Two Views on Europe

I'm on a short trip to Europe to take care of some things. It's nice here: Well-architected buildings line pretty streets with cozy cafes and without homeless people.

But is it a good place for entrepreneurs? Two friends have sent me two articles with vastly different viewpoints.

The first comes from Foreign Policy: "Europe's Phiosophy of Failure". It points out the anti-capitalist attitudes found in Germany's and France's school textbooks. The author, Stefan Theil, claims that these textbooks portray capitalism as brutal, economic growth as a health hazard, and entrepreneurs as money-grabbing dictators. Having gone to high school in Germany myself, I didn't find this to be true. But times and textbooks may have changed since the pro-American 1990s.

The other article comes from BusinessWeek: "Europe's Crop of Billion-Dollar Babies". It features Giuseppe Zocco, co-founder of my favorite European VC firm, Index Ventures. Zocco talks about how "there are a lot of European companies founded in the past 5 to 10 years that can, with the right support, become billion-dollar companies." Can Europe build bigger companies than Silicon Valley with investors that have a longer time horizon? We shall see.

If you liked this, read: Why Startups don't Condense in Europe.

Economist Report on Migration

The Economist has a special report on migration this week. As someone who has uprooted his life three times to move to a different country, this is a topic close to my heart.

"The number of migrants in the world today, both legal and illegal, is thought to total perhaps 200m (though many of the figures, even those used by governments, are at best educated guesses). That sounds a lot, but it adds up to only 3% of the world's population, so there is great potential for growth."

I would have thought this number to be much higher: Far more than 3% of my friends now life in a different country than they were born in. However, it turns out my sample is skewed:


Switzerland has the second-highest foreign-born population percentage in the world. Similarly, San Francisco is a destination for many born outside the US.

Another interesting map from this issue:


While this map just a qualitative view, it seems like the cliche of the rich Western states is still alive. Count the directions of arrows: East to West: 12, vs. West to East: 6. Similarly, South to North: 10 vs. North to South: 3.

Airport Shop Economics

Stroll through Zurich Airport and you’ll notice that, as in many airports these days, a vast amount of high-class shopping awaits past security: Burberry, Chopard, Hermès, Armani, Gucci, Hugo Boss – they’re all there. If you want to spend $600 on a purse while waiting for your flight, you can.


The only things I’ve ever bought at airport shops are newspapers, magazines, food, drinks, coffee, and power plug adapters that I forgot to bring. I’ve seldom set my foot in one of the boutiques, much less bought something there. Almost everyone I know hasn’t either.

Consequently, it seems like a large percentage of airport floor space is wasted on shops that people don’t visit or buy goods from. Why are they still there?

Boutiques, in airports, as in downtown shopping areas, are high-margin, low-frequency businesses. Sure, they may not have as many visitors, but when someone buys that $600 purse, they’ve just paid for the entire morning’s rent and salary. The road to success is to charge a lot of money to a few people.

The reason why boutiques are omnipresent at airports is that they are especially well-frequented by people with lots of disposable income and a knack for lifestyle: The rich, the jeunesse dorée, executives, middle managers, consultants – these are people who can make that $600 impulse buy. For the other 80% of travelers, this floor space is wasted.


But there’s another reason for their presence: Airport managers love boutique shops. They pay the same rent as anyone else, but make the whole airport seem more upscale. The shops themselves are often beautifully designed and pleasing to the eyes of all travelers. Even if they never come inside.

Seven Things We Should Fix

It’s time to complain about the world’s imperfections.

7. Finding Parking: I’d rather have my car’s navigation system just tell my where the next parking spot is, instead of spending 20 minutes hunting for one.

6. Taxi Fleets: In Germany, your average taxi is a largish Mercedes. In the US, it’s a Crown Victoria. The city gas mileage for both is horrible. The incentives for cab operators to switch to hybrids are there: The cars cost the same, but the gas mileage is much better. Why aren’t we seeing faster adoption?

5. Different power plugs: Why does almost every country need to have a different type of power plug? Instead of carrying around an assortment of adapters, the countries of the world should sit together and agree on a global standard.

4. Power adapter bonanza: Why does each device need a different power adapter? If all electronics manufacturers sat down and agreed on a few common types, you’d never need to ask "does anyone else here own a Nokia"?

3. Power lines: Those huge masts are an ugly distraction in the landscape. Can't we dig holes and put it all underground?

2. Tickets: In the age of e-tickets, why do we still need physical tickets to concerts and public transportation?

1. Cash: Coins and bank notes? You have to carry them around and refill supplies when you run out. The fact that cash even exists creates opportunities for counterfeiting, money laundering, and other unwanted side-effects. We’re actually pretty far on this one, but some last rebel holdouts still refuse to take MasterCard or Visa.

NYC Profit Calculator

Here's a fascinating account of how businesses in New York - from cab driver to copy shop to the Museum of Modern Art - make money.

New York Magazine: The Profit Calculator

I feel like there are some lessons to be learned here. Cab drivers worry less about tips and more about your destination - if you take a ride out to Queens, they're losing money because they have to drive back through traffic. Yoga gurus sacrifice money for prestige. H&M pricing is essentially a variant of bait-and-switch, but with scarcely clad bikini models on billboards.