Discover more from European Straits
Remote Work. Stories. Opportunities in Asia. Productive Uncertainty. Low Interest Rates.
Today: A column in "Sifted" about what it means to be based somewhere. Essays from the past week. Our Recruit from Anywhere Summit.
The Agenda 👇
“Where are you based?” is now a weird question to ask
We need more stories about European tech
Martin Pasquier’s thoughts on expanding in Asia
Why won’t CFOs adapt to low interest rates?
This afternoon ⚠️ Our Recruit from Anywhere Summit
More insights for entrepreneurs from The Family
My latest article in Sifted is out this morning. It questions whether the rise of remote work could serve to finally put an end to interminable debates about which city or country in the EU is the best for building a startup. The typical European startup already has so many cross-border features (Italian founders living in London, managing a tech team in Romania and selling in Germany, all while hoping to raise money with US investors).
In this context, it doesn’t really make much sense to worry about the question of “where are you based”, but instead only about “where is the value turning into wealth”.
You can read the whole piece right here 👉 What is a “European” startup in the era of remote work?
🇺🇸 European Tech’s Forgotten Stories
How many of you know the story behind Olivetti? I certainly didn’t before a reader pointed me in that direction following a trip to Italy in 2019 and a subsequent newsletter on entrepreneurship there. It led me to reflect on just how much we Europeans don’t know the stories of how great European companies were built. In contrast to a longstanding tradition in the US business world, there simply isn’t much written about them, and what is written doesn’t find a continent-wide audience.
That’s a shame, and not simply because it’s good to know things! The histories of how companies grew are an important part of transmitting generational knowledge, a key part of the virtuous circle that can boost entrepreneurship over time.
And while there are some signs that Europe is starting to delve further into the stories of how companies have been built, there’s still a long way to go. For example, how have we gotten to the end of 2020 without a detailed history of Rocket Internet? Where is the story of Maersk and how they’re repositioning for the Entrepreneurial Age? Why is Lego the sole exception to this general lack?
👉 I think about where the inspiration and knowledge for new generations of European entrepreneurs could come from in European Tech’s Forgotten Stories.
🏭 Another Round on Expanding in Asia
I’m a proponent of “working in public”. That’s why I’m always thrilled to get feedback from my readers, who are oftentimes exceptionally generous with their experiences and takes on the various topics I cover. My friend Martin Pasquier, who lives in Singapore, wrote to me after a recent edition on how European startups were failing to seize the opportunity to expand in Asia.
Martin pointed out a number of issues that he’s seen while living in Asia and helping with the expansion of the portfolio companies of the firm he works with, Fast-Track. This included positive signals, like lesser-known areas where there’s still significant economic growth taking place, as well as negative signals linked to geopolitics, such as the barriers being swiftly erected against foreign businesses that were previously generating lots of revenues in China.
Much of what the future holds will also be determined by the fact that the economy is being driven less by physical goods and more by online applications. While it might seem that this could eliminate some difficulties, in reality it complicates things, since digital services have to take much more care to fit local cultures and ecosystems.
👉 Read all of Martin’s insights in Another Round on Expanding in Asia.
🧙♀️ On Jerry Neumann’s “Productive Uncertainty” (Round 1)
One of the bloggers who I most look forward to reading is Jerry Neumann. He delivers consistently impactful and thought-provoking articles, which means that people tend to stop whatever they’re doing when he sends a new blog out—giving his long, well-researched pieces the time they deserve.
Jerry’s latest is on a key aspect of how the economy and the business world are changing, namely in the need to navigate the difference between risk and uncertainty. Risk is where you aren’t sure what will happen, but can make an educated guess because there’s a series of known possibilities. Uncertainty is when it’s impossible to set accurate odds because there’s simply no way to know what’s coming.
Corporations are obsessed with mitigating risk and are justifiably terrified of uncertainty, as their structures are fundamentally unsuited for the kinds of adjustments uncertainty requires. But startups are more able to mitigate uncertainty, and even to participate in bringing about particular outcomes by crafting their own narrative for the future.
👉 I highlight some of the (many!) thought-provoking issues raised in On Jerry Neumann’s “Productive Uncertainty” (Round 1).
📈 What to Make of Low Interest Rates
Capital is always looking for returns, something that has become a very complicated question in today’s age of extremely low interest rates. In particular, people have started to notice that while interest rates have significantly changed from their historical norms, many businesses haven’t adjusted their investment plans to take what appears to be a new normal into account.
That means that there’s a strategic opportunity waiting for your business, if you can properly evaluate the situation. Your competitors might not have changed their decision-making process regarding the returns they expect an investment to make. That means you can use today’s extremely low interest rates in ways that could gain market share.
The situation is different for governments, of course. It’s likely that they expected low interest rates to lead to a bonanza of investment, leaving their country in a better position to rebound. Yet all that cheap capital hasn’t generally gone in that direction, meaning that governments will need to utilize a few more tools if they want to see national champions emerge from today’s macroeconomic context.
👉 I run through the underlying economics of it all in What to Make of Low Interest Rates.
Sounds interesting? Subscribe to European Straits and let me know what you think!
🏝 Later today my firm The Family is hosting an online Summit on Recruiting From Anywhere. If you recall, the piece published in Sifted today is just my latest on the topic that was my greatest prediction ever, namely seeing 2020 as the year of remote work before we even heard of COVID-19! And since all remote work will first pass through remote recruiting, I certainly see this Summit as critical for all founders and managers who have to find a new framework for hiring talent.
There will be talks and workshops featuring experts with experience in both tech giants and startups, going behind-the-scenes on how to recruit when both talent and company can be located anywhere. Tickets are free, sign up here.
📖 As I mentioned last week, my fellow The Family directors and I are sharing startup lessons as we move towards the end of the year and the beginning of our newest batch of startups in January. Lately we’ve been talking about:
A question so many young entrepreneurs struggle with: How much should you really raise?
Why when things go wrong, founders should remember that Firing can be caring.
How to make sure your Cold emails are hot!
From Challenges of a Remote Workforce (June 2020):
In my wildest dreams, I can see governments and international organizations such as the OECD moving forward to acknowledge the balance tipping toward remote working and renegotiating most international tax treaties so as to make it easier for everyone—employers and workers—to deal with it. In practice, however, I know that it won’t happen, which is why some territories, including cities, charter cities, and entire countries, will design their own rules to make it easier for remote workers to settle there. There are already some making the necessary moves—or being invited to by some of their constituents.
All recent editions:
What to Make of Low Interest Rates—for subscribers only.
On Jerry Neumann’s “Productive Uncertainty” (Round 1)—for subscribers only.
Another Round on Expanding in Asia—for subscribers only.
European Tech’s Forgotten Stories—for subscribers only.
Why Don't Uber Drivers Own Shares? Now They Could—for everyone.
Where Are America's Wise Men & Women?—for subscribers only.
SaaS Is the New Manufacturing (Round 1)—for subscribers only.
America As a Technological Champion—for subscribers only.
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From Munich, Germany 🇩🇪