>> 2. Behind Silicon Valley on best technology and product building practices by at least 2 years.
This was clearly written in earnest, but works better as a satirical joke about the inward-facing nature of bay area tech. Please explain what "best technology and product building practices" means here, and how you can quantify that over time. What were the best practices of early 2016 which are just now being implemented in Zurich-base startups?
The parent's comment is valuable because they actually have direct experience with the topic. It's being upvoted accordingly. Very few people on HN are likely to have direct experience with Swiss start-ups, further amplifying the value of the parent's input.
>> 2. Behind Silicon Valley on latest technology and product building practices by at least 2 years.
In fact I said that if it weren't for immigration uncertainty, I would move there tomorrow. Last year, I moved to Seattle from SF to experience a change of pace. So it's not that I have blind love for all things SF.
SF has a lot more startups trying out things in a small geography. They are trying a lot more things and failing a lot more and consequently learning a lot more.
There are benefits and drawbacks of not being the first mover. Many a times you do not waste time, effort and money going after dead end ideas (remember HomeJoy). Sometime it leads to missing out on things like AirBnb (especially relevant to as tourist driven economy as Switzerland).
With lesser startups being formed, comparatively lesser capital available - Swiss ecosystem is trying to find it equilibrium. And as I originally mentioned - they are really smart people. They will figure out what is best for them.
This thread was also a good learning for me. Every word matters. Sometimes, you try to sneak a post in between other work and things slip!
Works against them towards what? Not wanting to conquer the world is legitimate, I don't see why everyone should absolutely want to become the next Bezos.
In today's globalized world - if you are not one of the bigger players and do not have moat (govt contract, some other kind of exclusivity) - other bigger players will come after you.
Basically no one is competing in NZ because no one cares about the NZ market. It's simply not large enough. Until it is.
I do think there is a lot to be said about not trying to build these giant world-eating companies that require you selling your soul to the devil. Companies like Craigslist I have a ton of respect for. A lifestyle company should be the dream of most, not the crazy disconnected-from-reality VC world we're seeing today.
I simply think anyone betting on their market being small enough to fly under the radar is making a very tenuous bargain.
Living in Poland, I see so many good ideas and good teams, that go absolutely nowhere because they begin with the local market, and struggle to achieve ramen profitability, while their global counterparts achieve scale and funding to ultimately take over the market.
There is a small niche of successful copycats that grabbed the local niche, and maintained the lead over the years due to strong network effects - like a local reddit clone (wykop.pl), or a local ebay clone (allegro.pl), but that's almost it.
All the other projects either failed to get off the ground, or got killed when globally oriented startups entered our country.
Ebay like marketplaces still have a big physical world component present. Even if it isn't ebay, it might be some other company in Australia. Or maybe trademe becomes the company which tries to take over in Austrlia. It's inevitable and just a matter of time!
Xero, however, has massive potential for growth, because it's international.
I don't understand why that is necessarily a bad thing. If someone is looking to make a shit ton of money, have a chance to monopolize or dominate the international market, then yes, that makes sense. But if you're happy and content serving nationally, and so are your customers, I really don't see why someone would want to expand internationally.
2) The internet may scale worldwide, by that doesn't mean any service can do so while maintaining that value per user. Hell, it may not scale beyond a neighborhood, let alone a country.
I don't think this is born out by the evidence. There are many social reasons that smaller markets prefer a local solution--both because of network effects and just because of branding.
In the Swiss case, Swiss people (often) don't use Google; they use Search.ch. They don't use Amazon (which is mostly unavailable in Switzerland); they use Galaxus. They don't use OkCupid; they use Parship. They don't use Zappos; they use Zalando (which is European, not Swiss, admittedly). They don't use eBay; they use Ricardo.
Many larger examples do involve the kinds of moats you describe--the Chinese Internet is a key example of that (where censorship and government backing contribute to the superiority of local alternatives)--but I think the phenomenon of Swiss startups having what an American might consider to be reduced ambitions has to be viewed in the context of Swiss _consumers_ also often preferring local options.
I would also add a subtler point here: to an American observer, the often-American-centric perspective of American startups--which are often slow to expand to foreign markets, but for whom "America" and "the world" are often near-synonyms--is less glaring than the Swiss-centric perspective of a Swiss startup. Americans--both entrepreneurs and their observers--are just less likely to realize the extent to which American companies equate national and international markets; it's far more obvious when observing a foreign company, especially one with as small a national market to dominate as Switzerland's.
[Amazon] has signed a cooperation agreement with Swiss Post, which means the postal agency will carry out customs clearance for Amazon in the near future.
Customs clearance is said to take a maximum of three hours, which makes 24-hour delivery from abroad possible. Amazon offers this delivery method as part of its Prime offer in Germany[1] I'm not referring to YC specifically, but investors and incubators who are comfortable with Uber-esq behavior.
The post you're responding to is about economics, though, and VC math doesn't work for funding modest successes.
A VC can fund 10 businesses and have 9 of them fail (high risk) as long as the remaining one provides 100x+ return (high reward).
If you don't fund that one blockbuster then you can't fund the failures.
If you want to be in low-risk and low-reward business, then you're a bank and you're providing loans, not giving out no-strings-attached cash.
We already have that. They're called banks.
Sure you can, you just bootstrap through monetising the ground work. For example, if you want a product company you can start out as a freelance design agency. The bulk of the initial design work will be for clients, but you can be involved with low volume manufacturing on the side. As the company grows, not only do you have the funds to take on progressively more ambitious product manufacturing projects, you've also built up a team of designers that can help push these projects forward. You're going to need designers right? Why not get them making you money from day one.
To give an alternative example, let's say you want to manufacture mobile phones. A good way to start small would be to manufacture accessories for existing phones. This is within the grasp of anyone within the Western world, given enough drive to do it. The revenue and knowledge you can gain doing so allows for increasingly sophisticated accessories to be built until the point where you have your own manufacturing premises (or have access to one at low rates, due to the volume of products you're pushing). The step from this point to manufacturing mobile phones is not that great.
Does this require more patience than burning through VC money? Sure, but it's also lower risk. Building a company gradually from the ground up means you get a better sense of what it takes to run a successful business (or in other words, experience is the best teacher).
Not only that, but the buyers of product and services are often different as well.
Sure, building up a huge services company lets you squirrel off some funds for product development, but how often do you see this in practice? The only example I can think of is IBM, and they're moving in the other direction.
https://en.wikipedia.org/wiki/Adafruit_Industries#History
A similar example being this product company, which started out in 2012 with two people and a laser cutter, growing to a product company that employs 30+ people within the space of 5 years:
As a side note, thank you for founding Hackaday also, it's one of my favourite websites.
As for examples of design consultancies morphing into manufacturing companies, Cambridge Audio is one such example:
Except for every company that came before the current dot-com cycle.
Yes, if you have plenty of receivables, and they're diversified, you can find banks to fund some working capital. But not operating expenses.
I'm not referring to operating expenses. I'm referring to investment in growth. The idea is to prove you have a business that can turn a profit by bootstrapping it yourself, then get a small business loan from a bank to take it to the next level.
There are also other sources of business loans. Here's one example:
https://www.fundingcircle.com/uk/businesses/
Here's another:
https://www.nerdwallet.com/blog/small-business/3-potential-b...
The idea that VC money is needed to grow a certain type of business simply isn't true. If you're prepared to be patient, you can avoid any VC involvement.
What a bizarre statement. So highly educated people can't be passionate about food?
Also, what I suggested is not limited to expansion through a franchise model. Let's go back to product manufacturing to explore why. Imagine you have just received an initial order of 100,000 units of Product X. You can meet this order with your current supply chain, but in order to cut costs in future orders you'd like to manufacture a greater proportion of the finished product in-house. Let's say for the sake of argument that you've identified potential savings if you can create injection molded cases for Product X. If you go to the bank with a low-risk plan to grow the business, including an analysis of the current health of the company and forecasts of future profits, you can reasonably expect that you can find a bank (or other business loan lender) willing to lend you the money to invest in your company to help it grow.
What a bizarre deduction. I'm passionate about food, I have no interest in starting my own restaurant.
It was a generalization based on my own observations, most banks lend to safe well-established models, university graduates tend to gravitate towards newer things.
That's your choice of course, but why do you think that is?
> "university graduates tend to gravitate towards newer things."
I don't think that's an accurate generalisation. For people who have STEM degrees, I'd agree, but there are a large proportion of people who followed other degrees (English majors, History majors, Philosophy majors, etc...) where I'd suggest that bias towards the new is not as prominent.
My original point was that people were attempting ideas which were in the realm of potential global mega corps. If you don't grow to be one, you get eaten up!
Not true. Domestic alternatives are often preferred over foreign competition. Two examples that leap to mind are eBay and Uber. Both failed in Japan because people preferred Yahoo! Japan auctions, and the Japanese taxi system. eBay and Uber can't compete there.
To take it down to the niche level, the big national real estate blogs all failed in Houston because they can't compete against HAIF or Swamplot.
One is better off building something smaller, where work and talent is enough to maintain it.
There are more opportunities in those companies (e.g. a $1 to $50 million dollar business) of which there are tens of thousands, than to build the 1 in 100 behemoth.
You'll have more chances of success, and you'll live and sleep better. Because money, above a certain amount, also has a marginal utility curve and diminishing returns.
$1..50 million dollar businesses: I agree, great stuff. I'm just not sure that such businesses have realistic long-term moats against the Amazons of the world.
In addition, having a few world conquerers around helps bring talent and money which is then turned into startups - there are a lot of great companies and non-profits that make SV what it is because some founder or early employee exited with retirement money and decided they wanted to apply their skills to helping society.
Not that's the norm, mind you, or that world-conquerers are amazing. Just, why having the occasional "big vision" around helps out.
SF locals that are priced out of their city would have likely different opinion.
Yet, while uber operated in Germany, they could get basically 100% of the customers – simply by throwing billions of VC money at the task to subsidize rides.
If competitors use such methods, there’s little you, as smaller company, can do.
There are two sides to a coin: while Uber has world-dominating ambition, that also means they aren't anywhere near as flexible to local market conditions as a local startup is. And I wouldn't consider Uber an unmitigated success yet - they still depend on VC cash to keep going, we'll see what happens when it runs out.
They refused to pay insurance for their drivers? That's the reason why Uber stopped. Because they didn't want to pay for the time between the driver leaving their home and entering the car, and the time that the driver picked up the first customer.
Which meant that during this time the driver was entirely uninsured, which in turn is illegal.
If even having this in their favor, small players are finding it difficult to survive - imagine if a bigger player comes in a space where there is a play for global level market place.
They could get a large market share, while they're heavily subsidizing their rides. The tricky part is keeping hold of the customers. Certainly where I live Uber made a pretty big push a couple of years ago, offering ridiculously cheap rides. During that period lots of people I know used Uber a lot. Once they stopped offering the subsidies and the prices rose back to 'normal' levels everybody went back to using taxis and public transport.
This is not true. It's up to the local canton to grant citizenship[1]. It has noting to do with EU vs non-EU either. Switzerland itself is not actually part of the EU[2]. For someone who visits so often, it seems odd that you don't know that. In fact even in the video in your link says that the same committee that rejected this person's citizenship awarded it to a Turkish individual and Turkey is not part of the EU.
>"Do not have world conquering ambitions"
Yes in the majority of the world this is actually considered quite normal and acceptable. Many would even say "preferable."
[1] https://www.swissinfo.ch/eng/becoming-a-citizen/29288376
[2] https://europa.eu/european-union/about-eu/countries/member-c...
Switzerland has a treaty with the EU that gives EU citizens the right to live and work in Switzerland (and vice versa). For non-EU citizens, the situation is far less clear cut.
Can you elaborate on that? Are these "best practices" around technology or process? Are they found in books, or are the books out of date and you just have to 'be there' to discover them?
In my experience further away you are from SF, less cutting edge you are. In my experience even South Bay is 6 months behind SF.
SF is a big melting pot, where a huge amount of talent are trying out new things and they are open to sharing their experiences - be it about latest technologies or latest customer acquisition strategies. Because of this, you find out about the latest strategies and associate advantages and disadvantages much earlier. By the time these strategies turn in blog posts and capture popular mind share - it takes months and years.
Of course there are exceptions everywhere and some companies outside SF are great at being at cutting edge. However on an amortized basis, further away from SF you are, more likely you are to be behind the cutting edge.
They just try a lot more things and find out faster what is working and what isn't working. Most of them turn out to be useless but the ones that work give them an early start.
If would rather be in a position where I can get potentially useful and useless information so that I can filter vs not having much information.
gRPC - Mountain View
Cgroups - Mountain View
Golang, Rust - Mountain View
Protobufs - Mountain View
Blaze - Mountain View
React - Menlo Park
Buck - Menlo Park
Thrift - Menlo Park
And this is only a fraction of it. Do you even work in tech? You sound like a talking head...
There are even only a few people in the SF/Oakland area at this point. Most are from outside of California.
The recent notion that the only good tech is popular tech is, quite frankly, aesthetically repulsive.
However most of the unicorns or near unicorns since 2010 have been based in SF. Dropbox, AirBnb, Uber, Lyft, Stripe, Zenefits, SoFi, Credit Karma, CloudFlare, DocuSign, Wish, Slack, Github, Instacart, Prosper, Automattic, Eventbrite, Okta, Docker, Gusto, Nextdoor.
Let list could go on and on. I stand by my statement that more talent in concentrated in a smaller area vs South Bay and they are trying out a lot more things and also faster. Dynamics of an urban area also play some role where, where you can quickly walk to, use public transport or get an Uber, vs driving to another place in South Bay. All this leads to SF being ahead of South Bay in terms of learnings and trying out things.
And name calling doesn't get us anywhere!
SV is a colony of capital B business, and they keep the makers around because they have to.
The term strip mine is a loaded term. In the classical sense, it devastates the ecosystem while extracting resources that are impossible to replace.
In fact, Silicon Valley does not do that. People aren't going to stop needing transportation because Uber used up all the transportation, and it won't stop needing places to stay because AirBnB lets you rent out your apartment.
> SV is a colony of capital B business
What is a capital B business as opposed to a lower case b business?
Where is the Xerox PARC of 2018? Why isn't there one? We have more computing power and are economically (as a whole) better off than at any other point in history.
At some point, you have to start aiming for the moon again.
Edit: capital-B business to me is the ultra-aggressive dominate-everything mindset that seems to corrupt a lot of people.
You're talking out of both sides of your mouth now. Strip mining usually means something that destroys a natural resource.
You were originally talking about how Silicon Valley "strip mines a particular domain." That implies that it's strip mining other industries, such as hire for ride, etc etc. You could almost argue that they strip mined animation and movie special effects because they took profits from manual animators and movie prop creators.
I fail to see how Silicon Valley is "strip mining" tech. (Btw, something different from what you previously implied) They're grabbing low hanging fruit, but they're not ruining the resource for everybody else.
Also, to address your last point, the economies of scale are such that at this point, if you don't dominate a market, at least locally, you're dogmeat.
So what is your metric of "cutting edge"? It sounds like you're optimizing for small business strategy? Seems honestly like VC funding is the biggest indicator here.
I agree with you completely, suggesting San Fran is more cutting edge than the South Bay is a bit ridiculous.
Containerization and its orchestration all started in the south bay. Pray tell, what was in use in SF for 6 months before it hit the startups based in MV, Sunnyvale, Palo Alto, etc.
There are always exceptions (like your containerization example), which can be attributed to serious tech players like Yahoo, Google and FB in South Bay. However holistically, SF has had much more unicorns and near unicorns. The contrast between SF and rest of the world has been more pronounced in recent year vs pre-2010 (except China of course - due to the growing economy and closed nature making it difficult for outside companies to operate).
Valuation has zero to do with innovation and using unicorns as a measure of bleeding edge tech is nonsense. Some of the very beat tech doesn’t necessarily turn into the best businesses.
And don’t forget, the South Bay has one of the most innovative middle-out compression innovators in history: Pied Piper.
I am curious what such Swiss people think of Nestlé, then. Or other companies and industries where Switzerland has a prominent global reputation?
I would just chalk it up to personal preferences and motivations, but the statement as written suggests it's a Swiss thing in general.
The point 2 should have been: >> 2. Behind Silicon Valley on latest technology and product building practices by at least 2 years.
I instead used the word "best" which doesn't really capture what I had meant. This thread also helped me develop a better understanding of my learnings.
I thought that is because so many Indians applying for green cards but there is a limit by country so it takes a long time?
Their cause is even more sympathetic than DACA. I sincerely believe if they were protesting and more politically involved, they'd easily pass it through but no noise is being made. That's a good thing personally in my opinion since I'm turned off by protests and think that it divides us, and most protesters are very aggressive and bluntly not very bright. However, protests are very effective in American History in order to make change and if I were in their position I'd say that's the best bet. Some protests seem politically manufactured and arguments easily refuted, but movements like the civil rights movements and the American Disability Act would not have been possible without protests.
I wouldn't go that far. DACA recipients were brought to the country as children and literally know nothing else, often including the language of their "home" country. H1Bs might be more beneficial economically, but I'm not convinced they are more sympathetic.
Not the country's problem. If you expose children to the consequences of your wrongdoing and mistakes, they suffer as well as you. Otherwise, that incentivizes wrongdoing.
Another example - if you rob a bank, and pay for your kid's private school tuition is it "wrong" to take away the money you stole because the kid is just accustomed to attending private school?
The laws are fairly clear. Most illegal immigrants know full well they're breaking the law by entering illegally. If they get caught, everybody involved suffers the consequences.
The country decides what the country's problems are and are not. DACA has widespread public support - 83% of voters support a pathway to citizenship, according a to a poll by Fox News (of all places):
http://www.foxnews.com/politics/2017/09/28/fox-news-poll-83-...
So it's safe to say the country considers it a problem, and a solvable one at that. You don't need to use wholly inaccurate analogies when people already understand the issue.
Odd, the people who are in charge of creating laws, the House and the Senate, are still in office after getting nothing done. Right now this is not the country's problem because laws on the books should be enforced, as they were passed by the legislature.
Why not vote legislators into office who can pass the laws? It would be the legislative branch's problem, most definitely not the executive branch - I applaud Trump for upholding the law as passed.
The executive branch enforces the law, the legislative branch creates laws, and the judicial branch interprets the law.
Using executive orders to selectively enforce or not enforce laws does an end run around the will of the people and laws. If enough people cared enough, vote legislators in who will change the laws to what you want. Just saying that at this current moment a majority of people want this solved but have no concrete solutions on what the exact pathway to citizenship is short-sighted, naive, and dangerous.
For one, there hasn't been an election since this latest change to DACA status happened. Secondly, very few people decide their vote on a single decision like this, and especially one that doesn't directly affect them. That doesn't mean they don't support it, though.
If people don't care enough to campaign/have their votes influenced for this issue, it means their preference isn't strong enough.
The fewer executive orders the better. Any executive order changing the laws as they are in the books should be immediately reversed, as it subverts all separation of powers in our government.
That's a good thing no? Diversity of immigrants? Otherwise 80%+ of all immigrants would be Indian/Chinese.
Doesn't seem unreasonable to me. Gives other countries a chance to immigrate.
Things I noticed:
1. Incredibly smart people.
2. Behind Silicon Valley on best technology and product building practices by at least 2 years.
3. Great work ethic and social responsibility.
4. Do not have world conquering ambitions - which kinda works against them. One of the founders was talking about an idea and was being very conservative with market size estimates. So I suggested to him - Think about how you can conquer the world. And his reply was - We are Swiss, we don't conquer the world.
I think one of the biggest challenge for Switzerland tech scene is that there is no viable immigration path for a non-EU citizen. Even after decades, you might not get a citizenship [1]. It makes it difficult for them to attract talent from outside, especially those with Silicon Valley experience.
Not that US is any better for Indians. Based on current estimates, if someone from India applies for an employment based Green Card now, they might get it in 70 years. And life is a pain because you have to do a lot of paperwork throughout.
If there was a viable immigration path in Switzerland, I would move there tomorrow!
1. https://www.swissinfo.ch/eng/naturalisation-controversy_amer...