🦄 The BS narrative of 'startups can't scale in Europe'
Whether in France, Germany, Spain, or the Netherlands, we all have this ongoing narrative: startups can't scale in Europe.
And yes, all of us, we got pretty good at the startup game as it was in the nineties and early 2000s in the U.S. We have interesting tech ventures grown by entrepreneurs, not large industrial conglomerates more than twenty years later. But as soon as they are viable with a chance of reaching massive scale, they jump on the U.S treadmill where they get real money from the NASDAQ.
And here goes the little music you've heard for years... We are a culture of risk-averse, grumpy folks in France, and we don't trust entrepreneurs. In Germany, banks don't fund tech and especially don't want to invest in software. In Spain, the market is too small and self-centered to really be able to support scale outside of its own frontiers...
You know what? I'm getting tired of this BS.
Are Californians more positive about entrepreneurs? Sure they are.
Now get $150K of free lunch money with medical care covered and 12-18 months of unemployment while you fund your project. Oh, you can't? I'm shocked. Not to mention that you got a Ph.D. in biotech or a Master's degree in engineering without accruing a $350K personal debt. Not that it really matters, I guess, as long as you get warm feedback on your pitch, eh? If we cut the bullshit, launching a startup in Europe is probably, at this point, way more efficient and easy than in the U.S.
But what of the scale problem? Don't you think it completely weird that as a 445 million people market, we can't scale newly fangled tech industries better than a comparatively smaller 331 million people market?
Let me share where, as Europeans, we fail critically: our public incubators and tech clusters, together with our private VC firms, don't play at an EU level. I'm not talking about learning expeditions (whatever that means), ribbon-cutting events, fuzzy partnerships, exotic soft-landing programs, or juniors investors scouting Crunchbase. No, all that we do.
What we don't do is what really matters, and it's two simple but very committed things:
- Start to incubate from day one some projects as European ventures, not regional small businesses.
- Have enough VCs level up from regional players to cross-European platforms.
Where not there, not because of lack of skills, but lack of proper incentive. Playing our own European market is, as we speak, never a priority. But this priority can be created by public money. Not more public money, but a rerouting of some of the billions spent on funding deepetch and startups.
And they are two key focuses:
- Public money to foster a real network of public incubators talking to each other and working together across European countries. This is key to removing step-by-step the vested interests in keeping startups tied down in Barcelona, Düsseldorf, or Lyon.
- Public money to create a proper Euronext 100 fast-track, with less red tape and proper incentives to get efficient financial roadshows going. This is the only way to get series B and C European VCs to chase something else than an exit on the NASDAQ.
Since I'm having a Christmas list moment, I'd also add something that should be obvious to everyone now:
- Embed a poison pill with the first €150-300K of public money given to local startups in Europe. Get this money, and commit to a European Patriot Act of sorts, where your technology will be under EU sovereignty.
These three things might seem daunting to achieve. No worry, let's start with deeptech transferred from a public lab to the private sector. It's the most obvious and straightforward change to get rolling.
Call me a radical if you want; I just think the time for EU candor on tech is over.