Europe vs. the US, the good, the bad and the ugly of the European ecosystem
Meeting the “Nordic Earl of Venture”
It is not every day you get to sit down with a true legend of European venture capital. When you do, you bring a notepad. I recently had the pleasure of catching up with PJ Pärson, a man who has been shaping the European venture ecosystem since 2004 as a Partner at Northzone. The guy has been in the trenches, backing unicorns before they were mythical creatures – Spotify, iZettle, Avito etc., and if there’s one person who knows the past, present, and future of European venture, it is PJ. So, naturally, we dove into it all: role models, Europe vs. the US, the good, the bad and the ugly of the European ecosystem. Spoiler: there were some real nuggets of wisdom in this one.
The Importance of Role Models for the Ecosystem
When PJ started in VC, European entrepreneurs were more survivors than success stories. The ecosystem was a wasteland of fragmented capital, limited ambition and, let’s be honest, a lack of inspiration. The US? That was a different planet. Tech founders were rock stars, wealth was openly celebrated and failure was just another chapter in the playbook.
In Europe? Twenty years ago, no one dreamt of being an entrepreneur. Parents wanted their kids to be doctors, lawyers, or consultants……Today, thankfully the tables have turned.
The power of role models can’t be overstated. They shape culture, inspire new generations and validate career paths that once seemed impossible. The US has had these figures for decades – Gates, Jobs, Bezos, Musk etc. These guys didn’t just build companies; they built a mindset; and in the process, they became part of the political and regulatory fabric of the country. Conversely in Europe, entrepreneurs have historically stayed in their lane, separate from political discourse and off front-page cover stories. But for an ecosystem to thrive, it needs leaders, not just innovators.
The Development of the ‘Hollywoodism’ Era
America turned tech entrepreneurship into entertainment. Silicon Valley became a script, with founders playing the lead roles, celebrated on the covers of the likes of Forbes and Vanity Fair. Launch events became as sought after as film premieres! Their every tweet dissected, their net worths obsessively tracked. And the cycle continued – more visibility, more ambition, more people wanting to join the party.
In Europe? Not so much. There’s a deep-rooted cultural reluctance to celebrate success and wealth. Flaunting success is seen as distasteful. But here is the thing: entrepreneurship is brutal. It’s a relentless, soul-crushing and high-stakes game. If we don’t recognise and reward those who succeed, why would anyone take the risk?
Why Role Models Haven’t Emerged in Europe (Yet)
The structural challenges in Europe go beyond culture:
Media Focus: European media fixates on companies, not individuals. While US media glorifies founders, European media loves a good negative spin – cautionary tales over success stories. The FT, for instance, ‘prefers’ a negative story and rarely celebrates European founders the way US outlets do with their own.
Failure Stigma: In the US, failure is a badge of honour, valuable experience that counts. In Europe, it’s a marked card. But attitudes are changing. Slowly.
Risk Aversion: Europe remains conservative when it comes to investing. While US VCs chase 100x returns, European investors still think 5x is impressive. This conservative approach dampens ambition.
Funding Gaps: Early-stage funding has improved, but later-stage capital is still disproportionately American or even Asian. If you want to scale big in Europe, the chances are you are getting a growth cheque from Insight, Sequoia, Tiger, or SoftBank – not a local fund.
Could Europe Create Its Own ‘Elon Musk’?
Entrepreneurship in Europe has never been hotter. Talent is abundant, networks are strengthening and experienced founders are recycling capital and advice into the ecosystem.
We are seeing the flywheel effect take hold – founders from companies like Skype, Revolut, Klarna, UIPath etc. are now backing the next generation – not only with capital but also sharing their playbook. But the big question remains: Can Europe produce its own larger-than-life entrepreneurial icon?
The challenges:
Funding Composition: ~60% of European venture funding comes from government sources. Institutional knowledge of the venture asset class remains weak.
Public Markets: European stock exchanges haven’t kept pace. The New York market alone sees more daily trading volume than all European markets combined.
Media Narrative: We need to stop with the doom-and-gloom headlines and start cheering on entrepreneurs. Celebrate them!
Role Models: Existing and Emerging
Europe has world-class entrepreneurs. We just don’t treat them as such. Here are some selected names that, if they were American, would already be household names:
- Daniel Ek (Spotify) – Built Europe’s answer to Apple Music before Apple even knew streaming mattered.
- Nikolay Storonsky (Revolut) – Turning banking on its head and doing it at lightning speed, both in terms of reach and products.
- Daniel Dines (UIPath) – Proving that automation and AI aren’t just Silicon Valley buzzwords.
- Taavet Hinrikus (Wise) – Disrupting finance while making cross-border payments seamless.
- Sebastian Siemiatkowski (Klarna) – Redefining credit for the digital age amongst thousands of consumers.
These guys are already role models. Europe just needs to recognise them as such. We need to celebrate the journey they have been on rather than drawing negative attention to them when they are experiencing set-backs – natural for all businesses.
US Trade War: A Blessing in Disguise for Europe?
The ongoing announcements of US trade tensions have created ripples worldwide. European startups are navigating new uncertainties, potential supply chain disruptions, cost and fiscal uncertainties, capital restrictions etc.
But this could be the ‘kick up the arse’ that the European ecosystem needs. A nudge to loosen regulatory shackles, strengthen public markets and increase private capital allocation to innovation?
What does all this Mean for Europe
As PJ highlights, Europe doesn’t need to be the US – it shouldn’t be. Yes, the US leads in capital availability, but Europe holds its own in other areas – free education, healthcare, social welfare, quality of life etc. The key is to develop an authentic European model of entrepreneurship, one that plays to the continent’s strengths.
That also requires:
A mindset shift: From ‘we can’t’ to ‘why not us?’
A focus on doing: Less talking, more building. Less regulation, more innovation.
Talent retention: Keep founders in Europe. Give them a reason to build and scale here.
Celebration of success: Stop treating entrepreneurs as villains and start recognising them as the drivers of economic progress.
At the end of the day, governments and corporates won’t solve Europe’s biggest challenges. Entrepreneurs will. It is time to recognise them as the heroes they are.
Whatever direction, through his engagement and tireless work PJ will continue to do his work and support existing and future hero entrepreneurs to achieve their targets and fulfil the ambition for themselves and for the continent.
Thus, is Europe ready for its own ‘Elon Musk’? Maybe. But the real question is: does it need one, or is it time to forge our own path?
