6 ms·

Too strict of labor laws that stifle innovation

by rayrey 4y ago

908B64B197 4y ago
It's also the sheer amount of laws and regulations around opening and running a business that makes it really hard for small organizations to get started. There's a LOT of paperwork around the EU, and as soon as you want to sell to the neighboring countries it's a lot of additional paperwork, red tape and regulations (it's better than it was still). A founder from Europe explained the 4th person to join the company as the 2nd employee (their first hire was an engineer) was a non-technical person whose job was mostly to fill out grant application forms. There are hundreds of different grants for companies with a long list of criterions. For example, they could have the countries government (so the taxpayer) foot the bill for a fraction of an employee's salary if he or she was a refugee from certain target countries. Of course, the local government had a similar scheme with a completely different application process and slightly different criterions. None of the grants had anything to do with their tech or how viable the business was by the way.
franczesko 4y ago
How labor laws are connected with innovation and how they stifle it?
dahwolf 4y ago
Nonsense. Europe simply doesn't have venture capital. Neither do most countries and regions, hence they move to Silicon Valley.
- p1esk 4y ago
  Why VCs don’t want to invest in European startups? Or are there no European startups to invest in?
  - manuelabeledo 4y ago
    There are. Most of them move to the US, though.
  - pjc50 4y ago
    The industry is a lot "closer" than people expect; it runs a lot more on handshakes and people going to the same parties than on cold numbers, so not only do startups have to be in the US they have to be specifically in SV. Two decades ago at a UK chip design software startup, the founders started a US branch and migrated there for just this reason. (The SVB bank run shows how strong the "being in the right whatsapp group message chat" is)
- outside1234 4y ago
  It's not the whole story but it isn't nonsense. You literally can't restructure a company in Germany without doing a year long song and dance with the worker's council. This is not agile enough for a startup.
  - Pet_Ant 4y ago
    You don't have that problem in Canada, and you have many of the same advantages but you don't have nearly the amount of startups and definitely almost no big ones. It's really Winner-take-all market.
    - speed_spread 4y ago
      Yep, Canadian tech companies either get bought out by American firms or self-sabotage into oblivion (Blackberry, Nortel).
    - 908B64B197 4y ago
      The problem (and opportunity for US investors) is Canada has almost no VC, and the few they have are extremely risk averse. One one side they held back economic and social growth of ~1/3rd of the population for more than a century through systemic racism and discrimination. On the other side, the government has created little incentives for capital owners to take more risks thanks to policies that artificially propped up real estate (enormous immigration quotas, lax laws on foreign money entering the country, no market correction post 2007 crash). Why invest in hard to understand and uncertain tech when you can simply build luxury houses and sell them to wealthy foreigners?
      - TMWNN 4y ago
        > The problem (and opportunity for US investors) is Canada has almost no VC, and the few they have are extremely risk averse. Based on all the stories we've heard over the past week from VCs and entrepreneurs about how SVB was the only bank willing to open accounts and extend credit to startups, I think many people underestimated that bank's importance in the Bay area economy. (I've also been startled by just how important SVB's UK, Canada, and even China branches seem to have been for their startups.) While SVB wasn't present in most other areas of the US, there is an extensive network of regional banks (of which SVB was one), so the odds that one is going to offer a no-revenue tech startup in Nashville or Phoenix or Worcester the financial help it needs to get started aren't bad. Now compare that to Canada, which has the Big Five national banks, tiny credit unions, and almost nothing else; apparently this makes borrowing money much, much more expensive than in the US. I hear that Australia is the same way.

Too strict of labor laws that stifle innovation

by rayrey 4y ago

Too strict of labor laws that stifle innovation

It's also the sheer amount of laws and regulations around opening and running a business that makes it really hard for small organizations to get started. There's a LOT of paperwork around the EU, and as soon as you want to sell to the neighboring countries it's a lot of additional paperwork, red tape and regulations (it's better than it was still). A founder from Europe explained the 4th person to join the company as the 2nd employee (their first hire was an engineer) was a non-technical person whose job was mostly to fill out grant application forms. There are hundreds of different grants for companies with a long list of criterions. For example, they could have the countries government (so the taxpayer) foot the bill for a fraction of an employee's salary if he or she was a refugee from certain target countries. Of course, the local government had a similar scheme with a completely different application process and slightly different criterions. None of the grants had anything to do with their tech or how viable the business was by the way.

franczesko 4y ago

How labor laws are connected with innovation and how they stifle it?

dahwolf 4y ago

Nonsense. Europe simply doesn't have venture capital. Neither do most countries and regions, hence they move to Silicon Valley.

p1esk 4y ago
Why VCs don’t want to invest in European startups? Or are there no European startups to invest in?
- manuelabeledo 4y ago
  There are. Most of them move to the US, though.
- pjc50 4y ago
  The industry is a lot "closer" than people expect; it runs a lot more on handshakes and people going to the same parties than on cold numbers, so not only do startups have to be in the US they have to be specifically in SV. Two decades ago at a UK chip design software startup, the founders started a US branch and migrated there for just this reason. (The SVB bank run shows how strong the "being in the right whatsapp group message chat" is)
outside1234 4y ago
It's not the whole story but it isn't nonsense. You literally can't restructure a company in Germany without doing a year long song and dance with the worker's council. This is not agile enough for a startup.
- Pet_Ant 4y ago
  You don't have that problem in Canada, and you have many of the same advantages but you don't have nearly the amount of startups and definitely almost no big ones. It's really Winner-take-all market.
  - speed_spread 4y ago
    Yep, Canadian tech companies either get bought out by American firms or self-sabotage into oblivion (Blackberry, Nortel).
  - 908B64B197 4y ago
    The problem (and opportunity for US investors) is Canada has almost no VC, and the few they have are extremely risk averse. One one side they held back economic and social growth of ~1/3rd of the population for more than a century through systemic racism and discrimination. On the other side, the government has created little incentives for capital owners to take more risks thanks to policies that artificially propped up real estate (enormous immigration quotas, lax laws on foreign money entering the country, no market correction post 2007 crash). Why invest in hard to understand and uncertain tech when you can simply build luxury houses and sell them to wealthy foreigners?
    - TMWNN 4y ago
      > The problem (and opportunity for US investors) is Canada has almost no VC, and the few they have are extremely risk averse. Based on all the stories we've heard over the past week from VCs and entrepreneurs about how SVB was the only bank willing to open accounts and extend credit to startups, I think many people underestimated that bank's importance in the Bay area economy. (I've also been startled by just how important SVB's UK, Canada, and even China branches seem to have been for their startups.) While SVB wasn't present in most other areas of the US, there is an extensive network of regional banks (of which SVB was one), so the odds that one is going to offer a no-revenue tech startup in Nashville or Phoenix or Worcester the financial help it needs to get started aren't bad. Now compare that to Canada, which has the Big Five national banks, tiny credit unions, and almost nothing else; apparently this makes borrowing money much, much more expensive than in the US. I hear that Australia is the same way.