I’ve been working with entrepreneurs in Europe for the last 10 years and I have heard time and time again a series of “facts” about European entrepreneurship that are closer to myth than anything else.
Mostly they are urban legends. An urban legend is a form of modern folklore consisting of stories that may or may not have been believed by their tellers to be true (cf. Wikipedia). Below you will find the 5 entrepreneurial urban legends we must kill to make Europe more entrepreneurial:
1. Failure is a dead end in Europe and well accepted in the U.S.
I have heard this quote again and again since I was born. The more I travel around the world, the more it is clear to me that it is just something that people repeat over and over in continental Europe. But it is a lame excuse not to face our fear of failure. The truth is that it is very difficult to fail in most cultures; and it is the same in France, U.S. or Germany. The key is to understand the audience. Who cares if your grandmother is unable to understand that it is hard to succeed in the world of start-ups? What is important is that you:
- Learn from this experience
- Can explain to the “entrepreneurial ecosystem” (fellow entrepreneurs, investors, academics, accelerators, incubators, etc.) how and why you failed. I have never seen an educated and competent entrepreneur or early stage investor make up his mind about an entrepreneur and/or his venture because he had failed in a previous intent.
2. Banks do not assume their role: they do not give credit to entrepreneurs
They have never done so!! It is not their job. Banks lend on hard assets; entrepreneurs sell a vision. Banks want cash flow that covers interest payments. Early entrepreneurs are not cash-flow positive, not good candidates for retail banks who are looking for customers that have a decent probability to payback their interests from day one. This is just something an entrepreneur cannot deliver. That is the reason why it is useless to blame the banks. We should rather strengthen equity within the early-stage network of equity investors in order to close the innovation gap we face compared to Israel or the U.S.
3. There are no successful entrepreneurs in Europe.They are many very successful entrepreneurs in Europe. We just do not see them . They are not visible enough. This lack of visibility has a negative consequence though: it is difficult for the young generation to identify themselves with invisible role models.
4. The first mover advantage is THE key ingredient of success.
Here I will just quote two very successful investors from different locations. Guy Kawasaki from Silicon Valley says: “If you have a good idea, you should assume that five companies are doing it out there in the world. If you have a great idea, assume that ten companies are doing it. Very few have first-mover advantage. It’s the first to scale, not the first to move, that matters“. And Luis Martín Cabiedes from Spain: “If you think you have a first mover advantage, make sure you can close the door behind you.”
Need I say more?
5. Successful entrepreneurs are young and science/computer based
That is probably the most dangerous topic people repeat like parrots. It is just not true. In fact, most entrepreneurs start their companies past their 40s (50% of them already have kids) . The reason why they are successful is mostly because they are educated and experienced; there are some things you just can’t find in a garage.
Let’s stop perpetuating these five urban legends. Entrepreneurs have always faced obstacle in every corner of the globe, both in the U.S. and in Europe . It is not the size of the obstacle that stops an entrepreneur, it is whether his/her dream remains bigger and stronger than his/her excuses.