When comparing the US, and especially the silicon valley area to European tech hubs and organized attempts, some things are usually brought up by people like the
a16z guys in their podcast and other similar sources. Or at least the ones I've taken to heart are:
- There must be a critical mass of both engineers and other disciplines like management and sales
- There must willing venture capital available, from early stage angel investors to later stage big money. Also it should develop a culture of successful exits where the people who got rich from an exit invest in the next round of companies.
- Laws must allow easy scaling up and down, e.g. it shouldn't be too hard to fire people weather it's an invididual bad fit or if money runs out, and laws should enable alternative compensations like stock options.
- There must be room for a culture of rapid change and going "all in" in various deals.
I don't really know how things are in Germany, but I live in one of the cities in Sweden where we try to have a tech hub like that. In Sweden, it's often easy to scale down a company by a "reduction in force" but to fire an individual person due to a bad fit or bad performance is hard. Our tax system is also bad for startups in several ways, including that stock options are mostly taxed like regular salary (e.g. very high) and for company owners who have sold their company it's quite easy to get into a situation where it's much cheaper tax-wise to way six years before starting a new venture. This combined really slows down things.
Most companies that are started here are "under the radar" and tech intensive - but not really FAANG worth. Stuff like under the hood technology for e.g. TV / Digital Video, or literally under the hood for e.g. the automotive or aerospace industries. They are also usually acquired by bigger companies before reaching a large valuation. This acquisition trend is also amplified by tax implications for the founders and it's also keeping stock option returns low.
The main exceptions we've had in Sweden the last 20 years are 1) the gaming and gambling industry (Minecraft etc), 2) Skype, 3) Spotify, and maybe 4) Klarna. These are more or less flukes, where a few individuals broke the Swedish mold and the
law of Jante and made something anyway.
Most engineers and software here do work for established mid- to large size companies. The American salary levels are unheard of. It's really hard to get the real silicon valley feeling here.
And we're much much worse than other parts of Europe in regards to allowing foreigners to work here. Embarrassingly bad. :(