Silicon Valley aside, why are Americans more willing to risk a startup?

https://news.ycombinator.com/item?id=48553

by weebro • 19 years ago

10 28 19 years ago

news.ycombinator.com

I'm based in the UK and am hoping to apply to YC in Oct. We are currently looking for strong hackers to co-found with us, if they like the idea. We cannot, however, find anyone in the UK even remotely interested. The concept of 'it's not what you do but when you do it' simply does not exist here. What does the US have that we don't?

rms2• 19 years ago

http://www.paulgraham.com/america.html

"I think what holds back European hackers is simply that they don't meet so many people who've done it. You see that variation even within the US. Stanford students are more entrepreneurial than Yale students, but not because of some difference in their characters; the Yale students just have fewer examples.

I admit there seem to be different attitudes toward ambition in Europe and the US. In the US it's ok to be overtly ambitious, and in most of Europe it's not. But this can't be an intrinsically European quality; previous generations of Europeans were as ambitious as Americans. What happened? My hypothesis is that ambition was discredited by the terrible things ambitious people did in the first half of the twentieth century. Now swagger is out. (Even now the image of a very ambitious German presses a button or two, doesn't it?)

It would be surprising if European attitudes weren't affected by the disasters of the twentieth century. It takes a while to be optimistic after events like that. But ambition is human nature. Gradually it will re-emerge."

rms2• 19 years ago

Did I Godwin this thread? It's a good essay, but I disagree with pg about the ambition being discredited by certain actions in the twentieth century. It just doesn't make a whole lot of sense.

daweedo• 19 years ago

On a quick note...I would have to say that the laws of the US provide a unique and time-tested opportunity for startups. This has driven the US to become a destination for many of the world's immigrants, leaving their own countries less populated with potential risk takers.

The notion of a free market is what distinguished the US from its European counterparts at its inception and has since demonstrated the ability to learn and grow. The benefit of the US at that time was a clean slate economy without all of the potential 'baggage' that the European countries possessed in the monarchical systems. What's more, for the most part it didn't matter where you came from or who your family was in the US. All that mattered was market potential.

Though European countries have moved their economies in much the same direction they still have to contend with the history of their governments. Culture and history are slow to let go of a people group. New ideas take time to be successfully introduced on an indigenous level if they are to become part of the cultural paradigm and identified history.

lupin_sansei2• 19 years ago

I would agree about the market being freer in the US than Europe, but the UK's market is almost as free as the US' http://www.heritage.org/research/features/index/countries.cf...

... there has to be something else that the US has got too. A population of 300 million (vs. the UK's ~60 million) springs to mind.

menloparkbum• 19 years ago

Some of them might be telecommuting for a US based startup. For instance, it is very hard to find people who are good with audio/video signal processing in the USA. The good ones are all in Europe. We have guys in France, Spain, London, and Estonia.

weebro5• 19 years ago

Thanks you America (and those from the UK) who pitched in on this thread. These are the types of things we should discuss in this forum (I find people chat a lot of sh*t on here, none of it related to start-ups or being entrepreneurial)

I also appreciate that Americans appreciate they are the descendants of Europeans. The word entrepreneur is French after all, so we must have had it somewhere along the line.

I have lived in your country and a couple of European countries and even in Saudi. In my experience and, in my opinion, Americans are entrepreneurial due to historical reasons. Those who left Europe went there to set up on their own and escape the 'system' in Europe.

'All men are created equal'. This one line explains it all (first suggested by an Italian). Any country in the world could create what America has in proportion to its population and size (yes that's a caveat of context and proportionality). It has to do with attitudes and these attitudes are, as rightly pointed out by PG, informed by trends, society, accepted norms and experience i.e. examples around you.

Experience has taught me, sadly in a personal sense, that accepted norms and historical attitudes which prevail to this day are the major reason for this differing of opinions. My parents are not particularly happy with my deviance from the legal profession, a traditionally highly respected profession in Europe. I was good at it, I qualified as a barrister and passed your NY Bar exam with 5 weeks study. But it had no creativity to me, I would create nothing but documents and a name for myself (which dies with me) and I began to realise that I did not measure success by virtue of a persons professional position.

In the USA success is measured by your contribution to society not your position within it or control over it.

I will say no more, I've gone on to long anyway. But hey give an Irishman a platform and expect to have warm ears X or sore eyes as the case may be.

chaostheory2• 19 years ago

I think it also has a lot to do with the way Americans view failure (versus Europeans and a few Asian countries).

In America while failure is not a good thing, it is also not a permanent thing that can scar you forever as a pariah in both society and the business community. You can try again and again... I could be wrong, but I don't think this is the case for Europe or countries like Japan; it's much harder to try something entrepreneurial more than once if you failed the 1st time...

Case in point, I think it took Sam Walton over ten tries before he got it right with Walmart. (Hell look at Edison too)

(I think as Americans we're just crazier than the Europeans.)

portLAN• 19 years ago

> I think it also has a lot to do with the way Americans view failure (versus Europeans and a few Asian countries).

U.S. Americans don't view failure the same as the Iraq and the Asian countries. South Africa, such as.

chaostheory2• 19 years ago

I forgot to mention this: Americans are either descendents of risk takers or risk takers themselves (if they are immigrants). I've forgotten the article/research but even in horrible times of famine, economic disaster, or war; for some reason very few people actually leave their country. I think less than 30%. I'm willing to bet that the US probably has taken in a huge majority of the people that were willing to take a risk in a place where they know little of (including the native language) for greater opportunity...

ks• 19 years ago

I'm going for the most obvious answer: USA is a single large market, over 5 times the population of UK. Most understand English and it is also geographically large, so there's lots of room for local competition.

You have a much greater chance of success. 20% of the US market equals 100% of the UK market... Even if you don't "win", you have a decent chance of at least breaking even.

lupin_sansei2• 19 years ago

As an (expat) British person myself I notice than many British people are very pessimistic about the chances of success compared to what I can gather from Americans.

kingnothing3• 19 years ago

I believe another part of it has to do with the cost of incorporation. In most places in the US, you can do it yourself for under $100. Comparatively, in most of Europe, it costs between $2,000 and $10,000 to form a company.

Also, with America's long standing tradition of entrepreneurship comes easy money for financing a new venture. In Europe, the spirit isn't there so to speak, so I assume the money would likewise be harder to come by.

I don't know anything about European law. Are companies in Europe afforded the same rights as in the US?

weebro5• 19 years ago

I'm a lawyer in NY (where I used to work) and the U.K., I also have a company here (in the U.K.). Cost of incorporation in the U.K. is GBP25 ($50), takes 1 Hour max and can all be done online with the incorporation docs emailed to you after 30 mins. Incorporating a Co. is very, very easy here. Bankruptcy blacklisting also only lasts 3 yrs now (excluding students trying to write off their student debt by incorporating and folding - former loophole).

As for E.U. V's U.S. Corporate (chancery) law it all hinges on a thing called 'The Delaware Effect'. In this E.U. this was tested in the European Court of Justice (our highest court) in 'The Centros Decision' where a Danish couple avoided the $4,000 incorporation fee in Denmark by incorporating in the U.K. and opening an office in Denmark. The ECJ ruled in their favour citing the free movement of persons (corporations are non-natural entities having the rights of a natural person).

The U.K. (Corp tax 22%) and Ireland (Corp tax 12.5%) are the Delaware's of Europe due to a rich body of corporate case law, ideal business law and economic climate and lenient laws on corporate responsibility. Your Sarbanes Oxley Act has resulted in a dilution of the Delaware effect and an uncompetitive business environment due to the expense of compliance. Its introduction has lead to London (and the LSE its stock exchange) becoming the preferred place of incorporation and IPO, and in London becoming the Largest Financial centre in the world. More money was invested in venture capital, and more takeover activity took place, in London this year than in the USA in the past 3 yrs. I was a stockbroker for 18 months after leaving law so sorry for the legal and finance lecture but hope this clarifies a few things.

Google, Microsoft, Cisco, Paypal, Dell, IBM and ebay all have their main base of European operations in the Republic of Ireland where they enjoy a 10% corporation tax (as the got in before it went up to 12.5).

Soooooooo, I'm not sure why YC are still incorporating companies in Delaware.

kingnothing3• 19 years ago

Great info, thanks for the education!

uuilly4• 19 years ago

American's love David and Europeans love Goliath.

The British believed in their Empire. They believed that it was right to put Squash courts and Polo fields in far flung countries. They believed that Britishness was the most natural state of man. The French, Russians and eventually the Germans felt the same way about themselves, only more so and less sucessfully. These empires were Goliaths and their people were proud of them.

The US was the first major colony to successfully break free from the Brits. The most formidable military force ever deployed sailed into the East River and bore down on a bunch of un-uniformed barefoot rabble representing our (at that time) pathetic revolution. Yet somehow we won. That picture was chopped up and burned into the DNA of every American. We re-live it when Bruce Willis crawls through air-ducts and elevator shafts to outwit German terrorists. And again when he leads his band of blue collar drillers to blow up a merciless asteriod. And his goals are simple too. Bruce just wants to get home in time for dinner whereas James Bond is "keeping the British end up." Americans are wary of higher causes which makes them distrust things bigger than themselves.

It's everywhere in this country, Big is bad and small is good. We hate Wallmart, Microsoft, Nike and Exxon. Nevermind that Target, Adobe, Reebok and Shell are doing the exact same thing as their bigger counterparts. They're not big so we can't hate them. The only thing that will "kill" Google (IBM / MS style) will be bigness. We will turn against them once they become Goliath.

Our people (formerly your people) banded together way back then and forged our ideals in violent reaction against bigness. And so it's been ever since. We were the 12th biggest army just before WWII and few thought we would outlast the Soviets. But once the Soviet Empire fell we became Goliath and we have hated ourselves ever since. The Brits and Russians in their prime would have no problem with Iraq. The Russians would roll in and kill everyone and the Brits would pit the Sunnis against the Shias and colonize what's left. We have gone in half cocked and we don't truely believe that it's our place to tell other people how to live. It is cruely ironic that we may have to sail back across the pond and ask our British cousins how we can best play the part of Goliath.

This is all a long way of saying that revering startups is just natural to us. It's what we've always done and for better or worse, it's all we know. I'm actually not sure why they were ever called startups. Upstarts is way more fitting...

kingnothing3• 19 years ago

I agree with the first two paragraphs, but not the rest of it. Somewhere in US history, things changed. The average American is clearly accepting, if not loving, of Walmart and other big companies, otherwise they would not be the juggernauts they are today. There would not be over 3800 Walmarts in the USA alone if we loved small and hated big.

uuilly4• 19 years ago

We have a love hate relationship w/ our captains of industry. We glorify their rise and then sue them into a corner and call them robber barrons when they get too big. I would say walmart is reaching its tipping point. MS has passed it and spends most of their revenues on lawyers. Walmart is close behind. As of now they get sued every 5 minutes.

jimbokun• 19 years ago

Americans do hate WalMart. But they still shop there.

euccastro2• 19 years ago

How long till Google becomes Goliath?

weebro5• 19 years ago

Yes, that's right David could afford to buy a new 'slingshot' with the spare $1.6 BILLION dollars he had just lying around. What is a Goliath to an American?? Boots - to - big - for, comes to mind.

weebro5• 19 years ago

Thanks for the history lesson. Now, let an Irish man (same former 'colony' issues as you Yanks) who's based in the UK, point out that the largest population in the USA is of German origin and the second is Irish. The closest vote in US Senate history was to vote your national language be German (lost by one vote) and it was the single most important factor in the USA staying out of WW2 for so long (apparently, I'm not sure I agree with that, nor am I here to start a American/Europe historical/factual dispute).

Arguably it was the British who were being entrepreneurial then as, put in historical context, colonising countries was primarily for economic gain - Land equalled money then, through taxes. We replaced the aristocracy with the government, which is now collecting the taxes instead. When we created the government, the Aristocracy had to find new vehicles for wealth creation so the created 'Corporations', hence why all big trade missions were funded by entities like the 'Corporation of London'. This gave the rich a way of passing wealth down the family without being taxed on it.

The David / Goliath analogy is rather paradoxical as it is American companies that lead globalisation and are the largest in the world. Google has a turnover in the BILLIONS; sorry that's not quite mom and pop corner store.....they are a goliath. But I am not here to give business lessons.

Please allow me to try focusing this discussion. I am interested in your brain/personality/experience. I'm asking YOU, as individuals and Americans how you feel. How does starting up make YOU feel? I believe the answer lies in societal norms and, therefore, American attitudes. This, I agree, has to do with historical trends.

uuilly4• 19 years ago

I really should have said Americans hate "The Biggest" rather than "The Big" (see my comment below.)

andyn• 19 years ago

Out of curiosity, where have you been looking and what would you expect from people if they joined you? Is it a part time thing?

(You have an interesting looking product there so I think you could do well out of it if you get it going)

weebro5• 19 years ago

Hi Andy, I've been put on to a few resources by YC companies (I'm a relentless networker) so am contacting programmers directly) Our current project (Quarrysell.com) does require a part time PHP, MySQL, Joomla, HTML experienced developer. This is because Quarrysell is only the first stage of a greater concept which you will not be able to guess from it right now.

So yes, Quarrysell needs a part time hacker. Our YC application needs full time hackers of course and we would prefer to have them on board sooner rather than later. If you (or anyone else is interested) drop me an email.

jsmcgd• 19 years ago

I'm not convinced that there are fundamental differences between attitudes in the US and Europe or at least Britain. The industrial revolution began in Britain and was a time of immense innovation and entrepreneurism. Us Brits still point to that as an example of our inherent entrepreneurial spirit however I reluctantly feel compelled to pour cold water on that idea. I think that period in our history could have taken place in any country given the same economic, educational and scientific conditions etc.

So my point is basically that you can find people with the right attitude anywhere. But that also is kind of the problem; unlike in the US, we don't have a Silicon Valley to gravitate towards. Some entrepreneurial people gravitate towards London but unlike Silicon Valley every other person you meet isn't going to be a budding empire builder. So in conclusion, they are there but you'll just going to have to look that much harder to find them.

queensnake• 19 years ago

Desperation. Lack of security to any in the long haul, unless you make it big. The fire is always below your feet, here. Any given job sucks, until you can make your own, work on something you /want/ to work on and make it. Bleak, but that's behind my own attitude.

Silicon Valley aside, why are Americans more willing to risk a startup?

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