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Agree. The european problem: non-entreprenurial culture resulting in startup-prohibiting red tape. Two factors where the US beats Europe. Now combine that advan

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? :)
  - _delirium 12y ago
    On the last point, I think that's a risk, but the dead-end can still be big enough to make a small company quite wealthy. For example one of the more successful niche-tech companies in Denmark makes a portal that many Danish doctor's offices use. They did a good job really digging into how their market worked and what it wanted, so it's very customized to the way Danish healthcare works. Although it has some benefits for patients too (if a doctor uses this portal, patients can book appointments online, etc.), the real selling point has been that they identified what administrative work produces a lot of the per-office overhead at small offices, and offload much of that, so the doctor saves more in administrative salaries than they pay for the PaaS. They also have a fairly "high-touch" sales process to convince doctors that their product really will help them out. This company is probably not going to grow outside of Denmark, but it makes a lot of money in Denmark (comparatively speaking), and its market is so specialized that it's somewhat protected from external competitors.
zby 12y ago
The USA subsidies high-tech via military spending. This is not just a Chomsky theory - it has been on Hacker News a few weeks ago: https://news.ycombinator.com/item?id=8980498 https://news.ycombinator.com/item?id=8980498 (direct: http://steveblank.com/secret-history/ http://steveblank.com/secret-history/)

_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? :)
- _delirium 12y ago
  On the last point, I think that's a risk, but the dead-end can still be big enough to make a small company quite wealthy. For example one of the more successful niche-tech companies in Denmark makes a portal that many Danish doctor's offices use. They did a good job really digging into how their market worked and what it wanted, so it's very customized to the way Danish healthcare works. Although it has some benefits for patients too (if a doctor uses this portal, patients can book appointments online, etc.), the real selling point has been that they identified what administrative work produces a lot of the per-office overhead at small offices, and offload much of that, so the doctor saves more in administrative salaries than they pay for the PaaS. They also have a fairly "high-touch" sales process to convince doctors that their product really will help them out. This company is probably not going to grow outside of Denmark, but it makes a lot of money in Denmark (comparatively speaking), and its market is so specialized that it's somewhat protected from external competitors.

zby 12y ago

The USA subsidies high-tech via military spending. This is not just a Chomsky theory - it has been on Hacker News a few weeks ago: https://news.ycombinator.com/item?id=8980498 https://news.ycombinator.com/item?id=8980498 (direct: http://steveblank.com/secret-history/ http://steveblank.com/secret-history/)