5 ms·

And yet Germany still doesn't seem to have much more startup / entrepreneurial success than any other European country. What gives?

summarity 2y ago
What are you looking for in particular? The model is geared towards slow, sustainable growth. And that growth might also not need to exceed a certain level. So you're unlikely to hear about many of them. Not all are in tech or software, many are focused on German-only (or DACH region) research, industrial development, etc. I think that's fine.
- fastball 2y ago
  Presumably you'd want to see that such initiatives are increasing the number of sustainable businesses created, per capita. Is that the case? --- EDIT: Some quick searching indicates that the startup rate (per capita) in Germany is about 1.1%, while the USA is 1.5%. Not a huge difference, but the USA doesn't have any of those initiatives afaik. Just wondering what actually moves the needle and how to better create a society that is entrepreneurial, and not just in a "billion dollar social media unicorn" kinda way, but businesses that provide actual tangible value. Definitely recognize that the "quality" of businesses being started in Germany could be higher, but I think you actually need to measure these things and understand what interventions actually make a difference. It is a similar issue with UBI in general: while it sounds nice and might be necessary if our "AI is the future" overlords get their way, you do actually need to back up the promise of "UBI will unlock human creativity" with some amount of hard data, imo.
  - DarkWiiPlayer 2y ago
    > Some quick searching indicates that the startup rate (per capita) in Germany is about 1.1%, while the USA is 1.5%. Not a huge difference, but the USA doesn't have any of those initiatives afaik. I believe there's differences between east and west Germany, so if you look at the west specifically, the gamp might get a little bit smaller. Beyond that, Germany doesn't have as much of a startup culture as the USA, which is precisely why we need to incentivise people in a way that others don't. > Just wondering what actually moves the needle and how to better create a society that is entrepreneurial Willingness and awareness, where the latter is probably easy to fix but the former is a bit trickier: You need those people who have the ability to pull it off to want it in the first place. And there I guess it splits into a) the benefits of entreprenaurship b) the benefits of employment and c) the cultural influence on how these are weighed against each other. So tl;dr: a) make starting a company attractive, b) make employment suck more and c) convince people that independence beats security. Employment in Germany is definitely a lot cozier than in the US, so unless we want to get rid of that, a) and c) are the options we have. If you want to achieve it without propaganda, then all you can really do is a), and that's what these programmes are already doing. I think reducing buerocracy and offering good social safety nets so a failing business doesn't translate to a ruined life are the way to go, at least in the short term.
    - fastball 2y ago
      Or maybe having a social safety net has the opposite effect you think it does, in that anyone starting a business without one is going to try that much harder to make sure their business doesn't fail, as otherwise their life is ruined. Someone with a safety net might be happy to give up after some minimum of effort because they know they'll be fine. Necessity is an incredibly strong motivator for people. Not necessarily saying that relying on the specter of ruination would be the right choice (if the above was true), but I don't think you can reduce it to such simplistic levers.
  - marcinzm 2y ago
    > Some quick searching indicates that the startup rate (per capita) in Germany is about 1.1%, while the USA is 1.5%. Not a huge difference, but the USA doesn't have any of those initiatives afaik. It sounds like these are small businesses and not startups. The US has 10% small businesses per capita.
    - fastball 2y ago
      My brief research was looking at new business registrations per year.
- mr_mitm 2y ago
  There was even an expression coined for this phenomenon in Germany: https://en.m.wikipedia.org/wiki/Hidden_champions https://en.m.wikipedia.org/wiki/Hidden_champions We have lots of SMEs that are world leading in their niche, but most people have never heard of them.
- CalRobert 2y ago
  Is slow growth sustainable?
pintxo 2y ago
Germany are also very risk averse. So we need such programs even just to counter this risk aversion.
deleted 2y ago
[deleted]
piva00 2y ago
Entrepreneurial success they definitely have, it's just not in-your-face tech/digital stuff, it's lots of Mittelstand companies focusing on niches, like in high-precision machines that are then used for precision manufacturing (optical lenses, chemistry reactors, etc.). What gives is that it isn't a primarily marketing-driven consumer-facing entrepreneurship so you don't hear about Peter Huber Kältemaschinenbau, or Rational AG-like companies[0]. [0] https://www.chargeurs.com/wp-content/uploads/2020/01/The-Best-of-German-Mittelstand.pdf https://www.chargeurs.com/wp-content/uploads/2020/01/The-Bes...
muzani 2y ago
Have you heard of Rocket Internet? It's one of the most successful models in the world. They may avoid the US market and such, but most of the unicorns in Malaysia are backed by Rocket. And most of the people who stay and start their own, backed by YC or whoever, are usually ex-Rocket. They hit 10% growth per week, even at unicorn sizes. I would anecdotally put Germany at #3 globally just for Rocket alone, with US and China ahead of them. There's lots of successful non-Rocket startups from Germany too, but most are boring stuff like agriculture, grocery delivery, pet stuff, etc. We normally don't take note of startups until they're Stripe-sized or something.
- kaashif 2y ago
  Is there any way to put numbers to this success? As in, by what metric is Germany #3?
- thom 2y ago
  Isn't Rocket's reputation that they just steal ideas from other startups and create cheap clones of them? Not a terrible business to be in, but not massively inspiring or globally reproducible.
  - muzani 2y ago
    I'm not a big fan of Rocket, but I think that's an unfair way to put it. I'd say they're similar to what Bezos would be like if he had to start from Europe lol. They take an existing model with a lot of potential and focus on implementation. They had a golden period with e-commerce because e-commerce is heavily logistics. And they do it in the hardest places, because the harder it is, the more they can sell the company for. Back when Lazada started, Indonesia had terrible credit card penetration. Roads were not suited to delivery; heck they built their own logistics because the local logistics were not suited for e-commerce. There's a lot of complex laws on hiring, or incorporating companies there (which are nicer now). China won't do it. They don't want to build companies in 6 different low income country with a total of 500m population or so. Normal people would just target the US or EU, which has more people and more money. But Rocket goes into these countries. They have a lot of emphasis on leadership. They drop a scalable playbook for the locals. They grow it fast until it hits a cap before they sell it off to something like Alibaba. They do have some dark patterns as well. Whatever caricatures people have of China, Rocket does it better - they work longer hours, work people harder, build things for extreme scale, do what the Chinese won't. It is not the funding model that GP speaks of. But it is a fairly successful model of creating and exiting startups. It's quite autocratic to my understanding. I don't have that kind of work ethic and I feel like there's a hint of envy when people call them copycats. They don't have a good presence on the English Wikipedia though.
nicbou 2y ago
German bureaucracy is a constant hindrance. Your first year in business is pure compliance work, and waiting for various paper-based processes to complete.
aleph_minus_one 2y ago
> And yet Germany still doesn't seem to have much more startup / entrepreneurial success than any other European country. What gives? Too much bureaucracy. Many people in Germany do hate it; there even exist quite some people in Germany who would really deeply from their heart love to see the politicians dead who are responsible for the whole bureaucratic mess (which are lots of politicians). EDIT: nicbou gives a similar point: https://news.ycombinator.com/item?id=43609839 https://news.ycombinator.com/item?id=43609839
cardanome 2y ago
Bureaucracy is crazy in Germany. Forget about doing anything online, paper and in person only. Founding any form of limited company is expensive and complicated. Want to put a website online? Have fun putting your full name and address in the imprint. Want to offer some courses that teach X? Yeah, no, you need a license for that, mate! Also being self-employed you lose most social benefits. You need to get private healthcare, you need to save up for retirement and so on. Getting back into public health care later on can be a bit complicated. So my advice is to keep working part time on a job that gives you health insurance and everything and work on your company in your free time. Germany is also one of the least friendly countries for expats. And I say that as a native Germain. Officials will refuse to speak English to you. Yes, refuse. Most people know how to speak English but often can't be arsed to do so. Plus general xenophobia and people being very tight-knit and not open to making new friends.
- aleph_minus_one 2y ago
  While I completely agree with many of the points that you made, I disagree with some: > Bureaucracy is crazy in Germany. Forget about doing anything online, paper and in person only. The latter point has nothing to do with bureaucracy. > Germany is also one of the least friendly countries for expats. And I say that as a native Germain. Officials will refuse to speak English to you. Yes, refuse. For example in the USA, they will refuse to speak German with you. So what? In my opinion there actually exist good reasons for this: 1. A lot of legal, bureaucratic German terms have no direct analogue in English (and their word forming sometimes depends on subtle grammatical features of the German leanguage). 2. For official purposes, it does not suffice if the clerk can somewhat speak English; he/she rather has to be fluent in a way that is "negotiation-safe" ("verhandlungssicher"; I know that this German term is usually translated with "confident in business discussions", "business fluent", "language proficient", but all of these translations don't catch the subtlety of the German term). > people [are] not open to making new friends. The German word "Freund" (commonly translated with "friend") has a different meaning than the English "friend" - the relationship goes much deeper. I don't think that Germans are not open to making new "Freunde", but if you want to have shallow, superficial relationships, Germany is not the ideal country. Vice versa, if you want to have deep relationships, you will likely be annoyed by the USA.

summarity 2y ago

What are you looking for in particular? The model is geared towards slow, sustainable growth. And that growth might also not need to exceed a certain level. So you're unlikely to hear about many of them. Not all are in tech or software, many are focused on German-only (or DACH region) research, industrial development, etc. I think that's fine.

fastball 2y ago
Presumably you'd want to see that such initiatives are increasing the number of sustainable businesses created, per capita. Is that the case? --- EDIT: Some quick searching indicates that the startup rate (per capita) in Germany is about 1.1%, while the USA is 1.5%. Not a huge difference, but the USA doesn't have any of those initiatives afaik. Just wondering what actually moves the needle and how to better create a society that is entrepreneurial, and not just in a "billion dollar social media unicorn" kinda way, but businesses that provide actual tangible value. Definitely recognize that the "quality" of businesses being started in Germany could be higher, but I think you actually need to measure these things and understand what interventions actually make a difference. It is a similar issue with UBI in general: while it sounds nice and might be necessary if our "AI is the future" overlords get their way, you do actually need to back up the promise of "UBI will unlock human creativity" with some amount of hard data, imo.
- DarkWiiPlayer 2y ago
  > Some quick searching indicates that the startup rate (per capita) in Germany is about 1.1%, while the USA is 1.5%. Not a huge difference, but the USA doesn't have any of those initiatives afaik. I believe there's differences between east and west Germany, so if you look at the west specifically, the gamp might get a little bit smaller. Beyond that, Germany doesn't have as much of a startup culture as the USA, which is precisely why we need to incentivise people in a way that others don't. > Just wondering what actually moves the needle and how to better create a society that is entrepreneurial Willingness and awareness, where the latter is probably easy to fix but the former is a bit trickier: You need those people who have the ability to pull it off to want it in the first place. And there I guess it splits into a) the benefits of entreprenaurship b) the benefits of employment and c) the cultural influence on how these are weighed against each other. So tl;dr: a) make starting a company attractive, b) make employment suck more and c) convince people that independence beats security. Employment in Germany is definitely a lot cozier than in the US, so unless we want to get rid of that, a) and c) are the options we have. If you want to achieve it without propaganda, then all you can really do is a), and that's what these programmes are already doing. I think reducing buerocracy and offering good social safety nets so a failing business doesn't translate to a ruined life are the way to go, at least in the short term.
  - fastball 2y ago
    Or maybe having a social safety net has the opposite effect you think it does, in that anyone starting a business without one is going to try that much harder to make sure their business doesn't fail, as otherwise their life is ruined. Someone with a safety net might be happy to give up after some minimum of effort because they know they'll be fine. Necessity is an incredibly strong motivator for people. Not necessarily saying that relying on the specter of ruination would be the right choice (if the above was true), but I don't think you can reduce it to such simplistic levers.
- marcinzm 2y ago
  > Some quick searching indicates that the startup rate (per capita) in Germany is about 1.1%, while the USA is 1.5%. Not a huge difference, but the USA doesn't have any of those initiatives afaik. It sounds like these are small businesses and not startups. The US has 10% small businesses per capita.
  - fastball 2y ago
    My brief research was looking at new business registrations per year.
mr_mitm 2y ago
There was even an expression coined for this phenomenon in Germany: https://en.m.wikipedia.org/wiki/Hidden_champions https://en.m.wikipedia.org/wiki/Hidden_champions We have lots of SMEs that are world leading in their niche, but most people have never heard of them.
CalRobert 2y ago
Is slow growth sustainable?

pintxo 2y ago

Germany are also very risk averse. So we need such programs even just to counter this risk aversion.

deleted 2y ago

[deleted]

piva00 2y ago

Entrepreneurial success they definitely have, it's just not in-your-face tech/digital stuff, it's lots of Mittelstand companies focusing on niches, like in high-precision machines that are then used for precision manufacturing (optical lenses, chemistry reactors, etc.). What gives is that it isn't a primarily marketing-driven consumer-facing entrepreneurship so you don't hear about Peter Huber Kältemaschinenbau, or Rational AG-like companies[0]. [0] https://www.chargeurs.com/wp-content/uploads/2020/01/The-Best-of-German-Mittelstand.pdf https://www.chargeurs.com/wp-content/uploads/2020/01/The-Bes...

muzani 2y ago

Have you heard of Rocket Internet? It's one of the most successful models in the world. They may avoid the US market and such, but most of the unicorns in Malaysia are backed by Rocket. And most of the people who stay and start their own, backed by YC or whoever, are usually ex-Rocket. They hit 10% growth per week, even at unicorn sizes. I would anecdotally put Germany at #3 globally just for Rocket alone, with US and China ahead of them. There's lots of successful non-Rocket startups from Germany too, but most are boring stuff like agriculture, grocery delivery, pet stuff, etc. We normally don't take note of startups until they're Stripe-sized or something.

kaashif 2y ago
Is there any way to put numbers to this success? As in, by what metric is Germany #3?
thom 2y ago
Isn't Rocket's reputation that they just steal ideas from other startups and create cheap clones of them? Not a terrible business to be in, but not massively inspiring or globally reproducible.
- muzani 2y ago
  I'm not a big fan of Rocket, but I think that's an unfair way to put it. I'd say they're similar to what Bezos would be like if he had to start from Europe lol. They take an existing model with a lot of potential and focus on implementation. They had a golden period with e-commerce because e-commerce is heavily logistics. And they do it in the hardest places, because the harder it is, the more they can sell the company for. Back when Lazada started, Indonesia had terrible credit card penetration. Roads were not suited to delivery; heck they built their own logistics because the local logistics were not suited for e-commerce. There's a lot of complex laws on hiring, or incorporating companies there (which are nicer now). China won't do it. They don't want to build companies in 6 different low income country with a total of 500m population or so. Normal people would just target the US or EU, which has more people and more money. But Rocket goes into these countries. They have a lot of emphasis on leadership. They drop a scalable playbook for the locals. They grow it fast until it hits a cap before they sell it off to something like Alibaba. They do have some dark patterns as well. Whatever caricatures people have of China, Rocket does it better - they work longer hours, work people harder, build things for extreme scale, do what the Chinese won't. It is not the funding model that GP speaks of. But it is a fairly successful model of creating and exiting startups. It's quite autocratic to my understanding. I don't have that kind of work ethic and I feel like there's a hint of envy when people call them copycats. They don't have a good presence on the English Wikipedia though.

nicbou 2y ago

German bureaucracy is a constant hindrance. Your first year in business is pure compliance work, and waiting for various paper-based processes to complete.

aleph_minus_one 2y ago

> And yet Germany still doesn't seem to have much more startup / entrepreneurial success than any other European country. What gives? Too much bureaucracy. Many people in Germany do hate it; there even exist quite some people in Germany who would really deeply from their heart love to see the politicians dead who are responsible for the whole bureaucratic mess (which are lots of politicians). EDIT: nicbou gives a similar point: https://news.ycombinator.com/item?id=43609839 https://news.ycombinator.com/item?id=43609839

cardanome 2y ago

Bureaucracy is crazy in Germany. Forget about doing anything online, paper and in person only. Founding any form of limited company is expensive and complicated. Want to put a website online? Have fun putting your full name and address in the imprint. Want to offer some courses that teach X? Yeah, no, you need a license for that, mate! Also being self-employed you lose most social benefits. You need to get private healthcare, you need to save up for retirement and so on. Getting back into public health care later on can be a bit complicated. So my advice is to keep working part time on a job that gives you health insurance and everything and work on your company in your free time. Germany is also one of the least friendly countries for expats. And I say that as a native Germain. Officials will refuse to speak English to you. Yes, refuse. Most people know how to speak English but often can't be arsed to do so. Plus general xenophobia and people being very tight-knit and not open to making new friends.

aleph_minus_one 2y ago
While I completely agree with many of the points that you made, I disagree with some: > Bureaucracy is crazy in Germany. Forget about doing anything online, paper and in person only. The latter point has nothing to do with bureaucracy. > Germany is also one of the least friendly countries for expats. And I say that as a native Germain. Officials will refuse to speak English to you. Yes, refuse. For example in the USA, they will refuse to speak German with you. So what? In my opinion there actually exist good reasons for this: 1. A lot of legal, bureaucratic German terms have no direct analogue in English (and their word forming sometimes depends on subtle grammatical features of the German leanguage). 2. For official purposes, it does not suffice if the clerk can somewhat speak English; he/she rather has to be fluent in a way that is "negotiation-safe" ("verhandlungssicher"; I know that this German term is usually translated with "confident in business discussions", "business fluent", "language proficient", but all of these translations don't catch the subtlety of the German term). > people [are] not open to making new friends. The German word "Freund" (commonly translated with "friend") has a different meaning than the English "friend" - the relationship goes much deeper. I don't think that Germans are not open to making new "Freunde", but if you want to have shallow, superficial relationships, Germany is not the ideal country. Vice versa, if you want to have deep relationships, you will likely be annoyed by the USA.