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People attribute differences in the enterpreneurial landscape between the US and European countries to cultural factors (aka some "abnormal" risk aversion) but

People attribute differences in the enterpreneurial landscape between the US and European countries to cultural factors (aka some "abnormal" risk aversion) but consider the possibility the difference is actually the rational stance on the face of persistent realities. First, there is the issue of the absence of scale. As a Briton once said (and Brexit famously demonstrated), there is no such thing as Europe. This is particularly true in the financial domain that the author knows well. Every crisis, whether economic, natural or purely political leads to fragmentation and retrenchement back to national borders. Terms such as banking union or capital markets union are the sorry markers of an ambition that was never fulfilled. Alas none of the European countries is big enough for the emerging planet scale economic forces that are being unleashed. Secondly, most European countries are quite statist, the central government plays a very, ahem, central role in economic life. This is not necessarily without merit - a different discussion altogether, but it does imply that the success or failure of potentially disruptive private sector initiatives hinges on political connections and access.

DeathArrow 2y ago
>First, there is the issue of the absence of scale. As a Briton once said (and Brexit famously demonstrated), there is no such thing as Europe. Aren't the markets global? Aren't Google, Apple, Microsoft, Nvidia, Samsung playing on global scale? Why limit yourself to a particular country or continent?
- openrisk 2y ago
  Markets are now "de-globalizing" in real time but that is less relevant for startups. Any entity that is now a "global" multi-national had to grow into that status at some point in their lifecycle. That trajectory is much easier (depending on sector) if the starting point is within a larger country. There are multiple factors: easier access to capital, more human talent, larger customer bases, a single regulatory framework etc. etc. These factors don't just act linearly, but in a combinatorial fashion that helps beat the genuinely low odds. Changing the world (which is what the formation of a major new enterprise effectively does) is not a trivial occurrence. Overcoming those obstacles is occasionally possible but it is very complex and costly. For the European economies the writing is on the wall.

DeathArrow 2y ago

>First, there is the issue of the absence of scale. As a Briton once said (and Brexit famously demonstrated), there is no such thing as Europe. Aren't the markets global? Aren't Google, Apple, Microsoft, Nvidia, Samsung playing on global scale? Why limit yourself to a particular country or continent?

openrisk 2y ago
Markets are now "de-globalizing" in real time but that is less relevant for startups. Any entity that is now a "global" multi-national had to grow into that status at some point in their lifecycle. That trajectory is much easier (depending on sector) if the starting point is within a larger country. There are multiple factors: easier access to capital, more human talent, larger customer bases, a single regulatory framework etc. etc. These factors don't just act linearly, but in a combinatorial fashion that helps beat the genuinely low odds. Changing the world (which is what the formation of a major new enterprise effectively does) is not a trivial occurrence. Overcoming those obstacles is occasionally possible but it is very complex and costly. For the European economies the writing is on the wall.