Daniel Ek commits to investing €1B in European ”moonshots”

https://sifted.eu/articles/spotifys-daniel-1bn-moonshots/

by daenney • 6 years ago

155 180 6 years ago

pb72• 6 years ago

Good. It’s about time Europe started producing global software products. We need competition in the US and China dominated spaces.

kzrdude• 6 years ago

What's a global software product?

cpach• 6 years ago

Stuff like Gmail, Basecamp, Datadog, etc?

patagurbon• 6 years ago

Creative Cloud, 95% of social media, Google/Bing, Office, Autodesk stuff, Windows. The biggest European global(ly consumed) software is probably Spotify right?

alexchamberlain• 6 years ago

Facebook, Google, Netflix, Amazon, eBay, WhatsApp, WeChat...

pb72• 6 years ago

Any software product that has significant market share internationally.

ganzuul• 6 years ago

He isn't talking about just software products.

"Ek mentioned machine learning, biotechnology, materials sciences and energy as some of these areas."

Material science in particular has endless promise. With the new XFEL infrastructure there is lots of potential too. Some examples of what we could do is replace plastics with bulk metallic glass, save energy in transport with low density steel, and more broadly with eutectic systems.

disown• 6 years ago

We need competition in the US and China dominated spaces.

China dominates what in the global software industry? Desktop OS? Smartphone OS? Office Suite? Database? Web server?

But I agree that we do need more competition.

gkoberger• 6 years ago

It's interesting he's jumping straight to "moonshots". Not a lot of companies come out of Europe, and I don't get the impression that's due to a lack of ambitious ideas. Rather, it's really hard to start a company in Europe – the tolerance for risk just isn't there (legally or otherwise).

sveme• 6 years ago

I believe it‘s rather an issue with the size of the market. It‘s just so much easier to internationalize when you are already the dominant player in the world‘s largest market, the US. Scales matter, see China.

d_silin• 6 years ago

EU is not a small market, but lack of unified culture/language is a bit of limitation.

yholio5• 6 years ago

The EU fought hard to create a single market, but the language, cultural and market fragmentation is still strong. It exists to some degree in the US (see for example Tesla's plight with protectionist dealership laws). But at least you don't need completely separate marketing, product branding and distribution in each state. If support and language is an issue, the complexity of EU business explodes. The linguistic bureaucracy of the EU Parliament is a good example, it makes the whole process 4x more expensive and cumbersome.

raverbashing3• 6 years ago

Well it seems that's the reason why he's targeting the moonshots.

It isn't too hard (thankfully) to get finance for a moderately viable idea.

skohan4• 6 years ago

As someone who has worked in both US and German-based startup, I agree that risk tolerance is a huge factor. Everyone from VC's to employees here seem to be way more hesitant to invest in an idea which hasn't been proven elsewhere in some form. That's a pretty bad recipe for moonshots, which by nature need to break the mold a bit.

People are also much more risk averse in terms of business model. For instance, the idea of loss-leading to gain market-share will play much better in the US than Germany, where it seems people would rather settle for modest revenue but stay in the black the whole time.

Another factor is the concept of work and work-life balance. In Germany holidays are sacred, and you won't generally find people putting in tons of overtime to get a product off the ground. That's great when you're a worker, but it does mean a slower pace than I saw in the US.

heavenlyblue• 6 years ago

In Germany holidays are sacred, and you won't generally find people putting in tons of overtime to get a product off the ground

Hmh. That’s only 10% slower if you assume Americans never take holidays (which is probably not true at all).

I don’t really believe startupers work as much as they claim to however, because you are usually useless at 16 hours a day for a month.

How much did it take Elon Musk to go callig people pedos of working heavy hours and sleeping in the office?

konschubert4• 6 years ago

I don’t think it’s that Europeans don’t want to work weekends. If that were the case you would see South Korea and Japan run circles around silicon valley.

In Germany at least it’s conservatism and a failure of imagination.

The average German Engineering student doesn’t dream of flying to Mars, he dreams of buying an expensive BMW.

refurb2• 6 years ago

In terms of being risk adverse, I can remember talking to a fellow student from France (yes, it’s an anecdote). We were both taking a class on private equity.

He described French risk aversion as such “In Europe, if you took investor money and your idea failed, you would be seen as a failure. It’s amazing that in the US you could raise $1M, lose it all and then go out and raise money again for another idea.”

diggan2• 6 years ago

Rather, it's really hard to start a company in Europe

As always, depends on where. Sweden has (or used to, at least before) basically a website where you can create a company, and it's mostly free to start the company as an individual (at least the basic form) so you can't really complain that it's hard.

In Spain, it's also relatively easy, just have to go sign some papers (and depending on company type, invest some money into it), but it's hardly "really hard".

Not sure about the rest of Europe, but can't imagine it's a lot harder than these two examples (counter examples incoming surely).

Although, if you with "it's really hard to start a company" mean "it's really hard as a unknown startup to raise funds from VCs", then yes, European investors do way more due diligence and are more risk averse, compared to US investors. But there are more things than startups :)

renewiltord3• 6 years ago

Sure, but that's not it. I can pay a hundred bucks and start in California but that's not the end of it. I'd have to pay franchise tax till the end of time, I have to pay SF tax on that, then I have to pay Prop C. If I were in LA, I'd have to pay city tax and county tax. Just keeping all the taxes straight would cause me to kill myself before I start in California. Everyone knows you incorporate in Delaware.

It's like that. I don't know what sort of laws you guys have there but just the paperwork is going to kill me, probably. And then any time you want to do anything, the paperwork will kill you, the regulators will be on your case, and all that. And that's the way Europeans like it. It's culturally normal there to be like "Oh, well why do you think you should be allowed to do that".

For instance, they would say "Maybe it isn't right that a company can just target ads to people without a comprehensive affirmative opt-in" and that would be the dominant view. "Maybe some guy in a garage shouldn't be allowed to hold a million people's personal data". There's a trade-off there: you don't get tracked but you don't get Google. And that's fair, but it means no business models that rely on things like that which count on low transaction costs can't happen, and lots of unicorns count on that.

jillesvangurp• 6 years ago

Creating companies is indeed a bureaucratic nightmare in Germany (where I currently live); but its doable if you need it done.

It's easier in e.g. Finland, Sweden, Estonia (which actually have produced some nice startups like Spotify, Skype, etc.). IMHO given the relatively small populations, places like that are actually remarkably successful when it comes to startups and technology companies. Finland has a mere 5 million people. I mean, Nokia for whom I used to work came from that tiny country and dominated the smart phone market for a while.

However, the real issues are more related to securing investments and funding and the inevitable process of having to shut down a company in case it fails. Which with a startup is more likely to happen than not. Failing fast is hard in a legal system that is purposely designed to make this hard.

It's also risky. You take a personal risk when you start a company and when a company can't pay its bills, it's the managing directors who are on the line with their personal capital. Limited liability is not so limited in Germany and it prevents companies from taking risks. There are all sorts of tricks to prevent that from escalating of course but they all involve the use of accountants, lawyers, and other middle men that are costly. And given that it is hard to raise seed capital in Germany, very little gets off the ground here.

Berlin where I live is a bit unusual in the sense that despite all this, there are loads of startups here and a density of capital and talent that is hard to find elsewhere in Europe. I always joke that this is despite the German government rather than because of their policies. It's basically a weird side-effect of the place being pretty much bankrupt. Local government here is basically just moving paper around and tends to be very hands-off because they have no budget for basically anything; including going after pesky startups taking liberties with the rules and regulations. Everything in this country is regulated to death but Berlin seems to be reasonably relaxed and informal.

For better or worse, people just showed up here from all over the world and started doing stuff after the wall came down. Lately, big German corporations that are trying to look hip are opening startup accelerators all over Berlin. Like all of them: Bosch, Siemens, VW/Porsche, etc. all are present here. Silicon Valley also moved in: MS, Apple, Tesla, Google, etc. all have offices here. And of course Tesla is building a Giga factory.

stkdump• 6 years ago

Not a lot of companies come out of Europe

Thats not true. Many companies are in Europe, much more than in the US: https://www.nationmaster.com/country-info/stats/Economy/Micr...

In Europe we have more companies of all sizes instead of accumulating into few mega-companies. But that has nothing to do with risk tolerance.

barry-cotter5• 6 years ago

Bigger companies are more efficient and more profitable on average though. You kind of have to be to grow. Fewer companies, but more efficient and profitable are more productive and lead to a higher tax take which can be used for all the things the government is good at, providing services we want to be universal and transfer payments.

yholio5• 6 years ago

The European Union should devote some of the untold billions they rain on farming subsidies and bailouts, and provide a EU-wide venture fund. YC model, other alumni and successful tech leaders select the most promising startups in a competitive bid for a fixed share ratio. This would do more for EU tech innovation that any other bureaucratic and academically driven initiatives had thus far.

speedgoose4• 6 years ago

The EU already grants a lot of money for research and innovation.

You have the horizon 2020 and horizon Europe programs for example. It's not perfect of course but it works.

https://en.m.wikipedia.org/wiki/Framework_Programmes_for_Res...

Lionga• 6 years ago

Show any unicorn financed by the horizon billions the EU wastes on these programs. Never was never will be one. It just does not work

knuthsat2• 6 years ago

The EU is silly. Most of these grants are picked up by beurocrats that know how to get them and enrich themselves.

Best example is that big blue brain project in Switzerland that got billions even when the science was not there.

Universities are currently filled with bureaucrats that know how to win grants and produce no results.

auggierose2• 6 years ago

Horizon 2020 does not work. It's all gobbled up by professional grant writers, not professional researchers.

auganov3• 6 years ago

Or EU could stop ruining the market with all their current programs and deregulate. Most "startups" in the EU are nothing more than grant chasers. There's very little private VC money because of all the grants. Even legitimate projects that take these grants aren't necessarily any better for it because of all the overhead they introduce.

It's most pronounced in new EU countries that get flooded with these funds.

mschuster91• 6 years ago

There's very little private VC money because of all the grants.

That's wrong. There are four real reasons:

1) our pension systems are mostly government run and on a rolling scheme (i.e. payments from current workers fund current pensioners, in exchange for future-redeemable points). That means that there is a lot less of "dumb cash" lying around in pension funds that screams to be invested for decades... historically that cash used to be put into "safe bets" such as government bonds but their returns are at below-inflation rates, and the only thing that is "profitable" is spreading out the cash over either the big tech companies or small startups.

2) networking. Just look who's in the "angel investor" rounds: people, both founders and early employees who got lots of money in the dotcom era or in the IPOs of the last years - they are all concentrated in the SV area, and enjoy the benefits of close personal contact, and then of course there is YC and a couple of less known clones which come in later. We simply do not have such networks in Europe.

3) risk aversity. Europeans do not like risk, the most obvious example being us Germans who are notorious for being risk averse, so risk averse that our car companies, 12 years after Tesla hit the market, still believe they can make "clean ICE" cars (by investing in synth-fuel tech). A side effect of that is the infamous Wirecard scandal - they were hyped so hard by everyone including our Chancellor who went lobbying in China simply because they were the only company other than dinosaur SAP who were German, were in digital business, and had (on the paper...) good business numbers.

4) "rags to riches" mentality: us Europeans have generally decent social security networks, stable government funded education - basically, you don't have that mentality, starting with young people, to "always hustle" to survive. We live mostly generally comfortable lives, but we're not driven to exploit whatever and wherever we can, simply because we don't need to.

The end result: we don't have venture capital simply because there has been no need for it for decades, it's only a recent trend here.

stingraycharles4• 6 years ago

I think you’re correct when you say that most “innovation” grants are going to companies that are anything but, but to say that most startups are nothing but grant chasers is absolutely not true.

I don’t know where you’re located, but at least here in The Netherlands we seem to have a fairly healthy startup ecosystem, where grants seem to be more of an afterthought because there’s a fair amount of VC money or bootstrapped startups.

dmitriid3• 6 years ago

Most "startups" in the EU are nothing more than grant chasers. There's very little private VC money because of all the grants.

Potato potato. Most "startups" in the US are nothing but VC money chasers and often lose billions of infinite investor money (looking at you, Uber) for indefinite periods of time. How is this different from grants other than it's "free" government money in one case and "free" VC money in the other?

pilsetnieks• 6 years ago

https://ec.europa.eu/easme/en/eic-accelerator

https://europa.eu/youreurope/business/finance-funding/gettin...

https://ec.europa.eu/regional_policy/en/funding/erdf/

https://ec.europa.eu/regional_policy/en/funding/cohesion-fun...

https://ec.europa.eu/regional_policy/en/funding/social-fund/

INTPenis• 6 years ago

This is a good list!

Besides these EU projects there are also national projects within EU member states. Like for example the NIC-SE foundation that manage the .se ccTLD tend to grant money to small startups.

yholio5• 6 years ago

I think following any of those links and comparing them to the https://www.ycombinator.com/deal/ page is a good illustration of how these programs fail. The bureaucracy for applying is daunting. The Accelerator will not fund pure startup ideas, rather technologies that have reached TRL 6-8, so not just a proof of concept demo, but a functional system in real life environment. The European Innovation Council will fund prospective technologies but only in well specified areas of interest.

Most recent unicorns will simply not thrive in this environment, it's more catered to the professional grant seekers or already successful companies, that can absorb a financing round of 500k-2.5 mil €

LudwigNagasena• 6 years ago

I don’t see anything that resembles a startup accelerator. Am I wrong? Are there examples of such companies?

oever• 6 years ago

EU also does subgranting, with tiny amount of bureaucracy, ideal for single developers or small teams. e.g:

https://nlnet.nl/PET/

https://nlnet.nl/discovery

Deadline every 2 months, next one in four days. Support for improving existing FOSS projects as well as endeavoring new ones. Past recipients worked on Wireguard, Jitsi, NextCloud, LibreOffice, EteSync, Guix and many more: https://nlnet.nl/project/

georgeburdell• 6 years ago

Money will not solve the EU's pervasive problem with corruption and grift. I'm thinking of huge investments like the 1bn euro flagship fund for graphene that have done nothing except prop up existing institutions of well-connected academics

jnurmine• 6 years ago

Except there are already products on the market as a result of the Graphene Flagship... https://graphene-flagship.eu/products

Also many new innovations on the way. Like "green graphene" composite, made from biomass, by Brightday Graphene in Sweden.

odiroot• 6 years ago

This is sort of already happening. As fa as I remember, all the startups I've ever worked for received grants from EU.

It's really a common thing.

jacquesm4• 6 years ago

Lack of money is not the problem. The problem is that anything remotely successful gets acquired by a US entity or that people don't even bother to try to get off the ground in the EU but that they start in SV through YC or some other US based accelerator.

CerealFounder• 6 years ago

Its just doesn't seem like the culture.

0xfaded• 6 years ago

As another poster pointed out, there are plenty of billions being sloshed about. But in my experience all this does is subsidize private investment. If an investor knows that the money they are putting in will unlock 3:1 in public money, then there's a pretty good argument for the investor to only give you a quarter of what you actually need. What's less thought about is how much time is wasted chasing tiny check sizes from these government programs. And then the reporting requirements are insane, hour by hour break downs of work plus reports and presentations at the end. They also don't like to give out large amounts and would rather fund lots of small partial projects, wasting even more time.

As far as innovation in the EU goes, the governments (yes, plural, another problem) need to get out of the way. I'm usually positive when it comes to the functioning of European governments, but this is one of the major exceptions.

I argue for European federalism, but also realize that's unrealistic. One possible step in the right direction would be to have an EU wide company structure with a single set of rules that makes investment between different European countries less complicated for companies and investors. I've also thought that a high profile EU investor could force some change by making it a requrement for their portfolio companies to immediately invert ownership to a Delaware Corp. That would open them up to US capital while simultaneously pissing of a lot of the innovation people in the government.

ilamont3• 6 years ago

“We all know that one of the greatest challenges is access to capital. And that is why I’m sharing today that I will devote €1bn of my personal resources to enable the ecosystem of builders”

He's made his billions on the backs of builders, the musicians who can record music all day long but will be lucky to receive pennies for a million listens. The 98.6% of artists outside of Spotify's top tier are making an average of $12 per month (https://www.rollingstone.com/pro/features/spotify-million-ar...).

Why can't Ek share his largesse with the builders who make it possible for his service to exist?

devmunchies4• 6 years ago

Historically, artists never made much money selling music. Artists made most of their music going on tour, selling merch, or monetizing their likeness.

I see spotify more like as an audio-based customer acquisition channel, like the radio.

Maybe it could build in some kind of "donate" patreon-like feature into the app. I wish Soundcloud had this.

ilamont3• 6 years ago

Historically, artists never made much money selling music. Artists made most of their music going on tour, selling merch, or monetizing their likeness.

In the early 1990s I worked for Jimmy Cauty and Bill Drummond's record label, back when they were dominating the UK and European pop charts as The KLF (https://www.npr.org/sections/therecord/2017/07/20/537708922/...).

They never made a pound touring. Their success and much of their impact was tied to European club playlists, the sales of singles, album sales, and the media.

You can talk to many other artists from that era who did depend on touring and merch, but also used distribution and sales of singles and albums (and advances on record deals) to establish themselves.

While plastic media was doomed long before Spotify, this "audio-based customer acquisition channel" is, by design, set up to benefit Spotify, record labels, and top artists, in that order.

Everyone else in the 98.6% tier gets the scraps.

willis936• 6 years ago

Have societies justly and fairly treated individuals in the past? If not then there’s little reason to point to it when talking about a person in power “doing the right thing”.

Mediterraneo10• 6 years ago

While artists made much more of their money on tour or selling merch, it didn’t take all that many sales of physical releases for an artist to top $12/month. Yes, the distributor and label took their share, and the royalty paid to the musicians was a minority of the sale price, but they could still make more money than they do now on streaming platforms.

rawburt• 6 years ago

Historically, artists never made much money selling music.

Yup, so why start now, right? That would go against tradition.

dubme1• 6 years ago

SoundCloud does have a donate button. At least in the sense that an artist can setup a paypal button that shows up on their profile.

I have created something similar with SoundRat (https://soundrat.com) that connects more with the patreon-like features and makes listening of music free but gives fans an option to donate to artists and get some perks for doing so.

mensetmanusman2• 6 years ago

Pre-radio, the music industry was much healthier, because ‘winner take all’ did not exist.

Each location could have their share of top talent to perform for the region.

mxschumacher• 6 years ago

Most of the cash goes to the labels, not spotify. Universal music alone has an implied valuation of $30bn

bllguo• 6 years ago

Because in terms of potential benefit to society, this is orders of magnitude more efficient than giving artists a few more bucks.

I don't even agree that they deserve it. The aggregate musical output is valuable, sure, but individually it's commoditized and worthless for all but the top musicians.

dmitriid3• 6 years ago

He's made his billions on the backs of builders, the musicians who can record music all day long but will be lucky to receive pennies for a million listens.

Ah, you surely mean recording companies and copyright holders that take up to 70% of Spotify's revenue and pay out pennies to artists. Why don't you ask those companies where all the money is going?

Why can't he share his largesse with the builders who make it possible for his service to exist?

Well, he is sharing it. At IPO Spotify disclosed that had paid "$9.7 billion in royalties to artists, music labels and publishers since it launched in 2006." [1] The thing is, Spotify doesn't have direct contracts with artists (and can't afford to for fear that the Big Four[2] will pull their content). So the question is: where did those billions go?

Let's read the article you're commenting on (emphasis mine):

--- start quote ---

Spotify pays the major record companies a 52% share of all net receipts attributable to streams of their artists. This was a figure the parties agreed to during negotiations in 2017, and it’s believed to have remained unchanged since.

According to Spotify’s Q2 results, the firm generated €1.89 billion ($2.05 billion) in the three months to end of June. We can therefore broadly assume that 52% of this money, or $1.07 billion, is being paid in recorded music royalties to labels and distributors, who will carry a portion of that over to their artists.

--- end quote ---

The article then continues being disingenuous pretending that 100% of the money that Spotify pays out goes to artists and that Spotify is solely responsible for that money.

So what is that "portion that labels and distributors carry over to their artists"?

Oh, look, only 12% of music revenue goes to artists [3] But obviously, it's the sole responsibility of Spotify (and Amazon, and Apple), and not of the Big Four that hold the music world hostage.

[1] https://www.cnbc.com/2018/02/28/how-spotify-licenses-and-pay...

[2] https://en.wikipedia.org/wiki/Music_industry#Consolidation

[3] https://www.techdirt.com/articles/20180819/00051140461/only-...

nemothekid2• 6 years ago

It seems so misguided to ask Ek to share; if he distributed his 3 billion it would not materially change the lives of the millions of artists on the platform.

The guys who always get paid are the majors, and the majors are the one who ensure the top artists (who are signed to thos labels) are always given the majority of the share.

overton• 6 years ago

Instead of finding a singular solution to a problem we need to think about a system-wide solution, healthcare is a great example of this. There are many structural problems in healthcare and just like we did with Spotify, you need to go, piece by piece and create something that actually is a win-win for all stakeholders.

Ah, Spotify, famously a win-win for all its stakeholders, including the musicians who can no longer make a living by recording music.

ResearchCode• 6 years ago

Might have to pay "talent" more than $40k a year before aiming for the moon.

toomuchtodo• 6 years ago

It's a complicated issue. Facebook pays well but their product is toxic to society. Google, Amazon, and Apple pay well but they can because of their moats and the lax US regulatory environment. Would FAANG be able to pay as well when anti competition regulations start to kick in and chip away at their revenue streams? Euro pay is definitely much lower (and needs to rise to meet the value technologists deliver), but perhaps its unrealistic to expect US tech comp (that's likely to compress anyway with remote work normalizing).

TLDR SV pay is likely too high and unsustainable in the long term. Equity moonshots are already lottery tickets, and you can't set public policy based on lottery tickets.

blocked_again7• 6 years ago

Leave US pay. Europe pay is low even in Indian standards.

marvin2• 6 years ago

The reason EU companies don't pay US tech salaries is that there aren't enough super profitable companies, and also, related, that the most profitable companies don't properly have to compete for the best engineers.

I think we would move in the direction of US tech companies if we managed to create five world-class tech behemoths, but I don't see that happening. Taxation will necessarily affect things; some places have an employer tax that approaches 100%. (Half the salary to the employee and half to the state, then tax the employee's share again afterwards).

knuthsat2• 6 years ago

The problem is that EU countries tax the paychecks so much that you’ll never be able to reach US levels.

blocked_again7• 6 years ago

That's not the problem. The tax in Europe is similar to that in California. The problem is tech companies pay very very low.

Swenrekcah• 6 years ago

But unless you make over something like 300k/year, you almost certainly get as much or more value from society than you pay in tax. Total effective tax rate is perhaps 20-45% depending on location and salary, but education, daycare, health care, etc is very heavily subsidised instaed.

hiharryhere• 6 years ago

You say that, but between federal, state and city income tax in NYC I was paying a higher rate there than when I lived in London.

The reason is that you’re competing in a much more varied market with less silly money splashing about. Cost of living in London is high, but you’re competing for jobs with competent teams in Eastern Europe. That coupled with fewer VCs funding “Uber for cats” ideas, there’s just not the appetite for paying devs US level salaries.

ma2rten3• 6 years ago

You have to take into account that cost of healthcare, cost of living and that Europeans typically don't have student loans to pay off.

csunbird• 6 years ago

the difference between europe salaries and usa salaries are multiple of any student loan or healthcare that you can get.

opportune2• 6 years ago

Almost all US software jobs come with healthcare for your family. Average student loan amount is like $30k. Even accounting for these costs EU pay is pretty bad compared to US. I was saving $100k/y my first job out of school in the US. This was at a good-but-not-great company with a standard new grad offer

The seemingly only place that’s replicable is in Switzerland at a handful of companies (Google and some small other companies) and that’s not even in the EU.

tootahe45• 6 years ago

You have to take into account that cost of healthcare

You literally don't, since companies provide this. Unless of course you're accounting for the better healthcare you'd receive in the US?

cost of living

Where most IT jobs are based in europe it isn't cheap to live at all..

jonplackett• 6 years ago

Maybe he means he wants to pay for Boris Johnson’s coronavirus testing scheme?

kabes2• 6 years ago

"We all know that one of the greatest challenges is access to capital". I don't recognize this. If I look around, there's enough money looking for an investment. Being risk-averse, lots of regulations and fragmented market are way bigger issues.

lawrenceyan• 6 years ago

Who popularized using the terminology of "moonshots" in VC / investing? Started seeing it a lot post 2015 or so.

notadog• 6 years ago

Alphabet's X (formerly Google X) may have helped popularize the term, as they have commonly been referred to as the "moonshot factory".

blocked_again7• 6 years ago

European tech ecosystem is a bit weird. I went through hundreds of job openings and pretty much all of them ask for experience with language X and framework Y for N years. I have yet to seen a description that doesn't care about what languages the candidate know. Its almost as if companies don't belive that engineers are capable of learning a new language or framework

Also I noticed there is too much focus on agile, scrum, DDD, etc.

And the pay is too low compared to living expenses. There are a lot of software engineering jobs that pay higher even in India.

Only good thing is you get to live in Europe and travel.

yxhuvud• 6 years ago

There is no such thing as a European tech ecosystem. It is very different depending on exactly which country you look at. Where did you focus your investigation?

blocked_again7• 6 years ago

Berlin mostly which is one of the major European tech hubs. I think the biggest one in EU.

ma2rten3• 6 years ago

It's this pretty common even in the US outside of silicon valley?

Pandabob• 6 years ago

Good for him.

I'm a little amazed at how little the Y Combinator model has been copied in Europe.

Now, obviously any new incubator wouldn't come even close to being able to offer what YC does right now with the extensive network etc. But hell, just offering 10-15 startups €120k every six months for ten years would be worth a shot. Maybe fly those companies to Berlin or London or Stockholm. Help them out with whatever you can, but mostly let them figure it out themselves. Maybe focus on startups from the EMEA region.

The costs would consist of the fund (€36M) plus the cost of operating the program (perhaps a €1M/year). That would still amount to below €50M.

Idk. There are probably plenty of reasons why this would be a bad idea, but if I'd ever have 50 million to spend, this is what I'd try.

jariel7• 6 years ago

The YC model has not been copied anywhere, and FYI there have been a zillion attempts at incubators in Europe. The problem is generally not money, it's a wide array of other things.

langitbiru2• 6 years ago

A couple of days ago, there was a discussion about why the YC model were really hard to be copied elsewhere.

https://news.ycombinator.com/item?id=24590401

chillacy• 6 years ago

Even in other US cities with local incubators and seed funding, startups all face the prospect of needing to visit SF for serious VC rounds later. If these companies are going to need investment from SF, why not just incorporate in Delaware and walk the well-worn path from startup to the NYSE?

aty2682• 6 years ago

Yeah good luck with that. There's a reason so few giant tech companies come from Europe, and it isn't cash.

mkl95• 6 years ago

As a software developer in a southern European country, the current scenario is just appalling. Salaries have receeded to the levels of the worst years of the previous decade, and we are now forced to make less money with worse conditions than at our previous jobs, because there is nothing better available.

This is good news, but we need investment two orders of magnitude higher before we think about fixing this situation.

If you are an American or Australian thinking of moving to southern Europe, consider moving to a developing country somewhere else instead. The job market will be similar and life will be much cheaper.

jariel7• 6 years ago

The problem in Europe is definitely not money, there is plenty of that. Also - 'moonshots'? They are big, failed R&D projects that may or may not pan out. Europe needs their own 'Salesforce' (i.e. 100 000 high paying jobs, massive revenues and value creation) not 'Drone Balloons'.

The issues are many and they are often at odds with other things, like 'quality of life'. From lack of large centres of innovation, not quite the right immigration system and attitudes towards migrants, a lack of hyper competitive attitude towards business (easy to see how this could be corrosive from another perspective), taxation and payroll taxes / inability to let people go (i.e. France), really closed business systems all over Europe, smaller markets, lack of risk taking everywhere from buyers, to investors, lack of big, cash-flush acquirers like Oracle, MS, etc. that eat up a lot of startups, a lack of 'flexible 1->n workforce' - ie the kinds of staffers that know how to go with a growing company and help it get established (this is a big ingredient of 'secondary domain knowledge' missing everywhere outside the Valley), to more sophisticated kinds of financing, and finally even just the right cooperative kind of attitude. Despite the competitiveness, there is definitely a 'goodwill' in the Valley that doesn't exist in most parts of the world.

Elk would be much better in trying to help Europe understand and overcome structural limitations because they already have the money.

aty2682• 6 years ago

Yep, very sad to see this at the bottom.

somerandomboi• 6 years ago

Positive article. Ek is correct when he states the entrepreneurial spirit in the United States is quite absent in Europe. In fact, investing in "deeptech" startups is a preferable action in relation to this net worth. On the topic of net worth, why did he remark "We all know that one of the greatest challenges is access to capital." His net worth is $ 4.5 billion. Still, it is a noble venture of his to promote entrepreneurship in Europe(quality it substantially lacks).

Ericson23142• 6 years ago

IMO the whole VC model is totally ass backwards. Spend money on infra (direct thing we want) or UBI, and let actual demand drive the investment.

Whether it's innovation grants or QE-driven VC, this is just supply-side bullshit making Frankenstein unprofitable hypeups.

If materially content Europeans don't wanna buy more money, that's great! Just keep on reducing working ours until it's clear what needed to be automated, and send the engineers to work on that.

FAANG envy is depressing and pathetic.

pyrale4• 6 years ago

This thread's comments are depressing. So many people commenting about how Europe should emulate the US system to be "competitive"...

I seriously suggest those people to look at the society they have created, and do some soul searching.

thom• 6 years ago

Sad that I had to scroll down so far before seeing someone make this point.

remir• 6 years ago

Access to capital is only one part of the equation; having a culture that favors innovation is the other part.

mensetmanusman2• 6 years ago

That’s awesome, I hope it doesn’t get sucked up by unions and legal battles with countries that will fight your right to work overtime.

langitbiru2• 6 years ago

Too bad there is no website yet for his European moonshots investment venture. A couple of months ago, Sam, Max, and Jack Altman built something similar, "Apollo - Funding for moonshots" (https://apolloprojects.com/).

Daniel Ek commits to investing €1B in European ”moonshots”

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