach a certain scale it can easily do more harm than good. The endless pursuit to "disrupt" and grow to please shareholders is the wrong dangling carrot for entrepreneurs. It only promotes "growth hacking" and other shady get-rich-quick schemes. I'm not a fan of more government oversight, but it's a good thing if it can control some of these tech giants.
- 0xfaded 6y ago
  As a consumer I also believe something that needs to be done to regulate big tech, but the problem of directing money into productive capital is huge. Every unicorn's valuation is basically realized by establishing some sort of monopoly or monopsony. This leads to another less-than-ideal situation, where companies are incentivized to spend money protecting their monopoly instead of innovating. Fundamentally this is bad. But it turns out that the capital cost of new technology is extremely high, and it becomes a corollary that anyone who wants to spend their lives developing the next technology should locate themselves in the most favorable funding environment. Europe can avoid being a tech backwater if it can figure out how to provide a favorable funding environment. One technocratic solution would be to make it the governments problem to reap reasonable returns from tech. Offering every citizen the option of purchasing up to 100.000 euros in tech bonds yielding 5% that EU governments become responsible for investing would unleash trillions of euros while exerting significant pressure on unproductive assets.
jjevanoorschot 6y ago
> This also supports Silicon Valley level wages, which are almost non existent in Europe. As a software engineer in Europe, I'd say that this is a good thing. Income inequality is much lower in most European countries than it is in the US.
piva00 6y ago
> Now not only has the EU declared unicorns unwelcome, but also European users will be discounted, and perhaps even become a liability, if an EU startup seeks an exit to a US buyer. That's a huge problem since all major EU exits are sales to US buyers. This is a problem for the founders and investors wanting to make a buck, not for us European users and even less for the European market as being owned by foreign entities is exactly a source of the problems for EU's tech industry. How would Americans feel if the only exit strategy for US startups was to be sold to Chinese behemoths?
me_me_me 6y ago
Its much easier to star a business in a homogeneous market like US. Where a culture is almost identical across each state. In contrast EU countries speak different languages and there are different cultural norms and habits. And while laws are similar there are differences between countries. I would say this is the biggest factor why us is the default unicorn location.

imiric 6y ago

As a consumer I can't see that as anything but positive. Most SV unicorns are overvalued and their technology is not nearly as important to the world as they think it is. Once they reach a certain scale it can easily do more harm than good. The endless pursuit to "disrupt" and grow to please shareholders is the wrong dangling carrot for entrepreneurs. It only promotes "growth hacking" and other shady get-rich-quick schemes. I'm not a fan of more government oversight, but it's a good thing if it can control some of these tech giants.

0xfaded 6y ago
As a consumer I also believe something that needs to be done to regulate big tech, but the problem of directing money into productive capital is huge. Every unicorn's valuation is basically realized by establishing some sort of monopoly or monopsony. This leads to another less-than-ideal situation, where companies are incentivized to spend money protecting their monopoly instead of innovating. Fundamentally this is bad. But it turns out that the capital cost of new technology is extremely high, and it becomes a corollary that anyone who wants to spend their lives developing the next technology should locate themselves in the most favorable funding environment. Europe can avoid being a tech backwater if it can figure out how to provide a favorable funding environment. One technocratic solution would be to make it the governments problem to reap reasonable returns from tech. Offering every citizen the option of purchasing up to 100.000 euros in tech bonds yielding 5% that EU governments become responsible for investing would unleash trillions of euros while exerting significant pressure on unproductive assets.

jjevanoorschot 6y ago

> This also supports Silicon Valley level wages, which are almost non existent in Europe. As a software engineer in Europe, I'd say that this is a good thing. Income inequality is much lower in most European countries than it is in the US.

piva00 6y ago

> Now not only has the EU declared unicorns unwelcome, but also European users will be discounted, and perhaps even become a liability, if an EU startup seeks an exit to a US buyer. That's a huge problem since all major EU exits are sales to US buyers. This is a problem for the founders and investors wanting to make a buck, not for us European users and even less for the European market as being owned by foreign entities is exactly a source of the problems for EU's tech industry. How would Americans feel if the only exit strategy for US startups was to be sold to Chinese behemoths?

me_me_me 6y ago

Its much easier to star a business in a homogeneous market like US. Where a culture is almost identical across each state. In contrast EU countries speak different languages and there are different cultural norms and habits. And while laws are similar there are differences between countries. I would say this is the biggest factor why us is the default unicorn location.