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Comment by tmsldd | Hacker News Reader

Although it is nice to have more funds available, which increases the competition among VCs, the main point is not lack of funds. I used to say that a good VC brings you two important things: money and market. Money alone doesn't bring you much (don't get me wrong ..). In my eyes that is the main issue in the startup scenario in Switzerland: lack of market. Having a population of about 8 million people means that your startup has to focus in exporting products & services since the beginning... which adds some layer of complexity/bureaucracy ... Startups tend to establish themselves as close as possible to the client market to simplify as much as they can their initial operation..

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> Although it is nice to have more funds available, which increases the competition among VCs, the main point is not lack of funds.

I agree on that, on the other hand I don't see the lack of market as a big problem. I like to take Spotify as example, it started in Sweden, which is a market comparable to the Swiss one in terms of size, but after the first prototypes and early versions, it went global almost immediately.

Schneider-Ammann said that a change of mentality is required in Switzerland. He noted that while in the US, business failure is greeted with a “better luck next time” or with a similar attitude, on the other hand, in Switzerland, “if you fail with your business idea here everyone points the finger at you. You are branded a looser”. This seems to be the main goal and I totally agree with him.

IMHO, a company can move to a global scale from the start with the right plan, but it's the mentality and the fact that Swiss VCs care more about patents and product protection preventing Swiss Start-up to compete with the rest of the world, instead of caring about quality of the actual product and picking the right time to enter the market.

I heard some stories about companies collecting 500-800k in seed investment, spending 50% of it in legal fees protecting a product they still have to develop, failing later in execution for lack of cash... this is what, I think, needs to be fixed in Switzerland.

I understand your point. Yeah.. this is king of a ecosystem.. which needs to be balanced. The good news about the report is that it shows a mindset shift.. Switzerland is stable, warm (people) and radiates freedom .. for sure it is a good candidate to become the next hub.

I totally agree on that!

It also has a lot of capital (although perhaps not necessarily risk-capital), and seems to be the only place in Europe that pays developers comparably to their pay in the US.

What are the visa policies? Are they conducive to tapping into a global labor pool?

Switzerland aims to position itself as a FinTech hub though, where location is a huge issue due to regulation. E.g. if you're based in the EU you a 'passport' which lets you use your banking license in other markets; in Switzerland you don't.

In general the FinTech market is not (yet) cross-border friendly which is why the current prime startups here are either high-margin insurance brokers or our friends in the cryptovalley.

Those Swedish startups didn't form out of nothing. Not only was Sweden early when it comes to things like personal computers, internet access and English, but also notable in many other areas. Almost all successful Swedish companies are at least partly related to gaming, music or telecom. That stems from a rather long organic history of the demoscene, artists and industry. Attitude might have something to do with, but few people would say that the Swedish attitude is anything like what people commonly think is needed for entrepreneurship.

Market size is always a problem in Switzerland. But you could say the same of startups in Israel, which seem to be doing just fine. As a Swiss startup (or a startup starting in any small market), you know from the beginning that you will have to internationalise. You don't start with your local market, you start with the global market in mind.

Spotify did it and they started in a in a European country of a similar size. A lack of market didn't stop them. Can you say why Switzerland would be different?

Hopefully it won't be different. All I want to say is: a startup here has to internationalize from the beginning, assume costs and expose itself to early competition. But if you see the funding history of Spotify [1], they got quite a lot of foreign funds. In the end, for the business side it doesn't really matter where the money comes from ;)

[1] https://en.wikipedia.org/wiki/Spotify#Funding

>Hopefully it won't be different. All I want to say is: a startup here has to internationalize from the beginning, assume costs and expose itself to early competition"

Sure but why is that any kind of impediment? You have the whole continent sitting there. Hasn't the EFTA made access to those other 28 countries easier?

One of the things that I think Spotify did well was building a buzz, so much so that people were using VPNs to get accounts. It was a real news item when it finally became available in some countries such as the US.

I thought that Deezer was building up a similar anticipatory buzz as an EU export a while back. However, I think they may have waited too long.

I don't thunk so. You can find counterexamples in startups from Israel that almost always target markets in other countries. At the end you would need to move but you can start almost anywhere.

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