[ad_1]
If the question "Where is Europe of Google" is posed in a room full of European investors and founders of companies, it is likely that this issue will be flooded with alcohol. But the problem, despite the irritation it causes in businessmen, is entirely appropriate.
Where is the European giant that is equivalent to US companies Google, Facebook, Amazon, Apple, etc.? Why is there not even Airbnb, Slack or Uber in the Old Continent? It is all the more urgent to discuss all these issues in the context of the Chinese steps to create their own giants – for example, Alibaba, Tencent and TikTok.
It can not be said that Europe is unable to produce world-clbad technology companies. The Finnish producer Nokia, as well as the Swedish company Ericsson, have dominated the mobile phone business for many years until they are overtaken by Apple via the iPhone. The former giant of Skype Internet communication was founded by Swedish Niklas Zenstrom and Danish Janus Fries.
At the present time, the only European company to challenge Apple's global leadership in streaming music is the Swedish company Spotify, which went public last year and has a market capitalization. $ 24 billion. The British fashion company Farfetch is also a worldwide public company, as well as its subsidiary Adyen Paying Company. German SAP remains one of the most respected enterprise software developers in the world.
Obviously, Europe lacks ambition or talent. Its universities are among the best IT institutions in the world.
The Business Insider team spoke with seven at-risk investors and founders, some of whom were among the top investors in some of Europe's most successful companies. Although some have united the threats to the global success of European technology companies, there is no single answer to the question of why Europe can not start a business like Facebook or Google.
Theory 1: In the area of financing, there is a "valley of death"
Richard Anton, co-founder of venture capital firm Oxx, explains that he often questions the "valley of death" – companies raise venture capital funds but are not enough large to raise funds in the amount of 38 to 58 billion dollars. These may be fully viable but failing companies that are struggling to close the gap between initial and subsequent funding to expand the business.
Anton worked on the so-called "Eurovision Rules", regarding Israel as part of the European technological ecosystem. He quotes the Israeli Internet security company Forescout as an example of a start-up that has not yet fallen victim to the "Valley of Death". Even with revenues of about $ 5 million, the company is struggling to raise funds. Oxx has invested in Israeli society. With a turnover of $ 300 million and a market valuation of $ 1.5 billion, it is now listed on the Nasdaq American Stock Exchange.
Thus, Israel's success as a technology partner challenges the idea that Europe can not produce excellent companies in this field. "If, by looking at Europe, you include Israel, the US public cybersecurity companies are dominated by Israeli companies." "It's about Forescout, Palo Alto Networks, or whatever." Imperva, there are many Israeli companies, "commented Anton.
Patrick Piquet, former chief financial officer of Google, who now heads the London subsidiary of the Canadian fund iNovia, also finds a funding gap. "The funding gap is just one of the realities in Europe – the capital for growth is really limited – if you're in the UK and you want to raise between $ 500,000 and $ 3 million, you have to work hard, but not too complicated, but if you need $ 50 million, it's really very complicated, usually you'll go to Silicon Valley, here (in the UK) There is not much money for expansion and experience in building large companies, "Pickett said.
Theory 2: There are few competent (and rich) managers to help Startarts achieve global success
The funding gap has all kinds of consequences for businesses. European companies are often sold to US giants sooner than their founders would like, and a large part of the talented IT staff moves to the US and stays there. DeepMind, an artificial intelligence company acquired by Google, is a major exception: DeepMind has chosen to build a large head office in London.
Nevertheless, it seems that there is a shortage of mid-level executives experienced on the Old Continent to help start a business from scratch or to mentor young entrepreneurs. "Silicon Valley is a black hole for talent," said Piquet.
Mark Tlacch, CEO and founder of the original software company Skype and Wix Cloud Services, added that there was a problem of stock options in Europe. In the United States, successful businesses enrich their loyal employees by offering them generous stock options. When these employees take advantage of this opportunity and the company really succeeds, they can become millionaires overnight. The culture of generous stock options is much less widespread in Europe, he commented.
This is a problem because, according to him, more millionaires mean that more money is being donated to the ecosystem by businesses. "I do not think we're generous at all, we're creating entrepreneurs who think they should be cheap," says Tlac.
Earlier this year, 500 European entrepreneurs signed an open letter stating that they would never compete for talent, unless the European regulations on buying options were met. actions is clarified.
Although slow, the situation is changing. The TransferWise financial start-up made a second share sale this month, allowing some of the company's employees to take advantage of their options. Most likely, they are already rich.
Theory 3: European venture capitalists are still not as risky as their US counterparts
One of the founders from Europe in the United States – Will Eastcott – said that in Europe, he did not make the choice to take risks. He and the other co-founder of the PlayCanvas gaming product launcher were able to raise their initial funding and then sell their business to Snap. Eastcott notes, however, that before the sale, it was difficult to raise additional funds.
"Europe is lagging behind the money available for startups.When you get into group A, it can be difficult to upgrade the level.My difficulties were that I had no way to go out, "he said.
After successfully launching PlayCanvas by selling the company to Snap, Eastcott thinks it would have no more trouble raising funds from European investors for a second company. But he's already living in Los Angeles.
However, there are signs that European entrepreneurs are increasingly supporting their own territory. The founders of European companies heading for Silicon Valley's most prestigious accelerator – Y Combinator – are coming back to Europe to set up their own companies. This is the case of Fat Llama and MessageBird startups.
Theory 4: Europe is not a homogeneous market like the United States or China
It is thought that it is much easier for Chinese or American companies to become giants, because to reach millions of customers, they must dominate only in their home market.
A French starter could dominate in his home country, with a population of about 70 million. A Chinese starter, gaining ground in his country, will have access to a population of 1.3 billion dollars. This automatically means that a successful Chinese beginner will look like a giant compared to his European national equivalent. In Europe, they are more "heroes" in certain regions, but they are struggling to develop.
"It's not easy to build a 50 to 100 million dollar business in Europe because the local market is made up of many different markets," said Sonei De Ricker, a partner at Accel. The company was one of the first investors in Spotify. "The reality in the consumer sector is that Europe still has different cultural patterns of consumption," she added.
"People buy differently – the return on e-commerce is different in Germany and Sweden, for example – the unified homogenous market in the United States is really a big force in the early days of business," says Ricker.
Theory 5: Silicon Valley is older than the technology hubs in Europe
Silicon Valley was born thanks to its proximity to excellent technical universities, including Stanford University; thanks to its leading role in the defense and semiconductor industries; as well as the success of the first venture capitalists in the 1960s. Although Europe has already created giants like Nokia, founded in 1865 as a paper mill, there is no equivalent technology hub on the Old Continent. Moreover, it seems more and more that there will never be any.
"We're like a teenager, but for me, Silicon Valley is not a place but a way of thinking and a philosophy – it's about how you build a team and the distance you're going to reach." There is no muscular memory in Europe, and creating a business here is not as easy as it has been for decades in Silicon Valley, "said Sonal De Ricker.
It illustrates the European General Regulation on Data Protection (GDPR), the set of strict consumer protection rules introduced in May 2018. Although it is too early to say what is the impact RGPD's Economic Development Report According to Atomico's European Technology Consulting, European startups now see privacy and security as the most difficult part of regulation.
The GDPR could make European companies less competitive than their counterparts in other parts of the world. "In China, companies are even encouraged to use all kinds of data," says Ricker.
Theory 6: European beginners must think globally
Although companies such as Farfetch and Spotify prove that Europe can succeed in the field of consumer technology, the Old Continent also has the opportunity to create giants in other areas.
London, which has already surpbaded other European capitals in terms of financial services, has created a number of interesting finished launches such as Monzo Neo Bank, TransferWise Money Transfer Company and OakNorth Loan Company.
The British capital is also a promising place for the development of artificial intelligence. Facebook is based on its technology development center. London is based on the launch of five autonomous AII cars.
Germany, which has a great history in production and science, has created Lilium, a start-up for flying taxis, competing with the American UberAir.
Richard Anthon of Oxx's venture capital management company identifies the areas of education, cultivation techniques, quality badurance, insurance and the pharmacy as areas in which Europe can dominate.
At the same time, there are also pessimists about the future development of Europe. "There is no European ribbon that gives a magic advantage over others," commented Hussein Kanji, partner of the British Darktrace Artificial Intelligence Society. "We live in a global technology market that offers a rivalry on an equal footing, so entrepreneurs around the world see opportunities, so it's a race to create the best business in the world." All sectors To win this race, you must first have thought of this idea, being the most ambitious, bringing together the best team and collecting enough capital, "he added.
tags: europe | Google | apple | China | USA | facebook | Amazon | the spirit of Israel business | India | Facebook European Union Alibaba | technological giants | Google | Amazon | Alibaba | Apple
[ad_2]
Source link
