Europe’s Plan to Compete with Silicon Valley(blogs.wsj.com)
blogs.wsj.com
Europe’s Plan to Compete with Silicon Valley
http://blogs.wsj.com/digits/2015/04/22/europes-plan-to-compete-with-silicon-valley/?mod=ST1
22 comments
Here in Denmark IT companies are extremely elitist. Tons of simple ASP.NET and Java EE jobs require a master's degree in CS or CE.
Contrast this with the coding bootcamps and "everyone can learn to code" culture in the US and you can see why innovation is so slow here in Denmark.
I am a CS student genuinely interested in compiler construction, distributed systems and programming language design so I don't feel I'm being forced to take a CS degree to get an IT job.
But I still think it's sad that you need an advanced degree to get CRUD web/business app development jobs.
Contrast this with the coding bootcamps and "everyone can learn to code" culture in the US and you can see why innovation is so slow here in Denmark.
I am a CS student genuinely interested in compiler construction, distributed systems and programming language design so I don't feel I'm being forced to take a CS degree to get an IT job.
But I still think it's sad that you need an advanced degree to get CRUD web/business app development jobs.
Innovation isn't slow in Denmark at all (source: I work for a Danish software company). Do you have any evidence people from these 'everyone can learn to code bootcamps' actually land good jobs or end up doing something innovating in the US?
I think the difference between Denmark and Silicon valley is investment money and the size of the domestic market. If the EU wants to recreate Silicon Valley, it's not tech they need to stimulate, but money.
I think trying to recreate silicon valley is like trying to recreate Hollywood or Mecca.
I think the difference between Denmark and Silicon valley is investment money and the size of the domestic market. If the EU wants to recreate Silicon Valley, it's not tech they need to stimulate, but money.
I think trying to recreate silicon valley is like trying to recreate Hollywood or Mecca.
I can't speak for the bootcamps, but I know dozens of self taught developers working at Amazon and Google, and the large companies are typically more credentialist. I have no problem believing that coding bootcamps can result in high paying jobs.
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I think it is common everywhere to have out of portion experience and education requirements for programming jobs even in USA. I don't have any CS education and nobody has ever asked me about my education. Though, I have been in business since 1997.
There's some of that, but I've also met quite a few self-taught programmers in the Nordic region. They mostly do have some very "solid" alternative credentials. One of the more common alternative credentials, which I think is a bit unique to the region, is the heavy role of people from the demoscene. If you look at programmers in many tech companies, there are a lot of demoscene people lacking university degrees who fill senior roles. This is more true outside the very traditional sectors, though; IO Interactive has more demoscene alumni than Danske Bank does.
Isn't this more of a supply/demand issue than anything else? Most my friends back in Poland are coders and engineers and they all have master degrees in their fields.
My thoughts exactly. A difference between US and Europe is that in EU countries a degree is cheaper (or completely free if you meet some financial and grades requirements), since it is subsidized by the state in many cases.
But I agree with the parent that it shouldn't be a discrimination, especially if you can demonstrate relevant experience in the field.
But I agree with the parent that it shouldn't be a discrimination, especially if you can demonstrate relevant experience in the field.
Despite the cost of tuition doubling in the last decade or so, the US still produces a vast number of college graduates. It ranks #6 in the world in terms of college graduates (assoc. degree or higher) per capita (behind Russia, Canada, Israel, New Zealand, Japan).
The US is also now producing twice the number of masters graduates per capita it was 25 years ago.
One thing that US isn't lacking for, is college degrees.
And when it comes to the free aspect - if that's so great, how come 3/4 of European countries have vastly lower college graduation rates versus the US?
The US is also now producing twice the number of masters graduates per capita it was 25 years ago.
One thing that US isn't lacking for, is college degrees.
And when it comes to the free aspect - if that's so great, how come 3/4 of European countries have vastly lower college graduation rates versus the US?
Not free of opportunity costs, and even if the degree is free, you still have to eat and pay rent.
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Never is a strong word. I agree with you on the VC front; but talent-front, I am so blown away w/ what London has to offer. Plus excellent schemes like Entrepreneur First are really changing stuff.
But the attitudes of investors is lacking massively: Aaron Harris tweeted that "When reading YC apps, the most important question isn't "Why could this fail?" but "How could this be incredible?"" -- this sentiment needs to seep into the minds here, who seem more focused on risk aversion than optimising for upside.
I hope this is the 'easy' bit to change (I'm not sure). My gut says it's an old guard that will eventually be replaced.
But the attitudes of investors is lacking massively: Aaron Harris tweeted that "When reading YC apps, the most important question isn't "Why could this fail?" but "How could this be incredible?"" -- this sentiment needs to seep into the minds here, who seem more focused on risk aversion than optimising for upside.
I hope this is the 'easy' bit to change (I'm not sure). My gut says it's an old guard that will eventually be replaced.
Could you elaborate on the nature of European VC's (as compared to American ones)? I'm genuinely curious.
Here's a recent anecdote:
A company in London had developed a seriously impressive, breakthrough technology. When they went to meet European VCs, they wanted a business plan, revenue graphs, etc., nothing about how the technology worked. They were mostly ex-McKinsey and ex-banking and probably would not have understood the mechanics anyway. They lowballed/ passed on this company, because they were raising > £10 million, which by EU standards is a massive amount, and the financials of this < 5 y/o company were too shaky.
Then the founders went out to SF for a month, and pretty soon were practically drowning in termsheets.
It's a classic "market for lemons". The best EU VCs move or get moved to Silicon Valley. The ones that are left are nearly always bad.
Best description of them is a bunch of used car salesmen who would rather make their money by extracting value through tricking and hurting entrepreneurs, than by working hard to add value and make great bets. Sad, but that's been my experience over the years.
You could make a long list of specific differences, but that's the general situation.
Best description of them is a bunch of used car salesmen who would rather make their money by extracting value through tricking and hurting entrepreneurs, than by working hard to add value and make great bets. Sad, but that's been my experience over the years.
You could make a long list of specific differences, but that's the general situation.
Not the parent, but what I've heard is that they're cash-strapped, risk-averse and don't really care about growth.
Basically European VC's in hightech are living in SF. Very few are staying here.
I think that is a good thing that Europe may never have a Silicon Valley.
Some things in the US corporate world are extremely reckless and pray on the many to profit the few.
Some things in the US corporate world are extremely reckless and pray on the many to profit the few.
Is that an accurate characterization of Silicon Valley, though?
If you're an engineer in a startup you known you're making somewhat of a gamble. But even if you lose, you're not exactly going to be poor. If you're a founder, my impression at least is that the US culture is much more tolerant of people whose business went bankrupt. In Europe you're just one step up from a criminal.
If you're an engineer in a startup you known you're making somewhat of a gamble. But even if you lose, you're not exactly going to be poor. If you're a founder, my impression at least is that the US culture is much more tolerant of people whose business went bankrupt. In Europe you're just one step up from a criminal.
To be fair, a lot of American startups only work because of the lack of privacy and labour laws in the US (compared to the EU). EU legislature may be a hassle at times, but it tends to give customers and employees a lot of protection they wouldn't get in the US.
But what you say about startups in the EU is true. In many EU countries insolvency can have drastic consequences for the founder(s). In some of them it's also much harder to incorporate than in the US (e.g. in Germany you need to raise € 25k to form a "GmbH"; there is now also a transitional form called "UG (haftungsbeschränkt)" (yes, always unabbreviated or you can be sued) but you still need to follow all the legal and tax requirements and everyone will think you're poor and/or a scam).
Additionally VCs seem to focus more on traditional requirements and metrics, like business plans or profit estimates, rather than growth or traction. For example it seems to be nearly impossible to get funding for open source companies ("So let me get this right: you're giving it away for free and you expect us to fund you?").
But what you say about startups in the EU is true. In many EU countries insolvency can have drastic consequences for the founder(s). In some of them it's also much harder to incorporate than in the US (e.g. in Germany you need to raise € 25k to form a "GmbH"; there is now also a transitional form called "UG (haftungsbeschränkt)" (yes, always unabbreviated or you can be sued) but you still need to follow all the legal and tax requirements and everyone will think you're poor and/or a scam).
Additionally VCs seem to focus more on traditional requirements and metrics, like business plans or profit estimates, rather than growth or traction. For example it seems to be nearly impossible to get funding for open source companies ("So let me get this right: you're giving it away for free and you expect us to fund you?").
The closest thing Europe has to a major tech hub is Tel Aviv.
So the best tech hub in Europe is - not in Europe? Figures. :)
True though, serious stuff seems to be happening with Israel. I even know of a growing number of US-based startups who've been raising parts of their rounds from Israel-based investors in the past few years.
Correct me if I'm wrong, my impression is that they don't have the anti-American nationalism and not invented here syndrome mentalities that countries in Europe seem to have. Big advantage.
True though, serious stuff seems to be happening with Israel. I even know of a growing number of US-based startups who've been raising parts of their rounds from Israel-based investors in the past few years.
Correct me if I'm wrong, my impression is that they don't have the anti-American nationalism and not invented here syndrome mentalities that countries in Europe seem to have. Big advantage.
>Correct me if I'm wrong, my impression is that they don't have the anti-American nationalism and not invented here syndrome mentalities that countries in Europe seem to have. Big advantage.
Israeli philo-Americanism is its own can of worms. But in general: Israel is a very young country, often only a couple of steps up from the developing world, and is thus lacking in an "establishment" to "disrupt". This makes it a very good place to experiment, simply because, what the hell, nobody's going to try to stop you, and the masses and government feel more bolstered by your experimentation than threatened.
But this comes with a distinct downside for the country: that big, serious stuff is assumed to either be "kmo ba'hul" (like [it is] abroad), or to eventually necessitate a move abroad. Successful Israeli entrepreneurs and engineers hope to move to Silicon Valley or New York, with the unfortunate result that Israel stays a very young country with comparatively less-developed infrastructure.
Israeli philo-Americanism is its own can of worms. But in general: Israel is a very young country, often only a couple of steps up from the developing world, and is thus lacking in an "establishment" to "disrupt". This makes it a very good place to experiment, simply because, what the hell, nobody's going to try to stop you, and the masses and government feel more bolstered by your experimentation than threatened.
But this comes with a distinct downside for the country: that big, serious stuff is assumed to either be "kmo ba'hul" (like [it is] abroad), or to eventually necessitate a move abroad. Successful Israeli entrepreneurs and engineers hope to move to Silicon Valley or New York, with the unfortunate result that Israel stays a very young country with comparatively less-developed infrastructure.
Europe corps aren't anti-american when it's about tech. Pretty much the opposite. We had to pretend our french tech was developped at our US office to be able to sell it to german companies.
I was unclear. Of course they have no hesitation about consuming US products or services. I meant about adopting the US business culture & investment habits in their offices.
Silicon Valley VCs can be spineless as well. There's a lot of herd mentality: plenty of VCs who check others' opinions before deciding whether they like you.
Perhaps the difference is that 10% who aren't spineless. We may have a critical mass that Europe doesn't: a small percentage of non-spineless VCs that is just enough to get a few things off the ground. Unfortunately, the not-spineless VCs who actually show leadership and think for themselves are also inaccessible without a social advantage: you have to get that introduction first. You can't just call up Sequoia and get an afternoon with a senior partner.
"Europe" (speaking broadly, because it's a huge (sub)continent) has advantages on the ground. It's not a horrible place to live. Europe has a lot of problems, but they have universal healthcare, a culture of substance, and attractive architecture. Silicon Valley, on the other hand, is soulless, ugly, expensive, and detached from reality. I'd live in Budapest or London before Palo Alto or Mountain View and it's not even close. (This isn't an America vs. Europe comparison. I like New York and Chicago quite a lot.)
All of that said, Europe does need, if it wants to be significant in the technology game, to overcome the McKinsey/Rocket mentality that seems to exist in the upper reaches. SV's upper tier (investors) is bad but theirs is even more stifling, elitist, and detrimental (although probably less immature and obnoxious).
Perhaps the difference is that 10% who aren't spineless. We may have a critical mass that Europe doesn't: a small percentage of non-spineless VCs that is just enough to get a few things off the ground. Unfortunately, the not-spineless VCs who actually show leadership and think for themselves are also inaccessible without a social advantage: you have to get that introduction first. You can't just call up Sequoia and get an afternoon with a senior partner.
"Europe" (speaking broadly, because it's a huge (sub)continent) has advantages on the ground. It's not a horrible place to live. Europe has a lot of problems, but they have universal healthcare, a culture of substance, and attractive architecture. Silicon Valley, on the other hand, is soulless, ugly, expensive, and detached from reality. I'd live in Budapest or London before Palo Alto or Mountain View and it's not even close. (This isn't an America vs. Europe comparison. I like New York and Chicago quite a lot.)
All of that said, Europe does need, if it wants to be significant in the technology game, to overcome the McKinsey/Rocket mentality that seems to exist in the upper reaches. SV's upper tier (investors) is bad but theirs is even more stifling, elitist, and detrimental (although probably less immature and obnoxious).
Misleading title: This isn't Europe's plan to compete with SV, it's Europe's plan to stop being a complete mess.
Click-bait alert!
This is just an US article about Europe, which falls in the same spectrum of English telling History or Silvia Saint praising virginity.
Jesus! https://www.youtube.com/watch?v=y3kcnm2THXI
Just relax :)
This is just an US article about Europe, which falls in the same spectrum of English telling History or Silvia Saint praising virginity.
much of Europe lags behind, with countries in the south
and east in particular struggling with slower, less
reliable 3G and even 2G
Jesus! https://www.youtube.com/watch?v=y3kcnm2THXI
Just relax :)
That's a pretty silly complaint for Americans to make, considering I still cannot get a 4G signal in the suburban or rural Northeast, and can only get one some of the time in the heart of major cities like New York or Boston!
As a European the title of the article pretty much sums up why there is no Silicon Valley here in Europe. Politicians and bureaucrats think they can somehow create and run such an environment from "the top down", when what is needed is a culture change and more venture funds to dangle carrots for entrepreneurs. Here often you have to deal with state bodies for funding for startups populated by beuracrats and controlled/directed by politicians.
p.s: the IT industry here in Ireland is basically a giant money laundering / tax avoidance operation for multinationals... definitely does not have the same spirit as Silicon Valley (or the weather for that matter)
p.s: the IT industry here in Ireland is basically a giant money laundering / tax avoidance operation for multinationals... definitely does not have the same spirit as Silicon Valley (or the weather for that matter)
And the best way to introduce innovation "from the top down" for some reason always involves inventing more complicated legislation or benefits.
Then somehow, large established companies turn out to be the ones who end up profiting because they have the legal/administrative staff to file out a few tons of paperwork.
It's truly maddening.
I worked for a European startup once, and one of the founders left to create a consultancy that did nothing else than to help other companies fill out the relevant forms.
Then somehow, large established companies turn out to be the ones who end up profiting because they have the legal/administrative staff to file out a few tons of paperwork.
It's truly maddening.
I worked for a European startup once, and one of the founders left to create a consultancy that did nothing else than to help other companies fill out the relevant forms.
I can relate, EU VAT would be a prime example of needless bureaucracy and paperwork. All that time wasted collecting, calculating, paper shuffling around in order to get VAT right, is time not spent on actually running your startup
Yes one can pay accountants but that means increasing your costs and complicating your business from day 1
If they want more startups, they could for example exempt companies lets say with under half a million in turnover from having to waste so much time and energy on everything VAT related
Instead of focusing on making a profitable product/service and then worrying about taxation, startups have to worry about taxes from day 1.
Hell the EU are even now trying to get companies/people from outside the EU who do not live or work here be captured into the beuracratic pit via VAT MOSS
Yes one can pay accountants but that means increasing your costs and complicating your business from day 1
If they want more startups, they could for example exempt companies lets say with under half a million in turnover from having to waste so much time and energy on everything VAT related
Instead of focusing on making a profitable product/service and then worrying about taxation, startups have to worry about taxes from day 1.
Hell the EU are even now trying to get companies/people from outside the EU who do not live or work here be captured into the beuracratic pit via VAT MOSS
The idiotic VAT proposals were actually the fault of individual govs, not of the EU as a whole.
The EU plan was to exempt small businesses. But for god-only-knows what reason - I'm not ruling out petulance because they'd be losing tax breaks - some of the member states vetoed this.
The EU plan was to exempt small businesses. But for god-only-knows what reason - I'm not ruling out petulance because they'd be losing tax breaks - some of the member states vetoed this.
Is who vetoed that proposal public information?
Not so far as I know. But considering that one of the main losers was Luxembourg - which is where many EU companies base themselves for the tax breaks - it's not unreasonable to wonder if that was one of the names on the list.
Of course, the details should be public, and it's no one's credit that they're either hidden or hard to find.
Of course, the details should be public, and it's no one's credit that they're either hidden or hard to find.
In fairness, what you're describing sounds like the same hubris behind New York City's START-UP program:
http://startup.ny.gov/
http://startup.ny.gov/
The digital single market strategy “in no way” aims to limit the progress of U.S. tech firms in Europe, Mr. Ansip told The Wall Street Journal.
No worries there !
The European strategy is always to have more and complicated rules (VAT got far more complex by Jan 1st 2015, net-neutrality is discussed, data roaming is under attack, etc).
European politicians do not understand that all the big companies once started as very small companies.
By complicating things (again: VAT, data roaming, etc) the entry levels are raised.
By the time successful US companies (soon to be Chinese companies ?!) reach Europe they have enough muscle to adapt to the rules.
Small local companies hardly ever grow that big. And it will only get more difficult.
No worries there !
The European strategy is always to have more and complicated rules (VAT got far more complex by Jan 1st 2015, net-neutrality is discussed, data roaming is under attack, etc).
European politicians do not understand that all the big companies once started as very small companies.
By complicating things (again: VAT, data roaming, etc) the entry levels are raised.
By the time successful US companies (soon to be Chinese companies ?!) reach Europe they have enough muscle to adapt to the rules.
Small local companies hardly ever grow that big. And it will only get more difficult.
>By complicating things (again: VAT, data roaming, etc)
What exactly do you think the problem is with abolishing data roaming charges? As it is, the telcos are screwing everyone, the plan to limit the data roaming charges is good from everyone else's perspective!
What exactly do you think the problem is with abolishing data roaming charges? As it is, the telcos are screwing everyone, the plan to limit the data roaming charges is good from everyone else's perspective!
Yes, there should be no roaming charges so people can freely travel in Europe and be online always and everywhere. That would be good.
However, the latest plan is to NOT abolish them... Just a discount for a while or some free data for one week or something :-(
Not really helpful in creating 'one market'...
I'm sure that's not an artifact of policy.
> A single digital market could bring in €340 billion to European GDP, create 3.8 million jobs,
Automation was never about creating jobs. In my experience it's mainly about two things:
- Doing the same or more work with fewer people
- Doing things a person cannot safely or accurate or affordably (or at all) do in person
Compare the number of people employed by a major software company compared to a major oil company with a similar market cap. We are not in the business of creating jobs, our job is to save customers money by making jobs redundant.
> Geo-blocking of online content – the geographical fencing in of video services like Netflix NFLX -1.24%, for instance – across the EU should be abolished, the strategy paper says. Copyright law should be updated and harmonized.
That sounds good to me, but the content that's blocked to me is almost never from inside the EU, it's content from American IP owners I'm not allowed to watch / listen to. I don't think this is because of copyright laws, but simply because the content owners insist on selling their IP on a per country basis.
The only thing that stops me from accessing European content are the 23 different official languages.
Automation was never about creating jobs. In my experience it's mainly about two things:
- Doing the same or more work with fewer people
- Doing things a person cannot safely or accurate or affordably (or at all) do in person
Compare the number of people employed by a major software company compared to a major oil company with a similar market cap. We are not in the business of creating jobs, our job is to save customers money by making jobs redundant.
> Geo-blocking of online content – the geographical fencing in of video services like Netflix NFLX -1.24%, for instance – across the EU should be abolished, the strategy paper says. Copyright law should be updated and harmonized.
That sounds good to me, but the content that's blocked to me is almost never from inside the EU, it's content from American IP owners I'm not allowed to watch / listen to. I don't think this is because of copyright laws, but simply because the content owners insist on selling their IP on a per country basis.
The only thing that stops me from accessing European content are the 23 different official languages.
Precisely. I am still waiting for the dime to drop in politics regarding the true nature of technology. It is all about efficiency, and by definition, human workers are inefficient. Once this fact is internalized and understood, we can begin having a frank discussion on what our societies will look like in the future.
Spoiler: it won't be anything like the present system.
If the current systems are in place going forward, we will have a dystopian future where a tiny percentage of the world population owns everything, and everyone else is a useless meatbag. Farming, manufacturing, defence, sanitation and other critical infrastructure will be highly automated. Consumer products will no longer be lucrative because the majority of consumers will have zero disposable income. Luxury goods will be the new consumer market [1].
The unholy trinity of capitalism, globalisation and automation is proving far too effective. Off-shore labor minimizes costs in the short term, while automation eliminates them in the long term. As capital increasingly substitutes for labor (in the form of technology) as the sole factor of production, it becomes impossible to participate in the market without large capital reserves. Thus, the rich get richer, and the poor get poorer. Piketty has already documented this phenomenon occurring across the board.
We live in interesting times.
1. http://store.apple.com/ca/buy-watch/apple-watch-edition?prod...
Spoiler: it won't be anything like the present system.
If the current systems are in place going forward, we will have a dystopian future where a tiny percentage of the world population owns everything, and everyone else is a useless meatbag. Farming, manufacturing, defence, sanitation and other critical infrastructure will be highly automated. Consumer products will no longer be lucrative because the majority of consumers will have zero disposable income. Luxury goods will be the new consumer market [1].
The unholy trinity of capitalism, globalisation and automation is proving far too effective. Off-shore labor minimizes costs in the short term, while automation eliminates them in the long term. As capital increasingly substitutes for labor (in the form of technology) as the sole factor of production, it becomes impossible to participate in the market without large capital reserves. Thus, the rich get richer, and the poor get poorer. Piketty has already documented this phenomenon occurring across the board.
We live in interesting times.
1. http://store.apple.com/ca/buy-watch/apple-watch-edition?prod...
Not to mention the underlying different cultures in the case of entertainment seservicek like Netflix. Even if the language could be translated on the fly (which will certainly happen inevitably) would Germans find an Italian comedy funny, and vice versa?
I dunno, we know they like Italian cartoons, westerns and opera, so why not?
The plans described are a good start, but what I think we need is more a mentality change than anything else.
Starting a tech company in Europe is, usually, easy enough. The paperwork is more complex and expensive than in the US, but easy enough to navigate.
Looking at the startup hubs in Europe (London, Berlin, Amsterdam, Dublin...), getting early stage or seed money is also relatively easy. But we find the first difference with the US here.
Getting a bit of money is easy enough, maybe something below 500K€ is feasible. But there's no way you are going to get the valuations and the money raised by similar startups in the valley.
Most VCs here are pretty risk-averse, so that's an extra hurdle, but there's a lot of other VC operating on both sides of the ocean that are sometimes more approachable and the networks of angel investors work really well.
For me, the real problem is growth. Converting a startup into a big company requires a lot of changes. Sometimes the founders are able to step up their game and continue to run the big company, but more often than not you need senior executives, people that have done this before and have the set of skills, knowledge and contacts to manage a big monster.
There's plenty of people with those skills in Europe, but the mentality is totally different from the US. In the US you can find one of these guys that is bored, contemplating retirement and sees this process as an exciting opportunity. In Europe is more common for these people to be afraid of losing their position.
All this IMHO, of course and based of my experiences.
By the way, I find it funny that the article talks about simplifying tax structures just after they've approved MOSS, which is a headache for most companies selling virtual goods.
Starting a tech company in Europe is, usually, easy enough. The paperwork is more complex and expensive than in the US, but easy enough to navigate.
Looking at the startup hubs in Europe (London, Berlin, Amsterdam, Dublin...), getting early stage or seed money is also relatively easy. But we find the first difference with the US here.
Getting a bit of money is easy enough, maybe something below 500K€ is feasible. But there's no way you are going to get the valuations and the money raised by similar startups in the valley.
Most VCs here are pretty risk-averse, so that's an extra hurdle, but there's a lot of other VC operating on both sides of the ocean that are sometimes more approachable and the networks of angel investors work really well.
For me, the real problem is growth. Converting a startup into a big company requires a lot of changes. Sometimes the founders are able to step up their game and continue to run the big company, but more often than not you need senior executives, people that have done this before and have the set of skills, knowledge and contacts to manage a big monster.
There's plenty of people with those skills in Europe, but the mentality is totally different from the US. In the US you can find one of these guys that is bored, contemplating retirement and sees this process as an exciting opportunity. In Europe is more common for these people to be afraid of losing their position.
All this IMHO, of course and based of my experiences.
By the way, I find it funny that the article talks about simplifying tax structures just after they've approved MOSS, which is a headache for most companies selling virtual goods.
Misleading. This proposal decreases EU competitiveness by INCREASING the VAT taxes on digital goods. Until now, companies often haven't have to charge VAT for customers residing in a different country from the providing company. Now, they'll always have to charge VAT!
> A single digital market could bring in €340 billion to European GDP
Not trying to help startups, trying to get more money by taxation. Way to continue to screw over tiny startups who are trying to compete with the US, EU!
> A single digital market could bring in €340 billion to European GDP
Not trying to help startups, trying to get more money by taxation. Way to continue to screw over tiny startups who are trying to compete with the US, EU!
On the other hand, they are creating a largest uniform digital goods landscape in the world with wealthiest customers. It they are successful we are bound to see quite a few new spotifys.
UPD: And VAT is smaller than e.g. 30% iTunes cut, which they can now regulate with a wave of hand.
UPD: And VAT is smaller than e.g. 30% iTunes cut, which they can now regulate with a wave of hand.
Just adding more taxes does nothing to create a more uniform landscape.
For the Europeans, consider that Amazon & other US web companies got to charge 0% sales tax for almost their entire customer-base in the US, until they were far beyond the startup stage. For many of their US customers, they still get to charge 0%. That's what promoting small businesses looks like.
VAT adds tons of problems, especially for service or purely digital products. It's very regressive against smaller companies vs larger companies. Best thing that EU could do for small businesses is copy the US sales tax model and get rid of the VAT.
As the article says, this is about worshiping huge, old, post-IPO companies like "Google" and "Facebook", not small startups.
For the Europeans, consider that Amazon & other US web companies got to charge 0% sales tax for almost their entire customer-base in the US, until they were far beyond the startup stage. For many of their US customers, they still get to charge 0%. That's what promoting small businesses looks like.
VAT adds tons of problems, especially for service or purely digital products. It's very regressive against smaller companies vs larger companies. Best thing that EU could do for small businesses is copy the US sales tax model and get rid of the VAT.
As the article says, this is about worshiping huge, old, post-IPO companies like "Google" and "Facebook", not small startups.
They're not "just adding taxes"; they enforce existing ones and also create a more uniform landscape.
It's not so important to me whether they worship small or big companies, I prefer medium sized ones anyway :)
It's not so important to me whether they worship small or big companies, I prefer medium sized ones anyway :)
How do you get to become a medium and then large company? You are a small one first. American companies can grow in a place with very few restrictions and obstructions on them while they're young and then expand into europe when they are sufficiently big. All these changes are doing is making it easier for them to do this, they'll have an inherent advantage because they don't have to deal with crap like VAT.
No, the existing laws do not always force you to pay VAT for customers in other countries in the EU. This, according to the article, would. It's adding additional taxation.
> I prefer medium sized ones anyway
Infuriating, short sighted, but typical line of thinking.
> I prefer medium sized ones anyway
Infuriating, short sighted, but typical line of thinking.
There are between 7,500 and 15,000 different sales tax jurisdictions in the United States, based variously on overlapping municipalities, school districts, metropolitan transit areas, etc. If one stipulates the necessity of paying out-of-state sales tax, the complexity of the situation makes it next to impossible to comply. Neighboring houses in the same city may have different sales tax rates. There are firms that specialize in just this, but even those can't achieve 100% accuracy.
VAT is on top of the iTunes cut, which they aren't going to regulate (and I don't believe they have the power to regulate sales commissions in that way either)
> “The message Europe is sending its entrepreneurs now is: stay at home”
As an european, working remotely with various US companies, my response is: Completely not! There is no reason to stay and create IP in Europe right now. At least not in my opinion. Both Asia and the US are better alternatives for starting up than doing so here.
I honestly think that a change in mindset is needed for attracting entrepreneurs or making them stay. This goes from the said entrepreneurs themselves to VCs and whatnot.
If they don't change their methods, I'm afraid in some time, things will start to go downhill for the entrepreneurial environment here.
I honestly think that a change in mindset is needed for attracting entrepreneurs or making them stay. This goes from the said entrepreneurs themselves to VCs and whatnot.
If they don't change their methods, I'm afraid in some time, things will start to go downhill for the entrepreneurial environment here.
They meant "stay at home; don't export!"
I think this is a fine example of a commission overestimating the amount of influence it can realistically bring to bear on technological advancement. Sure, removing barriers to competition should be a no brainer and differences between EU countries should be normalised.
Also, the next time someone says 'X is the next Silicon Valley' or 'X is Y's Silicon Valley' I'm going to throw myself off a cliff. How about instead of trying to emulate something successful and original, try to create something successful and original yourself?
Also, the next time someone says 'X is the next Silicon Valley' or 'X is Y's Silicon Valley' I'm going to throw myself off a cliff. How about instead of trying to emulate something successful and original, try to create something successful and original yourself?
Those looking to build their own Silicon Valley don't seem to grasp that there can be no other Silicon Valley. It is unique, derived from countless events spanning 60 years that are only possessed by Silicon Valley and which shaped that area distinctly. From Shockley to HP to Intel to Sun and Oracle, to Facebook and Google. That has a long chain of evolution, rolling venture capital returns, investor stock wealth (angels), built-up risk taking, very experienced management, and on and on. Such a thing can't be duplicated no matter what is attempted, you can't repeat the past that shaped Silicon Valley, so you can't build your own Silicon Valley.
Can Paris build something that could create their own domestic tech juggernauts? Absolutely, and it'll be nothing like Silicon Valley, it'll be unique to that locality in how it grows and behaves; it'll have a different approach to risk, or to funding, or to term sheets, or to exit opportunities et al.
Can Paris build something that could create their own domestic tech juggernauts? Absolutely, and it'll be nothing like Silicon Valley, it'll be unique to that locality in how it grows and behaves; it'll have a different approach to risk, or to funding, or to term sheets, or to exit opportunities et al.
I don't understand the popular obsession with recreating the Valley: can't we do something better?
We can and possibly have, it's just banal. We have comfortable lives with nationalised healthcare and cheap or free education. We aren't striving to earn money for our own health, or to prove ourselves because we can't afford a degree. Without that there's just making something because you want it made. Governments and private organisations in Europe are decent at finding those people and giving reasonable funding.
FYI - to highly ambitious people, just "living a comfortable life" sounds like hell. They wish to strive for far more, even if doing so is uncomfortable.
Decent, reasonable, comfortable - hardly the sales pitch you'll want to use if you want to attract or retain highly ambitious people. Do you?
Not trying to offend anyone, just consider that some people have much different desires than others.
Decent, reasonable, comfortable - hardly the sales pitch you'll want to use if you want to attract or retain highly ambitious people. Do you?
Not trying to offend anyone, just consider that some people have much different desires than others.
Eh, there's different kinds of ambition. Most of the highly ambitious people I know take living a comfortable life as a necessary starting point for real ambition, because their goals are to make things such as scientific advances, not to spend all their time just trying to make money. I wouldn't call Larry Ellison ambitious, for example. He is just a hard-headed, no-holds-barred businessman who wants to maximize his income. Copenhagen Suborbitals are much more ambitious than Oracle, in my view of ambition. Now a culture in which the likes of Oracle thrive: there is something that sounds like hell to ambitious people.
I hope they get something out of it, lots of tech jobs in a nice and accessible area is a good thing for the whole web ecosystem and me personally.
Question: What places in Europe would someone recommend an ambitious EU techie with no ties to move to (and possibly settle)? I figure the country needs to have fairly good internet and a decent political climate at the very least.
I'm Portuguese so maybe I'm biased, but seems Lisbon is becoming quite an attractive startup hub where the cost of living isn't too high (compared to London/Paris/etc) and you have nice weather, people, good quality of life and lots to do.
If you are thinking of starting something and need investment, London is hard to beat, with Berlin coming up second.
If you are thinking of starting something and need investment, London is hard to beat, with Berlin coming up second.
In the next few years I think Paris might become quite an interesting place. (disclaimer: I live there)
It's already booming compared to a few years ago, it is seeing some significant successful startups (Criteo, Blaclacar...), and the ecosystem is clearly growing at an accelerated pace, with new companies, new spaces, new schools, new events appearing all over the place.
In 2016-2017 a few really large incubators are to open. Like the one championed by Xavier Niel which will host 1000 startups in a gigantic railway warehouse converted to startup offices (I bet that neighborhood is going to feel that change!), or another one opened by the City that will host 300 startups.
All in all I expect a frantic activity in the next few years. Now with so many startups (and hopefully a few great ones in the lot!) the scramble for financing is bound to be pretty harsh.
It's already booming compared to a few years ago, it is seeing some significant successful startups (Criteo, Blaclacar...), and the ecosystem is clearly growing at an accelerated pace, with new companies, new spaces, new schools, new events appearing all over the place.
In 2016-2017 a few really large incubators are to open. Like the one championed by Xavier Niel which will host 1000 startups in a gigantic railway warehouse converted to startup offices (I bet that neighborhood is going to feel that change!), or another one opened by the City that will host 300 startups.
All in all I expect a frantic activity in the next few years. Now with so many startups (and hopefully a few great ones in the lot!) the scramble for financing is bound to be pretty harsh.
I'm french, lived in Paris for a while. Paris is absurdly expensive, and the French govt is fairly bad at understanding worldwide collaboration and the needs of their businesses. I'm not sure France is a good country to be in right now.
Well,
- I did not talk about the government, but I don't think it's that bad in France compared to most places in the world. Sure, some places like the Nordics seem to have pretty decent governments but at the end of the day in almost every country in the world the government is going to suck and you'll have to succeed despite them.
- Paris is "expensive" but it's still a LOT cheaper than other comparables cities, eg. London. I won't even talk about NYC or Silicon Valley.
- The ecosystem is blooming right now, and if it keeps up as I think it will, that means a tremendous number of opportunities for an ambitious person willing to start a business or work with startups.
- Funding sucks. But then again it sucks everywhere on the planet apart from SV so that's that. At least people who have worked in France can live on pretty decent unemployment checks for up to two years while they bootstrap the business so that's helpful enough.
- I did not talk about the government, but I don't think it's that bad in France compared to most places in the world. Sure, some places like the Nordics seem to have pretty decent governments but at the end of the day in almost every country in the world the government is going to suck and you'll have to succeed despite them.
- Paris is "expensive" but it's still a LOT cheaper than other comparables cities, eg. London. I won't even talk about NYC or Silicon Valley.
- The ecosystem is blooming right now, and if it keeps up as I think it will, that means a tremendous number of opportunities for an ambitious person willing to start a business or work with startups.
- Funding sucks. But then again it sucks everywhere on the planet apart from SV so that's that. At least people who have worked in France can live on pretty decent unemployment checks for up to two years while they bootstrap the business so that's helpful enough.
Berlin seems to be the most 'happening' place at the moment
I've always wondered why the Ruhr Valley isn't marketed/established as a techhub of sorts. Well connected infrastructure means it's essentially one big city and there are a few universities with decent tech departments. Berlin makes sense but come on...Valley in the title already ;P
As far as reputation among foreigners, some of it might be that Berlin is probably the easiest place to live in Germany without speaking German (or without speaking good German). Though, from what I gather, still not that easy, e.g. tech companies will hire you without German skills, and there is a considerable multilingual social/cultural scene, but the "official" side of daily life (civil service, doctors, utilities, etc.) will be challenging without German.
Because while it technically is one big city, politically and administratively it's rather 10 or so distinct cities, all competing with one another with no overarching strategy.
Besides, politics in the area is very much still living in the past (to the extent it's largely driven by nostalgia rather than by what's reasonable), when mining, steel and big state-run companies dominated the economic landscape. Politics being run by largely anti-business socialists for decades now doesn't help exactly either.
Corruption is rampant, there's no vision and in general people there don't seem to care as long as their favourite football club's still playing. It's a shame really. There's a lot of potential there that simply goes unused.
[edit: grammar]
Besides, politics in the area is very much still living in the past (to the extent it's largely driven by nostalgia rather than by what's reasonable), when mining, steel and big state-run companies dominated the economic landscape. Politics being run by largely anti-business socialists for decades now doesn't help exactly either.
Corruption is rampant, there's no vision and in general people there don't seem to care as long as their favourite football club's still playing. It's a shame really. There's a lot of potential there that simply goes unused.
[edit: grammar]
I can't name terribly many examples where rust belt turned new economy hub.
They usually just fade :-/
They usually just fade :-/
Rhine-Ruhr isn't rust-belt, though. It's the largest metro area in Germany, at 11.3 million, and is the EU's third-wealthiest metro area, after Greater London and Paris met.
Scandinavia. Slightly less functional than Singapore, but they're actual democracies. Stockholm, perhaps?
Also my recommendation, especially for the language ease. If you speak English to at least a "working professional" level, it's very easy to live and work in the big cities. At least in Copenhagen, the tech-sector work culture is very English-centric, and most official things can be done bilingually (civil servants all speak English, most forms and websites are translated, etc.). Of course there is nothing wrong with learning more languages, but it can be a big issue to attempt to get work and residence in a language you don't really speak well. For example I would personally not try to get a job in Italy unless I first learned good Italian, while I think an Italian who speaks English would find Denmark fairly easy, without needing to learn Danish up front (I know this in part because I have several Italian colleagues).
I actually live in Stockholm right now and I like it a lot, but I'm not sure I'll stay here. Can you tell me more about your experience in Copenhagen?
I like it, but really depends on what you're looking for. It is not a Big City in the sense that London, Paris, NYC, etc. are big cities. But it is a very nice, compact, medium-sized city. Small enough that you can easily bike everywhere, but large enough to have lots of cultural events, academic talks [1], places to go out, etc. I also like having a well-connected airport so nearby (15 minute metro ride from the city center). It has a fairly large international population as well. But I don't know Stockholm at all, so it's hard to compare. Alcohol is definitely cheaper and less regulated compared to Sweden!
[1] http://www.cphtalks.org/
[1] http://www.cphtalks.org/
If you are into hardware/embedded, consider the Eindhoven regio (http://en.m.wikipedia.org/wiki/Brainport_(Netherlands))
It hosts Philips, ASML, TomTom, Shapeways, NXP Semiconductors, DAF Trucks and quite a few other high tech startups.
It hosts Philips, ASML, TomTom, Shapeways, NXP Semiconductors, DAF Trucks and quite a few other high tech startups.
> Data by the commission shows that 41% of these EU enterprises don’t make use of any digital technology.
Technologies for these industries are everywhere, if they don't want them, will a digital European market change this? I don't think so...
> The first pillar of the plan: breaking down barriers in cross-border online activity. Differences between contract law, taxes, consumer protection and copyright laws among member states inhibit trade, the strategy says.
This is a good move, but still there are barriers in scaling: different languages and cultures.
> The commission also says it will work to remove the technical and legislative barriers that hinder the free flow of data within the EU.
This is interesting, I would really see how they will manage to achieve this without annoying France and other countries with mass-surveillance systems.
> Another pillar of the strategy: regulate a level playing field for companies and services in the same market.
In a nutshell: instead of promote European startups offering similar services, they want to fight AirBnB, Google, Apple, Uber and Facebook. We need step forwards, not fights.
It's a kind of half-baked program, still no better opportunities for investments, no better regulations for acquisitions (best exit strategy possible driving to more investors) and no program to motivate investors in putting money in the Hi-Tech market, but instead, EU will fight American companies.
Technologies for these industries are everywhere, if they don't want them, will a digital European market change this? I don't think so...
> The first pillar of the plan: breaking down barriers in cross-border online activity. Differences between contract law, taxes, consumer protection and copyright laws among member states inhibit trade, the strategy says.
This is a good move, but still there are barriers in scaling: different languages and cultures.
> The commission also says it will work to remove the technical and legislative barriers that hinder the free flow of data within the EU.
This is interesting, I would really see how they will manage to achieve this without annoying France and other countries with mass-surveillance systems.
> Another pillar of the strategy: regulate a level playing field for companies and services in the same market.
In a nutshell: instead of promote European startups offering similar services, they want to fight AirBnB, Google, Apple, Uber and Facebook. We need step forwards, not fights.
It's a kind of half-baked program, still no better opportunities for investments, no better regulations for acquisitions (best exit strategy possible driving to more investors) and no program to motivate investors in putting money in the Hi-Tech market, but instead, EU will fight American companies.
I have to think one major issue for a German startup (for example) would be that their ideas might not work in France because of French laws which might prohibit some feature of that German service. So, the Market for a French firm is (at least initially) France. That's significantly smaller than the US. Coupled with the fact if feels like most US managers look at a laptop as a basic tool while many European managers seem to regard it as a tool for their subordinates.
One big problem is that a European "Silicon Valley" would have to grow in one of the EU states - Silicon Valley is a locality, not a distributed phenomenon.
But with our current EU system, only the state hosting this tech hub would really benefit from it: We don't have federal taxes as in the US, each country has its own "social security" and pension system to which the new jobs would contribute, and this naturally brings more competition than cooperation.
But with our current EU system, only the state hosting this tech hub would really benefit from it: We don't have federal taxes as in the US, each country has its own "social security" and pension system to which the new jobs would contribute, and this naturally brings more competition than cooperation.
There is similar competition among states in the US. The states get very little revenue from the Federal government and when they do it's for specific programs (ie Highways or education). Often times they are mandated to institute programs by the Feds with no funds to finance the programs (assistive telephony).
For example, Applebees is well known restaurant chain here. Their corporate headquarters is near the border of Kansas and Missouri. Every few years they physically move back and forth across the border depending on which state gives them the best tax break.
For example, Applebees is well known restaurant chain here. Their corporate headquarters is near the border of Kansas and Missouri. Every few years they physically move back and forth across the border depending on which state gives them the best tax break.
Agreed, but the competition there is much lower, if anything else because the US states have much less power than the EU states - they cannot compete, for example, on the Social Security system.
If there's anything that's worrying it's how eager people are to misunderstand the article in favor of their own preconceived notions. This isn't about competing with SV as a startup hub, but about European companies being about compete with US companies in the local market. Which is a very real problem.
Europe (at least northern) is probably the easiest place in the world to start an Internet company. And we're also quite privileged in our opportunities in the US. If you're not doing one or the other (and want to of course) it's likely mostly your own fault.
Europe (at least northern) is probably the easiest place in the world to start an Internet company. And we're also quite privileged in our opportunities in the US. If you're not doing one or the other (and want to of course) it's likely mostly your own fault.
As a European, I've thought long and hard about the disadvantages of SV. Not least:
Cost of living. SF is far more expensive than anywhere in Europe, including London. This immediately ratchets up the burn rate.
Red tape. Whether it's a Delaware off-the-shelf incorporation or something else, sooner or later you're going to have to deal with the IRS. From previous experience that's a world of pain.
Health care. I don't pay for it here. I'd have to pay for it there - and pay a lot.
There are advantages too - immediate access to a huge market, mostly speaking a single language; lower sales taxes; networking and culture; weather (although cities like Barcelona which are comparable).
Access to talent is roughly equal. Certainly there are areas in Europe where developer standards are reassuringly high.
The real difference is that SV has a strong start-up tradition, while Europe has an industrial tradition of bigger and more established concerns, and start-ups seem to happen more by accident, often in waves - like the home computing wave of the early 80s, and the current tail end of the app+game wave.
Europe could certainly do more to improve that, but it's not so impossible to make things work here - it's just the challenges are different.
Cost of living. SF is far more expensive than anywhere in Europe, including London. This immediately ratchets up the burn rate.
Red tape. Whether it's a Delaware off-the-shelf incorporation or something else, sooner or later you're going to have to deal with the IRS. From previous experience that's a world of pain.
Health care. I don't pay for it here. I'd have to pay for it there - and pay a lot.
There are advantages too - immediate access to a huge market, mostly speaking a single language; lower sales taxes; networking and culture; weather (although cities like Barcelona which are comparable).
Access to talent is roughly equal. Certainly there are areas in Europe where developer standards are reassuringly high.
The real difference is that SV has a strong start-up tradition, while Europe has an industrial tradition of bigger and more established concerns, and start-ups seem to happen more by accident, often in waves - like the home computing wave of the early 80s, and the current tail end of the app+game wave.
Europe could certainly do more to improve that, but it's not so impossible to make things work here - it's just the challenges are different.
Sometimes I feel shame being a programmer in europe.
Reminds me of when German politicians were told by their advertising agencies that they should try to copy Obama's success in social media.
Resulting in a ton of cringe-worthy YouTube videos and managed twitter accounts and Facebook pages for politicians who think the Internet is "new" and still print out their e-mails.
For some reason European politicians talking about technology is often a lot like parents trying to come across as "cool" to their teenage kids. It just doesn't work and is a humiliating and disturbing experience for everyone involved.
There are some who get it right, mind you, but generally those in charge simply don't care about technology and see no reason to educate themselves (other than by listening to lobbyists who offer them shrink-wrapped opinions and soundbites).
Resulting in a ton of cringe-worthy YouTube videos and managed twitter accounts and Facebook pages for politicians who think the Internet is "new" and still print out their e-mails.
For some reason European politicians talking about technology is often a lot like parents trying to come across as "cool" to their teenage kids. It just doesn't work and is a humiliating and disturbing experience for everyone involved.
There are some who get it right, mind you, but generally those in charge simply don't care about technology and see no reason to educate themselves (other than by listening to lobbyists who offer them shrink-wrapped opinions and soundbites).
Maybe, EU is coming to SV, not the other way around.
Although startups have a great culture, big tech companies are being filled with executives and acquiring any disruptive micro-startup.
Analogously, many employees often feel like 'factory workers'(sorry for overstatement) being pressured by employers to produce X as fast as possible.
Although startups have a great culture, big tech companies are being filled with executives and acquiring any disruptive micro-startup.
Analogously, many employees often feel like 'factory workers'(sorry for overstatement) being pressured by employers to produce X as fast as possible.
I'd like to see a similar proposal on physical goods as well. Agriculture/food stuffs is another industry that is bogged down by the multitude of EU protectionist laws and tariffs. As I wine drinker, I suffer everyday because of them :)
There's one important thing Europe has got, that the US hasn't, and that is ASML; and the whole world seems to depend on it. I'd say the EU is in a pretty strong starting position.
ASML? "ASML is a Dutch company and currently the largest supplier in the world of photolithography systems for the semiconductor industry." Did autocorrect ruin your comment?
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I'm a former s.f. resident that has been living in Switzerland the last 7 years. My observation is that the engineering talent in Europe is very good. My opinion is that it is significantly better than in the u.s. With the developers more often formally trained as engineers and a more serious attitude overall (of course there are exceptions in both directions).
What Europe is missing is a strong vc industry and a better startup culture. Here in Switzerland there are of course vcs but most funding for startups comes from angel investors. And there is no incentive for working in a startup as they almost never offer options/ownership in the company. And so you get people developers in startups that are doing it for the experience and so at the low tier of programmers here.
If there was a stronger and more experienced vc culture I would think that they would improve startups by making them more like in the u.s. with options, stock grants, etc.
What Europe is missing is a strong vc industry and a better startup culture. Here in Switzerland there are of course vcs but most funding for startups comes from angel investors. And there is no incentive for working in a startup as they almost never offer options/ownership in the company. And so you get people developers in startups that are doing it for the experience and so at the low tier of programmers here.
If there was a stronger and more experienced vc culture I would think that they would improve startups by making them more like in the u.s. with options, stock grants, etc.
My first reaction to this headline.... HAHAHAHAHAHHAHAHA!!!
My second reaction to this headline.... HAHAHAHAHAHHAHAHA!!!
My second reaction to this headline.... HAHAHAHAHAHHAHAHA!!!
Sorry I don't see it.
Combined with the gloomy pessimism and fear of failure even in Europe's brightest areas (London and Berlin) and the absolute, spineless pathetic nature of European VC's (no not bitter at all ;) Europe will NEVER compete on any meaningful level with Silicon Valley.
edit: spelling