For years, founders in Europe have marveled at America’s ability to bolster entrepreneurship, the caliber of tech companies emerging from Silicon Valley, and the maturity of the investment landscape.

In America, failure is celebrated, seen as a mere consequence of trying to improve or disrupt an existing product or service. US entrepreneurs are known for their ability — and willingness — to tell the world about their success. Investors are less risk-averse.

Meanwhile, their European counterparts, often seen as far more humble, have been trying to perfect the art of cracking the US — because as much as it is big and challenging, the scale afforded by America’s vast customer base is something only Europeans can dream about. Indeed, making it stateside can often make or break a business.

On paper, Europe presents all the necessary elements to allow tech businesses to grow and scale — so perhaps entrepreneurs should look closer to home before crossing the Atlantic in a bid to succeed.

Europe benefits from geographical proximity: it’s possible to fly or take a train from one country to another in just a couple of hours. It boasts a huge single market of 500 million people that has, to some extent, facilitated trade between countries, and governments have tried to support entrepreneurship, spending sizeable amounts of money to bolster innovation and R&D.

While all of this is positive, it’s not always enough, hence the emergence of specific programs that exist to support startups. For instance, the European Commission-funded project, Data Market Services aims to overcome growth obstacles facing startups operating within a fragmented European data market — helping founders with pain-points such as privacy law, intellectual property, and investment opportunities.

Support is both necessary and welcomed and even though some startups have succeeded in the continent, growth in Europe remains challenging.

So what exactly are the challenges and how can entrepreneurs leverage the opportunities?

A fragmented market

In reality, European tech businesses are confronted with a clear set of challenges that can impact growth prospects.

“I think Europe is doomed and I’m really pessimistic because of the systemic nature of Europe’s fragmentation, which unfortunately doesn’t help European startups or companies achieve global scale as you can do in the US or in China,” says David Gurle , a seasoned tech entrepreneur, and CEO of Symphony.

The quantity and quality of talent and funding is not the problem. “The talent in Europe is as good as anywhere else. It’s not about lack of money either. It’s just that structurally, the European Union, hasn’t facilitated the creation of global champions,” he adds.

Altin Kadareja, co-founder and CEO of Cardo AI , a startup that helps institutional investors, servicers, and credit originators manage private debt investments, agrees somewhat.

“Expanding in Europe means you need to cope with a fragmented regulation and marketing and sales strategies have to be designed for single countries,” he says.

This can eat a lot of time and resources, especially if businesses find themselves dealing with local data.

“Think about credit risk, for example. When you want to compare the risk of an SME loan in France with the risk of another SME in Germany, there is no standardized risk provider to support this analysis because every data or risk provider has expertise in their home country. Therefore, as a private debt investor you would need to collaborate with several credit risk providers for every country and make sure they speak the same language,” he explains.

In Kadareja’s experience, southern European markets have proved the most challenging, which paradoxically, he claims, are the ones that need his company’s solution the most.

In this case, legacy systems and resistance to change have created considerable entry barriers. “For us, the UK has been much more direct and efficient,” he notes, highlighting how the disparities in Europe also abide by the North versus South divide.

Iván Caballero, CEO of Citibeats , a Barcelona-based social intelligence and text analytics platform based on natural language processing and machine learning, was quick to re-emphasize Kadareja’s point about fragmentation while also highlighting the state of Europe’s funding landscape.

“The maturity of the European investment market is growing, but if we compare it with the investment markets of the United States or Asia, for example, it is still less mature. I think we are on the right track but we still have a way to go,” he said.

PitchBook’s European Venture Report Q1 2020 states VCs poured an impressive €8.2 billion into European companies during the first quarter of 2020.

Even though the year got off to a good start, the report suggests that the coronavirus pandemic is expected to have a considerable impact on deal flow. More importantly, it notes that COVID-19 could threaten the flow of US capital into European tech companies, potentially reducing the options available to companies founded in the continent.

Opportunities across the market

Europe may be a challenging landscape to navigate but the continent has also birthed several successful tech outfits including Spotify (Sweden), Amadeus (Spain), AMSL (The Netherlands), Sophos (UK), Temenos (Switzerland), and Farfetch (UK).

Founders across the continent also have access to important tech hubs such as London, Paris, Amsterdam, Lisbon, Barcelona, or Berlin.

Even though activity is typically concentrated around these specific hubs, it’s important to note that investors are also waking up to the fact that it’s important to expand their search. In the UK, for example, it’s not unusual for VCs to look further afield, eyeing opportunities in other cities such as Bristol, Edinburgh, Glasgow, Oxford, or Cambridge. More rural areas such as East Anglia also present clear opportunities in the agritech space.

Attracting and retaining talent is indeed challenging — both for companies in Europe and elsewhere — but hiring is typically cheaper outside the US. This, of course, is a double-edged sword in that European tech is at risk of brain drain — the mass exodus of talented, and experienced, individuals seeking higher salaries on the other side of the Atlantic.

Niche companies are perhaps the most obvious beneficiaries in Europe. Those with specific know-how or product are more likely to flourish, able to leverage Europe’s fragmentation to better their bottom line. Europe’s fintech space, for example, is far more developed than that of the US.

Specifically, Kadareja believes there are plenty of opportunities for technology solutions that enable and facilitate investment management. “I see many opportunities for better infrastructure technology using new architecture solutions such as microservices architecture and using new coding languages that allow a faster and more efficient software development,” he adds.

The data space is also ripe for disruption.“Flexible database solutions that allow big data management and incorporation of alternative data sources are other challenges that can bring new opportunities in the market,” he adds.

There’s still hope

Even though European tech has come on leaps and bounds over the past several decades, there’s very little doubt that it still lags behind the US and parts of Asia. The good news is that founders no longer have to set their sights on US capital in order to enter new markets. The bad news is that Europe is structurally flawed — and it’s really down to entrepreneurs to find the right opportunities.

“Taking into account the particularities of the European market (diverse, atomized, heterogeneous) tech business should analyze which European markets fit better with their products and services, and also consider other markets that represent new opportunities,” says Caballero.

Indeed, expanding in Europe may not be easy, but with the right tools and support, it’s by no means impossible.

Have you overcome growth challenges in Europe? Share your advice and experience with the Growth Quarters community .

4 reasons why startups need to create a strategic narrative

“Culture eats strategy for breakfast, ” the preeminent management guru, Peter Drucker, once famously observed.

And that begs the question, does corporate culture reign supreme above all else, or could it, in turn, be somebody else’s lunch?

Whether or not your company’s corporate narrative is hungry for culture, is a matter of perspective. But I’m convinced that a strong, viable culture is a consequence of meaning-making by those who share it, and meaning is a basic manifestation of the stories companies tell to and about themselves.

Strategic Narrative has taken the business vocabulary by storm, not least thanks to Jeff Bezos — this term’s loudest advocate. So, naturally, every company is searching for it. In a seminal piece for the Harvard Business Review, Mark Bonchek calls it a story that “defines the company’s vision, communicates the strategy, and embodies the culture.”

For me, to develop a strategic narrative is to humanize and expound the mission statement. It is a way for an executive to explain why her company exists, what does it stand for, and why anyone should care. This is how you get beyond the corporate-speak and the language of dollars and cents, into the vernacular of authenticity and human emotions.

Meaning-making

Businesses used to compete on quality and price. And efficiency at scale was a sure path to success. But many of today’s customers aren’t after a better or cheaper thing, as much as they are after a unique and personalized experience .

In an increasingly digitized world, with infinite choices available within a few clicks, the meaning-making is a new competitive frontier. It is no longer about what the companies do, not even how they do it.

A question the companies must answer is “why they do what they do” and “how is that meaningful?”

North Star

A strategic narrative is a two-way street. When Starbucks found its niche as a “third place” between the office and home it resonated with the customers , who took their laptops to their favorite coffee shops.

This buttressed the narrative and nudged Starbucks to offer free wifi , which, in turn, strengthened the resonance.

There is a circular flow to how the corporate story is constructed and reinforced.

The contemporary CEO is under pressure from every possible direction. To do the right thing for the business beyond the quarterly targets, they need something to hold on to, an anchor, a north star.

The raison d’être story of your business is exactly that. It answers the question: “Where you’ve been, where you are, and where you are going” as Mark Bonchek pithily put it.

A strategic narrative is not a rationalization of the decisions you have already taken but a guide towards better decisions going forward.

Who is your audience?

If you’re a chief executive of a global corporation, you’re accustomed to many audiences: Townhalls with employees, boardroom presentations, or earning calls. But the audience that isn’t readily apparent is you .

The messenger is the message, but what about the reverse? Internalizing the message changes the messenger. Understanding why a given company exists, not superficially reflecting on this question in a box-ticking exercise, but truly knowing, requires a serious self-examination. Just like writing is a process of figuring out what one really thinks, articulating your strategic narrative is a way to find meaning beyond the “shareholder value creation.”

Take Poul Polman who used to “ run an empire of soap and mayonnaise .” He truly understood the power of narrative. His storytelling, as a CEO of Unilever, has transformed the company into a champion of sustainability, into a mission-driven business. And it too transformed the protagonist: Paul Polman has now come to represent and personify that narrative.

Actions speak louder than words

As Jeff Bezos will know, a strong narrative protects the CEO from undue shareholder pressure. But for everyone else, it also spells an elevated risk of a backlash. The stronger and more coherent the narrative, the lower the tolerance for incongruent actions .

In 2015, Wells Fargo was proudly featured among the top 10 in the annual Barron’s ranking . But all this goodwill evaporated in no time, when, in 2017, the Washington Post’s headline billed the bank the “ least-respected company in America .”

Everyone is allowed to make mistakes. But the public would’ve not judged Wells Fargo this harshly, if not for such a wide gap between the image it projected and the way it conducted its business.

On the other end of the spectrum is Tesla — a company grounded in its mission.

“To accelerate the world’s transition to sustainable energy” has little to do with automaking and a lot with meaning-making.

The founder and CEO Elon Musk is no stranger to controversy when it comes to his Twitter account . But when it comes to actions, everything that Tesla does is fully congruent with its narrative.

The release of Tesla Semi, the Model 3 launch, the battery storage… all those actions drive the narrative, not the tweets. That’s why the community of Tesla-owners is unlike any other , they identify with a story bigger than their car, bigger than themselves.

A strategic narrative is not what you say , it’s what you do . Peter Drucker is right, culture does come before strategy, but it is the narrative that permeates both, creates meaning, and inspires action.

Play to your strengths and DON’T forget them

Boris is the wise ol’ founder of TNW who writes a weekly column on everything about being an entrepreneur in tech — from managing stress to embracing awkwardness. You can get his musings straight to your inbox by signing up for his newsletter!

Wow, this has been an exciting week! On Monday, I announced I would transition into a new role at TNW and introduced our new CEO. You can read all about it in the official announcement here .

Of course, I didn’t come to this decision overnight. I’ve been TNW’s CEO for 15 years and thought about this meticulously before acting on it. Big decisions mean spending ‘big’ time pondering them.

But what I didn’t expect was how much time I’d need to just decide how to break the news.

Myrthe (TNW’s amazing new CEO and former COO) and I had so many discussions on if, how, and when would be a perfect moment to make this announcement.

In the end, we got to a decent draft announcing the change… but it stayed a draft for quite a while.

There were just so many things we had to organize in terms of workflow, internal organization, et cetera, et cetera, that the announcement kept getting deprioritized. I mean, surely a simple announcement can’t be that important?

Then, last week, it was finally time. Everything was in place and now we only had to push out the announcement post. But as I read it, something didn’t feel right.

Then it dawned on me. I’d been trying so hard to write a ‘standard press release’ and doing things like you’re ‘supposed to do’ that I’d failed to use TNW’s greatest strength.

For the last 15 years, one of the things we’ve always tried to do is NOT using the standard format for anything.

When we first started organizing events, we didn’t look at other events. We just organized a conference that we thought was interesting, and we ignored all the rules and what was generally accepted common practice. And I, who’s been CEO that whole time, forgot!

So when I realized this, I stopped laboring over a ‘press release’ and switched to writing a story — just as if it was this newsletter. That resulted in the fun little article you can now read on TNW .

Before we published it though, we also realized we didn’t have a good photo of me and Myrthe together.

So we checked our calendars to find a moment to get a photographer in for an official portrait and… starting to sound a bit like how things are ‘meant to be done,’ right?

Luckily, it didn’t work out. So we had to improvise.

I suggested taking a photo that looked like it was made in a photo booth at the train station. The advantage, I thought, would be that the images wouldn’t have to be high quality in themselves and could even be slightly blurry and black and white.

And since those photos always come in fours, we wouldn’t have to worry about finding the ‘perfect’ shot — we’d just combine four funny photos into one.

I found a room with a curtain, and then we asked the first person who walked by to take photos on my iPhone. All-in-all, the photoshoot took about 15 minutes, and we had a lot of fun thinking of different combinations; and had a nice symbolic last photo with Myrthe pushing me out of the picture.

I guess this announcement was one of the final ‘important things’ I did as a CEO, and it felt terrific to do it the TNW way. It also shows that you can achieve a lot with some creativity, defiance of the rules, and enthusiasm. And that you need to keep reminding yourself of it.

That’s certainly how I look back on the past 15 years as CEO of TNW.

P.S. Don’t worry about the title change, I’ll still write my newsletter! So until next week!

Can’t get enough of Boris? Check out his older stories here , and sign up for his newsletter here .