The successful ones, like Dubsmash, leave for the US after a while.
If I, as a German, was to create a startup in Europe today, I’d do so in London.
Seed funding, tech talent, tax situation, and lawyers to help you start your company - all on a better level. Yes, living was more expensive, but we actually enjoyed that - it put pressure on us and everyone working with us.
We had a highly successful exit in less than a year.
The lifestyle entrepreneur is a phenomenon that you can find in the US as well.
If anything, the success of Rocket Internet proves the point that Germany is not good at startups.
Instead, I worked for seed stage startups with ambitious missions such as changing the world. Even some crazy ideas can get funding in US because today’s angels are used to be engineers of yesterday.
Germany is not there yet. The market here needs to evolve years to get there. For example, if I could get my startup funded and successfully exit, then the next generation startups could have better angel options as I’d be willing to invest in startups with crazy & ambitious goals.
If you are looking at it that way, you have only one company in Germany which is SAP.
Global companies have massively increased their presence here.
Google has a huge presence in Munich, notably including a chunk of the V8 developers. Apple has a large hardware team in Munich. Amazon Berlin is aggressively hiring for developers to work on AWS. If you're after SF style salaries go work for Google Zürich and take home €200k.
What I hear from recruitment firms is that "mediocre engineers move to Berlin and great ones to Zurich". Also, GetYourGuide has their core backend engineering staff still in Zurich, but marketing and sales in Berlin. One of the founders writes that in machine learning, artificial intelligence, and complex data analysis, there are more talents in Switzerland than in Berlin: https://www.handelszeitung.ch/unternehmen/getyourguide-chef-...
Switzerland is even more founder/investor-friendly than the US. Example: Capital gain tax is 0%, that means, if you start a company, and sell it (=shares usually surgue in value), you don't pay taxes on this gain. Also, no capital gain taxes need to be paid, if you buy a publicly listed stock/ETF and hold it for more than 6 months. (More in another thing I wrote: "Switzerland: How buying real-estate can kill you financially and reasons to go for stocks instead" - https://bit.ly/2xIe8ri). Despite the legal infrastructure, we still lack the "American" mentality to become a startup place, but for small businesses it's much better here than in Germany:
A friend of me once said: "Germany is a rich country of poor people". The system in Germany hates small businesses / freelancers and is optimized for conglomerates like Siemens or BMW. If you open a company, you immediately drown in red-tape and upfront taxes. As a comparison, in Switzerland you can just start issuing invoices without a tax-code or anything. Only after you reach a certain threshold, you need to have to inform the authorities during the same tax-year. Also after that, things are very reasonable and easy. My tech recruitment firm generates "normal revenue" and I still haven't gotten a tax-consultant because I can do taxes myself. If I have a question, I call the tax authorities and they help me / give "free advice", which shocks my German entrepreneur friends. There, the tax-authorities treat them as criminals, no support is given and one is triple-checked thoroughly that no taxes are evaded, which, of course, happens anyway especially because taxes are damn high. If you make median wage, it's 45%. In Switzerland median wage is taxed at ~17%. Also, tax-authorities treat taxpayers like clients, whom one is grateful to. That reflects in the simplicity of the tax code: In Germany, if you go for dinner with clients, you need to subtract and can't deduct the part from the bill which you consumed; in Switzerland, you just deduct the whole bill.
(Content marketing from here: If you are European and you want to move here, shoot me an email to [email protected]. I am well-connected in the local tech scene because I match programmers with jobs for a living.)
EDIT: it seems as if you edited your post heavily to add the notion of “content”
... So why should top notch talent move to Germany, if they can
move to Norway, the Netherlands or Switzerland where they earn
double or triple? ...
I wouldn't recommend moving to The Netherlands for the salaries. But there might be other reasons to move there.
I just left The Netherlands, working from Thailand now and while I earn about half of what I earned in The Netherlands as a freelance dev, I probably save more money in the long run due to lower (practically non-existant) taxation [1] and just a general lower cost of living (especially on the Thai countryside, where I live with my GF and daughter).
Oh, I also only work 4 days a week now instead of 5, so better quality of living.
I estimate that in The Netherlands my basic cost of living was probably around 2500 EUR a month (mortgage, food, insurance, commuting), but in Thailand for the 3 of us it's around 1000 EUR or so (we built a house here, so no housing costs).
P.S.: I don't work for a Thai company, I work remotely (currently for a US client) through my Seychelles offshore company [2].
---
[0]: https://www.expatica.com/nl/finance/Tax-exemption-Dutch-30-p...
[1]: https://www.aesinternational.com/education-centre/taxes-for-...
[2]: https://www.sfm-offshore.com/seychellesoffshorecompany.html
I was recommending NL exactly because of the 30% tax exemption for 8 (!) years for foreigners who move to NL to work in tech and other "in demand" fields, which results in a very nice after-tax salaray. Without that, you're right, NL isn't that interesting financially.
That’s a dangerous thing though to push as a one-stop solution I think. There is huge advantages to work for one of these companies, but the drawbacks are also there, and they’re definitely not made for everyone
Furthermore, there are a lot of jobs that are being filled with engineers that don't really require an engineer. A good friend of mine is currently working for one of those companies, and his job mainly consists of building spreadsheets with risk models that are then passed on to, and mostly ignored by, the sales force. Needless to say, he's probably going to switch careers in the next few months.
For some people that is enough as long as they get paid at the end of the month, but if you actually want to do something, these companies are not the place for that.
meh, working with embedded hard-heads on experimental features for a car segment driven by oligarchs, CEOs, and mafiosos.
https://www.ingenieur.de/karriere/arbeitsleben/arbeitgeber/d...
Not saying as a consumer i do not prefer EU privacy laws, I do, but it will be hard to compete on a global scale being handcuffed in a lot of these smaller areas. (privacy, language barriers, taxes, salaries etc)
For who? It's probably more satisfying because you are making it without any help. But that's it.
Appearantly beeing a 'Startup' seems to be associated instability and unreliability in some circles -- wich again is part of these 'cultural issues' wich I was talking about in the previous post.
It's more about the fact that any new cool young company can disappear soon, if there is no business. And this happens both if investors give you money or if you simply don't make enough money. That's the way it is...
Eventually, if the business doesn't work well, it doesn't work well...
It's also somehow the reason that nobody got ever fired for hiring ibm or whatever the saying says...
Blaming GDPR for everything is another stupid trend I detest. I’ve inplemented a lot of stuff related to it and it’s definitely not what it gets pictured as.
At the end of the day it speaks more of the zeitgeist among Quartz’s “high-earning readers”.
Every law that remotely hinders the purist form of the free market is detested in Anglo media is seems. People have no problem hailing Amazon as a tech wonder and celebrate Bezos as the richest man alive. But how about minimum wage and proper working conditions in their warehouses?
'ah should get a better job then'. They are 'at will' employed.
Just because a law restricts business doesn't mean it's bad.
From what I noticed, it's mostly coming from the U.S. where every piece of regulation is seen as "government impending businesses that create jobs", including regulation against polluting etc. I am not sure how actual citizens feel, I suspect not as strongly against deregulation as the press make it seem, but they're definitely a lot more against it than in the EU.
Which precludes much of what is worth trying. The problem is that this attitude severely limits the potential upside.
This is one of the classic misunderstandings of European entrepreneurs and investors.
In finance - things with low risk, tend to produce low yield. This is generally well established because there are a lot of 'eyes on the info'. For example, we can calculate how much it costs to extract a new shallow water Oil find. Most of the variables are known.
Though it's not so clear in early-stage, the rule will still apply because the easy hanging fruit generally will be culled when there are intelligent actors.
So - you need to take on risk. Otherwise, you're probably not attacking a big opportunity.
European VC's usually come out of the world of finance - in fact, VC is considered a part of 'Private Equity'. In PE or big funds, they invest in one or many companies, and expect x% return. Some more, some less.
In PE, if a company were to go bankrupt, it would wipe out the portfolio profits. Imagine if Warren Buffet put money in CN Rail and it turfed.Bad.
But in VC - you get 9 fails and 1 home run. The fails are hard to swallow but they are an inherent part of the system.
Culturally, Europeans especially Germans are not good with that kind of failure. It can be seen as a permanent mark on one's competency and status. In Austria, up until recently, a CEO who put his company bankrupt could face criminal charges.
All of this makes sense in a culture of high standards and expectations, coupled with social solidarity of workers (i.e. you but us out of jobs, you pay!).
European LP's are not used to losing their money. European workers are not used to equity, to losing their jobs, to total instability.
European BigCo's often do not recognize value in startups. The culture in Europe is very protocol and status oriented - you're 'value' is a function of the prestige and power of the entity you represent. Ramshackle, scruffy coders showing you 'you can do something amazing' is just less potent an opportunity than it is in the US.
And of course, the exit opportunities are not there.
And then so many other systematic issues like the fact almost nobody will learn to speak German, immigration etc. etc.. - all of this makes it that much harder.
Much of what I am saying is stereotypical of course, but it's real enough.
I think Europe should take their disadvantages and turn them into advantages and use their 'longer scope of vision' to do value creating things.
Europe is good at getting people together and going 'big projects' that have a long term view. Like CERN. And EU treaties.
I can see some very powerful things concerning money - European countries are smaller and more nimble. Sweden does some cool stuff. What if a Swedish Crown corporation enabled a digital currency that could be used globally? Because of the integrity of the institution, and the fact that it's backed possibly by a 'real economy' - it could be a very powerful export. Much in the same way if you make 'jet fighters' you don't just go and sell them you need your countries diplomatic corps to work with you.
EDF in France (Energy) is tied closely to government, and that kind of stuff - i.e. nuclear, generally needs some hefty scale.
But also expect that many of the gains in such situations will be socialized, and maybe not come in the form of crazy billionaire status for founders.
As a corollary, the article cites European data protection law (in the context of not being able to collect usage data to improve the product) as a barrier to building startups which ... is also very wrong. You can (legally! Ethically! GDPR-compliantly!) collect all sorts of data with which to improve your product. I've seen it done, I've done it myself.
There are a lot of people here, German and non-German alike, trying to furiously recreate the SV way of doing things, as if that's the only way to build a strong tech industry. To me that's both uninteresting (why replicate the same model everywhere?) and bad business (not all markets are the same, and that's not a bad thing). Maybe people would be more successfully adapting to the local context. It's certainly working for a handful of startup incubators I know in Berlin.