We don't need startups, we need Digital-Mittelstand

Yes, but what if the big-software type economy isn't actually that useful?

Maybe you can grow it to 30% of GDP if you start doing a bunch of bad stuff, but if it can be replaced by open source local stuff-- if it's possible to simply kill facebook, Microsoft etc. and replace them with Linux together with a couple of not incredibly expensive software packages developed to provide a substitute, then why should we have a big-software economy?

I think this is more the idea. The interesting thing isn't to build a European Facebook or an EU SaaS economy, it's to kill the whole concept, globally.

It's probably more of cultural difference. It's common in the US to build companies like a lot of houses are build in the US.

In the US houses are often build from wood and plaster and have a high chance of being knocked down by a storm. Companies in the US are often build on a ton of dept (and never making a profit is not considered "weird") and have a high chance of being knocked down by a storm.

In Europe people like to build houses from brick and concrete. Companies in Europe are often expected to be profitable at some point and be able to wither a storm.

> If Europeans can’t figure out new valuable things to contribute to the world, than their system isn’t as clever or morally righteous or fantastic as they think it is.

Most Europeans have access to some kind of comprehensive public health offering, food that isn't killing us quite as quickly as American food does, etc. It is a system which requires thought and design that markets can't offer, since they're innately uncoordinated (the exception being oligarchies).

The idea that the market can be described as regular people deciding things is, by the way, fairly funny. We don't get to choose what gets made, and have to select from a buffet of often pretty poor options served up to us by people who are by and large not interested in anyone's wellbeing but their own.

Most of Europe recognises on some level that not everything that counts can be counted. That's the real difference. Regulation of new, high risk industries makes perfect sense from that perspective.

> If Europeans can’t figure out new valuable areas where they can contribute to the world, than their system isn’t as clever or morally righteous or fantastic as they think it is.

I don't think it follows that unprofitable things are by definition not clever, righteous, or fantastic. This seems like a blinkered, American-capitalist viewpoint.

Europe is dying. It is an old socialist relic, with a completely outdated model of reality. The successes of the extreme left and right shows that the political nobility are done.

Sadly europe never realized that low taxes, capitalism and liberty is what drives wealth.

I wonder if, in a generation, when the best brains moved to the US, asia and argentina, the continent will finally awake from its socialist slumber?

Hong Kong managed to go from a peasant village to a global financial center in a generation or two. In theory, it should be possible for europe to do the same. But in order for that to happen, there needs to be insight into the sickness, and awareness of the cure.

I'm happy I left. After I left high tax western europe I basically doubled my salary after tax! =)

> "move fast and break things" versus "WE DO NOT BREAK USERSPACE."

I think this is a great analogy to explain the issues to this crowd, although I think there's also a lot of people here who would happily break userspace. And it's successful in a financial sense.

It seems to me that all the America type Europeans already moved to America, and their departure only increased the cultural differences and made remaining more unbearable for the ones who were on the fence.

> "move fast and break things" versus "WE DO NOT BREAK USERSPACE."

An alternative analogy is "binary search" versus "linear search".

With linear search you don't risk overshooting your target, and it's less chaotic, but you also don't progress nearly as quickly.

>Reading between the lines, this highlights an inherent bias in the majority of American companies to provide service to extract value as opposed to providing service for public benefit.

American businesses do the same thing businesses do anywhere: try to generate more valuable products and services than they consume. It really is as simple as that. No value is "extracted" when you sell bread for more than it cost to buy flour, yeast, water, labour, and space to work. The idea that it is "extractive" screams to me of the lump of labour/labour theory of value idea, which is not just wrong but incoherent. Maybe that is not what you meant, but it is common for communists to claim that "all profit is extracted from workers' labour" and similar silly rubbish.

Nothing digitally can currently really prosper in Germany if it isn't an already completely finished consumer product (preferably as dumb as possible). There is capitalism, but there is no venture here. Although investors probably still see it differently, the average user has some form of primordial fear while engaging with any digital technology.

Exception is R&D for the most part, but here these tendencies seem to be growing as well. Insane amounts of money are wasted to evade tech as much as possible.

This has changed from only a decade ago where there was much more enthusiasm for tech. Now people are annoyed by it.

> And I'm also not sure what is proposed here to be done now.

The article lists 4 things under "What Should Be Done Next?" - Given your don't I think I can also be a bit snarky and ask: Have you read the article?

Screws are probably primarily not a B2C product , and screw producers probably integrate with their customers' systems and processes in non-trivial ways. I don't know enough about screws to make this concrete.

If there's no market for libraries and frameworks (like there used to be), the next best equivalent appears to be SaaS and software you can buy and run/host yourself. Germany seems to be doing pretty good there, considering SAP.

The problem I see is primarily that most software businesses aim to get out of their niche. I suppose a screw maker is perfectly content just being the number one in screws. A software business is rarely that focused: Better to do a lot of things OK than one thing great. Marketing and sales are the big levers, not quality. Probably because software is largely being sold to people who can't even judge their quality and mostly buy based on vibe. Software is, after all, a pop culture.

So if every piece of software gravitates towards being everything for everyone, and if marketing (money) is the big lever, it's a lot more of a winner takes all environment. That's an excellent environment for strong hustlers. It's a terrible environment for quiet people that care about quality.

> But what are the parts in the digital world?

In essence, all software is a service; often legally even. But for this we'd need to look at software that's "shipped" to all customers in more or less the same form. But is also not a full blown end-user product. Taking that, we can look at "parts" or even "partial products" as:

* B2B SAAS services. From microservices to large services. From API-only to full blown UI based. That reservation system for nail-studios or the extract-PDF-to-our-bookeeping-API.

* B2B Mobile apps. E.g. a scanner-app to help with packaging or finding in a warehouse. Or a PoS for restaurants or shops.

* Hosted versions of FLOSS software. e.g. nexcloud, mastodon, matomo, a ci-pipeline, SIP, LMS, CMS, etc.

* Managed common PAAS parts. Managed Postgres, managed LDAP, managed CI, managed firewall etc. Not on-prem (that would be services) but more like AWS, but then from local "Vendors".

* Plugins and micro-saas. Just look at the amount of paid-for plugins in shopify, salesforce, google docs, github-marketplace etc. etc.

Almost all of these could be startups. But have a very restricted TAM. So they'll remain small. They also don't deliver a full-blown end-user-product, but something that's built on top of other common IT components. They often have very localized focus (a common restaurant reservation in France is very different from a reservation in the Netherlands, for example), often have a benefit from being trusted on a human level (I'd either backup my companies data to some FAANG, or to that one guy that I know and has been servicing my company for the last decades very well already).

But most of all, they are too small to become scale-ups in the "silicon valley" sense. Because in doing so, they'd loose all that makes them valuable today.

(Source: I've worked at or on many such "startups" that would forever remain small but big enough for the founders to get a solid income from)

It's worse than that. Romania is #43 by GDP in the global ranking. There's faster internet compared to Germany in: Trinidad and Tobago, Colombia, Jordan, Panama, Ecuador, Moldova, etc.

Source: https://worldpopulationreview.com/country-rankings/internet-...

Yes, that. I regularly travel from Sweden to the Netherlands by train and have gotten into the habit of sending a message from Padborg (Danish-German border) that I'm about to enter Germany so I might not be able to react or have data access for the next 7-8 hours. Coverage is spotty at best, totally absent at worst. This seems to be more pronounced in northern Germany, the west is a bit better but still bad compared to my origin (the Nordic countries) and destination (the Netherlands).

Quo Vadis, wirtschaftswunder? Werden wir es wirklich schaffen?

…which currently impossible capabilities, businesses, applications does the allegedly missing fast internet allow?

Fiber has been laid out in many areas already, it won't be long until most households are upgraded. But to be honest it's not as much of an issue as people make it out, in most areas you can get 250 Mbit downstream and 50 Mbit upstream through DSL, that is plenty for most home use cases, there's just not enough demand for higher speeds. Don't tell me people are regularly maxing out their 1 Gbps lines. In most rural places the fiber linkup stalls not because there's no will to do it but because not enough households vote to get it, providers typically need a quorum of 10-20 % and they don't get it because most people just don't need or want faster Internet (or let's say they are not willing to pay 50-100 € per month for it). Telekom and other companies have fiber running in most of the smaller cities already (otherwise they couldn't offer 250 Mbit DSL) it was just the last mile that was missing and that is mostly being fixed now, but again most households don't even see the need to upgrade. That might change once services requiring super high bandwidth become popular (but what might those be), even 4k streaming is possible on 25 Mbit already and with 100 Mbit you can stream 8k content...

And yeah, Romania might have better Internet in some places with high population density but certainly not in the more rural areas, there was a big EU project (RO-NET) to help them get that up and running in more places in the last 5 years. In Germany you can get fiber connection in most cities as well.

Don't get me wrong I love faster Internet myself but don't pretend like that is a chief reason why Germany can't have IT startups, we have some of the best connectivity and peering in Europe with DE-CIX and the hub in Frankfurt.

I'm always happy to criticize the internet connections and the price for them in Germany...but it's most likely not the main reason that is holding back businesses.

Tell me about it. Australia has no 1gb symmetric. Might get 800/100 if lucky.

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Yeah but Germany's copper infrastructure is "Made in Germany". That label is gotta be worth something. /s

> 2. Simplify Bureaucracy and Regulations => Who doesn't want that?

European leadership and a fair chunk of the population. They're the ones who bought it in, if they didn't think it was worth the trade off they wouldn't have instituted it.

It seems like just yesterday we had people lining up to praise their bureaucratic takeover of iPhone charger design, for example. If the EU bureaucracy has time for that, what matter is too small for them to be involved in?

> I'd say most of the EU is already pretty good at this

Not Germany though. I don't think that's as easy to change as VAT changes. And since a bunch of their examples are primarily B2B, they wouldn't care about VAT changes either.

Dollar for dollar, Things is probably the single best app I’ve ever used. I can’t recommend it enough.

"Mittelstand" is pretty well defined: A privately owned company that values long-term durability higher than short-term profits.

"mitte" is the middle. Those are companies that are contempt with an average size, they don't strive to grow. (Or to "go big or go home", like US VCs would advise.) Also, "Mittelstand" companies are usually family-owned, which means that the CEO cares much more about being able to pass the business on to his kids on 20 years, than about raising today's stock price with buy-backs and dividends. And especially so if you have a niche provider that keeps offering the same services for 10s of years, is run by a tight-knit group of relatives, and cares more about quality than profits, those will proudly advertise themselves as "Mittelstand".

I personally have never seen Bosch listed as Mittelstand. By definition, SMEs have less than 500 employees. Are you mistaking the concept with something else?

I am sure that there are a large number of small business in the field, anayway. It's not a "either or" proposition, either.

The article comes across as naive and idealistic. This was especially odd: "The average German—apart from those who’ve left the country and morphed into “tech bros”—isn’t particularly moved by shareholder value, especially when the Basic Law of Germany begins with “Human dignity shall be inviolable."

I agree with the proposoal to simplify and regulations but this is easier said that done because these are cultural aspects.

The idea that you should be able to start a business without risks or hard work is also perhaps more part of the problem than of the solution:

"A government program could provide salary grants based on experience, allowing these individuals to dedicate time to developing a digital product without compromising their quality of life or financial stability.*"

I would also think that someone who lives and work in Germany ought to be speaking German and would not require the German state to provide paperwork to start a company in English.

Lastly, regarding VAT exemption thresholds we perhaps need to look at the root cause of those exemptions and calls for higher thresholds: VAT rates in Europe are ridiculously high and that is in turn caused by the size of the state.

Not too big, not too small, very cozy. I need it.

Was curious until I saw it's subscription based! Seriously? For a writing app? They can politely gtfo with that, I already got burned before by subscription-ware before. I want to own my purchases thank you very much.

It’s a major driver in the EU, so for sure they are associated.

Better still, stop thinking about it as "the European economy" and start thinking in terms of regional and national economies. There is not that much overlap between e.g. the Finnish or Swedish economy and the Portuguese or Greek economy and it does not make much sense to try to push these disparate countries into the same box even if bureaucrats in Brussels would like you to believe so.