Yep, there is a big reason why Europe has so few successful big tech companies, it is a regulatory hellscape. They have so many pointless privacy regulations that only the “big” companies can even hope to compete in many markets like ad tech.
There is a big reason why the USA outside of Silicon Valley and Seattle has so few successful big tech companies: because success begets success and capital breeds more capital. If it was just European regulation you'd expect SV equivalents everywhere except for Europe. That didn't happen.
And the last thing we need is more competition in ad tech.
Given the size and abuses by the existing ad tech giants, why do you say they last thing we need is more competition. wouldn't more competition mean they have less money and get away with less and have to behave better?
No, we need them to go away. Like the dinosaurs or the Dodo. Because competition between ad tech giants means the public is collateral damage in the ensuing war. That's because the advertiser money flows to the ad tech company that is most efficient at extracting dollars from their audience. Even a .1% increase is enough to swing the battle, and that arms race has been running since 1994 or so, the results are there for all to see.
As much as we would like them to magically disappear and get uninvented, like NFTs, there doesn't seem to be any mechanism by which that realistically happens. So then, like harm reduction, isn't more competition better than less? It means less money goes to the existing giants, which may not totally starve them, but will put them on a diet.
Silicon Valley equivalents are brimming up in other parts of the world, Taiwan is very much known for its hardware technology. There are documentaries about Shenzhen becoming a tech hub too. Even here in Bangalore (India), there are many tech companies doing massive amount of good work.
But they're also right in the sense that regulation acts like a barrier in many parts of the world. I had often wondered why did Linus Torvalds and other Engineers travelled to Silicon Valley to found Linux, etc? Did they not find opportunity in Finland or any other nearby European countries?
That's because once you have a runaway success the US will tax you lower and your quality of life will be higher than what you can achieve in Europe. The USA is a great country if you're on to a winner. So the vacuum cleaner in SV tends to suck the air out of a lot of EU successful start-ups and engineering efforts simply because that's where the money is. Typical start-up valuations in the USA dwarf those in Europe, access to a single unified and mostly mono-lingual market are far more of a factor than any EU regulations, that's just a dumb meme that gets tossed around by the clueless. Yes, taxes are higher. But so is average quality of life, as opposed to average GDP, which relies on outliers.
Despite being less wealthy and diverse in both language and culture, China and India produce more tech unicorns than the EU. Several smaller countries, like Singapore and Israel also do far better than the EU on a per-capita basis.
I'd attribute most of the gap to regulatory and cultural difference.
EU is also not uniform in terms of language - so most EU companies need to decide whether they go global and start in a foreign (English) language or begin in their native language and risk getting locked in there.
I’ve been mentoring startups in EU for over 10 years and there were only a handful that had issues with regulation, but 95% had issues with a language/country lock in.
You missed the per-capita examples of Israel and Singapore. If either had the population of Germany or even that of Spain, they'd have more unicorns than the entire EU.
It's not striking that the EU is as wealthy per-person as it is and has so few tech unicorns. It's also not striking for a region with hundreds of millions of people. What's striking is that despite being wealthy and populous, the region hasn't done too well with tech.
I'd say that it's even changed during my own lifetime. There was a time when German cars had a much larger market share and Nokia was a dominant phone company. Nokia failed the transition into the smartphone era and while German cars are still great, their market share in EVs is much, much smaller. And it's not like there's a lack of talent. Plenty of Europeans are building huge tech companies, but a large fraction are choosing to do so in the US or other similar markets, like Canada (e.g., Shopify).
GDP always gets trotted out as if it is a holy grail and a benchmark for social welfare, which it isn't so think of it as a (failed) preemptive strike against getting a longer comment thread.
And so have Eindhoven (ASML), London (Revolut, Monzo, Wise and Deliveroo), Paris (DailyMotion, AppGratis), Berlin (Soundcloud, Mister Spex, Zalando, Helpling, Delivery Hero, Home24 and HelloFresh) and Amsterdam (Sonos (ok, technically Hilversum), Booking.com, TomTom) etc, etc. So what?
Tech companies exist the world over. The specific kind of tech company that requires a mountain of free cash and that can monopolize a whole segment is a SV anomaly and Microsoft is the exception simply because of when it started.
Those are actually tiny compared to most US tech companies with a global reach. The issue is that here in Europe everyone speaks their own language, and it's not feasible to advertise your tech stuff to the entire continent. There's no TV channels here where you can reach 300M people with a single commercial in a single language.
It's also an issue with capital. Everyone was shocked when Mistral raised what, 300M dollars? Ask on the street if anyone's heard of Mistral, and then ask about ChatGPT.
Meanwhile effing xAI from Elon, that no one really cares about is looking to raise $1B.
Here in Europe we're sadly not on the same level. Available capital is smaller. Reach is smaller (in practice but not in theory). Profit margins are smaller. Regulation is higher.
In 2023 you need extreme luck to create something in Europe that reaches a global audience to the point it's not worth trying. Just go for your local domestic market instead.
> Those are actually tiny compared to most US tech companies with a global reach
What are you talking about? Booking is 5.3B revenue, 112B market cap. Adyen is 37B market cap. These are not "tiny" companies compared to public tech companies in the US, and there are more than just these two.
Sure, Europe doesn't have as many frothy VC's and associated tech companies with insane valuations as the US. But it's not trailing out in last place like some of these comments make it out to be.
People need to look at actual facts and numbers before regurgitating the same old memes about how terrible Europe and the EU are.
