Hacker News Reader

Comment by mschuster91 | Hacker News Reader

The main problem for Switzerland is not a lack of venture capital, but rather the Swiss Franc.

Cost of living in Switzerland is extremely high, which means a company has to pay huge salaries, and thus command bigger prices for its product. While that works fine when the product is luxury watches, diamonds or highest-quality cheese, it does not work out for "mass production goods" as any product (be it a physical product or a web service) can be cloned in the EU or in China for way less and then sold to Swiss people...

View on HN

Switzerland and Zurich is cheaper than you think, here my two-year-old blog post about living costs here: https://medium.com/@iwaninzurich/eight-reasons-why-i-moved-t...

From a employer's perspective there are advantages in Switzerland compared to the rest of Europe: Labour laws are not as strict, so it is possible to fire people (unlike in Germany or France where employees are like your children, you can't get rid of them). Although salaries are high, in Switzerland you pay 20% on top of the salary of the employee to the state, in Germany like 40%.

I dont think that Switzerland is more expensive than say San Francisco...

While it is true that is one of the most expensive European countries the cost of living is very close to the one in the bay area...

It is not much a matter of cost of living but rather cost of the Swiss Franc versus other currencies.

Currently, the swiss Franc is very strong, therefore making any Swiss product expensive to the exterior.

It can become a huge problem for an economy based on trading with neighbors.

> It can become a huge problem for an economy based on trading with neighbors.

Exactly. Switzerland has just 8.5M people living there, while the US has 322M and Germany 82M. If Germany were expensive, for example, it'd still have a sizable inner-country market while Switzerland does not.

It changes what you try to do, but Switzerland and Germany isn't all that different from Silicon Valley and the US.

You use premium resources in Switzerland and try to sell German (or EU) resources back upon lower markets at a high enough volume and mark up to make the high market costs incidental.

The EU has 510 Million.

Actually, the Swiss franc is at one of its lowest points in the 10Y view [1]

A Swiss franc is traded at roughly 1.09 Euros, I would say significant, sure, but not a deal breaker in high-tech industries. If we were talking about commoditized products I would have to agree but in our industries this is just not the case.

[1]: http://www.xe.com/currencycharts/?from=EUR&to=CHF&view=10Y

It's the other way around: EUR/CHF=1.09 means 1EUR=1.09CHF.

> [2011 to 2015] the Euro was exchanging [at] CHF1.20. [Then] the exchange rate stabilised to between CHF1.05 and CHF1.08 to the Euro, due in large part to further intervention from the SNB which discreetly set about buying up foreign currency to ensure the franc did [rise to] new heights

https://www.swissinfo.ch/eng/business/money--money--money_sw...

Yeah sorry... Still my point holds...

> Yeah sorry... Still my point holds...

not really, no. the opposite, actually. while not an all time high, it is pretty high in the 10 year context and it did affect export industries.

What industries where effected the most?

Mechanical and electrical engineering industries were seriously affected, according to Swissmem: https://www.swissmem.ch/en/news-medien/news/mem-industrie-di...

According to Credit Suisse, "nearly all sectors of industry are affected", especially the Mechanical Engineering industry, but also Metals and Food Industries, Hotels, Catering and Retailing: https://www.credit-suisse.com/ch/en/articles/articles/news-a...

There's a slight error there. SNB was buying foreign currency to lower the CHF exchange rate in an effort to protect the Swiss export industry.

Yes, sorry, I meant to write [not rise to].

Yes. The strength is the inverse of that.

My point was that in high margin industries such rate is not a big issues.

Sorry but this is not true. It has been such a big deal that the central bank pegged the currency artificially.

Start-ups mostly do not generate profits. Yeah, losses might increase but who in start-ups care about say 5% less revenue due to currency.

I can confirm. Just moved from Zurich to San Francisco. Pretty much everything except rent is cheaper in San Francisco (food can be up to half price of what I paid in Zurich) but rent being such a major expense, it ends up being similar. Salaries are a bit higher in Switzerland though so one would save more on average there.

And taxes are a lot lower!

Relative to the average income, Switzerland has rather unexpensive rents. Of course, in absolute terms, cost of living might still might make your runway on the same budget shorter compared to Berlin.

Average ongoing rents are relatively ok, but bringing in new people often means paying top market prices, they can be double to quadruple an average ongoing rent.

CH is cheaper cost-of-living-wise than Bay Area at-large. I formerly lived in the Bay Area and now live/work in Zürich. When you throw having a child into the equation, Zürich is hands-down cheaper and better than West Coast. No more worrying about what zip code you live in for a decent school district, etc. Your earnings go much further here.

This is an expensive place to visit as an outsider but cheap place to live and work. Let's not forget tax efficiency, either.

But, hey, the Helvetic Confederation isn't for everyone, and I'm OK with that.

Cost of living in Silicon Valley is not lower than Switzerland...

This is not correct. Internet services are considered high yield businesses and their ROI is very high. Google, Facebook, Apple, etc... pay high salaries even comparing to swiss standards.

The problem is that a startup is, eh, a start - up. You are using mainly your skills and as much resources you have to start. An expensive place should not be ideal for that, but hey, san francisco is super expensive and is still the startup hub.

So maybe there is something else...

do you have any link to a study comparing Switzerland tech salaries with Silicon Valley?

They're lower. Not by a lot if you just look at the median, especially relative to CoL (lower rents, lower taxes), but on average, the Bay Area has some 300k tech workers (?), several companies that make over $1m in profits per employee and drive the salaries up.

In Zürich Google will make you a 250k offer, and if you aren't happy, too bad for you, nobody else is going to pay that in Europe :)

Reply on news.ycombinator.com