Beyond Spotify and iZettle: How Sweden became Europe’s capital of startup exits

Sweden consistently ranks as an easy place to do business in surveys among executives [1]. It's also much faster and simpler to start a new business in Sweden than it is in France. I'm picking two examples which speak to my broader experiences. That said, they're anecdotes responding to a pattern pointed out in the article.

I'm not saying doing business in non-Swedish Europe is not worthwhile. It's just a lot easier in Sweden. When timelines matter or complexity is high, the Swedish team–in my experience–has come through more frequently. (I put Switzerland into a similar "easy to deal with" category, though I'm biased in being Swiss American.)

> if American English is a dealbreaker

I grew up speaking French and British English, so no, it probably is not. But when co-ordinating communications between an American legal team and overseas ones, I've seen (and perhaps I only notice this because I speak and write in both dialects) one team say one thing and the other read it as something else (or get confused) where all one needs do to alleviate the problem is "translate". This happens less when co-ordinating with Sweden. It's a small factor and certainly attributes no fault to anyone, but it's a factor that adds up to transactional costs.

[1] https://www.weforum.org/agenda/2017/11/these-are-the-easiest...

Seriously though, most swedes are very forgiving about others world views. As long as you sort your trash properly.

I find strange this assumption I sometimes read here that having a sense of collective means losing your individuality.

The hyper-individualism, I think, is just the flip side of hyper-authoritarianism. Swedish people are almost happy to pay taxes, Swedish people are some of the most active voters in the OECD (82% turnout last election, let's hope tomorrow's election is no worse!), and Swedish road safety policy is now a Swedish export.

It is indeed a very unusual combination, but I think it's what happens when you mix prosperity, democracy, and secularism for a long time. I hope that the recent waves of misinformation and polarizing media won't ruin it. But it isn't looking good.

If I had to pick out one thing Swedish culture does well, commercially, that many European cultures do not, it's allowing for dissent to be discussed [1]. Saying "I disagree with you" isn't an affront nor an insult, but the voicing of an opinion. That is not always true e.g. in France, Spain, Korea or the Middle East. (It's untrue in many American corporate cultures, too.)

This isn't a rule. But the number of Swedish teams where I've seen a junior productively question a senior in front of me is far higher than elsewhere in Europe.

[1] Switzerland, Ireland, the Netherlands and Denmark are also good at this.

No, it is not foolish. I know a few Swedish people that made that move over three years ago, and they have not come back yet.

The best company in Barcelona or Madrid is going to be better than the worst in Gothenburg. You may find something really good. It is just that you need to be more selective.

The other thing to take into account is that most Spanish people do not speak English. If you speak Spanish, that is not a problem. Otherwise, you need to find an international company that uses English as its primary language.

To move to another European country is a very easy way of living in a different culture.

To be fair, Europe and the more able governments are making up some of the gap through grant money. Although this leads to a cottage industry of funneling government money into others pockets, whether it be through companies that help you apply for the grants or just bullshit startups that aren't properly vetted.

BLS, US median for programmers:

82 240 USD/y

https://www.bls.gov/ooh/computer-and-information-technology/...

Engineering Union, Sweden, median for union programmers:

61 416 USD/y, as reported.

80 719 USD/y, including payroll tax.

I believe other European countries could report data in a similar manner. The employer cost is similar.

Part of it is cultural, in that there is still a widespread perception that software engineers are fungible cogs and that no one could possibly be worth that much more than the average technical worker in any other industry -- they value the contribution like industrial labor. I do a lot of work in Europe and many business people find it inexplicable that any software engineer could be worth a senior manager's wage.

The second part is that while wages are relatively low, the cost of employment is astonishingly high in many European countries. Consequently, the fraction of employment cost that gets delivered to the worker as wages is much smaller, all other things being equal. From an employer's perspective, the employment costs are much closer than the paycheck suggests. The company only cares about employment costs, not wages per se. This is unlikely to change anytime soon because it is a manifestation of the social labor ethos common in Europe.

That being said, I suppose I'm a little hypocritical because I live in Europe and work remotely for a US company. I was already doing fairly well (not astronomical) by local standards but got a 40% raise by just being normal by US standards.

It makes me wonder why there isn't more entrepreneurship here. Labour is cheap and if you fail you're unlikely to die in a gutter (at least you have health care). Hell, even commutes are better for the most part. It should be easier to start something in Europe than in California, not harder. Maybe I'll give it a shot after naturalization.

I could probably make 50-100% more somewhere else but I’d likely be working much more. What’s the hourly pay difference?

On the flip side: I know a few people who turned down opportunities to go work in the US, or who went there and came back to Europe after a few years. Having not worked outside Europe, I'm always curious about discussing the various pros and cons, and although the pros were fairly obvious (good weather all year long, astronomical salary, etc.), one of the cons listed was invariably "I have to live in the US". Exactly why this was a con changed from person to person, but it was always there, and couldn't be accounted to long distance since countries like Japan or Singapore were fine.

I'm going to hazard a guess and say that there's something intangible (which could probably be best ascribed to 'quality of life', as vague as it sounds) that makes very competent people stay in or go back to Europe, and this limits the brain drain somewhat and maintains competition for lower wages on this side of the Atlantic.

This applies only to native Swedes. As a foreigner, even EU national, it's trivial to end up overboard of the social security net. Beware of tollerating low compensation fed by the "we'll hold your back" cliche. The same situation in Germany.

Sweden of the Scandinavian countries is the odd one out. The serious hardworking big brother. They always had big companies (IKEA, Volvo, Ericsson) compared to Denmark and Norway. Far stronger engineering tradition. Self-sufficient with nuclear plants, weapons, automobiles and so on under the cold war. Far more open to immigration. Bigger difference between rich and poor. Better and deeper financial markets. More hierarchical.

> One thing that should be emphasized when comparing salaries between Sweden and other countries is how there is a secret tax baked into the Swedish salary -- arbetsgivaravgiften.

> Basically, in all other nationalities (to my knowledge), you are quoted how much the company will pay for your salary. Then tax is applied, and whatever is left is what you take home. In Sweden, you are quoted an in-between number. If you are offered $100k before tax in Sweden, that means the employer is _actually_ paying something like $143k. You will still not be getting $100k, but rather that is the "taxable income", so you end up with about $70k, but your employer paid $143k, but you agreed on $100k. Makes no sense.

I used to think like you, with this idea that Swedish salaries are substantially lower -- but if you use the true tax, salaries are actually comparable.

If you can't afford healthcare at all, they will bill you but you don't have to pay and they can't turn you away from a hospital emergency room. So basically government mandated free healthcare provided by private companies.

The problem is the lower and middle class, if you don't have insurance but do have something to lose, or if you have minimal insurance and a large medical issue, you can lose all your assets paying for healthcare.

What you said that's really interesting to me is that the high tax rate is paid in full by your company and not counted in your salary. Is that true all over Europe, like France for instance? I am always amazed by the really low salaries but if every bit of it is what you actually keep, it's not so bad. I didn't know it worked that way.

- No saving up for college for my kids.

- No student loans tuition is free in all universities and colleges.

- Goverment-paid pension savings"

It's a little disingenuous to talk about all those 'free things' that 'others' or 'the government' are paying for, because it communicates that those costs are magically externalized.

They are not, of course.

Citizens are paying for all of those things through very aggressive taxation.

Denmark has basically the highest degree of government participation in the economy in the world. [1]

Taxation in Scandinavian countries run deep.

Swedens top tax rate is 67% (!!!) though this includes social security. Payroll tax (employer side of social security) is about 30%, deducted before transfer to employee. And then after you take your money home, you pay an additional 25% VAT on everything you buy.

Think about that: Swedish company allocates $100K to employee. ~30% deducted for SS, so employees income is really $70K. Now, you pay up to 66% of that in taxes (not at 70K, but for higher income earners - certainly a lot of Google folks would!), so say 50% taxes, 'take home' is now $35K. Now, you pay 25% taxes on everything you buy. Assume people save 10% conservatively, meaning $31.5K in spending, which is about $6 VAT taxes.

So from $100K in comp, you're paying $70K to the government.

In the US obviously it would be considerably less.

I know all this has been argued before, but it's important to consider how aggressive that taxation is, I don't think it's ever fair to talk about 'no student debt' or 'free healthcare' without taking into consideration that level of taxation.

The real issue is the cost vs. quality of things like healthcare.

Now - in Canada, we have similar levels of taxation as California or New York and we get healthcare out of that, so now that's something to talk about ...

[1] https://data.oecd.org/gga/general-government-spending.htm

[2] https://tradingeconomics.com/sweden/personal-income-tax-rate

I suspect it's the same for many countries - though with different percentages. And yes makes comparisons very hard.

Update: looking at this comment - this is not unique - same in Croatia: https://news.ycombinator.com/item?id=17941203

Yes, it complicates things, and makes comparisons a bit more difficult. But it makes sense.

In the USA, depending on the company, you will have to add in healthcare as a "cost to company". That's basically included in the Swedish taxes.

Plus you have to normalize culture and employee protection/rights.

In the USA it's not abnormal to get 2 weeks of vacation per year, less than a week of "paid parental" leave, and be expected to be available to answer emails while you're on your paltry vacation. You can be fired at any time for any reason or no reason (in most cases and states you are an "at will employee")

In Sweden, this work:life balance would be preposterous. Employees get 6+ weeks of vacation a year, over _1 year_ of _paid_ parental leave, working healthcare, subsidized childcare, etc. You cannot be fired without cause and notice.

In the USA, other than social security (which is another topic), employees get very little back for their taxes. But we have a lot of wars to pay for.

You need to look at the big picture when you compare these numbers.

You get quoted what you get paid, and you pay tax on that.

That's rational.

It's just that they way 'employer taxes' are calculated is a little different - and in Nordic countries they are massive (thereby making it feel 'hidden').

VAT when baked into prices is also kind of hidden as well.