[loxodrome]

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.

[owenversteeg]

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.

[Mofpofjis]

> I think it's cultural.

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.

[whazor]

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?

[crznthndr]

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.

[bobxmax]

The "pioneer spirit" is so core to the American identity and hard to replicate in Europe

Americans just have a borderline delusional self-belief that other cultures really have a hard time matching

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

[Mofpofjis]

> The public money is inevitably passed through [...] public sector bureaucrats

I'd phrase it a bit differently -- local (country) regulations, taxes and fees stifle startups in the crib.

[whatshisface]

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.

[ClumsyPilot]

> 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

This is not a meaningful statement

‘Returning money in private hands’ does not result in more startup investment, it’s not in the culture to do this.

The money will be put into real estate, bonds, or whatever.

Look at London - it has as much wealth as NewYork or LA but all the money just piles up in real estate or Fintech.

But outside those niches? Good luck getting a farm-tech startup funded, no-one will take a punt.

So it falls to the government to try and kickstart something. As flawed as it may be.

Then they put together a competition for funding that basically feels like a school exam

[rowanajmarshall]

> Good luck getting a farm-tech startup funded, no-one will take a punt.

There are so, so many examples of British agtech companies getting funded:

https://www.lettusgrow.com/blog/2020/1/9/press-release-uk-ag...

https://edinburgh-innovations.ed.ac.uk/news/roslin-technolog...

https://fischerfarms.co.uk/fischer-farms-secures-26m-funding...

https://tropic.bio/tropic-biosciences-raises-28-5-million-se...

[chii]

> 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.

[loxodrome]

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.

Tax less, and prosperity follows!

[jampekka]

Looking at what the billionaires are doing in US politics, perhaps there's something to this.

[somethingsome]

Honestly, in academia you have good hands too, just not every lab. As in business, you also have not so good businesses.

Giving it to academia can 10x the result, but yes research is risky, that's why it's important it is founded externally.

Companies that profited from research in academia are very happy.

Overall I agree, the current European strategy is not optimal, for both Industry and academia.

[dr_dshiv]

“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.

[coolvision]

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)

[pembrook]

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.

[Snow_Falls]

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...

[ClumsyPilot]

> 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

[loxodrome]

Amen, I should frame this on my wall.

[fakedang]

> In America, a 20-year-old can drop out of college, code an app in his dorm, and become a billionaire.

Pedantic but counterpoint, Markus Villig.

[high_na_euv]

>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.

Who told you that?

[sally_glance]

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).

[TFYS]

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.

[BlueTemplar]

Have you ever even opened that journal ?

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...

[mbs159]

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.