The First Fully European Literature on Startup Scaling

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The First Fully European Literature on Startup Scaling

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This post originally appeared on Medium here

d3‘All told [American VCs] did not [seem to have] a strong impulsion to transfer a new block of cash to an account in London, Paris or Berlin, to dig in.’

This is the picture left by the talks at TechCrunch Disrupt London last Monday by a panel of SV VCs. Despite the stronger attention that Europe is getting from overseas, there are still no strong interests in transferring operations in Europe and increase their presence in the motherland.

Several investors want to invest in things that they know, in companies they can drive to or fly to in a day, and that is understandable. However the majority of these players are in the end motivated by returns, and a big part of the motivation for not expanding to Europe is that these returns are not worth the effort.

And in the end, companies that truly scale are going to get the US market as well. And are going to pass by their gates at some point.

The large return opportunities reside however in early stage investments. That is when a small investment can lead to great returns and that is why, in my opinion, we should see more transatlantic activity at an early stage. As a consequence, probably low investments are motivated by low returns.

Low returns caused by obstacles to blitzscaling

d4In the last Stanford class about blitzscaling, Reid Hoffman and John Lilly do an egregious job in showing and discussing the heuristics around startup scaling. Outlining the philosophy of several company stages, and specific challenges and opportunities connected to all of them.

And it makes you think. A startup already has an incredible number of risks. Increasing risks by not knowing what are the practices that others have used in the same situation is wrong and not value optimising for entrepreneurs.

This experience is either scarce or not present in most European startup networks. Which leads startups to repeat the same mistakes and overall not maximising their growth speed.

The first step is knowledge

There is a reason to study history and to have monuments. Human knowledge has the amazing characteristic of being transferable through time. And it allows present generations to not repeat errors that were committed in the past, and basically evolve faster.

The same should be applied to startups. A whole lot of the innovation that we are seeing today has been pioneered and failed at Xerox park in the 60s. The idea of human intelligence augmented by the machine was the main drive to develop software in the early stage of the computer era.

As a consequence, many of the mistakes have been already committed. And knowledge of them is a competitive advantage for your company against competitors or just against failure.

As Patrick Collison (Stripe) said, “knowing history of what has been happening in your sector is way to cheat”, it prevents you from make the same mistakes again.

A European body of startup knowledge

As a European startup that helps other startups in one of the most difficult activities, determining their valuation, we have been thinking a lot about this at Equidam. Determining valuations for companies means truly understanding their risks and potential. And the more we look into our data, and the more we read about these things online, the more we are convinced that the challenges and risks that European startups face are peculiar, unique to their geographies and need unique solution to be resolved.

We of course are not the only ones to think that EU problems need EU solutions. However, maybe because of the ever so European fragmentation, nobody is collecting this knowledge and making it readily available. So we decided we’ll do it.

Today we are launching the Equidam Weekly.

d5A weekly newsletter that contains articles written by European experts on European startup scaling and challenges. We are gathering articles from VCs, blogs, journals and startups that discuss how is the environment growing in Europe and how to confront these very specific challenges.

We strongly believe awareness needs to be raised on these matters, and we’d love to have all European experience and knowledge in it. If you feel you have this experience and knowledge, please reach out to us, we’d love to include you in it or just discuss these issues openly.

And of course, here’s the link to register to it!

This post originally appeared on Medium here

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