The Real Reason Italy Sucks at the Startup Game
programmingzen.com
programmingzen.com
Also, we don't have the mentality of "self-made man" and "go get it", most of our population expect everything from the government. They get a degree and expect to get a job the next day just because.
I have serious arguments with family members and friends regarding this, because I'm the totally opposite, I strive to succeeded and I'm happy and inspired when I see someone else succeeding. I don't want to be in a safe job for the rest of my life, I want to be in a limbo all the time, that will make me push forward and fight to a have a better life. And to be honest I'm doing a lot better than most of the people here, even if I don't have a "stable" job.
I'm currently working as freelancer for companies outside portugal, and I've just funded my company in the US. I expect to get away from here next year. I just can't stand this mentality
Portuguese here as well and I can vouch for just about everything phatbyte said as well. Anyone that has a little bit of success, in the eyes of 95% of the population did it either by a) corruption b) stealing c) abusing people/employees. People just don't believe hard work is a key to success. Heck, even when I change jobs for a better pay my own parents complain about it, they expect me to die in the same company I started working.
On another note, where care you in Portugal? If in the north/Porto, send me an email if you want to catch a beer. Always looking for same minded individuals for a chat.
I'm not in PT right now, but GF lives in Porto and I get to spend quite a bit of time there. Drop me an email (it's in my profile) and we'll catch a beer some time.
As an enterpreneur, I work really hard every day to meet my goals. 14 hours days are not unusual to me and working some 3-4 hours a day on weekends is the norm. When others know I work from home, they either assume that I just sit browsing Facebook all day and I'm really just collecting unemployment for the government or that I'm a lazy asshat whose parents pay for everything.
A year and a half ago, I was lucky enough to be featured by the most popular regional newspaper (~1M people live in this area) because of some work I did. A lot of the people who know me IRL congratulated me by it, but you should have seen some of the comments in the newspaper's website: they were incredibly vitriolic, calling me a lot of things like "lucky code butcher" or suggesting I was friends with someone in the newspaper because what I did was not newsworthy.
Combine that with the absurdly high unemployment rate, the incredibly high amount of people who prefer collecting 600€ of unemployment rather than working for 1000€ and the ridiculously high taxes we have to pay (an employee taking home ~1300€ a month would cost me around ~2700€) and you end up with the nightmare for startups we have here.
Hats off to you if you are an entrepreneur in Spain. Some 20 years ago or so when I was in college and trying to be self-employed or create my own company I would go to the government offices in my hometown (with 40% or so unemployment rate) to know what to do and they would look at me like I was crazy.
In one office nobody knew anything and I had to come back later to talk to the guy who supposedly knew something but was out having coffee. In another office they pretty much kicked me out because my questions led them to believe I was trying to find some loophole in order to commit fraud or something. And these were the “Offices for Employment Creation” or whatever they called it back them.
Everybody in Spain just tells you to go work for the government (and there are 4 or 5 levels of government that exist in Spain), competing in the “oposiciones” or tests for a position, where the ratios are like one position for a thousand applicants. This is so because not only government employment is stable (they basically cannot ever fire you no matter what) and usually relaxed but they often make more money that their counterparts in the private sector.
Yes, and what is more, they expect to magically get a job even if they got a degree in Minoan pottery, or post-modern French feminist theory.
But to be fair this issue is not limited to this countries, even in the US there are plenty of people who believe that if they got a degree that somehow magically entitles them to a job.
Also, see this picture:
http://marginalrevolution.com/wp-content/uploads/2011/11/Edu...
Note: Not really relevant to this comment, but I'm Spanish, but left many years ago, and I have zero intention of going back.
It's difficult to describe the situation to an outsider, but I found Italy a beautiful place to live but a frustrating and difficult place to work.
1) Italian bureaucracy is maddening. Simple things that take five minutes in America, like getting residency in a state or setting up a bank account can take days if not weeks or months.
2) Taxes and rent are absurdly high compared to wages. I had a great job--and compared to my Italian born peers it really was--that earned 2,600Euro a month. My one bedroom apartment cost 1,400 Euro + 400 euro for utilities and taxes (and utilities is where you get taxed into oblivion).
3) Nepotism and "serving your own." True to what the article mentions, to get my job I had to go through 4-5 rounds of interviews. When I was chosen over the two other Italian candidates, they were blown away. How could they chose this foreigner over them? It didn't matter I was a better programmer, or an Italian citizen, or that I spoke Italian. I was American and they were Italian -- how could the employer possibly chosen me?
4) A cultural tolerance for being corrupt or sly and getting away with it. I'm generalizing some here, but I feel this to be true for the most part.
And, to those who speak Italian (sorry could not find the clip with subtitles), this is a wonderful scene related: http://www.youtube.com/watch?v=W8TZNxWixN8
For instance, in order to get my SSN in portugal it took around 1-2 weeks. On the other hand, in the US I got my EIN in 5 minutes online.
Catania is not Milano and here we are in Sicily, but on the other side this is among the most costly places in Sicily, and at 10 Km from where I live there are tens of gyms, 1 Apple Store, a few very big cinemas and plenty of commercial centers and so forth.
Btw here there are a great number of programers, surely not less programmers than in the rest of Italy in average.
So the question could be, what is blocking the south where costs are much more reasonable from entering the startups business? I guess that cultural factors have the most weight...
In Italy banks or companies will never invest money in your startup if you can't cover at least all the money you need in 4/5 years. If you dare to found a new company and you fail then your life is destroyed. You are tagged as "cattivo pagatore" (bad payer) and you will never obtain money in form of loans.
Italy is a very bad place if you want to make something innovative.
What with the crisis, these sorts of reforms actually have a chance.
I am German, working some years for FIAT, and did my PhD in Italy, but left right after graduation for the US. The article perfectly summarizes the reasons I didn't want to stay and start something in Italy.
The only way not to sound like an Italian just complaining about outside forces is to leave the country. But than that is also not useful for Italy. So, you see the problem?
The only way not to sound like an Italian just complaining about outside forces is to leave the country.
1) On a personal level, you absolutely must be optimistic and try and do everything you can to create a company if that's what you want, but also to push the system to change and improve.
2) Statistically speaking, it's pretty obvious that messy taxes, bureaucracy and so on, do have negative effects at the margin, so taken as a whole, they're absolutely a valid thing to complain about.
The key distinction is to stay as far as possible from the poisonous ponderings about how it's not possible to do anything and it's all stacked against me and blah blah blah, which is all just a big excuse not to try.
Those are outside forces that will come and knock to your door as soon as your activity start to be profitable. People will ask you for money or favors or they will just make your life difficult just so they don't have to envy your success.
So, you are right, but you are also taking a superficial look at the problem. Of course you can start a company, but you will have to be much stronger and determinate and be able to deal with the fact that nobody, not even your family and friends, will support you.
I was only stating that the reasoning in your previous comment is incorrect (which, by the way, it's about italy, not your area).
I am not dumb enough to disagree on the general topic of "it's harder to start a company in corleone than in san francisco", I'm just worried by blanket statements from young people that the only chance to succeed is to change country.
Consider antirez, who ran a (successful, AFAIK) company from sicily or ciaopeople which has a decent business and is based in naples. It's harder yes, but the first N steps should be trying and failing, and only N+1 should be giving up to blaming outside forces.
But just saying "it can't be done" makes it impossible for you to do it. Period.
Me: working as an associate in a VC firm. Yes, operating in Italy. And yes, it is difficult, but we (as a startup community) are creating momentum and we can see something happening.
Bottom line: banks do not invest money in your company, they lend you money, that's why they require a positive cash flow NOW.
There could be a case to be made that countries should monitor that metric very closely and work hard to improve their "Yes to No" ratio.
Also, having lived and worked in Italy, my number 1 reason for setting up my company (which failed) in the UK was the insane level of bureaucracy in Italy. It's farcical, near impossible to navigate and anyone who's prepared to deal with that level of antiquated incompetence, corruption and inefficiency needs their head looking at. It's a beautiful country, but it's rotten to the core.
It's really mostly the other pillar of Chinese culture; Taoism. The two belief systems over the centuries go through cycles of being influential and Taoism in the new capitalistic China is re-emergent.
Taoism is really a lot about individualism, but it's also about going with the flow of life. It's called "following the Tao" and is very fatalistic. http://en.wikipedia.org/wiki/Wu_wei
I think your views of Chinese culture is being colored by a skin deep look at China's past hundred years. I think as a a whole Chinese history would disagree with you. During times of dynastic change Taoism was the prevailing cultural trope. Because dynastic change isn't the majority of historical time it can give the impression that Confucianism is the dominant "religion", but these moments of turmoil are critical and their effects are long lasting. Taoism (or at least their way of looking at things) is always in the background.
Just as an example, look at the literati culture after the take over of the Yuan Dynasty. Southern Song loyalists persisted for about two generations and really revitalized Taoist-inspired world views. They were the driving engine of Chinese culture during that time. Things like romanticizing the farmer, living of the land, the life of recluses etc.
A very similar thing happened after the take over of the Qing dynasty. Ming loyalists revitalized many of the same ideas.
During more tumultuous times Chinese turn to the more individualistic, less paternalistic side of their Culture as the central authority (and everything it represents - a father figure, the cultural vanguard etc.) erodes.
Right now, with the influx of Western ideas/culture and lifestyle the authority of the Communist regime is eroding to an extent. People view it as corrupt, inept and it doesn't command the respect it once had.
I think there is a cultural "swing" that is going to happen. And my argument was that neither system is conducive to entrepreneurship
"Assigning the idea of e.g. fatalism to "mostly Taoism" is also inaccurate." it's obviously an over simplification on my part. It's a complicated multifaceted world view of course, but fatalism plays an important part from what I understand. It's a little unfortunate that you didn't elaborate because I'd love to know your view of Taoism. I'm by no means an expert (haven't read any Taoist literature for instance), but from what I know it isn't the belief system of the capitalist-entrepreneur.
___ Example of Taoist influence: I've mostly approached Chinese culture from the artistic perspective, but look at for example Bada Shanren (Ming Loyalist), vs. like
http://images.search.yahoo.com/search/images;_ylt=A0oGdVGUT7... http://en.wikipedia.org/wiki/Shen_Zhou
Even without knowing a lot of abotu Chinese art, you can see that Shen Zhou has a more traditional Confusian take on art (he's imitating the masters. That's why his work looks more "generic") while Bada is a lot more experimental and lets his individuality come through his art (Shen does too, but in more subtler ways that aren't very easy to explain).
Most Chinese tend to be fairly pro-risk, but only after they have a degree. Cushy government jobs, or white-collar jobs in big corporations are preferred, but a reasonable number of Chinese want to start businesses. You don't have to meet that many old ladies selling wonton soup making twice the average wage of a university graduate to know the value of starting a business.
Have a look at the Geert Hofstede Cultural Dimensions, the five dimensions may allow a richer explanation than the 'yes' and 'no' question. There is an over arching theory independent of local characteristics as well - might even be falsifiable (aka Popper)!
>> Peaking during adolescence is risk-taking. We court risk more avidly as teens than at any other time. This shows reliably in the lab, where teens take more chances in controlled experiments involving everything from card games to simulated driving. And it shows in real life, where the period from roughly 15 to 25 brings peaks in all sorts of risky ventures and ugly outcomes.
If teens think as well as adults do and recognize risk just as well, why do they take more chances? Here, as elsewhere, the problem lies less in what teens lack compared with adults than in what they have more of. Teens take more risks not because they don't understand the dangers but because they weigh risk versus reward differently: In situations where risk can get them something they want, they value the reward more heavily than adults do.
The period's uniqueness rises from genes and developmental processes that have been selected for over thousands of generations because they play an amplified role during this key transitional period: producing a creature optimally primed to leave a safe home and move into unfamiliar territory. The move outward from home is the most difficult thing that humans do, as well as the most critical—not just for individuals but for a species that has shown an unmatched ability to master challenging new environments. In scientific terms, teenagers can be a pain in the ass. But they are quite possibly the most fully, crucially adaptive human beings around. Without them, humanity might not have so readily spread across the globe. <<
Full version at http://ngm.nationalgeographic.com/2011/10/teenage-brains/dob...
And my family is fairly progressive.
We are immigrants from Ukraine (circa '92)
Regarding taxes, it's pretty ridiculous, I would never encourage people to open a business here if they can avoid it.
I'm moving to the US next year and I can't wait to stop paying the ridiculous amount of money (in proportion of what I earn) that I pay now as a consultant.
I think I can add another reason why doing startups is hard in Italy: finding a cofounder or team members. I've worked in one of the biggest startup incubator in Italy (h-farm), and I can say from experience that it's super hard to find talented people, and that makes a difference at the end of the day.
It's difficult pretty much anywhere. And even in areas where there are lots of good people (SV), you then have to pay a lot.
There are plenty of talented people in Italy, that is not what I would consider the major problem.
And I say this as a serial drop-out who now lives abroad.
http://marginalrevolution.com/marginalrevolution/2011/11/ita...
This makes the real tax rate between 5 and 20%, depending on the specific amnesty you're going to enjoy, how much you feel like paying, and how good is your accountant.
Also you have to deal with stupid bureaucracy and pay a lot of taxes even if you are not profitable.
"The suspicion of Italians when it comes to extra-familial institutions explains why many here care more about protecting what they have than enhancing their wealth. Most Italians live less than a mile or two from their parents and stay there, often for financial benefits like cash and in-kind services like day care. It’s an insularity that runs all the way up to the corporate suites. The first goal of many entrepreneurs here isn’t growth, so much as keeping the business in the family."
See: http://www.nytimes.com/2010/08/01/business/global/01italy.ht...
No surprise to me, India ranks highest on the fatalism curve - 80% of us believe we are helpless to choose our path to success.
...which is fine. But when i see kids here, from the next generation as well, who somehow have this attitude, it breaks my heart.
For a start, i'd advocate teaching Critical thinking skills in our schools.
Antonio, come to our (why not yours yet?) group and see what 3248 Italian startuppers are currently doing to improve the situation of Italy.
And after Berlusconi's exit from politics, Italy will be a better place for everyone.
I've actually been part of ISS for a while, and am familiar with the great minds that it attracts. I even talked about it on Stacktrace: http://stacktrace.it/2011/01/25/intervista-con-stefano-berna...
Unfortunately, it's still a group of 3000-4000 people only, from which you can't really draw conclusions about a country of 60M people.
On the bright side, it's a light in the dark and one of the most exciting communities I've seen in Italy.
I am an Indian. Yes the last column in the bar and I can totally understand what u mean about countries sucking at start up games. There is a negative mindset people have towards building new businesses. The safety and the boredom of a government job is much more appealing to them. Makes me sad...
Interesting to see South Korea near the right side, rather than closer to Japan.
to me these have at least influenced "Fatalism" and "Risk aversion"