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Advice for US entrepreneurs who move to Europe

143 points by jkaljundi 14y ago

wilfra 14y ago
I'd be living on a beach in Italy right now were it not for the visa situation. Anybody know a way around the 90-day rule for Americans?
- mkuhn 14y ago
  If you have enough money take up residence in Switzerland. Tax rates in certain parts are negotiable as long as you do not earn money in Switzerland and we are part of the Schengen Area which allows you to travel freely within most of Europe.
  - onetwothreefour 14y ago
    How much money do you need? :)
- mansoor-s 14y ago
  Apply for a long stay visa with the Italian gov't
  - wilfra 14y ago
    What are the requirements for this? Do you have to have a job or be a student or setup a company or ...?
    - raverbashing 14y ago
      http://www.esteri.it/MAE/EN/Ministero/Servizi/Stranieri/IngressoSoggiornoInItalia/Soggiorno_stranieri_in_Italia.htm http://www.esteri.it/MAE/EN/Ministero/Servizi/Stranieri/Ingr... bad translation, but after entering Italy you can stay longer by proving you have the resources to stay there (like a longer tourism visa) (that's on that site somewhere, not on this page, but that's a starting point)
    - davidw 14y ago
      You have to become an expert in Italian bureaucracy. It's very difficult. You want to just talk to an Italian lawyer, pay them a bunch of money, and then wait a few years. Italy does not want skilled employees moving here. Well, they say they do, but they don't really act like it. The easiest thing to do is get married, or find a company here willing to hire you. BTW, not sure you'd enjoy the beaches in Italy much at this time of year - it might be getting up to 20C in Sicily soon, they say, but here in the north it's about 6C and foggy. BTW, I see you are a 'designer/developer': the company I'm contracting for right now might actually be interested in someone like that. If you're interested, or if you just want to chat about Italy, you're welcome to drop me an email.
- mahesh_rm 14y ago
  I am Italian. I set up a company in Italy and hire you. You set up a company in California and hire me. We pay each other the same minimum amount of money, and we are able to live where we want. If this fails, we can always get married!
  - carlob 14y ago
    It might be difficult to get married in Italy if you have the same gender… blame it on the catholic church!
- fauigerzigerk 14y ago
  Unfortunately I don't. It's pretty incredible how in a world of supposed free trade and globalisation we are prevented from freely trading our most valuable goods - our skills and knowledge and creativity.
  - mkuhn 14y ago
    Oh, I mentioned the money because Switzerland is a very expensive country to live in. Zurich, where I am from, was just "awarded" as the most expensive city in the world [1]. On the other hand wages in Switzerland are also among the highest in the world - it balances out. So if you want to work here just start applying. Google has its largest development office outside of the US here and a lot of companies have their European headquarters here and a lot of (former) startups are moving here too (e.g. Evernote [2] or Kayak [3]). I am not saying Switzerland is the easiest country to get into to work but it is definitely possible and a lot of people do. Over 20% of residents are foreigners and I am very proud of that fact. So: If you have unique skills, knowledge and creativity you are definitely very welcome here and I guess in most parts of the world. [1] http://www.telegraph.co.uk/finance/personalfinance/expat-money/9092994/Zurich-is-worlds-most-expensive-city.html http://www.telegraph.co.uk/finance/personalfinance/expat-mon... [2] http://www.moneyhouse.ch/en/u/evernote_gmbh_CH-020.4.046.397-5.htm http://www.moneyhouse.ch/en/u/evernote_gmbh_CH-020.4.046.397... [3] http://www.kayak.de/contact http://www.kayak.de/contact
aerique 14y ago
Wow, this isn't just advice for those moving to Europe but also how European countries can step up their game and integrate the good ideas from American culture while avoiding the bad.
- edtechdev 14y ago
  Or the opposite. Most of what I heard in the article about Europe I think was good, and protected the employees. The guy was mainly complaining about not getting tax breaks for capital gains and about having to pay more to fire people. And he didn't even understand the concept of people being motivated by more than just money. Perhaps more folks would be more willing to work at startups if they knew they couldn't be fired at the drop of a hat with no or little severance. I also think it's good to have a penalty (or risk) for firing folks. People aren't just a commodity to be disposed of when not needed. Of course it would also be nice to have universal health care, and a culture that didn't glorify monetary gain above all else.
  - walshemj 14y ago
    well most countries do have breaks for start ups ans at least the Uk doesn't have the perverse taxing of options that the USA has which can lead to options that are under water and worthless costing 100,000's
Svip 14y ago
I am not a fan of how he uses 'Europe' when he often means Spain and France. He clearly lacks an experience with Nordic countries (i.e. Scandinavia + Finland and Iceland), because a lot of what he says does not apply here. Working overtime is perfectly legal in Denmark for instance, if the employees prefer it (forcing them can be illegal). The reason is that in Denmark (and other Nordic countries), labour regulations are not enforced by law, but by negotiations between the employees (unions) and employers. Denmark doesn't even have a minimum wage law, for instance! Also here; it is not incredibly difficult to fire people. But as an employer, you need a good reason, or the courts will side with the employee and it'll cost you dearly. The advantage of this system is that it makes employers more keen on hiring people, because in the trial period (usually first 3 months), firing people is more easy than usual. European countries are very different, and Americans seem to forget that. He does mention that they are, but it seems that even to him he doesn't realise the actual difference.
- Svip 14y ago
  Also the thing about lawyers being cheap is accurate, but this is because in Europe (except the UK and Ireland), we use a Civil Law system, whereas the US (whom borrowed it from the UK) uses a Common Law system. The basic difference is that in a Civil Law system 'the law is the law'; court rules cannot change law practice. In addition, you cannot use previous court decisions to argue in a court of law. You can use them as guidelines, but nothing more. This means that it is quite easy for most people to understand how the law works; just look at the law text and the text's comments (which are also important when interpreting the law, i.e. understanding what the intent with the law is).
  - raverbashing 14y ago
    Well, actually, in practice it's the other way round Because then the law (text) is usually more complicated, and the bureaucracy adds complexity to it.
    - krzyk 14y ago
      But you don't have to have a list of all the previous verdicts, just the law book.
skreech 14y ago
Article is ridden with errors, mostly based on a faulty premise. Europe is not a country. Europe isn't even the EU. Laws, regulations, attitudes and tax rates vary widely. If you want to do a startup in Europe, choose a country first and then read up.
- objclxt 14y ago
  I would tend to agree: one of the biggest mistakes he makes is assuming EU wide directives are applied equally. The UK, for example, negotiated a clause meaning employers can have employees opt-out of the working time directive (which governs the number of hours in a week employees can work).
  - rmc 14y ago
    UK employees can opt out of part of the working time directive, the 48 hrs max working week ban. But other parts still apply, like minimum holidays per year
- aes256 14y ago
  Indeed, this article really ought to refer to Western Europe rather than Europe as a whole, and even then there are far too many generalizations.
- mkuhn 14y ago
  There definitely are a lot of generalizations in the article but there also are a lot of valid points. It is pretty insightful to see how a seasoned American Entrepreneur perceives Europe and the obstacles that can be found here. Not necessarily every obstacle applies everywhere. Some countries might even have different things hindering their competitiveness than those outlined by the article. But it definitely isn't all peachy for businesses over here (or there). This article does provide a kind of road map on how Europe could improve its business environment. If it wants to is a completely different question.
- rickmb 14y ago
  What's worse, were it gets specific on country and regulation, it still gets it wrong, seemingly deliberate. It's a political anti-regulation rant. Nothing more.
RyanZAG 14y ago
I don't live in a country with the kind of employee protection rules as in Germany, but the article still comes off as a rant against employee protections. Can't afford to treat your employees like humans? Want to give them big bonuses and then fire them the following year so they can't pay the mortgage on that house they put a deposit down on with that bonus? Don't want to shell out a bit of money on decent offices, and rather shove them in some little basement somewhere? None of this is required for a startup. You can actually treat your employees as human regardless of the stage of your business - especially considering that this guy can easily afford this stuff.
- Svip 14y ago
  I also don't buy the notion that Europeans are generally resentful towards entrepreneurs.
  - skrebbel 14y ago
    This differs enormously across countries. Which is really the problem with targeting anything at "Europe" (be it a blog post or a business): there's always something new that differs enormously across countries.
  - Swizec 14y ago
    In my experience the ex communist countries are still heavily resentful towards entrepreneurs. Especially because for the past 20 years being an entrepreneur has mostly meant legally stealing big corporations. At least in the eyes of many. There are a lot of decent entrepreneurs, but they don't get any press. However, the general mantra is "He has more than we do, he is obviously a scoundrel and a thief. You can't get there by being honest."
    - raverbashing 14y ago
      That's the true tragedy of places where 'under the table' is the norm rather than the exception (including ex-communist countries but not limited to them)
    - 14y ago
jordinl 14y ago
Funny how he refers to Europe as a whole country... > "Not only are forced severance pay packages a problem because most start ups fail and they still have to pay them but also because start ups are constantly trying out people and the concept of trying out people is very costly in Europe" I've been an unpaid intern in UK. My first full-time job in Spain clearly stated that I was on trial for the first three months and after that they didn't have an obligation to hire me... Oh, if this guy wanted to try different people, he could hire them as freelancers. > "In Spain, France, Italy, health care is free." No, it's not. People are taxed... > "You could argue that it is healthy to take sick days but unfortunately what happens here is that patients ask doctors medical justifications for paid job absences" Probably there are a few cases like this. I don't see this guy complaining about how low salaries are in Spain. > "In Europe there is a general belief that work is punishment and that the role of government is to protect people from overworking" No there's not... People want to work and they want to have a life. I've worked in Spain, and the impression you get from the employers is that you have to thank them for giving you a job, in my job in US they thank me for being there and make sure I'm happy. > "So there are many rules that make it hard to work the 12 hours per day that a start up may need in its initial months" Yeah right. My manager in Spain used to tell us that we were in a project with a fixed deadline that had to be met, so if we had to work extra time including weekend we would... > "To work hard, to work long hours, is actually illegal in Europe" What does working hard have to do with working long hours?
- justincormack 14y ago
  I think Spain has changed the rules on severance pay recently, and new employees do not get it. In the UK it has recently been ruled illegal in many circumstances to pay interns less than the minimum wage (basically if they do real work), so if you feel like it you can ask your ex-interner for the money. http://www.guardian.co.uk/uk/2012/oct/19/interns-payouts-minimum-wage-petition http://www.guardian.co.uk/uk/2012/oct/19/interns-payouts-min...
- anonymous 14y ago
  He also doesn't seem to understand that there are labour contracts and civil contracts. The former are the heavily regulated kind, the latter are like US contracts - you can put whatever you like in them. So it's entirely possible, if you wish, to draft a contract saying Person will work for 6 months at startup A in order to produce result X and unless they turn out incompetent (or the company goes under, etc), they'll be offered a labour contract. Whether anybody would feel comfortable signing such a thing though, is a different matter.
davidw 14y ago
On "Europe is not a country". 'Claro que no', but the same reaction every time to this sort of article gets a bit passe` as well. The author is clearly not just some bozo that moved to "Europe" a few months ago and is writing up his first impressions: he built some pretty serious companies here and obviously knows a thing or two that might be worth considering on its merits, despite the fact that, yes, things are a bit different in the Lofoten islands than in Pantelleria.
deleted 14y ago
[deleted]
venomsnake 14y ago
Firing is not hard. When my country telecom was privatized and the contract limited the amount of layoffs they could legally make - they just put every parasite in his own room with no internet, no pc-s, totally forbidden to use personal devices and gave them no tasks. They were also under strict monitoring for misusing the company time(reading on work), phones and being strict on arrival/departure. The ones that didn't left on their own out of boredom, soon accumulated enough "sins" to be fired.
- seanmcdirmid 14y ago
  That isn't actually firing someone, but making their life so miserable that they quit. See NYC's teacher rubber rooms. Compared to firing someone, I find this approach quite inhumane, at least you could challenge the firing.
- Nursie 14y ago
  In the UK that would be interpreted as 'constructive dismissal' and you could be spanked pretty hard for that at an employment tribunal. Is it that hard to get rid of someone within the rules?
  - venomsnake 14y ago
    They were under contract to not cut more than 3K jobs per year, but had to get rid of almost 20K persons. Saw what constructive dismissal is - how is this making the employee life unbearable - he is getting full salary for doing nothing and nobody is harassing him. He is just not allowed to communicate with the rest of the company.
    - Nursie 14y ago
      Making them sit in a room for hours at a time with no work, monitoring them for any activity they use to distract themselves so you can use it to fire them - that's basically abusive, verging on mental torture. The company being under contract is no excuse for abusive conduct.
allerratio 14y ago
> In most of Europe there is no concept of personal bankruptcy That's wrong. It only takes longer in most european countries. For example in Germany it takes 6 years.
- Xylakant 14y ago
  I'm not certain about it but I think debts from criminal offenses are not cleared on personal bankruptcy. Sozialversicherungsbetrug (not paying your employees social security) and tax evasion are criminal offenses for the manager of a company so they'd not be cleared. However, if you start up a company with employees you'd want a limited liability company of some form anyways, so personal liability only extends to criminal negligence or criminal offenses. It's still easy enough to get burned and indebted as manager though.
  - rmc 14y ago
    I'm not certain about it but I think debts from criminal offenses are not cleared on personal bankruptcy Not all debts can be cleared by bankruptcy in the USA AFAIK. I don't think you can clear college tutition fees with bankrupcty.
    - Xylakant 14y ago
      Yes, I heard that. The tricky part is that the debts that a failing startup is most likely to rack up are the ones that later translate into criminal charges and the manager is personally liable for that.
- rmc 14y ago
  Agreed. Ireland is 7 years I think (though it's being reduced). UK might be 1 year. To think of it from another perspective, harder bankruptcies mean that your debtors are not able to escape from their debts as easy. Surely that's a good thing for a business?
Irishsteve 14y ago
And if you move to Ireland you pay less corporation tax. All the laws stated exist, but as the author also pointed out. They aren't followed to the letter. It's only if you start acting the bollox that you need to worry about them.
rickmb 14y ago
What strikes me about this article is the utter lack of understanding. It is a highly subjective, very politicized and ideologically tainted description without any kind of understanding, and some of the attempts at interpretation of cultural and legal differences are either plain wrong or deliberately misrepresented. It's an anti-European rant, nothing more. Here's a great gem for example: "To work hard, to work long hours, is actually illegal in Europe." Seriously.
- james4k 14y ago
  You say that, but when I was working in the Netherlands, my colleagues and I were repeatedly told that we could not stay to work in the office past normal working hours. Even with impending deadlines that for the life of the company could not be moved, which is why we were working the long hours in the first place. To put it in perspective, at one point we were even told to work from home if needed, but to not tell them about it. I truly don't think there is any cultural misinterpretation there, this was pure legal paranoia. At least on this particular issue you pointed out.
  - growse 14y ago
    Just because you once had a job where your employer told you the law said a particular thing, doesn't mean the law actually says that particular thing. I've worked long weeks before without any issue between myself and my employer (in the UK). Most people I converse with/encounter would probably say the same thing. All the EU working time directive (http://en.wikipedia.org/wiki/Working_Time_Directive http://en.wikipedia.org/wiki/Working_Time_Directive) says is that an employer can't force you to work more than 48 hours a week. If you want to work 23.5 hour days, 7 days a week, and an employer who's willing to pay for that, knock yourself out.
    - justincormack 14y ago
      I believe that only applies in the UK, from Wikipedia "in the United Kingdom, it is possible to opt out of the 48 hour working week and work longer hours". However in the rest of Europe that seems not to be the case, although the exact details of the hours and how they are structured depends on national legislation.
Xylakant 14y ago
There's some light and some shadow in this article. I can't tell about southern europe, but most of this does not apply in germany - even the parts that are specifically about germany. There are recommendations about how a work-place should look like but they are mostly common sense [1] and not mandated by law, at least not in the IT Business. There is a law about workplace safety [2] but that's like 12 pages long and enforces very basic limits: You must have toilets, sufficient lighting, sufficient heating and the escape routes must not be blocked. If you feel like you can use your garage or your living room. Bonus payments are no problem at all either. If you feel like paying a bonus, pay it. If you want to have a written formula, write it down in a contract - but then you need to pay it if the employee qualifies. If your employee pretends to be sick, send him to the public health officer. If he isn't sick it's an immediate firing offense. Even verbally threatening to go on sick leave is an immediate firing offense. Severance packages are not mandated. You can have them in a contract, but the default is no severance package. It's still somewhat harder to fire someone than in the USA since you need an actual reason to do so. "She's irresistible" won't do. [3] It's pretty common to have 3-6 month probation period in a contract where both parties can terminate the contract on short notice. The part where he's right is extra work. The law is pretty strict here: 8 hours a day is the normal maximum, 10 hours a day for a limited time, maximum of 60 hours a week. There must be a 10 hour break between end of work and beginning on the next day. You can break those limits in emergencies, but you need a qualified reason. That sounds pretty harsh, but it's reasonable. It protects the employees on one side, but why would I want them to work more than 8 hours a day on a regular schedule when productivity drops sharp after 8, maximum 10 hours. We can do crunch time for a couple of weeks, but after that it just doesn't pay of. 12 hours a day are neither healthy for the employee nor for the startup. A team of zombies just doesn't perform. So I'm very little bothered by that law. Germany seems to be doing just fine productivity wise. [1] The monitor should be placed parallel to the window to reduce reflections, the chair and the table must be adjustable in height, ... [2] http://www.gesetze-im-internet.de/bundesrecht/arbst_ttv_2004/gesamt.pdf http://www.gesetze-im-internet.de/bundesrecht/arbst_ttv_2004... [3] http://edition.cnn.com/2012/12/22/us/iowa-irresistible-worker/index.html?iref=allsearch http://edition.cnn.com/2012/12/22/us/iowa-irresistible-worke...
- justincormack 14y ago
skrebbel 14y ago
Even though most of the dismissal comments here are fair and true, I find that this article contains some true gems: > When starting a company in the US, informality rules, we all know the HP story that HP was started out of a garage. Now in Europe work is so regulated that you can’t start a company out of a garage because you can’t legally work in a garage. > A friend of mine was fed up with an employee who worked poorly and told him that if he didn’t work harder he would fire him. This employee went to see a doctor, told the doctor that work depressed him and he was declared a mental patient, as a result my entrepreneur friend had to pay him for a year of doing nothing. As a European (Netherlands), I recognize these points very strongly. This is not just Southern European stuff. It's absolutely ridiculous how easily angry/unmotivated employees can suck a firm or department dry though sick leave and whatnot. That said, there's also > In the end what many European employers do is not give out stock options and give tiny bonuses. In the end what these laws do is that employers go for low fixed compensations and don’t expect outstanding work. This is so American that it hurts: want people to perform? Put a carrot in front of their noses. The European approach would be trying to make their work interesting and the work environment good, so that employees are intrinsically motivated to do outstanding. Sure, there's many companies that don't understand this, but then there's real many that do. It is simply not a strong part of European culture to be motivated by money, primarily.
- james4k 14y ago
  Stock options give employees a sense of ownership and responsibility in the company, which is a powerful thing.
  - eshvk 14y ago
    Also, Stock options are mostly at least in Silicon valley an excuse for a company to get away with paying less to their employees. Another excuse is to use them as a way of saying "It is your company so suck it up and do X" where X might be work 18 hours a day to anything. Classic case of misleading vividness [1] of stellar performance of a fraction of the startups causing this phenomenon to spread. [1] http://en.wikipedia.org/wiki/Misleading_vividness http://en.wikipedia.org/wiki/Misleading_vividness
neumann_alfred 14y ago
"the problem with this is that it is harder to convince a group of Europeans that they are out to conquer the world in their field. It is cultural." It's called World War I and II, and having learned a thing or two. "Conquering the world" in itself is a phrase only an utter brute would think, much less actually brag about. Why can you not get to know the world, and cooperate with it? What are you scared of? Why not be a peer amongst peers, who but a coward would want to be owner? Keep the crap that makes your country crap in that country kthx.. there is no point in moving to the EU if you're not going to actually learn from it.
- rmc 14y ago
  As well as some wars, there is also a long history of imperialism and actually trying to take over the world.
  - neumann_alfred 14y ago
    Which is my point exactly. I didn't say Europe is "better", if anything it was more savage; but that had high costs and many lessons. The US still thinks you can dominate the world and get away with it. Well nuh-uh.
michaelfeathers 14y ago
Nice article, at least as a heads up for people. But, there are two areas that he did not go into. One was possibility of building a business around relationships with contractors rather than employees. I can imagine there being laws that would make that hard also. The other is that maternity/paternity leave is big consideration also. While I think they are great in many contexts, I've heard from business owners in Northern Europe that they can be particularly painful for small businesses.
- justincormack 14y ago
  I dont know of any laws making working with contractors hard, so long as you are not apparently using them to avoid tax. Maternity and paternity are not usually a problem, obviously if your company is small anything can be a problem.
  - jdkx 14y ago
    In France it is illegal to use contractors where their condition of work are the same as employees. Specific cases are decided by the court, but basically the status of contractor can't be used to go around labour laws.
  - crucialfelix 14y ago
    in Germany you have to be careful that you don't use a specific contractor too much or he will be designated as an employee. source: I spoke to a German Tax accountant that specializes in startup consultation
martinvars 14y ago
I stand by my comment that I could not start a company in the garage of my father in law in Mulheim an der Ruhr. Many of those commenting here should see how companies get started in USA. And yes kudos to Germany for its changes in recent years. Other European countries should follow its lead. But lets remember one thing, a deregulated work environment in USA has led to engineers getting paid 2 or 3 times as much and that does not include stock options taxed at capital gains rates.
- GFischer 14y ago
  That is true, however the article did come off as very strong criticism, some of it unwarranted (I thought your criticism of severance was too strong). Looking forward to hearing your keynote at Punta Tech :)
  - GFischer 14y ago
    Correction, it seems Martin's not speaking at Punta Tech this year, I still hope he attends.
- avar 14y ago
  It's led to engineers getting paid more, but it's also arguably had negative effects on the people most of those European laws were meant to protect.
- deleted 14y ago
  [deleted]
- hamax 14y ago
  > But lets remember one thing, a deregulated work environment in USA has led to engineers getting paid 2 or 3 times as much Are you sure you're not confusing correlation and causation? China for example has no work regulations but engineers there don't get payed 3 times as much as in Europe. And China here is not an exception, US are. You'd have to do much more research to claim that deregulation leads to better payed jobs.
sbierwagen 14y ago
Note that Varsavsky was born in Argentina, and moved to the US when he was 16.
GFischer 14y ago
"state mandated severance pay packages... a direct attack to start ups" While it's true that many startups fail, I wouldn't go so far as to say severance pay is an attack. You can fire someone with two weeks notice in Spain, paying 33 days of severance for every year paid (used to be 45). AND take home salaries are usually lower. What is done in practice, to compare worker compensations across countries, is to factor that into the salary equations, it means that workers are a lot more expensive than what the take home salaries might imply, but consider: Employee A at an US startup has a take home salary of US$ 75.000 will cost US$ 100.000 or so to the employer per year. Employee B at a Spanish startup has a take home salary of US$ 56.000 (43.000 euros), and it will cost US$ 100.000 or so to the employer per year :) , factoring in severance, healthcare, social security and other benefits. As jordinl and others stated, most European countries have a three-month trial period for employees as well (edit: and it can be renewed, making the hypothetical 6-months-in non-performer as easy to fire as in the US). So, an European employee is usually NOT more expensive than an U.S. employee, it requires different considerations (and setting aside money for severance & stuff). It probably is a lot more bureaucratic, but that's it (on the other hand, there are a lot less lawsuits). If the reason for moving into Europe was cheaper salaries, bad luck, but if the reason was an unexplored market, it should work out. Edit: I do agree that there are some strong laws against beginning your startup in a garage, but the physical location shouldn't be a problem. About starting a new company: you can buy a pre-made company for 150 euros in Madrid, and probably the rest of Europe, with most of the paperwork solved for you. There are plenty of programs for helping new startups get off the ground (depends on the country, some are more progressive like Finland)
- justincormack 14y ago
  Starting a company is still not that easy in the rest of Europe, eg Belgium there are capital requirements of EUR18000 to start a company still.
  - GFischer 14y ago
    Wow, that's definitely not making it easy for a startup.
- 14y ago
tlarkworthy 14y ago
Great article (I am from UK). Dunno why its attracted so many haters.
- enra 14y ago
  I guess it's because it's talking about "Europe", and focusing on the very Western Europe. For entrepreneurs or startups, I would consider Berlin, Nordics or London, based on how internationally accessible they are and for their startup scene. Also I think telecom industry in general is much more old fashioned than web, mobile or gaming startups. For example in Helsinki, probably every startup event / meetup is always in English, as well all the sites. Also I haven't come across that many legal hurdles working or hiring for startups. The contracts have been pretty similar what I have gotten in US startups.
carlob 14y ago
At one point the author complains about 20k of social charges overhead on a 50k job. Then a few lines later he says that it's cool that in Europe you mostly don't need to pay 800/mo in health insurance. Those 20k are the equivalent of the health insurance + 401k. The only difference is that they are mandatory (and IMHO are a much better allocated).
- switch007 14y ago
  The landscape in the UK has changed somewhat in the last 5 years. Some foreigners like to think when we pay 30% in tax we receive unlimited resources whenever we retire and the government will tap in to our pot of "savings" whenever we need medical assistance. This simply isn't true. The "national insurance" payments don't even cover the cost of the NHS (£96.5 billion in 2010-2011 vs NHS budget for 2011-2012 of £106 billion).
jpeg_hero 14y ago
As an American Entrepreneur I find this article quite insightful. But from the comments here it does seem to have agitated quite a few European employees...
- camus 14y ago
  Because most of what is actually said is inaccurate.
ettitude 14y ago
Great piece of advice!
general_failure 14y ago
All generalizations including this one are wrong
greghinch 14y ago
Raising money in Europe is also quite difficult for an early stage startup. European investors are quite risk adverse; it's uncommon to invest in a company without existing revenues (even if there is a solid plan for revenue growth in the short term). It ultimately comes down to the perception of failure: if you start a company and fail, in Europe that's pretty much it for you, you've been branded a failure personally. Until that changes, the startup climate in Europe is going to continue to struggle.
ronaldmannak 14y ago
I have founded tech startups both in Europe (Holland) and Silicon Valley. While some details are apparently debatable (judging from the discussion here), the overall picture seems very accurate. The fear of failure and personal liability is a huge issue in most European countries. I hate to say it, but there is a lot European countries can learn from Silicon Valley.
jacoblyles 14y ago
Europe earns its moniker of "old world".
arvinjoar 14y ago
> Europe needs to deregulate companies with less than three years of age, less than 20 employees that are not yet profitable. While I'm in favor of deregulation, conditions like these generally prove to carry with them a lot of unintended consequences and perverse incentives.

143 points by jkaljundi 14y ago

I'd be living on a beach in Italy right now were it not for the visa situation. Anybody know a way around the 90-day rule for Americans?

mkuhn 14y ago
If you have enough money take up residence in Switzerland. Tax rates in certain parts are negotiable as long as you do not earn money in Switzerland and we are part of the Schengen Area which allows you to travel freely within most of Europe.
- onetwothreefour 14y ago
  How much money do you need? :)
mansoor-s 14y ago
Apply for a long stay visa with the Italian gov't
- wilfra 14y ago
  What are the requirements for this? Do you have to have a job or be a student or setup a company or ...?
  - raverbashing 14y ago
    http://www.esteri.it/MAE/EN/Ministero/Servizi/Stranieri/IngressoSoggiornoInItalia/Soggiorno_stranieri_in_Italia.htm http://www.esteri.it/MAE/EN/Ministero/Servizi/Stranieri/Ingr... bad translation, but after entering Italy you can stay longer by proving you have the resources to stay there (like a longer tourism visa) (that's on that site somewhere, not on this page, but that's a starting point)
  - davidw 14y ago
    You have to become an expert in Italian bureaucracy. It's very difficult. You want to just talk to an Italian lawyer, pay them a bunch of money, and then wait a few years. Italy does not want skilled employees moving here. Well, they say they do, but they don't really act like it. The easiest thing to do is get married, or find a company here willing to hire you. BTW, not sure you'd enjoy the beaches in Italy much at this time of year - it might be getting up to 20C in Sicily soon, they say, but here in the north it's about 6C and foggy. BTW, I see you are a 'designer/developer': the company I'm contracting for right now might actually be interested in someone like that. If you're interested, or if you just want to chat about Italy, you're welcome to drop me an email.
mahesh_rm 14y ago
I am Italian. I set up a company in Italy and hire you. You set up a company in California and hire me. We pay each other the same minimum amount of money, and we are able to live where we want. If this fails, we can always get married!
- carlob 14y ago
  It might be difficult to get married in Italy if you have the same gender… blame it on the catholic church!
fauigerzigerk 14y ago
Unfortunately I don't. It's pretty incredible how in a world of supposed free trade and globalisation we are prevented from freely trading our most valuable goods - our skills and knowledge and creativity.
- mkuhn 14y ago
  Oh, I mentioned the money because Switzerland is a very expensive country to live in. Zurich, where I am from, was just "awarded" as the most expensive city in the world [1]. On the other hand wages in Switzerland are also among the highest in the world - it balances out. So if you want to work here just start applying. Google has its largest development office outside of the US here and a lot of companies have their European headquarters here and a lot of (former) startups are moving here too (e.g. Evernote [2] or Kayak [3]). I am not saying Switzerland is the easiest country to get into to work but it is definitely possible and a lot of people do. Over 20% of residents are foreigners and I am very proud of that fact. So: If you have unique skills, knowledge and creativity you are definitely very welcome here and I guess in most parts of the world. [1] http://www.telegraph.co.uk/finance/personalfinance/expat-money/9092994/Zurich-is-worlds-most-expensive-city.html http://www.telegraph.co.uk/finance/personalfinance/expat-mon... [2] http://www.moneyhouse.ch/en/u/evernote_gmbh_CH-020.4.046.397-5.htm http://www.moneyhouse.ch/en/u/evernote_gmbh_CH-020.4.046.397... [3] http://www.kayak.de/contact http://www.kayak.de/contact

aerique 14y ago

Wow, this isn't just advice for those moving to Europe but also how European countries can step up their game and integrate the good ideas from American culture while avoiding the bad.

edtechdev 14y ago
Or the opposite. Most of what I heard in the article about Europe I think was good, and protected the employees. The guy was mainly complaining about not getting tax breaks for capital gains and about having to pay more to fire people. And he didn't even understand the concept of people being motivated by more than just money. Perhaps more folks would be more willing to work at startups if they knew they couldn't be fired at the drop of a hat with no or little severance. I also think it's good to have a penalty (or risk) for firing folks. People aren't just a commodity to be disposed of when not needed. Of course it would also be nice to have universal health care, and a culture that didn't glorify monetary gain above all else.
- walshemj 14y ago
  well most countries do have breaks for start ups ans at least the Uk doesn't have the perverse taxing of options that the USA has which can lead to options that are under water and worthless costing 100,000's

Svip 14y ago

I am not a fan of how he uses 'Europe' when he often means Spain and France. He clearly lacks an experience with Nordic countries (i.e. Scandinavia + Finland and Iceland), because a lot of what he says does not apply here. Working overtime is perfectly legal in Denmark for instance, if the employees prefer it (forcing them can be illegal). The reason is that in Denmark (and other Nordic countries), labour regulations are not enforced by law, but by negotiations between the employees (unions) and employers. Denmark doesn't even have a minimum wage law, for instance! Also here; it is not incredibly difficult to fire people. But as an employer, you need a good reason, or the courts will side with the employee and it'll cost you dearly. The advantage of this system is that it makes employers more keen on hiring people, because in the trial period (usually first 3 months), firing people is more easy than usual. European countries are very different, and Americans seem to forget that. He does mention that they are, but it seems that even to him he doesn't realise the actual difference.

Svip 14y ago
Also the thing about lawyers being cheap is accurate, but this is because in Europe (except the UK and Ireland), we use a Civil Law system, whereas the US (whom borrowed it from the UK) uses a Common Law system. The basic difference is that in a Civil Law system 'the law is the law'; court rules cannot change law practice. In addition, you cannot use previous court decisions to argue in a court of law. You can use them as guidelines, but nothing more. This means that it is quite easy for most people to understand how the law works; just look at the law text and the text's comments (which are also important when interpreting the law, i.e. understanding what the intent with the law is).
- raverbashing 14y ago
  Well, actually, in practice it's the other way round Because then the law (text) is usually more complicated, and the bureaucracy adds complexity to it.
  - krzyk 14y ago
    But you don't have to have a list of all the previous verdicts, just the law book.

skreech 14y ago

Article is ridden with errors, mostly based on a faulty premise. Europe is not a country. Europe isn't even the EU. Laws, regulations, attitudes and tax rates vary widely. If you want to do a startup in Europe, choose a country first and then read up.

objclxt 14y ago
I would tend to agree: one of the biggest mistakes he makes is assuming EU wide directives are applied equally. The UK, for example, negotiated a clause meaning employers can have employees opt-out of the working time directive (which governs the number of hours in a week employees can work).
- rmc 14y ago
  UK employees can opt out of part of the working time directive, the 48 hrs max working week ban. But other parts still apply, like minimum holidays per year
aes256 14y ago
Indeed, this article really ought to refer to Western Europe rather than Europe as a whole, and even then there are far too many generalizations.
mkuhn 14y ago
There definitely are a lot of generalizations in the article but there also are a lot of valid points. It is pretty insightful to see how a seasoned American Entrepreneur perceives Europe and the obstacles that can be found here. Not necessarily every obstacle applies everywhere. Some countries might even have different things hindering their competitiveness than those outlined by the article. But it definitely isn't all peachy for businesses over here (or there). This article does provide a kind of road map on how Europe could improve its business environment. If it wants to is a completely different question.
rickmb 14y ago
What's worse, were it gets specific on country and regulation, it still gets it wrong, seemingly deliberate. It's a political anti-regulation rant. Nothing more.

RyanZAG 14y ago

I don't live in a country with the kind of employee protection rules as in Germany, but the article still comes off as a rant against employee protections. Can't afford to treat your employees like humans? Want to give them big bonuses and then fire them the following year so they can't pay the mortgage on that house they put a deposit down on with that bonus? Don't want to shell out a bit of money on decent offices, and rather shove them in some little basement somewhere? None of this is required for a startup. You can actually treat your employees as human regardless of the stage of your business - especially considering that this guy can easily afford this stuff.

Svip 14y ago
I also don't buy the notion that Europeans are generally resentful towards entrepreneurs.
- skrebbel 14y ago
  This differs enormously across countries. Which is really the problem with targeting anything at "Europe" (be it a blog post or a business): there's always something new that differs enormously across countries.
- Swizec 14y ago
  In my experience the ex communist countries are still heavily resentful towards entrepreneurs. Especially because for the past 20 years being an entrepreneur has mostly meant legally stealing big corporations. At least in the eyes of many. There are a lot of decent entrepreneurs, but they don't get any press. However, the general mantra is "He has more than we do, he is obviously a scoundrel and a thief. You can't get there by being honest."
  - raverbashing 14y ago
    That's the true tragedy of places where 'under the table' is the norm rather than the exception (including ex-communist countries but not limited to them)
  - 14y ago

jordinl 14y ago

Funny how he refers to Europe as a whole country... > "Not only are forced severance pay packages a problem because most start ups fail and they still have to pay them but also because start ups are constantly trying out people and the concept of trying out people is very costly in Europe" I've been an unpaid intern in UK. My first full-time job in Spain clearly stated that I was on trial for the first three months and after that they didn't have an obligation to hire me... Oh, if this guy wanted to try different people, he could hire them as freelancers. > "In Spain, France, Italy, health care is free." No, it's not. People are taxed... > "You could argue that it is healthy to take sick days but unfortunately what happens here is that patients ask doctors medical justifications for paid job absences" Probably there are a few cases like this. I don't see this guy complaining about how low salaries are in Spain. > "In Europe there is a general belief that work is punishment and that the role of government is to protect people from overworking" No there's not... People want to work and they want to have a life. I've worked in Spain, and the impression you get from the employers is that you have to thank them for giving you a job, in my job in US they thank me for being there and make sure I'm happy. > "So there are many rules that make it hard to work the 12 hours per day that a start up may need in its initial months" Yeah right. My manager in Spain used to tell us that we were in a project with a fixed deadline that had to be met, so if we had to work extra time including weekend we would... > "To work hard, to work long hours, is actually illegal in Europe" What does working hard have to do with working long hours?

justincormack 14y ago
I think Spain has changed the rules on severance pay recently, and new employees do not get it. In the UK it has recently been ruled illegal in many circumstances to pay interns less than the minimum wage (basically if they do real work), so if you feel like it you can ask your ex-interner for the money. http://www.guardian.co.uk/uk/2012/oct/19/interns-payouts-minimum-wage-petition http://www.guardian.co.uk/uk/2012/oct/19/interns-payouts-min...
anonymous 14y ago
He also doesn't seem to understand that there are labour contracts and civil contracts. The former are the heavily regulated kind, the latter are like US contracts - you can put whatever you like in them. So it's entirely possible, if you wish, to draft a contract saying Person will work for 6 months at startup A in order to produce result X and unless they turn out incompetent (or the company goes under, etc), they'll be offered a labour contract. Whether anybody would feel comfortable signing such a thing though, is a different matter.

davidw 14y ago

On "Europe is not a country". 'Claro que no', but the same reaction every time to this sort of article gets a bit passe` as well. The author is clearly not just some bozo that moved to "Europe" a few months ago and is writing up his first impressions: he built some pretty serious companies here and obviously knows a thing or two that might be worth considering on its merits, despite the fact that, yes, things are a bit different in the Lofoten islands than in Pantelleria.

deleted 14y ago

[deleted]

venomsnake 14y ago

Firing is not hard. When my country telecom was privatized and the contract limited the amount of layoffs they could legally make - they just put every parasite in his own room with no internet, no pc-s, totally forbidden to use personal devices and gave them no tasks. They were also under strict monitoring for misusing the company time(reading on work), phones and being strict on arrival/departure. The ones that didn't left on their own out of boredom, soon accumulated enough "sins" to be fired.

seanmcdirmid 14y ago
That isn't actually firing someone, but making their life so miserable that they quit. See NYC's teacher rubber rooms. Compared to firing someone, I find this approach quite inhumane, at least you could challenge the firing.
Nursie 14y ago
In the UK that would be interpreted as 'constructive dismissal' and you could be spanked pretty hard for that at an employment tribunal. Is it that hard to get rid of someone within the rules?
- venomsnake 14y ago
  They were under contract to not cut more than 3K jobs per year, but had to get rid of almost 20K persons. Saw what constructive dismissal is - how is this making the employee life unbearable - he is getting full salary for doing nothing and nobody is harassing him. He is just not allowed to communicate with the rest of the company.
  - Nursie 14y ago
    Making them sit in a room for hours at a time with no work, monitoring them for any activity they use to distract themselves so you can use it to fire them - that's basically abusive, verging on mental torture. The company being under contract is no excuse for abusive conduct.

allerratio 14y ago

> In most of Europe there is no concept of personal bankruptcy That's wrong. It only takes longer in most european countries. For example in Germany it takes 6 years.

Xylakant 14y ago
I'm not certain about it but I think debts from criminal offenses are not cleared on personal bankruptcy. Sozialversicherungsbetrug (not paying your employees social security) and tax evasion are criminal offenses for the manager of a company so they'd not be cleared. However, if you start up a company with employees you'd want a limited liability company of some form anyways, so personal liability only extends to criminal negligence or criminal offenses. It's still easy enough to get burned and indebted as manager though.
- rmc 14y ago
  I'm not certain about it but I think debts from criminal offenses are not cleared on personal bankruptcy Not all debts can be cleared by bankruptcy in the USA AFAIK. I don't think you can clear college tutition fees with bankrupcty.
  - Xylakant 14y ago
    Yes, I heard that. The tricky part is that the debts that a failing startup is most likely to rack up are the ones that later translate into criminal charges and the manager is personally liable for that.
rmc 14y ago
Agreed. Ireland is 7 years I think (though it's being reduced). UK might be 1 year. To think of it from another perspective, harder bankruptcies mean that your debtors are not able to escape from their debts as easy. Surely that's a good thing for a business?

Irishsteve 14y ago

And if you move to Ireland you pay less corporation tax. All the laws stated exist, but as the author also pointed out. They aren't followed to the letter. It's only if you start acting the bollox that you need to worry about them.

rickmb 14y ago

What strikes me about this article is the utter lack of understanding. It is a highly subjective, very politicized and ideologically tainted description without any kind of understanding, and some of the attempts at interpretation of cultural and legal differences are either plain wrong or deliberately misrepresented. It's an anti-European rant, nothing more. Here's a great gem for example: "To work hard, to work long hours, is actually illegal in Europe." Seriously.

james4k 14y ago
You say that, but when I was working in the Netherlands, my colleagues and I were repeatedly told that we could not stay to work in the office past normal working hours. Even with impending deadlines that for the life of the company could not be moved, which is why we were working the long hours in the first place. To put it in perspective, at one point we were even told to work from home if needed, but to not tell them about it. I truly don't think there is any cultural misinterpretation there, this was pure legal paranoia. At least on this particular issue you pointed out.
- growse 14y ago
  Just because you once had a job where your employer told you the law said a particular thing, doesn't mean the law actually says that particular thing. I've worked long weeks before without any issue between myself and my employer (in the UK). Most people I converse with/encounter would probably say the same thing. All the EU working time directive (http://en.wikipedia.org/wiki/Working_Time_Directive http://en.wikipedia.org/wiki/Working_Time_Directive) says is that an employer can't force you to work more than 48 hours a week. If you want to work 23.5 hour days, 7 days a week, and an employer who's willing to pay for that, knock yourself out.
  - justincormack 14y ago
    I believe that only applies in the UK, from Wikipedia "in the United Kingdom, it is possible to opt out of the 48 hour working week and work longer hours". However in the rest of Europe that seems not to be the case, although the exact details of the hours and how they are structured depends on national legislation.

Xylakant 14y ago

There's some light and some shadow in this article. I can't tell about southern europe, but most of this does not apply in germany - even the parts that are specifically about germany. There are recommendations about how a work-place should look like but they are mostly common sense [1] and not mandated by law, at least not in the IT Business. There is a law about workplace safety [2] but that's like 12 pages long and enforces very basic limits: You must have toilets, sufficient lighting, sufficient heating and the escape routes must not be blocked. If you feel like you can use your garage or your living room. Bonus payments are no problem at all either. If you feel like paying a bonus, pay it. If you want to have a written formula, write it down in a contract - but then you need to pay it if the employee qualifies. If your employee pretends to be sick, send him to the public health officer. If he isn't sick it's an immediate firing offense. Even verbally threatening to go on sick leave is an immediate firing offense. Severance packages are not mandated. You can have them in a contract, but the default is no severance package. It's still somewhat harder to fire someone than in the USA since you need an actual reason to do so. "She's irresistible" won't do. [3] It's pretty common to have 3-6 month probation period in a contract where both parties can terminate the contract on short notice. The part where he's right is extra work. The law is pretty strict here: 8 hours a day is the normal maximum, 10 hours a day for a limited time, maximum of 60 hours a week. There must be a 10 hour break between end of work and beginning on the next day. You can break those limits in emergencies, but you need a qualified reason. That sounds pretty harsh, but it's reasonable. It protects the employees on one side, but why would I want them to work more than 8 hours a day on a regular schedule when productivity drops sharp after 8, maximum 10 hours. We can do crunch time for a couple of weeks, but after that it just doesn't pay of. 12 hours a day are neither healthy for the employee nor for the startup. A team of zombies just doesn't perform. So I'm very little bothered by that law. Germany seems to be doing just fine productivity wise. [1] The monitor should be placed parallel to the window to reduce reflections, the chair and the table must be adjustable in height, ... [2] http://www.gesetze-im-internet.de/bundesrecht/arbst_ttv_2004/gesamt.pdf http://www.gesetze-im-internet.de/bundesrecht/arbst_ttv_2004... [3] http://edition.cnn.com/2012/12/22/us/iowa-irresistible-worker/index.html?iref=allsearch http://edition.cnn.com/2012/12/22/us/iowa-irresistible-worke...

justincormack 14y ago

skrebbel 14y ago

Even though most of the dismissal comments here are fair and true, I find that this article contains some true gems: > When starting a company in the US, informality rules, we all know the HP story that HP was started out of a garage. Now in Europe work is so regulated that you can’t start a company out of a garage because you can’t legally work in a garage. > A friend of mine was fed up with an employee who worked poorly and told him that if he didn’t work harder he would fire him. This employee went to see a doctor, told the doctor that work depressed him and he was declared a mental patient, as a result my entrepreneur friend had to pay him for a year of doing nothing. As a European (Netherlands), I recognize these points very strongly. This is not just Southern European stuff. It's absolutely ridiculous how easily angry/unmotivated employees can suck a firm or department dry though sick leave and whatnot. That said, there's also > In the end what many European employers do is not give out stock options and give tiny bonuses. In the end what these laws do is that employers go for low fixed compensations and don’t expect outstanding work. This is so American that it hurts: want people to perform? Put a carrot in front of their noses. The European approach would be trying to make their work interesting and the work environment good, so that employees are intrinsically motivated to do outstanding. Sure, there's many companies that don't understand this, but then there's real many that do. It is simply not a strong part of European culture to be motivated by money, primarily.

james4k 14y ago
Stock options give employees a sense of ownership and responsibility in the company, which is a powerful thing.
- eshvk 14y ago
  Also, Stock options are mostly at least in Silicon valley an excuse for a company to get away with paying less to their employees. Another excuse is to use them as a way of saying "It is your company so suck it up and do X" where X might be work 18 hours a day to anything. Classic case of misleading vividness [1] of stellar performance of a fraction of the startups causing this phenomenon to spread. [1] http://en.wikipedia.org/wiki/Misleading_vividness http://en.wikipedia.org/wiki/Misleading_vividness

neumann_alfred 14y ago

"the problem with this is that it is harder to convince a group of Europeans that they are out to conquer the world in their field. It is cultural." It's called World War I and II, and having learned a thing or two. "Conquering the world" in itself is a phrase only an utter brute would think, much less actually brag about. Why can you not get to know the world, and cooperate with it? What are you scared of? Why not be a peer amongst peers, who but a coward would want to be owner? Keep the crap that makes your country crap in that country kthx.. there is no point in moving to the EU if you're not going to actually learn from it.

rmc 14y ago
As well as some wars, there is also a long history of imperialism and actually trying to take over the world.
- neumann_alfred 14y ago
  Which is my point exactly. I didn't say Europe is "better", if anything it was more savage; but that had high costs and many lessons. The US still thinks you can dominate the world and get away with it. Well nuh-uh.

michaelfeathers 14y ago

Nice article, at least as a heads up for people. But, there are two areas that he did not go into. One was possibility of building a business around relationships with contractors rather than employees. I can imagine there being laws that would make that hard also. The other is that maternity/paternity leave is big consideration also. While I think they are great in many contexts, I've heard from business owners in Northern Europe that they can be particularly painful for small businesses.

justincormack 14y ago
I dont know of any laws making working with contractors hard, so long as you are not apparently using them to avoid tax. Maternity and paternity are not usually a problem, obviously if your company is small anything can be a problem.
- jdkx 14y ago
  In France it is illegal to use contractors where their condition of work are the same as employees. Specific cases are decided by the court, but basically the status of contractor can't be used to go around labour laws.
- crucialfelix 14y ago
  in Germany you have to be careful that you don't use a specific contractor too much or he will be designated as an employee. source: I spoke to a German Tax accountant that specializes in startup consultation

martinvars 14y ago

I stand by my comment that I could not start a company in the garage of my father in law in Mulheim an der Ruhr. Many of those commenting here should see how companies get started in USA. And yes kudos to Germany for its changes in recent years. Other European countries should follow its lead. But lets remember one thing, a deregulated work environment in USA has led to engineers getting paid 2 or 3 times as much and that does not include stock options taxed at capital gains rates.

GFischer 14y ago
That is true, however the article did come off as very strong criticism, some of it unwarranted (I thought your criticism of severance was too strong). Looking forward to hearing your keynote at Punta Tech :)
- GFischer 14y ago
  Correction, it seems Martin's not speaking at Punta Tech this year, I still hope he attends.
avar 14y ago
It's led to engineers getting paid more, but it's also arguably had negative effects on the people most of those European laws were meant to protect.
deleted 14y ago
[deleted]
hamax 14y ago
> But lets remember one thing, a deregulated work environment in USA has led to engineers getting paid 2 or 3 times as much Are you sure you're not confusing correlation and causation? China for example has no work regulations but engineers there don't get payed 3 times as much as in Europe. And China here is not an exception, US are. You'd have to do much more research to claim that deregulation leads to better payed jobs.

sbierwagen 14y ago

Note that Varsavsky was born in Argentina, and moved to the US when he was 16.

GFischer 14y ago

"state mandated severance pay packages... a direct attack to start ups" While it's true that many startups fail, I wouldn't go so far as to say severance pay is an attack. You can fire someone with two weeks notice in Spain, paying 33 days of severance for every year paid (used to be 45). AND take home salaries are usually lower. What is done in practice, to compare worker compensations across countries, is to factor that into the salary equations, it means that workers are a lot more expensive than what the take home salaries might imply, but consider: Employee A at an US startup has a take home salary of US$ 75.000 will cost US$ 100.000 or so to the employer per year. Employee B at a Spanish startup has a take home salary of US$ 56.000 (43.000 euros), and it will cost US$ 100.000 or so to the employer per year :) , factoring in severance, healthcare, social security and other benefits. As jordinl and others stated, most European countries have a three-month trial period for employees as well (edit: and it can be renewed, making the hypothetical 6-months-in non-performer as easy to fire as in the US). So, an European employee is usually NOT more expensive than an U.S. employee, it requires different considerations (and setting aside money for severance & stuff). It probably is a lot more bureaucratic, but that's it (on the other hand, there are a lot less lawsuits). If the reason for moving into Europe was cheaper salaries, bad luck, but if the reason was an unexplored market, it should work out. Edit: I do agree that there are some strong laws against beginning your startup in a garage, but the physical location shouldn't be a problem. About starting a new company: you can buy a pre-made company for 150 euros in Madrid, and probably the rest of Europe, with most of the paperwork solved for you. There are plenty of programs for helping new startups get off the ground (depends on the country, some are more progressive like Finland)

justincormack 14y ago
Starting a company is still not that easy in the rest of Europe, eg Belgium there are capital requirements of EUR18000 to start a company still.
- GFischer 14y ago
  Wow, that's definitely not making it easy for a startup.
14y ago

tlarkworthy 14y ago

Great article (I am from UK). Dunno why its attracted so many haters.

enra 14y ago
I guess it's because it's talking about "Europe", and focusing on the very Western Europe. For entrepreneurs or startups, I would consider Berlin, Nordics or London, based on how internationally accessible they are and for their startup scene. Also I think telecom industry in general is much more old fashioned than web, mobile or gaming startups. For example in Helsinki, probably every startup event / meetup is always in English, as well all the sites. Also I haven't come across that many legal hurdles working or hiring for startups. The contracts have been pretty similar what I have gotten in US startups.

carlob 14y ago

At one point the author complains about 20k of social charges overhead on a 50k job. Then a few lines later he says that it's cool that in Europe you mostly don't need to pay 800/mo in health insurance. Those 20k are the equivalent of the health insurance + 401k. The only difference is that they are mandatory (and IMHO are a much better allocated).

switch007 14y ago
The landscape in the UK has changed somewhat in the last 5 years. Some foreigners like to think when we pay 30% in tax we receive unlimited resources whenever we retire and the government will tap in to our pot of "savings" whenever we need medical assistance. This simply isn't true. The "national insurance" payments don't even cover the cost of the NHS (£96.5 billion in 2010-2011 vs NHS budget for 2011-2012 of £106 billion).

jpeg_hero 14y ago

As an American Entrepreneur I find this article quite insightful. But from the comments here it does seem to have agitated quite a few European employees...

camus 14y ago
Because most of what is actually said is inaccurate.

ettitude 14y ago

Great piece of advice!

general_failure 14y ago

All generalizations including this one are wrong

greghinch 14y ago

Raising money in Europe is also quite difficult for an early stage startup. European investors are quite risk adverse; it's uncommon to invest in a company without existing revenues (even if there is a solid plan for revenue growth in the short term). It ultimately comes down to the perception of failure: if you start a company and fail, in Europe that's pretty much it for you, you've been branded a failure personally. Until that changes, the startup climate in Europe is going to continue to struggle.

ronaldmannak 14y ago

I have founded tech startups both in Europe (Holland) and Silicon Valley. While some details are apparently debatable (judging from the discussion here), the overall picture seems very accurate. The fear of failure and personal liability is a huge issue in most European countries. I hate to say it, but there is a lot European countries can learn from Silicon Valley.

jacoblyles 14y ago

Europe earns its moniker of "old world".

arvinjoar 14y ago

> Europe needs to deregulate companies with less than three years of age, less than 20 employees that are not yet profitable. While I'm in favor of deregulation, conditions like these generally prove to carry with them a lot of unintended consequences and perverse incentives.