4 ms·

Those graphs are so sad. It's all American companies competing among themselves: Twitter, Bing, DuckDuckGo... Even on our home turf, even with natural advantage

by blfr 12y ago

Those graphs are so sad. It's all American companies competing among themselves: Twitter, Bing, DuckDuckGo... Even on our home turf, even with natural advantage (not so much in search but definitely in shopping), local competition is at the bottom, far behind Amazon and Ebay. And this doesn't seem to worry anyone here. We continue to tack on more regulation, tax rules detrimental to small businesses in their complexity, and now surveillance that would make Obama blush[1]. Oh, but we will show these evil monopolists with this formal complaint. [1] https://news.ycombinator.com/item?id=9379299 https://news.ycombinator.com/item?id=9379299

crdoconnor 12y ago
>tax rules detrimental to small businesses It's quite a common schtick among big businesses (including the aforementioned monopolists) to blame the lack of small business competition on tax rules. The tax rules they refer to actually do nothing to small businesses, but they are usually detrimental to their own bottom line. This is how Google/Microsoft/Amazon ended up reaping such huge profits and paying such pathetically low taxes. It didn't happen by accident, and it also didn't help any small businesses along the way. Quite the opposite.
- davidw 12y ago
  As an American living in Italy, there really are more taxes and "death by a thousand cut" fees and rules here than in the US, from what I've seen. Everyone treats their Fords and Fiats well, but for smaller companies, it's all the red tape and small stuff that's most annoying, not even the overall tax level.
  - danieldk 12y ago
    As an American living in Italy, there really are more taxes and "death by a thousand cut" fees and rules here than in the US, from what I've seen. I like to pay a little more tax and actually have a decent healthcare system, social security net, and retirement. One of the problems is that many of the large US corporations legally avoid tax via one of the tax havens (including my country of origin, The Netherlands). It creates an uneven playing field. There is no reason why European companies couldn't compete. Taxes may be higher, but wages are lower, and costs may be significantly lower if you are in east Europe. I also don't completely agree with the sentiment that started this thread, there are also plenty of European startups/ex-startups doing well: Booking.com, Spotify, Rovio, Mojang (Swedish) was just bought by Microsoft for 2.5 billion, Skype was also a European before it was purchased by Microsoft.
    - davidw 12y ago
      This is a complex topic: * There are taxes and taxes. Pay a % every month, simply and easily? That's not such a big deal - everyone has different tollerances and preferences, but it is what it is. Italy has lots of little, annoying taxes and gotchas, though, which take a lot of time and are irritating. For businesses, a lot of these need to be paid even if the business is not profitable (like startups!). * Healthcare is actually more expensive in the US as a % of GDP. "Europe" wins there in my personal experience. For businesses it's easier too: no shopping around for health insurance. * Social security changes a lot from country to country. Italy's system does not really seem to be working that well to me, though. * Retirement. I don't trust either the Italian or US systems. I hope yours works better. My point was mostly that it's all the small - and constant - annoyances that make life harder for a small business here in Italy. http://www.economist.com/news/united-states/21606293-small-businesses-fret-less-about-taxes-over-regulation-red-tape-blues http://www.economist.com/news/united-states/21606293-small-b... - this kind of backs up what I said - it's not the overall level of taxation so much as the 'hassle' factor. I would suspect that things are better in the Nordic countries, and maybe the Netherlands too.
      - eitally 12y ago
        Brazil is exactly the same!
      - eitally 12y ago
        Brazil is exactly the same!
      - danieldk 12y ago
        I agree that the taxation systems in Europe can be simplified and changed to benefit startups a little more. I would suspect that things are better in the Nordic countries, and maybe the Netherlands too. Definitely. I have my gripes about social security in The Netherlands and I think basic income would be better, but social security is pretty good: 75% of the last income for the first two months, 70% for the remainder of the year. After that, a single gets Euro 960.83 per month, a married couple Euro 1,372.62 per month, plus an extra amount quarterly per child (which IIRC everyone, including working people, gets). With regards to retirements, everyone gets so-called 'AOW' (850,97 per month or 2 * 586,56). Normally when you work, you also collect money in a private pension, which gets added to the AOW. AOW is directly paid by taxes, the private pension is a fund. Normally, when you work all your life, AOW + pension + home ownership gives you a royal retirement.
woodpanel 12y ago
Agree. The european problem: non-entreprenurial culture resulting in startup-prohibiting red tape. Two factors where the US beats Europe. Now combine that advantage the Americans have with the economics of scale of Software: It eats the world. Part of that cake: Pretty much any non-downtown store in Europe.
- _delirium 12y ago
  In some places red tape is a big issue, but I don't think it's the whole story. Starting a small business in Denmark nowadays is extremely streamlined: you can do the entire registration process for the Danish equivalent of an LLC online, and your business is registered within a day or so. It's so easy that it's become common for people to start a company even for small-scale side-business stuff. It's also fairly easy to hire and fire people (one prong of the "flexicurity" policy [1]). I think a big problem has been the economics of scale you mention, because Europe has not really functioned as a common market. One part is language. This is changing a bit (at least here), and most Danish tech startups now make their products English-first, or even English-only, which greatly increases the odds of international adoption. Some is more cultural, though; we don't read French or Italian or German media, and nobody else reads Danish media, so things that get a "buzz" in one country travel fairly slowly cross-border, while American media spreads quickly. Probably a lot more factors of this sort. One issue of incentives, though, is that it can still be in many cases an individually rational choice to target a more "provincial" market. If you're a Danish startup and identify a Danish-specific underserved market, you have less potential for growth, but may have higher probability of at least modest success, due to much less competition. So even if it's better for Europe as a whole for startups to target a broad, international market, it might be rational for individual startup founders to target smaller, country-specific markets. American startup founders to a large extent lack this choice, because there are not many tech market niches which are, say, Tennessee-specific. [1] https://en.wikipedia.org/wiki/Flexicurity https://en.wikipedia.org/wiki/Flexicurity
  - woodpanel 12y ago
    Got to agree! Good points you made. I think Red Tape is a symptom of the culture. The language barrier keeps economics of scale from coming into effect for founders. The abundance of investment capital is an important factor. If that factor increases you become less dependant from factors like "knowing the right people" and "got to having a superb idea". Building upon your "provincial market" statement: Couldn't it be said, that those country-specific niches will lure the entrepreneurial folk into building dead-end, non-scalable products? :)
SEJeff 12y ago
Being American, I've always quietly wondered literally what makes the US so startup and big tech company friendly. Would you mind elaborating on what makes the EU not as good as the US for startups? From spending some time in Berlin, it reminded me of a smaller, cheaper, and overall much nicer San Francisco.

by blfr 12y ago

crdoconnor 12y ago

>tax rules detrimental to small businesses It's quite a common schtick among big businesses (including the aforementioned monopolists) to blame the lack of small business competition on tax rules. The tax rules they refer to actually do nothing to small businesses, but they are usually detrimental to their own bottom line. This is how Google/Microsoft/Amazon ended up reaping such huge profits and paying such pathetically low taxes. It didn't happen by accident, and it also didn't help any small businesses along the way. Quite the opposite.

davidw 12y ago
As an American living in Italy, there really are more taxes and "death by a thousand cut" fees and rules here than in the US, from what I've seen. Everyone treats their Fords and Fiats well, but for smaller companies, it's all the red tape and small stuff that's most annoying, not even the overall tax level.
- danieldk 12y ago
  As an American living in Italy, there really are more taxes and "death by a thousand cut" fees and rules here than in the US, from what I've seen. I like to pay a little more tax and actually have a decent healthcare system, social security net, and retirement. One of the problems is that many of the large US corporations legally avoid tax via one of the tax havens (including my country of origin, The Netherlands). It creates an uneven playing field. There is no reason why European companies couldn't compete. Taxes may be higher, but wages are lower, and costs may be significantly lower if you are in east Europe. I also don't completely agree with the sentiment that started this thread, there are also plenty of European startups/ex-startups doing well: Booking.com, Spotify, Rovio, Mojang (Swedish) was just bought by Microsoft for 2.5 billion, Skype was also a European before it was purchased by Microsoft.
  - davidw 12y ago
    This is a complex topic: * There are taxes and taxes. Pay a % every month, simply and easily? That's not such a big deal - everyone has different tollerances and preferences, but it is what it is. Italy has lots of little, annoying taxes and gotchas, though, which take a lot of time and are irritating. For businesses, a lot of these need to be paid even if the business is not profitable (like startups!). * Healthcare is actually more expensive in the US as a % of GDP. "Europe" wins there in my personal experience. For businesses it's easier too: no shopping around for health insurance. * Social security changes a lot from country to country. Italy's system does not really seem to be working that well to me, though. * Retirement. I don't trust either the Italian or US systems. I hope yours works better. My point was mostly that it's all the small - and constant - annoyances that make life harder for a small business here in Italy. http://www.economist.com/news/united-states/21606293-small-businesses-fret-less-about-taxes-over-regulation-red-tape-blues http://www.economist.com/news/united-states/21606293-small-b... - this kind of backs up what I said - it's not the overall level of taxation so much as the 'hassle' factor. I would suspect that things are better in the Nordic countries, and maybe the Netherlands too.
    - eitally 12y ago
      Brazil is exactly the same!
    - eitally 12y ago
      Brazil is exactly the same!
    - danieldk 12y ago
      I agree that the taxation systems in Europe can be simplified and changed to benefit startups a little more. I would suspect that things are better in the Nordic countries, and maybe the Netherlands too. Definitely. I have my gripes about social security in The Netherlands and I think basic income would be better, but social security is pretty good: 75% of the last income for the first two months, 70% for the remainder of the year. After that, a single gets Euro 960.83 per month, a married couple Euro 1,372.62 per month, plus an extra amount quarterly per child (which IIRC everyone, including working people, gets). With regards to retirements, everyone gets so-called 'AOW' (850,97 per month or 2 * 586,56). Normally when you work, you also collect money in a private pension, which gets added to the AOW. AOW is directly paid by taxes, the private pension is a fund. Normally, when you work all your life, AOW + pension + home ownership gives you a royal retirement.

woodpanel 12y ago

Agree. The european problem: non-entreprenurial culture resulting in startup-prohibiting red tape. Two factors where the US beats Europe. Now combine that advantage the Americans have with the economics of scale of Software: It eats the world. Part of that cake: Pretty much any non-downtown store in Europe.

_delirium 12y ago
In some places red tape is a big issue, but I don't think it's the whole story. Starting a small business in Denmark nowadays is extremely streamlined: you can do the entire registration process for the Danish equivalent of an LLC online, and your business is registered within a day or so. It's so easy that it's become common for people to start a company even for small-scale side-business stuff. It's also fairly easy to hire and fire people (one prong of the "flexicurity" policy [1]). I think a big problem has been the economics of scale you mention, because Europe has not really functioned as a common market. One part is language. This is changing a bit (at least here), and most Danish tech startups now make their products English-first, or even English-only, which greatly increases the odds of international adoption. Some is more cultural, though; we don't read French or Italian or German media, and nobody else reads Danish media, so things that get a "buzz" in one country travel fairly slowly cross-border, while American media spreads quickly. Probably a lot more factors of this sort. One issue of incentives, though, is that it can still be in many cases an individually rational choice to target a more "provincial" market. If you're a Danish startup and identify a Danish-specific underserved market, you have less potential for growth, but may have higher probability of at least modest success, due to much less competition. So even if it's better for Europe as a whole for startups to target a broad, international market, it might be rational for individual startup founders to target smaller, country-specific markets. American startup founders to a large extent lack this choice, because there are not many tech market niches which are, say, Tennessee-specific. [1] https://en.wikipedia.org/wiki/Flexicurity https://en.wikipedia.org/wiki/Flexicurity
- woodpanel 12y ago
  Got to agree! Good points you made. I think Red Tape is a symptom of the culture. The language barrier keeps economics of scale from coming into effect for founders. The abundance of investment capital is an important factor. If that factor increases you become less dependant from factors like "knowing the right people" and "got to having a superb idea". Building upon your "provincial market" statement: Couldn't it be said, that those country-specific niches will lure the entrepreneurial folk into building dead-end, non-scalable products? :)

SEJeff 12y ago

Being American, I've always quietly wondered literally what makes the US so startup and big tech company friendly. Would you mind elaborating on what makes the EU not as good as the US for startups? From spending some time in Berlin, it reminded me of a smaller, cheaper, and overall much nicer San Francisco.