4 ms·

Distraction. Being compliant with all these regulations takes the very valuable focus away from the main goal of a startup: Finding product market fit. Establis

Distraction. Being compliant with all these regulations takes the very valuable focus away from the main goal of a startup: Finding product market fit. Established companies have no problem being compliant because they already have everything setup.

hef19898 4y ago
This level of compliance is so low that every business in Germany manages it. It is dirt cheap to outsource to a tax advisor, and in doing so no distraction at all. Product market fit doesn't matter if you are unable to run a business.
- SkyAndSand 4y ago
  I don't think 1000€ per year for a yearly closing for a dormant company is "dirt cheap", but we might have different definitions of what constitutes "cheap".
  - hef19898 4y ago
    Well, it is more like 800. And there is a difference between dormant, in my cade, and a holding. Because the holding is serving a purpose. The 800 are if you have someone do it for you, it is much less if you do it yourself. In case of a dormant company wothout activities it is easy enough. If you know how balance sheets work. I do, I'm just too lacy to do it myself. In the end, yes, all things considered 800 are cheap. After all, I have a mortgage.
- ghufran_syed 4y ago
  And yet there is no successful German internet company on the scale of Amazon, Facebook, Netflix, Apple, Google. I claim the regulatory environment is a factor preventing such businesses being successful - why are are you so sure it couldn't be?
  - hef19898 4y ago
    Because easy access to vebture capital, a huge single language market, a risk affine culture and prior success in these fields seem to play a much larger role than how difficult it is to incorporate. If an entepreneur is already discouraged by incorporating, maybe he should stay an employee.
  - register 4y ago
    German people of the elder generation ( boomers ) are generally risk adverse. I would say that this is the biggest reason why.
    - andi999 4y ago
      Small things also. Bezos choose books for amazon since it is a perfect comodity with low consumer prices. You do not have to see the product to know what you will get. Then by using scale of volume they could reduce the sales price and become more attractive. The last step wouldnt have worked, since you are not allowed to sell books at different price in germany. Also if you ordered a book from a bookstore sometimes you had same day delivery to that bookstore or latest next day. Amazon mostly lifted of in Germany when they started to sell other stuff.
  - johannes1234321 4y ago
    There are many difference. A key one: German companies will start to cater around German-speaking market, then expand to Europe, then further out. An American company will focus on American market and while doing that is - due to using a wide spread language - immediately useable world wide and then can adapt to languages and cultures over time.

hef19898 4y ago

This level of compliance is so low that every business in Germany manages it. It is dirt cheap to outsource to a tax advisor, and in doing so no distraction at all. Product market fit doesn't matter if you are unable to run a business.

SkyAndSand 4y ago
I don't think 1000€ per year for a yearly closing for a dormant company is "dirt cheap", but we might have different definitions of what constitutes "cheap".
- hef19898 4y ago
  Well, it is more like 800. And there is a difference between dormant, in my cade, and a holding. Because the holding is serving a purpose. The 800 are if you have someone do it for you, it is much less if you do it yourself. In case of a dormant company wothout activities it is easy enough. If you know how balance sheets work. I do, I'm just too lacy to do it myself. In the end, yes, all things considered 800 are cheap. After all, I have a mortgage.
ghufran_syed 4y ago
And yet there is no successful German internet company on the scale of Amazon, Facebook, Netflix, Apple, Google. I claim the regulatory environment is a factor preventing such businesses being successful - why are are you so sure it couldn't be?
- hef19898 4y ago
  Because easy access to vebture capital, a huge single language market, a risk affine culture and prior success in these fields seem to play a much larger role than how difficult it is to incorporate. If an entepreneur is already discouraged by incorporating, maybe he should stay an employee.
- register 4y ago
  German people of the elder generation ( boomers ) are generally risk adverse. I would say that this is the biggest reason why.
  - andi999 4y ago
    Small things also. Bezos choose books for amazon since it is a perfect comodity with low consumer prices. You do not have to see the product to know what you will get. Then by using scale of volume they could reduce the sales price and become more attractive. The last step wouldnt have worked, since you are not allowed to sell books at different price in germany. Also if you ordered a book from a bookstore sometimes you had same day delivery to that bookstore or latest next day. Amazon mostly lifted of in Germany when they started to sell other stuff.
- johannes1234321 4y ago
  There are many difference. A key one: German companies will start to cater around German-speaking market, then expand to Europe, then further out. An American company will focus on American market and while doing that is - due to using a wide spread language - immediately useable world wide and then can adapt to languages and cultures over time.