Technology becomes better faster and cheaper by the day

Rapidly improving infrastructure

Technology is improving dramatically. It is becoming faster and cheaper. Exciting new applications are emerging and in particular there are some pockets of excellence available within Europe that could be a kick-start to entrepreneurs. The price-performance of enabling technologies is doubling every 18 months. 28.8 kbps modems will be replaced by larger modems, ISDN lines ADSL/IXL technology or cable modems. European telecommunications deregulation has driven down the cost of transmitting voice and from ten times US prices in 1995 to three times in 1998, and recent events are increasing this trend. In parallel with this, new more advanced technology is emerging. Essential transaction enablers such as smart cards, transaction servers and encryption technology are but a few. There are some pockets of excellence within Europe; it is behind the game, but it has some strategic assets that entrepreneurs may be able to exploit to create wealth. Ask yourself how you can utilise the following assets:

Minitel: Minitel accounted for twice the amount of eCommerce traffic within Europe until 1997. Prior to 1997 the French eCommerce market was bigger than the US market. What is so exciting is that it proves that customers will go online when there are cheap access, secure transactions, attractive offers and ease of use. Minitel is now outdated technology that will migrate to the Internet.
Mobile telephony: The convergence of mobile phones and computing devices offers eCommerce on the move. Specifically, digital phones equipped with smart cards can provide a gateway to the Internet and portals provided by entrepreneurs and phone companies alike. Phones operating on the Global System for Mobile Communication (GSM) standard can be used in every European country making this a potential killer application.
Digital TV: Europe has the potential to take the lead in digital television for eCommercial purposes. Digital TV can broadcast electronic information from the Internet to an individual's TV set. Providing the set or set top box is connected to a phone line, orders and other information can easily be sent back to service providers. As European ownership of home computers is significantly lower than US levels, there is a greater opportunity to develop digital TV. Anecdotal UK evidence suggests that product sales through digital TV have exceeded retailers' expectations.
Smart cards: Europe leads the world in the production and use of smartcards. Smartcards facilitate the development of eCommerce, and the wider eEconomy, providing tools for identification and security, which are themselves areas of European technical leadership. Smartcards are already in widespread use in Europe for purchase of items such as electricity, telephone calls, car parking space and as loyalty cards.
Language telephony: Europe has a lead in voice recognition and translation software. These applications could radically ramp up the potential for European eCommerce. Future biometric voice identification is not only easier than pin codes and passwords but also more secure. Voice recognition removes a further barrier to European adoption of mobile eCommerce, since it is removes the need for a keyboard. Automatic translation will increase the scale economies of European businesses.

Emerging supportive environment

European funding groups are moving fast to fund the best ideas, driven by the extraordinary market capitalisation of Internet/eCommerce new entrants. The money is out there, for the right teams and ideas. Governments seem to be moving in the right direction, even if this is a little slower than eSpeed.

Money is becoming increasingly available

US Internet-related investments increased nearly six-fold from $3.4bn in 1998 to $19.9bn in 1999, accounting for 56% of total investments. Average funding, at $11.1m, was double that of 1998. Compare this to all European technology investments which accounted for only 28% of the total European investments in 1998. This number has grown by 75% since 1997, and is ramping up big time. Encouragingly, the amount of capital committed to European early-stage (seed and start-up) deals more than doubled in 1998. European figures are ramping up dramatically – there is money around for the right ideas and teams. Check out the European Private Equity and Venture Capital Association Web site to see if the year 2010 figures are out yet. Bear in mind – there is a load of dumb money for dumb ideas but most plans still don't get funded!

Entrepreneurial environments are emerging, but have a way to go

A new entrepreneurial environment is developing across Europe, driven by the Internet phenomena. It started within the entrepreneurial/Internet clubs and has swept out into the consultancies and on into business. Europe has a long way to go to catch up with the US entrepreneurial spirit where rewards are greater for the winners and the losers aren't horsewhipped:

Rewards need to be greater for the winners: If you are a young European millionaire you will be deeply admired by those who aspire but you won't reach the hero status given to the US winners. If you are French, your stock options will be taxed at 80%. If it is social acceptance or money that drives you, the rewards are greater in the US than in Europe. This is changing fast and shouldn't frighten you into inactivity. If you fail in eCommerce your entrepreneurial and functional skills will be in great demand. If you have the emotional resilience – go for it!
Losers should not be horsewhipped: At a recent dinner of eCommerce gurus, the US millionaire suggested that filing for bankruptcy was an effective 'financial planning tool'. The UK millionaire advised that bankruptcy was a social stigma that could threaten your ability to get another job. Indeed, it is impossible to drive a London taxi as a bankrupt. You may want to weigh this up – for a nano-second or two. Entrepreneurs tend not to plan for failure but it is important to manage your downside. In the current skills shortage, people who have failed in their eEndeavours will be warmly welcomed into the very best firms. Those firms who don't want to employ 'those who tried' are so arrogant and shortsighted that they will probably end up having their own downside to manage.
Enlightened governments will see further than the end of their noses: Governments have a duty to improve the delivery of their citizen services, make operations more efficient, boost competitiveness and create wealth. eCommerce does all of these elements and more. All governments have the power to unleash entrepreneurs from the shackles their predecessors have imposed. But don't wait for government action – get on with your plans and get round the hurdles. Despite my soap box moaning, everything seems to be moving in the right direction. If you do speak to your elected representative, you may want to mention:
Put government money where the growth is: Many European governments have a rather peculiar tendency to invest in subsidising lossmaking industries, rather than investing in the growth areas. Frustrating, but tough! Use your vote and get on with it.
Best people deliver jobs for local people: Mobility of labour from outside the EU is positively discouraged in some European countries. A German company can't hire a non-EU national without proving it can't find a German or other EU citizen qualified for the job. Specialists from some countries, such as China or India, often can't get work permits at all. It is legal for a German company to transfer a foreign manager to Germany if it already employs him abroad, but such transfers require a work permit which labour officials may refuse to issue. This is incredibly shortsighted when there aren't enough people with technology skills locally and the best people will often come from the US, Russia, China and India. Entrepreneurs can't staff ideas with 100% green beans and they haven't the time or money to start training people in the start-up days. If entrepreneurs lose, so do economies, so do local people.
Low-cost access – fast: Many of the giant telephone monopolies in Europe are being dismantled too slowly, with former state-run companies in Germany, France and Italy still using their traditional ties to governments to block competitors or any further deregulation. Recently, UK Chancellor of the Exchequer, Gordon Brown has brought pressure to bear on the telecom companies and the industry regulator, Oftel, to introduce competition faster, bringing about big cuts in prices. This may soon be replicated across Europe.

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