EUntrepreneur! (or why it's difficult to be an Internet entrepreneur in Europe)

Yes, I just invented a new word.

This is the first part in a series of articles on being an Internet entrepreneur in Europe.

Why is it so difficult to do an Internet startup in Europe?

Welcome to Europe, we have good food and pretty monuments!

We're an interesting patchwork of cultures, with very specific issues such as language, population size, and lower purchasing power than in the USA or Japan in average. To put it differently, if you want your business to be successful, it will probably take more efforts than in these places. So what does that mean?

The problem

The European market is completely fragmented:

There are 27 countries in Europe.
That's 27 different national identities, each with their own culture.
There's more than 20 languages spoken.
Each country has its own specific consuming habits.

The good news: they use the Euro.

You can't be local

Internet companies are usually aimed at being high growth scenarios: most online businesses are not about selling services to a small niche of people.
It's perfectly fine to be local if you want to have a flower shop or a car rental.
The problem with staying in your own country is that it's going to be difficult to reach millions of people.

If you live in Germany or France, you may be able to afford to ignore this advice. Not so if you live in Finland, Slovenia, Belgium, Sweden, or any other market with < 10M people.

Language

So let's say you want to reach different countries. You'll have to plan your site for this:

- Make sure your site has an infrastructure that supports different languages
- Make sure you can update those languages easily. If text in one language, you need to be able to do the same in others as well.
- You need to be able to reach the guy who did the translation later, just in case. It's not a one time thing.
- It needs to sound "authentic". No funny expressions from the dictionary.
- You need to support funny characters, such as ß ö ä é ø
- You need to make sure you address people in the correct manner. In french, we have "tu", which is less formal than "vous". I don't want a website to call me "tu", I'm not a teenager.

Of course, you also need to have good English.
Nothing says "cheap" as a bad english translation.

Culture and marketing

Each country has its own culture.
If you want to penetrate a country, you will need to adapt.

Who else is in the same market?
Where can you reach your customers? Are there communities, forums, student unions, events where they are gathered?

What do people want? Maybe your product service doesn't fit people's mentality in that country. Are you sure?
Do they expect freebies?
How important is it to be present locally? Do you know anyone there?

What kind of marketing do they like? Direct? Word of Mouth?
Is the press difficult to reach?

Maybe your name sounds stupid in other languages:

• When Motorola introduced its new "Q" phone in France, they did not know that selling them "Mon Q" sounded like "My ass".
• Google's social network "Orkut" means "Orgasms" in Finnish.
• And there's more examples.

Don't under estimate the nationality aspect either.
Some countries have very strong identities and will prefer a product because it is local.

For example, when Microsoft launched its Xbox 360 in Japan, it had to face remarks such as: "Japan already has Nintendo and Sony. Don't need to buy the Xbox."

It's very difficult to appeal to people from a different culture.
If even big companies fail at reaching several countries, what will you do to do it better?

Team

Your company is only worth as much as what your team can produce.

You need a tech guy who can create a flexible system for your languages at least.
Be ready to use servers in other countries if needed.

You need to be able to pitch in english, and preferably also in other languages.
You need to talk with people from different places.
Be able to travel.

If you simply work with people who speak the same language and have the same cultural background as you, you're in for a rough ride.

Local isn't all that bad

There are examples of companies that have been very successful in their home markets:

StudiVZ.de, the German Facebook clone, managed to beat the US site.
Alando.de was a German clone of Ebay, which did the same and was later bought by Ebay.
Skyblog and Irc Galleria both have been very successful in their home countries.

Of course, there's a few things to consider here:
- they're the exception
- they were first movers in their market
- they all tried (and failed) at spreading in foreign markets

I hope I raised some points you didn't think about before

Part 2 is coming soon!