4 ms·

Was it ever in doubt that the USA is the best place to start a business? America is no. 14 on the list of best countries to start a business in. http://www.for

Was it ever in doubt that the USA is the best place to start a business? America is no. 14 on the list of best countries to start a business in. http://www.forbes.com/best-countries-for-business/list/ http://www.forbes.com/best-countries-for-business/list/

paulbaumgart 13y ago
So say some journalists. The results speak for themselves. Edit: In case it wasn't apparent, my "ever any doubt" question was rhetorical hyperbole. Any statement, no matter how self-evident, will have some people contradicting it. Edit2: See mtrimpe's comment below; Forbes is probably optimizing for small business in their analysis instead of startups with potential for high scalability.
- workhere-io 13y ago
  In case it wasn't apparent, my "ever any doubt" question was rhetorical hyperbole. Any statement, no matter how self-evident, will have some people contradicting it. Your argument that the US is the best place to start a business is not in any way "self-evident", and you have provided no source or proof. So say some journalists. Their methodology seems sound. "We determined the Best Countries for Business by looking at 11 different factors for 134 countries. We considered property rights, innovation, taxes, technology, corruption, freedom (personal, trade and monetary), red tape, investor protection and stock market performance. Forbes leaned on research and published reports from the Central Intelligence Agency, Freedom House, Heritage Foundation, Property Rights Alliance, Transparency International, the World Bank and World Economic Forum to compile the rankings." http://www.forbes.com/sites/kurtbadenhausen/2011/10/03/the-best-countries-for-business/ http://www.forbes.com/sites/kurtbadenhausen/2011/10/03/the-b...
  - paulbaumgart 13y ago
    They left out "size and wealth of domestic market" and "access to capital," which I suspect are the most important factors beyond a minimal level of market fairness. It's really not self-evident that the vast majority of successful companies are started in the US?
    - insuffi 13y ago
      As proven time and time again, most popular does not mean "the best".(especially, considering how many people there are in the US compared to any EU nation. That'd certainly explain the "number of successful businesses".) Do you think those people starting companies would do any worse, if we placed them in, say, Denmark? EDIT:Or maybe Israel, which has the highest density of start ups worldwide? I'd be curious to see the per capita numbers of countries.
      - paulbaumgart 13y ago
        > Do you think those people starting companies would do any worse, if we placed them in, say, Denmark? Yes. Facebook, Apple, Google, Tesla, etc. would never have happened in Denmark. I'm really glad my parents did the annoying work of immigrating to the SF Bay Area from Germany when I was a kid. Otherwise I would have wasted years of my life doing it myself. Did you watch the Elon Musk interview posted here the other day? He said more-or-less the same thing: it was really obvious, growing up in South Africa, that California was the place to be to make things happen. Edit: I don't know much about Israel. They seem to be doing a pretty good job, based on what little I do know. It doesn't sound like they're at SF Bay Area levels yet, but making progress: http://aleph.vc/the-israel-venture-capital-index/ http://aleph.vc/the-israel-venture-capital-index/
        insuffi 13y ago
        I don't see how you refuted my point. Have you tried anywhere else? Did Musk?
        paulbaumgart 13y ago
        This is obviously not a topic that can have a conclusive resolution. There are too many factors at play here. I believe the preponderance of evidence is in favor of starting a business in the USA, specifically in one of the major innovation hubs.
        13y ago
  - tptacek 13y ago
    Did you actually find their methodology? I couldn't. I read the summary of the most recent rankings, which explained why the US was so far down the list (taxes), but not the scheme by which they consolidates all the sources they used and created a rating. Given Forbes' own editorial slant, I don't think it's entirely unreasonable to look at these rankings as a simple coatrack for Forbes argument that the US corporate tax rate should be lowered. If you could find the methodology document for Forbes ranking --- anything similar to the World Bank's ranking, which is itself not totally great, would be helpful --- I'd be grateful. This topic comes up a lot on HN.
ThomPete 13y ago
Denmark is considered one of the best places to start a company, but that is based on the bureaucratic burden of starting a company. It is a very different thing to actually scale that company to any significant size there. The metrics used to measure these things are fundamentally flawed as they look at the institutional side of things not on the reality that is running a business and growing a company.
- workhere-io 13y ago
  It is a very different thing to actually scale that company to any significant size there. Yet, Danish companies like Lego, Carlsberg and Maersk (whose subunit Maersk Line in itself is the largest company of its kind in the world) seem to be doing fine.
  - ThomPete 13y ago
    they are old companies, we are talking getting it of the ground not old industries made in very different times
tptacek 13y ago
You need to be a little careful with these rankings, because they're subjective. Forbes, for instance, drastically prioritizes taxes for its rankings. The corporate tax rate in the US is higher than that of Ireland, and (as Forbes summary straightforwardly admits) that pushes the US down in the rankings. For a startup, there are significantly more important factors to consider than the corporate tax rate, not least because most startups are managed to avoid taxable profits for the first several years of their existence (sometimes all the way up until IPO). For instance: * The US offers at-will employment. Ireland, at the top of the list, has an Unfair Dismissal act that allows employees with a year of tenure to file claims not only if they're dismissed, but if they're "constructively" dismissed --- that is to say, if their role in the company is substantially altered in a way that allows them to claim that they're being "managed out" of the company. Constructive dismissal is a standard market clause for executives and acquirees in the US, but is certainly not a day-to-day feature of employment law. * The World Bank Ease-of-doing-business index dings Ireland, putting them far below the US, for (among other things) the difficulty of enforcing contracts in Ireland; my tea-leaf-reading from the index's abstracted data is that you have a good certainty of enforcing a contract base in Ireland, but that the process is more time-consuming and expensive than in the US, which is ranked 50 places higher than Ireland (at #11 overall). * Similarly, the World Bank dings Denmark (putting them 2 places below the US overall) because (among other things) it's significantly more difficult to incorporate in Denmark than in the US (where you can do it approximately as easily as ordering a non-one-click-compatible book from Amazon). Denmark also has mandatory severance of up to 6 months wages depending on tenure. 6 months wages isn't a big deal to any big company, but for a startup, it could change the calculus of when the company will need to shutter during a downswing to meet its legal obligations to employees; in the US, so long as you can make good on any current wages owed employees, you can run up until the last minute. * Sweden, which Forbes ranks higher than the US, has intricate employment law rules that require not only a legally defensible just cause for termination, but also a good faith effort on the part of an employer to find another job for an employee even if just cause exists to fire them. Sweden also allows shareholders to personally sue directors in a variety of situations. There is no way Forbes actually believes Sweden is a better place to start a company than the US. Here is a combination of factors that makes the US a good place to start a business: * Extremely well-tested corporation law that makes the formation of a company, distribution of equity, resolution of disputes, and enforcement of ownership relatively predictable. * Virtually no government interference with the formation of companies themselves, so that you could practically form a new LLC for every individual Github project you started, pay less for that than you would for hosting costs, and stand a very good chance of having those LLCs defend your interests in disputes. * Multiple classes of corporation, convertible between each other, with some optimized for "click a button on a web page and create an LLC for my Github project", and others, not that much more expensive, that allow for multiple classes of shareholder, with the laws for those corporate forms predictable enough that hundreds of thousands of dollars of venture funding have become a standardized packaged product for promising startups (this is mind-boggling when you look at the societal infrastructure that enables it). * A system of at-will employment that (for the most part) makes employment of workers almost risk free, so long as you don't play fast and loose with owed salary or tax withholdings. * A tax system that is reasonably simple, not disastrously onerous, and in many ways optimized for entrepreneurs (for instance, the differing taxation schemes offered for salary versus distributions, or the ease of deducting business expenses). * Extremely well-tested employment law that, among other things, makes it straightforward to retain 1099 contractors for one-off projects without risking their conversion into full-time employees with severance rights. * One of the world's largest single borderless markets, such that you can start a company in Oregon and, with almost total certainty, be able to straightforwardly collect money for services (other than direct financial services, insurance, pharmaceuticals, and agriculture) from people in Florida. * The host of the world's largest equities markets, so that investors in startups can plow money into companies knowing that if that company is the 1 in 20 that is going to go public, the most lucrative place for it to go public is the country of its origin. The US is probably not the best place in the world to start a company. Forbes and the World Bank agree that Hong Kong and New Zealand are better. But running a company in New Zealand also requires you to domicile in New Zealand, which can complicate hiring, marketing, and (if you sell anything physical) channel delivery. If we had single-payer health coverage, I think we'd be the best country to do business in.
NicoJuicy 13y ago
I can't believe Belgium is better for starting a business.. Paperwork takes forever (unless you earn less then 15.000 €/ year). Taxes are insanely high (highest of the world) Employees are the most expensive in the world This list ain't correct, that's easy to see as a Belgian... Or it should be very irritating to start a business in United States. I do believe one of the beste places is Ireland though

paulbaumgart 13y ago

So say some journalists. The results speak for themselves. Edit: In case it wasn't apparent, my "ever any doubt" question was rhetorical hyperbole. Any statement, no matter how self-evident, will have some people contradicting it. Edit2: See mtrimpe's comment below; Forbes is probably optimizing for small business in their analysis instead of startups with potential for high scalability.

workhere-io 13y ago
In case it wasn't apparent, my "ever any doubt" question was rhetorical hyperbole. Any statement, no matter how self-evident, will have some people contradicting it. Your argument that the US is the best place to start a business is not in any way "self-evident", and you have provided no source or proof. So say some journalists. Their methodology seems sound. "We determined the Best Countries for Business by looking at 11 different factors for 134 countries. We considered property rights, innovation, taxes, technology, corruption, freedom (personal, trade and monetary), red tape, investor protection and stock market performance. Forbes leaned on research and published reports from the Central Intelligence Agency, Freedom House, Heritage Foundation, Property Rights Alliance, Transparency International, the World Bank and World Economic Forum to compile the rankings." http://www.forbes.com/sites/kurtbadenhausen/2011/10/03/the-best-countries-for-business/ http://www.forbes.com/sites/kurtbadenhausen/2011/10/03/the-b...
- paulbaumgart 13y ago
  They left out "size and wealth of domestic market" and "access to capital," which I suspect are the most important factors beyond a minimal level of market fairness. It's really not self-evident that the vast majority of successful companies are started in the US?
  - insuffi 13y ago
    As proven time and time again, most popular does not mean "the best".(especially, considering how many people there are in the US compared to any EU nation. That'd certainly explain the "number of successful businesses".) Do you think those people starting companies would do any worse, if we placed them in, say, Denmark? EDIT:Or maybe Israel, which has the highest density of start ups worldwide? I'd be curious to see the per capita numbers of countries.
    - paulbaumgart 13y ago
      > Do you think those people starting companies would do any worse, if we placed them in, say, Denmark? Yes. Facebook, Apple, Google, Tesla, etc. would never have happened in Denmark. I'm really glad my parents did the annoying work of immigrating to the SF Bay Area from Germany when I was a kid. Otherwise I would have wasted years of my life doing it myself. Did you watch the Elon Musk interview posted here the other day? He said more-or-less the same thing: it was really obvious, growing up in South Africa, that California was the place to be to make things happen. Edit: I don't know much about Israel. They seem to be doing a pretty good job, based on what little I do know. It doesn't sound like they're at SF Bay Area levels yet, but making progress: http://aleph.vc/the-israel-venture-capital-index/ http://aleph.vc/the-israel-venture-capital-index/
      - insuffi 13y ago
        I don't see how you refuted my point. Have you tried anywhere else? Did Musk?
        paulbaumgart 13y ago
        This is obviously not a topic that can have a conclusive resolution. There are too many factors at play here. I believe the preponderance of evidence is in favor of starting a business in the USA, specifically in one of the major innovation hubs.
        13y ago
- tptacek 13y ago
  Did you actually find their methodology? I couldn't. I read the summary of the most recent rankings, which explained why the US was so far down the list (taxes), but not the scheme by which they consolidates all the sources they used and created a rating. Given Forbes' own editorial slant, I don't think it's entirely unreasonable to look at these rankings as a simple coatrack for Forbes argument that the US corporate tax rate should be lowered. If you could find the methodology document for Forbes ranking --- anything similar to the World Bank's ranking, which is itself not totally great, would be helpful --- I'd be grateful. This topic comes up a lot on HN.

ThomPete 13y ago

Denmark is considered one of the best places to start a company, but that is based on the bureaucratic burden of starting a company. It is a very different thing to actually scale that company to any significant size there. The metrics used to measure these things are fundamentally flawed as they look at the institutional side of things not on the reality that is running a business and growing a company.

workhere-io 13y ago
It is a very different thing to actually scale that company to any significant size there. Yet, Danish companies like Lego, Carlsberg and Maersk (whose subunit Maersk Line in itself is the largest company of its kind in the world) seem to be doing fine.
- ThomPete 13y ago
  they are old companies, we are talking getting it of the ground not old industries made in very different times

tptacek 13y ago

You need to be a little careful with these rankings, because they're subjective. Forbes, for instance, drastically prioritizes taxes for its rankings. The corporate tax rate in the US is higher than that of Ireland, and (as Forbes summary straightforwardly admits) that pushes the US down in the rankings. For a startup, there are significantly more important factors to consider than the corporate tax rate, not least because most startups are managed to avoid taxable profits for the first several years of their existence (sometimes all the way up until IPO). For instance: * The US offers at-will employment. Ireland, at the top of the list, has an Unfair Dismissal act that allows employees with a year of tenure to file claims not only if they're dismissed, but if they're "constructively" dismissed --- that is to say, if their role in the company is substantially altered in a way that allows them to claim that they're being "managed out" of the company. Constructive dismissal is a standard market clause for executives and acquirees in the US, but is certainly not a day-to-day feature of employment law. * The World Bank Ease-of-doing-business index dings Ireland, putting them far below the US, for (among other things) the difficulty of enforcing contracts in Ireland; my tea-leaf-reading from the index's abstracted data is that you have a good certainty of enforcing a contract base in Ireland, but that the process is more time-consuming and expensive than in the US, which is ranked 50 places higher than Ireland (at #11 overall). * Similarly, the World Bank dings Denmark (putting them 2 places below the US overall) because (among other things) it's significantly more difficult to incorporate in Denmark than in the US (where you can do it approximately as easily as ordering a non-one-click-compatible book from Amazon). Denmark also has mandatory severance of up to 6 months wages depending on tenure. 6 months wages isn't a big deal to any big company, but for a startup, it could change the calculus of when the company will need to shutter during a downswing to meet its legal obligations to employees; in the US, so long as you can make good on any current wages owed employees, you can run up until the last minute. * Sweden, which Forbes ranks higher than the US, has intricate employment law rules that require not only a legally defensible just cause for termination, but also a good faith effort on the part of an employer to find another job for an employee even if just cause exists to fire them. Sweden also allows shareholders to personally sue directors in a variety of situations. There is no way Forbes actually believes Sweden is a better place to start a company than the US. Here is a combination of factors that makes the US a good place to start a business: * Extremely well-tested corporation law that makes the formation of a company, distribution of equity, resolution of disputes, and enforcement of ownership relatively predictable. * Virtually no government interference with the formation of companies themselves, so that you could practically form a new LLC for every individual Github project you started, pay less for that than you would for hosting costs, and stand a very good chance of having those LLCs defend your interests in disputes. * Multiple classes of corporation, convertible between each other, with some optimized for "click a button on a web page and create an LLC for my Github project", and others, not that much more expensive, that allow for multiple classes of shareholder, with the laws for those corporate forms predictable enough that hundreds of thousands of dollars of venture funding have become a standardized packaged product for promising startups (this is mind-boggling when you look at the societal infrastructure that enables it). * A system of at-will employment that (for the most part) makes employment of workers almost risk free, so long as you don't play fast and loose with owed salary or tax withholdings. * A tax system that is reasonably simple, not disastrously onerous, and in many ways optimized for entrepreneurs (for instance, the differing taxation schemes offered for salary versus distributions, or the ease of deducting business expenses). * Extremely well-tested employment law that, among other things, makes it straightforward to retain 1099 contractors for one-off projects without risking their conversion into full-time employees with severance rights. * One of the world's largest single borderless markets, such that you can start a company in Oregon and, with almost total certainty, be able to straightforwardly collect money for services (other than direct financial services, insurance, pharmaceuticals, and agriculture) from people in Florida. * The host of the world's largest equities markets, so that investors in startups can plow money into companies knowing that if that company is the 1 in 20 that is going to go public, the most lucrative place for it to go public is the country of its origin. The US is probably not the best place in the world to start a company. Forbes and the World Bank agree that Hong Kong and New Zealand are better. But running a company in New Zealand also requires you to domicile in New Zealand, which can complicate hiring, marketing, and (if you sell anything physical) channel delivery. If we had single-payer health coverage, I think we'd be the best country to do business in.

NicoJuicy 13y ago

I can't believe Belgium is better for starting a business.. Paperwork takes forever (unless you earn less then 15.000 €/ year). Taxes are insanely high (highest of the world) Employees are the most expensive in the world This list ain't correct, that's easy to see as a Belgian... Or it should be very irritating to start a business in United States. I do believe one of the beste places is Ireland though