Many people attempt to apply the American mindset to the European market, then act surprised when it doesn't work. This is yet another example.
European culture operates differently, and the startup model doesn't translate seamlessly to this continent for a variety of reasons. I've explored this in depth on my blog, with a particular focus on Germany: https://mertbulan.com/2025/02/24/we-dont-need-startups-we-ne...
This feels like an orthogonal point. The OP make a very specific comparison to his travel company and Airbnb, and how people ignored them or even belittled them but adored Airbnb despite being very similar companies.
Europeans use Airbnb. Trying to to say he was trying to "apply the American mindset to the European market" as a bad thing doesn't really hold water here when the American product literally won.
Yes, the kind of companies historically started in Europe are very culturally different to startups. The point being made is that really for no good reason, Europe does not culturally support the existence of startups and is often actively hostile towards them.
The solution being "just don't do startups in Europe" is like, ok sure I guess you can do that, but it doesn't actually address the problem that was presented: cultural incompatibility and unwillingness to change.
Another part of the American mindset. Not all the companies are trying to win here in Europe. Some believe that companies can co-exist. They can serve different groups of people. Not all of them are pushing for getting more market share or jumping into different industries like Airbnb is doing now.
Call me crazy but i don't think european media should hype up an airbnb-like company, just because it has the capability to make money does not mean its good for the world or should exist. We do not need a european amazon, we need to move away from companies like that full stop.
Ironically, you're trying to apply a German mindset to the entire European market. That doesn't really work either.
In the sense that Mittelstand is more than just SMEs, I don't think it ever really existed here. There's no cultural fascination with being a middle business or having a family-owned business. A similar word ("middenstand") was used a lot, but it referred to shops only. In American TLA-speak: SMEs with a D2C model. The term "middenstand" died a slow death in the last 25 years. It's rarely used nowadays.
Good riddance too. The whole term reaks of limited social mobility. In Dutch "stand" has a much stronger feudal vibe than "klasse".
In the audio/music production space Germany has Ableton, Bitwig, Steinberg, Native Instruments, u-he, and quite a few others. All following the Mittelstand model as far as I know.
Notwithstanding all the physical audio equipment manufacturers in Germany, there are loads of them producing quite high quality gear.
Sorry, but it's a typical German detached from reality attitude. We are going to find some magical niches that no one else will dare to touch allowing us to live quietly in a village and print money just like that (not a lot of money of course, we don't want to be TOO unrealistic, just enough for a comfortable life).
Not going to work in an innovative digital economy. We can see how resilient Mittelstand is by the current wave of bankruptcies and the general state of economy.
As far startups go it has much less to do with culture or hype but with the fact that Europe even with the single market has far more localized and ring fenced markets than the US.
So you end up with smaller overall markets with a well dug in established competition.
Entropy tends to increase over time (or, so I heard). The cultural analogue of that would be that all cultures--given the prevalence of internet, and on top of that, the US being one of the "loudest"--will either become or approach that of the US. And it'll bring along everything that's good and bad. That means, decadence, greed, gluttony, enshittification, are unavoidable, however unlikely and alien they seem at present time. In less generous terms, the sick tend to infect the healthy, more than the latter can heal the former.
Swiss gov?/quagos(driven by the Gallic element)? do unbeatable job hyping their wares internationally? Might be best hypsters in their weight class "government of <10million". (German SMEs do not need the international market as much)
For further comparison direct sales incurred by US press is insignificant internationally next to Hollywood,and one can argue the CIA does more-better commerce hype than DoC itself
Interesting article, but I think it's not contradicting to the OP post. What is a "successful specialized high-quality mid size company"? It's formerly a successful startup, just aiming not to cover as wide audience as possible, but a narrow market. And not aiming to go public or sell out, but retain private ownership and vision of the founders. Think Ebay store vs Valve (Steam) store.
The problem is that to become a mittelstand, company must survive early growth phase, and the OP tweet correctly notices that such possibility is severely hampered both by EU and USA media. To continue my example - "we have Valve at home"(c) i.e. for example EU has CDPR with it's GoodOldGames (GoG) store. Yeah, it also went a bit wide in past years, but not because of lack of trying to be specialized. And they still retain that specialization mostly. But they are far far away from the Steam, and I now suspect the marketing playing a key part in it.
tl;dr - authors message "Germany should focus on developing the Digital-Mittelstand" is wrong. It is wrongly formulated. It's like saying "country should focus on developing successful companies". Yeah, no shit Sherlock, but before that every successful company must somehow be created and grow.
Or, alternatively, we can replace every Mittelstand word in the incentives part of the article and all of the sentences would be true:
STARTUP, however, can leverage remote work to further reduce costs. Employees could live in small towns, enjoy lower living expenses, and maintain a high quality of life thanks to Germany’s good transportation infrastructure. Remote work also translates into lower personnel costs, typically the largest expense for any startup. By tapping into these advantages, STARTUP could achieve both profitability and sustainability without compromising employee well-being.
If you’re already sold on the STARTUP concept, let’s explore the potential products they can create. There’s a wide range of possibilities: (a list of typical software industries)
Rather than pouring large grants into startups with the hope of generating returns for shareholders, the German government should consider introducing tailored incentives to foster the development of STARTUP.
Salary Grants - (applicable to startups? of course)
> Or take fragmented markets. Same question: how could US startups successfully conquer these fragmented EU markets when European startups can't?
How many tiny US startups have been successful in EU markets?
I'm from Norway, we're ~5 million people here. You're not going to have a ton of users, and hence employees, before having to study other countries' rules and regulations. Some of which might not be available in English, and we all know how great it is to use automatic translation for that.
We had <10 employees when our company branched out into the Nordic countries. Complying to rules and regulations has been a constant struggle, and I suspect impossible if not for the fact that we're a B2B shop, as B2C is much more regulated.
That said, I'm not disagreeing with the main point of the post. I think we and our media could take more pride in local software.
The weird thing is that for physical goods, and especially food here in Norway, I feel like there already is this patriotism OP finds lacking in software.
Aussie in Norway, and have been part of a founding team here, as well as lead teams in companies you've definitely heard of.
I think the OP on X gets it right. It for sure is a marketing problem. The media machine in Europe is most likely fractured by languages. So take Norway. Sure we have our fair share of tech blogs/news/etc. but all are in Norwegian. Which cool for the local market, but outside that it's not the language that others are speaking. Where as the US publish in their native language, which so happens to be something most people speak globally.
I'm not suggesting that the local tech journalism is doing it wrong. But what is lacking is some kind of large European tech journalism, or heck even all the smaller ones writing about each other's cool new startups.
>But what is lacking is some kind of large European tech journalism
Yes, even when tech media in europe would want to hype the original OP startup, they are not that influential in general. I follow tech news daily but all of them are U.S. media, there is nothing comparable here.
Media coverage is definitely a factor, but the post has some gleaming issues.
> Take excessive regulations for instance, which gets mentioned all the time. If they were such a hindrance to startups, why would American startups succeed in Europe - like Airbnb in our case - and European startups not? We all face the same regulations
Nope, they don't. US companies in Europe generally don't care about EU regulations. Even if we skim over privacy, AirBnB succeeded in Europe despite there being laws preventing short lets in many municipalities.
US startups can devote 100% of their energy to getting their product and operations right. Then when they enter the European market they already have that part down when they start dealing with your governments. European startups attempting to compete don't have that luxury.
> US companies in Europe generally don't care about EU regulations.
They care as much or as little as European companies.
When you're trying to make it in business you should not spend too much time trying to comply with all possible regulations. Focus on growing the business and avoid serious and costly breaches.
I still remember a business course in university (in Europe) during which the lecturer told us: "By law you must file this whatever every year but the penalty for not doing so is cheaper than spending time doing it so don't bother". Very direct and frank but that's how it is.
US startups also don't care about US regulations. AirBnB, Uber, Tesla, Coinbase and many others break the laws in the US they don't like. I'm not making the moral argument that breaking laws is always wrong. Instead I'm simply pointing out that breaking "bad laws" is culturally accepted in Silicon Valley but not in Europe. Silicon Valley startups do what it takes to win.
A bottom up cultural shift is required to change startup culture in Europe. I have lived in both the USA and UK, attempted various startups in both. Reactions of family in UK and around Europe - I've given up a simple life to be a chancer, small setbacks are seen as enormous failures, every discussion is commiseration, enormous skepticism. USA friends and family are universally positive, respectful, full-throated and full-hearted behind what I've done, they view my goals as meaningful despite failures. This starts at the bottom and bubbles up to media, investors, company and government.
Why do we need so much that the thought of wrapping the mentality of a whole society around it comes to mind before questioning its legitimacy in a certain context? So serial startup-making can be executed like chain smoking. What are the big benefits that this very form and specific brand of organization type deserves special treatment, other formations or no formations, single persons, departments in a keep-going company, co-ops, semi-chaotic group of enthusiast, or whatever will never ever produce without absorbing proper startup mentality to the core of the society?
I am sceptic, yes, not least because I was in a startup of a serial startuper where half of the efforts were spent on being a proper startup. How startupers do, how they act, what they do in what stage, what is the proper procedure for being a startup? There is even television series that was used as reference. Remaining efforts went into other detals, one among those was product development. Asking another startup founder about where he sees the company in 5 years the answer was 'Sold!' without a second of hesitation. I was phrasing wrong, I assumed I was asking about the product roadmap that happened to be made in the formal setting of this organization, but that was not in the focus of the minds apparently.
Americans can have an inflated positivistic style pulled on when they want to anyways, to be enthusiastic for the sake of enthusiasm, in selective situations, easily shifted to and away from anything. I wouldn't rely on that too much, but especially wouldn't use as reference for transforming a different society that may be a bit more repelling with the same thing of all things.
It's not just about startups, it's about entrepreneurial attitude in general. Europe has great workers, including great engineers, but business culture is lacking. Entrepreneurs we have are mostly "professional entrepreneurs" with no understanding or interest in the "technical details" - and it shows in the results. And eventually it's detrimental to the workers too - there are fewer good places to work, they pay less etc.
the meaning of required in the relevant sentence is not "we are required to do this because it should be done" but rather "if we want that step 2 gets done then step 1 would be required for step 2 to get done."
Because all that scepticism, non-support etc. are like small micro-defeats that will suck the life energy. Not to mention all those taxes which sucks money energy. :-) But the deeper reason I see in in Europe is that everything is biased towards big and old, and not new and small.
A saying of my own: America is superficially conservative and deeply liberal, while Europe is superficially liberal and deeply conservative.
Tangentially, it’s why I don’t think authoritarian reactionary stuff will “take” here for any length of time. The instant Americans figure out it’s anything more than a stylistic performative way to “own” the other side — the instant they are actually told what to do — it is over.
That’s a clever aphorism, but it’s overly simplistic and misunderstands both contexts. America’s foundational ethos - individualism, market primacy, and suspicion of state power - is deeply libertarian, not liberal in the European sense. Meanwhile, much of Europe has embedded egalitarianism and social solidarity into its institutions - not superficial liberalism, but deeply held post-war consensus. The “deep conservatism” in Europe is often just a reflection of cultural continuity, not ideological rigidity. It’s more accurate to say both continents contain layers of contradiction, but projecting neat labels misses the complexities of their political DNA.
As a European that has spent a significant amount of time over the last 5 years in America this has been a cultural learning for me.
This is very true. No real American trusts authority, whether that is the government, or large companies, or other institutions like universities. This is why Uber could get away with breaking the law as long as they were still seen as a small startup.
>A bottom up cultural shift is required to change startup culture in Europe.
History and the study of Volksgeists shows that's almost impossible without any major revolutionary event.
The status quo Europeans have had for centuries was their lives being at the mercy of some higher monarchic power, be it emperors, kings, lords, etc, then revolutionary communists, fascists, dictators, etc, and post-WW2 at the mercy of the social welfare state to handle everything for you. There was never a period our relatively recent history where we could just do whatever we wanted, without the ruling powers interfering some way or dictating the rules till the next regime change, and so the Volksgeist inherited and passed on that status quo across generations, kind of like Plato's cave, or like a fish in the water. That's why many Europeans who felt held back or persecuted by the status quo fled to the US decades/centuries ago.
This is totally opposite to the American way of life since 1776 where the state was mostly hands-off to leave you alone and would not help you out, nor get in your way, you'd live or die based on your own individual actions. I realize this is different today for Americans, with the government having way more taxes, regulations and social services than in 1776, but the original Volksgeist around minimalist government, individualism, personal freedom and self-responsibility still prevails.
So people can say "we need to change" all they want, but the reality is that's never gonna happen, Europeans aren't gonna become Americans and Americans aren't gonna become Europeans, the cultural inertia is too powerful, and you can't fight against the stream.
> [German engineers and tech workers a]re not the kind to release half-baked products and patch issues later
What the article doesn't point out is that this is deeply ingrained not just among companies but among customers, too, and it's one of the many culture shocks I've seen my colleagues who move between US and EU markets experience.
If a European customer (adjusting for geographical variation, Europe is pretty big and diverse) runs into some weird issue and they call tech support, there's a very good chance that you've already lost them. It doesn't matter if tech support was super helpful, remedied things right away, and the customer support experience was top notch. The perception is that if they had tech support to un-break it, someone not only cut corners, but didn't even cut them very well, and now they wasted their time, too.
This isn't "just a cultural thing", it's ingrained because of how customers themselves do business, too (which makes it especially difficult to deal with in a B2B setting). The whole chain of commercial relations and norms is structured in such a way that depending on a "move fast and break things" platform is a very, very bad idea.
This is one of the most frequent things I had to explain in review meetings, and it went both ways:
- People who moved from US to EU markets didn't understand why customers had nothing but good words to say about customer support and then didn't renew contracts citing quality issues
- People who moved from EU to US markets going nuts over product release timelines getting aggressively slashed not so much because the feature sheet was too thin but because they thought there was no way to get those features tested enough
I don't know what country is it, but being in Germany I've had to interact with customer support (for internet providers, banks etc.) a lot. At the quality was not top notch at all. The companies are well alive and thriving.
The article reads like sour grapes: It's always someone else's fault.
It was your company. If you knew the press in the US was better, /why didn't you expand to the US/? /Why didn't you raise money in the US?/ Companies are ultimately transnational, the market for capital, talent, and eyeballs is global, and if you weren't getting what you wanted from the European press, why didn't you go after the American press?
There are some structural things which make things more difficult than if you're living in SF, LA, or NYC--I'd argue more strongly it's the lack of pension funds investing as LPs in funds which results in less overall money in the ecosystem--but there's a LOT of the US which is not those places, and I would strongly argue that it's easier to be a startup in Berlin or Paris than in Chicago or Dallas.
I have for many years believed this. In practical terms global media is American media. And if press coverage is necessary for cheap costumer awareness, then American companies have the advantage that global media hype them up more than non-american. In before stupid objections, this isn't a law of nature, obviously; there's exceptions to everything.
Aren’t American startups enjoying access to capital markets to a much larger extent, which in turn is a result of financialization of the US economy and demand for USD as a reserve currency (ie unrelated to tech itself)?
My impression is US VC startups are not trying to sell anything to customers or break even, it’s a game of hype and future potential from inception to very late in the game. Basically, you don’t even have a business model until you’ve passed through all the rounds and even longer. Instead, you’re working towards finding and validating PMF, often with free or subsidized products to capture markets before even thinking about ROI. All while appearing successful since the VC money keeps flowing, essentially driving the car while the company is changing tyres. In the last decade, had anyone tried to optimize for profit or dividends in the startup world?
OTOH my impression of EU startups are addressing an existing validated need (such as CRMs, booking systems etc). While I do think it’s also culturally more risk- and novelty averse, in terms of capital access you just can’t afford anywhere near the length and size of the runway.
the financialization and the exorbitant privilege of the USD are probably not negligible factors, but they are simply miniscule compared to the stark difference in the dynamics of the Valley and other VC/startup scenes.
Readit News
European culture operates differently, and the startup model doesn't translate seamlessly to this continent for a variety of reasons. I've explored this in depth on my blog, with a particular focus on Germany: https://mertbulan.com/2025/02/24/we-dont-need-startups-we-ne...
Europeans use Airbnb. Trying to to say he was trying to "apply the American mindset to the European market" as a bad thing doesn't really hold water here when the American product literally won.
Yes, the kind of companies historically started in Europe are very culturally different to startups. The point being made is that really for no good reason, Europe does not culturally support the existence of startups and is often actively hostile towards them.
The solution being "just don't do startups in Europe" is like, ok sure I guess you can do that, but it doesn't actually address the problem that was presented: cultural incompatibility and unwillingness to change.
Another part of the American mindset. Not all the companies are trying to win here in Europe. Some believe that companies can co-exist. They can serve different groups of people. Not all of them are pushing for getting more market share or jumping into different industries like Airbnb is doing now.
In the sense that Mittelstand is more than just SMEs, I don't think it ever really existed here. There's no cultural fascination with being a middle business or having a family-owned business. A similar word ("middenstand") was used a lot, but it referred to shops only. In American TLA-speak: SMEs with a D2C model. The term "middenstand" died a slow death in the last 25 years. It's rarely used nowadays.
Good riddance too. The whole term reaks of limited social mobility. In Dutch "stand" has a much stronger feudal vibe than "klasse".
Notwithstanding all the physical audio equipment manufacturers in Germany, there are loads of them producing quite high quality gear.
Not going to work in an innovative digital economy. We can see how resilient Mittelstand is by the current wave of bankruptcies and the general state of economy.
As far startups go it has much less to do with culture or hype but with the fact that Europe even with the single market has far more localized and ring fenced markets than the US.
So you end up with smaller overall markets with a well dug in established competition.
For further comparison direct sales incurred by US press is insignificant internationally next to Hollywood,and one can argue the CIA does more-better commerce hype than DoC itself
The problem is that to become a mittelstand, company must survive early growth phase, and the OP tweet correctly notices that such possibility is severely hampered both by EU and USA media. To continue my example - "we have Valve at home"(c) i.e. for example EU has CDPR with it's GoodOldGames (GoG) store. Yeah, it also went a bit wide in past years, but not because of lack of trying to be specialized. And they still retain that specialization mostly. But they are far far away from the Steam, and I now suspect the marketing playing a key part in it.
tl;dr - authors message "Germany should focus on developing the Digital-Mittelstand" is wrong. It is wrongly formulated. It's like saying "country should focus on developing successful companies". Yeah, no shit Sherlock, but before that every successful company must somehow be created and grow.
Or, alternatively, we can replace every Mittelstand word in the incentives part of the article and all of the sentences would be true:
STARTUP, however, can leverage remote work to further reduce costs. Employees could live in small towns, enjoy lower living expenses, and maintain a high quality of life thanks to Germany’s good transportation infrastructure. Remote work also translates into lower personnel costs, typically the largest expense for any startup. By tapping into these advantages, STARTUP could achieve both profitability and sustainability without compromising employee well-being.
If you’re already sold on the STARTUP concept, let’s explore the potential products they can create. There’s a wide range of possibilities: (a list of typical software industries)
Rather than pouring large grants into startups with the hope of generating returns for shareholders, the German government should consider introducing tailored incentives to foster the development of STARTUP.
Salary Grants - (applicable to startups? of course)
Simplify Bureaucracy and Regulations - (same)
Expand VAT Exemptions - (same)
English Language Support - (same)
etc. etc.
How many tiny US startups have been successful in EU markets?
I'm from Norway, we're ~5 million people here. You're not going to have a ton of users, and hence employees, before having to study other countries' rules and regulations. Some of which might not be available in English, and we all know how great it is to use automatic translation for that.
We had <10 employees when our company branched out into the Nordic countries. Complying to rules and regulations has been a constant struggle, and I suspect impossible if not for the fact that we're a B2B shop, as B2C is much more regulated.
That said, I'm not disagreeing with the main point of the post. I think we and our media could take more pride in local software.
The weird thing is that for physical goods, and especially food here in Norway, I feel like there already is this patriotism OP finds lacking in software.
I think the OP on X gets it right. It for sure is a marketing problem. The media machine in Europe is most likely fractured by languages. So take Norway. Sure we have our fair share of tech blogs/news/etc. but all are in Norwegian. Which cool for the local market, but outside that it's not the language that others are speaking. Where as the US publish in their native language, which so happens to be something most people speak globally.
I'm not suggesting that the local tech journalism is doing it wrong. But what is lacking is some kind of large European tech journalism, or heck even all the smaller ones writing about each other's cool new startups.
Yes, even when tech media in europe would want to hype the original OP startup, they are not that influential in general. I follow tech news daily but all of them are U.S. media, there is nothing comparable here.
> Take excessive regulations for instance, which gets mentioned all the time. If they were such a hindrance to startups, why would American startups succeed in Europe - like Airbnb in our case - and European startups not? We all face the same regulations
Nope, they don't. US companies in Europe generally don't care about EU regulations. Even if we skim over privacy, AirBnB succeeded in Europe despite there being laws preventing short lets in many municipalities.
They care as much or as little as European companies.
When you're trying to make it in business you should not spend too much time trying to comply with all possible regulations. Focus on growing the business and avoid serious and costly breaches.
I still remember a business course in university (in Europe) during which the lecturer told us: "By law you must file this whatever every year but the penalty for not doing so is cheaper than spending time doing it so don't bother". Very direct and frank but that's how it is.
I'm not sure why my comment was flagged, so I'll add the link to the evidence here: https://democrats-judiciary.house.gov/uploadedfiles/2025.02....
My point is that in the US, you don't have to follow the law. If you're rich enough, you are the law.
Dead Comment
Why do we need startups?
Why do we need so much that the thought of wrapping the mentality of a whole society around it comes to mind before questioning its legitimacy in a certain context? So serial startup-making can be executed like chain smoking. What are the big benefits that this very form and specific brand of organization type deserves special treatment, other formations or no formations, single persons, departments in a keep-going company, co-ops, semi-chaotic group of enthusiast, or whatever will never ever produce without absorbing proper startup mentality to the core of the society?
I am sceptic, yes, not least because I was in a startup of a serial startuper where half of the efforts were spent on being a proper startup. How startupers do, how they act, what they do in what stage, what is the proper procedure for being a startup? There is even television series that was used as reference. Remaining efforts went into other detals, one among those was product development. Asking another startup founder about where he sees the company in 5 years the answer was 'Sold!' without a second of hesitation. I was phrasing wrong, I assumed I was asking about the product roadmap that happened to be made in the formal setting of this organization, but that was not in the focus of the minds apparently.
Americans can have an inflated positivistic style pulled on when they want to anyways, to be enthusiastic for the sake of enthusiasm, in selective situations, easily shifted to and away from anything. I wouldn't rely on that too much, but especially wouldn't use as reference for transforming a different society that may be a bit more repelling with the same thing of all things.
Europe: "You are my friend, so your success makes me look like a failure, and your failure makes me look like a success"
Tangentially, it’s why I don’t think authoritarian reactionary stuff will “take” here for any length of time. The instant Americans figure out it’s anything more than a stylistic performative way to “own” the other side — the instant they are actually told what to do — it is over.
As a European that has spent a significant amount of time over the last 5 years in America this has been a cultural learning for me.
History and the study of Volksgeists shows that's almost impossible without any major revolutionary event.
The status quo Europeans have had for centuries was their lives being at the mercy of some higher monarchic power, be it emperors, kings, lords, etc, then revolutionary communists, fascists, dictators, etc, and post-WW2 at the mercy of the social welfare state to handle everything for you. There was never a period our relatively recent history where we could just do whatever we wanted, without the ruling powers interfering some way or dictating the rules till the next regime change, and so the Volksgeist inherited and passed on that status quo across generations, kind of like Plato's cave, or like a fish in the water. That's why many Europeans who felt held back or persecuted by the status quo fled to the US decades/centuries ago.
This is totally opposite to the American way of life since 1776 where the state was mostly hands-off to leave you alone and would not help you out, nor get in your way, you'd live or die based on your own individual actions. I realize this is different today for Americans, with the government having way more taxes, regulations and social services than in 1776, but the original Volksgeist around minimalist government, individualism, personal freedom and self-responsibility still prevails.
So people can say "we need to change" all they want, but the reality is that's never gonna happen, Europeans aren't gonna become Americans and Americans aren't gonna become Europeans, the cultural inertia is too powerful, and you can't fight against the stream.
What the article doesn't point out is that this is deeply ingrained not just among companies but among customers, too, and it's one of the many culture shocks I've seen my colleagues who move between US and EU markets experience.
If a European customer (adjusting for geographical variation, Europe is pretty big and diverse) runs into some weird issue and they call tech support, there's a very good chance that you've already lost them. It doesn't matter if tech support was super helpful, remedied things right away, and the customer support experience was top notch. The perception is that if they had tech support to un-break it, someone not only cut corners, but didn't even cut them very well, and now they wasted their time, too.
This isn't "just a cultural thing", it's ingrained because of how customers themselves do business, too (which makes it especially difficult to deal with in a B2B setting). The whole chain of commercial relations and norms is structured in such a way that depending on a "move fast and break things" platform is a very, very bad idea.
This is one of the most frequent things I had to explain in review meetings, and it went both ways:
- People who moved from US to EU markets didn't understand why customers had nothing but good words to say about customer support and then didn't renew contracts citing quality issues
- People who moved from EU to US markets going nuts over product release timelines getting aggressively slashed not so much because the feature sheet was too thin but because they thought there was no way to get those features tested enough
It was your company. If you knew the press in the US was better, /why didn't you expand to the US/? /Why didn't you raise money in the US?/ Companies are ultimately transnational, the market for capital, talent, and eyeballs is global, and if you weren't getting what you wanted from the European press, why didn't you go after the American press?
There are some structural things which make things more difficult than if you're living in SF, LA, or NYC--I'd argue more strongly it's the lack of pension funds investing as LPs in funds which results in less overall money in the ecosystem--but there's a LOT of the US which is not those places, and I would strongly argue that it's easier to be a startup in Berlin or Paris than in Chicago or Dallas.
My impression is US VC startups are not trying to sell anything to customers or break even, it’s a game of hype and future potential from inception to very late in the game. Basically, you don’t even have a business model until you’ve passed through all the rounds and even longer. Instead, you’re working towards finding and validating PMF, often with free or subsidized products to capture markets before even thinking about ROI. All while appearing successful since the VC money keeps flowing, essentially driving the car while the company is changing tyres. In the last decade, had anyone tried to optimize for profit or dividends in the startup world?
OTOH my impression of EU startups are addressing an existing validated need (such as CRMs, booking systems etc). While I do think it’s also culturally more risk- and novelty averse, in terms of capital access you just can’t afford anywhere near the length and size of the runway.
https://alexdanco.com/2021/01/11/why-the-canadian-tech-scene...