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Comment by macco | Hacker News Reader

I think the biggest problem is the small home market / fragmented market.

While the EU has a very well integrated market for industry goods, for services (where I would include software) the market is less than perfect.

The language barrier is the biggest strangle for EU software entrepreneurship / platform business in my opinion.

The second-biggest obstacle imho is funding. If you want to grow really fast, it is hard to get enough money.

Third, I would rank ecosystem in general, besides money.

I think over regulation is not as bad as it is often said. All developed countries have regulations in place, some more some less.

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If language were a major barrier; then, how does one explain the US doing well in the EU?

I get that home markets may not be big and provide a springboard perhaps to other markets but even the big countries there don’t seem to dominate the small countries in terms of Software.

>> If language were a major barrier; then, how does one explain the US doing well in the EU?

By the time US companies reach the EU they are already big, worth billions.

That being said I believe the main issue in EU is funding.

One good entrepreneur said that focusing first on 2 markets would be ideal when starting out. They went for 5 markets and said it was too much hassle. In the end focused on US/Polish market.

IMO language is big barrier as just testing different text in UI is a lot of hassle when starting out - not to mentions laws, cultures difference, dealing with business partners etc. is much harder due to that.

IMO common law/company to easily hire people across EU would help.

> If language were a major barrier; then, how does one explain the US doing well in the EU?

Hypothesis: A lot of people read English well enough to use apps and websites even before automatic translation was built into e.g. Chrome and Safari; but translation into your mother tongue is much easier than transition into a second language.

A good question. I think the answer lies somewhere in the fact that one in five Germans speaks French but about half speak English.

Yeah, I don't think language is really the issue. I mean, it can be a barrier, but I doubt it's the most important one. I think access to money is #1. The US, especially Silicon Valley, has a culture of taking risks, of venture capital, and it has a culture of bringing people together in order to get that money in the hands of startups. Europe tends to be more risk-averse. We want to invest, but only once it's clear it's going to be a success. People are much less eager to take risks with their money, and entrepreneurs are less eager to risk bankruptcy.

I think this has been debunked? Just look at Sweden as an counter example or Israel.

I believe it’s just the lack of massive capital and the power law of VC investments. Start 1000s companies with smart people and a tiny fraction will get insanely big.

We’re starting to see this in Europe too now.

Hiring SE in Sweden takes minimum 6 months. Take into account a Union to deal with. It's probably too complex for some startups. Does it make Sweden a good example for starting a company or bad one?

On the other hand, people in Sweden are positive about hiring (and sometimes being hired as a) freelancer. But that's not a company, right?

If Sweden and Israel are good counter examples, maybe there's something to that language barrier after all; Sweden and Israel are both countries with an excellent command of English.

This is probably true, because I know many Europeans that come to America and start their startups. So it may not be that there are few European startups, just few startups targeting that market.

> I think the biggest problem is the small home market / fragmented market.

That doesn't explain why Israel doesn't have this problem, they have an even smaller home market. They just sell internationally.

Israel is economically very tightly integrated with the US, they have the oldest Free Trade Agreement with them (1985). One third of their exports go to the US and having such an old FTA means it has become very cheap for companies to setup branches overseas.

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