Growing Pains: Do European Software Founders Lack The Confidence To Scale?

Does the European software industry have a problem? On the face of it, no. Although we Europeans – and I include my home turf of the U.K. in that grouping – got off to a slow start when compared to the U.S., investor cash is pouring into startups, unicorns are being created and, ultimately, that should feed through growing numbers of genuinely world-leading digital businesses.

Certainly, that’s what policymakers would like to believe when they talk optimistically about the next Facebook, Google or Adobe being created on European soil.

But according to Phill Robinson, the European ecosystem is still failing to support software businesses on the journey that runs from ambitious startup to global leader. With a resume that includes time spent as CMO at salesforce and various CEO roles in the Bay Area, Robinson has established Boardwave, a not-for-profit industry organization for software leaders. By bringing leading lights from the corporate world into contact with their counterparts from the startup and scaleup communities, his intention is that experienced leaders will provide founders and managers of earlier-stage companies with the advice, support and confidence they need to grow.

But given the progress made by software startups and scaleups in recent years, is there really an issue to be resolved?

Sharing Experience

“The problem is that there is a huge amount of knowledge and expertise in the European software industry, but it is not easy to get access to it if you are the founder of a young business,” he says.

Compare and contrast with the Bay Area. “In Silicon Valley, they have had a considerable amount of success in building big software companies, “he continues. “In Europe, we used to talk about lack of access to capital. That’s no longer the issue. One of the issues is that people don’t share their expertise.”

It’s partly a question of geography. “Silicon Valley is 40 miles long and everyone knows everyone else,” Robinson says. But there are cultural factors too. “People phone each other up. They share their ideas,” he adds.

But do the differences between Europe and Silicon Valley really matter in terms of outcomes?

Boardwave’s press release cites stark statistics to illustrate the gap between the U.S. and Europe. For instance, there are no European companies in the global top ten software companies. That’s actually open to debate given the presence of Germany’s SAP on most lists, but it’s certainly true that otherwise, the U.S. dominates. And as a whole Europe’s software businesses are worth just 30% of any of the US big four.

Now, you could argue that the success of U.S. companies is partly attributable to history and geography. The industry is older and better established. Consequently, the ecosystems – in the Bay area and elsewhere – are better developed. Added to that,, U.S. companies benefit from a huge internal market. They can do a lot of growing before needing to go global.

A Question Of Confidence

That begs a question. Is there a genuine causal link between success and a willingness to share expertise and ideas?

Robinson argues that without support from business leaders who know what it takes to grow world-class companies, founders often lack the confidence to carry on. So instead of continuing to scale, they shepherd their businesses until they reach a certain size and then they sell out, often to an overseas rival. Thus, the European Google never emerges.

So is there anything that can be done? It has to be said that governments and their agencies are doing a lot to provide founders with the support they need through mentoring and education. And there are already industry bodies that faciliate support and mentoring.

Robinson’s goal is to create an industry platform to provide support and one that draws on some heavy hitters. Patrons include Stephen Kelly, former CEO of Sage; Leo Apotheker, former CEO of SAP & HP; Steve Garnett, former chair of Salesforce EMEA and numerous others drawn from the upper echelons of the industry. Founders of scaleups and startups are also represented.

All well and good, but can you get them to engage with each other and pass on knowledge? Robinson Boardwave has worked on that. Ahead of physical events, members can use an app to book conversations with other individuals.. On the forward agenda are dinners to discuss topics such as managing a business through recession and how to make Europe more successful. There are also mentoring events dedicated to single issues.

If it all goes according to plan, startups will be able to learn from scaleups who in turn can benefit from the expertise of those who are further along the development curve. Robinson says the platform is intended to benefit the whole software industry, but at the moment the membership is weighted towards the enterprise software arena.

Will it have an impact? That remains to be seen. Arguably recreating the kind of informal communication between peers that is often cited as a feature of Silicon Valley could be tough. But any organization that successfully brings some of the most senior people in the software industrytogether to share experience with startups and scaleups should be helpful.

Robinson’s goal is to see more startups acquiring the skill and confidence to go on growing.