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My pithy take on the most important explanatory factors here: 1) EU/UK startups lack a big enough common market to sell into to go from 100 to 1,000,0000 relat
by mushufasa 2y ago
My pithy take on the most important explanatory factors here:
1) EU/UK startups lack a big enough common market to sell into to go from 100 to 1,000,0000 relative to US and Chinese startups.
2) Tax laws in many EU countries significantly limit founders' exit opportunities and magnitude of personal financial success. This "tail wags to the dog" because of risk/reward: if the ultimate reward is not high, a founder can't justify taking on much risk, nor can their investors.
While the tax laws are interconnected with the societal culture (e.g. "American Dream mentality"), I think high frequency of examples of outlier success founders is what will change the culture, and those people won't start companies (or get very far) if they are dealing with 1) and 2).
Or they'll just move to USA to start their businesses, as has been often the case.
- DeathArrow 2y ago>1) EU/UK startups lack a big enough common market to sell into to go from 100 to 1,000,0000 relative to US and Chinese startups. Are US companies selling only in US market? Why can't EU/UK startups address global markets?
- disgruntledphd2 2y agoIt's much easier to start in your home market, get experience there and then expand. Also, the US is basically the best market for everything (fortunately or unfortunately), so even if you start in Latvia, the next market you enter will probably be the US. This is because it's relatively open and has lots of people speaking a common language, with a (mostly) common regulatory system so you can spread the setup costs over a much larger market. Compare to starting in Ireland and then hitting the UK, France, Germany, Poland etc. Each of those countries will incur startup costs but the market size is smaller so you'll make less profit (all other things being equal).