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If Steve Jobs was adopted by a Belgian family rather than an American family, it's extremely possible he may have ended up working in a bank instead of co-founding Apple. Why? Because starting a company and growing it is hard no matter where you are, but the difficulty is magnified in Europe, where people are divided by geography, regulation, language and cultural prejudice.
While entrepreneurship and startups have spread tremendously in Europe, a lot of aspiring young entrepreneurs leave Europe for the United States. Very little will stop a true entrepreneur from trying to reach his or her goals, including uprooting their entire life and moving it across the ocean to optimize their chances of success. From my interactions with them, the United States' gravitational pull is only getting stronger.
So, what can Europe do about it? Here are my three recommendations.
Focus on creating large companies
Europe produces plenty of small businesses: restaurants, small technology firms, clothing stores, hair salons, and so on. What it doesn't produce enough of are innovative companies that grow quickly and end up big. It's a problem.
Look at the 500 largest companies in the world (Fortune Global 500). According to Bruegel, a European think tank devoted to international economics, Europe created three new, large companies between 1975 and today. The U.S. created 26.
That number is even more incredible when you take into account the fact that Europe has about twice the population of the U.S. The reality is if Europe were to be competitive, it has to produce 25 times more large companies than it does today.
Access to capital continues to be a challenge in Europe. Getting seed capital (1M EUR or less) has become easier, but raising significant money (25M EUR and more) to turn your company in a global business continues to be difficult. Large companies also provide an important 'exit strategy' for startups. Without a vibrant exit market, it's harder to attract both entrepreneurs and investors.
Large companies also play an important role in creating successful innovation centers. They are catalysts for creating angel investors, for providing distribution, and serve as a breeding ground for talent and practiced management.
If you look at Silicon Valley, Hewlett Packard, among others, served that purpose in the early days, and more recently, a number of successful entrepreneurs have emerged from Google.
I recommend that European government stimulus focuses on companies that could become titans, not on small companies that won't move the needle. Too often, there are investments made in companies that have limited or no growth potential.
Level the playing field
Anyone who has built a global organization likely understands that European work regulations can shackle the growth of startups. Taxes are high, it's hard to acquire a European company, severance packages can be outrageous and it's extremely difficult to fire someone.
It only gets worse when you attempt to operate in multiple European countries, as anyone with the ambition to build a large company has to. Each country is different enough that it requires setting up a local legal entity, and having local accountants and local attorneys. Setting up and running these legal entities costs valuable time and money, a huge distraction that gets in the way of actually running and growing your business.
Europe needs to roll out unified labor laws that are competitive globally and unified across Europe. My biggest worry is the branches of government that try to promote entrepreneurship are not powerful enough to address Europe's labour rules.
Change our culture
A small business can be started anywhere in the world, but it takes a different level of ambition to aspire to become the next Apple. The biggest thing entrepreneurs need is the belief that it can be done, that it's worth taking the risk and putting in the hard work. Having the right culture unlocks the passion and dedication necessary to succeed.
Silicon Valley is a state of mind. To recreate Silicon Valley in Europe, Europe must first adopt Silicon Valley's culture. I believe Europe's culture would benefit from adopting part of the American Dream: the egalitarian belief that everyone is able to succeed through hard work, and that it is acceptable and encouraged to better oneself economically through hard work.
It doesn't mean Europe needs to give up its strong communal beliefs and its desire to look out for the greater good. I'm a firm believer that many modern businesses can "do well and do good". Businesses that generate value for their shareholders and that also have a positive impact on the world go beyond generating profits.
Our world does not lack business opportunities; there are plenty of people with needs that aren't met. Enabling entrepreneurship enables innovation, and innovation helps change the world. The entrepreneurs that succeed in building large businesses, especially those that are aligned with fixing the world's problems, will transform the lives of others for the better and introduce more opportunity on a global level.
Entrepreneurs, not the government, will change the world. It's time for Europe to help their companies grow.
Many organizations adopt Open Source for reasons like flexibility and agility. Everyone needs to do more with less. But in government, Open Source drives both civic engagement and government participation like never before. Because of digital, the world feels much smaller and more connected. And Open Source gives people the opportunity to rally around a cause, no matter where they live.
Think about how we petitioned our government before we had the We The People website. I bet you have to think pretty hard about how it was done (I do!). Now, a website has brought to life the First Amendment rights of U.S. citizens. Millions of people's voices are heard. People pull together based on common concerns. The White House built We The People using Drupal and shared the code on GitHub, opening up the opportunity for other governments to easily create their own online petitioning systems.
Now, all kinds of open government data made available through the Data.gov project makes it possible for any developer, anywhere, to create a civic app. These apps have made us see our cities and towns in a different light.
Open City is one example of a group of local volunteers who create Open Source apps using government data. While the group is based in Chicago, the idea is that any city can grab code from an Open City app and make it their own.
Here are a few interesting examples: Clear Streets tracks a city's plows in real time. Living outside of Boston, I know we could use an app like that! Crime in Chicago lets citizens compare crime statistics in certain areas of town, which could be useful for people making decisions about where to move their families.
What is perhaps the most gratifying is that as open-source developers, we can collaborate on projects and help people around the world. It's part of what gets us out of bed in the morning. Earlier this year, participants in DrupalCon Portland launched a website in 24 hours to help people in Moore, Oklahoma, find transportation and housing after the tornado. Two weeks later, the site was discovered on Twitter in Germany and was repurposed to help people affected by the flooding in northern Europe. This type of project inspires us all to see how technology can make an immediate difference.
Other events, such as the National Day for Civic Hacking, encourage developers to use open government data to "collaboratively create, build, and invent". The idea that hackathons can help build and create a healthy, citizen-powered technology ecosystem within government is relatively new, and full of promise. Tim O'Reilly believes that government can escape the "vending machine" mentality (citizens put in tax dollars and get out services) by thinking of "Government as a Platform" for participation. I couldn't agree more.
Open Source ideals are already spreading in governments throughout the world, with good reason. A global network of developers is motivated to help. It's one of the best examples of civic engagement. As digital citizens, we all now have the power to contribute. One person's time and talent can make a huge difference. That is a movement I'm proud to be a part of.
(I originally wrote this blog post as a guest article for VentureBeat. I'm cross-posting it to my blog.)
Very exciting news from the White House today.
Last night President Obama fulfilled his promise to release the code behind "We the People", a Drupal-based application that enables the American people to directly petition the President of the United States on issues they care most about. The release follows a commitment the President made to the United Nations to share the technology behind this platform “so any government in the world can enable its citizens to do the same".
In October of 2009, WhiteHouse.gov was relaunched on Drupal. Two years later, the White House launched We the People on Drupal, a big step forward for Open Government. While governments haven't traditionally recognized the importance of the grassroots, word of mouth organizing that thrives on the Internet, We the People encourages grassroots citizen engagement.
Even more exciting is that if you are an Open Source developer, you can get involved with improving how your government actually works. Needless to say, I'm thrilled to see Open Source and Drupal changing the world in a positive, powerful way.
The newly released code is packaged as a Drupal install profile. The profile is currently tailored to the White House's website but every Github member can issue pull requests to make it more generally useful. The Petition install profile can be cloned, forked or downloaded from the White House's Github repository.
Vivek Kundra just released the Drupal software code for the ITDashboard.gov tool, which is built on Drupal by REI Systems. You can find the source code at http://www.cio.gov/tools/. More information can be found in a blog post by Alex Howards from O'Reilly Radar: White House releases IT Dashboard as open source code.
This is important for Drupal and Open Source: the U.S. Government, one of the largest IT buyers and users in the world, has just taken another big step in embracing Open Source and becoming an active contributor. It also enables us, the Open Source community, to help the U.S. Government enhance ITDashboard.gov or to recommend it to our respective governments all around the world. Very cool!
The new investor.gov is a good looking site that also seems to be 508 compliant (for accessibility). The site is easy to use, making it easy for users to get the information they need without being overwhelmed.
All in all, the site is great example of how governments can leverage Drupal to create beautiful and accessible sites. Nice work SEC!
Another U.S. government agency switched to Drupal. This time, it is the U.S. Small Business Administration. As part of their mission to ensure that small business owners and entrepreneurs have access to accurate, timely and helpful information, the SBA relaunched their website in Drupal. Check it out at SBA.gov.
The site was built by Promet Source and DRT Strategies (DRT).