> On the surface, it doesn't seem like there's anything particularly lacking, at least from my superficial understanding as an American viewing in from the outside.
My personal opinion is that, whilst we (still, just...) live in a "single market", Europe isn't a "market" just by itself.
Sure, you can do business cross-borders quite easily, but there's not the same critical mass of language, culture, business environment, and confidence as there is in the States. The US is a bunch of loosely connected areas that at least have language, currency, and to a lesser degree, culture that permeates them.
The differences between the UK and France when launching a product are substantial - and whilst it's technically "easy" (a bit of i18n here, a Stripe GBP-EUR transaction there), unpicking user needs and behaviours across language barriers can be hard.
If you incubate a product in SV, you can roll that out to the rest of the US with only slight changes in approach. If you incubate a product in Portugal, you have your work to cut out from the get-go to reach more than just 10m people.
My stretch is that it encourages companies to try and "dominate" their home market rather than trying to do the harder thing and spread - that slows the hockey-stick as you try and wring the last few dollars out of a mature environment and makes investment outcomes less tasty.
Combine all of that with a generalised point about Europeans being less "work-driven" and so probably a less % of people trying.