Europe's unfair advantages
Plus: Is Seed the new Series A?
· 832 words
Melanie Gabriel & Christian Woese
November 05, 2024 • Read time: 4 minutes
Dear hustlers, founders, operators and visionaries,
There is just one topic today: the US election. Judging from their Twitter (sorry: X) feeds, most tech people in Silicon Valley have stopped doing tech and turned to politics. Just in time for the election, OpenAI last week released its competitor to Google: ChatGPT Search. You will be able to ask ChatGPT for the results of the election tomorrow and it should be able to give you the answer - unless it hallucinates. In a world increasingly full of fake news and alternative facts, who are we humans to blame an AI for hallucination? Follow the Gradient and stay tuned.
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Your talk track for this week’s cocktail party
Big Tech earnings: Cloud boom and AI battles
Last week, GAFAM tech giants (Google, Apple, Facebook, Amazon, Microsoft) reported earnings with a clear trend: cloud services and AI infrastructure are driving growth. Across the board, Big Tech is pouring billions into data centres, computing chips and energy to fuel its growth in AI services - including deals for their own nuclear reactors. While the long-term justification of the scale of these investments is disputed, short-term revenue growth numbers are impressive: 15% for Google parent Alphabet, 35% for Google’s Cloud division and 19% for Meta.
Large language models - doomed to fail in EU regulation?
With the EU Artificial Intelligence Act coming into force in January 2025, penalties and fines are looming for AI companies failing to comply (remember Mark Zuckerberg’s and Daniel Ek’s article on Europe’s incoherent regulation?). Language models will have to meet different criteria, e.g. adhere to privacy, transparency, accuracy and promote well-being. ETH Zurich now released research scoring current language models against these criteria. The bottom line: none of them fully pass the test. What this means for the ability to use these models in Europe remains to be seen, and whether this is bad for the affected companies or rather the European Union.
What do you meme?
Food for thought
Europe’s unfair advantage to the US
Europe either stands accused of overregulation or underinvestment. It’s scattered market and growth gap brings some unexpected advantages, though: skilled talent is cheaper to get allowing to focus on finding product market fit before scaling; academic institutions are abundant nurturing scientific innovation; and the complexities of a fragmented market raise resilient founders. There is reason for hope.
Is Seed the new Series A?
Over the last ten years, startups have gotten older across the stages: a company raising a Seed today is as old as a Series A company was 10 years ago. What are the reasons: Less burn, higher professionalisation in funding, more interim rounds?
The power of scaling
Scaling can take a long time - yet when it happens, it is unstoppable…
Mark your calendar
Austria
Culttech Summit in Vienna, 5-6 November [Program]
Wolves Summit in Vienna, 6-7 November [Program]
Forbes Women’s Summit in Vienna, 6 November [Program]
Germany
This is Marketing in Frankfurt, 4-5 October [Program]
Gründerszene CHRO Dinner in Munich, 5 November [Register]
Startupland in Cologne, 6 November [Program]
Ada Lovelace Festival in Ludwisburg, 6-7 November [Program]
Netherlands
Founders Running Club Amsterdam, every Saturday [Join]
Spain
Norrsken Impact Week, 7 November [Program]
Sifted Breakfast during Impact Week, 7 November [Register]
Switzerland
SEF Growth in Bern, 5 November [Register]
UK
Turing Summit in London, 6 November [Program]
Accelerators & Awards
With “Accelerators” and “Awards” we’re introducing two new segments that can be a game changer for founders and startups.
Talent Kick is a free program for Swiss students and researchers to build impactful startups. Gain funding, a cross-university network, and hands-on experience to launch your venture while you study [📍Switzerland, Deadline: November 6, 2024 11:59 CET].
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Smart hack
B2B Sales is a hell of a challenge. Gal Aga provides his insights on turning “Selling” into “Enabling Buyers” in this post - in a nutshell:
Don’t demo - give exclusive views into how peers solve problems
Don’t pitch - offer insights like a highly-paid advisor
Don’t just follow up - provide 'project management as a service'
Don’t rely solely on your champion - build CEO sponsorship early
Don’t send resources - orchestrate the decision process
One good read
Sifted's outgoing news editor shares some final thoughts on how tech companies can hurt entrepreneurship and independent businesses: