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Many people attempt to apply the American mindset to the European market, then act surprised when it doesn't work. This is yet another example. European cultur

Many people attempt to apply the American mindset to the European market, then act surprised when it doesn't work. This is yet another example. European culture operates differently, and the startup model doesn't translate seamlessly to this continent for a variety of reasons. I've explored this in depth on my blog, with a particular focus on Germany: https://mertbulan.com/2025/02/24/we-dont-need-startups-we-need-digital-mittelstand/ https://mertbulan.com/2025/02/24/we-dont-need-startups-we-ne...

glimshe 1y ago
Great post. The German audio product company u-he sounds like your digital mittelstand. They make synthesizers nobody can quite emulate.
- piva00 1y ago
  In the audio/music production space Germany has Ableton, Bitwig, Steinberg, Native Instruments, u-he, and quite a few others. All following the Mittelstand model as far as I know. Notwithstanding all the physical audio equipment manufacturers in Germany, there are loads of them producing quite high quality gear.
  - thefz 1y ago
    Sennheiser too!
Yizahi 1y ago
Interesting article, but I think it's not contradicting to the OP post. What is a "successful specialized high-quality mid size company"? It's formerly a successful startup, just aiming not to cover as wide audience as possible, but a narrow market. And not aiming to go public or sell out, but retain private ownership and vision of the founders. Think Ebay store vs Valve (Steam) store. The problem is that to become a mittelstand, company must survive early growth phase, and the OP tweet correctly notices that such possibility is severely hampered both by EU and USA media. To continue my example - "we have Valve at home"(c) i.e. for example EU has CDPR with it's GoodOldGames (GoG) store. Yeah, it also went a bit wide in past years, but not because of lack of trying to be specialized. And they still retain that specialization mostly. But they are far far away from the Steam, and I now suspect the marketing playing a key part in it. tl;dr - authors message "Germany should focus on developing the Digital-Mittelstand" is wrong. It is wrongly formulated. It's like saying "country should focus on developing successful companies". Yeah, no shit Sherlock, but before that every successful company must somehow be created and grow. Or, alternatively, we can replace every Mittelstand word in the incentives part of the article and all of the sentences would be true: STARTUP, however, can leverage remote work to further reduce costs. Employees could live in small towns, enjoy lower living expenses, and maintain a high quality of life thanks to Germany’s good transportation infrastructure. Remote work also translates into lower personnel costs, typically the largest expense for any startup. By tapping into these advantages, STARTUP could achieve both profitability and sustainability without compromising employee well-being. If you’re already sold on the STARTUP concept, let’s explore the potential products they can create. There’s a wide range of possibilities: (a list of typical software industries) Rather than pouring large grants into startups with the hope of generating returns for shareholders, the German government should consider introducing tailored incentives to foster the development of STARTUP. Salary Grants - (applicable to startups? of course) Simplify Bureaucracy and Regulations - (same) Expand VAT Exemptions - (same) English Language Support - (same) etc. etc.
dgb23 1y ago
An interesting and useful perspective. There seem to be a lot of parallels with Switzerland in that regard.
- gsf_emergency 1y ago
  Swiss gov?/quagos(driven by the Gallic element)? do unbeatable job hyping their wares internationally? Might be best hypsters in their weight class "government of <10million". (German SMEs do not need the international market as much) For further comparison direct sales incurred by US press is insignificant internationally next to Hollywood,and one can argue the CIA does more-better commerce hype than DoC itself
fsflover 1y ago
I don't see how the OP's startup couldn't become a "digital mittelstand".
ZephyrBlu 1y ago
This feels like an orthogonal point. The OP make a very specific comparison to his travel company and Airbnb, and how people ignored them or even belittled them but adored Airbnb despite being very similar companies. Europeans use Airbnb. Trying to to say he was trying to "apply the American mindset to the European market" as a bad thing doesn't really hold water here when the American product literally won. Yes, the kind of companies historically started in Europe are very culturally different to startups. The point being made is that really for no good reason, Europe does not culturally support the existence of startups and is often actively hostile towards them. The solution being "just don't do startups in Europe" is like, ok sure I guess you can do that, but it doesn't actually address the problem that was presented: cultural incompatibility and unwillingness to change.
- mertbio 1y ago
  > the American product literally won Another part of the American mindset. Not all the companies are trying to win here in Europe. Some believe that companies can co-exist. They can serve different groups of people. Not all of them are pushing for getting more market share or jumping into different industries like Airbnb is doing now.
  - mytailorisrich 1y ago
    That's a strangely naive and idealistic view of Europe. Companies are trying to win in Europe and competition is as fierce as anywhere. What "some" do is a moot point. You'll always find "some" people/companies behaving in a certain way wherever you go.
  - ZephyrBlu 1y ago
    You keep avoiding the point. Yes, some companies aren’t trying to “win”, but what about the companies that are trying to “win”? It sounds like you’re implying they simply shouldn’t exist in Europe.
- _vere 1y ago
  Call me crazy but i don't think european media should hype up an airbnb-like company, just because it has the capability to make money does not mean its good for the world or should exist. We do not need a european amazon, we need to move away from companies like that full stop.
lucumo 1y ago
Ironically, you're trying to apply a German mindset to the entire European market. That doesn't really work either. In the sense that Mittelstand is more than just SMEs, I don't think it ever really existed here. There's no cultural fascination with being a middle business or having a family-owned business. A similar word ("middenstand") was used a lot, but it referred to shops only. In American TLA-speak: SMEs with a D2C model. The term "middenstand" died a slow death in the last 25 years. It's rarely used nowadays. Good riddance too. The whole term reaks of limited social mobility. In Dutch "stand" has a much stronger feudal vibe than "klasse".
oytis 1y ago
Sorry, but it's a typical German detached from reality attitude. We are going to find some magical niches that no one else will dare to touch allowing us to live quietly in a village and print money just like that (not a lot of money of course, we don't want to be TOO unrealistic, just enough for a comfortable life). Not going to work in an innovative digital economy. We can see how resilient Mittelstand is by the current wave of bankruptcies and the general state of economy.
dogma1138 1y ago
Europe does not have a monolithic culture. As far startups go it has much less to do with culture or hype but with the fact that Europe even with the single market has far more localized and ring fenced markets than the US. So you end up with smaller overall markets with a well dug in established competition.
penguin_booze 1y ago
Entropy tends to increase over time (or, so I heard). The cultural analogue of that would be that all cultures--given the prevalence of internet, and on top of that, the US being one of the "loudest"--will either become or approach that of the US. And it'll bring along everything that's good and bad. That means, decadence, greed, gluttony, enshittification, are unavoidable, however unlikely and alien they seem at present time. In less generous terms, the sick tend to infect the healthy, more than the latter can heal the former.

glimshe 1y ago

Great post. The German audio product company u-he sounds like your digital mittelstand. They make synthesizers nobody can quite emulate.

piva00 1y ago
In the audio/music production space Germany has Ableton, Bitwig, Steinberg, Native Instruments, u-he, and quite a few others. All following the Mittelstand model as far as I know. Notwithstanding all the physical audio equipment manufacturers in Germany, there are loads of them producing quite high quality gear.
- thefz 1y ago
  Sennheiser too!

Yizahi 1y ago

Interesting article, but I think it's not contradicting to the OP post. What is a "successful specialized high-quality mid size company"? It's formerly a successful startup, just aiming not to cover as wide audience as possible, but a narrow market. And not aiming to go public or sell out, but retain private ownership and vision of the founders. Think Ebay store vs Valve (Steam) store. The problem is that to become a mittelstand, company must survive early growth phase, and the OP tweet correctly notices that such possibility is severely hampered both by EU and USA media. To continue my example - "we have Valve at home"(c) i.e. for example EU has CDPR with it's GoodOldGames (GoG) store. Yeah, it also went a bit wide in past years, but not because of lack of trying to be specialized. And they still retain that specialization mostly. But they are far far away from the Steam, and I now suspect the marketing playing a key part in it. tl;dr - authors message "Germany should focus on developing the Digital-Mittelstand" is wrong. It is wrongly formulated. It's like saying "country should focus on developing successful companies". Yeah, no shit Sherlock, but before that every successful company must somehow be created and grow. Or, alternatively, we can replace every Mittelstand word in the incentives part of the article and all of the sentences would be true: STARTUP, however, can leverage remote work to further reduce costs. Employees could live in small towns, enjoy lower living expenses, and maintain a high quality of life thanks to Germany’s good transportation infrastructure. Remote work also translates into lower personnel costs, typically the largest expense for any startup. By tapping into these advantages, STARTUP could achieve both profitability and sustainability without compromising employee well-being. If you’re already sold on the STARTUP concept, let’s explore the potential products they can create. There’s a wide range of possibilities: (a list of typical software industries) Rather than pouring large grants into startups with the hope of generating returns for shareholders, the German government should consider introducing tailored incentives to foster the development of STARTUP. Salary Grants - (applicable to startups? of course) Simplify Bureaucracy and Regulations - (same) Expand VAT Exemptions - (same) English Language Support - (same) etc. etc.

dgb23 1y ago

An interesting and useful perspective. There seem to be a lot of parallels with Switzerland in that regard.

gsf_emergency 1y ago
Swiss gov?/quagos(driven by the Gallic element)? do unbeatable job hyping their wares internationally? Might be best hypsters in their weight class "government of <10million". (German SMEs do not need the international market as much) For further comparison direct sales incurred by US press is insignificant internationally next to Hollywood,and one can argue the CIA does more-better commerce hype than DoC itself

fsflover 1y ago

I don't see how the OP's startup couldn't become a "digital mittelstand".

ZephyrBlu 1y ago

This feels like an orthogonal point. The OP make a very specific comparison to his travel company and Airbnb, and how people ignored them or even belittled them but adored Airbnb despite being very similar companies. Europeans use Airbnb. Trying to to say he was trying to "apply the American mindset to the European market" as a bad thing doesn't really hold water here when the American product literally won. Yes, the kind of companies historically started in Europe are very culturally different to startups. The point being made is that really for no good reason, Europe does not culturally support the existence of startups and is often actively hostile towards them. The solution being "just don't do startups in Europe" is like, ok sure I guess you can do that, but it doesn't actually address the problem that was presented: cultural incompatibility and unwillingness to change.

mertbio 1y ago
> the American product literally won Another part of the American mindset. Not all the companies are trying to win here in Europe. Some believe that companies can co-exist. They can serve different groups of people. Not all of them are pushing for getting more market share or jumping into different industries like Airbnb is doing now.
- mytailorisrich 1y ago
  That's a strangely naive and idealistic view of Europe. Companies are trying to win in Europe and competition is as fierce as anywhere. What "some" do is a moot point. You'll always find "some" people/companies behaving in a certain way wherever you go.
- ZephyrBlu 1y ago
  You keep avoiding the point. Yes, some companies aren’t trying to “win”, but what about the companies that are trying to “win”? It sounds like you’re implying they simply shouldn’t exist in Europe.
_vere 1y ago
Call me crazy but i don't think european media should hype up an airbnb-like company, just because it has the capability to make money does not mean its good for the world or should exist. We do not need a european amazon, we need to move away from companies like that full stop.

lucumo 1y ago

Ironically, you're trying to apply a German mindset to the entire European market. That doesn't really work either. In the sense that Mittelstand is more than just SMEs, I don't think it ever really existed here. There's no cultural fascination with being a middle business or having a family-owned business. A similar word ("middenstand") was used a lot, but it referred to shops only. In American TLA-speak: SMEs with a D2C model. The term "middenstand" died a slow death in the last 25 years. It's rarely used nowadays. Good riddance too. The whole term reaks of limited social mobility. In Dutch "stand" has a much stronger feudal vibe than "klasse".

oytis 1y ago

Sorry, but it's a typical German detached from reality attitude. We are going to find some magical niches that no one else will dare to touch allowing us to live quietly in a village and print money just like that (not a lot of money of course, we don't want to be TOO unrealistic, just enough for a comfortable life). Not going to work in an innovative digital economy. We can see how resilient Mittelstand is by the current wave of bankruptcies and the general state of economy.

dogma1138 1y ago

Europe does not have a monolithic culture. As far startups go it has much less to do with culture or hype but with the fact that Europe even with the single market has far more localized and ring fenced markets than the US. So you end up with smaller overall markets with a well dug in established competition.

penguin_booze 1y ago

Entropy tends to increase over time (or, so I heard). The cultural analogue of that would be that all cultures--given the prevalence of internet, and on top of that, the US being one of the "loudest"--will either become or approach that of the US. And it'll bring along everything that's good and bad. That means, decadence, greed, gluttony, enshittification, are unavoidable, however unlikely and alien they seem at present time. In less generous terms, the sick tend to infect the healthy, more than the latter can heal the former.