🪴EU is royally f***ed

This graph, showing a contrast between the US and EU startup ecosystems, blew my mind last month. 

The US has significantly outperformed the EU by a margin of more than ~75x in terms of valuation and ~5x in terms of number of startups created.

This is why some people refer to Europe as “just a rounding error when it comes to large companies”.

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🪫 Companies “from-scratch”

““From scratch” refers to starting a company from its inception as a new entity, rather than using companies made through mergers or acquisitions.

One more group of companies was also considered — publicly-traded companies (since the report specifies “market capitalisation,” not private valuation).

Only such companies were considered for this metric, which makes a couple of private corporations not appear on the graphs (fyi).

🇪🇺 European startup ecosystem

There was only 14 EU companies worth more than $10B, with a total marketcap equal to ~$430B.

$430B seems like a decent amount of money, however not for a continent. It is equal to:

1/6 of Apple ($2.8T), Nvidia ($2.7T), Microsoft ($2.6T)
1/5 of Google ($1.9T), Amazon ($1.9T)
1/3 of Meta ($1.2T)
2/5 of Tesla ($1.1T)

Doesn’t look the good, does it.

🪦 Regulations will be on our headstone inscription

In the early 2000s, the GDP growth per capita gap between the EU and the US wasn't as stark. However, today, the US has pulled significantly ahead.

Main reason behind the slowing down is to be attributed to bureaucracy itself. Not only it makes itself less attractive to founders, it takes many investors away too.

These facts are not only troubling on its own, but they compound into larger issues, such as talented founders leaving to the US, because of a better opportunities for funding and mindset around their companies, widening the gap further.

Just from top of my head:

• The most basic Tesla autopilot not working in EU, while you have self-driving taxis in SF,

• OpenAI models not working at all because of the regulations.

• Many, many more examples.

Disgusting, if you ask me.

🧠 Mindset and cultural differences

Startups not failing, yet barely staying alive in a limbo is much more common in Europe, which means wasting more founders on useless problems.

As an entrepreneur, you want to feel everything is possible. In Europe people always tell you that you won't succeed and you should think twice. In the US, they say just do it and if it works you're successful, if you fail you can do something else. If you fail in Europe that would be a red mark next to your name.

So how do we fix this? If only I knew.

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