The Myth of the "Non-Entrepreneurial" European Tech Founder

I remember being at a tech convention and overhearing someone say, 'I heard innovation here (the UK) isn't that good'.

A common feature of discussion in tech nowadays is the saying that European tech founders are 'too risk-averse', that they 'aren't as Entrepreneurial as, say, the Americans, or the Chinese', or that European work culture 'values vacations too much'.

'They're too risk-averse'

To which my initial response to this would be: Don't blame the people, blame the system.

Europe is an extremely old continent, and its laws and regulations have been put in place to prevent corruption and oligarchyisation which have, for now, worked. Its economic growth is currently slow (which is set to start to recover by around ~2028 [source, source]). And that is due to a fast-changing world with laws and regulations that worked 15 years ago that might not work as well now.

If we take, for instance, PSD/PSD2 (Payment Services Directive) - an EU regulation enacted in 2007 to create a single EU market for payments [source], then later revised in 2016, its core requirements: 1. Enforcing multifactor authentication to reduce fraud; 2. banks needing to provide secure APIs so licensed third‑party providers (such as fintech companies) can initiate payments and access account data with the customer’s consent; 3. Stronger consumer protection and liability rules for unauthorised payments.

This directive was meant to encourage new fintechs to enter the market—a clearly noble goal—but a regulation that resulted in high compliance and licensing costs for new players entering the market, compared to the American system (especially in the context of early-stage fintech burden) which is more tolerant of open banking being decided through private data-sharing agreements (Plaid, MX, etc).

The issue isn't the ambitions, but the friction. It does not mean your 'work culture is not as good as ours', it is more like 'laws that were made with good reason and regulations this country ('country', for lack of a better word) put in place aren't working for this current time in history, what do we do about it?' It may be frustrating for the 'ship-fast' crowd, but on a positive note, European laws in a broader context have successfully made a generally egalitarian society without problems of severe wealth inequality as seen in countries like the U.S. and China.

That said, the current European system is undeniably slow and bureaucratic despite having noble aims; however, going back to the point of this article, this has nothing to do with the founder, but rather the system.

'They just aren't as Entrepreneurial'

The biggest myth of them all.

Stripe, SAP, Revolut, Spotify, Nokia, Adyen, Synk, Hugging Face, UiPath, Dataiku, Algolia, the list goes on... All are European-founded, albeit with many headquartered in the U.S. The point is that the creativity or 'entrepreneurialness' of the European founder is no different from a founder anywhere in the world, with between at least 30-40 of the top 100 best universities in the world being in Europe, it is clear that the average European founder does not simply 'choose mediocrity' or to 'not think big', as mentioned in the above paragraph is it not a cultural issue, it is a systematic issue.

'Too much vacation time, little building'

I'm sure the curious amongst us have probably heard this line before, and it usually refers to European work culture placing too strong an emphasis on work-life balance and, in some countries, an entire month (which is usually August) where employees don't work at all. This is not enough to 'build great things', or not 'suitable for the ambitious'.

Firstly, in the context of European OECD countries that work the most hours, Poland, Greece and a variety of Eastern European countries top the United States, and are some of the highest in the first world [source].

Secondly (which leads on from the first point), work hours ≠ value created. We are living in an age where fewer people can be more productive than ever, and it is hardly coincidental that countries whose annual work hours are some of the lowest (e.g. Norway, Denmark) are generally the most productive [source]. At first glance, it's easy to assume fewer hours means less ambition, seeing countries like Norway, Denmark and Germany working fewer hours, and concluding their mentality/work culture doesn't facilitate the creation of 'great things'. This is a huge oversimplification.

The 'August off' talking point is also usually exaggerated. Tech hubs like London, Berlin, Paris, and Warsaw do not take 'August off'; vacation time across these cities is not that dissimilar to their counterparts across the Atlantic. 'August off' applies generally to Southern European countries and (in parts of) France, and refers to late July/August simply being the most common time for people in these countries to take their longest holiday because that's when schools are closed. Additionally, as mentioned before, it is not generally a typical thing in tech, especially in major cities.

Conclusion: Talent Doesn't Choose to Think Small

An archetypal talented founder/entrepreneur will look similar no matter whether they are in London, Warsaw, or San Francisco; the only difference will be the resources available to them. It is easy to look at a chart like this and assume a lack of ambition, but that is unfortunately a widespread oversimplification that ignores structural regulatory complexity and a variety of other factors that aren't anything to do with the founders themselves.