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Why Startups Condense in America
Posted by
Hemos
on Mon Jun 12, 2006 08:37 AM
from the finding-the-why dept.
from the finding-the-why dept.
bariswheel writes "The controversial genius developer/writer/entertainer Paul Graham writes an insightful piece on Why Startups Condense in America. Here's the skinny: "The US allows immigration, it is a rich country, it is not (yet) a police state, the universities are better, you can fire people, work is less identified with employment, it is not too fussy, it has a large domestic market, it has venture funding, and it has dynamic typing for careers. Inquire for details within."
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Better Universities? (Score:5, Insightful)
But I don't agree with all of it: That's odd, all the studies and anecdotal evidence presented to me suggest otherwise. I don't think the universities themselves are better, you're just more likely to make better contacts here than abroad. And the only reason for that is because Americans have money and a lot of them use it to invest (as Paul pointed out).
I've been through undergrad and grad schools in the US and I have to say that there were more than a few courses where I didn't learn anything.
Why is he asking about Universities in Europe? What about Eastern Europe or the Ukraine or Russia? What about the results to the programming challenge that everyone made a big fuss about? What about China's Universities?!
I'm not as confident about the US as Mr. Graham is. In fact, I'm kind of afraid when someone like him writes an article like this because it feels like we're creating a false sense of security as an industry leader.
Re:Better Universities? (Score:5, Interesting)
It's about quantity. If Chinese Universities were able to handle the demand of top Chinese students, they wouldn't flood to American universities by the thousands. There are top universities around the world, but if you write down all the "tier 1" universities in a particular discipline, more than half of them will be in America.
Parent
Re:Better Universities? (Score:5, Interesting)
Good point, which gets lost in most discussions like this.
For some reason, most people will read a sentence like "America has many of the world's top universities" and think it said "No country but America has a top university."
This is mostly a sign of the abject level of the teaching of basic logic at schools around the world. In America, too, because most Americans will misread things in the same way.
What I've always found especially curious is the mismatch of the American higher-education system with the open and blatant anti-education attitude of much of the American public. It's not just George Bush; signs of education and intelligence are carefully hidden by most American politicians, because they understand that this would be a major flaw to a huge fraction of the voters.
Meanwhile, people make jokes about how education is now America's major export industry. Funny how a country can make and export something that they don't like to use at home.
Parent
Re:Better Universities? (Score:5, Insightful)
This is mostly a sign of the abject level of the teaching of basic logic at schools around the world. In America, too, because most Americans will misread things in the same way.
Well, the resason for the confusion is because, if you read "Top University" as "Top 10" or something like that, the statements are basically synonymous. According to most rankings, America does have a near monopoly at the very top, though Oxford and Cambridge will always be there, and the best Asian universities are certainly improving very rapidly. According to this [sjtu.edu.cn], America has 8 of the top 10 and 17 of the top 20. So I'd forgive someone of the "error" of believing all the top universities are American. I'm not saying it's a good thing, but it's not far off.
What I've always found especially curious is the mismatch of the American higher-education system with the open and blatant anti-education attitude of much of the American public.
That's a bit of an oversimplification. Pretty much the *entire* American public is pro-education. Some of them simply differ on *what should be taught*, which is a pretty significant distinction. And there are a handful of very conservative American universities - not many, but some - so even the most conservative Americans support education and send their kids off to college. And also, the Bible-thumping crowd is a very vocal minority, but a minority nonetheless. I believe the average American doesn't really care about the whole evolution thing to get very riled up.
signs of education and intelligence are carefully hidden by most American politicians, because they understand that this would be a major flaw to a huge fraction of the voters.
I'd say that's a little off too. It's more that the southern and rural voters I believe you're referring to - who may lack sophistication, but not intelligence - don't take well to condescending intellectuals *at all*. Like, say, John Kerry, who came off that way. Contrast that with Bill Clinton, who is brilliant but not condescending, and got on very well with voters of all classes.
To disclose, I grew up in the south, went to undergrad at a bottom-tier university, grad school at a top-10 American school, and now live in a major city on the east coast. So I've seen a few different perspectives on the whole "Education in America" thing.
Parent
Re:Better Universities? (Score:5, Insightful)
The only trouble with this is, it blinds us to what makes those empires really succesful -- natural resources, opportunism and good old blind luck, in the form of historical happenstance.
Parent
Re:Better Universities? (Score:5, Insightful)
If you want to read a story about how an economy is not a matter of resources or luck, but rather how little or much a government meddles in the economy, read about Zimbabwe.
http://news.bbc.co.uk/2/hi/business/2780775.stm [bbc.co.uk]
Economies are based on the decisions of its citizens... a million little decisions controls the tide of the economy. When a hands-off, rational minded government or political climate takes place, economies do better. When a meddling, irrational government takes seed, then that's what you get.
If natural resources take such a huge stance, why are most of the oil producing nations still 'poor'?
Your reference to the empires of 100+ years ago doesn't apply because the wealth of that period was 'exported', a.k.a. stolen and redistributed. The American 'exceptionalism' you quote was by large not built on Empire wealth but by the wealth of industry of its citizens. And that itself is pretty exceptional.
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Re:Better Universities? (Score:5, Informative)
So, as much as I hate chaufinism (either US or otherwise), this is not it but just a basic truth.
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Re:Better Universities? (Score:5, Funny)
I can't stand it either. Learn to drive your own damn car!
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startups (Score:5, Insightful)
Of course part of the problem (both in the US and over here) is that a lot of businesses tend to have a blinkered restricted view of just selling/dealing with their domestic market (which of course in the US is larger) rather than doing business globally (which in a lot of businesses is the best way to grow).
Bay Area-centric (Score:5, Interesting)
As a European I find the article rather America-centric.
As an American I find this article to be Bay Area-centric. Silicon Valley ceased being an engine of significant economic growth after the dotcom bust. It is unlikely to return to its former glory. It is kind of humourous that pundits like Paul Graham are still taking victory laps for an era of growth in Silicon Valley he had little to do with. In the US the economies of the southwest and southeast are much more vital.
Parent
Let me get this straight... (Score:5, Insightful)
Does this say more about higher education in Europe or the US?
Re:Let me get this straight... (Score:5, Insightful)
I think you've just described every institution of higher learning known to mankind.
Parent
Largely true but a flipside too (Score:5, Insightful)
But the US style has it's problems. US companies wind up as slaves to the markets and often damage their engineering skills. The problems in the US car industry show this. While the German car industry has come up with fuel injection, ABS braking and constant four wheel drive over the past 20 years the US industry has invented the cupholder and the SUV.
Likewise, somehow the Japanese are great craftsmen. This skill is reflected in the quality of Toyota's manufacturing and the remarkable qualities in Japanese portable electronics. Apple may have invented the ipod, but the walkman and the transistor radio all came out Japan.
It's good that the world is like this. Countries specialise. But presuming that one companies system is superior for everything to all the others is silly. The best is what is created when the systems work together - as in the computer industry where the parts are made in Asia and the software comes from all over the world, and in particular from the US.
Re:Largely true but a flipside too (Score:5, Insightful)
Parent
Re:Largely true but a flipside too (Score:5, Insightful)
Not exactly... GM had fuel injection in the 1950s. All wheel drive was developed in Germany because Audi competed heavily in rally racing. A from of racing that isn't all that popular in the US. Not to mention that AWD isn't all the great of an addition to most cars. It eats more gas and is expensive to maintain. It is good for people that like to drive fast in really bad weather. As far as US contributions to the Automotive art? Pollution controls are a huge one. The US had pollution controls on auto decades before anyone else did. As such they paid for the majority of the development costs.
"Likewise, somehow the Japanese are great craftsmen. This skill is reflected in the quality of Toyota's manufacturing and the remarkable qualities in Japanese portable electronics. Apple may have invented the ipod, but the walkman and the transistor radio all came out Japan."
The transistor radio came out the US. The Transistor came out of the US. http://en.wikipedia.org/wiki/Transistor-Radio [wikipedia.org] "The first commercial transistor radio, the Regency TR-1, was announced on October 18, 1954 by the Regency Division of Industrial Development Engineering Associates of Indianapolis, Indiana".
Followed by, "Transistor radios did not achieve mass popularity until the early 1960s when prices of some models fell below $20, then below $10 as markets became flooded with radios from Hong Kong."
One of the big jokes about "Transistor radios from Japan" was the Transistor wars. Japanese companies would advertise how many transistors they put in the radios, so they would put in extra transistors that really did nothing. I guess they thought more was better even if it really wasn't. Honda and Toyota both build cars in the US now. According to consumer reports many US cars are now more reliable than most cars from EU countries now. Toyota, Honda, BMW, and VW all build cars in the US now. You may say that Toyota and Honda have a culture of high quality in automotive production how ever to make the claim that it is cultural sort of ignores Suzuki which really doesn't have that high of a reliability rating or Nissan which while makes some very good cars also has some that have gotten poor reliability ratings. the US does seem to have a remarkable history of innovation. Some countries like the UK has a great history of destroying innovation. Read about Frank Whittle sometime. The real key to the the success the US has is that is seems to be willing to adapt to change and to take the best of other cultures and allow it to become part of the US culture.
You are just repeating tired stereotypes that mean nothing and are frankly just not true.
Parent
Easier to find investors (Score:5, Interesting)
Innovation comes from freedom of expression (Score:5, Insightful)
I'm a consumer whore. And how! (Score:5, Funny)
American Chauvinism (Score:5, Insightful)
And this survey demonstrates what, other than the parochialism of the American computer science professors with whom Graham happens to be acquainted?
Laws are it. (Score:5, Insightful)
Mr Graham needs to travel more... (Score:5, Insightful)
- Immigration: The US has a great immigration policy, but it's not really that much different from a lot of advanced Western countries, esp. when it comes to skilled workers (researchers, college graduates, etc). E.g., the UK has a much larger talent pool it can draw from for immigrants (esp. Commonwealth citizens) yet there have been very few successful UK startups. Same could be said for Germany, the Nordic countries, and most of Southern Europe.
- The US is a rich country: so is most of Western Europe, Australia, NZ, Southeast Asia, Japan, etc. Arguably the latter regions have even better infrastructure than the US.
- The US is not a police state: again, neither is any EU member or the rest of Western Europe. Still, the only big European startup as of late has been Skype, and even that was US-funded.
- American Universities are better: absolutely, but not for the reasons stated. American universities are just more free to make money from their R&D, unlike most say European ones. Since they can run research for profit they can also hire the best professors and researchers they can find and that creates a virtuous cycle. In Europe for example, most research schools are state institutions and thus professor salaries are set to a nationwide scale. Plus it's much harder to profit from R&D.
- You can fire people in America: labor mobility is not a US invention. If you are faced with stifling labor laws, you can work around them. You can use contractors, bankruptcy law, subsidies, the list goes on. Plus, Anglo-Saxon countries with liberal labor laws (UK, Australia), still haven't fostered startups that well.
The rest of the list is even more wooly than these bits. Here's my take as to why the US does startups better:One important factor... (Score:5, Insightful)
Don't forget that, for many years, the USA have been at the forefront of technology and science because the US Governement -- meaning you, Happy American Tax-Payers! -- has been very happy to sign big, fat juicy checks to US corporations, US Universities, US Think Tanks, etc. Also, the US Governement was able to do this because, right after the end of WWII, the USA were one of the very rare country in the world with industries left intact and a lot of natural resources.
Now that the US Governement is pretty much anti-science, and that the US debt is soaring to ever more dangerous summits, I am not so sure the USA can maintain their advance on the rest of the world. But we'll see.
Re:Fewer bureaucratic barriers (Score:5, Informative)
Actually, here in the Netherlands, I have spoken to a few businessmen which deal or have dealt with the US. They all find dealing with the Americans an enormously bureaucratic process. Also note that lots of rules come from overseas from our point of view, Sarbanes-Oxley comes to mind.
To start a company in the Netherlands, you do two things:
- visit the local Chamber of Commerce and spend 10 minutes to tell your new
business its name
- Fill in one (1) form and send it to the (equivalent of the) IRS for a
VAT-number
That's it. How unbureaucrative can you get?Parent
Re:It's the Coke (Score:5, Funny)
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Re:Distortion by size (Score:5, Interesting)
My point is that most Americans, even ones who travel, have no concept of any other way of life. That's not a criticism, just an observation. If everyone in Europe spoke the same language, ate the same food, etc, etc, we'd be saying the same about them. We don't have a concept of neighboring countries, except Canada and Mexico, because we never bump into any.
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