Paris - VC a la mode? Au Contraire, mes amis......

Mike Butcher gives Sarah Lacy a good Fisking on her article re European startups over in gay Paris - my take is that this Euro-optimism is still somewhat premature, and may still be a cul-de-sac.

There is a sense here of deja vu, 2000 style in fact, ne c'est pas?

Anyway, there have been many theories advanced as to why Euroland has lagged the US - social welfare, tax differences, better corporate employment options, less money, smaller economies, VC's are accountants not tech people, dollar exchange rates etc etc have all been advanced as reasons, and despite all the joie de vivre I haven't seen any great lessening in the cries of Go West, Young man in 2007.

I think something else needs to happen:

Esther Dyson, asked about her view of the US vs EU startup community earler this year, noted.

In essence, US VC's back "insane ideas" like, oh, YouTube or MySpace early and often - you get funding, but so do lots of other people. Its far, far harder to get funding in Europe for any New New Thing, but if you can its great as there is usually no competition.

.

In other words the big issue is the US (West Coast mainly, it must be said) has - in my observation anyway - a different attitude to Option Theory, or Probability, or - to put it another way - just taking a Punt.

Now both Sarah and Mike feel that a new generation of second-time EUntrepreneurs are ready to back the next EU-Tube, and that is good as if they do so then more conservative ones will have to fund or die.

But I also think we need to be a bit strategic in our thinking and do what is more likely to work. In my observation, 3 key areas are:

(i) Local language rip-offs of US ideas - market is validated, language is a barrier to entry - good news is you may be a national champion and sell to a US behemoth - bad news is you probably won't be the next Google unless perhaps its a Chinese language play

(ii) Go where transaction costs are low - webservices, common standards, direct to customer - penetrating the US national market if you need US salesforces, distribution channels etc is always going to put a European company at a disadvantage.

(iii) Rich Media - we Europeans bat above our weight on this area, and as the broadband internet gets bigger and more people globally come onstream, it plays to our strengths.

I'd like to say Mobile as well, but my perception is that in 2006/7 the sclerotic Euromobile industry has started to fall behind the US (at least that's where an increasing amount of innovation appears to be happening). If EU regulators can prise the oligopolies open it would be a welcome - and probably necessary - step to get Euromobile back in front.