Challenges in Tech Product Execution Across Europe

While I support pro-European initiatives like Project Europe, Europe does not need more seed capital or more young entrepreneurs. Only 4% of European startups reach 1M€ in ARR, with a significantly higher failure rate for people under 30. A major issue for startups scaling past 10M€ ARR in Europe is market size. The European market is fragmented, with tons of country-specific solutions offering similar feature sets that are never consolidating because no-one can afford to buy the others. Look how many companies based in different countries are solving the exact same problem right now in Spend Management, Procurement, Billing, Treasury, SMB payments... In a VC's mind, increasing the number of companies increases the likelihood of betting on the right one, especially if you capture them early like pre-seed stage funds do. But all it does in reality is creating a gap between offer and demand by artificially increasing offer while demand stays flat. It drives prices low for everyone and makes it hard to find sustained, long-term growth in an already small market. The same happens with quality, I started in tech at 19 and didn't have a good enough understanding of the actual issues to build a good enough product. I've seen it with Spendesk, Pleo, Payhawk, Soldo and others fighting for the same bone while Ramp grew unbothered on a significantly bigger market. Not everyone should be an entrepreneur, we need engineers, designers, sales and marketers for our companies to succeed. If everyone is offered the perspective to become the next Cursor (spoiler, it doesn't happen that often), especially at an age where you're supposed to start getting trained at your job, it removes an incredible pool of talented employees from the market. I actually think Europe needs less, higher quality companies that can cover the whole continent and get big enough to compete with US players. Europeans need to start buying products made in Europe when they're on par with American or Indian ones. European VCs need to understand it takes a long time to build a 100M€ ARR business when you need to expand in 27 different markets. The reason Europe doesn't build companies is unfortunately not that we lack seed stage funding, it's way deeper.

Mario Draghi’s report delivers a sounding alarm and a stinging slap on EU competitiveness. #VW is the old man of Europe, #ASML maybe in the same spot in a decade and saddest part is indeed there are no startups that grew in the past decade, neither there seem to be any that ma become 1Bn, 10Bn companies. This is most troublesome to us all , to be honest 😓 Here are a few highlights of the report - #GDPGap: A significant GDP gap has emerged between the EU and the US, largely due to a slower productivity growth in Europe. - #LivingStandards: Since 2000, real disposable income per capita has grown almost twice as much in the US as in the EU. - #Innovation #Gap: The EU lags behind the US and China in innovation, particularly in advanced technologies. - #Industrial #Structure: Europe is stuck in a static industrial structure, with few new companies rising to disrupt existing industries or create new growth engines. - #MarketCapitalization: No EU company with a market capitalization over EUR 100 billion has been created from scratch in the last 50 years, while all six US companies valued over EUR 1 trillion have been established within this timeframe. - #Academic #Excellence: The EU has only three research institutions ranked among the top 50 globally based on top academic science journal publications, compared to 21 in the US and 15 in China. - #Regulatory #Barriers: Complex and fragmented regulatory systems in the EU hinder tech sector growth, especially for young companies. Regulatory barriers include: - #IPRs Filing: Discouraging inventors from filing Intellectual Property Rights due to costly and complex procedures. - #Precautionary Approach to #AI: The EU's regulatory stance often imposes preemptive restrictions that hamper innovation, such as the AI Act's additional requirements on high-powered AI models. - #Fragmentation: Heterogeneous requirements and national regulations make it difficult for digital companies to operate across the EU, leading to high compliance costs. - #Data Constraints: Limitations on data storage and processing increase compliance costs and hinder AI model training, putting EU companies at a disadvantage compared to the US and China. - #Competition and #Cooperation:EU competition enforcement may inhibit cooperation within industries, further stifling growth. - #Public #Procurement Rules:Different national rules in public procurement create ongoing costs for cloud providers, benefiting larger, often non-EU-based companies. This report underscores the pressing need for the EU to close these gaps and address the structural issues holding back its competitiveness.

How could EU start-ups catch-up to US ones? Over the years, I’ve worked with and invested in startups across the US and Europe. I’ve seen incredible ideas turn into billion-dollar businesses and I’ve seen promising companies struggle despite having top tier talent and technology. As we saw in the recent Paris AI Summit, Europe is working hard to catch up to the US and China as it relates to all things tech and AI. There are amazingly talented engineers and founders in Europe with smart ideas for new businesses. But can they actually succeed at scale and create similar generational success stories as we’re consistently seeing in the US tech world? The unfortunate reality is that too often promising startups in Europe struggle to reach their full potential. This usually happens for two main reasons: 1) Reduced access to cash: both capital and large customer demand for innovative products. The European VC landscape is not as pervasive or aggressive as it is the US. This makes it almost impossible to compete globally, scale and ultimately succeed. Additionally, Europe’s regulatory landscape for businesses is still fragmented across countries and too complex. This prevents tech startups from easily accessing a large, unified home market. In most cases expanding from a start-up’s home market to neighbor countries in EU still requires to invest in expensive and slow one-by-one market expansion initiatives. Lastly, the B2B market is often risk-averse, with European clients being reluctant to spend too much from an early stage start-up. 2) Not balancing enough technology innovation with a true problem-solving approach. Successful start-ups almost always emerge from an identified, severe problem or friction that they solve with technology innovation. In Europe, I still see some founders doing the opposite: being excited about an amazing solution they’ve discovered with technology, and then looking for customers who may be uninterested in buying it. This often creates a situation where entrepreneurs have created an incredible product, but the need for it just isn’t there. This is why at DVx Ventures we always talk first about “the problem we’re solving” when launching or investing in a new start-up. When that problem is real, the fit with the market is way easier to find, demand is there and the go-to-market becomes so much easier. Our EU investments in Hospitality with Zumi , Fashion with ModaResa or Biotech with Interstellar Lab have followed that exact principle: Big-Problem -> Innovative-Tech-Solution -> Traction As Europe continues investing in AI and innovation the question is will we see more access to funding, drastic simplification of regulations, and a stronger focus on market-driven solutions? The opportunity here is huge - what happens next will determine how far European startups can go. What do you think it will take for Europe to close the gap?

They both have a point.... Europe creates many promising startups, but few global leaders! Every year, we see incredible companies emerge — from product-first players like Lovable, to workflow automation champions like n8n, and many more across climate, fintech, and AI. The starting point looks bright: strong talent, solid products, and communities that believe in them. But the challenge isn’t starting up. It’s scaling up. European startups often face structural hurdles once they move beyond product–market fit: ⚠️ Fragmented markets - 27 languages, regulations, and customer preferences make “going European” as complex as going global. ⚠️ Capital intensity - later-stage funding still lags compared to the U.S., forcing founders to spend more time fundraising than scaling or going to the US (lovable) ⚠️ Risk appetite - culturally, we’re great at building sustainable businesses, but often hesitate to make the bold, global bets that create category leaders. To turn more Lovables and n8ns into global champions, Europe needs to bridge this gap - with more growth capital, harmonized regulations, and ecosystems that reward ambition at scale.

"…you just don’t have people working hard enough to achieve success." I get where Nik (founder of Revolut) is coming from, but I see things a bit differently. Yes, Europeans value work-life balance more than Americans. But does always being on really mean working hard? Or just being…available? 🤔 The real challenges for European startups aren’t about effort—they’re about structural hurdles. Here’s what’s actually slowing things down: 🚧 1. Regulatory Maze – Founding a company in Europe is still a bureaucratic nightmare (especially in Germany). Now, try scaling across countries with different tax and labor laws. It's like playing startup hard mode. ⚖️ 2. Labor Laws – Many EU countries (Germany, France, Italy, Netherlands) have super employee-friendly laws. Great for stability, but tough for startups that need agility. In early-stage companies, things change fast - if hiring is easy, but restructuring is near-impossible, that’s a real problem. 🌍 3. Cultural Barriers – Selling from Germany into France? Tricky. Scaling across Europe? Challenging. While the U.S. has one massive market, European startups navigate fragmented, risk-averse buying cultures. Convincing customers to take a bet on a new player is often an uphill battle. So, are European startups just chilling too much? Or are they grinding through a whole different set of challenges? Maybe if we tackled these issues, I could finally spend more time on LinkedIn! What do you think? 💬👇 #Startups #Entrepreneurship #Europe #Growth #Innovation

🌍 Scaling Deep Tech in Europe 🇪🇺 Europe’s deep tech moment is now — but scaling it takes more than just great inventions. This bold report reveals what’s holding us back: 🧠 A fragmented talent ecosystem struggling to retain the best minds 💸 Funding gaps, especially at the growth stage (only 14% of EU deep tech companies reach Series C) ⚖️ Risk-averse investors and policymakers who talk innovation but fear uncertainty 🌐 Weak connections between research, industry, and venture capital But it’s not all doom and gloom. The report sets out a real execution plan for Europe to lead in AI, quantum, robotics, semiconductors, and next-gen materials. That includes: 🔧 A call to create 1,000 scaleups across 10 years 👥 Building a talent flywheel through global hiring and EU-wide mobility 🏦 Plugging the Series B & C financing gap with sovereign funds and institutional capital 📈 Creating scale-up-focused innovation policies — not just R&D ones ⚙️ Whether you're a founder, investor, or policymaker, this is your playbook to put Europe in the deep tech driver's seat. We don't need more slide decks. We need execution. And this report shows exactly how to do it. Respect to the European champions behind the Deep Tech Network. 💡 Let’s move from potential to power. #DeepTech #ScalingEurope #InnovationPolicy #AI #Quantum #OGApproved #EuropeanTech #StartupEcosystem #ExecutionMatters

Is Europe fixing one of the biggest blockers to scaling innovation? Five months ago, I signed the EU Inc initiative. Last week in Davos, Ursula von der Leyen publicly backed it at the World Economic Forum. This is massive news! EU Inc is about creating an optional, pan-European company framework that would allow founders to incorporate once and scale across Europe more easily, using digital-first processes designed for cross-border growth. If Europe wants to compete in AI and other frontier technologies, the challenge today is scale and speed. And scale in Europe still means crossing borders. This came up again a few days later when Rosberg Ventures, together with Telekom TechBoost, hosted a special Executive Dinner that brought together top European companies and selected AI startups from Silicon Valley, Israel, the DACH region, and the UK. I co-moderated a fireside discussion with Arvind Jain, CEO of Glean, and Klaus Werner from Deutsche Telekom on what it actually takes to make organisations ready for AI. Many Silicon Valley founders I know talk about how easy it is to launch, raise, hire and scale across the US market (there’s one legal framework with one set of rules). But in Europe, many founders I speak to really struggle with the fact that there are completely different rules in Germany, France, Spain or Italy, sometimes even city by city. Whether in Fintech or even mobility, I’ve watched these founders spend months navigating local requirements before they can even start testing or scaling, instead of improving the product or serving customers. That’s where momentum gets massively lost. This is exactly why EU Inc matters. It might not solve everything. But it directly addresses the gap between Europe’s ambition and the reality of scaling companies across 27 markets. Europe already has the founders and the technology. Now it is about removing the friction and red tape that slows execution once scale begins. It is time to keep pushing to get this right. What are your thoughts on EU Inc becoming a reality? Let’s discuss in the comments.