Why can’t the European Technology companies competing with the giants of Silicon Valley? It’s an enduring puzzle for the continent’s IT leaders – and one Phil Robinson is trying to solve.
After a global career as a technical executiveAnd Robinson returned home to the UK and founded Boardwave, a networking platform that wants to make Europe a software superpower.
The concept emerged from Robinson’s diverse background in the sector. The entrepreneur has spent decades traversing Europe and Silicon Valley, in roles ranging from CMO to Salesforce.com during the IPO of the CEO of Dutch software giant Exact.
These experiences revealed several advantages for US technology companies. Robinson focused on one idea: the fertile ground for success created by the tight-knit Silicon Valley community. The small land area connects a large number of technology experts, entrepreneurs, investors and advisors. Meanwhile, the business environment in Europe is highly fragmented.
To simulate the effects of a valley network, Robinson founded Boardwave. At TNW Valencia on March 30, he promised to share more insights into building tech giants.
Before the talk, Robinson unveiled one of his most ambitious proposals: the creation of a European version of Nasdaq.
Nasdaq is the world’s major market for technology stocks. Google, Amazon, Apple, Facebook and Microsoft have all gone public on the exchange. In Europe, there is no similar business place, which limits the growth of startups.
“There is no single technology market here in Europe,” Robinson told TNW. “There is also no knowledge, experience, and understanding of software from public market investors. They don’t know how to value software companies, they don’t understand how they work, and they don’t understand the intrinsic value of them.”
These conditions contribute to a wide “exit gap” between European and American firms. In Europe, tech founders often sell their companies while they’re still private — missing an opportunity to maximize their valuations in the public market.
Companies seeking to go public are usually listed in the United States.
“They either go to the NYSE or the Nasdaq,” says Robinson. “At that point, it was no longer a European software company — it was suddenly an American software company.”
Arm hammer blow
Float plans in the arm provide a painful example of the effects. The British chip giant is set to ignore UK government pleas to list in London and instead float in New York. Even offers to bend the stork’s market rules failed to convince the company to go public in its home country.
Analysts attribute the decision to larger stock markets in the US investment landscape, focus on growth, and history of generating higher valuations. By contrast, European investors have a reputation for being risk averse and short-term.
The NASDAQ listing also increases confidence in the company’s long-term survival.
“It’s a step towards being a world leader, which we don’t have in Europe,” says Robinson.
It is a market for technology companies to go public in Europe.
Proposals have been put forward for a local equivalent of the Nasdaq in Paris or London. But Robinson insists that only the pan-European stock exchange will have the necessary scale.
Creating such a market would be an enormous challenge. It requires the will of politicians, new legislation and deeper market expertise. Once these companies are in place, European tech companies will need convincing to list on the market.
The process won’t be easy, but Robinson is convinced it’s worth the effort.
“If you have a European version of Nasdaq…it’s a marketplace for technology companies to go public and list in Europe — and not sell to be an American software company by virtue of the fact that there’s nowhere else to go.”
Phill Robinson will be speaking at TNW València, which takes place at the end of March. If you’d like to experience the event, we have something special for our loyal readers. Use the promo code TNWVAL30 And get 30% off your conference business pass for TNW València.