Scaling Europe
00:09:33 · Simon Schaefer, Sebastian Johnson
If you're not in the trenches, if you've never raised capital from a VC or invested in a company, how can you know these things? Right? And so people tend to stick to what they've built as the the thing that they're looking to protect, and, you know, we're rattling a lot of cages here. [00:09:50] S0: Yeah. It's really interesting. So, yeah, the the notaries has been a big one, of course, been very viral. It's interesting about the trade unions. You know, the notaries are obviously German. Are there markets or countries which are more cynical or more aggressively pushing back? [00:10:04] S1: Yeah. Of course. So it's not the country Germany, but it's German trade unions, obviously. If you look at one of the shadow repertoires and the leader of the pike actually, René Repasi, he's a social democrat from Germany. His mandate, his his constituency is social democrats and of course trade unions are a big part of that. Right? And so codetermination is a big topic in Germany. It's not a topic at all in Spain, and so there's there's these various levels. But, see, that's that's precisely, and this this touches on another nonnegotiable that we're trying to keep in there that member states want to delete, which is insolvency. We [00:10:41] S0: can
00:10:41 · Sebastian Johnson, Simon Schaefer
[00:10:41] S0: can [00:10:41] S1: get to the details of why and how, but that's that's another indicator of, like, a lack of understanding of this innovation economy where, you know, in the end, insolvency is a really rare case for the startup economy. Like, your your normal case would be, you know, you have venture capitalists on board, okay, venture capitalists on board, okay, you find a way for a fire sale or you unwind the company professionally and close it. Right? But for the company to lose its revenues and no longer be able to pay its obligations for a court to close the company, that's kind of like not really our case to optimize for. Yeah. And so, yeah, there's there's a lot of these where you have gap of knowledge and Germany is definitely a country that has an industrial backbone. Right? And as such, some of the structures that they've come to live with are not necessarily compatible with what we're looking at in the innovation economy. [00:11:34] S0: And how do we get through that? Is it a case of convincing them to get on our side? Or is it a case of, I don't know, trying to bypass it or convince people in charge that actually they're not well informed, they're making the wrong decisions? How do we how do we get over those objections?
00:11:34 · Sebastian Johnson, Simon Schaefer
[00:11:34] S0: And how do we get through that? Is it a case of convincing them to get on our side? Or is it a case of, I don't know, trying to bypass it or convince people in charge that actually they're not well informed, they're making the wrong decisions? How do we how do we get over those objections? [00:11:47] S1: My European answer would be fine. Compromise? My entrepreneurial answer is, you know, that's their problem. I I I I have two hearts beating here, because the one thing is compromise where compromise is possible, yes, but not at the cost of the original goal. And let's put a framing around that, because what's the original goal? We currently... I don't know. Think yesterday or the day before yesterday, one of the guys from deal room pulled a chart on how much value was created by European founders abroad, right, in trillions. And, like, that's what we're trying to get away from. We're trying to have Europeans found in Europe, scale in Europe, and finance in Europe. Right? Yeah. And our competitor is Delaware. And that we we see EU-INC from the team's perspective, we see that as a first building block of, like, getting somewhere. This is infrastructure. This is a base layer component, but this is by no means the end goal, and it's not touching IPOs yet. Right? [00:12:43] S0: Yeah. Yeah.
00:12:43 · Sebastian Johnson, Simon Schaefer
[00:12:43] S0: Yeah. Yeah. [00:12:44] S1: So really there's this... Yeah. I I want to say from an entrepreneurial perspective, whatever is in the way of this might one way or the other have to be overcome in in whichever way possible. We would be used to hack it, hack the system. At the very beginning of EU Inc, we actually thought about it. Why not approach it like Deel or Remote have done it and and build this cluster of companies that we make available as a service for people so you can easily scale across Europe. Right? But sounds like a ten year time frame to do that. Yeah. That's really interesting. 70 billions raised. Yeah. Yeah. But that's the normal solution entrepreneur would get to. Right? [00:13:25] S0: Yeah. And what's it been like working with the people in the EU itself? Right? Because we... You know, there's so many memes about the EU, and I don't think it's particularly fair. A lot of the anti EU propaganda that we get, especially from from The US, it actually feels like the EU has been pretty receptive to a lot of this stuff, and it's actually been surprisingly willingly to engage and to try and get it over the line and to compromise. What's been your experience working very closely with a lot of these kind of politicians or bureaucrats?
00:13:53 · Simon Schaefer, Sebastian Johnson
[00:13:53] S1: So here's the thing. I think the majority of who we work with on a very high level is obviously highly educated, very intelligent, and really willing to move the needle for Europe. This is their ambition. This is what they've been mandated to do. So I think that's... It's a it's a lot of very highly professional people that we're working with, yet there is a knowledge gap. And I've said I worked in Portugal for five years running the innovation economies strategy sides, think tank, whatever you want, do tank, whatever you wanna call it, start up Portugal. And I was quite strongly criticized for saying, hey, this is no surprise. All of our politicians are way too old. Because, you know, that's where you get to. Digital natives in politics is still rather rare, and you need to kind of understand how that works intrinsically in order to come up with the right conclusions for policies. And think about how young this economy is. Right? Albeit being extremely widespread and powerful, it still is a rather young economy compared to other legislative frameworks we try to create for other stuff. Yeah. [00:15:00] S0: Yeah. The the list of people who've signed this is crazy. I mean, like, everybody in European tech, I would say, founders, investors, operators, like, it's like a who's who of of European tech. Have you faced any pushback or criticism from within the tech community itself? Has there... It feels very aligned and that everybody wants this. Has there been any disagreement on what what the solution is?
00:15:24 · Simon Schaefer, Sebastian Johnson
[00:15:24] S1: Yeah. Well, not what the solution is. If I had any... Heard any feedback, it's like, hey. It's possible today. There's many successful companies. Why do we need this? That's really the only pushback I've heard from within the community, and it's a bit silly because that's not the question. Right? The question is how many companies would have... How many more companies would have been successful if we didn't have these barriers? But, no, alignment is maximal. We're really excited about that too. Mean, you you said it right. That's a crazy list of people that signed up for this, many from within our network. And Yeah. You know, that's also probably why this EU-INC thing is moving so well, I mean, in comparison to other policies and regulations rather quickly, because endorsement is really high. And I have to say the same is true from the political side. So we're talking about Nats and Macron meeting and having a side letter that says twenty eighth regime is one of our priorities. We have Ursula von der Leyen, who's, of course, made the famous Davos speech, which was funny because she first time called it EU-INC, and we were in our weekly meeting when that happened. This was a really fun moment. [00:16:24] S0: Must have been amazing. Yeah.