Europe, the other Silicon Valley…
Posted: April 2nd, 2006 | 19 Comments »A long article about a question that made my week-end: is Europe is THE place to be in Tech right now. Let me develop ;-)
One of the questions that consistently came up in our discussions with VCs was the localization. Where would coComment incorporate and live if it was to become a company?
In 2001 the answer would have been simple: Silicon Valley. The money, workforce, partners, infrastructure, everything we would have needed was there and only there. But today things are not that clear, and I even wonder if Europe is actually not a better place to be. Let’s see
Silicon Valley is less attractive
From last week’s edition of the Mercury News:
Baby boomers are retiring, workers are getting squeezed out by the high cost of living and foreign professionals are moving back home.
That was the buzz in the Valley: the Chinese and Indians are going back home to work on their own projects. The rents are completely insane, and the infrastructure sucks (Californians pay 250$ more per year in car reparations than the rest of the US citizens). For the first time in history, THE valley has to fight to retain talent, the breach is open.
Europe is hot
• reason number one is – I’m sure you guessed – the Skype deal. The company, based in Luxembourg with developers in Estonia, had a worldwide success and got bought by an American corporation despite being based in Europe. So it is posible, you can make it big in Europe. We all know now.
• Investors are turning to Europe, following the Skype deal but also because they see a market with potential and less competition. That means more money invested on this continent, and that could snowball into something. Money isn’t everything (see the bullet below) but it sure facilitates the blossoming process.
• take Switzerland – the market I know quite well. Lately, four Swiss startups have been in the global news: plazes (Zurich), ads-click (Geneva), Wikio and coComment (Bern). That’s because we now live in a meritocracy. Money, VCs, and the press no longer decide what will be successful. Great products/services with intuitive designs that solve a real problem win.
Europe has a few unique assets
• You’ve heard the old adage: Europeans have ideas, but they can’t take it to the market. Thing is, taking an idea to the market is getting easier with each passing day. In the future, the edge will be more about having ideas, less about being able to implement them (I’m simplifying for sure).
• another piece of wisdom: the European market is too small. But adwords have no boundaries, and if you’re smart enough you can speak any language by outsourcing localization to your users. There are enough global customers – connected to the web, speaking English – for thousands of companies around the globe, wherever they are.
• slow is right, and we’re prepared for that. I’m really convinced that there is something in the slow movement initiated by Carl Honoré. As Bruno Giussani writes in a recent blog post about slow, “we’ve lost the race for working hours against the Chinese anyway, and our future is in the value added, the creativity, and for that our brain needs time for relaxation.” True, and I feel that Europe is better prepared for that than the rest of the world. Here I am surrounded by people who want to preserve themselves, not to get overwhelmed by work. Two of my closest friends decided to reduce their work time at the birth of their kids, while it seems that the US is about leaving later than the guy above you in the pyramid, and Asia about working 20 hours a day 7 days a week (unfortunately without anybody asking if you like it or not). Ideas come to those who take time, and our setup is better suited for that.
• all those years of being in the shadow of Stanford and the MIT have finally forced the Universities to move, and do two things: 1) get together and unify their systems (the Bologna process, introducing more transparency, mobility, and therefore competition between the schools), and 2) get closer to the economic world.
• there is less competition for talent. How many attractive web 2.0 startups in Europe? Impossible to say, but surely less than in the US where finding programmers is again getting difficult. We have great schools here, and surely more talent looking for challenges and cool projects.
• there is a great infrastructure. Take the train in California, you will get my point.
Europe has a chance (and needs to change)!
All these factors – and there are probably more btw – give me the intuition Europe is not such a bad place. But there are a few things that need to change, for example:
• top people not answering their emails. LIFT exposed one thing about Europe: the probability that someone answers an invitation to speak email is inversely proportional to the person’s importance. It seems that the higher you get, the more unreachable you have to become. Tim Berners Lee, Ray Ozzie, Robert Scoble, Vinton Cerf, all these guys answered me – and remain REACHABLE despite their amazing careers – while I’ve never heard back of Daniel Borel, Mark Burki, André Kudelski or Stelios. This doesn’t matter in the old top-down world, but is a huge problem in the bottom-up era. Ideas come from the smaller guys, established players better listen or innovation will never come out of the dark.
• get together. Again, LIFT. But also Reboot, Innovate Europe, Pedro and André’s upcoming conference in Lisbon, we need more occasions to network and get together. Good things come out of these gatherings.
• take risks, try things you’ve never done before, don’t fear failure. Failure is the best learning experience you can get!
• be proud! There is a fine line between confidence and arrogance, the reason why most Europeans don’t even like to appear to self assured. Having been around Americans lately, I like their approach much more. They don’t hesitate to speak up when they do good, but also accept the blame when hey have to take it. That’s totally fair.
If I’m writing this it’s not to start a debate over what’s the best place to do business. That’s an endless debate and it’s not the right time to start a company anyway ;-)
What I mean is that Europe might not be such a bad place after all, and that we might have a few assets to play in the global game. It’s now up to all those with ideas to take their responsibilities. Stand up, do your thing, now is the time (and it has never been easier)!
Pierre Chappaz – Wikio founder – lives in Geneva but the company seems to be based in Luxembourg (holding) with development in France.
Pierre Chappaz – Wikio founder – lives in Geneva but the company seems to be based in Luxembourg (holding) with development in France.
Luxembourg seems to be the trend. About “slow is right”: The problem is when you see the market moving so quickly this year, you feel a stupid kind of: “i’m not in, what happens to me ?”.
Luxembourg seems to be the trend. About “slow is right”: The problem is when you see the market moving so quickly this year, you feel a stupid kind of: “i’m not in, what happens to me ?”.
Good provocative post, Lau.
It reminded me of Gillian Crampton Smith’s speech
to the 2003 graduating class of the Interaction Design Institute in Ivrea, Italy, in which she described what she called “Californian” and “European” virtues.
Californian: pragmatism, audacity, lightness of touch.
European: conviviality, quality, elegance, friction.
She positions these values for interaction designers, but I view them as ideals for all of us.
I think you and Bruno are wise to point out the work/life balance advantage in Europe. I don’t think it’s really about “slow” or “fast” but more about keeping in touch with life beyond work. Our generation has the opportunity to interpret and model work/life balance in new, markedly European ways.
Your advice to Europeans to get past the fear of failure is well needed. It’s the biggest hindrance to innovation that I’ve seen.
Good provocative post, Lau.
It reminded me of Gillian Crampton Smith’s speech
to the 2003 graduating class of the Interaction Design Institute in Ivrea, Italy, in which she described what she called “Californian” and “European” virtues.
Californian: pragmatism, audacity, lightness of touch.
European: conviviality, quality, elegance, friction.
She positions these values for interaction designers, but I view them as ideals for all of us.
I think you and Bruno are wise to point out the work/life balance advantage in Europe. I don’t think it’s really about “slow” or “fast” but more about keeping in touch with life beyond work. Our generation has the opportunity to interpret and model work/life balance in new, markedly European ways.
Your advice to Europeans to get past the fear of failure is well needed. It’s the biggest hindrance to innovation that I’ve seen.
I agree on the shake-up needed, but then there needs to be more than mere attitude changes. From personal experience, I know that the appartment rental resignation heads-up are too long, health insurances resignation heads-up are too long, the tax systems play havoc between countries, and other things like memberships at gyms and so on are hard to cancel for the end of the month in countries like F or D.
Basically, when you want to be flexible, you’re still faced with a non-negligible cost in case of a fast transfer you want to do. You might say “hell, the startup will give you options to compensate”, but that might just end up to be a sunk cost. Europe needs an overall more flexible life framework for it to work straight away and provide the environment in which startups can be established rapidly and talent can join easily.
Talking to other people, another factor is the set-up of businesses, which takes awfully long. We need change on that front as well. Why can’t you get phone lines activated the same day you request them? Why can’t you get all documents for your company in the same week? A streamline of that process is long overdue in Europe.
I agree on the shake-up needed, but then there needs to be more than mere attitude changes. From personal experience, I know that the appartment rental resignation heads-up are too long, health insurances resignation heads-up are too long, the tax systems play havoc between countries, and other things like memberships at gyms and so on are hard to cancel for the end of the month in countries like F or D.
Basically, when you want to be flexible, you’re still faced with a non-negligible cost in case of a fast transfer you want to do. You might say “hell, the startup will give you options to compensate”, but that might just end up to be a sunk cost. Europe needs an overall more flexible life framework for it to work straight away and provide the environment in which startups can be established rapidly and talent can join easily.
Talking to other people, another factor is the set-up of businesses, which takes awfully long. We need change on that front as well. Why can’t you get phone lines activated the same day you request them? Why can’t you get all documents for your company in the same week? A streamline of that process is long overdue in Europe.
I can’t really reflect on the US flexibility as I haven’t experienced it. But there are also a lot of legends about creating companies in Europe. I went through the process in Switzerland and it took me one week to setup my corporation. I thought it would take month, be complicated, etc… You simply hire an accountant, he fills the forms, you sign the papers in front of the notary and then you’re done. 7 days.
Admin REALLY got simpler, and if you put the right people around you it’s really no hassle.
I thought it would be a real pain, but the barrier was in my head, not in reality. That’s why I think it’s mostly a mentality/attitude thing. My observations is that most people who complain about the difficulty of creating a company actually NEVER went through the process themselves (I ain’t saying that for you Chris!)
And who needs to activate phone lines with mobile phones anyway ;-)
I can’t really reflect on the US flexibility as I haven’t experienced it. But there are also a lot of legends about creating companies in Europe. I went through the process in Switzerland and it took me one week to setup my corporation. I thought it would take month, be complicated, etc… You simply hire an accountant, he fills the forms, you sign the papers in front of the notary and then you’re done. 7 days.
Admin REALLY got simpler, and if you put the right people around you it’s really no hassle.
I thought it would be a real pain, but the barrier was in my head, not in reality. That’s why I think it’s mostly a mentality/attitude thing. My observations is that most people who complain about the difficulty of creating a company actually NEVER went through the process themselves (I ain’t saying that for you Chris!)
And who needs to activate phone lines with mobile phones anyway ;-)
You point out below that four swiss startups have been in the global news. That is great, and these startups are indeed promising.
But let’s not get ahead of ourselves either: There are probably as many startups from the silicon valley making the global news every week! [ bay area population size is similar to that of switzerland ]
So even if the local scene is improving, there is still a loooong way to go….
But such posts certainly help the morale of people like me who are back in CH after spendinga few years in the silicon valley ;)
You point out below that four swiss startups have been in the global news. That is great, and these startups are indeed promising.
But let’s not get ahead of ourselves either: There are probably as many startups from the silicon valley making the global news every week! [ bay area population size is similar to that of switzerland ]
So even if the local scene is improving, there is still a loooong way to go….
But such posts certainly help the morale of people like me who are back in CH after spendinga few years in the silicon valley ;)
Of course it’s not much, but as Jason Fried says you should always “celebrate small victories”… My point was that 4 swiss companies in the global news is completely new.
Welcome back (what about a beer henry? where are you based? feel free to contact me!)
Of course it’s not much, but as Jason Fried says you should always “celebrate small victories”… My point was that 4 swiss companies in the global news is completely new.
Welcome back (what about a beer henry? where are you based? feel free to contact me!)
indeed! this is not a thing about america vs. europe, but the europeans have all that it takes to make their economy sustainable, and it is not by copying what others have done that it will happen.
europe is a great and diverse place to live, and the nature of business and enterpreneurship is evolving from capitalistic ideology to something that includes values and ethics. business is about people anyhow, not about money. still money is an essential resource in our society, so it is also part of the equation, but it is not the equation.
indeed! this is not a thing about america vs. europe, but the europeans have all that it takes to make their economy sustainable, and it is not by copying what others have done that it will happen.
europe is a great and diverse place to live, and the nature of business and enterpreneurship is evolving from capitalistic ideology to something that includes values and ethics. business is about people anyhow, not about money. still money is an essential resource in our society, so it is also part of the equation, but it is not the equation.
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