This week I read an article about why its a bad idea for young people to start a company in Ireland. I agree with this, but would broaden that out to the entire EU.
I have worked in start-ups from Ireland, France, and Germany so I have a decent spread of knowledge on this topic.
I believe the following four factors act as breaks on tech start-ups in the EU:
More VC funds are required, especially seeding. In Ireland for example, the biggest start-up VC is actually the State via various agencies, and they are bureaucratic, slow, and risk-adverse. Some of the EU start-ups I worked with actually took their VC funding from the US, while operating in the EU.
A cultural shift towards risk and failure is required. All of the EU has this challenge: failure is still wrapped in shame, and in some countries like Ireland, going bankrupt can have punitive legal consequences. Compare that to the US, where failure is seen as a necessary step towards ultimate success.
Greater celebration of local success stories in the media (less begrudgery). This may be a uniquely Irish cultural phenomenon, as I was interested to note the definition of this word mentions it as being Hiberno-English, which is stated as "resentment or envy of the success of a peer; criticism of ostentatious display of success." Ref: https://en.wiktionary.org/wiki/begrudgery
We need less regulations against risk and innovation. Government regulation is an attempt to de-risk, but innovation by its very definition requires uncertainty of outcome, AKA risk. Therefore we have opposing forces at play. In the US, culturally people are ready to absorb more risk and less regulation. The EU is the opposite.
In the US, with a good vision deck and a great story, you can get investment. In the EU, that is much harder, because Europeans tend to look for the reasons why something will fail.
Now Patrick and John are multi-billionaires. Here in Ireland they are barely mentioned in the media, while in the US they are celebrated.
Short term I am not optimistic on this, as cultural change takes a very long time, and in fact the EU is heading in the wrong direction in terms of trying to mitigate against every little risk in life via regulation.
When companies have to navigate intense regulation, innovation becomes risky and expensive, and slows to a halt. It really is an opposing force, you can't have both.
What I am working on this week:
Tech Leadership podcast series : episode 23 will be on "Turning up at meetings", and being present in general.
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