Why American tech companies become European leaders?
Google, Facebook, Uber, Apple, Amazon are clear leaders in their field in Europe. What is the reason behind this? Can we do something about this?
According to research by Bill Gross, the single most important aspect for creating success for a start up is timing of the introduction of the product (In other words: is society ready to use it):
If the timing of the introduction of the service is right a company can quickly grow from start up to scale up. The USA has a large local market, with an entrepreneurial spirit. There are many companies founded, many mutations in Darwin's terms. If an American company has a good concept it subsequently has a very large homogeneous home market where it can explode without translation, legal, financial, cultural and other localisation issues that slow down their growth (as happens with their European counterparts). As they will have grown much quicker then their counterpart from (let’s say) Holland, they have obtained more resources to take over other companies, improve their technology and market their service better. They can then outperform local European competition, or buy them.
So American success it is a combination of timing and size of the home market.
You see similar things happening in China, with for instance Alibaba in ecommerce and DiDi in autonomous driving.
What can we do against it?
I know governments want to do something against this. They don't want to be dependent. They want to create European jobs and keep profits (and data) in Europe.
We cannot do very much, we have to stay realistic. There are other things we are good at in Europe, like making good cheese, cars and airplanes and art.
European governments can help to make sure good ideas are brought to life and international growth is stimulated and facilitated. Make sure European winners are created, maybe even at the expense of other European competitors. Cooperation between European countries to make sure the European winners grow faster, so maybe even at the expense of the European losers. Here Darwin comes into play again.
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