EuroOSCON: Startups in Europe
There have been some great comments in reply to my post about the startups in Europe, but this one from William B Dollars caught my eye:
Interesting question and interesting selection of responses. I am from the US, but work as a VC in Europe and am continually frustrated by the challenges of finding great start-up companies to work with. The reasons are complex and include:
- social issues: if you start a company and fail, there are often serious results from a career perspective; basically, failure is not accepted and this adds to the overall risk.
- VC issues: Although some VCs have been around in Europe for a while (e.g. 3i in the UK has been around since the 1950's), most were spawned by the craze of the late 1990's and were/are staffed by ex-investment bankers who had never been inside a business before, but thought they knew more than everyone else because someone had paid them a load of money in their previous job. Seriously, though, the big issue is that the VCs in Europe are typically unable to take on the level of risk that US VCs are happy with because on their first or second fund, they cannot afford to have failures. Often when you meet a Euro VC they say "we have not had any failures" which actually means they have not taken enough risk. The decent US VCs have been going for a while and recognise that having failures is part of the game and are thus more willing to take risks.
- Specifically with regards to software, it is usually important for software start-ups to be able to work with/collaborate with/grab the attention of larger software companies. In Europe that means they can go talk to ... SAP. Maybe Business Objects... in general, this industry is so dominated by US companies that I think some of the management/commercial expertise required to create viable, investible software start-ups is not readily available in Europe and certainly not to the extent that VCs need to feel comfortable investing in the sector... it is v. hard to invest in enterprise software in Europe.
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@otis: sure, and the earth is a flat disc. you name europeans the ones "who were left behind". you are so funny guy! the nations who are left behind started up projects like airbus a380, are delivering nearly alll the parts needed to repair all of all your war and death vehicles. the ones which you think are NOT left behind, are importing more goods than they produce all the time. and this is also a lot of know how (largest part imported from germany for space flight technologies). so guy, you seem to be the best entrepreneur i know. claiming this kind of pseudo darwinism seems a little bit far from the cry.
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Otis [07.29.05 09:12 AM]
I think the problem stems from sociocultural background, and even has its roots in biology. Those who wanted new challenges, who wanted to explore, who wanted to achieve and find a better life left Europe to seek their fortune in the U.S. and Australia. Those who were left behind, were people who took less risk. Most people living in Europe now are descendants of those who chose not to take their chances in the new world, they carry their DNA, and with that some character traits. Europe has a lot of baggage, a lot to live up to, whereas the U.S. has no baggage and no history to live up to. It's purely capitalistic, whereas European countries choose to pick a route that's less extreme, and less risky. You see manifestation of this in all different aspects of life in Europe vs. the U.S. I don't know which of the two is better.