Ultimately it’s all about investing money to create real assets that generate cash flows. One can side step regulations to some extent whilst developing a product (nobody cares/notices until you are actually growing fast) and then deal with regulations later. Uber already showed this and the leading AI firms are following the same act - having ripped off a lot of content but nobody threw a fit until a legit asset came out of it.
It's counterintuitive but if you allow "failing fast", you lower risk of new engagements, and this allows for more speculative bets on ideas and people.
Make it difficult to evict tenants? Expect more stringent requirements from landlords
Enact rent control? Initial rents are going up, new builds are are disincentivized.
Strong worker protection? Expect fewer highly paid roles (wage compression)
I'm not saying these regulations are unilaterally bad - I'm saying don't be surprised that there are 2nd-order effects that are arguably just as bad, if not worse.
> The only way an international business is going to consider investing in French workers, for example, is with relatively low salaries to offset the inability to fire them.
> Strong worker protection? Expect fewer highly paid roles (wage compression)
For European startups it’s different motivation. Lower salaries than in USA are an advantage, but job security isn’t a show stopper. First team is hired in fixed contracts, which may be converted to permanent with growth. In scaling phase you add external support, with e.c. 20% of workforce coming from outstaffing, so that you can react on the market and scale down when needed. If you are big enough to be called international business, you will not hire in one of the most expensive locations in the world (USA) unless you have a good reason. There exist other easy-to-fire tech hubs, and it’s not a big problem in Europe anyway (it’s just some more effort to execute, but even with payouts it’s probably cheaper than in US).
> Make it difficult to evict tenants? Expect more stringent requirements from landlords
In Europe there’s less homeless people. It doesn’t work like that.
>Enact rent control? Initial rents are going up, new builds are disincentivized.
It’s not rent controls that make markets inefficient. They are reaction to NIMBY regulations and disincentivized home ownership like in Germany. Root cause is uncontrolled extraction of scarce resource (land) and the solution is actually to scale down for-profit rental market while aggressively subsidizing ownership and construction.
The US, by having bad worker protections and privacy abusing tech companies, etc. have been able to pave the way for extreme amounts of innovation that just wouldn't happen anywhere else. The rest of the world then effectively has innovation subsidized since they import the finished product.
The EU has taken it to another level.
For venture ultimately it’s a soulless moneyman’s game. Really they have to pick winners, and anybody can look at the landscape and see there’s just not gonna be a Pierre Zuckerberg or a Klaus Kalanick. And if there ever is, he’ll need to raise lots of money anyway, which would come from venture.
Which is very much a positive. Those two aren’t a boon to humanity, they very much made everything worse at a global scale. We need fewer people emulating them, not more.
