Waterfall: The European Way Of Starting Companies(lolstartups.com)
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Waterfall: The European Way Of Starting Companies
http://lolstartups.com/post/113097374/waterfall-the-european-way-of-starting-companies
24 comments
I've been thinking up some business plans to execute in Germany lately and i have the impression that you can't be more innovative than the US here, because of the culture.
Germany (or Europe) is more conservative, which means that US trends impact a few years later. Web apps are not adopted as fast as in the US. An innovative idea must not be executed too soon otherwise you fail. So when the time for your innovation is right in Germany, it has been right in the US two years before.
By taking an idea from the Valley and copy it, you roughly hit the right time quite well. In the end the company doesn't get big, because the original Valley company will buy or sue it (see for example Facebook vs StudiVZ).
I'm still waiting for a german Weebly for example. They are probably still to small to translate and localize to multiple languages, but there already is need for it. So i think a german copy would be successful.
This is my theory why europeans tend to copy.
Germany (or Europe) is more conservative, which means that US trends impact a few years later. Web apps are not adopted as fast as in the US. An innovative idea must not be executed too soon otherwise you fail. So when the time for your innovation is right in Germany, it has been right in the US two years before.
By taking an idea from the Valley and copy it, you roughly hit the right time quite well. In the end the company doesn't get big, because the original Valley company will buy or sue it (see for example Facebook vs StudiVZ).
I'm still waiting for a german Weebly for example. They are probably still to small to translate and localize to multiple languages, but there already is need for it. So i think a german copy would be successful.
This is my theory why europeans tend to copy.
Depends in which areas. If you are in environmental sector (for example alternative energy) there is a good chance that the technology has been developed in Germany. Same for machines, cars, ... Europe has several companies competing in the area of high-speed trains. The US has none. It is just thinking about having their own high-speed train services (minus the Acela, which is not really high-speed), where Europe has lots of those in France, Germany, Spain... There are innovation areas where Europe actually now is ahead of the US. That happened, because the US was more focused in finance, space and military technology - and less so with other engineering areas (often civil).
The German 'Mittelstand' (medium sized companies) has lots of 'Weltmarktführer' (market leaders) which are based on innovation and technology in their areas. Software is part of their offerings, but it is not the web-based software what they develop. It is often embedded software or applications. Guess what, these companies are fully exposed to global competition. Actually their market is global - which is why Germany has a huge trade surplus - from selling high-tech, machines, tools, cars, trains, robots, ...
The article is also not really correct with respect to 'Theseus'. Theseus is a german research project in the area of semantic knowledge infrastructure. It is not a start up company and it is not done with France. Theseus is basic research.
Volkswagen is also long ago - it was founded by the Nazis. It is not an example how companies are created in Germany nowadays.
It is true that Germany has less venture capital and its innovation is not that much based on creation of startup companies funded by venture capital. But that does not mean innovation is government controlled or induced. The example I mentioned above, innovation in the 'Mittelstand' is the counter example.
The German 'Mittelstand' (medium sized companies) has lots of 'Weltmarktführer' (market leaders) which are based on innovation and technology in their areas. Software is part of their offerings, but it is not the web-based software what they develop. It is often embedded software or applications. Guess what, these companies are fully exposed to global competition. Actually their market is global - which is why Germany has a huge trade surplus - from selling high-tech, machines, tools, cars, trains, robots, ...
The article is also not really correct with respect to 'Theseus'. Theseus is a german research project in the area of semantic knowledge infrastructure. It is not a start up company and it is not done with France. Theseus is basic research.
Volkswagen is also long ago - it was founded by the Nazis. It is not an example how companies are created in Germany nowadays.
It is true that Germany has less venture capital and its innovation is not that much based on creation of startup companies funded by venture capital. But that does not mean innovation is government controlled or induced. The example I mentioned above, innovation in the 'Mittelstand' is the counter example.
Graphic design, architecture, typography, clothing design, etc., are also bleeding edge in many parts of Europe (esp. Germany, France, Italy, Netherlands) compared to the US.
This article is complete rubbish and bears no resemblance to fact whatsoever. I live and work in Europe, run my own business in Europe and have had some involvement in a number of start-ups.
Confirmed. I've worked for plenty of European startups (and other companies) that bear no resemblance to this:
"a company is willed into existence by the government as a public-private partnership when a need has been identified by the bureaucrats and political leaders. The goals are clear, and design happens after the money is on the table and an initial committee of experts has been recruited."
There are things like that, but there are in the US too. It's the exception though, rather than the rule, even here. There are problems in Europe, but my will to continue reading faltered upon reading the silly caricature.
"a company is willed into existence by the government as a public-private partnership when a need has been identified by the bureaucrats and political leaders. The goals are clear, and design happens after the money is on the table and an initial committee of experts has been recruited."
There are things like that, but there are in the US too. It's the exception though, rather than the rule, even here. There are problems in Europe, but my will to continue reading faltered upon reading the silly caricature.
well, if you've worked for startups, then you've worked for the exception. i'm not saying there aren't any, just fewer than would make sense.
i hope there will be more startups in europe in the future, and some people are already doing a great job, but the majority hasn't even taken notice that you can start companies that way, yet.
i hope there will be more startups in europe in the future, and some people are already doing a great job, but the majority hasn't even taken notice that you can start companies that way, yet.
If your point is that youngsters in continental Europe are less entrepreneurial in general, I think you're right. Not one of the students I studied with has started a company. I'm not just talking about those I befriended, I'm talking about entire classes. The fact that my alma mater has one tech spinoff every 3 years on average is further evidence of this. I don't know a single tech-sector person under fifty who has started on his own. It's as if geeks in my country are more timid or something.
Come on. Europe is not the Soviet Union, and while the government sticks its nose in things in plenty of ways, there is plenty of space for entrepreneurs, startups, and all kinds of businesses that aren't some kind of government-created entity.
Let's talk about the real problems with Europe & startups, not made-up ones.
Here's my take on things:
http://journal.dedasys.com/2008/12/13/startups-and-work-euro...
Let's talk about the real problems with Europe & startups, not made-up ones.
Here's my take on things:
http://journal.dedasys.com/2008/12/13/startups-and-work-euro...
I've worked for two startups in the UK and neither resembled this. What about Virgin, EasyJet, Last.fm, etc. etc. No government money there. This article describes an extremely small minority of startups, the exceptions, not the rule.
Startups aren't a revolutionary new thing, they've happened throughout history. It just happens to be in vogue to talk about them at the moment.
The article is absurd as it uses examples of big infrastructure companies that HAD to be setup by government in the past as the infrastructure costs were too high to a startup (telcos, post offices) and compares them to Google which had low costs to begin with. It's attacking a straw doll.
Startups aren't a revolutionary new thing, they've happened throughout history. It just happens to be in vogue to talk about them at the moment.
The article is absurd as it uses examples of big infrastructure companies that HAD to be setup by government in the past as the infrastructure costs were too high to a startup (telcos, post offices) and compares them to Google which had low costs to begin with. It's attacking a straw doll.
While the article exaggerates some points, there is a cultural difference between Europe and America when it comes to these things. As someone who was born and has lived most of my life in Europe I'm well familiar with how the "system" works and how people think, and it frustrates me. While there of course are lots of individuals in Europe with an entrepreneurial mindset, the vast majority still relies too much on the states and their bureaucracies. It's not so much the governments' fault as it is everyone's. When noone steps up to do the job, the state has to do it for them.
Which European countries have you lived in?
While everyone, including me, is bashing European bureaucracy and tendencies towards statism, there are a lot of examples of hugely successful and transformative European companies started by real entrepeneurs:
RyanAir & EasyJet: These completely transformed the European airline industry in a very disruptive way. The old "flag carriers" are dying off one after the other, and I'm pretty sure I speak for us all when I say "good riddance" to that. Now we just need to get rid of the state monopolies on rail transport (which is coming soon), and we're going to see the same sort of transformation on high-speed and conventional rail.
Free.fr: Unfortunately only in France for the moment, this ISP is what every ISP should strive towards: Low prices, good service, lots of features, etc. If you ever wish your ISP would just do or change <something>, Free has already done that and more, including standing up to Sarko's ridiculous Hadopi law.
Skype: Was started in Europe and has and still is transforming the telecom industry along with other companies providing VOIP services.
RyanAir & EasyJet: These completely transformed the European airline industry in a very disruptive way. The old "flag carriers" are dying off one after the other, and I'm pretty sure I speak for us all when I say "good riddance" to that. Now we just need to get rid of the state monopolies on rail transport (which is coming soon), and we're going to see the same sort of transformation on high-speed and conventional rail.
Free.fr: Unfortunately only in France for the moment, this ISP is what every ISP should strive towards: Low prices, good service, lots of features, etc. If you ever wish your ISP would just do or change <something>, Free has already done that and more, including standing up to Sarko's ridiculous Hadopi law.
Skype: Was started in Europe and has and still is transforming the telecom industry along with other companies providing VOIP services.
As an addendum to this comment I just want to say how much it frustrates me that there aren't more companies like these in Europe. These are shining examples of what we could achieve if our mindset was a little different. There is huge potential for disruptive business in Europe, but no-one's taking advantage of it.
It's an interesting article that has a hint of rant about it.
There's no reason a public-private partnership couldn't work if the motivations and skills were aligned properly. Entrepreneurial competition, striving for riches and fame, and fear of starving next month if things don't go well all play their part in forming the scrappy startup - and are probably key ingredients for success. If governments and bigger organizations can remember that, and build new ventures on those principles, then there's a much better chance of succeeding than the model described by the article.
There's no reason a public-private partnership couldn't work if the motivations and skills were aligned properly. Entrepreneurial competition, striving for riches and fame, and fear of starving next month if things don't go well all play their part in forming the scrappy startup - and are probably key ingredients for success. If governments and bigger organizations can remember that, and build new ventures on those principles, then there's a much better chance of succeeding than the model described by the article.
When will you Americans get this?
Europe is not a country, (also a pet peeve, Africa is not a country). There is no over-arching European culture, and I don't think any one would ever claim that there is.
Paul Böhm is from Austria. Your point about Europe is valid of course, but please direct your ire at your fellow European:-)
last.fm is from Austria. There are others.
Metalab, the hackerspace the author of the article started, is partially funded by the govt but I find it hard to believe it was willed into being by govt committee.
This article is so strange... and it sounds just like the US, except instead of search engines, it's some kind of war tech (whether it's weaponry, vehicles, planes, or spy stuff).
Telecoms and resource companies (e.g. mineral oil), power, postal services, and so on, have a similar history in the US... but who would write about the "US Method of Startups: Waterfall" and use the postal service as an example?
Not to mention the bailouts (of railroads, of utilities, of car makers, of banks...).
Metalab, the hackerspace the author of the article started, is partially funded by the govt but I find it hard to believe it was willed into being by govt committee.
This article is so strange... and it sounds just like the US, except instead of search engines, it's some kind of war tech (whether it's weaponry, vehicles, planes, or spy stuff).
Telecoms and resource companies (e.g. mineral oil), power, postal services, and so on, have a similar history in the US... but who would write about the "US Method of Startups: Waterfall" and use the postal service as an example?
Not to mention the bailouts (of railroads, of utilities, of car makers, of banks...).
I think there are some sour grapes or frustration there, given the guy's involvement with startups - maybe something hasn't been going well for him and/or he's run into lots of bureaucrats or obstacles, something which does happen in Europe. Hopefully he can get around those difficulties.
> last.fm is from Austria.
I went to Dornbirn and met one of the guys formerly involved with Last.fm, who is now doing some other kind of startup. Nice place.
> last.fm is from Austria.
I went to Dornbirn and met one of the guys formerly involved with Last.fm, who is now doing some other kind of startup. Nice place.
You might be right.
I also think Austrians especially have no idea how good they've got it. They think the US is different because if you just take trips to NYC or other major destinations, you don't get a feel for it.
I'm grateful for what it's like to live in Austria. Typically at least once a day, something will remind me of how much better it is here.
I don't even care about the taxes.
I also think Austrians especially have no idea how good they've got it. They think the US is different because if you just take trips to NYC or other major destinations, you don't get a feel for it.
I'm grateful for what it's like to live in Austria. Typically at least once a day, something will remind me of how much better it is here.
I don't even care about the taxes.
Despite what you may believe (or want to believe) that's not completely true. Europeans tend to exaggerate internal differences to an extreme and are not able to see the big picture. There exists a culture that is uniquely European as opposed to American, or Chinese. For example, when Americans talk about European tendencies towards bureaucracy they're right, and it's something that affects all of Europe (yes, that includes you, "but we're not like all you continental types" UK). Ironically, this narrowmindedness ("we're not all the same") is a feature of said European culture.
Yeah, the countries don't have nearly as much in common as US states, of course, but the longer you spend in "Europe" (whichever countries you pick, it seems to me), the more subtle but serious differences to the US you notice... that seem fairly cross-cultural within Europe.
I haven't been anywhere that reminded me of the US' typical daily grind.
I haven't been anywhere that reminded me of the US' typical daily grind.
Actually this is government vs. business, not Europe vs. U.S.
American == Entrepreneur && European == Government funded.
Creating models to fit your world views is _always_ wrong.
Creating models to fit your world views is _always_ wrong.
Now, what really annoys me about European entrepreneurs is the tendency to just copy stuff. Like "starting europe's first ycombinator-style incubator" and then "travel to the bay area (...) to get inspiration for my next project". That may work, of course, but there's zero creativity in it.