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Comment by climate_realist | Hacker News Reader

I think people here who look at Finland and Europe in general and see these social programs to help you get ahead are rather blinded by the reality that they only exist for Europeans. As a US citizen who lived in Europe for 5 years, I can assure you that it's a 100% closed game. If you are not from the EU, you can only work for a European. It makes no difference if you have a great idea, or even your own funding, you won't get the legal permission to found a business in Europe unless you basically got a European to found it for you and then you can be their employee. This is basically why the tech scene in Europe is more smoke than heat, it only allows the local talent to be successful, which we all know leads to subpar results. It is also why you really don't see any actual innovation come out of Europe.

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I am also an American who lived in Finland, Austria, and Denmark for, cumulatively, over 5 years. I now own and run a small but successful bootstrapped American SaaS.

What bothered me is that in all the above countries, they try to encourage entrepreneurship through rigged government programs. These programs offer grants and other benefits to 'the right kind of startups' - usually ones that are fashionable because the subject is currently hyped - ai, climate change, etc. Bureaucrats who know nothing about business pick whom to award grants through bullshit means. I imagine there's a lot of 'who you know' going on, too.

That wouldn't be so bad but, because these countries have such high taxes and other restrictions, the only benefit to starting a business there are these programs.

With these countries, it's not important that your startup is actually making money as long as you can brag about how you're changing the world at parties.

Finland's startup culture is especially bad in this department. It was disappointing as Finland is otherwise awesome.

I agree. I think that a problem in the EU is the wide abundance of government subsidies. The intentions are good but in fact it messes up the mechanism of natural selection in startups. Companies that haven't managed to raise money from private investors because they shouldn't really be funded (for various reasons e.g. their business model isn't viable, not a good team, or have exterior obligations and aren't fully committed,...) manage to keep their business running for 2-3 years because they're being held in life support through a government subdidy. In the end, they still have to shut down when the funding runs out, resulting in a net loss for everyone.

Don't get me wrong, subsidies are generally still important, for instance for initiatives that have a positive societal impact but that are hard to monetize. It's crucial that these organizations can still exist (not everything needs to be able to generate shareholder value to have a right to exist) and if subsidies allow them to do their thing, then that's great. But for the private sector, I think that there are other mechanisms that achieve the same goal but that maintain the much-needed Darwinism of startups, e.g. by offering tax breaks for angel investors.

"Companies that haven't managed to raise money from private investors"

This comment is a bit off topic for Finland. It does not have large capital markets looking for a good investment. It's a capital poor country.

Which is a good thing to know, if you come here looking for startup funding. The reason you don't find strong local seed funding is not because government blocks them. The reason is there is no capital for seeding, so to speak.

Startups don't need large capital markets.

The vast majority of new businesses in the United States don't get VC funding. They get small investments from friends, families, local banks, etc...

Well, you do need capital markets, even small ones. For cultural reasons Finland really does not have them. For example, there are no local banks. The whole country has only a few large banks which all require collateral. And here, you don't really go asking for an investment from friends and families.

The main cultural difference here that failure is seemed extremely shamefull. And taking loans from friends and family more or less dubious. And if you failed, and had asked loans from friends and families, would be crushingly shamefull. Hence this creates fear, hence it's not really done.

Well, the thing is, investment requires capital.

Finland really does not have it. This may feel odd, but really, Finland is capital-poor country.

Unless government invested, nobody would.

In places like England with lots of private capital it makes sense to leave investment to the markets. But like I said... that market of capital just trying to find the best investment, does not exist in Finland in massive scale.

It's OK if nobody invests. There's no god given right for the well connected middle class to play Silicon Valley for their own gratification.

You do realize our way of life was built from investment? Scientific revolution gave us ideas but industrialization gave us the means the realize those ideas to the benefit of all mankind. To not to invest means no creative destruction, and stagnation.

You were responding to a specific complaint, and I was responding to your response.

European governments are throwing money at questionable startups in the hope of replicating SV. Being opposed to that is not the same as not believing in investment as a general principle (?!).

Ah, sorry. Your comment was just that "It's OK if nobody invests". I was responding to that in general principle.

European governments are throwing money at all sorts of dubious things. I don't think being inept about how to create new business value is the worst thing they do. At least there is funding available.

I suppose the thing that ires you is - is this funding inclusive or is it only supplied to cronies. Knowing european systems, I think, like everywhere, having connections of course helps, but in general the systems are built with some level of inclusivity in mind.

I believe the programs are actually harmful, because they filter for different things than what it actually takes to make a startup work. You're teaching people to play games and jump through arbitrary hoops, rather than connect with customers and identify problems to solve.

And that's before you take in to account corruption and inclusivity. I do believe Europe (at least based on my experience living in Germany) makes effort towards inclusivity, but if you looked at where this money is going, it would be vastly weighted to the middle and upper class (though I concede I may be wrong on this point).

Given that you can easily bootstrap a tech company on the side with some contract work, my belief can be summed up as the practice is: 1) actively harmful 2) unfair 3) wasteful 4) unnecessary

It sounds your argument is based on claims of hypothetical second order systems effects. I think that systems thinking is important - but makes it very hard to discuss further if the other party (me) is not deeply familiar with the domain (german economic life and people) which I'm not.

I.e. 'actively harmfull' -> but just dropping state investment won't magically teach peoples how to do business in a customer oriented way. So you need some second order effects to kick in (i.e. people would then focus on market needs more etc).

I can't really comment on that. I don't know the german psyche enough to postulate on the second order effects.

Most of german industry has been grown historically in a corporative manner, so I'm a bit skeptical you could drive US style individual entrepreunship in just by dropping this or that government program.

So only Americans can make these sort of companies? This is a deliberate investment by their government, and yes they shouldn't be handing out to Americans who can go to SV and get their handout from their VCs.

You can raise money internationally. I did it. So "only Americans" is a total straw man.

Do you also believe these countries should accept the consequences of not influencing the next generation of successful startups?

Your experiences match mine exactly. There's a reason why the country doesn't have any anti-corruption agencies. Finland is a great country to be lower middle class in, but if you have a bit of ambition or talent, you'll probably find the environment quite demotivational.

> These programs offer grants and other benefits to 'the right kind of startups' - usually ones that are fashionable because the subject is currently hyped - ai, climate change, etc.

> I imagine there's a lot of 'who you know' going on, too.

Isn't this pretty much everywhere? US/India/China? And it's probably not limited to just government programs but even Angels/VCs/press are prone to hype?

The current product I'm building[1] doesn't excite a lot of people in my immediate vicinity but people thousands of miles away from me are looking forward to the launch. It's a question of positioning and product-market fit at the right place, right time with the right idea.

If the mom-test book and building this saas has taught me anything, you should always be evaluating the intent/point of view of the person you are talking to.

In this case, if it's a bureaucrat or a politician, it is all about optics. They have to justify every decision made, so implicitly their aim is to gain brownie points with the population and an average population does not really evaluate ideas based on pure merit but on what feels good which is, almost always, hype.

[1] https://getliste.com

Isn't this pretty much everywhere?

No. In the United States, the majority of businesses get funding because the founders have a good business plan. It's sometimes easier if you know the right people, but only if you seek capital from those types of people.

oh boy do you live in a bubble... :D

This is also my experience. In Denmark they have a startup scene of sorts, but they literally only fund startups that are by the "right" people or are trendy. I never saw anything get funded on merit, just if you are Danish and in particular, if you came from the elite socioeconomic strata. I never saw any interest in if the idea was sound, if the kid applying for the money actually knows anything about it, etc. It always seemed like if you were a rich white guy, they had cash to throw your way. And yes, its 100% a case of winners being picked, which is why almost none of these companies actually works. They think that just because the kid is Danish that the market wants his idea. They are usually wrong.

To be fair, this is how it works in the US too. Just some of the values are changed.

Can you name some examples?

> With these countries, it's not important that your startup is actually making money

Wow. I always thought that's a SF VC thing. If anything EU businesses focus much much earlier on profitability. That's the reason why they are much more risk averse and rarely (if ever) create some really ludicrous startups.

> These programs offer grants and other benefits to 'the right kind of startups' - usually ones that are fashionable because the subject is currently hyped - ai, climate change, etc.

As opposed to the American VC model currently driving such vital innovations as "how do we make middle class people use a jitney cab service?", "what if short term office leases came with free beer?", "will lazy people pay to have food delivered?" and "oh will they pay to have other stuff delivered, too?"

Look, I kind of get what you're saying, but it's not as if US startups are immune from bragging about "changing the world" and I'm more willing to put up with that bragging if you're at least trying to solve an actual hard problem.

The government should be funding crazy blue-sky long shots like small-scale fusion reactors and surgical nanobots because nobody else will. It's hard to make money on that kind of thing in the short- to medium-term but if it came to fruition, it really would be transformative.

"these countries have such high taxes and other restrictions, the only benefit to starting a business there are these programs"

Well, that's not true. You also have a good safety net if it doesn't work out. Quality of life, happiness, health care and education is also good or among the best.

Sad, but true. The good thing is there are more and more private investors, which allow to bypass this bullshit.

I feel that a lot of comments from US folks here are a bit hypocritical:

> It makes no difference if you have a great idea, or even your own funding

Most european countries (most countries in the world, actually) have some kind of entrepreneur/investor visa, but most importantly:

You might be able to start a company in the US while officially traveling for tourism/business, but that's actually a flaw and not an advantage: If you're lucky you might be able to regularise your position, but you might just get denied entry back in the US the next time that you'll travel. Good luck running your business in the US, then.

If you want to move to the US and start your own business, something like the O-1 visa won't cut it, since unlike any European work visa, it won't give you a path to permanent residency. You want the EB-1, EB-2 or EB-5 visas. The first 2 are much harder to obtain (even if you got a O-1), and the EB-5 is not open to all nationalities. Finally, you'll need way more than 100.000$ (probably at least 500.000$) to be able to be approved for an EB-5.

US requirements are steep, and even if you have a great idea and funding that's probably not going to be enough. Getting to work for an established local company, owned by natives, is the most straightforward way to get a work visa. That's true in the US just like in most other rich countries (but obviously it requires finding a company willing to sponsor you, like a FAAMG, but those have a famously selective interview process. And on top of that you have H1-B caps.)

Just as a couple of counter examples, in case you weren't aware of them

- Spain has an entrepeneurship visa, that any founder from anywhere can apply for. To apply I think you need to produce a credible business plan which shows it'll employ a certain number of citizens (I don't know if EU or Spanish specifically) eventually.

- France similarly has an entrepeneurship visa for founders from anywhere. I believe one of the requirements is to raise a certain amount of seed from specifically French accredited investors.

But, while I think it's better than you're implying, I definitely agree with your general thrust that visas need to adapt to embrace the growing popularity of people moving country not necessarily for employment, but to create new companies, jobs and growth.

It's unnecessarily cumbersome to do that basically everywhere (particularly in strong economies) right now, not just the EU, and that's a net loss for the citizens of the respective countries.

I've been a US expat in Europe for almost 20 years now.

I spent a lot of time in Belgium (to the point I became a citizen) and am now in Barcelona starting a FinTech.

Europe lacks both a risk-taking mentality and the framework to foster real entrepreneurship.

Spain was able to become much more competitive thanks to the austerity they were forced to go through post-crisis, but there are still way more bureaucratic hoops I have to jump through compared to what I would need to do to start my business in the US.

Incorporating an LLC alone (the equivalent of a c-corp is rarely used by startups over here) requires 3,000 EUR in the bank plus about the same amount in legal fees. In many other countries, it's a five-figure deposit to get a company set up. As the director of the company, I'm required to register as a freelancer so that I "can't fire myself and claim unemployment" which is ridiculous within itself.

Stock options don't really exist in Europe either, meaning I can't really issue them to attract talent. In otherwords, I need to access more capital at an earlier stage to grow my business in comparison to US competitors.

Finally, there is no such thing as chapter 11 bankruptcy within the EU, which limits risk-taking by businesses.

As for France, it's great that they have a visa. However, the legal and labor system is similar to Belgium, making founding and scaling a company a royal PITA. Belgium is a great place to work in a giant company (usually a bank or an insurer) but an absolutely lousy place to start a business, visa program or otherwise.

Europe needs to get this figured out. The continent has too much talent and too large of a market to not be able to be a global innovation force.

Funny how there's tons of companies in Europe still.

What it actually lacks is the silly money of SV VC.

It's got the entrepreneurs, and it's got the risk taking, it's just not got the massive VCs. So Europeans make different kinds of companies.

It costs £19 to start a business in the UK, and you can do it in 5 minutes online, so again, you're wrong on the causes. If you want to talk about crazy bureacracy just raise the subject of what state/s corp/c corp/state taxes/lawyers fees/craziness you have to do in America.

It's just that the money willing to invest in startups has all congregated in SV.

The vibe I got from his post was that the formalities starting a company aren't the bottleneck, perhaps more of a symptom instead. Just about everything he said applies to Finland too. Registering a company means putting ~3000 € on the table but sure, you can do it fairly quickly online.

Registering a company in Finland does not require 3000€ or even close to that. The figure is closer to 100€.

When I registered mine the minimum required amount of stock capital was 2500 €. That cash needed to be on the company's bank account before the registration was formalized. The notice to trade register to formally incorporate the company was 450 €.

Looks like the first rule was abolished last year. The notice to trade register now costs 275 € electronically, or 380 € in paper form.

Incorporating an LLC alone (the equivalent of a c-corp is rarely used by startups over here) requires 3,000 EUR in the bank plus about the same amount in legal fees.

At least when I did start a Sociedad Limitada (LLC) around 8 years ago these 3,000 euro did not need to be provided in cash. Most -all? I cannot remember- of them could be the value of things you owned, like a computer (serial number provided). The valuation of the computer or similar was taken at face value. In case of debt from your company they would take these goods used as capital.

There are initiatives in some cities, like Barcelona Activa, so make it easier to start a company (simpler forms too) but overall I agree it is still a bit bureaucratic.

> It is also why you really don't see any actual innovation come out of Europe.

There's actually quite a lot of incremental innovation happening in Europe, but they're in non-consumer spaces so they're less visible.

But you're right, a lot of European innovation is in the area of refining and improving proven ideas. The pool of technical expertise in Europe is vast and strong so it makes sense to leverage the competitive advantage there.

The U.S. on the other hand is much stronger at defying norms and inventing completely new categories.

U.S. companies know this, so the joke in industry is: invent in the U.S., perfect in Europe (setup R&D labs etc.), and manufacture in China.

If you can employ yourself, there's the Dutch American Friendship Treaty, or DAFT.

https://shawnindutch.com/ discusses it.

The requirements are pretty basic - "have something resembling a business and €4500" if I remember right.

I'm an American in Europe (Ireland myself) and once I got stamp 4 (takes two years) I become every bit as eligible for state grants and supports as a citizen.

That's certainly not the case in Finland, where you just need to have one Finnish resident on your board in order to incorporate. There's also the startup permit (https://www.businessfinland.fi/en/do-business-with-finland/s...), which lets you get that residence permit in the first place.

Coming back to the topic of the original post though, in order to work as a freelancer in Finland, you do not need to incorporate to begin with and you certainly don't need to set up an LTD right away as the guide suggests. In fact doing so, can be counter productive, since while setting up a company is easy, shutting own down and becoming an employee again is not simple around here.

I'm running Toughbyte (https://www.toughbyte.com/) and we act as one of the brokers for freelancers in Finland such as the ones mentioned in the guide. What I've been recommending to those wanting to go freelance is that they first try to become employed by a broker on a fixed term contract or work through a cooperative (osuuskunta in Finnish). After that, they can set up an individual entrepreneurship (toiminimi) and only once they've had consistent revenue for about a year, consider setting up an LTD (OY). The limited liability that an LTD provides isn't strictly speaking necessary when working as part of a team on a times and materials basis.

That's not true. American entrepreneurs can acquire Dutch residency for the purpose of starting a business in Netherlands. Access to Dutch social services is a different thing.

https://en.wikipedia.org/wiki/DAFT

(edit, I see now that someone else has pointed out the same thing)

Fintech in the UK looks pretty innovative to me, banking in the US is embarrassing.

everything pales in comparison to Vanguard and its innovative ownership and strategy.

You need permanent residence permit, that's all. The need for a permit is not dependent on nationality but instead your place of residence.

https://www.infofinland.fi/en/moving-to-finland/non-eu-citiz...

I am confused by this comment. Finland and other EU countries offer startup visas and the requirements for them require minimal capital. Recruiting outside of EU is also relatively easy since there is no artificial cap and no significant salary requirements like with H1B. It's a cakewalk compared to the monsterity that is the US visa system.

It's not super hard to do in Finland actually, especially if you engage a local to help you. If you want to, you can become an e-resident and run a business in Estonia completely online.

https://e-resident.gov.ee

Estonian e-residency doesn’t magically make you a tax resident of there and absolve you of your tax obligations to your country of residence. Some countries still require you to pay local tax on any income from foreign companies as long as you’re considered a tax resident.

Yeah, there are definitely shortcomings to that approach. I was just trying to address the:

"I can assure you that it's a 100% closed game. If you are not from the EU, you can only work for a European... you won't get the legal permission to found a business in Europe unless you basically got a European to found it for you"

comment as I have not found that to be true.

Besides whatever other EU countries people here might mention, I know that Romania offers residency permits to US citizens who want to start a business, and the fees and taxes are fairly low. (If I understand correctly, you have to renew the residency annually, but you can still transition to permanent residency after five years like any other temporary residency class.) If you have a great idea, then you can start in Romania and enjoy the same access to the single market as anywhere else in the EU.

Not only this, but all of the taxes and regulations will only impede your growing business.

Yes, you might be able take a risk because your healthcare is covered in the beginning..but once you want to grow to an actual thriving company, it becomes very difficult.

This is why almost all of the moderately large companies in places like Finland, Denmark, or Sweden are incorporated elsewhere.

I’m pretty sure a lot of EU countries make it easy to get temporary resident status if you start a business though? And some require <$100k investment

For the ones I looked into becoming a permanent resident after X years was also not that challenging and IIRC (might be wrong) that gives you basically full work permissions for all EU countries

>only exist for Europeans.

Well, actually, no. They're reciprocal, actually.

US citizens in Austria are generally treated similar to the way Austrian citizens would be treated in the US. Reciprocation is a basis of international relations.

Also, its entirely possible to get residency in "Europe", if you understand that "Europe" is not just London or Paris.

(Disclaimer: non-european citizen with 20 years residency and legal work/founder status, lived)

>If you are not from the EU, you can only work for a European.

I was under the impression you can start a business as long as you have a residence permit.

https://www.suomi.fi/company/starting-a-business/foreign-ent...

I have no idea about Finland, but in Europe in general, you can't open a business cleanly without a permanent residence permit, which takes usually 5+ years to get. In Denmark where I've lived, it's about 9+ years last I checked, but Danes are super xenophobic, so they don't want you there period. The link you sent describes being forced to be approved by some board they have, so it also sounds like Finland has hurdles too. In my experience, Europe is happy to skip out on the next Google if it means only the local get to play and win.

Spain and France have entrepreneur visas.

So if I am rich or can convince the people that I have the right sort of idea, I can try there? I don't think that's quite the same thing as letting a person succeed on their own merit in the free market. It sounds like much the same as what I saw elsewhere in Europe - the state or a group of rich people picking winners, who more often than not don't win.

But US has far stricter visa system than EU?

Then, like anywhere else, you can try to become a citizen. I mean, it's not like Spain has very strict requirements.

Estonian e-residency?

Estonian e-residency is not a true residency. It's mostly just marketing.

> Please be aware that e-Residency does not confer citizenship, tax residency, residence or right of entry to Estonia or to the European Union. It is not a visa or residence permit. via: https://apply.gov.ee/

So while you can start a company in Estonia, you can't legally work there or stay in the EU as far as I know.

> in Europe in general, you can't open a business cleanly without a permanent residence permit

What about that e-Residency thing Estonia created?

I know for Slovenia that you can start a company there as a foreigner, and then get a work visa simply by employing yourself, it's a fairly simple procedure. After 5 years you qualify for permanent residency (I believe that's the same everywhere in EU).

afaik, if you are EU/EEA or Swiss citizen, you can do it online in no time.

If you're from outside, then you need to get a startup permit from a panel of experts (and fulfill a couple more conditions), which quite difficult I guess.

>In my experience, Europe is happy to skip out on the next Google if it means only the local get to play and win.

Wasn't Google founded by two citizens of the United States of America?

This isn’t the case in the uk, anyone can start a business

> It is also why you really don't see any actual innovation come out of Europe.

...as opposed to I suppose the amazing 'innovations' coming out of the US, such as shiny overpriced phones with overpriced proprietary cables, a taxi service with an app, some media-streaming services grown large based on their media content rather than innovation per se, and a plethora of disguised surveillance programmes? Wow thanks America, life is so much better in this emerging dystopia!

Amazon I'll grant you does deserve praise for amazing logistics.

Can you name a single thing that you would consider innovative from Europe? I'm serious, I just can't think of anything. These are good people for making a slightly better Mercedes than last year's model, but they won't be cooking up the next iPhone anytime soon. The system there does not reward risk takers, the smart move is incremental updates to well established existing products.

> but they won't be cooking up the next iPhone anytime soon.

It's funny you say this since Nokia, who are a Finnish company, were the globally dominant mobile phone company for years before the iPhone due to their innovations e.g. doing camera phones well. The 3310 is one of the best selling mobile phones ever. Yes they ultimately fell from that position, but to suggest Europe is some desert of mediocrity seems foolish.

I think you misunderstand. I mean an innovation on par with the iPhone, where it basically changed how people live their lives. I'm quite sure Europeans can make a phone, the problem is they can't hit an innovative home run to save their lives.

Your hyperbole is burying any realistic point you are trying to make, I think.

WWW had far bigger impact that iPhone, and is european innovation.

For that matter, the entire system of democratic capitalism and relatively free markets you are espousing was invented there. Fair to argue who's done the best job of "perfecting" it, but it's European ideas originally :)

I think it is very interesting to compare entrepreneurial approaches and success rates (to the degree it's meaningful) across jurisdictions, for what it's worth. But "Europe can't do this at all" is a silly line to draw.

I misunderstand your vague handwavey definition then. What is the data or metric that you're basing your opinion off exactly? 7 of the top 10 best selling mobile devices of all time are made by Nokia [0]. How is that not changing how people live their lives?

[0] https://en.m.wikipedia.org/wiki/List_of_best-selling_mobile_...

Could you please stop creating accounts for every few comments you post? We ban accounts that do that. This is in the site guidelines: https://news.ycombinator.com/newsguidelines.html.

HN is a community and we want it to remain one. For that, users need some identity for others to relate to. Otherwise we may as well have no usernames and no community, and that would be a different kind of forum. https://hn.algolia.com/?sort=byDate&dateRange=all&type=comme...

You needn't use your real name, of course.

The web and browsers were invented at CERN.

Minecraft was Swedish. Nokia is Finnish. VLC is French. ARM is British. Sinclair was British. The entire demo scene is Nordic.

Israel is technically in Asia, but for most practical purposes (legal system, healthcare system, taxes, sport leagues, broadcast rights, dvd regions) it is considered to be in Europe. And it produced Checkpoint (firewalls...), Teva (largest generic drug manufacturer, but also original drugs like copaxon for MS), CAR-T for cancer treatment, and a couple of other things you’ve heard about.

But the iPhone was only commercially innovative really - as I understand there was prior art for all the critical parts of it including adding a touchscreen to a phone, going back quite a long way. American automotive engineering has until very recently been laughably backward; Tesla is an exception. Formula 1 is almost exclusively European (in fact largely British). Rolls-Royce are at the forefront of jet engine manufacturing. If you don't think these examples involve innovation, well...

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