Culture of entrepreneurship and other related/all cultures in Europe
We’ve read many articles about lack of some culture in Europe as a reason why we are so behind the US regarding startups. But if culture is the reason, how come Asian startups are growing so fast, much faster than Europe?
So let’s start from the beginning. We apologize in advance for going (too far) back to basics, but we want to be clear and it might give you a new perspective on many other things.
What do you do best? Things you find easy to do, or things that are hard for you to do?
If you need food and have two options:
- To go fishing on a lake which is full of delicious fish
- Or to plant an apple tree in the desert and wait for it to grow?
What will you choose?
In the first question we assume that things you do the best are things you do with ease. Second question is similar, and you will probably choose first option which is easier and with smaller risk.
So people are choosing easiest, riskless ways to complete their tasks and live their lives.
If that is true, can we assume that in the past what people did (as job) has been in most cases determined based on what kind of terrain and in which climate they have lived. Or let’s say what kind of resources they had at their disposal. If terrain and climate ware suitable for some plants they were probably planting those plants. If terrain was near sea with plenty of fish, they were probably mostly fishing.
If you are mostly fishing will you develop different kind of skills than people that are mostly in agriculture? Do people who are fishing every day have to live differently than those who are taking care of their plants? Will they have/develop different gods to whom they will bring sacrifice? Will they develop different kind of skills to protect what they are doing (their way of life)?
And we could go on and on with questions like these, but we think that you understand where we are going with this.
So if your answers are yes, yes, yes and yes, you do understand. You will agree with us that culture is a product of market conditions and not vice versa.
But this is not the end of it.
If one terrain becomes hostile and people have to move from it to survive (let’s say agriculture guys) and they move to a place where people are doing something else (let’s say to those guys that are fishing), than those that came have become a part of market conditions of those that are fishing, and new balance is needed. Those agricultural guys might know how to grow some local plants more efficiently because they have experience, or they might bring with them some new plants which will grow on this new terrain. In this situation, mixing of cultures will occur and a new culture will be produced, with maybe two gods. But if situation proves to be different and terrain remains “hostile” for agriculturalists, then they will a) die b) adopt and learn to catch fish and probably switch religions. In that case we won’t see any changes in the culture, or it will be minimal. (There is also option c) kill the fishing guys and take over their business and culture, maybe with some changes)
This is our theory of culture development governed by market conditions, we don’t know if this is something known to everybody, or completely new theory, but we believe that this is true and we can explain many things happening in Europe based on our theory.
Like for example:
If you change educational system and give much more emphasis on education for entrepreneurism but terrain (market conditions) is “hostile” for entrepreneurism, will that education provide that market with the much needed change?
We don’t believe it will, at least not sufficient change.
But if that country imports 1.000.000 (let’s assume that is a sufficient number for changing market conditions) already established entrepreneurs who know what they need and who will aggressively ask to get what they need, they might find a way to get it and, in the end, they might change market conditions (they are a part of those market).
Europe doesn’t have market conditions to grow internet companies/startups as the US or Asia have. And what is even worse, it isn’t going in a direction of developing much needed market conditions, or at least not fast enough.
So market conditions for startups aren’t climate or terrain in classical meaning any more, but (and in this order):
- Market size (Europe is no single market, but 28 different markets) and harmonization
- Regulatory obstacles (GDPR, VATMESS…)
- Infrastructure (access to needed resources – know-how, experience, internet infrastructure, hardware…)
- Money available (fuel for growth).
Let us explain
Market size – the name of the game is speed, if you have a big, unified market, and you are starting your startup on such market, than your market risk is small because there is probably plenty of potential customers for your product. They will provide you with incomes and based on those incomes you will be able to grow even faster. The US have that, because of that US started to develop VCs 75 years ago. They (market) had the need for risk money. When companies started to grow, they needed more money to cover big market, it was too big a risk for banks, so market responded with VCs. On the contrary, EU markets (28 of them) were much smaller, and to cover small market bank loan was in most cases enough. Most of the companies in the EU were working inside their countries’ borders, those borders existed to protect them from competition and that is the reason why we didn’t have so much innovations in the EU, but I will leave this for another post.
Regulatory obstacles – Overregulations are killing inventions. If you overregulate or regulate the market too soon, you will not give startups needed time to develop their products, you will just kill them. Europe has the need to overregulate to protect which is already established/developed, but with that it is also slowing down all EU startups and not giving them the opportunity to invent/grow. With that, EU is killing its own future. They think they are protecting us, but are doing exactly the opposite. Only those with enough money will be able to adapt and those are not from the EU.
Infrastructure – everything else you need to start an internet startup (everything you can pay for), but that infrastructure also in many cases comes with the market size, or better to say, it grows faster on bigger markets because market conditions demand that.
Money available – last condition, because if everything else is provided, it will come! Because "money will go where money will grow"
There are also some exceptions (e.g. Israel, Sweden…) which can again be explained with (maybe ours) theory of culture development. If you want us to explain specific exception, please write us to: 1000startupseu (at) gmail. com.
Comments by e-mail – 1000startupseu (at) gmail.com
Comments by Twitter – @1000startupsEU