Column by Belgian born Silicon Valley entrepreneur Dries Buytaert
If Steve Jobs was adopted by a Belgian family rather than an American family, it’s extremely possible he may have ended up working in a bank instead of co-founding Apple. Why? Because starting a company and growing it is hard no matter where you are, but the difficulty is magnified in Europe, where people are divided by geography, regulation, language and cultural prejudice.
While entrepreneurship and startups have spread tremendously in Europe, a lot of aspiring young entrepreneurs leave Europe for the United States. Very little will stop a true entrepreneur from trying to reach his or her goals, including uprooting their entire life and moving it across the ocean to optimize their chances of success. From my interactions with them, the United States’ gravitational pull is only getting stronger.
So, what can Europe do about it? Here are my three recommendations.
1. Focus on creating large companies
Europe produces plenty of small businesses: restaurants, small technology firms, clothing stores, hair salons, and so on. What it doesn’t produce enough of are innovative companies that grow quickly and end up big. It’s a problem.
Look at the 500 largest companies in the world (Fortune Global 500). According to Bruegel, a European think tank devoted to international economics, Europe created three new, large companies between 1975 and today. The U.S. created 26.
That number is even more incredible when you take into account the fact that Europe has about twice the population of the U.S. The reality is if Europe were to be competitive, it has to produce 25 times more large companies than it does today.
Access to capital continues to be a challenge in Europe. Getting seed capital (1M EUR or less) has become easier, but raising significant money (25M EUR and more) to turn your company in a global business continues to be difficult. Large companies also provide an important ‘exit strategy’ for startups. Without a vibrant exit market, it’s harder to attract both entrepreneurs and investors.
Large companies also play an important role in creating successful innovation centers. They are catalysts for creating angel investors, for providing distribution, and serve as a breeding ground for talent and practiced management.
If you look at Silicon Valley, Hewlett Packard, among others, served that purpose in the early days, and more recently, a number of successful entrepreneurs have emerged from Google.
I recommend that European government stimulus focuses on companies that could become titans, not on small companies that won’t move the needle. Too often, there are investments made in companies that have limited or no growth potential.
2. Level the playing field
Anyone who has built a global organization likely understands that European work regulations can shackle the growth of startups. Taxes are high, it’s hard to acquire a European company, severance packages can be outrageous and it’s extremely difficult to fire someone.
It only gets worse when you attempt to operate in multiple European countries, as anyone with the ambition to build a large company has to. Each country is different enough that it requires setting up a local legal entity, and having local accountants and local attorneys. Setting up and running these legal entities costs valuable time and money, a huge distraction that gets in the way of actually running and growing your business.
Europe needs to roll out unified labor laws that are competitive globally and unified across Europe. My biggest worry is the branches of government that try to promote entrepreneurship are not powerful enough to address Europe’s labor rules.
3. Change our culture
A small business can be started anywhere in the world, but it takes a different level of ambition to aspire to become the next Apple. The biggest thing entrepreneurs need is the belief that it can be done, that it’s worth taking the risk and putting in the hard work. Having the right culture unlocks the passion and dedication necessary to succeed.
Silicon Valley is a state of mind. To recreate Silicon Valley in Europe, Europe must first adopt Silicon Valley’s culture. I believe Europe’s culture would benefit from adopting part of the American Dream: the egalitarian belief that everyone is able to succeed through hard work, and that it is acceptable and encouraged to better oneself economically through hard work.
It doesn’t mean Europe needs to give up its strong communal beliefs and its desire to look out for the greater good. I’m a firm believer that many modern businesses can “do well and do good”. Businesses that generate value for their shareholders and that also have a positive impact on the world go beyond generating profits.
Our world does not lack business opportunities; there are plenty of people with needs that aren’t met. Enabling entrepreneurship enables innovation, and innovation helps change the world. The entrepreneurs that succeed in building large businesses, especially those that are aligned with fixing the world’s problems, will transform the lives of others for the better and introduce more opportunity on a global level.
Entrepreneurs, not the government, will change the world. It’s time for Europe to help their companies grow.
by Dries Buytaert
Dries originally wrote this blog post as a guest article for The Next Web (English) and De Tijd (Dutch).
Dries Buytaert is the original creator and project lead for the Drupal open source web publishing platform, used by 2% of the world’s websites. Buytaert serves as president of the Drupal Association, a non-profit organization formed to help Drupal flourish.
Buytaert is also co-founder and chief technology officer of Acquia, a venture-backed software company that offers products and services for Drupal. In 2011, Forbes elected Acquia as one of the Top 100 Most Promising Companies. In 2012, Inc declared Acquia the fastest growing private software company in the United States.
A native of Belgium, Buytaert holds a PhD in computer science and engineering from Ghent University and a Licentiate Computer Science (MsC) from the University of Antwerp. In 2008, Buytaert was elected Young Entrepreneurs of Tech by BusinessWeek as well as MIT TR 35 Young Innovator. In 2012, Ernst & Young gave Buytaert the Entrepreneur Of The Year Award for New England. In 2013, Buytaert was elected a Young Global Leader for the World Economic Forum.
40 Under 40: Dries Buytaert of Acquia
by Keith Regan, Special to the Boston Business Journal
Dries Buytaert is a passionate believer in what he calls “the open-source way.”
For Buytaert, the co-founder and CTO of Acquia in Burlington, and president of the Drupal Foundation — meant to expand use of the open-source platform he began to create at the age of 19 — the ripple effects of embracing open collaboration go well beyond business and government applications of technology.
“The collaboration of open-source communities has the power to raise the bar for all participants,” said Buytaert. “The innovation that’s generated by contributors can be widely shared and enjoyed, particularly for those who would otherwise be at a disadvantage. With Drupal, the same technology that’s powering customer experiences for Global 2000 organizations is readily available for the next great startup. And emerging nations benefit from the innovation of more than 130 countries that use Drupal for their government sites.”
WhiteHouse.gov and many of the busiest government websites globally have been built on the Drupal platform, and Buytaert‘s evangelism has led thousands of developers worldwide to help create new ways of managing and displaying content using the technology. Currently, he’s helping to steer work on Drupal 8, which will leverage new technologies for mobile data display and other updates to “set a new standard for ease of use.”
The Drupal community rallied around the city of Moore, Okla., after a tornado devastated the community in May of 2013. Developers created a hub for those impacted to find housing and other services, a model reused again to help victims of widespread flooding in Europe later that year. Acquia, which has grown since 2007 to 450 employees and a roster of 4,000 corporations and organizations using its technology, embraces that same core philosophy of leveraging what has already been learned to expand the possibilities for others.
by Keith Regan, Special to the Boston Business Journal
Categories: Leadership in Innovation