Wednesday 17 February 2010

Why almost nothing revolutionary comes out of Europe

Recently, I overheard this one: "why is it almost nothing revolutionary comes out of Europe?" This question basically expresses a perception that can be explained.

Most tech companies in Europe don't target the world market - they target one country first, and when they dominate that, they invade the next countries. This is the reason why has a huge market share in Germany, and is present in USA, but is totally unknown in Denmark, which borders Germany inside EU.

Many companies dominate their own country, but do not have presence in other countries. Difference in languages, law, culture etc. separate the markets. These companies often either produce something better than the largest international companies, or ends up being destroyed in the competition. Many countries had dominating Word processor app companies, but Microsoft Word killed most of these. In other words, if the local company doesn't make a greater product, it doesn't survive. Therefore, the local population often considers local companies to produce better products than other countries. A good example is, that a typical sink faucets from USA would never have a chance on the Danish market, because we are used to more advanced systems with thermostats etc. To many Danes, it is annoying when the cold-water and the warm-water taps are separate, and to many it is annoying if the shower isn't thermostat-controlled. Also, Danes use more expensive wall sockets for electricity, than Germany or Sweden. This makes a house 0.05% more expensive, but better-looking, and few seem willing to save that money.

There are many revolutionary products from Europe, but they are probably not as highly profiled in English media. Many products are kept out of the U.S. market, for various reasons, and some get a delayed entry. When I recently went into a T-mobile shop in New York, and explained that I was from Europe, the immediate reaction was: "Oh, that's where all the cool Nokia phones are." If the initial launch isn't done in an English-speaking country, it may be old news once it gets to an English language country. In the meantime, a latecomer may have entered (or started in) an English-language market, so that the original inventor looks like the late-comer. In similar ways, products from USA that may be first-movers internationally, sometimes look like late-comers in other markets. Which phone came first? Google Nexus One or HTC Desire? Where I live, it seems that HTC Desire comes first.

You need to read news in other languages than English in order to read about tech from Europe. Microsoft thought that Great Plains would have better software than a company from Europe, but changed their minds, and is now basing their business on European software they didn't understand the power of, until they looked more closely at it.