Why Italy, Spain, France, and other European countries can’t create global digital products.

The first market: why it’s so crucial

Let’s take the classic example of an Italian startup. The most natural thing to do is developing, launching, and optimizing the product in the Italian market.

Product and marketing

Once you have a product developed in a market like the Italian one, it’s tough to expand it in other nations (unless being Italian is an added value for the company, but usually, this is true for organizations operating in fashion, food, or design. Not tech).

Company culture

Here’s where things become even more problematic.

High complexity and low economy of scale

As I described above, the typical situation is a small company that must structure itself as a multinational business when it does not have the right dimension yet.

Valuation and raising

The European venture capital market is less developed than the American one; we all know that.

The power of the US market

Once a company tries to expand abroad from one of these European countries, they often realize that the product doesn’t make sense in other countries because there is another strong territorial competitor or substantial cultural differences.

The power of focus

When you have a big market, you have a lot of competition.

The best startup countries in Europe

It’s not surprising that almost every startup-related stats in Europe looks like this.

  • There’s a great ethic of work. (Ethical businesses are the only ones sustainable on a big scale and long term).
  • English can easily be the primary language of the company. (This is the elephant in the room that nobody is talking about, but it’s crucial.)
  • High qualified immigration.
  • Another elephant in the room: there’re a lot of other successful startups (= more know-how, talents, investments, ecosystem, etc.)
  • Transferwise (London, UK)
  • Revolut (London, UK)
  • Farfetch (London, UK)
  • Klarna (Stockholm, Sweden)

The myth of “New European Silicon Valley”

It is funny to see news every year all with the same headline: “CityX, the New European Silicon Valley.”

  • Talent attraction
  • Serendipity and “density” effect
  • Founder mindset
  • Investors mindset
  • Employees mindset
  • Ease of raising capital
  • Less M&A culture
  • etc.

Conclusions: how to create global products in Europe

Let’s try to figure out some useful and practical pieces of advice.

Help me

As I said at the beginning of this post, I don’t pretend this is the absolute truth. Here are just a few thoughts based on my personal experience.

Follow me on Twitter @Tosi_Tommaso

Related links

Why Fundraising Is Different In Silicon Valley — Michael Seibel — Y Combinator

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Tommaso Tosi

Tommaso Tosi

Tech and Media entrepreneur. Co-founder & CEO @ Titanss