Wow it’s so refreshing to know that other people can see this.
There is simply not enough private capital investment in Europe. The public money is inevitably passed through academic hands or other public sector bureaucrats. And it is simply an ineffective way to allocate capital. The money should be returned to private hands where it belongs and those individuals should be the ones to decide how to invest their own capital.
Why do so few Europeans get this? It’s like they just can’t stand the idea of a wealthy person investing their own money.
Funny enough, I don't actually think the money is quite the problem that people think it is.
Look at the early days of YC. Single digit millions a year was enough to stimulate the growth of a whole ecosystem of startups! Some startups are inherently capital-intensive but most don't need that much money to get to the point of basic viability. There are plenty of private individuals in Europe who could support a $10M a year incubator by themselves, not to mention the many institutions that could do this. And yet... there is no European YC and there never was.
I think it's cultural. Go talk to the top students at the top universities in the US and Europe and you will notice plenty of talent on both sides of the Atlantic - yet far different levels of ambition. Now run an experiment; pay ten of those students a hundred EUR/USD to tell everyone that they're dropping out and starting a startup. Watch the parents' reaction. Watch the professors' reaction. Watch the reaction from their doctor, their baker, their crush, their garbageman.
You already know the result, of course, it's obvious. That's your problem; and by comparison, the money hardly matters.
Oh yes. Being a failed entrepreneur is a stigma. Being a very successful entrepreneur is a stigma too. Only being a struggling or moderately successful entrepreneur is acceptable.
But if you look to the Hofstede's Six Cultural Dimensions, you can see that European cultures are geared toward Long-Term Orientation (compared to the Short-Term from USA). In long-term thinking, why can you not wait two years before dropping out of university and start a startup afterwards?
Do you believe short-term thinking is essential for successful startups?
> why can you not wait two years before dropping out of university and start a startup afterwards?
because someone else over in the USA dropped out two years earlier than you to do this very same startup, and thus they get a head start.
Unless your novel idea is so completely novel, that nobody else but you could've done it. Most ideas are not this novel, and first mover advantage is real.
Not to mention that to make long term work out, the short term must also work out. It's a stair case - each short term period adds up and turns into long term. It is almost impossible to have a long term plan work out, if the short term is so unsuccessful that you need more funding every year.
YC became valuable because of the ecosystem. YC enables so many varieties of exit options and inherently lowers the risk for the investors across various stages in the lifecycle of the startup company.
If the only options are such that the companies have to become profitable in isolation or go IPO, starved off private capital otherwise then the risk is much higher.
That’s why it may very well be impossible to create another YC that’s successful., unless you can replicate the entire ecosystem along with it.
> The Gulf Arabs are another group with a similar mentality but they don't have the population, freedom or education (yet) to do the same things
Correction, the Gulf Arabs don't. Their autocratic leadership is though. A frequent point of contention between government and public is the private sector - the government wants them all to join the private sector and even provides locals with seed funding for most kinds of businesses. But the locals are rather risk averse and would rather stay in the cushy public sector. The few who are entrepreneurial tend to be extremely entrepreneurial though, and they have a lot of the risk-enabling capital structure in place in Abu Dhabi and Dubai
Yes you're right. The broader population doesn't have that mentality and are, in fact, I would say on average quite lazy. It's a certain group among the elite (especially those foreign educated) who seem to really want to push the needle.
>The "pioneer spirit" is so core to the American identity and hard to replicate in Europe
Consider that the European frontier is either
- west: Americas (already done)
- south: Africa (not gonna happen again)
- north/east: drang nach osten (again, not to be repeated)
- up / down? Perhaps Europe needs to focus on space and mining tech?
Russia has a frontier, and they are pretty strong in engineering, but I doubt that a SV style ecosystem is likely to form, given the… ahem… unique cultural aspects.
All said, I disagree that a frontier experience is necessary: the UK, Germany and Austria-Hungary were massive industrial modernizers while the US was still going through its westward colonization.
Is tech an exceptional field, or just the current SotA in industrial development?
There's different frontiers. Good farmland used to be the big thing. And trade routes, like natural harbors or navigable rivers. So in many parts of the world, most of the best places were already taken and the "frontier" was worse land. But not so in Americas, because there was available land for reasons. You could have "fertile frontier".
Over time when farming technology improved, people could live self-sufficiently in worse places. Transportation technology changed as well. Railways, highways. And now remote working and data centers. So there have been frontiers also in the old world in that sense. The king of Sweden in the 1500s declared some eastern frontier areas as tax free for some time, as he wanted people to settle there to control those areas (in accords, some of it might have been Russia...). Many places have waxed and waned over the centuries. When Estonia gained independence for the second time, some Finnish farmers went there as there was excellent farmland that was very underutilized.
With modern knowledge you could even build up a great place to live almost anywhere. Good policies and cheap energy. Maybe fresh water is the hardest physical requirement.
When it comes to tech startup capital, its not America its Silicon Valley and nobody else. Sure there are deals closing in other regions but the structure isnt the same.
Silicon Beach/Alley/Gulf/Islands within America cannot replicate it either
Without a culture of paying it forward as a reckless angel investor sometimes dressed up as a fund, already within the people that made it, none of these ecosystems get off the ground
Notably, Silicon Valley’s earliest winners were from a government funded initiative
Instead of giving it all to a few people to spend buying real estate and mineral rights, you could tell the funding agencies that they're allowed to take risks, or give it to people's retirement accounts and let companies seek public investment.
Then you should also look at Wayve (self-driving cars, $1 billion Series C), Lighthouse (travel and rental data, $370 million Series C), Highview Power (novel energy storage, £300 million). Lots more too. I won't deny that the UK specialises in fintech, but there's a lot more going on than that.
> So it falls to the government to try and kickstart something.
why should it fall to the gov't? They're one of the worst funders of startups imho.
In these scenarios, the gov't isn't funding the business via equity, but grants - aka free money. This makes all the wrong incentives. Taxpayers don't feel the loss (not truly, like a private investor would), if the startup fails.
Bullshit. All the big VC firms in the USA are funded by private investors (rich people). They fund risky tech startups because big, fast gains are possible and the marginal capital gains tax rate is 20%. In the UK it's 39%! But 24% for residential property, hence the focus on real-estate that you mention.
The HDI of European states is on par with that of the United States [0].
The US has issues, but using American issues as an excuse to ignore European issues (which in reality are a result of soverignity tussles) is ridiculous.
I've lived in Canada as a kid and have family in Europe - at a macro level the differences in QoL aren't that significant, as HDI (an aggregate benchmark of developmental indicators) highlights.
I guess the question becomes, which "Europe" and which "America" are you comparing. And even then, developmentally, the US isn't much different than Western or Northern Europe.
> For average/unambitious or unfortunate/poor people
I mean, youth and normal unemployment remains significantly higher in much of the Europe compared to the US [0][1] and median income after tax remains roughly on par [2], even factoring for purchasing power parity [3].
As a whole, it appears that the US is roughly on par with much of it's peers in Western and Northern Europe, and American problems appear to be overreported and European ones underreported
I personally think there is a lot of glamorization of Europe because more Americans visit Western and Northern Europe as tourists than the other way around, and attribute their tourism experience as that of a normal European, which is an unrealistic assumption.
And it's not like ambitious risk takers don't exist in Europe - look at the startup and dev scene in Sweden, Czechia, Romania, and Poland. It's clearly an institutional problem.
These places are so large and diverse it doesn't make much sense comparing them. You really want to be comparing many-to-many American states to European countries. You can't generalize about "The USA" quality of life. Massachusetts is going to be vastly different from Mississippi in terms of basically every quality of life attribute you can possibly measure. I'm not from Europe, but I bet the same is true country-to-country there.
This is a good point. People always point to places like Sweden yet conveniently ignore the Bulgarias. In fact, most EU countries wouldn't even be considered a first world country.
I don't disagree. I also hate playing this card but there's a racialized element to it... snobs on Reddit and HN love to glamorize Nordic countries in particular, despite being tiny, racially homogenous countries with their own bucketload of problems.
In my opinion the only real issue the US has is healthcare. In all other ways even for middle class people it's better. People think Canada is some socialized heaven... yet home ownership is MUCH more realistic in say Michigan than it is just across the border in Ontario.
“They've been indoctrinated into thinking that if a business makes money, it must be cheating. The entire continent has Stockholm Syndrome from decades of leftist academics preaching that profit = exploitation, as if every entrepreneur is some 19th-century robber baron twirling a mustache”
So true!! As a university professor, this nails it. It’s sad — Amsterdam, for instance, used to have such a strong culture of business. But that vitality has greatly diminished.
This is very misleading, just look at the data:
https://en.wikipedia.org/wiki/List_of_unicorn_startup_compan...
Yes, it's different for different countries, and some EU countries are less startup friently. But countries like Norway or Estonia have ~1 unicorn per 1M people, just 50% of US (~2)
Your description of the European intellectual climate is admittedly accurate if somewhat hyperbolic.
But I think your analysis of the root causes is lacking. European humans aren't different organisms than non-european humans. Culture does not form in a vacuum. It comes from base properties of the geography and experiences of humans in the region.
In my opinion, it's primarily down to 3 things:
1) Population density: Europe has 3X the population density (and subsequent urbanization) as the US. Urbanization leads to more collectivist attitudes. If you compare European attitudes to those in a high density American location like New York City, you'll be amazed how similar (in everything from religiosity to socialist economic leaning to political philosophy). It's the higher proportion of low population density areas of the US that lead to major differences in political philosophy.
2) Experience of downside risk: European risk aversion is quite easily explained by the fact they have experienced the most extreme version of downside risk imaginable in recent memory (WWII). The worst thing the US knows is a depression. Not total annihilation, fire bombing and markets going to 0.
3) Ethnocentrism: Europe's nationalist ethno-states are far less culturally diverse than the broader US. This leads to a higher capacity of empathy for strangers (because people in a mono-culture are more similar to you, you empathize with them more easily). Ironically though, this empathy is what leads to a higher percentage of GDP being driven by centralized government spending (50% in Europe vs. 30-35ish% in USA). The market is less empathetic, but ultimately more efficient and grows the overall pie faster...even accounting for the additional increase in inequality.
Growth compounds exponentially, so this gets more dramatic over time. People in podunk US Midwest States now have a higher disposable income per capita (on both mean and median measures) than people in London, a place you would traditionally think of as among the richest in the world.
But again, the US didn't get here because 'culture.' It got here due to design decisions made hundreds of years earlier. Being a multicultural society reveals base human racist leanings, which results in more individualist governance, which leads to a greater embrace of markets and private capital, which leads to faster growth.
Coudenhove-Kalergi writes about this dichotomy you mention between urban man and rural man right at the beginning of the book "Practical Idealism." I think you will find it highly relevant.
I'm not so sure your first point is correct. Would you consider the Nordic countries to be collectivist? Because they are among the most sparsely populated countries in Europe, more sparsely than the US, but they are the countries with the best government services. Also, Canada is more sparsely populated the US.
The north is different due to the weather. I mean, sure, Canadian tundra and the Nordic Arctic and Sub-Arctic is technically land, but I'm not sure you're getting a good comparison of population density by including it in calculations. That would be like calculating the oceans around the US in population density numbers since people live on boats technically.
Nordic countries have small populations due to the limitation of arable land to support humans at all. The US has no such limitation and could support vastly more population.
Incredible to see such blind fanaticism here on HN. The sheer ingnorant, anti-europeanism here is incredible. Europe socialist? Hates capitalism? The home of thacher, austerity, the EU is socialist? I just don't even know what media one consumes to get this kind of world view.
Is this how american's justify selling their country to the highest bidder? "at least we're not eating toilet paper like the europeans". You know, some of the richest people in the world...
> anti-capitalist activists using iPhones, riding in Ubers, and ordering Amazon deliveries…
> every single job, iPhone, and modern convenience they enjoy exists because someone, somewhere, took a risk to make a profit.
Amazingly capitalists use things invented by socialists, like satellites, or the LED. Or things invested by Nazis and Monarchists.
Their favourite iPhone is made by communists, with minerals mined by .. well I am not sure what you call em but they are not capitalists
Every day Capitalists use public sanitation, running water, Education, GPS, police and prosecution but they imagine they could exist in a mad max world instead of dying of cholera
China is the most economically capitalist major country on earth. In fact, they embrace capitalism more than the US if you compare percentages of GDP driven by government spending.
50% of European GDP is government spending. The USSR was 70-80%. Meanwhile China is currently at 30%.
China has been a capitalist state since the 70s with a turn to State Capitalism in the 2010s. Furthermore, China's leadership remains anti-Welfarism, with Xi himself making speeches against expanding the already weak social safety net.
> Every day Capitalists use public sanitation, running water, Education, GPS, police and prosecution but they imagine they could exist in a mad max world instead of dying of cholera
Capitalism doesn't preclude public infrastructure. That's just a facile argument.
> the LED
The modern LED was developed by Texas Instruments and Bell Labs in the 1950s.
> like satellites
Both the US and the USSR knew about how to launch satellites in space by the mid-1950s. It was the USSR that chose to prioritize it, and the US that chose to deprioritize it.
> Their favourite iPhone is made by communists, with minerals mined by .. well I am not sure what you call em but they are not capitalists
Do you think those miners are volunteering out of revolutionary solidarity? Or perhaps "disposable cogs in the global supply chain" was the term you were looking for?
The USSR was a state-run economy. Workers got wages, sure, but the mines, the profits, the whole system was controlled by the government, not private owners chasing profit. Capitalism isn't just "getting paid," it's about who owns the means of production and how wealth circulates.
>Europeans don't just dislike capitalism. They've been indoctrinated into thinking that if a business makes money, it must be cheating. The entire continent has Stockholm Syndrome from decades of leftist academics preaching that profit = exploitation, as if every entrepreneur is some 19th-century robber baron twirling a mustache.
Your prior is objectively false, because Europe has the Stripe and Spotify founders (both of which became billionaires during the last 15 years or so).
Come on, the U.S is devolving into a fascist dictatorship as we speak, mostly due to capitalism and the worship of wealth. And for as long as capitalism remains, it will only get worse and worse, because capitalism is deeply flawed in that it has exponential power concentration built it. Monopolies form and rent seeking wealth siphons the wealth from the working people to the top. Breaking large companies would help, but it's like fighting a fire with buckets of water, eventually concentrating capital corrupts the regulators and this happens. If you can't see the connection between what's happening and capitalism, you really should think about it more objectively.
People are also happier in most European countries than they are in the US, because the constant competition for wealth and using wealth as the measure of what everyone is worth is not good for mental health and does not lead to a peaceful society, but one where people are set against each other. Europe has problems, but fixing them with capitalism is not going to lead to better lives for most people.
This sounds plausible on the surface, but by putting them all in the same basket you show that you have no idea what you are talking about : it's a bit like blaming wokists for their voting for Trump because wokists are from the USA and Trump was elected in the USA...
Europeans don't just dislike capitalism. They've been indoctrinated into thinking that if a business makes money, it must be cheating.
Those are some big assumptions about 750 million people. Would love to see the data on this.
> In America, a 20-year-old can drop out of college, code an app in his dorm, and become a billionaire. In Europe? Good luck.
Assuming that's the case with you, right? And if not, then why not if it's so simple? Everybody knows that these cases are extremely rare, but they do happen both in the US and in the EU.
> The ultimate proof that Europe's system is broken? Its smartest people leave. Engineers, doctors, entrepreneurs, they all flee to the U.S., Switzerland, or Singapore, where they're allowed to keep what they earn.
Again, would love to see the data on this. Based on my own personal anecdata, one of the reasons why IT engineers don't move to the US despite being offered to do so is because they enjoy the other benefits of living in the EU, like high-speed rail, free health-care, free higher education, being car independent, childcare benefits and having more days off.
There is simply not enough private capital investment in Europe. The public money is inevitably passed through academic hands or other public sector bureaucrats. And it is simply an ineffective way to allocate capital. The money should be returned to private hands where it belongs and those individuals should be the ones to decide how to invest their own capital.
Why do so few Europeans get this? It’s like they just can’t stand the idea of a wealthy person investing their own money.