Regulation isn't going to stop innovation that much, or the tech industry wouldn't be in california. The primary difference is that the US is one homogenous, huge market.
If I build something in California, to California's laws, and it becomes a success, I can immediately sell it across the entire rest of the US, and I can expand across the US, using the same employment contracts as in california, same lawyers as in california, etc.
Sure, later on I can save money by making the Delaware version of my product with more cancerous chemicals, or have stricter NDAs in my Florida contracts.
But if I start with California regulations, I can expand to the entire US with a small team of employees.
There's nothing like that in Europe. If my product works in Germany, I'll need a french, spanish, italian translation to sell it in these countries. I can't just hire people from these countries either — they've got different holidays, different work hours, different unions I'll have to deal with. Different tax codes and agencies. And often these are conflicting with one another.
In the US, I need one or two support shifts in one or two languages. In the EU I need 27. In the US, I need one version of the product, with one plug. In the EU, unless I'm okay with 10A and a plastic chassis, I need a dozen different versions.
And even if the product can be used universally, European culture is significantly more diverse than US culture.
Is a phone call at 7am or 8pm more appropriate? Depends on whether you're in Germany or Spain. When a job applicant includes a photo of themselves and lists their parents' degrees and jobs on their own CV, is that appropriate or not? In Germany, that's often expected, in many other regions, a huge no-go.
To be successful in the US, I need to build one company. To be successful in the EU, I need to build a multinational corporation with 27 local branches.
California's tech industry works because there is a long-established tradition of lawbreaking in California. We pass all these regulations, and then ignore them. Sometimes the more enlightened legislators put in explicit carve-outs for businesses of less than 50 employees or a $B in revenue, so that startups don't have to actually break the law, they can just ignore it. But they're going to ignore it anyway, so the carve outs really serve the law's benefit rather than the startup.
In practice, the way California tech startups work is
1) Break *all* the laws.
2) Get customers
3) Raise capital
4) Profit!
5) Hire lawyers to bring the company into compliance with the laws.
6) Hire lobbyists to bring the laws into compliance with the company.
7) Try to prevent your employees from doing the same thing you did.
Steps #5-6 aren't limited to a particular state. At that point, you have buckets of money anyway, so you contort your company structure and product into a configuration that is legal in as many jurisdictions as possible, including internationally.
You’re discounting the fact that there’s plenty of internal movement in Europe - I worked with a French firm that had a bunch of Italians, some Swiss, an Englishman, two Spaniards and a bunch of Russians working there along with the French people, all living around and working in their Paris office.
It wouldn’t be that hard to find people to translate your app and provide support in the major languages in most large European cities.
In the US, you don't have to find people to translate your app and provide support in other languages at all. It would help if you did this for Spanish though, but that's it.
Also since national markets in Europe are relatively big by themselves a lot of companies tend to be satisfied with comfort of a single market success.
And once you've got control of one EU country, expanding to another EU country is just as complicated as expanding to the US is.
So if you're spending the same effort anyway, expanding to the US with 300 million people is much more profitable than expanding to Germany with 80 million people, or the Netherlands with 20 million people.
Which is why Spotify became available in Sweden, the US, and the rest of the EU in that order.
> Which is why Spotify became available in Sweden, the US, and the rest of the EU in that order.
Which is verifiably false.
Spotify launched in 2006, and expanded into the US in 2011. You truly believe that it never expanded in the EU in the intervening 5 years? How then did it launch in the UK in 2009? Or how did it have a million paying customers in the EU by the time they launched in the US?
There's literally a section on the Wikipedia article detailling how it launched in a handful of countries, expanded to the US, and only then expanded to most of the EU:
Spotify launched in Sweden, Finland, France, Norway, Spain, followed by the United Kingdom and the Netherlands.
After the US expansion, Spotify finally expanded to Andorra, Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Monaco, Poland, Portugal, Slovakia and Switzerland
That means Spotify launched for 222 million europeans, expanded to 300 million US-americans, before becoming available for the remaining 281 europeans.
You'd never see a US company launching e.g. only for Washington, Oregon, California and Nevada, expanding to China, and only afterwards become available in the remaining states.
> Which is why Spotify became available in Sweden, the US, and the rest of the EU in that order.
All that matters is the original comment: "Which is why Spotify became available in Sweden, the US, and the rest of the EU in that order."
Where reality is Spotify became available in 7 countries before attempting to expand in the US.
Which is, funnily, what you literally wrote in your edit:
> That means Spotify launched for 222 million europeans, expanded to 300 million US-americans, before becoming available for the remaining 281 europeans.
Edit Where by "expanded to the US" is literally "failed to capture any significant market for a long time"
> Edit Where by "expanded to the US" is literally "failed to capture any significant market for a long time"
Sure, but they still decided to expand to the US, despite a worse outlook, before expanding to the remaining EU countries. As said, you'd never see a US company do that.
The US is a large, rich homogeneous market with a population of over 300 million. There's no wonder foreign companies want to get a foothold in this market, and it's no wonder US companies don't tend to look outside of the US until there's nothing to do in the US.
Sure, but that's exactly my point: The primary factor limiting EU startups isn't regulation, it's that they don't have access to a large, homogeneous, monolinguistic market
If I build something in California, to California's laws, and it becomes a success, I can immediately sell it across the entire rest of the US, and I can expand across the US, using the same employment contracts as in california, same lawyers as in california, etc.
Sure, later on I can save money by making the Delaware version of my product with more cancerous chemicals, or have stricter NDAs in my Florida contracts.
But if I start with California regulations, I can expand to the entire US with a small team of employees.
There's nothing like that in Europe. If my product works in Germany, I'll need a french, spanish, italian translation to sell it in these countries. I can't just hire people from these countries either — they've got different holidays, different work hours, different unions I'll have to deal with. Different tax codes and agencies. And often these are conflicting with one another.
In the US, I need one or two support shifts in one or two languages. In the EU I need 27. In the US, I need one version of the product, with one plug. In the EU, unless I'm okay with 10A and a plastic chassis, I need a dozen different versions.
And even if the product can be used universally, European culture is significantly more diverse than US culture.
Is a phone call at 7am or 8pm more appropriate? Depends on whether you're in Germany or Spain. When a job applicant includes a photo of themselves and lists their parents' degrees and jobs on their own CV, is that appropriate or not? In Germany, that's often expected, in many other regions, a huge no-go.
To be successful in the US, I need to build one company. To be successful in the EU, I need to build a multinational corporation with 27 local branches.