OK, Europe: It’s your move
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I held the first Warsaw TechCrunch Meetup in 2007 at a pub called Lolek. We were visiting my wife’s parents and I figured I would post on the site and get a few people together to see the first iPhone. Five wary people came and three left when figured out the meetup was a dud.
Two weeks ago I visited Krakow for ImpactCEE. The event was an effort to bring together politicians, big business, and entrepreneurs. Hundreds of people milled in a massive auditorium across from Wawel Castle where, centuries before, a dragon menaced the countryside. It was clear that things had changed. In less than a decade the entrepreneurial spirit exploded in Poland and Central Europe. From Gdansk to Ljubljana, from Vienna to Budapest the old cradle-to-grave corporate mentality and the offshoring so prevalent in these countries for the past twenty years went away. Why?
Because things got better all over thanks to the EU and the potential benefits of entrepreneurial activity outweighed the risks… because of the EU.
Now as the Brexit vote is quickly swallowed by the news cycle (and will probably be remembered as a polarizing but ultimately impotent squib), it’s time for Continental Europe to step it up. Some countries are already trying. Poland, for example, just announced a $700 million fund to help startups and similar efforts have sprung up throughout Central Europe.
Continental Europe has its age-old problems, prejudices, and arguments. The governments – but not the people – of Poland and Hungary are turning hard towards a nationalism that has become a joke at dinner parties. The Brexit points to the sort of xenophobic and backwards-looking tendencies that got gutted Europe in two World Wars. But that’s the macro level. On the micro level, on the ground, businesses are blooming everywhere. Amazing technology is coming out of European incubators and universities and cities that were once factories for producing cookie-cutter engineers. The idea that a young person in Estonia could build a new global communications platform would have been ludicrous in 1980. Now it’s not so far-fetched.
Here are a few points on which Europe should focus in order to keep growing and show the UK that a united Europe is stronger than any one nation.
Focus on on-ramps. The Kafka-esque days of deep European bureaucracy are over. It’s getting easier and easier to grow in Europe. E-identitiy, for example, is exactly what will make the aforementioned Estonia a powerhouse in the next decade. Other countries would do themselves a great favor and follow its lead. Easy on-ramps for entrepreneurs to plug into the EU market is essential. Many would argue that Europe replaced one byzantine bureaucracy with another, I would argue that the current regulatory environment is improving. Further, I believe, fintech is the way forward for many smaller European countries who should now take over for the UK as leaders in the financial space.
Build to last. One of the most visible uses of EU money has been the immense and amazing improvement of Europe’s architecture and art. Places that just ten years ago looked like ruins are now outdoor museums. Cities crushed by bombs and misrule are now fairy tale towns that tourists visit en masse. This same attention to detail and care must be taken with small businesses. What is a startup but an engine for change just as education is an engine for growth and art is an engine for cultural expansion? Europe needs to build to last.
Less lip service. The theater of entrepreneurship is alive and well in Europe and that has to change. Europe has to build real tech businesses. The European tendency to give small amounts of capital for huge chunks of equity has to stop and valuations have to go up. VCs in Europe say they have to take on a lot of risk but I would argue the unique aspects of the European educational system helps build scalable and salable enterprise technologies that could, with investment and encouragement, reach the wider world.
In the end the EU has done more good than harm. Arguments abound whether Greece should get Germany’s largesse or Hungary should fund a Portuguese highway but this much is true: when the cultures and nations of Europe were aligned against each other all hell broke loose. That can’t happen again.