Advice for US entrepreneurs who move to Europe(english.martinvarsavsky.net)
english.martinvarsavsky.net
Advice for US entrepreneurs who move to Europe
http://english.martinvarsavsky.net/entrepreneurship/advice-for-us-entrepreneurs-who-move-to-europe.html
159 comments
I think Spain has changed the rules on severance pay recently, and new employees do not get it.
In the UK it has recently been ruled illegal in many circumstances to pay interns less than the minimum wage (basically if they do real work), so if you feel like it you can ask your ex-interner for the money. http://www.guardian.co.uk/uk/2012/oct/19/interns-payouts-min...
In the UK it has recently been ruled illegal in many circumstances to pay interns less than the minimum wage (basically if they do real work), so if you feel like it you can ask your ex-interner for the money. http://www.guardian.co.uk/uk/2012/oct/19/interns-payouts-min...
He also doesn't seem to understand that there are labour contracts and civil contracts. The former are the heavily regulated kind, the latter are like US contracts - you can put whatever you like in them. So it's entirely possible, if you wish, to draft a contract saying Person will work for 6 months at startup A in order to produce result X and unless they turn out incompetent (or the company goes under, etc), they'll be offered a labour contract.
Whether anybody would feel comfortable signing such a thing though, is a different matter.
Whether anybody would feel comfortable signing such a thing though, is a different matter.
I do not think that would work almost anywhere in the western world. Neither in the US or in Europe. There are laws regulating employment in all European countries and all or almost all American States. And you cannot bypass these laws with just a paper.
This probably depends on the juristiction, but I strongly doubt it's that easy to get around employee law like that. Often the laws are written to basically say "Person A is an employee if they do a type of work for pay etc. etc.", regardless if they have a "labour contract" vs "civil contract".
If it was that easy, then all companies would do it.
If it was that easy, then all companies would do it.
Even though most of the dismissal comments here are fair and true, I find that this article contains some true gems:
> When starting a company in the US, informality rules, we all know the HP story that HP was started out of a garage. Now in Europe work is so regulated that you can’t start a company out of a garage because you can’t legally work in a garage.
> A friend of mine was fed up with an employee who worked poorly and told him that if he didn’t work harder he would fire him. This employee went to see a doctor, told the doctor that work depressed him and he was declared a mental patient, as a result my entrepreneur friend had to pay him for a year of doing nothing.
As a European (Netherlands), I recognize these points very strongly. This is not just Southern European stuff. It's absolutely ridiculous how easily angry/unmotivated employees can suck a firm or department dry though sick leave and whatnot.
That said, there's also
> In the end what many European employers do is not give out stock options and give tiny bonuses. In the end what these laws do is that employers go for low fixed compensations and don’t expect outstanding work.
This is so American that it hurts: want people to perform? Put a carrot in front of their noses. The European approach would be trying to make their work interesting and the work environment good, so that employees are intrinsically motivated to do outstanding. Sure, there's many companies that don't understand this, but then there's real many that do. It is simply not a strong part of European culture to be motivated by money, primarily.
> When starting a company in the US, informality rules, we all know the HP story that HP was started out of a garage. Now in Europe work is so regulated that you can’t start a company out of a garage because you can’t legally work in a garage.
> A friend of mine was fed up with an employee who worked poorly and told him that if he didn’t work harder he would fire him. This employee went to see a doctor, told the doctor that work depressed him and he was declared a mental patient, as a result my entrepreneur friend had to pay him for a year of doing nothing.
As a European (Netherlands), I recognize these points very strongly. This is not just Southern European stuff. It's absolutely ridiculous how easily angry/unmotivated employees can suck a firm or department dry though sick leave and whatnot.
That said, there's also
> In the end what many European employers do is not give out stock options and give tiny bonuses. In the end what these laws do is that employers go for low fixed compensations and don’t expect outstanding work.
This is so American that it hurts: want people to perform? Put a carrot in front of their noses. The European approach would be trying to make their work interesting and the work environment good, so that employees are intrinsically motivated to do outstanding. Sure, there's many companies that don't understand this, but then there's real many that do. It is simply not a strong part of European culture to be motivated by money, primarily.
Stock options give employees a sense of ownership and responsibility in the company, which is a powerful thing.
I don't know why people downvoted you.
I understand the point behind stock options, I just daresay that the reasoning is a bad cultural fit for most of Europe. I know too little about American culture to be sure here, but this line of reasoning gives me the impression that many Americans start a company or join a startup in order to get rich.
My impression is that this is an uncommon motivation in much of Europe. All (few) successful European enterpreneus that I know (including the founder of my current employer) started a firm for other reasons, typically independence, creating the ideal workplace, or the wish to create some dream product.
Stock options give you the opportunity to get rich, but they don't give you any actual say in what the company does until it goes public. In other words, while it may help motivate employees to make the company a financial success, I can't see how stock options help encourage employees to contribute to a nice workplace environment, having interesting work for yourself and your colleagues, and general workplace happiness.
Now, at the risk of mixing "European culture" and "my opinion" a bit, and I may sound like a softie here, but I just don't think that getting big fast is the only measure to company success.
I think that a small but stable company that's a great place to work at may in well be more considered successful than a company that goes to a massive IPO in two years of work stress, little sleep and broken love relationships.
I understand the point behind stock options, I just daresay that the reasoning is a bad cultural fit for most of Europe. I know too little about American culture to be sure here, but this line of reasoning gives me the impression that many Americans start a company or join a startup in order to get rich.
My impression is that this is an uncommon motivation in much of Europe. All (few) successful European enterpreneus that I know (including the founder of my current employer) started a firm for other reasons, typically independence, creating the ideal workplace, or the wish to create some dream product.
Stock options give you the opportunity to get rich, but they don't give you any actual say in what the company does until it goes public. In other words, while it may help motivate employees to make the company a financial success, I can't see how stock options help encourage employees to contribute to a nice workplace environment, having interesting work for yourself and your colleagues, and general workplace happiness.
Now, at the risk of mixing "European culture" and "my opinion" a bit, and I may sound like a softie here, but I just don't think that getting big fast is the only measure to company success.
I think that a small but stable company that's a great place to work at may in well be more considered successful than a company that goes to a massive IPO in two years of work stress, little sleep and broken love relationships.
Also, Stock options are mostly at least in Silicon valley an excuse for a company to get away with paying less to their employees. Another excuse is to use them as a way of saying "It is your company so suck it up and do X" where X might be work 18 hours a day to anything. Classic case of misleading vividness [1] of stellar performance of a fraction of the startups causing this phenomenon to spread.
[1] http://en.wikipedia.org/wiki/Misleading_vividness
[1] http://en.wikipedia.org/wiki/Misleading_vividness
I do not understand the kind of person whose sense of ownership and responsibility derives from the amount of potential money they have invested. To me, such a person doesn't feel any ownership and responsibility to the company: they feel ownership and responsibility towards their money, which is being held hostage from them contingent on a company's success.
I want to work for a company for whom I'm nearly willing to work for free. Like anyone else, I have bills and expenses and of course I want to be paid... but my goal is to produce and contribute value. Having my basic needs met is a foundation for that.
I dunno. Maybe I'd understand better if I got in on the ground floor of the next Google and cashed out when they hit it big?
I want to work for a company for whom I'm nearly willing to work for free. Like anyone else, I have bills and expenses and of course I want to be paid... but my goal is to produce and contribute value. Having my basic needs met is a foundation for that.
I dunno. Maybe I'd understand better if I got in on the ground floor of the next Google and cashed out when they hit it big?
VCs have a hit rate of 1 or 2 percent in choosing successful startups. An employee, in contrast, has an even smaller chance to choose well, to get rich via an exit. It just doesn't make sense to join startups to get rich. You do it for the fun, the sense of adventure, the chance to make risky products, the responsibility, the level of engagement, and particularly meritocracy. Founders, on the other hand, have a better chance of gaining money and prestige, even from a minor exit.
er that's bollocks in the UK the share save schemes are wildly popular - I know people who got £40k tax free out of one years at BT
And one at my current employer that comes out next year will pay out £20k if you maxed out your contributions 4 years ago
And a lot of mainland Europeans give out 1/12 bonuses at year end the "13th Month"
And one at my current employer that comes out next year will pay out £20k if you maxed out your contributions 4 years ago
And a lot of mainland Europeans give out 1/12 bonuses at year end the "13th Month"
I am not a fan of how he uses 'Europe' when he often means Spain and France. He clearly lacks an experience with Nordic countries (i.e. Scandinavia + Finland and Iceland), because a lot of what he says does not apply here.
Working overtime is perfectly legal in Denmark for instance, if the employees prefer it (forcing them can be illegal). The reason is that in Denmark (and other Nordic countries), labour regulations are not enforced by law, but by negotiations between the employees (unions) and employers.
Denmark doesn't even have a minimum wage law, for instance!
Also here; it is not incredibly difficult to fire people. But as an employer, you need a good reason, or the courts will side with the employee and it'll cost you dearly. The advantage of this system is that it makes employers more keen on hiring people, because in the trial period (usually first 3 months), firing people is more easy than usual.
European countries are very different, and Americans seem to forget that. He does mention that they are, but it seems that even to him he doesn't realise the actual difference.
Working overtime is perfectly legal in Denmark for instance, if the employees prefer it (forcing them can be illegal). The reason is that in Denmark (and other Nordic countries), labour regulations are not enforced by law, but by negotiations between the employees (unions) and employers.
Denmark doesn't even have a minimum wage law, for instance!
Also here; it is not incredibly difficult to fire people. But as an employer, you need a good reason, or the courts will side with the employee and it'll cost you dearly. The advantage of this system is that it makes employers more keen on hiring people, because in the trial period (usually first 3 months), firing people is more easy than usual.
European countries are very different, and Americans seem to forget that. He does mention that they are, but it seems that even to him he doesn't realise the actual difference.
Also the thing about lawyers being cheap is accurate, but this is because in Europe (except the UK and Ireland), we use a Civil Law system, whereas the US (whom borrowed it from the UK) uses a Common Law system.
The basic difference is that in a Civil Law system 'the law is the law'; court rules cannot change law practice. In addition, you cannot use previous court decisions to argue in a court of law. You can use them as guidelines, but nothing more.
This means that it is quite easy for most people to understand how the law works; just look at the law text and the text's comments (which are also important when interpreting the law, i.e. understanding what the intent with the law is).
The basic difference is that in a Civil Law system 'the law is the law'; court rules cannot change law practice. In addition, you cannot use previous court decisions to argue in a court of law. You can use them as guidelines, but nothing more.
This means that it is quite easy for most people to understand how the law works; just look at the law text and the text's comments (which are also important when interpreting the law, i.e. understanding what the intent with the law is).
There are different Civil Law systems though. Some, based on Roman law, is very focused on the letter of the law while others like the Scandinavian law system are focused on the intention behind the laws.
Well, actually, in practice it's the other way round
Because then the law (text) is usually more complicated, and the bureaucracy adds complexity to it.
Because then the law (text) is usually more complicated, and the bureaucracy adds complexity to it.
But you don't have to have a list of all the previous verdicts, just the law book.
I'm really not sure what's the state of the art on verdict libraries is (or how it was done before), but as always I suppose most impacting results are more divulged.
But believe me "just the law book" is not as easy as it sounds.
But believe me "just the law book" is not as easy as it sounds.
Code analogy time: "But you don't have to have a list of sample code and examples, just the language reference." :)
> ... whereas the US (whom borrowed it from the UK) uses a Common Law system.
The state of Louisiana was inspired by the Napoleonic Code: juries there decide both facts and law. Precedent is not worshipped like it is in the rest of the U.S.
The state of Louisiana was inspired by the Napoleonic Code: juries there decide both facts and law. Precedent is not worshipped like it is in the rest of the U.S.
> I am not a fan of how he uses 'Europe' when he often means Spain and France.
And even then, he tends to be more wrong than right (overtime isn't illegal in France, as far as I know, although mandatory overtime is; and depending on the status of the employees overtime pay may or may not exist: broadly-speaking blue-collar workers are on the clock and paid overtime, white-collar workers are on "260 days" contrats an won't get paid extra if they work 20h/day of their own volition. They'll likely have to get paid (or get extra time off) if they have to work more than 5 days a week or during holidays)
> Also here; it is not incredibly difficult to fire people. But as an employer, you need a good reason
And there usually is a delay of some sort, although in tech it can often be waived through mutual agreement.
> the trial period (usually first 3 months)
Which, depending on the country, can be renewed once.
> firing people is more easy than usual.
Trial period is essentially equivalent to "right to work" US states: either side can terminate employment at will.
And even then, he tends to be more wrong than right (overtime isn't illegal in France, as far as I know, although mandatory overtime is; and depending on the status of the employees overtime pay may or may not exist: broadly-speaking blue-collar workers are on the clock and paid overtime, white-collar workers are on "260 days" contrats an won't get paid extra if they work 20h/day of their own volition. They'll likely have to get paid (or get extra time off) if they have to work more than 5 days a week or during holidays)
> Also here; it is not incredibly difficult to fire people. But as an employer, you need a good reason
And there usually is a delay of some sort, although in tech it can often be waived through mutual agreement.
> the trial period (usually first 3 months)
Which, depending on the country, can be renewed once.
> firing people is more easy than usual.
Trial period is essentially equivalent to "right to work" US states: either side can terminate employment at will.
There's some light and some shadow in this article. I can't tell about southern europe, but most of this does not apply in germany - even the parts that are specifically about germany. There are recommendations about how a work-place should look like but they are mostly common sense [1] and not mandated by law, at least not in the IT Business. There is a law about workplace safety [2] but that's like 12 pages long and enforces very basic limits: You must have toilets, sufficient lighting, sufficient heating and the escape routes must not be blocked. If you feel like you can use your garage or your living room.
Bonus payments are no problem at all either. If you feel like paying a bonus, pay it. If you want to have a written formula, write it down in a contract - but then you need to pay it if the employee qualifies.
If your employee pretends to be sick, send him to the public health officer. If he isn't sick it's an immediate firing offense. Even verbally threatening to go on sick leave is an immediate firing offense.
Severance packages are not mandated. You can have them in a contract, but the default is no severance package. It's still somewhat harder to fire someone than in the USA since you need an actual reason to do so. "She's irresistible" won't do. [3] It's pretty common to have 3-6 month probation period in a contract where both parties can terminate the contract on short notice.
The part where he's right is extra work. The law is pretty strict here: 8 hours a day is the normal maximum, 10 hours a day for a limited time, maximum of 60 hours a week. There must be a 10 hour break between end of work and beginning on the next day. You can break those limits in emergencies, but you need a qualified reason. That sounds pretty harsh, but it's reasonable. It protects the employees on one side, but why would I want them to work more than 8 hours a day on a regular schedule when productivity drops sharp after 8, maximum 10 hours. We can do crunch time for a couple of weeks, but after that it just doesn't pay of. 12 hours a day are neither healthy for the employee nor for the startup. A team of zombies just doesn't perform. So I'm very little bothered by that law. Germany seems to be doing just fine productivity wise.
[1] The monitor should be placed parallel to the window to reduce reflections, the chair and the table must be adjustable in height, ... [2] http://www.gesetze-im-internet.de/bundesrecht/arbst_ttv_2004... [3] http://edition.cnn.com/2012/12/22/us/iowa-irresistible-worke...
Bonus payments are no problem at all either. If you feel like paying a bonus, pay it. If you want to have a written formula, write it down in a contract - but then you need to pay it if the employee qualifies.
If your employee pretends to be sick, send him to the public health officer. If he isn't sick it's an immediate firing offense. Even verbally threatening to go on sick leave is an immediate firing offense.
Severance packages are not mandated. You can have them in a contract, but the default is no severance package. It's still somewhat harder to fire someone than in the USA since you need an actual reason to do so. "She's irresistible" won't do. [3] It's pretty common to have 3-6 month probation period in a contract where both parties can terminate the contract on short notice.
The part where he's right is extra work. The law is pretty strict here: 8 hours a day is the normal maximum, 10 hours a day for a limited time, maximum of 60 hours a week. There must be a 10 hour break between end of work and beginning on the next day. You can break those limits in emergencies, but you need a qualified reason. That sounds pretty harsh, but it's reasonable. It protects the employees on one side, but why would I want them to work more than 8 hours a day on a regular schedule when productivity drops sharp after 8, maximum 10 hours. We can do crunch time for a couple of weeks, but after that it just doesn't pay of. 12 hours a day are neither healthy for the employee nor for the startup. A team of zombies just doesn't perform. So I'm very little bothered by that law. Germany seems to be doing just fine productivity wise.
[1] The monitor should be placed parallel to the window to reduce reflections, the chair and the table must be adjustable in height, ... [2] http://www.gesetze-im-internet.de/bundesrecht/arbst_ttv_2004... [3] http://edition.cnn.com/2012/12/22/us/iowa-irresistible-worke...
It protects the employees on one side, but why would I want them to work more than 8 hours a day on a regular schedule when productivity drops sharp after 8, maximum 10 hours.
Do you have any modern (i.e., post 1940) evidence for this? What little empirical evidence I've seen suggests 60 hours is optimal. (But what little evidence there is applies to industrial fields, and likely doesn't generalize to knowledge work.)
http://www.overcomingbias.com/2011/12/work-hour-skepticism.h...
http://www.overcomingbias.com/2011/12/construction-peak-60hr...
Do you have any modern (i.e., post 1940) evidence for this? What little empirical evidence I've seen suggests 60 hours is optimal. (But what little evidence there is applies to industrial fields, and likely doesn't generalize to knowledge work.)
http://www.overcomingbias.com/2011/12/work-hour-skepticism.h...
http://www.overcomingbias.com/2011/12/construction-peak-60hr...
The usual model of the effectiveness of overtime in software is described in detail at http://www.stevemcconnell.com/rdvolot.htm . Most of the direct references are not from experiment but based on observations of effective work environments.
You linked to a claim for skepticism, but did not mention the the extensive counter-examples from the first commenter, at least as it applies to some subfields of work. The quote I find most persuasive is: "The best data on sustained intellectual activity comes from financially independent authors. While completing a novel famous authors tend to write only for 4 hr during the morning, leaving the rest of the day for rest and recuperation."
That is a strong suggestion that 4 hours of creative work is about the daily limit. Why is this not a sufficient counter-argument for a broad "60 hour is optimal" recommendation? After all, a self-supporting author has good economic inventive to create more works, but this puts a limit of 28 hours per week on creative work.
Your second link is based on the Nov. 2001 newsletter of "a national firm of Construction Consultants and Claims Specialists, assisting owners and contractors in achieving profitable and trouble-free construction projects", and not, say, a peer-reviewed journal or research organization. The newsletters most recent citation is from 1992, so a bit over 20 years old, instead of a bit over 60 that you are disdainful about.
Can you find anything more recent, and research-oriented, which provides better evidence for your "60 hours is optimal" suggestion? In your analysis, please note, as the newsletter points out, that "The fatigue resulting from a daily two-hour commute is considered similar to a daily increase of two working hours.", so you can't look at a 40 hour work-week in the City of London and assume that that's the only factor to consider, if the commute takes an hour each way. (The newsletter highlights this because in some construction jobs the crew is housed on-site, so there is no commute, which makes the direct interpretation of the chart results difficult.)
Because the overcomingbias.com references didn't include more recent, and more academic/research oriented papers, I suspect both it and you did insufficient research.
In any case, I don't think you understand the math of the evidence that you report. The contracting job numbers say that it's better to hire 1.25x people, who work 40 hours per week, than it is to hire 1x people who work 60 hours per week. Assuming the cost per hour are equal - which it often is for hourly construction work - then the first gives the company more productivity for the same cost.
The only way that 60 hours per week is optimal for the company is if the workers are paid constant rates no matter how much they work per day, or if it wasn't possible to hire 25% more workers (e.g., because of the size of the site, or number of hours available to work). But that's not good incentive to get people to work longer hours, is it.
So I don't understand how you drew your conclusion that 60 hours is optimal.
Here are some of the more recent (post-1940s) papers on this topic, quoting from the CDC, which is one of the top Google hits for this topic, at http://www.cdc.gov/niosh/topics/workschedules/abstracts/daws... :
> Few studies have directly investigated the financial consequences of long working hours. For example, in a study on white-collar jobs, performance decreased by as much as 20% when 60 or more weekly hours are worked (Nevison, 1992). Data from 18 manufacturing industries in the U.S. show that a 10% increase in overtime resulted, on average, in a 2.4% decrease in productivity measured by hourly output ( Shepard and Clifton, 2000). High overtime levels can cause poor employee morale, which can affect productivity and absenteeism. For example, Circadian showed that 31% of extended hours operations that have extremely high overtime hours (25% or greater) also had poor morale, compared to only 13% of companies with low or normal overtime (Kerin, 2003). Long working hours and overtime contribute to increased worker fatigue and safety problems. For example, the average cost of workers compensation claimed per individual at extended hours facilities that reported severe fatigue problems was considerably higher ($4,037) than at facilities that report moderate ($2,240), minor ($981) or no ($276) fatigue problems (Figure 4) (Kerin, 2004).
Note that productivity is only one of the factors. Health costs, impact on family life, and accident claims are others (though the last can be included in the productivity numbers, as they seem to be for the construction numbers).
The Shepard and Clifton paper uses post-1940s data, and would be a better reference than the newsletter. I'm not paying for access to the full paper. You?
Again, don't misinterpret the 2.4% decrease from 40- to 60-hours-per-week to say that working 60 hours is better for the company than 40. If the employees are paid per hour, than it's better to hire more people than it is to have the same people work overtime. (Again, ignoring secondary effects; perhaps the factory isn't large enough for 25% more people.) Plus, the employees will have better morale, and bad morale decreases productivity.
Another, more modern review (and definitely better than a company newsletter) is "Working Long Hours: A Review of the Evidence, Volume 1" (2003), from the Institute for Employment Studies in the UK ( http://webarchive.nationalarchives.gov.uk/+/http://www.dti.g... ). It references "Bienefeld (1972) who observed that major reductions in hours in British economic history preceded rather than followed peaks of productivity growth", though "this evidence may disputed." Still, I find nothing in there which gives strength to your "60 hours is optimal" suggestion. If anything, most of the research is aimed at determining if 35 is a more optimal number than 40.
Based on your termination of our previous exchange on the similarity of employment to a monopoly, I'm not surprised that your analysis seems weak. Your math seems wrong and your citations poor. (BTW, in that monopoly thread I've cited several economics papers which explore the model I outlined, and the developers of that model received the 2010 Nobel Prize in economics. I've also cited several papers which use the factors that you say you've never seen in economics models. This supports my belief that your analysis seems weak.)
You linked to a claim for skepticism, but did not mention the the extensive counter-examples from the first commenter, at least as it applies to some subfields of work. The quote I find most persuasive is: "The best data on sustained intellectual activity comes from financially independent authors. While completing a novel famous authors tend to write only for 4 hr during the morning, leaving the rest of the day for rest and recuperation."
That is a strong suggestion that 4 hours of creative work is about the daily limit. Why is this not a sufficient counter-argument for a broad "60 hour is optimal" recommendation? After all, a self-supporting author has good economic inventive to create more works, but this puts a limit of 28 hours per week on creative work.
Your second link is based on the Nov. 2001 newsletter of "a national firm of Construction Consultants and Claims Specialists, assisting owners and contractors in achieving profitable and trouble-free construction projects", and not, say, a peer-reviewed journal or research organization. The newsletters most recent citation is from 1992, so a bit over 20 years old, instead of a bit over 60 that you are disdainful about.
Can you find anything more recent, and research-oriented, which provides better evidence for your "60 hours is optimal" suggestion? In your analysis, please note, as the newsletter points out, that "The fatigue resulting from a daily two-hour commute is considered similar to a daily increase of two working hours.", so you can't look at a 40 hour work-week in the City of London and assume that that's the only factor to consider, if the commute takes an hour each way. (The newsletter highlights this because in some construction jobs the crew is housed on-site, so there is no commute, which makes the direct interpretation of the chart results difficult.)
Because the overcomingbias.com references didn't include more recent, and more academic/research oriented papers, I suspect both it and you did insufficient research.
In any case, I don't think you understand the math of the evidence that you report. The contracting job numbers say that it's better to hire 1.25x people, who work 40 hours per week, than it is to hire 1x people who work 60 hours per week. Assuming the cost per hour are equal - which it often is for hourly construction work - then the first gives the company more productivity for the same cost.
The only way that 60 hours per week is optimal for the company is if the workers are paid constant rates no matter how much they work per day, or if it wasn't possible to hire 25% more workers (e.g., because of the size of the site, or number of hours available to work). But that's not good incentive to get people to work longer hours, is it.
So I don't understand how you drew your conclusion that 60 hours is optimal.
Here are some of the more recent (post-1940s) papers on this topic, quoting from the CDC, which is one of the top Google hits for this topic, at http://www.cdc.gov/niosh/topics/workschedules/abstracts/daws... :
> Few studies have directly investigated the financial consequences of long working hours. For example, in a study on white-collar jobs, performance decreased by as much as 20% when 60 or more weekly hours are worked (Nevison, 1992). Data from 18 manufacturing industries in the U.S. show that a 10% increase in overtime resulted, on average, in a 2.4% decrease in productivity measured by hourly output ( Shepard and Clifton, 2000). High overtime levels can cause poor employee morale, which can affect productivity and absenteeism. For example, Circadian showed that 31% of extended hours operations that have extremely high overtime hours (25% or greater) also had poor morale, compared to only 13% of companies with low or normal overtime (Kerin, 2003). Long working hours and overtime contribute to increased worker fatigue and safety problems. For example, the average cost of workers compensation claimed per individual at extended hours facilities that reported severe fatigue problems was considerably higher ($4,037) than at facilities that report moderate ($2,240), minor ($981) or no ($276) fatigue problems (Figure 4) (Kerin, 2004).
Note that productivity is only one of the factors. Health costs, impact on family life, and accident claims are others (though the last can be included in the productivity numbers, as they seem to be for the construction numbers).
The Shepard and Clifton paper uses post-1940s data, and would be a better reference than the newsletter. I'm not paying for access to the full paper. You?
Again, don't misinterpret the 2.4% decrease from 40- to 60-hours-per-week to say that working 60 hours is better for the company than 40. If the employees are paid per hour, than it's better to hire more people than it is to have the same people work overtime. (Again, ignoring secondary effects; perhaps the factory isn't large enough for 25% more people.) Plus, the employees will have better morale, and bad morale decreases productivity.
Another, more modern review (and definitely better than a company newsletter) is "Working Long Hours: A Review of the Evidence, Volume 1" (2003), from the Institute for Employment Studies in the UK ( http://webarchive.nationalarchives.gov.uk/+/http://www.dti.g... ). It references "Bienefeld (1972) who observed that major reductions in hours in British economic history preceded rather than followed peaks of productivity growth", though "this evidence may disputed." Still, I find nothing in there which gives strength to your "60 hours is optimal" suggestion. If anything, most of the research is aimed at determining if 35 is a more optimal number than 40.
Based on your termination of our previous exchange on the similarity of employment to a monopoly, I'm not surprised that your analysis seems weak. Your math seems wrong and your citations poor. (BTW, in that monopoly thread I've cited several economics papers which explore the model I outlined, and the developers of that model received the 2010 Nobel Prize in economics. I've also cited several papers which use the factors that you say you've never seen in economics models. This supports my belief that your analysis seems weak.)
I should have been more clear - I meant for the phrases "what little empirical evidence I've seen" and "likely doesn't generalize to knowledge work" to indicate my lack of confidence in the little data I've seen. (Not to mention the fact that my entire post was just a question, together with links one discussion of a little bit of data.)
I'll take a look at your CDC links and see if they answer my question.
Incidentally, my apologies for not responding to your reply to me - I didn't notice it on Christmas afternoon and I just logged on today. I'll take a glance at what you wrote.
I'll take a look at your CDC links and see if they answer my question.
Incidentally, my apologies for not responding to your reply to me - I didn't notice it on Christmas afternoon and I just logged on today. I'll take a glance at what you wrote.
Thats the problem with generalizations about Europe, there has been some progress towards harmonisation but lots of things vary hugely from country to country. For every statement you have to add "except in Belgium", "except in Germany" etc, and he mostly just added the "except in UK" ones.
There are some valid generalizations about europe. There are some mandated minimum holidays for example (4 weeks IIRC) and the tendency to have stronger employee rights. The work ethos is different as well, europeans tend to regard extreme outliers in wealth as extreme outliers, less as role models. The problem is that this article takes some assumptions that might be true for spain and uk and tries to sell them as 'europe'. I'd be interested if the majority of american investors see europe this way or if this is an outlier.
The work ethos is different as well, europeans tend to regard extreme outliers in wealth as extreme outliers, less as role models.
I think part of these stems from the fact that some of the extreme outliers in europe (in terms of wealth or political power) often inherited their wealth. Whereas the USA has the attitude that "This is America, the land of oppertunity, where an illiterate immigrant can step off the boat in ellis island and if he works hard enough, he can own a skyscraper in Manhatten". Whereas, in Europe, there are many people who inherited their wealth. There is also a much more noticable class system.
Strong employee rights comes from blue collar people who, being aware of the class system, do not believe that they will ever be mega rich, and hence fought for more rights & laws for themselves.
(Not to say either 'meme' is correct, I'm just pointing out what people think, which informs what they think.)
I think part of these stems from the fact that some of the extreme outliers in europe (in terms of wealth or political power) often inherited their wealth. Whereas the USA has the attitude that "This is America, the land of oppertunity, where an illiterate immigrant can step off the boat in ellis island and if he works hard enough, he can own a skyscraper in Manhatten". Whereas, in Europe, there are many people who inherited their wealth. There is also a much more noticable class system.
Strong employee rights comes from blue collar people who, being aware of the class system, do not believe that they will ever be mega rich, and hence fought for more rights & laws for themselves.
(Not to say either 'meme' is correct, I'm just pointing out what people think, which informs what they think.)
I disagree with you, i think it has much more to do with the concept of happiness..
In US where the capitalism is too strong, people tendo to believe that wealthy = happiness
Despite not been a european, but a brazilian, i think europeans understand that happiness its a more tricky and uneasy concept to conquer.. and is made of much more values.. even the simplest ones..
They are far more sophisticated in human relationships and the concept of happiness..
but lets not generalize..i know a lot of sophisticated americans.. but is much harder to get there.. cause it needs one to get free from its own dominating culture..
In Brazil we have similar regulations, and labor parties are stronger and popular..
We try to work and be happy with our work, and make a living, but also we want time to have fun, to be with the family.. even if you have to earn less money..
those are different perspectives from the life quality we all want and spect.. different equations, different answers..
who are right? i think it always depends.. what is good for you may not be good for me.. and this means it cannot be enforced by the stronger part of the relationship..
freedom is based on choice.. on the capacity and possibility of choosing.. if someone stronger, be it a enterpreteneur or a country, enforce someone to take a path, that is just limiting individual freedom.. and that is a real threat..
People are different, and have different life values.. we should protect that.. not enforce the "everyone should fit into this box, please!" behavior
I tend to like more the way europeans live life than our brothers from north.. because its everything about happiness not about (just) money, and i think they(europeans) are more conscious about it.
Life should be driven by passion, making a living, money, wealthy.. should be just a consequence of that.. or not :)
In US where the capitalism is too strong, people tendo to believe that wealthy = happiness
Despite not been a european, but a brazilian, i think europeans understand that happiness its a more tricky and uneasy concept to conquer.. and is made of much more values.. even the simplest ones..
They are far more sophisticated in human relationships and the concept of happiness..
but lets not generalize..i know a lot of sophisticated americans.. but is much harder to get there.. cause it needs one to get free from its own dominating culture..
In Brazil we have similar regulations, and labor parties are stronger and popular..
We try to work and be happy with our work, and make a living, but also we want time to have fun, to be with the family.. even if you have to earn less money..
those are different perspectives from the life quality we all want and spect.. different equations, different answers..
who are right? i think it always depends.. what is good for you may not be good for me.. and this means it cannot be enforced by the stronger part of the relationship..
freedom is based on choice.. on the capacity and possibility of choosing.. if someone stronger, be it a enterpreteneur or a country, enforce someone to take a path, that is just limiting individual freedom.. and that is a real threat..
People are different, and have different life values.. we should protect that.. not enforce the "everyone should fit into this box, please!" behavior
I tend to like more the way europeans live life than our brothers from north.. because its everything about happiness not about (just) money, and i think they(europeans) are more conscious about it.
Life should be driven by passion, making a living, money, wealthy.. should be just a consequence of that.. or not :)
Interesting perspective, I hadn't thought of that.
"The work ethos is different as well, europeans tend to regard extreme outliers in wealth as extreme outliers, less as role models.
What does that have to do with work ethos? Do you think there is a strong correlation between working hard and the dream of becoming extremely wealthy? Of the four options, (born poor/rich, working hard/slacking) I agree that (born poor & slacking) is highly unlikely to make you wealthy, but that is about it.
The exaggerated version of my view on workers rights in Europe/the EU (1), compared to the US, is that, in Europe, the class struggle between the Proletariat and the Bourgeoisie (http://en.wikipedia.org/wiki/Proletariat#Usage_in_Marxist_th...) has led to a distribution of power that gives more power to the proletariat.
That is why, for example, consumer laws are stronger in the EU, and that workers have more rights, enforced by the EU, more or less acting for all workers.
In the USA, "workers" and "owners" are more each others enemies than collaborators for a common cause (for an extreme example, see http://www.motherjones.com/politics/2012/02/mac-mcclelland-f...), and workers work hard for two reasons: fear of their employers and the _dream_ of becoming extremely wealthy.
In the EU, on the other hand, bosses respect their employees and give them room for self-development. That makes them work hard (did I say this was the exaggerated version?).
I also thinks similar logic applies to medical insurance and the prison systems in the EU and the USA, but that may be a bit far sought.
Also, some loose remarks on things stated in the article:
- AFAIK, you can start your startup in a garage all you want. Rules about workplace conditions only apply to employees. As long as you don't have employees, you can work wherever and however you want.
- Similarly, you can work as long as you want for your own company.
- Many countries have limited liability companies (http://en.wikipedia.org/wiki/Limited_liability_company) that give you easy protection against losing your house in case your company goes bankrupt. The difficulty of starting one varies by country (Google showed me ads claiming a price of about €400–, or about €3000,– if you want one within four hours for Dutch ones)
- When I learned about it earlier this year, I was surprised that Germans have to have a doctor's approval to report sick. That sounds like bureaucratic waste to me. In the Netherlands, you just report sick.
(1) I know the two are different, but the EU 'exports' its rules outside the EU, too. For example, Switzerland is not in the EU, but it follows many EU directives because it wants to trade easily with its neighbors and even pays towards the EU budget (http://en.wikipedia.org/wiki/Switzerland–European_Union_rela...); Norway is not in the EU, but it is in the Schengen zone of 'no passport check on travel'. To get there, it has to comply with several EU rules (http://en.wikipedia.org/wiki/Norway–European_Union_relations)
On the other hand, there are so many degrees of 'in the EU' that mere mortals cannot keep track of them (http://en.wikipedia.org/wiki/European_Union#Member_states: 27 members, one almost member, 5 candidates, 4 potential candidates, one potential candidate which is not recognized as an independent country by all, some EFTA countries not in the EU, micro states that have the euro, but are not in the EU, overseas areas of European countries (http://en.wikipedia.org/wiki/Special_member_state_territorie...). Nevertheless, I'll treat "Europe" and "the EU" as synonyms. That should do for this rant.
What does that have to do with work ethos? Do you think there is a strong correlation between working hard and the dream of becoming extremely wealthy? Of the four options, (born poor/rich, working hard/slacking) I agree that (born poor & slacking) is highly unlikely to make you wealthy, but that is about it.
The exaggerated version of my view on workers rights in Europe/the EU (1), compared to the US, is that, in Europe, the class struggle between the Proletariat and the Bourgeoisie (http://en.wikipedia.org/wiki/Proletariat#Usage_in_Marxist_th...) has led to a distribution of power that gives more power to the proletariat.
That is why, for example, consumer laws are stronger in the EU, and that workers have more rights, enforced by the EU, more or less acting for all workers.
In the USA, "workers" and "owners" are more each others enemies than collaborators for a common cause (for an extreme example, see http://www.motherjones.com/politics/2012/02/mac-mcclelland-f...), and workers work hard for two reasons: fear of their employers and the _dream_ of becoming extremely wealthy.
In the EU, on the other hand, bosses respect their employees and give them room for self-development. That makes them work hard (did I say this was the exaggerated version?).
I also thinks similar logic applies to medical insurance and the prison systems in the EU and the USA, but that may be a bit far sought.
Also, some loose remarks on things stated in the article:
- AFAIK, you can start your startup in a garage all you want. Rules about workplace conditions only apply to employees. As long as you don't have employees, you can work wherever and however you want.
- Similarly, you can work as long as you want for your own company.
- Many countries have limited liability companies (http://en.wikipedia.org/wiki/Limited_liability_company) that give you easy protection against losing your house in case your company goes bankrupt. The difficulty of starting one varies by country (Google showed me ads claiming a price of about €400–, or about €3000,– if you want one within four hours for Dutch ones)
- When I learned about it earlier this year, I was surprised that Germans have to have a doctor's approval to report sick. That sounds like bureaucratic waste to me. In the Netherlands, you just report sick.
(1) I know the two are different, but the EU 'exports' its rules outside the EU, too. For example, Switzerland is not in the EU, but it follows many EU directives because it wants to trade easily with its neighbors and even pays towards the EU budget (http://en.wikipedia.org/wiki/Switzerland–European_Union_rela...); Norway is not in the EU, but it is in the Schengen zone of 'no passport check on travel'. To get there, it has to comply with several EU rules (http://en.wikipedia.org/wiki/Norway–European_Union_relations)
On the other hand, there are so many degrees of 'in the EU' that mere mortals cannot keep track of them (http://en.wikipedia.org/wiki/European_Union#Member_states: 27 members, one almost member, 5 candidates, 4 potential candidates, one potential candidate which is not recognized as an independent country by all, some EFTA countries not in the EU, micro states that have the euro, but are not in the EU, overseas areas of European countries (http://en.wikipedia.org/wiki/Special_member_state_territorie...). Nevertheless, I'll treat "Europe" and "the EU" as synonyms. That should do for this rant.
>> "The work ethos is different as well, europeans tend to regard extreme outliers in wealth as extreme outliers, less as role models.
> What does that have to do with work ethos? Do you think there is a strong correlation between working hard and the dream of becoming extremely wealthy? Of the four options, (born poor/rich, working hard/slacking) I agree that (born poor & slacking) is highly unlikely to make you wealthy, but that is about it.
I'm sorry I was unclear. I meant that as a list of items that tend to be different not that the work ethos is different in the issue of rich people as role models.
Two minor nitpick: Studies show that of the 4 options (born poor/rich, working hard/slacking) two are bad: Born poor is highly unlikely to make you wealthy. Slacking will make things worse, but in general the equation "born (modestly) rich -> die rich" and "born poor -> die poor" holds true. [1]
Calling in sick in Germany is a bit more difficult: By default you only need a doctors approval after the third day. The employer can demand a medical certificate on day one if they choose to. Small businesses get most of the wage paid by the health insurance for the period that they have the doctors certificate, so they tend to be stricter about it.
[1] see for example http://www.americanprogress.org/issues/economy/news/2006/04/... for the american case, sadly social mobility is not on an acceptable level in germany either. Nordic countries tend to be better in that respect.
> What does that have to do with work ethos? Do you think there is a strong correlation between working hard and the dream of becoming extremely wealthy? Of the four options, (born poor/rich, working hard/slacking) I agree that (born poor & slacking) is highly unlikely to make you wealthy, but that is about it.
I'm sorry I was unclear. I meant that as a list of items that tend to be different not that the work ethos is different in the issue of rich people as role models.
Two minor nitpick: Studies show that of the 4 options (born poor/rich, working hard/slacking) two are bad: Born poor is highly unlikely to make you wealthy. Slacking will make things worse, but in general the equation "born (modestly) rich -> die rich" and "born poor -> die poor" holds true. [1]
Calling in sick in Germany is a bit more difficult: By default you only need a doctors approval after the third day. The employer can demand a medical certificate on day one if they choose to. Small businesses get most of the wage paid by the health insurance for the period that they have the doctors certificate, so they tend to be stricter about it.
[1] see for example http://www.americanprogress.org/issues/economy/news/2006/04/... for the american case, sadly social mobility is not on an acceptable level in germany either. Nordic countries tend to be better in that respect.
And certainly in the Uk severance packages are not a Q for start ups as.
A The statutory redundancy payment only applies if you have worked for two years (which most failed start-up wont have)
B If a company goes bust badly the state pays the redundancy - some multinationals have abused this by artificially making a subsidiary bankrupt the 100's redundant workers redundancy where paid by the Government when the parent company got of of Scot free.
And don't forget get that IT workers are considered professionals and so don't have the full protection of the working time directive.
A The statutory redundancy payment only applies if you have worked for two years (which most failed start-up wont have)
B If a company goes bust badly the state pays the redundancy - some multinationals have abused this by artificially making a subsidiary bankrupt the 100's redundant workers redundancy where paid by the Government when the parent company got of of Scot free.
And don't forget get that IT workers are considered professionals and so don't have the full protection of the working time directive.
I don't live in a country with the kind of employee protection rules as in Germany, but the article still comes off as a rant against employee protections.
Can't afford to treat your employees like humans? Want to give them big bonuses and then fire them the following year so they can't pay the mortgage on that house they put a deposit down on with that bonus? Don't want to shell out a bit of money on decent offices, and rather shove them in some little basement somewhere?
None of this is required for a startup. You can actually treat your employees as human regardless of the stage of your business - especially considering that this guy can easily afford this stuff.
Can't afford to treat your employees like humans? Want to give them big bonuses and then fire them the following year so they can't pay the mortgage on that house they put a deposit down on with that bonus? Don't want to shell out a bit of money on decent offices, and rather shove them in some little basement somewhere?
None of this is required for a startup. You can actually treat your employees as human regardless of the stage of your business - especially considering that this guy can easily afford this stuff.
> Can't afford to treat your employees like humans? Want to give them big bonuses and then fire them the following year so they can't pay the mortgage on that house they put a deposit down on with that bonus? Don't want to shell out a bit of money on decent offices, and rather shove them in some little basement somewhere?
Isn't this something the market will mostly take care of, especially in tech where people can easily change jobs?
"Jobs for life" is a net negative in Italy: it keeps young people out of jobs, and it makes people hold on for dear life to jobs they hate and aren't great at just because they are Permanent Jobs. Far better to have a lot of flexibility, and state support for the unemployed, rather than turning employers into supporters of people they do not wish to employ.
Isn't this something the market will mostly take care of, especially in tech where people can easily change jobs?
"Jobs for life" is a net negative in Italy: it keeps young people out of jobs, and it makes people hold on for dear life to jobs they hate and aren't great at just because they are Permanent Jobs. Far better to have a lot of flexibility, and state support for the unemployed, rather than turning employers into supporters of people they do not wish to employ.
I somewhat agree; you basically need a middle ground. It shouldn't be too easy to fire people, but neither should it be too hard. I think what we have in my country (.dk) hits that middle ground fairly decently.
As a matter of fact, here in Italy Denmark is often cited as a very good example to follow regarding work regulations.
By Ichino who was until a few days ago part of a very small, yet vocal, minority of a center-left party and has now joined the ranks of the centrr-right.
His views are far far from being mainstream...
His views are far far from being mainstream...
Isn't this something the market will mostly take care of
Only if there is a perfectly functioning market. Which there often isn't in many cases. Hence the laws.
Only if there is a perfectly functioning market. Which there often isn't in many cases. Hence the laws.
I don't think I need to spell out that Italy's laws and government are probably not what most people think of when they think of "perfectly functioning", right?
Markets often work well even if they're not "perfectly functioning". Governments certainly solve other kinds of problems decently even if they are not "perfectly functioning" either. I'm pretty happy with the health care here in Italy, for instance.
Markets often work well even if they're not "perfectly functioning". Governments certainly solve other kinds of problems decently even if they are not "perfectly functioning" either. I'm pretty happy with the health care here in Italy, for instance.
This article is worse than a rant. People rant in response to intolerable conditions.
But this fellow has been entrepeneur-ing in Europe for more than 15 years, he has done quite well by his own admission, and now, after all this time, comes up with this hit piece against employee rights. It's deeply dishonest.
But this fellow has been entrepeneur-ing in Europe for more than 15 years, he has done quite well by his own admission, and now, after all this time, comes up with this hit piece against employee rights. It's deeply dishonest.
Doesn't seem to have learned much in 15 years then.
I also don't buy the notion that Europeans are generally resentful towards entrepreneurs.
Personally I don't think people are resentful to entrepreneurs but it isn't glorified the way it is elsewhere. If I told an American friend I ran my own business they would usually be very interested and tell me how great that is. Most of the people I know (Europeans) tend to think of it as 'not a real job' and regular tell me 'I should get a real job'. These aren't people trying to hurt me, they legitimately believe that I need a real job. I don't think entrepreneurship is celebrated less here, I think that is it only celebrated when you are either incredibly successful or have something to show for it i.e. you have a store you run. It's hard for a lot of people to understand software development and that I can work from my house with nothing but a laptop, meet clients online, and only talk with them via the internet.
Certainly, in British culture, hard work carries a certain amount of respect, and those who are perceived to have obtained wealth without putting the work in (as applies to many 'entrepreneurs') are absolutely resented.
Perhaps related is the fact ostentatious displays of wealth are generally frowned upon. In the US it seems fashionable for entrepreneurs to become fabulously wealthy, then flaunt their wealth as 'inspiration' to other would-be entrepreneurs. In Britain, if not the rest of Europe, this draws resentment more so than admiration.
Perhaps related is the fact ostentatious displays of wealth are generally frowned upon. In the US it seems fashionable for entrepreneurs to become fabulously wealthy, then flaunt their wealth as 'inspiration' to other would-be entrepreneurs. In Britain, if not the rest of Europe, this draws resentment more so than admiration.
Not sure id agree with you "old" money will look down on new money. Apparently some old money Sloanes used look down Kate Mideltons parents self made millionaires.
Her Mum as an ex Air hostess was refered to as ‘doors to manual'
Her Mum as an ex Air hostess was refered to as ‘doors to manual'
to be fair I don't think that being a telecommuting software developer is glorified anywhere really.
From France, the view seems to be that small businesses are mainly for artisanal things. People don't really have this idea of working your life away because our culture believes (rightly so? I imagine here the opinion might be opposite) more in that work is not the meaning of life, and so the idea of spending so many hours toiling away (especially in something like software eng, where there are 10000s of consultancies you could work for and probably be beter paid) seems counterintuitive. That or you're just greedy.
I'd also like to point out that Europe is not a country, talking about "Europeans" is silly outside of the context of "people who have access to affordable healthcare", and that mentalities change enormously across borders.
From France, the view seems to be that small businesses are mainly for artisanal things. People don't really have this idea of working your life away because our culture believes (rightly so? I imagine here the opinion might be opposite) more in that work is not the meaning of life, and so the idea of spending so many hours toiling away (especially in something like software eng, where there are 10000s of consultancies you could work for and probably be beter paid) seems counterintuitive. That or you're just greedy.
I'd also like to point out that Europe is not a country, talking about "Europeans" is silly outside of the context of "people who have access to affordable healthcare", and that mentalities change enormously across borders.
>> "Europe is not a country"
I completely agree. I was just referring to it as the article referred to it. I was talking specifically about the UK & Ireland.
I completely agree. I was just referring to it as the article referred to it. I was talking specifically about the UK & Ireland.
A ... well, I'm not going to get specific, as he's probably not too hard to locate via facebook or something, but a person I know through my wife was ranting about how all entrepreneurs are dishonest thieves at dinner the other day. Granted, this was an after-a-few-bottles-of-wine chat at the table, not a serious, reasoned opinion from someone who I do respect, but still, it's not an uncommon opinion here in Italy.
Unfortunately, this is often true here in Italy: The main reason, imho, is that rules are often so difficult to follow that selection is working against the more honest entrepreneurs...
Exactly. One of the first people many Italians think of when they hear 'entrepreneur' is Berlusconi, whose 'big idea' wasn't something new or clever or otherwise particularly innovative, but a sneaky way around the state television monopoly. I think it's an example that shows both sides of the coin: the oppressive state, and the "entrepreneur" being not an innovator, but someone good at bending the rules. So yeah, that's probably where that comes from, but it's a vicious circle, because people look down on those who are doing something new and creative as well.
It definitely is a vicious circle. There are for sure many other effects at work, but I'm pretty sure that this is one of the most important ones - and one which is incredibly difficult to break, because moralists and "furbi" (sly ones) both work to keep things as they are :(
Yeah well, and here we're looking at an article claiming "it's illegal to work hard in the EU", which wasn't even wrote by a random drunk and is just as bad.
Also: http://www.garann.com/dev/2012/what-the-fuck-is-an-entrepren...
Also: http://www.garann.com/dev/2012/what-the-fuck-is-an-entrepren...
Well it's so easy to evade taxes when you are self employed as opposed to an employee or a civil servant, that this is often true.
Every time that you get your espresso and you don't get a receipt (which is more often than not), the owner of the café pays no taxes.
Every time that you get your espresso and you don't get a receipt (which is more often than not), the owner of the café pays no taxes.
It wouldn't be too hard to find someone holding the same views in the US, I should think.
In my experience the ex communist countries are still heavily resentful towards entrepreneurs.
Especially because for the past 20 years being an entrepreneur has mostly meant legally stealing big corporations. At least in the eyes of many. There are a lot of decent entrepreneurs, but they don't get any press.
However, the general mantra is "He has more than we do, he is obviously a scoundrel and a thief. You can't get there by being honest."
Especially because for the past 20 years being an entrepreneur has mostly meant legally stealing big corporations. At least in the eyes of many. There are a lot of decent entrepreneurs, but they don't get any press.
However, the general mantra is "He has more than we do, he is obviously a scoundrel and a thief. You can't get there by being honest."
That's the true tragedy of places where 'under the table' is the norm rather than the exception (including ex-communist countries but not limited to them)
There isn't just one single general mantra. For example, the notion that success/money prove the value of what you're doing -- instead of your own rational reflection, nothing else -- is often heard, from big shots to wannabes. Just look at the crap Microsoft, Facebook, Intel, Google and Apple got/get away with. Yeah we bitch, sometimes, but generally it's a-okay because the ends justifies the means, they're household names, la-di-blah. If we're already that FUBAR with stuff that is out in the open, the full spectrum is probably not very flattering either.
This differs enormously across countries.
Which is really the problem with targeting anything at "Europe" (be it a blog post or a business): there's always something new that differs enormously across countries.
Which is really the problem with targeting anything at "Europe" (be it a blog post or a business): there's always something new that differs enormously across countries.
It's most certainly true in France and I guess in other Latin countries.
But but but « entrepreneur » is a French word!
So how did entrepreneurs like Sarkozy and Berlusconi ever get elected?
Get off it.
Entrepreneurs aren't worshiped like gods by default just for being entrepreneurs, that's all.
Get off it.
Entrepreneurs aren't worshiped like gods by default just for being entrepreneurs, that's all.
Sarkozy is not an entrepreneur. It's theorically a lawyer but he is a full time politician for 30 years (He was mayor of Neuilly since 1983).
You'd be surprised. Ambition is generally seen as bad. The best description of European culture(s) is the Law of Jante: http://en.wikipedia.org/wiki/Law_of_Jante
You'd be surprised by how little that actually applies today. Yet, politicians and public debators always talk about it. And I should know; I am Danish.
"the problem with this is that it is harder to convince a group of Europeans that they are out to conquer the world in their field. It is cultural."
It's called World War I and II, and having learned a thing or two. "Conquering the world" in itself is a phrase only an utter brute would think, much less actually brag about.
Why can you not get to know the world, and cooperate with it? What are you scared of? Why not be a peer amongst peers, who but a coward would want to be owner? Keep the crap that makes your country crap in that country kthx.. there is no point in moving to the EU if you're not going to actually learn from it.
It's called World War I and II, and having learned a thing or two. "Conquering the world" in itself is a phrase only an utter brute would think, much less actually brag about.
Why can you not get to know the world, and cooperate with it? What are you scared of? Why not be a peer amongst peers, who but a coward would want to be owner? Keep the crap that makes your country crap in that country kthx.. there is no point in moving to the EU if you're not going to actually learn from it.
As well as some wars, there is also a long history of imperialism and actually trying to take over the world.
Which is my point exactly. I didn't say Europe is "better", if anything it was more savage; but that had high costs and many lessons. The US still thinks you can dominate the world and get away with it. Well nuh-uh.
What strikes me about this article is the utter lack of understanding.
It is a highly subjective, very politicized and ideologically tainted description without any kind of understanding, and some of the attempts at interpretation of cultural and legal differences are either plain wrong or deliberately misrepresented.
It's an anti-European rant, nothing more. Here's a great gem for example:
"To work hard, to work long hours, is actually illegal in Europe."
Seriously.
It is a highly subjective, very politicized and ideologically tainted description without any kind of understanding, and some of the attempts at interpretation of cultural and legal differences are either plain wrong or deliberately misrepresented.
It's an anti-European rant, nothing more. Here's a great gem for example:
"To work hard, to work long hours, is actually illegal in Europe."
Seriously.
You say that, but when I was working in the Netherlands, my colleagues and I were repeatedly told that we could not stay to work in the office past normal working hours. Even with impending deadlines that for the life of the company could not be moved, which is why we were working the long hours in the first place. To put it in perspective, at one point we were even told to work from home if needed, but to not tell them about it. I truly don't think there is any cultural misinterpretation there, this was pure legal paranoia. At least on this particular issue you pointed out.
There are huge differences between the countries. I have two friends working for two different us gaming companies doing basicly the same job. One in France and one in Germany.
The one in France has a strict work schedule. If he has to do some special works like traveling for a fair or similar, he will be rewarded with freetime and/or money. Working late? Rewarded.
The guy in Germany has a real problem. He is working late in the night on daily bases but he is payed only for the 40h stated in his contract. Everybody knows about it. Everybody is doing it. The workload demands it also. Nobody is talkig about it. Sure he could sue them but hey, they don't tell you to do it.
The one in France has a strict work schedule. If he has to do some special works like traveling for a fair or similar, he will be rewarded with freetime and/or money. Working late? Rewarded.
The guy in Germany has a real problem. He is working late in the night on daily bases but he is payed only for the 40h stated in his contract. Everybody knows about it. Everybody is doing it. The workload demands it also. Nobody is talkig about it. Sure he could sue them but hey, they don't tell you to do it.
In my country (Uruguay), labor laws have a mandated maximum of overtime. If a work inspector finds your company violationg that, the company is liable for some serious fines.
Also, employees can sue for unpaid overtime.
This makes companies extremely serious about employees leaving on time. In the company I work for, the computers automatically shut down at 6 p.m. (we're supposed to leave at five thirty).
Also, employees can sue for unpaid overtime.
This makes companies extremely serious about employees leaving on time. In the company I work for, the computers automatically shut down at 6 p.m. (we're supposed to leave at five thirty).
You can sue for unpaid OT in the USA as well.
Just because you once had a job where your employer told you the law said a particular thing, doesn't mean the law actually says that particular thing.
I've worked long weeks before without any issue between myself and my employer (in the UK). Most people I converse with/encounter would probably say the same thing. All the EU working time directive (http://en.wikipedia.org/wiki/Working_Time_Directive) says is that an employer can't force you to work more than 48 hours a week. If you want to work 23.5 hour days, 7 days a week, and an employer who's willing to pay for that, knock yourself out.
I've worked long weeks before without any issue between myself and my employer (in the UK). Most people I converse with/encounter would probably say the same thing. All the EU working time directive (http://en.wikipedia.org/wiki/Working_Time_Directive) says is that an employer can't force you to work more than 48 hours a week. If you want to work 23.5 hour days, 7 days a week, and an employer who's willing to pay for that, knock yourself out.
Not in germany. The law mandates ab absolute maximum of 10 hours a day, 10 hours break between shifts and max 60 hours a week unless there's some case of emergency. These already are the extended hours, that are only possible if the overtime can be taken off within a reasonable timeframe. The regular work-hours are 6 days of 8 hours. The employer is legally responsible that these limits are enforced.
Did not know. Stand corrected. Seems this is UK-only. Wonder if there's a difference between a worker being salaried vs paid per hour?
No. There's a difference between employed workers where the regulations apply and freelancers that can actually do whatever they want. Actually if my employee were to accept a side-job he'd have to report it to me so that I can check he's not going over the 60 hours limit.
Interesting enough some companies start to recognize that long hours don't get them as much value as they thought. I know of a case where a pretty large enterprise customer has a "max 8 hours a day" clause for subcontractors and freelancers.
Interesting enough some companies start to recognize that long hours don't get them as much value as they thought. I know of a case where a pretty large enterprise customer has a "max 8 hours a day" clause for subcontractors and freelancers.
I believe that only applies in the UK, from Wikipedia "in the United Kingdom, it is possible to opt out of the 48 hour working week and work longer hours". However in the rest of Europe that seems not to be the case, although the exact details of the hours and how they are structured depends on national legislation.
That sounds highly company specific. I am Dutch, and I have never encountered this before, despite working at many different companies. While working overtime is not the norm, it is certainly not unheard of, or even particularly rare, when deadlines are approaching. Depending on your contract, you may get comped in money, extra vacation or not at all.
But then the opposite side is "ea_spouse" in the USA....
That was the exact same sentence that changed my whole attitude; and I'm a tolerant guy. It's a pity that "work hard" and "work long hours" are separated only by a comma.
PS: I'm still "infected" by this article: http://www.salon.com/2012/03/14/bring_back_the_40_hour_work_...
PS: I'm still "infected" by this article: http://www.salon.com/2012/03/14/bring_back_the_40_hour_work_...
How is not working long hours a bad thing?
Article is ridden with errors, mostly based on a faulty premise. Europe is not a country. Europe isn't even the EU.
Laws, regulations, attitudes and tax rates vary widely. If you want to do a startup in Europe, choose a country first and then read up.
Laws, regulations, attitudes and tax rates vary widely. If you want to do a startup in Europe, choose a country first and then read up.
There definitely are a lot of generalizations in the article but there also are a lot of valid points.
It is pretty insightful to see how a seasoned American Entrepreneur perceives Europe and the obstacles that can be found here. Not necessarily every obstacle applies everywhere. Some countries might even have different things hindering their competitiveness than those outlined by the article. But it definitely isn't all peachy for businesses over here (or there).
This article does provide a kind of road map on how Europe could improve its business environment. If it wants to is a completely different question.
It is pretty insightful to see how a seasoned American Entrepreneur perceives Europe and the obstacles that can be found here. Not necessarily every obstacle applies everywhere. Some countries might even have different things hindering their competitiveness than those outlined by the article. But it definitely isn't all peachy for businesses over here (or there).
This article does provide a kind of road map on how Europe could improve its business environment. If it wants to is a completely different question.
What's worse, were it gets specific on country and regulation, it still gets it wrong, seemingly deliberate.
It's a political anti-regulation rant. Nothing more.
It's a political anti-regulation rant. Nothing more.
Indeed, this article really ought to refer to Western Europe rather than Europe as a whole, and even then there are far too many generalizations.
Yes. I am European, working as a contractor in my own limited company, and am not in a position to speak out for the busines climate in all of Europe. I can say how taxes, pensions and health care works in Sweden, but going beyond that, I would mostly be speculating.
I would tend to agree: one of the biggest mistakes he makes is assuming EU wide directives are applied equally. The UK, for example, negotiated a clause meaning employers can have employees opt-out of the working time directive (which governs the number of hours in a week employees can work).
UK employees can opt out of part of the working time directive, the 48 hrs max working week ban. But other parts still apply, like minimum holidays per year
I stand by my comment that I could not start a company in the garage of my father in law in Mulheim an der Ruhr. Many of those commenting here should see how companies get started in USA. And yes kudos to Germany for its changes in recent years. Other European countries should follow its lead. But lets remember one thing, a deregulated work environment in USA has led to engineers getting paid 2 or 3 times as much and that does not include stock options taxed at capital gains rates.
> But lets remember one thing, a deregulated work environment in USA has led to engineers getting paid 2 or 3 times as much
Are you sure you're not confusing correlation and causation? China for example has no work regulations but engineers there don't get payed 3 times as much as in Europe. And China here is not an exception, US are.
You'd have to do much more research to claim that deregulation leads to better payed jobs.
Are you sure you're not confusing correlation and causation? China for example has no work regulations but engineers there don't get payed 3 times as much as in Europe. And China here is not an exception, US are.
You'd have to do much more research to claim that deregulation leads to better payed jobs.
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It's led to engineers getting paid more, but it's also arguably had negative effects on the people most of those European laws were meant to protect.
That is true, however the article did come off as very strong criticism, some of it unwarranted (I thought your criticism of severance was too strong).
Looking forward to hearing your keynote at Punta Tech :)
Looking forward to hearing your keynote at Punta Tech :)
Correction, it seems Martin's not speaking at Punta Tech this year, I still hope he attends.
"state mandated severance pay packages... a direct attack to start ups"
While it's true that many startups fail, I wouldn't go so far as to say severance pay is an attack. You can fire someone with two weeks notice in Spain, paying 33 days of severance for every year paid (used to be 45). AND take home salaries are usually lower.
What is done in practice, to compare worker compensations across countries, is to factor that into the salary equations, it means that workers are a lot more expensive than what the take home salaries might imply, but consider:
Employee A at an US startup has a take home salary of US$ 75.000 will cost US$ 100.000 or so to the employer per year.
Employee B at a Spanish startup has a take home salary of US$ 56.000 (43.000 euros), and it will cost US$ 100.000 or so to the employer per year :) , factoring in severance, healthcare, social security and other benefits.
As jordinl and others stated, most European countries have a three-month trial period for employees as well (edit: and it can be renewed, making the hypothetical 6-months-in non-performer as easy to fire as in the US).
So, an European employee is usually NOT more expensive than an U.S. employee, it requires different considerations (and setting aside money for severance & stuff). It probably is a lot more bureaucratic, but that's it (on the other hand, there are a lot less lawsuits). If the reason for moving into Europe was cheaper salaries, bad luck, but if the reason was an unexplored market, it should work out.
Edit: I do agree that there are some strong laws against beginning your startup in a garage, but the physical location shouldn't be a problem.
About starting a new company: you can buy a pre-made company for 150 euros in Madrid, and probably the rest of Europe, with most of the paperwork solved for you. There are plenty of programs for helping new startups get off the ground (depends on the country, some are more progressive like Finland)
While it's true that many startups fail, I wouldn't go so far as to say severance pay is an attack. You can fire someone with two weeks notice in Spain, paying 33 days of severance for every year paid (used to be 45). AND take home salaries are usually lower.
What is done in practice, to compare worker compensations across countries, is to factor that into the salary equations, it means that workers are a lot more expensive than what the take home salaries might imply, but consider:
Employee A at an US startup has a take home salary of US$ 75.000 will cost US$ 100.000 or so to the employer per year.
Employee B at a Spanish startup has a take home salary of US$ 56.000 (43.000 euros), and it will cost US$ 100.000 or so to the employer per year :) , factoring in severance, healthcare, social security and other benefits.
As jordinl and others stated, most European countries have a three-month trial period for employees as well (edit: and it can be renewed, making the hypothetical 6-months-in non-performer as easy to fire as in the US).
So, an European employee is usually NOT more expensive than an U.S. employee, it requires different considerations (and setting aside money for severance & stuff). It probably is a lot more bureaucratic, but that's it (on the other hand, there are a lot less lawsuits). If the reason for moving into Europe was cheaper salaries, bad luck, but if the reason was an unexplored market, it should work out.
Edit: I do agree that there are some strong laws against beginning your startup in a garage, but the physical location shouldn't be a problem.
About starting a new company: you can buy a pre-made company for 150 euros in Madrid, and probably the rest of Europe, with most of the paperwork solved for you. There are plenty of programs for helping new startups get off the ground (depends on the country, some are more progressive like Finland)
Starting a company is still not that easy in the rest of Europe, eg Belgium there are capital requirements of EUR18000 to start a company still.
Wow, that's definitely not making it easy for a startup.
This would indicate that starting a company in Spain is not quite as easy as you say:
http://www.doingbusiness.org/data/exploreeconomies/spain/#st...
You are talking about a "real" (Limited Liability) company, right?
http://www.doingbusiness.org/data/exploreeconomies/spain/#st...
You are talking about a "real" (Limited Liability) company, right?
Hmm, this made me read a little bit more, and it isn't as easy or cheap as I had made it to be.
However, what I'm talking about is a "real" company, only somebody else took the trouble to do most of the paperwork described in your link (it's the same as is done in my country, you buy a pre-registered company).
There are two kinds of Limited Liability companies in Spain:
http://www.spanish-living.com/starting-business-spain/faqs
"Should I form a new company or buy a ready-made company?
With a ready-made company ('off the shelf') you save the step of registering a new name (8-14 days). As soon as you come to sign at the notary, your company can begin operations."
"What are the differences between Sociedad Limitada (SL) and a Sociedad Anónima (SA)?
An SL is similar to the British 'Ltd' or the American 'LLC'.
Accounting for an SL is fairly simple and in the first three years, you can apply for 'simplified accounting'.
Accounting for an SA is more complicated and yearly auditing is required. An SL requires capital backing of 3006€, while an SA requires 60,000€. "
However, what I'm talking about is a "real" company, only somebody else took the trouble to do most of the paperwork described in your link (it's the same as is done in my country, you buy a pre-registered company).
There are two kinds of Limited Liability companies in Spain:
http://www.spanish-living.com/starting-business-spain/faqs
"Should I form a new company or buy a ready-made company?
With a ready-made company ('off the shelf') you save the step of registering a new name (8-14 days). As soon as you come to sign at the notary, your company can begin operations."
"What are the differences between Sociedad Limitada (SL) and a Sociedad Anónima (SA)?
An SL is similar to the British 'Ltd' or the American 'LLC'.
Accounting for an SL is fairly simple and in the first three years, you can apply for 'simplified accounting'.
Accounting for an SA is more complicated and yearly auditing is required. An SL requires capital backing of 3006€, while an SA requires 60,000€. "
On "Europe is not a country". 'Claro que no', but the same reaction every time to this sort of article gets a bit passe` as well. The author is clearly not just some bozo that moved to "Europe" a few months ago and is writing up his first impressions: he built some pretty serious companies here and obviously knows a thing or two that might be worth considering on its merits, despite the fact that, yes, things are a bit different in the Lofoten islands than in Pantelleria.
> In most of Europe there is no concept of personal bankruptcy
That's wrong. It only takes longer in most european countries. For example in Germany it takes 6 years.
That's wrong. It only takes longer in most european countries. For example in Germany it takes 6 years.
I'm not certain about it but I think debts from criminal offenses are not cleared on personal bankruptcy. Sozialversicherungsbetrug (not paying your employees social security) and tax evasion are criminal offenses for the manager of a company so they'd not be cleared. However, if you start up a company with employees you'd want a limited liability company of some form anyways, so personal liability only extends to criminal negligence or criminal offenses. It's still easy enough to get burned and indebted as manager though.
I'm not certain about it but I think debts from criminal offenses are not cleared on personal bankruptcy
Not all debts can be cleared by bankruptcy in the USA AFAIK. I don't think you can clear college tutition fees with bankrupcty.
Not all debts can be cleared by bankruptcy in the USA AFAIK. I don't think you can clear college tutition fees with bankrupcty.
Yes, I heard that. The tricky part is that the debts that a failing startup is most likely to rack up are the ones that later translate into criminal charges and the manager is personally liable for that.
Agreed. Ireland is 7 years I think (though it's being reduced). UK might be 1 year.
To think of it from another perspective, harder bankruptcies mean that your debtors are not able to escape from their debts as easy. Surely that's a good thing for a business?
To think of it from another perspective, harder bankruptcies mean that your debtors are not able to escape from their debts as easy. Surely that's a good thing for a business?
I have founded tech startups both in Europe (Holland) and Silicon Valley. While some details are apparently debatable (judging from the discussion here), the overall picture seems very accurate. The fear of failure and personal liability is a huge issue in most European countries. I hate to say it, but there is a lot European countries can learn from Silicon Valley.
At one point the author complains about 20k of social charges overhead on a 50k job. Then a few lines later he says that it's cool that in Europe you mostly don't need to pay 800/mo in health insurance.
Those 20k are the equivalent of the health insurance + 401k. The only difference is that they are mandatory (and IMHO are a much better allocated).
Those 20k are the equivalent of the health insurance + 401k. The only difference is that they are mandatory (and IMHO are a much better allocated).
The landscape in the UK has changed somewhat in the last 5 years. Some foreigners like to think when we pay 30% in tax we receive unlimited resources whenever we retire and the government will tap in to our pot of "savings" whenever we need medical assistance. This simply isn't true. The "national insurance" payments don't even cover the cost of the NHS (£96.5 billion in 2010-2011 vs NHS budget for 2011-2012 of £106 billion).
Firing is not hard. When my country telecom was privatized and the contract limited the amount of layoffs they could legally make - they just put every parasite in his own room with no internet, no pc-s, totally forbidden to use personal devices and gave them no tasks. They were also under strict monitoring for misusing the company time(reading on work), phones and being strict on arrival/departure. The ones that didn't left on their own out of boredom, soon accumulated enough "sins" to be fired.
Interesting.. out of curiosity, which country is this?
Bulgaria - it was 2001/2002 I think. Ancient times when Dialogic phone cards were considered sexy. And ISDN speeds were fast. I was doing some dev work for them on a outside project. The company had payroll of 35 000 and a modern telecom needed only 6-7000. The new owners used every possible combination of scare, carrots, sticks, severances to try and achieve the goal.
France Telecom basically did that to some of its employees too when it muted from monopoly to oligopoly. It led to a surge in suicides.
That isn't actually firing someone, but making their life so miserable that they quit. See NYC's teacher rubber rooms. Compared to firing someone, I find this approach quite inhumane, at least you could challenge the firing.
In the UK that would be interpreted as 'constructive dismissal' and you could be spanked pretty hard for that at an employment tribunal. Is it that hard to get rid of someone within the rules?
They were under contract to not cut more than 3K jobs per year, but had to get rid of almost 20K persons.
Saw what constructive dismissal is - how is this making the employee life unbearable - he is getting full salary for doing nothing and nobody is harassing him. He is just not allowed to communicate with the rest of the company.
Saw what constructive dismissal is - how is this making the employee life unbearable - he is getting full salary for doing nothing and nobody is harassing him. He is just not allowed to communicate with the rest of the company.
Making them sit in a room for hours at a time with no work, monitoring them for any activity they use to distract themselves so you can use it to fire them - that's basically abusive, verging on mental torture. The company being under contract is no excuse for abusive conduct.
Have you noticed the word parasites in my original post? As a post communist regime company in Eastern Europe half were communist party related nepotists, third were incompetent and 20% did medal of honor worthy deeds to try and do all the work there was. It was common for a lot of people to come to work just to drink coffee and do nothing but gossip. They just took away the coffee and the gossip.
So the problem is the regulatory situation that the company was in, this weird contract that required you to keep a certain number of people employed.
I'm sorry you felt you had to abuse people to achieve your business goals. This would not be acceptable in my country, but then neither would you be bound to keep a certain number of people employed.
I'm sorry you felt you had to abuse people to achieve your business goals. This would not be acceptable in my country, but then neither would you be bound to keep a certain number of people employed.
In the U.S., an employee has the right to do the work they were hired to do, owing to the need for career development and currency.
In the US employees also get the right to get a pink slip and move the hell away. Which is not always the case in Europe. A friend currently had some trouble firing a very toxic person from his startup.
This is perverse situation where employee rights has gone berserk - in my country firing is hard because the government prefers not to pay the unemployment benefits it is obliged to so they always side with the employees in the private sector.
This is perverse situation where employee rights has gone berserk - in my country firing is hard because the government prefers not to pay the unemployment benefits it is obliged to so they always side with the employees in the private sector.
This is true in most European countries too.
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Raising money in Europe is also quite difficult for an early stage startup. European investors are quite risk adverse; it's uncommon to invest in a company without existing revenues (even if there is a solid plan for revenue growth in the short term). It ultimately comes down to the perception of failure: if you start a company and fail, in Europe that's pretty much it for you, you've been branded a failure personally. Until that changes, the startup climate in Europe is going to continue to struggle.
Nice article, at least as a heads up for people. But, there are two areas that he did not go into. One was possibility of building a business around relationships with contractors rather than employees. I can imagine there being laws that would make that hard also. The other is that maternity/paternity leave is big consideration also. While I think they are great in many contexts, I've heard from business owners in Northern Europe that they can be particularly painful for small businesses.
I dont know of any laws making working with contractors hard, so long as you are not apparently using them to avoid tax. Maternity and paternity are not usually a problem, obviously if your company is small anything can be a problem.
In France it is illegal to use contractors where their condition of work are the same as employees. Specific cases are decided by the court, but basically the status of contractor can't be used to go around labour laws.
in Germany you have to be careful that you don't use a specific contractor too much or he will be designated as an employee.
source: I spoke to a German Tax accountant that specializes in startup consultation
source: I spoke to a German Tax accountant that specializes in startup consultation
> Europe needs to deregulate companies with less than three years of age, less than 20 employees that are not yet profitable.
While I'm in favor of deregulation, conditions like these generally prove to carry with them a lot of unintended consequences and perverse incentives.
While I'm in favor of deregulation, conditions like these generally prove to carry with them a lot of unintended consequences and perverse incentives.
And if you move to Ireland you pay less corporation tax. All the laws stated exist, but as the author also pointed out. They aren't followed to the letter.
It's only if you start acting the bollox that you need to worry about them.
It's only if you start acting the bollox that you need to worry about them.
Note that Varsavsky was born in Argentina, and moved to the US when he was 16.
Wow, this isn't just advice for those moving to Europe but also how European countries can step up their game and integrate the good ideas from American culture while avoiding the bad.
Or the opposite. Most of what I heard in the article about Europe I think was good, and protected the employees. The guy was mainly complaining about not getting tax breaks for capital gains and about having to pay more to fire people. And he didn't even understand the concept of people being motivated by more than just money.
Perhaps more folks would be more willing to work at startups if they knew they couldn't be fired at the drop of a hat with no or little severance. I also think it's good to have a penalty (or risk) for firing folks. People aren't just a commodity to be disposed of when not needed. Of course it would also be nice to have universal health care, and a culture that didn't glorify monetary gain above all else.
Perhaps more folks would be more willing to work at startups if they knew they couldn't be fired at the drop of a hat with no or little severance. I also think it's good to have a penalty (or risk) for firing folks. People aren't just a commodity to be disposed of when not needed. Of course it would also be nice to have universal health care, and a culture that didn't glorify monetary gain above all else.
well most countries do have breaks for start ups ans at least the Uk doesn't have the perverse taxing of options that the USA has which can lead to options that are under water and worthless costing 100,000's
Great article (I am from UK). Dunno why its attracted so many haters.
I guess it's because it's talking about "Europe", and focusing on the very Western Europe. For entrepreneurs or startups, I would consider Berlin, Nordics or London, based on how internationally accessible they are and for their startup scene. Also I think telecom industry in general is much more old fashioned than web, mobile or gaming startups.
For example in Helsinki, probably every startup event / meetup is always in English, as well all the sites. Also I haven't come across that many legal hurdles working or hiring for startups. The contracts have been pretty similar what I have gotten in US startups.
For example in Helsinki, probably every startup event / meetup is always in English, as well all the sites. Also I haven't come across that many legal hurdles working or hiring for startups. The contracts have been pretty similar what I have gotten in US startups.
All generalizations including this one are wrong
Europe earns its moniker of "old world".
Great piece of advice!
I'd be living on a beach in Italy right now were it not for the visa situation. Anybody know a way around the 90-day rule for Americans?
I am Italian. I set up a company in Italy and hire you. You set up a company in California and hire me. We pay each other the same minimum amount of money, and we are able to live where we want. If this fails, we can always get married!
It might be difficult to get married in Italy if you have the same gender… blame it on the catholic church!
If you have enough money take up residence in Switzerland. Tax rates in certain parts are negotiable as long as you do not earn money in Switzerland and we are part of the Schengen Area which allows you to travel freely within most of Europe.
How much money do you need? :)
Unfortunately I don't. It's pretty incredible how in a world of supposed free trade and globalisation we are prevented from freely trading our most valuable goods - our skills and knowledge and creativity.
Oh, I mentioned the money because Switzerland is a very expensive country to live in. Zurich, where I am from, was just "awarded" as the most expensive city in the world [1].
On the other hand wages in Switzerland are also among the highest in the world - it balances out. So if you want to work here just start applying. Google has its largest development office outside of the US here and a lot of companies have their European headquarters here and a lot of (former) startups are moving here too (e.g. Evernote [2] or Kayak [3]).
I am not saying Switzerland is the easiest country to get into to work but it is definitely possible and a lot of people do. Over 20% of residents are foreigners and I am very proud of that fact. So: If you have unique skills, knowledge and creativity you are definitely very welcome here and I guess in most parts of the world.
[1] http://www.telegraph.co.uk/finance/personalfinance/expat-mon... [2] http://www.moneyhouse.ch/en/u/evernote_gmbh_CH-020.4.046.397... [3] http://www.kayak.de/contact
On the other hand wages in Switzerland are also among the highest in the world - it balances out. So if you want to work here just start applying. Google has its largest development office outside of the US here and a lot of companies have their European headquarters here and a lot of (former) startups are moving here too (e.g. Evernote [2] or Kayak [3]).
I am not saying Switzerland is the easiest country to get into to work but it is definitely possible and a lot of people do. Over 20% of residents are foreigners and I am very proud of that fact. So: If you have unique skills, knowledge and creativity you are definitely very welcome here and I guess in most parts of the world.
[1] http://www.telegraph.co.uk/finance/personalfinance/expat-mon... [2] http://www.moneyhouse.ch/en/u/evernote_gmbh_CH-020.4.046.397... [3] http://www.kayak.de/contact
Apply for a long stay visa with the Italian gov't
What are the requirements for this? Do you have to have a job or be a student or setup a company or ...?
You have to become an expert in Italian bureaucracy. It's very difficult. You want to just talk to an Italian lawyer, pay them a bunch of money, and then wait a few years. Italy does not want skilled employees moving here. Well, they say they do, but they don't really act like it.
The easiest thing to do is get married, or find a company here willing to hire you.
BTW, not sure you'd enjoy the beaches in Italy much at this time of year - it might be getting up to 20C in Sicily soon, they say, but here in the north it's about 6C and foggy.
BTW, I see you are a 'designer/developer': the company I'm contracting for right now might actually be interested in someone like that. If you're interested, or if you just want to chat about Italy, you're welcome to drop me an email.
The easiest thing to do is get married, or find a company here willing to hire you.
BTW, not sure you'd enjoy the beaches in Italy much at this time of year - it might be getting up to 20C in Sicily soon, they say, but here in the north it's about 6C and foggy.
BTW, I see you are a 'designer/developer': the company I'm contracting for right now might actually be interested in someone like that. If you're interested, or if you just want to chat about Italy, you're welcome to drop me an email.
http://www.esteri.it/MAE/EN/Ministero/Servizi/Stranieri/Ingr...
bad translation, but after entering Italy you can stay longer by proving you have the resources to stay there (like a longer tourism visa) (that's on that site somewhere, not on this page, but that's a starting point)
bad translation, but after entering Italy you can stay longer by proving you have the resources to stay there (like a longer tourism visa) (that's on that site somewhere, not on this page, but that's a starting point)
> "Not only are forced severance pay packages a problem because most start ups fail and they still have to pay them but also because start ups are constantly trying out people and the concept of trying out people is very costly in Europe"
I've been an unpaid intern in UK. My first full-time job in Spain clearly stated that I was on trial for the first three months and after that they didn't have an obligation to hire me... Oh, if this guy wanted to try different people, he could hire them as freelancers.
> "In Spain, France, Italy, health care is free."
No, it's not. People are taxed...
> "You could argue that it is healthy to take sick days but unfortunately what happens here is that patients ask doctors medical justifications for paid job absences"
Probably there are a few cases like this. I don't see this guy complaining about how low salaries are in Spain.
> "In Europe there is a general belief that work is punishment and that the role of government is to protect people from overworking"
No there's not... People want to work and they want to have a life. I've worked in Spain, and the impression you get from the employers is that you have to thank them for giving you a job, in my job in US they thank me for being there and make sure I'm happy.
> "So there are many rules that make it hard to work the 12 hours per day that a start up may need in its initial months"
Yeah right. My manager in Spain used to tell us that we were in a project with a fixed deadline that had to be met, so if we had to work extra time including weekend we would...
> "To work hard, to work long hours, is actually illegal in Europe"
What does working hard have to do with working long hours?