Why Germany should copy Silicon Valley's culture rather than their startups

It's a European cultural issue. Denmark is not any different.

There are big discussions in Denmark right now about how to create growth. So the following can be applied to Germany as well I think.

I am saddened to see that most politicians thinking is:

1. Education 2. Green Tech (Wind Mills and Wave Mills primarily with government funding. Yes you heard that right) 3. Upgrading your education 4. Education 5. Innovation

All completely useless. And here is why:

1. Less than 5% of people with higher education in Denmark starts companies.

2. Green tech is not a thing. It's a term a vague one like UX. Let it go on record that the next bubble will be the green tech bubble.

What we should be talking about is technology, chemistry, biology, physics and various combinations of those.

Instead as seem to be the case in most of Europe eager to ditch nuclear (an actually fairly environmentally friendly energy source) governments are betting on specific technologies. Completely disregarding that it's impossible to get any proper economy into them anytime soon.

What can I say, sigh...

3. Denmark has a fairly large group of blue collars. Of course it makes some sense to try and upgrade them and I am sure it helps with some of them. But the battle to get a proper production industry up and running is simply futile and wont work.

First of all, the danish salaries are some of the highest in the world. Danes have some of the most protecting laws to the blue collar worker (no I am not at all against that, just trying to explain why it wont work) That means we are loosing to Germany and Poland and Sweden.

Danish Engineer ca. 40.000 DKK Polish Engineer ca. 15.000 DKK Indian Engineer ca. 5.000 DKK (if not less)

Just to show you the difference here. Anyone having done outsourcing knows that the quality can be different but it really depends on what kind of project we are talking about.

Second. The US lost 4 million jobs to the Chinese between 98-04. In the same period of time the chinese lost 18 million jobs to ... the robots.

Everything that can be automated will be automated and believing that we can somehow resurrect an industry that never really where that competitive is just pure insanity. Even engineers are loosing jobs.

4. Yes education once again. This is just to illustrate how much the government believe in this. Recently a study was done that showed that companies with most Phds had the highest revenue. This was then used as a proof to show just how important education is for the future of this country.

Now anyone who have spent just a couple of days on HN knows one of the biggest fallacies gets called out here.

"Correlation != causation"

Of course the other take on this story could be. The companies with the highest turnover had the most Phds hired.

The report made no attempt to claim connection between the number of Phds and the financial success of the company. No. Leave that the to the politicians.

5. According to our politicians we are supposed to grow from the experience economy and through innovation. Our cultural minister even have made a "task force" of cultural celebrities from around europe who are to travel around europe and find out how to use art as a vehicle for growth and innovation.

Yes you heard it right. This is the kind of insanity we are dealing with here.

Never mind that saying we need innovation has as little effect on the ability of a country to innovate as saying green tech creates green technology. The politicians actually believe that they can intellectualize growth and progress.

In other words. Everything that is right about SV is wrong about Denmark and my guess most places in Europe.

I am a German engineering student. I will try to describe the situation as I see it from here.

1. Start-Ups are lacking incentives:

Germans are obsessed with evaluating risks and will almost always go for the safe bet, rather the risky way. Its somehow ingrained in our culture. So the college grad has two options: 1- Land a safe job in the industry (eg. automotive), company benefits maybe even a company car. Thanks to relatively good job security and the good state of the economy you can probably work there for a long time, maybe not the highest income but good for suburban life + 2 spain vacations a year. 2 - You have that Idea. But there is a high chance you will fail. You will have to spend alot of time learning company laws, tax problems, etc. And while there is a chance that you can be a wealthy man while building you dream product. You will spend most of your time thinking about failure (even if you dont even have wife and kids to support). - By the time I finished building product x (and then probably fail), I will have reached a higher position and a company car a bigcorp - why bother the risk. Also talent acquisitions are rarely head of, we don't have Google or Apple who will aquire a small media/tech company for the people. Big money is in other industries that have a higher barrier of entry than web-startups.

2. Germans don't get the valley VC investment strategies:

Throwing millions of $'s on company's that dont have a business plan, just because it may be the next google/facebook/...? Considering failure as the norm, just because one of 100 company's you fund will go public. Germanys company culture is built around long time growth and substitutability. Big companys like Bosch ( €51billion revenue, 300k employees) are family owned (and 92% goes into a charity). Try to explain your SV funding business model to a german business person and he will shake his head and dont even try to get a bank loan.

3. Lack of entrepreneur networks:

SV is described in the way of "you can bump into a VC guy in a coffee shop and pitch him on your idea". Everyone know everyone, several events, money everywhere. I am not 100% up to date with the berlin scene but I dont think it is quite there. Although universities try to built networks and encourage students to start a company its nowhere near the possibilities of SV

4. Perfection mentality

Also known as "Ingenieurs-Mentalität". Its also a cultural thing I guess, especially at technical institutes / universities. If it isnt perfect you dont even think about bothering someone else with it. Never ship something that is half baked.

That said I consider myself an entrepreneurial person but also struggle with those points. (Like most people on HN, I guess) I have a long list of ideas. I sometimes start to build but stop when I realize how long the way to perfection will be. I set myself a goal for this year to complete one project and release it just for the heck of it. I will report when I reach this goal.

Writing from a German startup right now, I can't quite follow the author here. Granted - German copycats and especially the Samwer Brothers have brought some bad feelings into the community... but Berlin is getting better and bolder every day. It's basically almost all the goodness from Silicon Valley, but without the hype and craze. It's a friendly, crazy and green city with great work ethics - you don't live for working, you work for a living. Contrary to the article, accelerators, VC funding and the war for talent have long arrived here for sure - but it's all still pretty calm and well-thought out. Maybe there's still a little less innovation here, but on the other side, it's much harder to get funding without a business model that makes sense. Color definitely wouldn't happen here. We got all the cool things and conferences, but I'm pretty glad we're doing it the German way: No hire and fire, health insurance for everyone and the income disparity feels just so much more just compared to the states. I once thought of moving over to Silicon Valley, but by now I'm pretty glad that everything I want has moved over here without bringing the TSA, mass surveillance, corporate politics, discussion about the validity of evolution, a deadlocked two-party system and a growing helplessness over the unstoppable and unlimited capitalism that's ruining society already over there. All the best from Berlin - and if you feel the same, maybe it's time to come over? Dom

One main difference between Europe and the US is that wealth concentration in America is much, much higher than in Europe.

This is one of the main forces behind the VC scene: for a multi-millionaire, throwing a few hundreds here and there to some young gun is nothing, even if you lose them all you'll still have your Porsche and your boat.

In Europe, wealth is more distributed, which means that, for many, a bad investment of a few hundred thousand euros can make a real dent in the family fortune. We have less poor people, but less uber-rich people as well, it's a trade-off; it so happens that this trade-off works well with heavy industry but less with the super-dynamic "business at the speed of light" of this new millennium.

This is not to say we should cut some slack to the uber-rich (most of them come from aristocratic families and don't deserve to be where they are anyway), but rather that we need to find different, european ways of generating seeding resources for startups, and that's a bit of a bitch.

If US based startups would start globally instead of only nationally, they wouldn't have the "problem" of copycats. It's the same with movies. If the movies would come out globally, people would have less incentive to pirate them.

And even if there are copycats, so what. I didn't hear ebay complain when they bought their German equivalent. It saved them a lot of time and know how, if not money. And Facebook certainly doesn't complain about their German "competition".

I'd say live and let live. Also: If you can't beat them, just buy them. Otherwise ignore them.

Tell HN:

I participated in a German Government startup program in 2004/2005 called EXIST-SEED (nowadays called EXIST Gründerstipendium). I wouldn't recommend this to anyone. The funding I got was relatively modest (35 kEUR in my case -- as a consultant I now earn more than that within 4 months) and I was drowned in bureaucracy. To this very day, I am arguing with the German IRS because they do not want to treat a failed startup as a business and thus refuse to deduct the expenses I had. I literally ended up spending more time with bureaucracy than doing real work.

If you compare the modest startup funding provided by the federal government to the amount spent on the German cash-for-clunkers program in 2009 ("Abwrackprämie"), which was 5 billion Euro, you get an idea what the government's priorities really are: Firstly big (automotive) corporations, then a lot of nothing, then the Mittelstand, again a lot of nothing, and then as an also-ran the startup scene.

You're ultimately fighting an uphill battle as a founder in Germany: A tiny private VC scene, meager support from the government and a mind-boggling bureaucracy.

I don't see this changing so I drew the frustrating conclusion to become a consultant fleecing fucking big corps.

"People in SV are not afraid to fail. In fact, having failed before is considered a great quality. If you haven’t failed, you’re either inexperienced or suspicious. Startups try, fail, try again, pivot, fail and try again."

I think aside from maybe regulation, this is the biggest issue that Germany has and it's also the same one that Japan faces. The fear of failure and losing face. I'm not even sure that you can change this short of a few decades.

As a first order of approximation, I think there are two important dominant factors affecting proliferation or lack thereof of startups in a country:

1) Social Rule Obey Factor: This signifies how the people in the country are willing to follow social and legal rules, even when they appear frivolous. This factor obviously is hard to quantify, but an easy heuristic to compare countries in this dimension is to look at their traffic pattern: In countries like India, China, Russia, Turkey the traffic is mess, due to the fact people do not really care about the rules, e.g. "if other people obey the rules I can get ahead with not obeying". Having a high SROF, i.e. "follow the leader type society" is an impediment to innovation because innovators and entrepreneurs are by their very nature anti-authoritarian and like to go against the rules (e.g. Feynman's safe breaking adventures at Los Alamos), this is sometimes called the "hacker culture". On the other hand, too low a SROF leads to anything goes type societies which may be detrimental to developing important aspects of the entrepreneurship culture, e.g. IP.

2) Entrepreneurial Spirit Factor: This is what people have discussed in their comments here, a lack of fear of failing, taking risks, etc. The ESF of a society correlates highly to historical factors, e.g. in the US it's high due to the "pioneer spirit", in Israel due to the sense or urgency (surrounded by enemies). It's very hard to boost up ESF in the short term. As Adam Shand has put it: "We can't create a culture of freedom and innovation, but we can build a network which fosters its growth", i.e. you can only try to nourish ESF by creating secondary tools (e.g. VCs, entrepreneurial networks), you can't increase it directly.

So, I divide countries (again, simplifying things, of course) as follows:

    |------------|--------------|---------------|
    |            |   High ESF   |    Low ESF    |
    |------------|--------------|---------------|
    | High SROF  |  US          | Most of Europe|
    |------------|--------------|---------------|
    | Low SROF   | India, China |               |
    |------------|--------------|---------------|

The US is in the best spot, having both factors high; however, its SROF is just at the Goldilocks point, neither too high as to stifle innovation or too low to lead to chaotic behavior. This is achieved by the existence of very low SROF cultures, i.e. SV in an otherwise high SROF country. Countries like India and China (also Russia, Turkey, Brazil, etc.) have a high ESH but low SROF, which makes things chaotic and slows down the set up reliable entrepreneurial institutions. As mentioned in most of the comments here, Europe has to get over it culturally induced low ESF. Again, I think, the reason is cultural: Most European society historically had rigid class-based societal structures (e.g. even today people are generally classified by their vocation) so there may be an instinctive aversion to people who want to shake the structure and cannot be classified easily. This, of course, doesn't explain the success of India, with its rigid caste structure. I think the very strong jugaad culture (http://en.wikipedia.org/wiki/Jugaad), which is also prevalent in countries like Russia and Turkey may explain this. As raganwald emphasizes, "At either end of the educational spectrum, there lies a hacker class".

Who is in the bottom right cell? An example would be most Arab countries, with dismal levels of ESF (not needed due to oil money).

Context: I founded companies in CEE and moved to London.

Many people mention mindset and cultural attitude in the comments. To me "mindset and culture" are just symtoms. The reason is very simple:

The markets in europe (compared to the US) have: Same downside. Smaller upside.

This leads to less risk friendly and safer (slower) patterns and systems. Incorporated over centuries this leads to cultural attitude and mindset.

It's not that this is the best attitude for doing startups. But it is a (market) selected attitude for doing business within these markets. The best ways to break this: Minimize your downside (skip problem-solution phase by copycating) or don't be limit to the market (by far harder due to media (and ultimately network) bubbles).

June 1.-3. i'm organizing a Startup Weekend in Frankfurt Germany, to get a strong Startup culture and community started here, and this will include more events in the future. I set out to do this not to copy the culture of silicon valley, rather the culture of the Amsterdam Startup scene and especially the Appsterdam Initiative.

When i was at Startup Weekend Amsterdam and got to meet Mike Lee and others it occured to me that this was a concept that was much more realistic for a european and especially german city.

In Germany getting VC Money is not easy and you have to be very careful how the deal is done because of Tax issues. Taking risks is very unpopular in Germany and failed startups are viewed upon as wasted money and time, failed founders are looked upon as pariahs.

To combat this all that helps is a very strong community that has a common denominator where people share their point of view which is different from most of the people around them and help them with problems that are common only to startups in germany.

Non-Startup-event-wise our city isn't bad. Our Webmondays draw >100 people, our Barcamps over 200. We've got a local Hackerspace which offers 3D Printing Workshops among other things. We have a strong web culture, although Co-Working spaces are still being set up and are still more expensive than i would like them to be.

Frankfurt is known mostly as a banking city and some Venture Capital Groups are based here. It's not ideal as office space doesn't come as cheap as elsewhere, but the infrastructure in Frankfurt is superb and I've never met so many qualified Freelancers as in the Rhine-Main-Area.

The founder of one of the current YC Company Popset, Nicolas Bös, is from Frankfurt and very excited that we're building something here, which comes to show that we have the potential here.

As a french, I get very strange feeling reading comments here. Germany is presented as an example by French gov for it's better industry (presidential elections are in May ).

Does that means that Germany is not better, or that France is even worse ?

I think one of the reasons there are more copycats in Europe, mainly non English speaking Europe, is because of the low number of US startups making their product multi-lingual, marketing or attempting to support those markets.

I'm currently in the 12th grade of a Gymnasium in Germany and while we get a lot of information on jobs, possible areas of study and things you can do after studying at a university creating or joining a startup is not even considered.

The risk is generally considered to be so high that you have to be unbelievably good at what you are doing, insane or most likely both to take it under consideration.

I think the culture is too different, I also think their education system has something to do with it, relatively few go the gymnasium and then to university(thus study formal computer science) where as in the US, university is something everyone is expected to do. I am not sure how their vocational education is for computer science, or even if their expected or encouraged to start up on their own.

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