Many people attempt to apply the American mindset to the European market, then act surprised when it doesn't work. This is yet another example.
European culture operates differently, and the startup model doesn't translate seamlessly to this continent for a variety of reasons. I've explored this in depth on my blog, with a particular focus on Germany: https://mertbulan.com/2025/02/24/we-dont-need-startups-we-ne...
ZephyrBlu · 4h ago
This feels like an orthogonal point. The OP make a very specific comparison to his travel company and Airbnb, and how people ignored them or even belittled them but adored Airbnb despite being very similar companies.
Europeans use Airbnb. Trying to to say he was trying to "apply the American mindset to the European market" as a bad thing doesn't really hold water here when the American product literally won.
Yes, the kind of companies historically started in Europe are very culturally different to startups. The point being made is that really for no good reason, Europe does not culturally support the existence of startups and is often actively hostile towards them.
The solution being "just don't do startups in Europe" is like, ok sure I guess you can do that, but it doesn't actually address the problem that was presented: cultural incompatibility and unwillingness to change.
mertbio · 4h ago
> the American product literally won
Another part of the American mindset. Not all the companies are trying to win here in Europe. Some believe that companies can co-exist. They can serve different groups of people. Not all of them are pushing for getting more market share or jumping into different industries like Airbnb is doing now.
ZephyrBlu · 2h ago
You keep avoiding the point.
Yes, some companies aren’t trying to “win”, but what about the companies that are trying to “win”?
It sounds like you’re implying they simply shouldn’t exist in Europe.
mytailorisrich · 4h ago
That's a strangely naive and idealistic view of Europe.
Companies are trying to win in Europe and competition is as fierce as anywhere. What "some" do is a moot point. You'll always find "some" people/companies behaving in a certain way wherever you go.
lucumo · 3h ago
Ironically, you're trying to apply a German mindset to the entire European market. That doesn't really work either.
In the sense that Mittelstand is more than just SMEs, I don't think it ever really existed here. There's no cultural fascination with being a middle business or having a family-owned business. A similar word ("middenstand") was used a lot, but it referred to shops only. In American TLA-speak: SMEs with a D2C model. The term "middenstand" died a slow death in the last 25 years. It's rarely used nowadays.
Good riddance too. The whole term reaks of limited social mobility. In Dutch "stand" has a much stronger feudal vibe than "klasse".
glimshe · 5h ago
Great post. The German audio product company u-he sounds like your digital mittelstand. They make synthesizers nobody can quite emulate.
piva00 · 5h ago
In the audio/music production space Germany has Ableton, Bitwig, Steinberg, Native Instruments, u-he, and quite a few others. All following the Mittelstand model as far as I know.
Notwithstanding all the physical audio equipment manufacturers in Germany, there are loads of them producing quite high quality gear.
thefz · 4h ago
Sennheiser too!
dogma1138 · 1h ago
Europe does not have a monolithic culture.
As far startups go it has much less to do with culture or hype but with the fact that Europe even with the single market has far more localized and ring fenced markets than the US.
So you end up with smaller overall markets with a well dug in established competition.
oytis · 2h ago
Sorry, but it's a typical German detached from reality attitude. We are going to find some magical niches that no one else will dare to touch allowing us to live quietly in a village and print money just like that (not a lot of money of course, we don't want to be TOO unrealistic, just enough for a comfortable life).
Not going to work in an innovative digital economy. We can see how resilient Mittelstand is by the current wave of bankruptcies and the general state of economy.
dgb23 · 4h ago
An interesting and useful perspective. There seem to be a lot of parallels with Switzerland in that regard.
gsf_emergency · 1h ago
Swiss gov?/quagos(driven by the Gallic element)? do unbeatable job hyping their wares internationally? Might be best hypsters in their weight class "government of <10million". (German SMEs do not need the international market as much)
For further comparison direct sales incurred by US press is insignificant internationally next to Hollywood,and one can argue the CIA does more-better commerce hype than DoC itself
fsflover · 4h ago
I don't see how the OP's startup couldn't become a "digital mittelstand".
Yizahi · 4h ago
Interesting article, but I think it's not contradicting to the OP post. What is a "successful specialized high-quality mid size company"? It's formerly a successful startup, just aiming not to cover as wide audience as possible, but a narrow market. And not aiming to go public or sell out, but retain private ownership and vision of the founders. Think Ebay store vs Valve (Steam) store.
The problem is that to become a mittelstand, company must survive early growth phase, and the OP tweet correctly notices that such possibility is severely hampered both by EU and USA media. To continue my example - "we have Valve at home"(c) i.e. for example EU has CDPR with it's GoodOldGames (GoG) store. Yeah, it also went a bit wide in past years, but not because of lack of trying to be specialized. And they still retain that specialization mostly. But they are far far away from the Steam, and I now suspect the marketing playing a key part in it.
tl;dr - authors message "Germany should focus on developing the Digital-Mittelstand" is wrong. It is wrongly formulated. It's like saying "country should focus on developing successful companies". Yeah, no shit Sherlock, but before that every successful company must somehow be created and grow.
Or, alternatively, we can replace every Mittelstand word in the incentives part of the article and all of the sentences would be true:
STARTUP, however, can leverage remote work to further reduce costs. Employees could live in small towns, enjoy lower living expenses, and maintain a high quality of life thanks to Germany’s good transportation infrastructure. Remote work also translates into lower personnel costs, typically the largest expense for any startup. By tapping into these advantages, STARTUP could achieve both profitability and sustainability without compromising employee well-being.
If you’re already sold on the STARTUP concept, let’s explore the potential products they can create. There’s a wide range of possibilities: (a list of typical software industries)
Rather than pouring large grants into startups with the hope of generating returns for shareholders, the German government should consider introducing tailored incentives to foster the development of STARTUP.
Salary Grants - (applicable to startups? of course)
Simplify Bureaucracy and Regulations - (same)
Expand VAT Exemptions - (same)
English Language Support - (same)
etc. etc.
magicalhippo · 5h ago
> Or take fragmented markets. Same question: how could US startups successfully conquer these fragmented EU markets when European startups can't?
How many tiny US startups have been successful in EU markets?
I'm from Norway, we're ~5 million people here. You're not going to have a ton of users, and hence employees, before having to study other countries' rules and regulations. Some of which might not be available in English, and we all know how great it is to use automatic translation for that.
We had <10 employees when our company branched out into the Nordic countries. Complying to rules and regulations has been a constant struggle, and I suspect impossible if not for the fact that we're a B2B shop, as B2C is much more regulated.
That said, I'm not disagreeing with the main point of the post. I think we and our media could take more pride in local software.
The weird thing is that for physical goods, and especially food here in Norway, I feel like there already is this patriotism OP finds lacking in software.
intothemild · 4h ago
Aussie in Norway, and have been part of a founding team here, as well as lead teams in companies you've definitely heard of.
I think the OP on X gets it right. It for sure is a marketing problem. The media machine in Europe is most likely fractured by languages. So take Norway. Sure we have our fair share of tech blogs/news/etc. but all are in Norwegian. Which cool for the local market, but outside that it's not the language that others are speaking. Where as the US publish in their native language, which so happens to be something most people speak globally.
I'm not suggesting that the local tech journalism is doing it wrong. But what is lacking is some kind of large European tech journalism, or heck even all the smaller ones writing about each other's cool new startups.
greyman · 4h ago
>But what is lacking is some kind of large European tech journalism
Yes, even when tech media in europe would want to hype the original OP startup, they are not that influential in general. I follow tech news daily but all of them are U.S. media, there is nothing comparable here.
openplatypus · 5h ago
Media coverage is definitely a factor, but the post has some gleaming issues.
> Take excessive regulations for instance, which gets mentioned all the time. If they were such a hindrance to startups, why would American startups succeed in Europe - like Airbnb in our case - and European startups not? We all face the same regulations
Nope, they don't. US companies in Europe generally don't care about EU regulations. Even if we skim over privacy, AirBnB succeeded in Europe despite there being laws preventing short lets in many municipalities.
sksksk · 5h ago
It's also a lot easier to invest in compliance when you've already got product-market-fit in the regulation light US.
dariosalvi78 · 5h ago
also because American companies get into Europe when they are already somewhat established and can afford paying well staffed legal departments
gizmo · 5h ago
US startups also don't care about US regulations. AirBnB, Uber, Tesla, Coinbase and many others break the laws in the US they don't like. I'm not making the moral argument that breaking laws is always wrong. Instead I'm simply pointing out that breaking "bad laws" is culturally accepted in Silicon Valley but not in Europe. Silicon Valley startups do what it takes to win.
exe34 · 5h ago
Tesla's CEO bought the government and fired everybody who was investigating his companies!
fallingknife · 5h ago
US startups can devote 100% of their energy to getting their product and operations right. Then when they enter the European market they already have that part down when they start dealing with your governments. European startups attempting to compete don't have that luxury.
mytailorisrich · 4h ago
> US companies in Europe generally don't care about EU regulations.
They care as much or as little as European companies.
When you're trying to make it in business you should not spend too much time trying to comply with all possible regulations. Focus on growing the business and avoid serious and costly breaches.
I still remember a business course in university (in Europe) during which the lecturer told us: "By law you must file this whatever every year but the penalty for not doing so is cheaper than spending time doing it so don't bother". Very direct and frank but that's how it is.
reedf1 · 5h ago
A bottom up cultural shift is required to change startup culture in Europe. I have lived in both the USA and UK, attempted various startups in both. Reactions of family in UK and around Europe - I've given up a simple life to be a chancer, small setbacks are seen as enormous failures, every discussion is commiseration, enormous skepticism. USA friends and family are universally positive, respectful, full-throated and full-hearted behind what I've done, they view my goals as meaningful despite failures. This starts at the bottom and bubbles up to media, investors, company and government.
izacus · 5h ago
Why is it "required"? What's so desirable in the american mindset that folks so badly need in EU?
reedf1 · 5h ago
Why represent my point like that? "is required to change startup culture in Europe." If you don't want it, don't change.
K0balt · 5h ago
Poor reading comprehension skills or a bad faith interpretation. Either way, what you wrote was absolutely fine.
bryanrasmussen · 5h ago
the meaning of required in the relevant sentence is not "we are required to do this because it should be done" but rather "if we want that step 2 gets done then step 1 would be required for step 2 to get done."
greyman · 4h ago
Because all that scepticism, non-support etc. are like small micro-defeats that will suck the life energy. Not to mention all those taxes which sucks money energy. :-) But the deeper reason I see in in Europe is that everything is biased towards big and old, and not new and small.
koonsolo · 3h ago
US: "You are my friend, so your success means my success"
Europe: "You are my friend, so your success makes me look like a failure, and your failure makes me look like a success"
api · 5h ago
A saying of my own: America is superficially conservative and deeply liberal, while Europe is superficially liberal and deeply conservative.
Tangentially, it’s why I don’t think authoritarian reactionary stuff will “take” here for any length of time. The instant Americans figure out it’s anything more than a stylistic performative way to “own” the other side — the instant they are actually told what to do — it is over.
simonjgreen · 4h ago
That’s a clever aphorism, but it’s overly simplistic and misunderstands both contexts. America’s foundational ethos - individualism, market primacy, and suspicion of state power - is deeply libertarian, not liberal in the European sense. Meanwhile, much of Europe has embedded egalitarianism and social solidarity into its institutions - not superficial liberalism, but deeply held post-war consensus. The “deep conservatism” in Europe is often just a reflection of cultural continuity, not ideological rigidity. It’s more accurate to say both continents contain layers of contradiction, but projecting neat labels misses the complexities of their political DNA.
As a European that has spent a significant amount of time over the last 5 years in America this has been a cultural learning for me.
TheNewsIsHere · 1h ago
I would add that the original submission also brushes aside the very real problem that the US has what is effectively a widespread cult of fascists whose leader is the sitting President. We’re talking about a not insignificant number of people who either enjoy the cult or are too {stupid,uneducated,naïve,gullible,sucked in} to see the leopard that is staring at their face and drooling for a bite.
fallingknife · 4h ago
This is very true. No real American trusts authority, whether that is the government, or large companies, or other institutions like universities. This is why Uber could get away with breaking the law as long as they were still seen as a small startup.
mihaaly · 4h ago
Peeking out of my bubble a bit:
Why do we need startups?
Why do we need so much that the thought of wrapping the mentality of a whole society around it comes to mind before questioning its legitimacy in a certain context? So serial startup-making can be executed like chain smoking. What are the big benefits that this very form and specific brand of organization type deserves special treatment, other formations or no formations, single persons, departments in a keep-going company, co-ops, semi-chaotic group of enthusiast, or whatever will never ever produce without absorbing proper startup mentality to the core of the society?
I am sceptic, yes, not least because I was in a startup of a serial startuper where half of the efforts were spent on being a proper startup. How startupers do, how they act, what they do in what stage, what is the proper procedure for being a startup? There is even television series that was used as reference. Remaining efforts went into other detals, one among those was product development. Asking another startup founder about where he sees the company in 5 years the answer was 'Sold!' without a second of hesitation. I was phrasing wrong, I assumed I was asking about the product roadmap that happened to be made in the formal setting of this organization, but that was not in the focus of the minds apparently.
Americans can have an inflated positivistic style pulled on when they want to anyways, to be enthusiastic for the sake of enthusiasm, in selective situations, easily shifted to and away from anything. I wouldn't rely on that too much, but especially wouldn't use as reference for transforming a different society that may be a bit more repelling with the same thing of all things.
oytis · 3h ago
It's not just about startups, it's about entrepreneurial attitude in general. Europe has great workers, including great engineers, but business culture is lacking. Entrepreneurs we have are mostly "professional entrepreneurs" with no understanding or interest in the "technical details" - and it shows in the results. And eventually it's detrimental to the workers too - there are fewer good places to work, they pay less etc.
TheNewsIsHere · 1h ago
The other side to this is that technical people often make for poor business people.
These are different skill sets, and developing competency in both generally takes a long time focusing on each. That takes a lot of time and willingness.
oytis · 1h ago
Historically best innovative companies were founded by engineers though - even in Germany in its better (in terms of economic growth at leastt) times. It's kind of related to the culture again - if you see business as something scary that only specially talented and specially trained people should do, that is what you get, your engineers will not be very good at it.
FirmwareBurner · 5h ago
>A bottom up cultural shift is required to change startup culture in Europe.
History and the study of Volksgeists shows that's almost impossible without any major revolutionary event.
The status quo Europeans have had for centuries was their lives being at the mercy of some higher monarchic power, be it emperors, kings, lords, etc, then revolutionary communists, fascists, dictators, etc, and post-WW2 at the mercy of the social welfare state to handle everything for you. There was never a period our relatively recent history where we could just do whatever we wanted, without the ruling powers interfering some way or dictating the rules till the next regime change, and so the Volksgeist inherited and passed on that status quo across generations, kind of like Plato's cave, or like a fish in the water. That's why many Europeans who felt held back or persecuted by the status quo fled to the US decades/centuries ago.
This is totally opposite to the American way of life since 1776 where the state was mostly hands-off to leave you alone and would not help you out, nor get in your way, you'd live or die based on your own individual actions. I realize this is different today for Americans, with the government having way more taxes, regulations and social services than in 1776, but the original Volksgeist around minimalist government, individualism, personal freedom and self-responsibility still prevails.
So people can say "we need to change" all they want, but the reality is that's never gonna happen, Europeans aren't gonna become Americans and Americans aren't gonna become Europeans, the cultural inertia is too powerful, and you can't fight against the stream.
vb-8448 · 4h ago
mmm ... your argument doesn't explain why China is more succesfully? They used to have some higher power since forever
logicchains · 4h ago
The average Chinese businessperson of that generation has as little trust in the government as the most hardcore American conservative, due to the extreme corruption they witnessed.
FirmwareBurner · 4h ago
As someone from a relatively successful country with entrenched high levle corruption, I can say that cuts both ways.
Plenty of business people actually like the high level corruption because it can make doing business easier for them: no red tape, no long wait times, just bribe a some politician and all your paperwork is approved instantly, then it's smooth sailing. That's how China became rich despite corruption.
What you don't want is the Africa style corruption where every single peon and government worker from the top to the bottom, from the president to the policeman on the street, wants a bribe from you every 5 minutes for random reasons they make up. This way nothing ever gets done and the country stays perpetually poor.
disgruntledphd2 · 1h ago
Yeah, high level corruption is bad, but pervasive corruption is much, much worse.
FirmwareBurner · 4h ago
Some European nations were also successful when ruled by higher powers, see the colonial empires of Britain, France, Spain, Portugal, etc. but so many wanna-be world powers occupying a small space led to constant conflicts, limited freedoms, bloody regime changes, and the famous self-immolations of WW1 and WW2 which finally introduced modern democracy to Europe and a end(on paper) to their focus on world domination.
My point is, it can be easy to become economically successful like China when you're a large country with massive human capital and don't give a fuck about democracy, slavery, human abuse and welfare, regulations, etc. and prioritize money at all cost. It's how most empires became empires.
jxjnskkzxxhx · 5h ago
I have for many years believed this. In practical terms global media is American media. And if press coverage is necessary for cheap costumer awareness, then American companies have the advantage that global media hype them up more than non-american. In before stupid objections, this isn't a law of nature, obviously; there's exceptions to everything.
klabb3 · 4h ago
Aren’t American startups enjoying access to capital markets to a much larger extent, which in turn is a result of financialization of the US economy and demand for USD as a reserve currency (ie unrelated to tech itself)?
My impression is US VC startups are not trying to sell anything to customers or break even, it’s a game of hype and future potential from inception to very late in the game. Basically, you don’t even have a business model until you’ve passed through all the rounds and even longer. Instead, you’re working towards finding and validating PMF, often with free or subsidized products to capture markets before even thinking about ROI. All while appearing successful since the VC money keeps flowing, essentially driving the car while the company is changing tyres. In the last decade, had anyone tried to optimize for profit or dividends in the startup world?
OTOH my impression of EU startups are addressing an existing validated need (such as CRMs, booking systems etc). While I do think it’s also culturally more risk- and novelty averse, in terms of capital access you just can’t afford anywhere near the length and size of the runway.
alxlaz · 3h ago
> [German engineers and tech workers a]re not the kind to release half-baked products and patch issues later
What the article doesn't point out is that this is deeply ingrained not just among companies but among customers, too, and it's one of the many culture shocks I've seen my colleagues who move between US and EU markets experience.
If a European customer (adjusting for geographical variation, Europe is pretty big and diverse) runs into some weird issue and they call tech support, there's a very good chance that you've already lost them. It doesn't matter if tech support was super helpful, remedied things right away, and the customer support experience was top notch. The perception is that if they had tech support to un-break it, someone not only cut corners, but didn't even cut them very well, and now they wasted their time, too.
This isn't "just a cultural thing", it's ingrained because of how customers themselves do business, too (which makes it especially difficult to deal with in a B2B setting). The whole chain of commercial relations and norms is structured in such a way that depending on a "move fast and break things" platform is a very, very bad idea.
This is one of the most frequent things I had to explain in review meetings, and it went both ways:
- People who moved from US to EU markets didn't understand why customers had nothing but good words to say about customer support and then didn't renew contracts citing quality issues
- People who moved from EU to US markets going nuts over product release timelines getting aggressively slashed not so much because the feature sheet was too thin but because they thought there was no way to get those features tested enough
oytis · 3h ago
I don't know what country is it, but being in Germany I've had to interact with customer support (for internet providers, banks etc.) a lot. At the quality was not top notch at all. The companies are well alive and thriving.
shubhamjain · 4h ago
This is a pretty bad take, imo and confuses cause and effect. Why does US press hype their startups? Because they do have track record of creating revolutionary companies, something that can be traced back to 70s (Atari, Apple, Microsoft).
It’s much easier for an established player to replicate the success elsewhere, despite of over-regulation. Just see how successful are US firms in India, but it will be mistake to not fault Indian bureaucracy and regulation for the lack of its own set of high-tech companies. So I would take Airbnb's success in EU with a grain of salt.
In US, you can start a LLC, get a bank account, a tax ID, all within a few days. The process is completely online. Taxes? A single form for the whole year when you’re starting out. Hiring and laying off employees is relatively easy. How many European countries can claim the same?
trashcan2137 · 4h ago
> In US, you can start a LLC, get a bank account, a tax ID, all within a few days. The process is completely online. Taxes? A single form for the whole year when you’re starting out. Hiring and laying off employees is relatively easy. How many European countries can claim the same?
In Poland, for example it's remarkably similar. I had an LLC, bank account and EU VAT ID without leaving my home.
Hiring gets a little bit more tricky because we like having accessible health care and don't like throwing people under the bus so you have a notice time of anywhere from 2 weeks to 3 months depending how long that particular person has been your employee.
Taxes? You pay once/month but even then you most likely have an accountant handling that for you.
FirmwareBurner · 4h ago
>In Poland, for example it's remarkably similar. I had an LLC, bank account and EU VAT ID without leaving my home.
That simplicity changes drastically once you're a newly arrived immigrant into an EU country, with some countries being much worse than others, see France for example.
disgruntledphd2 · 1h ago
To be fair, company formation difficulties vary country by country in the EU, which is part of the problem. Hence the Collison brothers calling for a EU level incorporation to smooth over this stuff (which would be great).
mytailorisrich · 4h ago
There is definitely a cultural aspect.
There is a much bigger resistance to change and to new things in Europe and iften the first reaction is indeed to shoot down new ideas.
dsalzman · 4h ago
> Or take fragmented markets. Same question: how could US startups successfully conquer these fragmented EU markets when European startups can't?
I think this assumption is wrong. By the time a “startup” in the US expands into Europe they are really not a “startup” anymore. They have a proven business model in the US and have raised 100Ms. So succeeding in Europe is not a fair comparison. When Airbnb expanded into Europe in 2011 they had raised 120m and acquired a company in Germany to kickstart the expansion.
h1fra · 4h ago
US startup coming the EU can sustain the bureaucracy because they are already printing money to pay the lawyers.
Anyway I also don't believe it's that, but the fact that there is 30 different cultures, regulations, markets, whereas in the US there are one big market that speaks the same language.
US:American dream. EU: My cousin create a website in his attic for €20
When still starting, using a university email address:
US: credibility. EU: doesn’t even have a domain! How can it be anything
Limited liability company vs sole proprietor:
US: Not so smart. EU: company means credibility so let’s not risk working with him, eventhough in terms of claimsof, it’s unlimited without an LLC
People often say that Americans are all show and no content. The opposite is true. They look for value and story. The “show” is in the polished quality of consumer (and small business) products.
djoldman · 4h ago
Anyone have examples of startups starting out in a European country, keeping their HQ in Europe, and taking big market share in the US?
pbmonster · 4h ago
There's many (just Google "startup unicorns europe"), but most will be B2B niche stuff nobody has ever heard of.
The popular ones I can think of from the top of my head are Spotify, Klarna, DeepL, Vinted and TeamViewer.
MisterSandman · 5h ago
This really is an excellent post. I wonder if things will change with the anti-Americanism spreading throughout the world
joshstrange · 4h ago
This was an interesting read and being called a copycat while being the first-mover must have been infuriating. But I have to call into question other parts of this post due to this:
> Contrary to popular belief, they don't do it in a stupid way by just banning competition. Those cases are actually very rare and only occur if the companies in question violate Chinese law in pretty egregious ways.
> Most of the time it's the exact contrary: they welcome foreign companies and competition, but create conditions where local alternatives can thrive alongside them, giving Chinese users and businesses legitimate options to choose domestic champions.
They are correct, that is contrary to popular belief, to the point I question if this author is wrong. Living in a country for 8 years does not an expert make. My understanding is foreign companies are “welcomed” in, so long as they give heavy ownership to Chinese citizens/companies, are ok with stolen IP, and are fine doing whatever the government tells them to do (like giving them full access to the data centers, which are required to be in China).
josefritzishere · 4h ago
If your product needs hype to survive was it even real?
danelski · 2h ago
What is marketing then?
ryzvonusef · 7h ago
Arnaud Bertrand (creator of HouseTrip (sold to TripAdvisor)) explains in a twitter post that:
____
> At first, when I created the company and before Airbnb was even a thing, I used to pitch the company to the media and the general response I would get was almost one of contempt, as in "why would I belittle myself to write about your startup? And furthermore, who would be stupid enough to stay in an apartment when there are hotels? You guys have no future..."
> And then Airbnb got launched and the American media started their thing, hyping the company like it was the greatest innovation since sliced bread, like they were national heroes, giving them hundreds of millions in free publicity.
> That's when European media started to take notice. Not of us, god forbid, but of Airbnb. The concept was promoted by Silicon Valley, see... so now it was valid.
> So I went back to pitch HouseTrip to European media. This time around I was met with a different kind of contempt: "So you guys are like Airbnb? Why would we cover a European copycat when we can just write about the real American original?" Luckily I'm not violent but lets say those moments really tested my civility
> All in all, we arrived in the absolutely grotesque situation where, despite Airbnb not having yet set foot in Europe, they were already a cultural phenomenon there, promoted by European media, for free, when the European original - yours truly - had to spend millions on paid marketing (mostly to Google and Facebook, American companies) to achieve a small fraction of the brand recognition.
> So there you have it, the dirty little secret behind Europe's lag. We're essentially witnessing a "colonization of the minds" whereby Europe has structurally internalized its technological inferiority, celebrating American startups while dismissing its own homegrown companies.
____
It's a long post, this was just the relevant snippet, i suggest people read it, they get into more detail regarding US/EU/China startup scene
gausswho · 4h ago
Salient. Ironic he wrote it on Twitter.
gsky · 5h ago
I see this happening in many countries but they love to hype up silicon valley startups.
amadeuspagel · 5h ago
What? Remember Wirecard?
oytis · 3h ago
Wirecard, Northvolt, Lilium. German media and politics seem to have a unique talent for only promoting wrong things.
tessierashpool9 · 3h ago
German media are puppets of the government and their NGOs. That's why those specific companies have been hyped up - they were officially backed by the government.
oytis · 3h ago
Being backed by the government is not necessarily a bad thing. It's just the government seems to be uniquely backing things that don't fly.
FinnLobsien · 4h ago
I'm European and there's a lot to bemoan and many reasons why Europe is behind (overregulation, fragmentation, etc.).
And this article is directionally correct in the sense that Europe has internalized a sense of inferiority and will hype up American companies.
But the culprits he talks about are shaky at best:
> Take excessive regulations for instance, which gets mentioned all the time. If they were such a hindrance to startups, why would American startups succeed in Europe - like Airbnb in our case - and European startups not? We all face the same regulations
This is just wrong. Yes, the regulations are the same. No, the burden relative to company resources isn't the same. A company with billions in the bank has options most EU startups don't:
1. Pay a battalion-sized compliance team
2. Ignore the law, pay the fines when they come, continue to ignore the law
3. Get into years-long, drawn-out legal battles while changing nothing
Yes, we face the same regulations. No, they don't have the same impact. It's sort of like a person who inherited millions saying "Cost of living isn't a problem, we all face the same housing costs".
> Or take fragmented markets. Same question: how could US startups successfully conquer these fragmented EU markets when European startups can't?
Same thing. Localization, local entities and complying with local regulations are a lot easier when you can throw a couple million at it. Meanwhile a startup can barely comply with all of one country's regulations.
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You can criticize overregulation, the fact that EU grants almost always arrive at incumbents that can afford lobbyists (the old money class), etc.
But I think "the media" plays the tiniest part in this. Traditional media has been in decline for 20 years.
If anything, yes, we need a shift in cultural narrative, away from internalized inferiority. But the idea that some gatekeeper at a newspaper changed the trajectory at a startup I think is wrong.
Besides, this reads a bit like "Who has the idea first should get all the money", which is rarely how things work.
wat10000 · 5h ago
Dude spent three months in Nepal reflecting on what went wrong, and apparently didn’t come up with anything he or his company should have done differently. Maybe he’s right, but it’s very suspect.
jokethrowaway · 4h ago
I think it's natural for press to avoid hyping EU startups: they perform bad.
Is the press responsible for the bad performance? I don't think so.
(source: I worked in startups in EU, UK and US, I started two companies in EU and UK, one failed).
I think the underlying problem is the anti-work attitude of people. Most people don't want to work hard, they don't have any ambition. And this attitude is normal in Soviet Union 2.0, a society where you get beaten down by taxes if you try to climb up the ladder and regulations make sure your company gets stopped before it's too large. The US is objectively better in this regard, but it's getting worse every year. Luckily there is a lot more capital from the past keeping the startup scene afloat. Will it survive another 20-40 years or will the next Silicon Valley be in China?
Anyway the general lack of ambition in EU means that the composition in an EU startup is completely different between US and UE.
While you can find real gems in US startups, in EU you find your typical average corporate employee - but less skilled or more junior.
People in EU startups are just people who couldn't grab a job anywhere else. They're not hoping to make it big because there is no capital to have life changing exits and the government will get most of the profits anyway.
Leaders and managers in US are also considerably better than in the EU. Many countries in EU never had a decent entrepreneurial class. Building those skills will take decades.
dgb23 · 4h ago
Interesting take. On the topic of work ethic: If we measure it via labor participation rate then EU and US are similar with some countries being lower and others being higher than the US in that regard.
Switzerland as an example is quite a bit higher in that metric. But it is known for a rather conservative economic approach overall. Favoring stability, predictability and quality over velocity and big payoffs.
Perhaps it's a good thing that there are different models and cultures.
ldjkfkdsjnv · 5h ago
they fail because software engineering is low status in europe, and so its low paid, and they have no talent to actually build good tech companies
danelski · 4h ago
I feel like you mistake cause and result here. The number of Europeans working for US companies shows that the environment nurtures status / wages, rather than Americans being somehow intellectually superior by default.
seydor · 5h ago
a symptom rather than a cause. there is little incentive to succeed in europe because the culture is against it, or , at best, indifferent. tech journalists reflect this fact. most people are technophobes , but they do ultimately catch up with US tech after the media has spotlighted it, and they do it reluctantly or because of fomo. being an early adopter is anti-european. we are supposed to be more seasoned, more elitist, and leave early adoption to the plebs.
qoez · 5h ago
Europe in general have a refusal to lying to preserve integrity and trust problem, they should borrow from the americans and succumb to arms races that eat into public trust by making exaggeration and lying the default.
European culture operates differently, and the startup model doesn't translate seamlessly to this continent for a variety of reasons. I've explored this in depth on my blog, with a particular focus on Germany: https://mertbulan.com/2025/02/24/we-dont-need-startups-we-ne...
Europeans use Airbnb. Trying to to say he was trying to "apply the American mindset to the European market" as a bad thing doesn't really hold water here when the American product literally won.
Yes, the kind of companies historically started in Europe are very culturally different to startups. The point being made is that really for no good reason, Europe does not culturally support the existence of startups and is often actively hostile towards them.
The solution being "just don't do startups in Europe" is like, ok sure I guess you can do that, but it doesn't actually address the problem that was presented: cultural incompatibility and unwillingness to change.
Another part of the American mindset. Not all the companies are trying to win here in Europe. Some believe that companies can co-exist. They can serve different groups of people. Not all of them are pushing for getting more market share or jumping into different industries like Airbnb is doing now.
Yes, some companies aren’t trying to “win”, but what about the companies that are trying to “win”?
It sounds like you’re implying they simply shouldn’t exist in Europe.
Companies are trying to win in Europe and competition is as fierce as anywhere. What "some" do is a moot point. You'll always find "some" people/companies behaving in a certain way wherever you go.
In the sense that Mittelstand is more than just SMEs, I don't think it ever really existed here. There's no cultural fascination with being a middle business or having a family-owned business. A similar word ("middenstand") was used a lot, but it referred to shops only. In American TLA-speak: SMEs with a D2C model. The term "middenstand" died a slow death in the last 25 years. It's rarely used nowadays.
Good riddance too. The whole term reaks of limited social mobility. In Dutch "stand" has a much stronger feudal vibe than "klasse".
Notwithstanding all the physical audio equipment manufacturers in Germany, there are loads of them producing quite high quality gear.
As far startups go it has much less to do with culture or hype but with the fact that Europe even with the single market has far more localized and ring fenced markets than the US.
So you end up with smaller overall markets with a well dug in established competition.
Not going to work in an innovative digital economy. We can see how resilient Mittelstand is by the current wave of bankruptcies and the general state of economy.
For further comparison direct sales incurred by US press is insignificant internationally next to Hollywood,and one can argue the CIA does more-better commerce hype than DoC itself
The problem is that to become a mittelstand, company must survive early growth phase, and the OP tweet correctly notices that such possibility is severely hampered both by EU and USA media. To continue my example - "we have Valve at home"(c) i.e. for example EU has CDPR with it's GoodOldGames (GoG) store. Yeah, it also went a bit wide in past years, but not because of lack of trying to be specialized. And they still retain that specialization mostly. But they are far far away from the Steam, and I now suspect the marketing playing a key part in it.
tl;dr - authors message "Germany should focus on developing the Digital-Mittelstand" is wrong. It is wrongly formulated. It's like saying "country should focus on developing successful companies". Yeah, no shit Sherlock, but before that every successful company must somehow be created and grow.
Or, alternatively, we can replace every Mittelstand word in the incentives part of the article and all of the sentences would be true:
STARTUP, however, can leverage remote work to further reduce costs. Employees could live in small towns, enjoy lower living expenses, and maintain a high quality of life thanks to Germany’s good transportation infrastructure. Remote work also translates into lower personnel costs, typically the largest expense for any startup. By tapping into these advantages, STARTUP could achieve both profitability and sustainability without compromising employee well-being.
If you’re already sold on the STARTUP concept, let’s explore the potential products they can create. There’s a wide range of possibilities: (a list of typical software industries)
Rather than pouring large grants into startups with the hope of generating returns for shareholders, the German government should consider introducing tailored incentives to foster the development of STARTUP.
Salary Grants - (applicable to startups? of course)
Simplify Bureaucracy and Regulations - (same)
Expand VAT Exemptions - (same)
English Language Support - (same)
etc. etc.
How many tiny US startups have been successful in EU markets?
I'm from Norway, we're ~5 million people here. You're not going to have a ton of users, and hence employees, before having to study other countries' rules and regulations. Some of which might not be available in English, and we all know how great it is to use automatic translation for that.
We had <10 employees when our company branched out into the Nordic countries. Complying to rules and regulations has been a constant struggle, and I suspect impossible if not for the fact that we're a B2B shop, as B2C is much more regulated.
That said, I'm not disagreeing with the main point of the post. I think we and our media could take more pride in local software.
The weird thing is that for physical goods, and especially food here in Norway, I feel like there already is this patriotism OP finds lacking in software.
I think the OP on X gets it right. It for sure is a marketing problem. The media machine in Europe is most likely fractured by languages. So take Norway. Sure we have our fair share of tech blogs/news/etc. but all are in Norwegian. Which cool for the local market, but outside that it's not the language that others are speaking. Where as the US publish in their native language, which so happens to be something most people speak globally.
I'm not suggesting that the local tech journalism is doing it wrong. But what is lacking is some kind of large European tech journalism, or heck even all the smaller ones writing about each other's cool new startups.
Yes, even when tech media in europe would want to hype the original OP startup, they are not that influential in general. I follow tech news daily but all of them are U.S. media, there is nothing comparable here.
> Take excessive regulations for instance, which gets mentioned all the time. If they were such a hindrance to startups, why would American startups succeed in Europe - like Airbnb in our case - and European startups not? We all face the same regulations
Nope, they don't. US companies in Europe generally don't care about EU regulations. Even if we skim over privacy, AirBnB succeeded in Europe despite there being laws preventing short lets in many municipalities.
They care as much or as little as European companies.
When you're trying to make it in business you should not spend too much time trying to comply with all possible regulations. Focus on growing the business and avoid serious and costly breaches.
I still remember a business course in university (in Europe) during which the lecturer told us: "By law you must file this whatever every year but the penalty for not doing so is cheaper than spending time doing it so don't bother". Very direct and frank but that's how it is.
Europe: "You are my friend, so your success makes me look like a failure, and your failure makes me look like a success"
Tangentially, it’s why I don’t think authoritarian reactionary stuff will “take” here for any length of time. The instant Americans figure out it’s anything more than a stylistic performative way to “own” the other side — the instant they are actually told what to do — it is over.
As a European that has spent a significant amount of time over the last 5 years in America this has been a cultural learning for me.
Why do we need startups?
Why do we need so much that the thought of wrapping the mentality of a whole society around it comes to mind before questioning its legitimacy in a certain context? So serial startup-making can be executed like chain smoking. What are the big benefits that this very form and specific brand of organization type deserves special treatment, other formations or no formations, single persons, departments in a keep-going company, co-ops, semi-chaotic group of enthusiast, or whatever will never ever produce without absorbing proper startup mentality to the core of the society?
I am sceptic, yes, not least because I was in a startup of a serial startuper where half of the efforts were spent on being a proper startup. How startupers do, how they act, what they do in what stage, what is the proper procedure for being a startup? There is even television series that was used as reference. Remaining efforts went into other detals, one among those was product development. Asking another startup founder about where he sees the company in 5 years the answer was 'Sold!' without a second of hesitation. I was phrasing wrong, I assumed I was asking about the product roadmap that happened to be made in the formal setting of this organization, but that was not in the focus of the minds apparently.
Americans can have an inflated positivistic style pulled on when they want to anyways, to be enthusiastic for the sake of enthusiasm, in selective situations, easily shifted to and away from anything. I wouldn't rely on that too much, but especially wouldn't use as reference for transforming a different society that may be a bit more repelling with the same thing of all things.
These are different skill sets, and developing competency in both generally takes a long time focusing on each. That takes a lot of time and willingness.
History and the study of Volksgeists shows that's almost impossible without any major revolutionary event.
The status quo Europeans have had for centuries was their lives being at the mercy of some higher monarchic power, be it emperors, kings, lords, etc, then revolutionary communists, fascists, dictators, etc, and post-WW2 at the mercy of the social welfare state to handle everything for you. There was never a period our relatively recent history where we could just do whatever we wanted, without the ruling powers interfering some way or dictating the rules till the next regime change, and so the Volksgeist inherited and passed on that status quo across generations, kind of like Plato's cave, or like a fish in the water. That's why many Europeans who felt held back or persecuted by the status quo fled to the US decades/centuries ago.
This is totally opposite to the American way of life since 1776 where the state was mostly hands-off to leave you alone and would not help you out, nor get in your way, you'd live or die based on your own individual actions. I realize this is different today for Americans, with the government having way more taxes, regulations and social services than in 1776, but the original Volksgeist around minimalist government, individualism, personal freedom and self-responsibility still prevails.
So people can say "we need to change" all they want, but the reality is that's never gonna happen, Europeans aren't gonna become Americans and Americans aren't gonna become Europeans, the cultural inertia is too powerful, and you can't fight against the stream.
Plenty of business people actually like the high level corruption because it can make doing business easier for them: no red tape, no long wait times, just bribe a some politician and all your paperwork is approved instantly, then it's smooth sailing. That's how China became rich despite corruption.
What you don't want is the Africa style corruption where every single peon and government worker from the top to the bottom, from the president to the policeman on the street, wants a bribe from you every 5 minutes for random reasons they make up. This way nothing ever gets done and the country stays perpetually poor.
My point is, it can be easy to become economically successful like China when you're a large country with massive human capital and don't give a fuck about democracy, slavery, human abuse and welfare, regulations, etc. and prioritize money at all cost. It's how most empires became empires.
My impression is US VC startups are not trying to sell anything to customers or break even, it’s a game of hype and future potential from inception to very late in the game. Basically, you don’t even have a business model until you’ve passed through all the rounds and even longer. Instead, you’re working towards finding and validating PMF, often with free or subsidized products to capture markets before even thinking about ROI. All while appearing successful since the VC money keeps flowing, essentially driving the car while the company is changing tyres. In the last decade, had anyone tried to optimize for profit or dividends in the startup world?
OTOH my impression of EU startups are addressing an existing validated need (such as CRMs, booking systems etc). While I do think it’s also culturally more risk- and novelty averse, in terms of capital access you just can’t afford anywhere near the length and size of the runway.
What the article doesn't point out is that this is deeply ingrained not just among companies but among customers, too, and it's one of the many culture shocks I've seen my colleagues who move between US and EU markets experience.
If a European customer (adjusting for geographical variation, Europe is pretty big and diverse) runs into some weird issue and they call tech support, there's a very good chance that you've already lost them. It doesn't matter if tech support was super helpful, remedied things right away, and the customer support experience was top notch. The perception is that if they had tech support to un-break it, someone not only cut corners, but didn't even cut them very well, and now they wasted their time, too.
This isn't "just a cultural thing", it's ingrained because of how customers themselves do business, too (which makes it especially difficult to deal with in a B2B setting). The whole chain of commercial relations and norms is structured in such a way that depending on a "move fast and break things" platform is a very, very bad idea.
This is one of the most frequent things I had to explain in review meetings, and it went both ways:
- People who moved from US to EU markets didn't understand why customers had nothing but good words to say about customer support and then didn't renew contracts citing quality issues
- People who moved from EU to US markets going nuts over product release timelines getting aggressively slashed not so much because the feature sheet was too thin but because they thought there was no way to get those features tested enough
It’s much easier for an established player to replicate the success elsewhere, despite of over-regulation. Just see how successful are US firms in India, but it will be mistake to not fault Indian bureaucracy and regulation for the lack of its own set of high-tech companies. So I would take Airbnb's success in EU with a grain of salt.
In US, you can start a LLC, get a bank account, a tax ID, all within a few days. The process is completely online. Taxes? A single form for the whole year when you’re starting out. Hiring and laying off employees is relatively easy. How many European countries can claim the same?
In Poland, for example it's remarkably similar. I had an LLC, bank account and EU VAT ID without leaving my home.
Hiring gets a little bit more tricky because we like having accessible health care and don't like throwing people under the bus so you have a notice time of anywhere from 2 weeks to 3 months depending how long that particular person has been your employee.
Taxes? You pay once/month but even then you most likely have an accountant handling that for you.
That simplicity changes drastically once you're a newly arrived immigrant into an EU country, with some countries being much worse than others, see France for example.
There is a much bigger resistance to change and to new things in Europe and iften the first reaction is indeed to shoot down new ideas.
I think this assumption is wrong. By the time a “startup” in the US expands into Europe they are really not a “startup” anymore. They have a proven business model in the US and have raised 100Ms. So succeeding in Europe is not a fair comparison. When Airbnb expanded into Europe in 2011 they had raised 120m and acquired a company in Germany to kickstart the expansion.
Anyway I also don't believe it's that, but the fact that there is 30 different cultures, regulations, markets, whereas in the US there are one big market that speaks the same language.
Startup in the garage or attic:
US:American dream. EU: My cousin create a website in his attic for €20
When still starting, using a university email address:
US: credibility. EU: doesn’t even have a domain! How can it be anything
Limited liability company vs sole proprietor:
US: Not so smart. EU: company means credibility so let’s not risk working with him, eventhough in terms of claimsof, it’s unlimited without an LLC
People often say that Americans are all show and no content. The opposite is true. They look for value and story. The “show” is in the polished quality of consumer (and small business) products.
The popular ones I can think of from the top of my head are Spotify, Klarna, DeepL, Vinted and TeamViewer.
> Contrary to popular belief, they don't do it in a stupid way by just banning competition. Those cases are actually very rare and only occur if the companies in question violate Chinese law in pretty egregious ways.
> Most of the time it's the exact contrary: they welcome foreign companies and competition, but create conditions where local alternatives can thrive alongside them, giving Chinese users and businesses legitimate options to choose domestic champions.
They are correct, that is contrary to popular belief, to the point I question if this author is wrong. Living in a country for 8 years does not an expert make. My understanding is foreign companies are “welcomed” in, so long as they give heavy ownership to Chinese citizens/companies, are ok with stolen IP, and are fine doing whatever the government tells them to do (like giving them full access to the data centers, which are required to be in China).
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____It's a long post, this was just the relevant snippet, i suggest people read it, they get into more detail regarding US/EU/China startup scene
And this article is directionally correct in the sense that Europe has internalized a sense of inferiority and will hype up American companies.
But the culprits he talks about are shaky at best:
> Take excessive regulations for instance, which gets mentioned all the time. If they were such a hindrance to startups, why would American startups succeed in Europe - like Airbnb in our case - and European startups not? We all face the same regulations
This is just wrong. Yes, the regulations are the same. No, the burden relative to company resources isn't the same. A company with billions in the bank has options most EU startups don't:
1. Pay a battalion-sized compliance team 2. Ignore the law, pay the fines when they come, continue to ignore the law 3. Get into years-long, drawn-out legal battles while changing nothing
Yes, we face the same regulations. No, they don't have the same impact. It's sort of like a person who inherited millions saying "Cost of living isn't a problem, we all face the same housing costs".
> Or take fragmented markets. Same question: how could US startups successfully conquer these fragmented EU markets when European startups can't?
Same thing. Localization, local entities and complying with local regulations are a lot easier when you can throw a couple million at it. Meanwhile a startup can barely comply with all of one country's regulations.
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You can criticize overregulation, the fact that EU grants almost always arrive at incumbents that can afford lobbyists (the old money class), etc.
But I think "the media" plays the tiniest part in this. Traditional media has been in decline for 20 years.
If anything, yes, we need a shift in cultural narrative, away from internalized inferiority. But the idea that some gatekeeper at a newspaper changed the trajectory at a startup I think is wrong.
Besides, this reads a bit like "Who has the idea first should get all the money", which is rarely how things work.
Is the press responsible for the bad performance? I don't think so. (source: I worked in startups in EU, UK and US, I started two companies in EU and UK, one failed).
I think the underlying problem is the anti-work attitude of people. Most people don't want to work hard, they don't have any ambition. And this attitude is normal in Soviet Union 2.0, a society where you get beaten down by taxes if you try to climb up the ladder and regulations make sure your company gets stopped before it's too large. The US is objectively better in this regard, but it's getting worse every year. Luckily there is a lot more capital from the past keeping the startup scene afloat. Will it survive another 20-40 years or will the next Silicon Valley be in China?
Anyway the general lack of ambition in EU means that the composition in an EU startup is completely different between US and UE. While you can find real gems in US startups, in EU you find your typical average corporate employee - but less skilled or more junior.
People in EU startups are just people who couldn't grab a job anywhere else. They're not hoping to make it big because there is no capital to have life changing exits and the government will get most of the profits anyway.
Leaders and managers in US are also considerably better than in the EU. Many countries in EU never had a decent entrepreneurial class. Building those skills will take decades.
Switzerland as an example is quite a bit higher in that metric. But it is known for a rather conservative economic approach overall. Favoring stability, predictability and quality over velocity and big payoffs.
Perhaps it's a good thing that there are different models and cultures.