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Lack of Entrepreneurial Culture Seen as Europe’s Biggest Obstacle

90 points by FrojoS 15y ago

deleted 15y ago
[deleted]
WasabiVentures 15y ago
I think it is beyond just the culture. While it is true that they don't foster entrepreneurism in Europe, there is also the educational system and government interference that plays a big part.
dmitri1981 15y ago
> the panel decried Europe’s lack of hunger A somewhat inadvertent turn of phrase that may well be telling you more than expected about the situation in Europe.
ovi256 15y ago
This is a classic example of "if only more people would be like us, the world would be better!". Sure enough, the experts are all entrepreneurs and investors. Well, in this particular case, they may very well be right. But things like this really bother me: "traditional engineering-driven approach to business, with its emphasis on perfection, longevity, pride in ingenuity and culture of deep-thinking put the country at a competitive disadvantage in the fast-moving new economy". Really ? That's all he had to say about what made Germany an economic powerhouse on par only with Japan ? Oh, what we need then are more social media experts, I'm sure, to drive value creation through synergistic customer discovery. I'm pretty sure he's beating on a strawman here. Also, the last piece of candy: 'The so called “poor countries,” such as Brazil, have this hunger. They are going to catch up on us.' And how is that a bad thing ? Good for them.
- coliveira 15y ago
  Americans don't like to talk about it, but they should better learn how emulate Europe rather than the opposite. The USA is nowadays more similar to Europe than to new developing economies. While Europe hasn't the high growth it once had, they know how to maintain an economy that retains prosperity for most of its people.
  - latch 15y ago
    Wait, what? I'm not anti/pro america/europe. I'm also not very good at geography, but are you talking about the same Europe as I think you are? Are you suggesting that Europe, as a whole, is an economic model to follow right now? Or when you say Europe do you really just mean Germany ?
    - JanezStupar 15y ago
      Tongue in cheek - Europe could be defined as federation of countries striving to become like Germany. Like US could be defined as federation of countries striving to become like NewFornia.
      - deleted 15y ago
        [deleted]
  - jerf 15y ago
    In the global race to have the worst economy, Europe (as a whole) currently has a significant edge over the US, although the US is certainly running the race with gusto. There's serious talk of having to break the EU up over the economic crisis it is having. The traditional "US should be more like Europe" rhetoric should be packed away in storage for a while, conditions are not ripe for it.
    - danssig 15y ago
      There is talk of breaking up the EU because the bad countries are bankrupting the ones that are doing really well. When everyone notices that the producers and the problem countries are the usual suspects, of course the conclusion is that maybe this agreement wasn't such a good idea after all.
    - jbooth 15y ago
      Most of the European problems right now are problems that the US just plain cannot have -- Greece, Spain and Italy running up huge debts because they have the credibility of the eurozone without any of the responsibility. America's different, we're one country. Those problems aside, we could do a lot worse than modeling europe, way less gas usage, higher health insurance coverage, 2 months of vacation a year. Sounds a lot more stable to me.
- diego_moita 15y ago
  > Also, the last piece of candy: 'The so called “poor countries,” such as Brazil, have this hunger. They are going to catch up on us.' Disclosure: I am Brazilian. They might, but it will take much longer than anyone expects. The truth is that Europe has a lot of advantages when compared to countries like Brazil, India, etc. 1) Working institutions, including the rule of the law. Don't get me started about the ineptitude and incompetence of Brazilian police and courts. 2) A notion of what good governance means, at least outside of Italy and the PIGS. Patronage is so widespread and accepted here that this word doesn't even have a direct translation. 3) Culture and I don't mean classical erudition, but basic literacy. 4) A working credit industry. Only farmers and people with connections in the government can get easy credit in here. For all others the interest rates are a rip-off. Also, few people realize that some of the problems Europe has (decreasing population) are already arriving here; so it is possible that we get old before we get rich.
  - swah 15y ago
    But we have the jeitinho brasileiro.
keiferski 15y ago
. Making money, he said, was not seen as a good thing to do. “The culture is changing, but it will take time.” There's your marketing problem. If being an entrepreneur was only about making money, I wouldn't want my culture to encourage it either. They should focus less on materialism and more on making a difference and creating jobs.
- patrickk 15y ago
  "They should focus less on materialism and more on making a difference and creating jobs." Making a difference? Creating jobs? If I was a business owner (I hope to be someday), the last thing I would be concerned with is job creation. As the old adage goes, "overhead walks on two legs" i.e. wages are a major cost for a business. My first concern would be positive cash flow, then ramen profitability. Then perhaps getting funded, and only then, job creation. Making money should the the sole goal of any business, then afterwards you can worry about making a difference, and employing people. Any other focus and you aren't going to make a difference or create jobs, because you will be out of business. EDIT: amended last sentence
  - keiferski 15y ago
    I am talking about the marketing (or culture) of entrepreneurship. I.E. what the article is about. Not actual business principles. Spreadsheets and bottom lines aren't going to convince anyone to make the jump.
- jacoblyles 15y ago
  Making money occurs when you divert resources from a lower-valued use towards a more highly-valued use. Making money is the root of all prosperity. If your culture despises the making of money, it is philosophically sick.
- FrojoS 15y ago
  Guess what "venture capital" is called in Germany. "Risiko Kapital" which literally means "risk capital". And yes, I agree, the typical picture of an entrepreneur here is that of a greedy - or dumb - person.
spdy 15y ago
The biggest problem is that we dont have "easy money" in europe and there is no real tech hub like the valley around here. Investors want to know upfront how you plan to make money and phrases like "we will figure this out later" wont help you if you need to raise money. If this sort of thinking changes maybe we will see more billion dollar companies in europe.
- deleted 15y ago
  [deleted]
maxxxxx 15y ago
"Germany’s approach, which Mr. Davidson said typically starts with acquiring a deep understanding of the problem before making the decision to act was exactly the opposite of the culture he saw both in his home country of Israel and in America." They should appreciate different approaches instead of calling them a "problem". It's ridiculous to tell the Germans to become more like America or Israel. The German strategy has its problems and so does America's.
mhd 15y ago
Why does everything need to be just like Silicon Valley? Everything being like Wall Street certainly didn't help either. I especially laughed at the line that perfectionism and proper engineering are bad for startups. This explains a lot. (Yes, when it comes to selling stuff that doesn't work and you don't need in the first place, Europe has a lot to learn. Every service-based industry does better in the US.) Meanwhile, the amount of companies founded per year is on a steady rise, so there is a entrepreneurial movement, it's just different. Not saying that either approach is perfect, don't get me wrong. It's just that I don't get those "Europe is worse because it doesn't have companies like Facebook" articles. Neither Europe nor the US has lots sweat shops with Asian conditions, are we both now hopelessly behind this and should mend our ways?
- marknutter 15y ago
  A lack of perfectionism does not mean a lack of quality. There's such a thing as trying to be too perfect and missing out on a market opportunity.
  - mhd 15y ago
    Just like the presence of perfectionism and engineering doesn't mean that people are sitting on "unfinished" products for decades. Never mind that the US has some pretty awesome engineering itself and that the average quality of German startup software isn't any better. Basically, the speaker was just throwing some cliches into the room, whether they fit or not. He might as well have said that Germans don't get anything done because they spend so much time to listen to the Hoff.
fbnt 15y ago
Absolutely spot on. It's not lack of funds or the absence of a proper ecosystem, it's a huge cultural gap. The whole school system is fundamentally broken. Since elementary school to the very last stages of university education I've been told to study, work hard and eventually, with time, gain access to some big and famous corporate in a responsability position, get a lifelong contract, settle down and enjoy life. That should have been my professional life goal. Entrpreunership isn't even remotely considered. It's like it was 'none of my business', as companies were somehow a father-son 'inheritance'. Add to that a very entrpreunership-adverse legislation (for an LLC equivalent in Italy you need a 20K deposit upfront and you'll be paying, at the end of the day, more than 50% of your profits in taxes) and you've got a recipe for disaster. Also, the public opinion seems to have no or little interest in the matter, and the situation looks dreadfully stagnant. Fortunately, there are sparks of cultural changes lately, especially with the younger folks, but it's a change that won't happen overnight for sure.
- leyfa 15y ago
  Fortunately, there are sparks of cultural changes lately, especially with the younger folks, but it's a change that won't happen overnight for sure. I would like to contribute my personal data point on this. I'm a student in a smallish Dutch town at a university that's mostly focused on economics/business and medicine. It feels like there's a considerate entrepreneurial spirit among the students here. Many seem to wish to found a startup and there are some there doesn't seem to be the mentioned aversion against success and making it big. From what I can tell, most of this is (still) just hot air, meaning that people have big ideas but don't dare start working on them. On the other hand, this might also be due to the lack of a bigger engineering or CS department with more people that can actually build something. Maybe this is the beginning of a change of culture. I wonder if students in bigger tech-universities have similar experiences.
  - FrojoS 15y ago
    My personal data point is also, that most people who are interested in startups, including those who do them, are buisnes guys. And we do have three big tech university here in Munich. I know plenty exceptions but overall this is what I see.
mahrain 15y ago
One contributing factor here in the Netherlands is a huge lack of the type of investors I read about on this site. If you want to start a business here, there are two options, either go to the bank and get a personal loan with loads of interest, or depend on "triple-F-financing": friends, fools and family. Only in internet startups that have international appeal do you find a little bit of startup funding, but these investors are hardly ever Dutch firms.
mephju 15y ago
I think the reason for Silicon Valley being in the USA and their entrepeneurial approach is that the USA as a country of immigrants has got higher concentration of people with ADD. ADD people from Europe migrated into the USA since people with ADD are more likely to migrate. Those people are responsible for the culture of impulsivness and creativity in the USA, kinda like role models. So migration is responsible for the lack of this kind of entrepeneurial approaches in Europe and responsible for the surplus of the same in the USA. Simple, he? What do you think about this theory?
- jquery 15y ago
  I think there is a large truth here, in that Americans have the entrepreneurial spirit in their blood and in their culture. Most of our ancestors were highly dissatisfied with the status quo, to the point where they were willing to travel thousands of miles to a faraway land, back when that was a much bigger deal than it is today. But I think this is another discussion entirely.
  - FrojoS 15y ago
    Really? I think its spot on. This trend continues to today. As PG has pointed out in his advocacy for a founder visa [1], about half of vc-backed company founders are immigrants [2]. [1] http://www.paulgraham.com/foundervisa.html http://www.paulgraham.com/foundervisa.html [2] http://venturebeat.com/2006/11/15/note-to-washington-about-half-of-vc-backed-company-founders-are-immigrants/ http://venturebeat.com/2006/11/15/note-to-washington-about-h...
    - mephju 15y ago
      Even the descendants of ADD immigrants are more likely to have ADD themselves. There is a 30% chance for children to get ADD when 1 parent has got it and 50% chance when both parents have it. Therefore percentage of people having ADD should be much higher in America than anywhere else.
rianjs 15y ago
I have no comment on whether Europe needs to be more like Silicon Valley, but my gut feeling is that it doesn't. That being said, Europe isn't nearly as friendly to failure as the US is. Bankruptcy laws in the EU are waaaaaay more onerous than they are in the US. The question of whether this is a chicken and egg problem WRT European culture is up for debate. tl;dr: Cultures are different. News at 11.
zwieback 15y ago
When I was growing up in Germany I remember hearing this exact same complaint about lack of entrepreneurship a good 30 years ago. My dad, who is a solid state physicist, was a kind of cheerleader for modern technology and was exasperated how companies were not adopting and adapting more quickly. His predictions that the economy was going to go down the tubes while the rest of the world pulled away still ring in my ears. Yet here we are and looking around my neighborhood in Oregon I see VWs, Audi's, Mercedes and Porsches, our dishwasher is a Bosch and any serious Oregonian owns a Stihl chainsaw. While I agree that a shocking number of young Germans (and likely other Europeans) are looking for the security of a "Beamter" (civil servant) job, there are definite pros to the German system and I think to keep the balance maybe it's not so bad we have countries with different systems. Here in the USA almost everyone is an amateur at almost everything we do and that breeds excellence from a few but also a lot of shoddy work. In Germany it's the opposite, the general skill level in industry, science and even culture is relatively high but there are few international standouts. I think software and software entrepreneurship is particularly well suited to the American system. Interestingly, in my work as an embedded systems engineer there are a lot of German companies offering development tools (Keil and Hitex come to mind) and other specialty hardware. Not everyone has to develop the next Groupon or Facebook, there are a lot of other possibilities.
- davidw 15y ago
  > any serious Oregonian owns a Stihl chainsaw. Well, depending on which bit of Oregon they're from, they might abhor the idea of a device to "denude mother gaia's old growth forests" or something to that effect... Said as someone who grew up in Oregon.
  - ghurlman 15y ago
    Not when that old growth is blocking the road after a storm.
  - forkandwait 15y ago
    I think about 53% of OR wants to dance naked in the old growth forests, and about 47% wants to cut it all down and go to church 3 times a week. Said as someone who has lived in Oregon and absolutely LOVES both its hippies and its hicks.
franze 15y ago
ok, as i'm currently starting my business in austria (that's in europe) i want to add my 2c. the biggest obstacle is that the government won't go out of your way. 1. i could start my company now 2. but it would be stupid, as i would miss out on the "unternehmensgründerförderung" (start up support) 3. for getting "unternehmensgründerförderung" you have to attend a sh#tload of courses (for about 2 months) which tell you nothing about starting a business, but a lot of "what you have to do so that you don't get into trouble with the government later" 3.1. and they tell you a sh#tload of things about things you have to do to get a 'unternehmensgründungs' grant for your business 3.2. during that period your business is forbidden to earn money 4. as soon as you start your startup you have at least half a month of work outlined on what you now have to do to please your government 5. even if your company would just exists for 1 minute, you will get herrases by the government and insurance companies for the next 3 years. oh, and every time the government discusses that fact that there are not enough new companies, they talk about another 'development program' (a.k.a. grant) which you then get educated about, if you want to or not. sometimes i think i'm becoming an anarchist, an entrepreneur-anarchist.
- dualogy 15y ago
  Yes you should, and it's not hard. You start by refusing to take any more government money, then proceed to the advanced stage where you also refuse to pay them any. Involves a lot of travel, but who wouldn't love that? Entrepreneur-anarchists certainly do ;)
- zenspunk 15y ago
  So, Europe needs less regulation on the low-end of town (small businesses) to increase international competitiveness, and the US needs more regulation on the high-end of town (big business) to decrease corruption and prevent anti-competitive practices. Would it be fair to say that?
  - marknutter 15y ago
    Small businesses decrease corruption and anti-competitive practices in large businesses.
- 15y ago
vvpan 15y ago
US workaholics are ruining things for the rest of the world. Cool the hell off, stop the race.
danssig 15y ago
Honest question: Is WSJ really an HN worthy source anymore? EDIT: How far are you WSJ fanboys going to downvote me on this? The company is owned by Rupert Murdock. The same one who owns Fox news. And this article was rubbish. Am I really the only person surprised to see this here?
forkandwait 15y ago
Note the rhetoric " ... seen as Europe's Biggest Obstacle": by using the passive and an authoritative tone, the WSJ tries to make it seem that there this idea comes from nowhere, and is a universal truth without being attached to real people politicking to make the world the world into what they want (umm, low taxes and regulation for us, thank you). Making seemingly universal statements is one of the best tricks to hiding partisan interests (and the left does this just as often as the right). I would bet money that if you gave a poll, more Europeans would want to move AWAY from a "entrepeneurial culture" (whatever that means) than toward it. For the average working Fritz and Hannah it would mean giving up social services, safety, free education, and excellent vacations.
- marknutter 15y ago
  Without a healthy economy, social services, safety, free education, and excellent vacations will eventually go away. I think it's a universal truth that everyone wants a good economy, regardless of whether you're a socialist or a capitalist.
Maro 15y ago
I'm an entrepreneur in E.Europe. Biggest obstacle is lack of markets, lack of capital. For most tech products like websites and software, the best (and first) market is the US. I used to think that the Internet can bridge this gap, after all, you don't need physical proximity to sell digital goods, but I was wrong. In most cases you need physical/cultural proximity to build your tech business.
shareme 15y ago
A question for European readers: Do you see the culture of the Welfare State as an obstacle to changing culture to accept that being successful, doing new business ventures is a good thing?
- rospaya 15y ago
  I don't really see the comparison here. Germany is a successful country and Germans enjoy a high standard of living. Is there a trade off between welfare and entrepreneurship? I don't know, but I don't see the issue, as Germans are doing pretty good for themselves.
- arethuza 15y ago
  I'm not sure that I see why there should be a correlation between the two ideas - it is perfectly possible to believe that you can provide decent social services (education, healthcare etc.) without discouraging private enterprise. [NB I'm in the UK and I fully support the current governments attempts to thin down the public sector here - with up to 25% cuts in some areas (not the NHS though)].
- DasIch 15y ago
  I don't think the Welfare State is a problem at all nor do I think we have a problem in this culture with being successful. It is just that most people consider the risk associated with creating a startup and the probability of actually succeeding to low. Being an employee is a lot simpler, quite safe and depending on your education is a lot more likely to get you a nice lifestyle.
- narag 15y ago
  It's not the Welfare State but bureaucracy and tax greed. Today I've read a blog post by Jesús Encinar, CEO of idealista.com, the go-to site for renting and buying real state in Spain. The article is in Spanish, short summary below): http://www.jesusencinar.com/2011/06/10-ideas-concretas-para-que-haya-mas-startups.html http://www.jesusencinar.com/2011/06/10-ideas-concretas-para-... "Ten ideas to promote startups in Spain" - Limited liability - The State shouldn't keep VAT returns for a year. - Not overtaxing employee's stock (taxed 47% for employees) - Not overtaxing business angels - Easy foreign workers recruit - Limit the need for licenses for everything. - Lower freelancers taxes - Lower startup social security burden - Remove 1% tax on capital ampliations - Stop attacking Internet sector These are only the titles. Reading the details is depressing. Some of what you take for granted in the USA is impossible or infeasible here. The basic idea is that, in order to startup, you must pay tons of taxes and licenses from the start, even if you're not earning a cent.
jdietrich 15y ago
My favourite company in the world is a German engineering firm called Rohloff. Their motto is "No slogans, just facts" and their business is really just a single product - a beautifully engineered internal gearbox for bicycles called the Speedhub, that costs €1000 and lasts 100,000km. Rohloff make a product as finely engineered as any swiss watch, but in doing so create an anti-consumerist product. Their product is built to last forever and usually does. While their Japanese, American and Italian competitors battle to create ever more fragile "racing" components and strive for ever increasing levels of built-in obsolescence, Rohloff obstinately refuse to make anything the most durable and reliable product. If we measure the wellbeing of society purely in terms of GDP, Rohloff are a disaster; But the only way for Rohloff to improve profitability would be for them to throw their customers under the bus. There is nothing left to improve in a Rohloff Speedhub - it is for all practical purposes perfect. Any possible "improvement" would benefit the marketers, not the customer. I prefer Mercedes and BMW to Cadillac and Lincoln. I would rather see my country emulate Germany than America.
- marknutter 15y ago
  I hope Rohloff is aware of the irony that "No slogans, just facts" is a slogan. While I admire companies who make products that last forever, most people aren't that interested in spending a ton of money on something that will last forever. If you're sure you're going to be using your bike for 70+ years, $1000 isn't a bad investment. If you're like most people, you probably bike once every few months, if that, and the cheap US/Chinese/Japanese products are probably fine. It's not fair to compare companies that are competing on price with companies that are competing on quality. For most people, "ok" and "cheap" are good enough.
  - cromulent 15y ago
    > It's not fair to compare companies that are competing on price with companies that are competing on quality. For this particular consumer, in the marketplace, it's fair enough :) And if it's unfair, bad luck.
    - 15y ago
hunterp 15y ago
Plenty of people in europe are creating interesting startups...
cph1 15y ago
I see a lot of "Europe is like this, Europe is like that" comments here... I wish people would realize that in terms of culture and legislation the various European countries are wildly different. The difference between Southern and Northern Europe is massive (think USA - Mexico), and even between countries that are near each other geographically there are quite big differences (think USA - Canada). Those differences aren't a bad thing in any way and don't mean that we can't be united in some sense - but please just realize that saying that "Europe is like this and that" is like saying "North America is like this and that".
cph1 15y ago
"...Germany’s traditional engineering-driven approach to business, with its emphasis on perfection, longevity, pride in ingenuity and culture of deep-thinking..." I fail to see how those things are negative. As a matter of fact, I wish more entrepreneurs would adopt this kind of thinking: Being proud of your craft and your product. Sure, you need to be able to make decisions, but there is also something to be said for making quality products instead of going for execution speed over quality. Quality-driven thinking is part of what makes Germany one of the largest economies in the world - despite the fact that it is much less populous than other big economies like the US, Japan, and China.
richieb 15y ago
Funny, I worked for two startups in the 90s. Both were started in Paris by Frenchmen.
mtw 15y ago
I've been there, the worse is the weight of structures and bureaucracies
bugsy 15y ago
The criticism of Germany's culture of designing well made products that are an excellent value is a bit odd. Germany's economy has done much better than most others during the Great Depression II, and has avoided the problems with crime, fraud and corruption of the US. The only reasonable explanation for the article is the author is threatened by Germany's success and hoping to confuse them by writing an article advocating they do dumb things instead.

90 points by FrojoS 15y ago

deleted 15y ago

[deleted]

I think it is beyond just the culture. While it is true that they don't foster entrepreneurism in Europe, there is also the educational system and government interference that plays a big part.

dmitri1981 15y ago

> the panel decried Europe’s lack of hunger A somewhat inadvertent turn of phrase that may well be telling you more than expected about the situation in Europe.

ovi256 15y ago

This is a classic example of "if only more people would be like us, the world would be better!". Sure enough, the experts are all entrepreneurs and investors. Well, in this particular case, they may very well be right. But things like this really bother me: "traditional engineering-driven approach to business, with its emphasis on perfection, longevity, pride in ingenuity and culture of deep-thinking put the country at a competitive disadvantage in the fast-moving new economy". Really ? That's all he had to say about what made Germany an economic powerhouse on par only with Japan ? Oh, what we need then are more social media experts, I'm sure, to drive value creation through synergistic customer discovery. I'm pretty sure he's beating on a strawman here. Also, the last piece of candy: 'The so called “poor countries,” such as Brazil, have this hunger. They are going to catch up on us.' And how is that a bad thing ? Good for them.

coliveira 15y ago
Americans don't like to talk about it, but they should better learn how emulate Europe rather than the opposite. The USA is nowadays more similar to Europe than to new developing economies. While Europe hasn't the high growth it once had, they know how to maintain an economy that retains prosperity for most of its people.
- latch 15y ago
  Wait, what? I'm not anti/pro america/europe. I'm also not very good at geography, but are you talking about the same Europe as I think you are? Are you suggesting that Europe, as a whole, is an economic model to follow right now? Or when you say Europe do you really just mean Germany ?
  - JanezStupar 15y ago
    Tongue in cheek - Europe could be defined as federation of countries striving to become like Germany. Like US could be defined as federation of countries striving to become like NewFornia.
    - deleted 15y ago
      [deleted]
- jerf 15y ago
  In the global race to have the worst economy, Europe (as a whole) currently has a significant edge over the US, although the US is certainly running the race with gusto. There's serious talk of having to break the EU up over the economic crisis it is having. The traditional "US should be more like Europe" rhetoric should be packed away in storage for a while, conditions are not ripe for it.
  - danssig 15y ago
    There is talk of breaking up the EU because the bad countries are bankrupting the ones that are doing really well. When everyone notices that the producers and the problem countries are the usual suspects, of course the conclusion is that maybe this agreement wasn't such a good idea after all.
  - jbooth 15y ago
    Most of the European problems right now are problems that the US just plain cannot have -- Greece, Spain and Italy running up huge debts because they have the credibility of the eurozone without any of the responsibility. America's different, we're one country. Those problems aside, we could do a lot worse than modeling europe, way less gas usage, higher health insurance coverage, 2 months of vacation a year. Sounds a lot more stable to me.
diego_moita 15y ago
> Also, the last piece of candy: 'The so called “poor countries,” such as Brazil, have this hunger. They are going to catch up on us.' Disclosure: I am Brazilian. They might, but it will take much longer than anyone expects. The truth is that Europe has a lot of advantages when compared to countries like Brazil, India, etc. 1) Working institutions, including the rule of the law. Don't get me started about the ineptitude and incompetence of Brazilian police and courts. 2) A notion of what good governance means, at least outside of Italy and the PIGS. Patronage is so widespread and accepted here that this word doesn't even have a direct translation. 3) Culture and I don't mean classical erudition, but basic literacy. 4) A working credit industry. Only farmers and people with connections in the government can get easy credit in here. For all others the interest rates are a rip-off. Also, few people realize that some of the problems Europe has (decreasing population) are already arriving here; so it is possible that we get old before we get rich.
- swah 15y ago
  But we have the jeitinho brasileiro.

keiferski 15y ago

. Making money, he said, was not seen as a good thing to do. “The culture is changing, but it will take time.” There's your marketing problem. If being an entrepreneur was only about making money, I wouldn't want my culture to encourage it either. They should focus less on materialism and more on making a difference and creating jobs.

patrickk 15y ago
"They should focus less on materialism and more on making a difference and creating jobs." Making a difference? Creating jobs? If I was a business owner (I hope to be someday), the last thing I would be concerned with is job creation. As the old adage goes, "overhead walks on two legs" i.e. wages are a major cost for a business. My first concern would be positive cash flow, then ramen profitability. Then perhaps getting funded, and only then, job creation. Making money should the the sole goal of any business, then afterwards you can worry about making a difference, and employing people. Any other focus and you aren't going to make a difference or create jobs, because you will be out of business. EDIT: amended last sentence
- keiferski 15y ago
  I am talking about the marketing (or culture) of entrepreneurship. I.E. what the article is about. Not actual business principles. Spreadsheets and bottom lines aren't going to convince anyone to make the jump.
jacoblyles 15y ago
Making money occurs when you divert resources from a lower-valued use towards a more highly-valued use. Making money is the root of all prosperity. If your culture despises the making of money, it is philosophically sick.
FrojoS 15y ago
Guess what "venture capital" is called in Germany. "Risiko Kapital" which literally means "risk capital". And yes, I agree, the typical picture of an entrepreneur here is that of a greedy - or dumb - person.

spdy 15y ago

The biggest problem is that we dont have "easy money" in europe and there is no real tech hub like the valley around here. Investors want to know upfront how you plan to make money and phrases like "we will figure this out later" wont help you if you need to raise money. If this sort of thinking changes maybe we will see more billion dollar companies in europe.

deleted 15y ago
[deleted]

maxxxxx 15y ago

"Germany’s approach, which Mr. Davidson said typically starts with acquiring a deep understanding of the problem before making the decision to act was exactly the opposite of the culture he saw both in his home country of Israel and in America." They should appreciate different approaches instead of calling them a "problem". It's ridiculous to tell the Germans to become more like America or Israel. The German strategy has its problems and so does America's.

mhd 15y ago

Why does everything need to be just like Silicon Valley? Everything being like Wall Street certainly didn't help either. I especially laughed at the line that perfectionism and proper engineering are bad for startups. This explains a lot. (Yes, when it comes to selling stuff that doesn't work and you don't need in the first place, Europe has a lot to learn. Every service-based industry does better in the US.) Meanwhile, the amount of companies founded per year is on a steady rise, so there is a entrepreneurial movement, it's just different. Not saying that either approach is perfect, don't get me wrong. It's just that I don't get those "Europe is worse because it doesn't have companies like Facebook" articles. Neither Europe nor the US has lots sweat shops with Asian conditions, are we both now hopelessly behind this and should mend our ways?

marknutter 15y ago
A lack of perfectionism does not mean a lack of quality. There's such a thing as trying to be too perfect and missing out on a market opportunity.
- mhd 15y ago
  Just like the presence of perfectionism and engineering doesn't mean that people are sitting on "unfinished" products for decades. Never mind that the US has some pretty awesome engineering itself and that the average quality of German startup software isn't any better. Basically, the speaker was just throwing some cliches into the room, whether they fit or not. He might as well have said that Germans don't get anything done because they spend so much time to listen to the Hoff.

fbnt 15y ago

Absolutely spot on. It's not lack of funds or the absence of a proper ecosystem, it's a huge cultural gap. The whole school system is fundamentally broken. Since elementary school to the very last stages of university education I've been told to study, work hard and eventually, with time, gain access to some big and famous corporate in a responsability position, get a lifelong contract, settle down and enjoy life. That should have been my professional life goal. Entrpreunership isn't even remotely considered. It's like it was 'none of my business', as companies were somehow a father-son 'inheritance'. Add to that a very entrpreunership-adverse legislation (for an LLC equivalent in Italy you need a 20K deposit upfront and you'll be paying, at the end of the day, more than 50% of your profits in taxes) and you've got a recipe for disaster. Also, the public opinion seems to have no or little interest in the matter, and the situation looks dreadfully stagnant. Fortunately, there are sparks of cultural changes lately, especially with the younger folks, but it's a change that won't happen overnight for sure.

leyfa 15y ago
Fortunately, there are sparks of cultural changes lately, especially with the younger folks, but it's a change that won't happen overnight for sure. I would like to contribute my personal data point on this. I'm a student in a smallish Dutch town at a university that's mostly focused on economics/business and medicine. It feels like there's a considerate entrepreneurial spirit among the students here. Many seem to wish to found a startup and there are some there doesn't seem to be the mentioned aversion against success and making it big. From what I can tell, most of this is (still) just hot air, meaning that people have big ideas but don't dare start working on them. On the other hand, this might also be due to the lack of a bigger engineering or CS department with more people that can actually build something. Maybe this is the beginning of a change of culture. I wonder if students in bigger tech-universities have similar experiences.
- FrojoS 15y ago
  My personal data point is also, that most people who are interested in startups, including those who do them, are buisnes guys. And we do have three big tech university here in Munich. I know plenty exceptions but overall this is what I see.

mahrain 15y ago

One contributing factor here in the Netherlands is a huge lack of the type of investors I read about on this site. If you want to start a business here, there are two options, either go to the bank and get a personal loan with loads of interest, or depend on "triple-F-financing": friends, fools and family. Only in internet startups that have international appeal do you find a little bit of startup funding, but these investors are hardly ever Dutch firms.

mephju 15y ago

I think the reason for Silicon Valley being in the USA and their entrepeneurial approach is that the USA as a country of immigrants has got higher concentration of people with ADD. ADD people from Europe migrated into the USA since people with ADD are more likely to migrate. Those people are responsible for the culture of impulsivness and creativity in the USA, kinda like role models. So migration is responsible for the lack of this kind of entrepeneurial approaches in Europe and responsible for the surplus of the same in the USA. Simple, he? What do you think about this theory?

jquery 15y ago
I think there is a large truth here, in that Americans have the entrepreneurial spirit in their blood and in their culture. Most of our ancestors were highly dissatisfied with the status quo, to the point where they were willing to travel thousands of miles to a faraway land, back when that was a much bigger deal than it is today. But I think this is another discussion entirely.
- FrojoS 15y ago
  Really? I think its spot on. This trend continues to today. As PG has pointed out in his advocacy for a founder visa [1], about half of vc-backed company founders are immigrants [2]. [1] http://www.paulgraham.com/foundervisa.html http://www.paulgraham.com/foundervisa.html [2] http://venturebeat.com/2006/11/15/note-to-washington-about-half-of-vc-backed-company-founders-are-immigrants/ http://venturebeat.com/2006/11/15/note-to-washington-about-h...
  - mephju 15y ago
    Even the descendants of ADD immigrants are more likely to have ADD themselves. There is a 30% chance for children to get ADD when 1 parent has got it and 50% chance when both parents have it. Therefore percentage of people having ADD should be much higher in America than anywhere else.

rianjs 15y ago

I have no comment on whether Europe needs to be more like Silicon Valley, but my gut feeling is that it doesn't. That being said, Europe isn't nearly as friendly to failure as the US is. Bankruptcy laws in the EU are waaaaaay more onerous than they are in the US. The question of whether this is a chicken and egg problem WRT European culture is up for debate. tl;dr: Cultures are different. News at 11.

zwieback 15y ago

When I was growing up in Germany I remember hearing this exact same complaint about lack of entrepreneurship a good 30 years ago. My dad, who is a solid state physicist, was a kind of cheerleader for modern technology and was exasperated how companies were not adopting and adapting more quickly. His predictions that the economy was going to go down the tubes while the rest of the world pulled away still ring in my ears. Yet here we are and looking around my neighborhood in Oregon I see VWs, Audi's, Mercedes and Porsches, our dishwasher is a Bosch and any serious Oregonian owns a Stihl chainsaw. While I agree that a shocking number of young Germans (and likely other Europeans) are looking for the security of a "Beamter" (civil servant) job, there are definite pros to the German system and I think to keep the balance maybe it's not so bad we have countries with different systems. Here in the USA almost everyone is an amateur at almost everything we do and that breeds excellence from a few but also a lot of shoddy work. In Germany it's the opposite, the general skill level in industry, science and even culture is relatively high but there are few international standouts. I think software and software entrepreneurship is particularly well suited to the American system. Interestingly, in my work as an embedded systems engineer there are a lot of German companies offering development tools (Keil and Hitex come to mind) and other specialty hardware. Not everyone has to develop the next Groupon or Facebook, there are a lot of other possibilities.

davidw 15y ago
> any serious Oregonian owns a Stihl chainsaw. Well, depending on which bit of Oregon they're from, they might abhor the idea of a device to "denude mother gaia's old growth forests" or something to that effect... Said as someone who grew up in Oregon.
- ghurlman 15y ago
  Not when that old growth is blocking the road after a storm.
- forkandwait 15y ago
  I think about 53% of OR wants to dance naked in the old growth forests, and about 47% wants to cut it all down and go to church 3 times a week. Said as someone who has lived in Oregon and absolutely LOVES both its hippies and its hicks.

franze 15y ago

ok, as i'm currently starting my business in austria (that's in europe) i want to add my 2c. the biggest obstacle is that the government won't go out of your way. 1. i could start my company now 2. but it would be stupid, as i would miss out on the "unternehmensgründerförderung" (start up support) 3. for getting "unternehmensgründerförderung" you have to attend a sh#tload of courses (for about 2 months) which tell you nothing about starting a business, but a lot of "what you have to do so that you don't get into trouble with the government later" 3.1. and they tell you a sh#tload of things about things you have to do to get a 'unternehmensgründungs' grant for your business 3.2. during that period your business is forbidden to earn money 4. as soon as you start your startup you have at least half a month of work outlined on what you now have to do to please your government 5. even if your company would just exists for 1 minute, you will get herrases by the government and insurance companies for the next 3 years. oh, and every time the government discusses that fact that there are not enough new companies, they talk about another 'development program' (a.k.a. grant) which you then get educated about, if you want to or not. sometimes i think i'm becoming an anarchist, an entrepreneur-anarchist.

dualogy 15y ago
Yes you should, and it's not hard. You start by refusing to take any more government money, then proceed to the advanced stage where you also refuse to pay them any. Involves a lot of travel, but who wouldn't love that? Entrepreneur-anarchists certainly do ;)
zenspunk 15y ago
So, Europe needs less regulation on the low-end of town (small businesses) to increase international competitiveness, and the US needs more regulation on the high-end of town (big business) to decrease corruption and prevent anti-competitive practices. Would it be fair to say that?
- marknutter 15y ago
  Small businesses decrease corruption and anti-competitive practices in large businesses.
15y ago

vvpan 15y ago

US workaholics are ruining things for the rest of the world. Cool the hell off, stop the race.

danssig 15y ago

Honest question: Is WSJ really an HN worthy source anymore? EDIT: How far are you WSJ fanboys going to downvote me on this? The company is owned by Rupert Murdock. The same one who owns Fox news. And this article was rubbish. Am I really the only person surprised to see this here?

forkandwait 15y ago

Note the rhetoric " ... seen as Europe's Biggest Obstacle": by using the passive and an authoritative tone, the WSJ tries to make it seem that there this idea comes from nowhere, and is a universal truth without being attached to real people politicking to make the world the world into what they want (umm, low taxes and regulation for us, thank you). Making seemingly universal statements is one of the best tricks to hiding partisan interests (and the left does this just as often as the right). I would bet money that if you gave a poll, more Europeans would want to move AWAY from a "entrepeneurial culture" (whatever that means) than toward it. For the average working Fritz and Hannah it would mean giving up social services, safety, free education, and excellent vacations.

marknutter 15y ago
Without a healthy economy, social services, safety, free education, and excellent vacations will eventually go away. I think it's a universal truth that everyone wants a good economy, regardless of whether you're a socialist or a capitalist.

Maro 15y ago

I'm an entrepreneur in E.Europe. Biggest obstacle is lack of markets, lack of capital. For most tech products like websites and software, the best (and first) market is the US. I used to think that the Internet can bridge this gap, after all, you don't need physical proximity to sell digital goods, but I was wrong. In most cases you need physical/cultural proximity to build your tech business.

shareme 15y ago

A question for European readers: Do you see the culture of the Welfare State as an obstacle to changing culture to accept that being successful, doing new business ventures is a good thing?

rospaya 15y ago
I don't really see the comparison here. Germany is a successful country and Germans enjoy a high standard of living. Is there a trade off between welfare and entrepreneurship? I don't know, but I don't see the issue, as Germans are doing pretty good for themselves.
arethuza 15y ago
I'm not sure that I see why there should be a correlation between the two ideas - it is perfectly possible to believe that you can provide decent social services (education, healthcare etc.) without discouraging private enterprise. [NB I'm in the UK and I fully support the current governments attempts to thin down the public sector here - with up to 25% cuts in some areas (not the NHS though)].
DasIch 15y ago
I don't think the Welfare State is a problem at all nor do I think we have a problem in this culture with being successful. It is just that most people consider the risk associated with creating a startup and the probability of actually succeeding to low. Being an employee is a lot simpler, quite safe and depending on your education is a lot more likely to get you a nice lifestyle.
narag 15y ago
It's not the Welfare State but bureaucracy and tax greed. Today I've read a blog post by Jesús Encinar, CEO of idealista.com, the go-to site for renting and buying real state in Spain. The article is in Spanish, short summary below): http://www.jesusencinar.com/2011/06/10-ideas-concretas-para-que-haya-mas-startups.html http://www.jesusencinar.com/2011/06/10-ideas-concretas-para-... "Ten ideas to promote startups in Spain" - Limited liability - The State shouldn't keep VAT returns for a year. - Not overtaxing employee's stock (taxed 47% for employees) - Not overtaxing business angels - Easy foreign workers recruit - Limit the need for licenses for everything. - Lower freelancers taxes - Lower startup social security burden - Remove 1% tax on capital ampliations - Stop attacking Internet sector These are only the titles. Reading the details is depressing. Some of what you take for granted in the USA is impossible or infeasible here. The basic idea is that, in order to startup, you must pay tons of taxes and licenses from the start, even if you're not earning a cent.

jdietrich 15y ago

My favourite company in the world is a German engineering firm called Rohloff. Their motto is "No slogans, just facts" and their business is really just a single product - a beautifully engineered internal gearbox for bicycles called the Speedhub, that costs €1000 and lasts 100,000km. Rohloff make a product as finely engineered as any swiss watch, but in doing so create an anti-consumerist product. Their product is built to last forever and usually does. While their Japanese, American and Italian competitors battle to create ever more fragile "racing" components and strive for ever increasing levels of built-in obsolescence, Rohloff obstinately refuse to make anything the most durable and reliable product. If we measure the wellbeing of society purely in terms of GDP, Rohloff are a disaster; But the only way for Rohloff to improve profitability would be for them to throw their customers under the bus. There is nothing left to improve in a Rohloff Speedhub - it is for all practical purposes perfect. Any possible "improvement" would benefit the marketers, not the customer. I prefer Mercedes and BMW to Cadillac and Lincoln. I would rather see my country emulate Germany than America.

marknutter 15y ago
I hope Rohloff is aware of the irony that "No slogans, just facts" is a slogan. While I admire companies who make products that last forever, most people aren't that interested in spending a ton of money on something that will last forever. If you're sure you're going to be using your bike for 70+ years, $1000 isn't a bad investment. If you're like most people, you probably bike once every few months, if that, and the cheap US/Chinese/Japanese products are probably fine. It's not fair to compare companies that are competing on price with companies that are competing on quality. For most people, "ok" and "cheap" are good enough.
- cromulent 15y ago
  > It's not fair to compare companies that are competing on price with companies that are competing on quality. For this particular consumer, in the marketplace, it's fair enough :) And if it's unfair, bad luck.
  - 15y ago

hunterp 15y ago

Plenty of people in europe are creating interesting startups...

cph1 15y ago

I see a lot of "Europe is like this, Europe is like that" comments here... I wish people would realize that in terms of culture and legislation the various European countries are wildly different. The difference between Southern and Northern Europe is massive (think USA - Mexico), and even between countries that are near each other geographically there are quite big differences (think USA - Canada). Those differences aren't a bad thing in any way and don't mean that we can't be united in some sense - but please just realize that saying that "Europe is like this and that" is like saying "North America is like this and that".

cph1 15y ago

"...Germany’s traditional engineering-driven approach to business, with its emphasis on perfection, longevity, pride in ingenuity and culture of deep-thinking..." I fail to see how those things are negative. As a matter of fact, I wish more entrepreneurs would adopt this kind of thinking: Being proud of your craft and your product. Sure, you need to be able to make decisions, but there is also something to be said for making quality products instead of going for execution speed over quality. Quality-driven thinking is part of what makes Germany one of the largest economies in the world - despite the fact that it is much less populous than other big economies like the US, Japan, and China.

richieb 15y ago

Funny, I worked for two startups in the 90s. Both were started in Paris by Frenchmen.

mtw 15y ago

I've been there, the worse is the weight of structures and bureaucracies

bugsy 15y ago

The criticism of Germany's culture of designing well made products that are an excellent value is a bit odd. Germany's economy has done much better than most others during the Great Depression II, and has avoided the problems with crime, fraud and corruption of the US. The only reasonable explanation for the article is the author is threatened by Germany's success and hoping to confuse them by writing an article advocating they do dumb things instead.