About this talk
In this panel discussion, Masha leads a conversation on the impact of regulations on European startups and scale-ups. She highlights how excessive or poorly designed regulations can hinder their growth and market entry, leading to founders spending disproportionate amounts of budget on compliance. The need for clearer, more harmonized regulations is emphasized, as well as the disconnect between policymakers in Brussels and the realities faced by entrepreneurs. The panelists, including Daniel Friedlander from CCIA Europe and Marcus, a technical founder, share their experiences with regulations such as the GDPR, the AI Act, and sector-specific rules. They discuss how these regulations can create barriers to innovation, highlight the importance of founder feedback in shaping future policies, and propose collaborative initiatives to bridge the gap between tech communities and policymakers.
Full transcript
Our next talk well our next panel is coming up right now. This time we're not doing a break. We're going to continue this for quite a while. We have a really cool panel. We often hear that Europe can't keep up, can't compete and because we're regulating too much. But you know our next talk if you ever been in a discussion like that is going to really educate
you on how we can advance technology in Europe more. And I would like to invite Masha to the stage who's going to lead the next panel. Big round of applause for Masha. >> [applause] >> Well, we're going to talk about regulations. So let's have some fun. So my name is Masha and I'm currently leading Dutch Basecamp, which is an organization that helps European startups and scale ups
with internationalization. I also have a startup in cybersecurity compliance and naturally on a daily basis we see founders struggling with scaling across the EU. Of course there are many issues. Of course we can talk about access to capital, but we see on a daily basis that regulations do affect the way that founders can scale across the EU. We see that they can block certain deals, delay market
entrance. And honestly right now it's an interesting moment because there are a lot of talks about simplification. We all of course heard about initiatives like EU Inc. There is a big push for European tech sovereignty. However, the problem is that the two worlds, the Brussels world and the founder real tech world, they barely talk to each other, right? So they're creating regulations without really talking to us.
So in order to change some things currently at Dutch Basecamp and at Augury we're running an EU-wide research on how regulations affect founders on a daily basis. You see the QR code here. It will only take 3 minutes of your time and the idea is that we will want to bring the voices of real founders, technical leaders to Brussels and really amplify and hopefully make some positive
change together. And as a part of this process today, we have a panel where we'll bring the two worlds together. We have Daniel coming straight from Brussels, and we also have Mark, who is a serial entrepreneur, technical founder. He's been on the market for a while. He has seen GDPR being born, GDPR affecting his product. So, really we can just share the stories. We can see how
people in Brussels actually think about it. How do they understand founders? And do they actually understand founders? And hopefully together we can make a certain change. Um Yeah. I don't Yeah. >> Arsen, it's going to be It's going to be really interesting panel. I think this is something that a lot of people in Europe are talking about. How long have you guys been working on this initiative
if this not going too far into your into your talk? >> To be honest, it just like kind of started gradually because the more you work with founders and the more you talk about internationalization, like going to new markets, scaling rapidly, the more you see that this problem becomes more and more prominent. We also see that a lot of founders burn their runway on compliance, on legal
teams. And it's not because, you know, we're not against regulations. We just want to simplify things. We want it to be more clear how to be compliant because we already see good results from the survey that shows that European founders actually want to be compliant. They want to build in Europe from day one. However, it's just not easy. And if we just talk to each other a
bit more, things might improve. So, guys, you ready to join me? >> Big round of applause for our panelists. >> Perfect. >> Yeah. Thank you, Marsha. Thank you. >> So, as I mentioned, we have the two worlds here. We have the real technical founder, and we have a person coming straight from Brussels. So, So should we do a quick round of introductions? >> Yes. >> Daniel, let's
start with >> Sure, thank you. Daniel Friedlander and I work for CCIA Europe and it's a trade association. So I actually work with a large range of tech companies. Now most of them are quite big, some are very but we're in the same space as you, as a lot of the founders, the developers and we're working on a lot of the same issues, sometimes not from the
same point of view, but often actually with a huge amount of mutual benefit and a huge amount of mutual impact from what happens in European politics and so that's why I'm delighted to be here hoping to talk, to share some experiences and to support frankly getting you a stronger voice in the rules that then you actually have to live by and perhaps not live by. >> Thank
you. >> Yeah, I'm Marcus. I'm one of the founders of Lead Label, which we started about 8-9 years ago, which is a marketing company. I'm responsible for the technology technology part of it and I'm also one of the founders of Enclea, which is an ecological firm. So I think for me it's interesting to to join today because on the one hand like Lead Label is sort of
restricted as well by the GDPR and a lot of regulations and on the other side the ecological world is world is mainly like created by law. So it's sort of on both spectrums of the yeah, the jurisdiction. So yeah, excited to be here and to share some thoughts. Yeah. >> Thank you so much for being here. So you know when we work with early stage founders, we
often see that founders start with passion. They want to change something. They barely ever think about compliance from day one. But then comes the point when you grow a bit, then you get faced with that compliance and regulation talk. How did it happen for you for both of the companies or one of them? >> Yeah, actually for Lead Label it was actually one of the core reasons
why we thought it would be Sorry. Yeah, why we started? Because the GDPR got introduced and we saw that a lot of traditional companies were not compliant, so we tried to figure out a way in which we could like sort of operate in a compliant way in order to still facilitate demand in the market. So, we started actually from compliance as a company. >> one you were
like, we need to be GDPR >> was a very important part of it and we actually sat down with legal companies as well to really form a basis and to validate basically our business model if it would be sort of if it would fit in the current new legislation. So, from day one it was an important part because we knew that if it wasn't, then it's kind
of a bad investment, you know, if you're going to invest a lot of money in it and a year later your clients say, "Well, we like it, but yeah, it's not compliant enough, so we're not going to do it." It's kind of a waste of time and money. So, yeah, for us it was actually kind of important. Same with with Enclea, the environmental firm, because we saw
that a lot of rules basically suffocated the market a little bit. And everybody wanted to stay compliant, but there weren't enough people to do it. So, we tried to automate processes, make it more efficient so we could basically, yeah, be compliant but in a more effective way. So, I think for both companies it was important. >> So, the GDPR started kind of like as an enabler for
your growth. Did it change throughout the time or >> Yeah, it changed a lot. In the beginning it was really a conversation opener because you could say like, yeah, we figured it out. We we we can stay within the boundaries of the new European law and they were very interested and excited about it because for them it was also I mean it's their business, you know, it's
marketing, they need to make sales, they need to grow. So, they were also looking for ways in which they can operate still under the new regime, let's say, to say. And I think after a while it it started to change a some fakeness was introduced into the market, especially I think from the Dutch privacy authority at a certain point in which they become more strict than the
European law itself. So, it was kind of confusing. People were like, "Oh, but we thought it was possible, uh but maybe not." Uh that kind of vagueness, and that really uh was hurting not only our company, but a lot of other companies as well, which I always spoke to often, uh in operating it, because you need some clarity to operate and to invest. And that was something,
yeah, we really struggled with after our startup. >> Tell us about the clarity that comes >> Well, I think the the problem, you know, when when we're here earlier hearing hearing you you're working on such tangible, real things. And the way European laws are created, it is not based on that, and that's why the outcome is often a strange mix of over prescriptive and vague and difficult
to interpret. And that's because you have all these different inputs coming in, right? You have so many different political parties from so many different countries who are trying to have a say, uh who are trying to change things, and who don't necessarily have uh an incentive at heart that is about making it easier for business to grow and to scale. Uh then you have the different countries
that might support the idea of, you know, a single market where you can just be everywhere at once, but they also want to protect their own national market and certain interests, which creates barriers. Uh and then the European Commission, which is sort of may maybe they're the developers. They have to do the first uh the first go. Uh what they actually come up with does not often
benefit from enough actual technical understanding either of the businesses it may impact, what it'll do, and really that that practical level. Um and that's why I think, you know, it's important if you can fill out uh the survey, because this kind of work actually matters, because so much of uh politics and policy making on tech policy is based on either anecdote, data, and just stories the EU
wants to hear from, you know, the desperate voice of of developers and but it's not always easy to to get it there. And so, you know, I work with with much larger companies. They have much more resource to put into some of these things, but it's really important to your voices as well. So, I'm I'm trying to give a very simple way of how it's done, and
I'm hoping you also have some comments and questions later about how that's impacted you. Just like with Mark. >> Yeah, definitely we can take some questions later. I think what would be interesting to cover is this topic about the national adaptation, right? Because you mentioned that of course there is GDPR, it's EU-wide, right? But then you mentioned that the Netherlands actually made local adaptation that made it
much stricter. Maybe you can give some examples of >> Yeah, there I mean there are a lot of examples about it, but for example, in ecological world, there's sort of in the Netherlands, there are some extra regulation, and now you see a lot of cities basically doing city-wide ecological research, and we say try to relieve the burden from like individual projects, and they call it SMBs. We
actually like build software for it and help them sort of make it more efficient and make it more insightful. But if you for example look to Germany, that doesn't really exist there. They they have like very different ways of doing it. So, if you want to adapt your your software or your product to for example Germany in that case, it would be not possible because it just
doesn't >> possible? >> No, not possible. Maybe it will come in the future, but for now it's not there. And I think like yeah, with with the GDPR for us, it's mainly EU versus non-EU. So, the GDPR is is pretty wide in EU, and I think there are differences. I think in the Netherlands, they are very strict. They even got sort of commented on by the European
Court. So, saying like yeah, you're way out of line. Chill down. And I mean if the European Union says you're out of line, like that's not really a flex. That's a bad thing. Um so, I think that's creates sort of like I said some fakeness and you really don't know uh yeah, what the interpretation would be of our local authorities and that's just bad for business. It's
just not for us it's a not a functional situation. Uh even if you want to invest like why are you going to invest if they're going to wig wag next year and they're going to change your interpretation and maybe your business is not legal anymore. Like it's not a safe sort of basis even for investments. Yeah. >> 100% that we're already seeing our survey. We have a
question whether you chose not to enter specific European market because of regulations and 80% of people say yes. >> So, how can you scale across Europe without having like one, you know, framework for scaling? This is it's pretty bad. >> Yeah. That's pretty bad. Yeah. And even sometimes I think it backfires as well because I'm thinking like 2024 um the Dutch authority of of privacy they published
a paper in which they essentially said like all scraping was illegal and they even like put a bomb underneath all all the all the large language models and we were were using our open AI GPT to develop a lot and it was really exciting for us about exciting tech basically. Uh and they basically said it was illegal and it was was for us it was a really
crazy thing but I thought like yeah, sure man you can make remarks on how to build it and you can try to steer it and make it a little bit more compliant but making the essence of it uh kind of illegal uh it's it's bad for business and now you see what's the effect. We're all using the US counterparts. >> Absolutely. >> So, we're basically sending them
our data and basically the the product is still there. It's just not here and we don't have any control over it. So, that's like I mean you can be safe but you have to think about the consequences more. You know, what if we don't do it? I think that's like an important question to ask. >> So, for me >> [clears throat] >> that we hear that a
lot and actually from from people at every every level. There's good news and there's bad news. The good news is that sort of the the European politics world is very aware of the problems that have been created. They're very aware that one of the reasons it's harder to get investment here, to scale, to grow, uh to hire properly, even to give equity, all these things. They're very
aware of the problems that actually have been created by a rush to create rules in the hope that the rules would create innovation. And now there's a realization that maybe that doesn't work. So, that's the good news. >> [snorts] >> Um and and that has led to some political attempts at a very high level to change things. The bad news is, like with anything, there's an incentive
structure uh and the goodwill is running into quite a few different hurdles. Um and that's one of the reasons we're trying to talk to a lot of people because the best way to break through those hurdles is right now to get more involved and to actually show the very practical, concrete undeniable uh impacts to double down on them. It's why, you know, the the EU Inc initiative
uh that was almost forced on Europe by founders, by founders banding together, creating an entire campaign on top of their multiple day jobs. Uh that's that's almost never seen before in in politics across Europe. Uh and a lot of the people who were behind that and who were very successful at getting it there are are in the Netherlands. But now that's sort of getting stuck in the
machinery. Right? Where they're I don't know, they're they're they're editing out some of the key lines of code, you know, and and so the the outcome at the end may be unhelpful or unworkable or not the outcome that people actually know is needed. And again, that's why the survey, the examples, getting involved uh matters actually now probably more than than before. >> Realistically speaking, we're all excited
about the EU Inc and made a lot of headlines and made a lot of positive PR for Europe. Is that going to happen, and when, and how? What is the backstage process? What is happening right now? >> So, the the backstage process is that uh envisioned by founders very successfully. The EU bought into it because of this moment where they know they need to change. They've Now,
the commission, which is the one that the only one that can write laws, has proposed something. but that's where it goes both then to all the different countries and to the European Parliament. And they come at it from completely different points of view with completely different reasons for doing things linked to different political parties, with different political goals in different countries, and they all have to then
each have their own position and then agree. And that's where the difficulty is, but that's where you can get involved also in wherever countries you're from, where you're working, where you can talk to different uh local associations, people like, uh you know, Dutch Basecamp, who can also then put you in touch with a range of other uh actors, and you can get more involved. And I I
think that EU ink at the moment risks not being EU ink, but being sort of more of the same. The people behind it are pushing really hard, and I think they need support. Um because if you can't get something this simple, this uncontroversial, and that actually lifts up everyone to a higher level through, uh then we do have a a problem. Uh coming back to you, Mark.
So, we talked a little bit about EU versus non-EU, and I guess you feel like you're a little bit losing competitiveness compared to your um you know, players outside. And I think once we had the interview with you, you also mentioned how much you spend on compliance. Can you give us some example of the runway that is used for that? >> Yeah, I think uh I mean,
I speak for example for Lead Label. Uh usually the we work with large corporations, and they you to start with a pilot, for example. >> Mhm. >> Uh but the thing is that for for a pilot, the level of compliance will be exactly the same as for a long-term contract. So, uh in practice, we're sometimes even spending up to 50 60% of the pilot sort of revenue
towards Yeah, towards the legal fees, compliance, we've to sort of data processing agreements, like the whole shebang, basically. They want They want to have it I mean, their legal team doesn't really matter if it's like a pilot or a full-blown project. So, we often say to your clients, "Hey, if we if we know beforehand that the pilot wouldn't be wouldn't be successful, we wouldn't even do it
because it's a waste of time for you and for us." Uh which is which is kind of a shame cuz sometimes you need to take like a plunge with a with a small pilot, do some test, try something new in order to uh you know, innovate and get sort of new insights, maybe make a new product out of it. So, yeah, it's it's kind of a little
bit of a barrier. Uh but we just take it. We see that as sort of an investment. Yeah, yeah. >> But but you were saying before we we got on because we were talking about it, uh that it's also just about uh use of your own resource and energy, right? And so, and one of the good examples is always if you're having to spend money on lawyers
and counsel, then you don't have as much money for the engineers, the developers. It's it's a it's a misallocation of resource compared to those you're competing against. And you see that at every level. So, I was in uh a few weeks ago and talking to a French founder who just raised 30 million. I was like, "Oh, that's amazing." He goes, "Yes, but 12 million is already off
for compliance, right?" From the get-go. And now, France is its own particular world. If any of you are working there, good luck. Um but [laughter] you know, if [snorts] that's the environment in which each time you have to then outcompete with less each time, it's a very difficult um way to actually thrive. >> 100% Yeah. >> In our survey, we already see like we have over 100
responses so far. The most common answer is that people spend around 30% on compliance. Uh but we also saw some answers of some people spending 80%. So, what are you even focusing on? Are you building a product or are you just like feeding money into the legal teams and consultants? It's insane. >> Yeah. And the reality is if you're Well, I was at another event yesterday where
one of the developers said, you know, "If I followed every rule that I had to from Brussels, I wouldn't have a product." And that's a very powerful kind of statement, which which shows sometimes the legal jeopardy you can be in if you're trying to build something new and different. Um But but it also shows sort of the the difficulty of And I'd like to hear also from
from you guys cuz you've done it. And from you, like, at what stage you feel you have to really involve things, but also if you're having to bring in costly external advice and it's not even from within your team, you know, are you able to trust it? What happens when it goes wrong? What kind of environment does that create if you're trying to build and scale business?
>> I also often hear from founders is that even if you get legal advice, sometimes you get very contradictory opinions. So, basically, you're spending money on something that might not be even right. So, you spend it twice and it doesn't guarantee that you will not break the rule afterwards. It's something. >> Yeah, that's probably because of the some of the fakeness and the changes in interpretation and
then you have discussions and then at a certain level, they were sort of we were the client and they were like, "Yeah, we agree it's like legal, it's fine, but we're still not going to do it because it's too risky." And they're changing their opinions sometimes. So, we don't want to start this campaign or this project and then have to backpedal next year or get the backlash
out of it or the image reputation risk, like all that kind of stuff. So, it's not only about what the exact law says, but it's also sort of the context. Do they feel safe to innovate? Yes or no? And if they don't feel safe, they will say that we'll just treat conservatively and just wait out until somebody else tries it. >> That's our European approach on that
right now. We're too scared of the It's like cost of inaction is just lower than cost of action for companies just to adopt adaptation and narration. So, yes, it's crazy. Mhm. I have a question for you. So, of course, you work with big companies that have large lobbying budgets, but of course, right now people in the EU, they're saying that they want to talk to founders, they
want to get our voices uh heard, but how can we actually do it? What is the right way to approach that? Maybe you have some success stories. >> So, so some of them are, you know, groups that that you work with or or through people that you directly or you know, there's a developers alliance. There's all these groups that you can join actually often uh for no
cost where you can get involved and you can follow uh the EU ink campaign is actually a great example because it was very organic bottom-up where people joined something online. Uh you know, a lot of it was actually through through LinkedIn. Um but the reality is there are local and national associations that do a lot of very good work. Um politicians are at heart still local. So,
a lot of them will come back here or where you live and it's actually so much easier than you think just to write to them and say, "Hey, I'm a local company. I'm trying to scale up. I have a problem. I'd like to meet you for half an hour and to talk to you about it and to explain it." And often these these politicians can actually try
to help and if that happens enough, then you get the momentum going and that's how EU ink at least got uh written and proposed. A year ago, no one thought this was going to happen. It was an organic way of doing it. Then, the reality is uh there are a lot of things where there's a lot of shared interest between smaller companies and the larger ones. The
larger ones also are very much uh are looking for a very healthy pipeline of startups, uh you know, of companies to invest in, of potential new partners, new businesses, acquisitions. So, there is a shared interest um to a very large degree. So, whenever possible, I'm also advocating for things that don't directly benefit the larger companies, but they benefit a healthier ecosystem. Because even if a lot of
my membership are global companies or American companies, and we can talk about the sovereignty thing cuz it's very interesting. They've invested so much in Europe. You know, for them Europe needs to succeed. You guys need to succeed. Your company succeeding then helps everyone. And that's sort of the shared interest. And you know, on on on sovereignty on this big discussion of what is sovereignty, what is your
own sort of supply chain, what is your own market. I think the most interesting thing for me is not sort of to push these ideas of top-down, you must buy from so-and-so people because that's a very restrictive market where you're not actually building something sustainable because you're not building based on a customer. You're not building based on demand. That's unhealthy. What what is actually healthy is exactly
what you're doing where you're trying to build organic capacity, capability, but where you actually need a market that will encourage you, where you can find better investment, where you can hire people properly, where you can then access another country very easily. Where right now you can't. And so those are actually not that hard to fix. But we need more political will to fix those. And then I
think those will solve some of the bigger bigger issues. If if we do things in a sort of moment of fear based on geopolitics, based on, you know, politicians not liking each other or saying silly things, that's not actually planning for a better future for for business here. >> Amazing. I mean, it's ironic that European Commission itself they're not following their own compliance. It's like they're pushing
for EU tech sovereignty, but they're using AWS as a provider, and they're not even compliant themselves with NIS2, for example, because they just don't see themselves in the scope. So >> [laughter] >> I guess we're running out of time a little bit. Maybe we can have some questions from the audience. No. Well, then I'll ask you once. Oh, okay, >> Otherwise, I have questions. >> I have
plenty. >> I have a question. Uh thank you very much um for a very interesting discussion. Uh but you mentioned AWS um specifically AWS and multiple other American players are opening so-called sovereign clouds on EU soil. Um what do you think about those initiatives? >> I think it's for you. >> Yeah. So, for me, sovereignty is if you want to operate here, you have to follow by
the rules where you are. Uh you know, the reality is you have a lot of sovereign cloud solutions and they need to comply with the local rules. Often, they are partnerships with local companies. To me, that's a net positive for everyone. Uh and the reality is some people want to replace some of the hyperscalers right away, but there is not that capacity. What's important for us is
that you have the ability to choose, to switch, and to build what you need for you. Sovereign cloud solutions to me go into that. So, they're net positive. They will develop more. The market will develop more. Uh but once you start people from being able to choose or the market from being able to choose based on where a company's headquarters is, that's not helpful. And with the
way the international politics world works, there's a thing called reciprocity. And if Europe starts doing that and putting up walls, the walls work both ways, and they will also keep European companies that want to grow in other places out as well. And to me, that that's not a positive way to do things, and that's not how you actually grow uh your capabilities and your businesses. >> That's
a great question, though. >> Yeah. Do we have any more questions? Uh Yeah, we have one here. >> Um hi. Um rather hypothetical question. Like, how do you build compliance that works for both? Like for end customers because compliance is there for a reason, right? Like different different kinds of things. And it's not fair to always talk about compliance as a bad thing because they, you know,
on the other side you have users with their data, with their PII, with the you know, with everything. But yeah, more of a hypothetical question. How would do you build compliance that works and that scales? >> I think compliance should be there and is there for a reason. We're not anti-regulation. The problem is that we need harmonization. So sometimes all these acts, they don't really work together
because some of the points they either contradict, we have different reporting times for the same incident, and under one compliance and regulation, you could be one entity and fall under one scope of responsibility, but then another one applies to you. Let's say a UAI act, let's say you're high risk. But then you also operate in financial services. So in Dora, you'll be something else. So one incident
that can happen to anyone, it can trigger multiple things in multiple uh compliances, and then you have to deal with it all at once. Big companies have budgets for this. They have budgets for legal, they have budgets for PR, for tech investigations. Small companies, they also have to comply. However, when you have the reporting time of 24 or 72 hours, you and it can happen over the
weekend, you just don't have the capacity to figure out what happened, who to report to, and how to actually tell it to your customers because based on some of the regulations, for example, like GDPR, you have to tell your customers that you had an incident before you even know the nature of that incident. Imagine that would be your commercial suicide. You don't have enough time to understand
what happened, and you already need to release the statement. So, if we can harmonize this, that will make life easier for all the companies because we are saying that everyone has to comply, but the ones who the can comply, they're exactly the big tech, right? Because they have budgets for this and startups don't, but they have to follow the same rules. So, either we need to have
scale in effect that applies once you grow, or we need to harmonize this regulation so they actually work together, not against each other. >> But but compliance is good. We want compliance. We want compliance. >> But it has to be in a way that is not destructive to the potential for the business, yeah. >> stable in a way. Like we we like we think it's very important
to have compliance. I mean, we one of our companies started from a compliance point of view. Uh so, it can bring opportunities if you can differentiate yourself from people who are not compliant and you're going to work work with the rules, not against them. But I think the main thing that that that's was difficult for us and Lo can speak to uh is that it's not very
stable. So, it changes very fluid. Uh sometimes you cannot constantly adapt to it because you have to build a business model as well. You have to invest as well. You have to set up I mean, for some clients, you're sending them campaigns for 6 7 years, for example. Uh so, if like the statements change a year later, yeah, that's kind of a a bus kill. So, we
we we we like the compliance rules, but we just have to know what we're going to invest in because investments are not like for our half year or year. >> We just want clarity. We want clarity and clear instructions on how to be compliant. I mean, we all are pro-European tech. We want to, you know, push for pro-European providers. It's just really becomes harder and harder to
operate in Europe and more expensive. And it's very sad to see because based on the survey, we also asked a question like, would you consider to move your headquarters outside of the EU and we gave couple of reasons. Of course, one of them was regulations. And unfortunately, 40% of people said yes and because of regulations. And it's sad and some people said that we already moved the
headquarters. So, we're losing talent, and what we want to change is to actually keep companies here. We have amazing talent. We have the right infrastructure. We can be competitive, but we just need to work together. And that's exactly why we're doing the survey right now, because our voices can be heard, and we'll try everything we can to just amplify that and actually make a positive change. We're
not trying to destroy regulations. We just try to make it easier for us to operate on the >> Hello guys. Sorry. I was just wondering, there's some information being portrayed in the media about the uh single market of the EU. and that alongside with the multi-layered EU reform that uh politicians are trying to push forward. Do you think that this is really the the best way forward
uh that we have currently for EU? the idea of a Europe and a European single market it is very powerful, right? You see it when you cross the border, you don't need a passport anymore when you're traveling. The reality for businesses is that very few businesses have that kind of ease when they're doing something in other European countries, whether it's a physical product, whether there it's a
service. The rules are fundamentally different because each country will take the EU rule, and then they will change it and add on to it and add national things. Sometimes it's a little thing. Sometimes it's to protect an old incumbent sector or industry. Sometimes it's because they want to keep even other European competition out. And so, when you have that, a multiplication of these things in each country
with one file over another. We're close to now a hundred different digital pieces of legislation of of rules that have to be incorporated. Now, they won't all apply to each of your But, if you add in all those things, it means that to actually enter a different market or to raise money from a different market or to employ differently, you have such different rules and that adds
so many costs. So, one of the reasons that we're saying this needs to be fixed is because some of my members are perhaps the only ones who actually have a single market because they've invested and created big entities in each country they take a return from it. But, they there's an almost difference between these companies and then everyone else who's competing we want everyone to be able
to compete better, to raise money in a faster way. Um there are other rules rule changes that you can do on, you know, capital markets, on raising money, on giving equity, all these things. But, the simplest is really letting you have access to the full market. Right? I talk to a lot of companies who come including small ones who come to to Brussels to talk to the
EU politicians who say it's much easier for me to sell outside of Europe from Europe >> and I make more money selling outside. So, that's where I focus. But, then you're missing this big opportunity and you're bringing people actually into Europe. All right? And I think that's an interesting contrast. They want to people want to come here. They want to create here. The quality of life here
is great. I'm an immigrant from Canada here. I want to be here. >> I'm also not from Europe, but I choose to be here and it's like people choose it for the lifestyle choice. We want to live in Europe. It's just unfortunately sometimes companies have to leave. Like three investors from three different European countries would ask a company to flip to Delaware just because it makes their
life easier even though they're European investors. We've seen that happening. So, it's just pragmatic, but it's it's a sad truth. And I think you also mentioned that, right? When we talked that >> Yeah, I mean some of my my friends they are even opening up shop in uh US or outside of the EU. Not to sort of permanently move because they obviously have like their personal lives
here and then their friends and family and everything. But as a business point of view, it's it's for them very attractive to enter the market sort of outside of the EU so they can have like more of a free quicker environment to grow and then they can obviously push back in innovation here once it's legal or if it's legal or it is all tested. >> Uh but
but the hybrid model for them is very attractive. I don't know a lot of people who actually moved permanently because I think everybody is very happy here to live here. But that's not really a part of a business discussion. It's more of a personal discussion. >> Yeah, it's a personal choice for the founders. Yeah. >> Uh so but from a business perspective, like I I spoke to
a lot of them where yeah, they they think it's very attractive and some of them already made >> Are you considering as well? >> Uh yeah, I'm considering as well. Yeah. >> Yeah, I think it's a typical story when like a European company keeps R&D in Europe but then all the commercial activities are moving all the investments goes from the US and we're losing our cap table
to the American investors and then on paper it's still a European company, but in fact our economy does not benefit from it at all. So yeah, very sad. Do we have Yeah, I think we have another >> We have about uh 10 minutes left, so let's make it uh the last couple of >> Okay. >> Uh from your perspective, what are the biggest uh showstopper regulations which
are in place? >> Basically the worst ones. >> The worst regulations? >> I don't I don't know if Mark you you have your point of >> Yeah, I'm in. Do you you have some time? Yeah, they're very specific. yeah, I think it's it started with uh I mean, GDPR was first kind of an enabler but it started to be a big showstopper. I think a lot of
companies they stopped or either went into pivoted into different markets. So that's mainly in the the data and the marketing uh area. Uh think for ecological part which is the other sort of area operate in. Um it's it's enabling the market, but it's preventing innovation because I have I'll have a lot of discussion with also the authorities and the people who approve like a permit and stuff
like And and we can automate a lot of the They have machine learning AI, we have image recognition, we can automate a lot of the field work. Sometimes people have to sit all night in a garden with a little microphone and have to see with their eyes if there's a bird coming and if they note it in a notepad. Like that's what they're actually doing And obviously
you can automate that. Even they can't sit there solo anymore because of security regulations, so they have to be at least two or three people there. So, they're like sometimes when when people are are are changing their garden, they're like three guys sitting in the garden the entire night and for multiple nights during the year because you know there's like breeding season and there's feeding whatever. Uh
so, you have the discussion with them but then we can automate it and say, "Yeah, but is that AI is it 100% accurate?" And it's like, "Yeah, it's not really a question if it's like 100% accurate. Is it more accurate or equally accurate than the people who are sitting there chilling and with with with some Coke and or diet Coke or whatever and they and they they
see something and write it down. Like that's not perfect, you know?" So, we have to be more a bit more flexible uh with with accepting new technologies as well. Don't expect it to be perfect. So, in in in in in in in in in in in that sense it's sort of preventing innovation a lot. And that's really that's something I didn't not expect on forehand, but it's
really a showstopper in ecological market because people are very traditional there. And I understand it's it's the environment, it's nature, you have to be careful, but at least for something you could run it in parallel. Like you you could let these people sit there and you could have the technology on site and you can basically compare but even that is is a long talk. >> I mean
for us from what we've seen in the the and we never targeted any industry specifically, right? So, we just kind of released the research to all the EU countries, to all the founders. What we hear the most complaints about are industry specific regulations, specifically for health tech. We hear a lot of complaints about MDR. I don't know if you're familiar with that, but it's for medical devices.
And that is the majority of companies that operate in the EU for them to take that compliance would eat out all their investment and will probably take 4 to 5 years realistically to obtain. So, most of them actually right now are moving away from Europe right away and a lot are going to Asia as well. And other ones are trying to kind of like operate as not
a medical device, but like more wellness. So, kind of go around that. So, definitely industry specific regulations like MDR is a bus kill and I would say also in fintech we hear a lot of complaints of like PSD2, which is for payments, daughters well and also the way they sometimes contradict or kind of contradict make it more complicated with GDPR. So, like PSD2 for example asks you
to store all the credit card information of the, you know, users for x amount of time and then GDPR tells you not to and the user can request to delete that. So, these small things, once they add up, right? Like you have to deal with multiple regulation at once. If you are operating in an intersection of industries, you get even more. And now of course we get
so many questions about the EU AI Act because it's so not clear, especially for companies that might be high risk. They do not know how much it's going to cost them, what the process should look like. So, that adds a lot of uncertainty and that's the uncertainty that becomes very expensive at the end. >> Yeah. The Yeah, for me I I just really focus on that. It's
the the showstopper thing is really the fact that a lot of the rules don't line up. >> Right? So, different obligations. Sometimes the obligation is literally delete but keep. And either way you could get a huge fine, right? That doesn't work. Then there if you link that into then all the different reporting obligations and often there are multiple ones, but they're just different enough that you have
to do it again. That's a problem and then yes, sectorally. So if you're going to launch a streaming service, the audiovisual media services directive is going to keep you from entering most markets. The AI Act was so bad, even though you know, a little bit more than a year ago it was celebrated as this amazing achievement. Uh earlier this week they already passed huge changes to it
because they realized if you just kept going with the AI Act as it was and it was celebrated, it would kill off a good chunk of AI use or model development in Europe. They need to do more. Um you know, wherever you look, you will find very clear examples and and if we have time after talk, I can, you know, point you to a few of these
things as well if that's helpful. Um the reality is the rules were not written or created with the intention of helping business. They were created with the intention of >> Um and and that's the fundamental difference often to different and other places and then you see it in the application. >> Yeah, in Europe we just like to regulate in the US they just throw money at everything
and see how it goes, right? So very different approaches. Um do we have more questions? I think we have last 5 minutes or so. >> We have time for one more question. >> Don't be afraid this is the best opportunity. >> Is that right? >> So I didn't hear? >> Didn't hear. >> Looks like >> No. >> That's it. Uh then let's do our last question, yeah?
Um if you were to give one piece of actionable advice to policy makers that Daniel can bring home, what would it be? >> Um yeah, is there a way to let them feel more of the pain they create? >> Yes, yes, so please fill in that research and we'll make them suffer. >> I mean, like I think that it's not really a real problem. It's more of
a authority problem, like who feels the pain of what they create as well, because it's not only about how can we prevent failures? It's also about what happens if we don't do stuff, cuz that's also a huge risk. And I think if if there's to be more of ownership of balance uh, for the people who create the rules around it. Yeah, so maybe yeah, I don't know.
What do you think about it? Like how can we give them more pain? >> That's a hard one because they are I think now is the first time where they're actually already aware of the pain. >> The question is whether they're able to move, but to move they will need a sustained amount of of pressure and and examples. And I think that's coming. That's why I think
the research is so good. It continues. Uh, but but you guys contacting people or sending in other things or sending in examples, it actually does help. And right now we are at this moment where the the the European Union is trying to do this of all the rules. Uh, and a lot of business a lot of smaller business is are sending in things now and then trying
to push. And the reality is unfortunately politics is also a relationship business. So having people who can go there and meet them, send in a delegation of founders, that does work, but it can't just be a one-time thing. It has to be regular. And that's always the problem because you have businesses to build, you can't be doing this too much. Um, so I would say looking for
allies, it's also why I'm here because I think it's important and there is a huge amount of mutual benefit. Um, and then uh, politicians are on social media a lot, right? What's the What's the first job of a politician? It's to get reelected. Make noise on social media, make awareness, it actually does have an impact, and it's actually very easy to do, and probably a lot of
you are very good at it. That that that that helps, too, and you don't even have to see them. >> We want to see their faces, right? >> Yeah, yeah. So, I think it Maybe it's good to say as well that I mean, we're maybe bashing, obviously, on certain things that are not good. I mean, in general, we're pretty excited about what we can achieve, and I
think the reason why we're like pushing for improvements because we really believe in that we have like an amazing place on which we can build amazing stuff. So, we really just That's That's eventually the main goal, right? The end The end game that we just become better and we can compete and we win, basically, in the end. So, I think maybe it's good to mention that it's
not all bad. >> No, definitely. >> good things, uh, but it could be better. That's That's definitely true. >> Exactly. >> we're living in probably the best place in the world. >> Uh, we want to make it even better. >> it's because we care, and we're trying to make it better. So, again, if you guys have a moment to fill in the survey, or if you would
like to participate in the more in-depth interview, where you can share your stories, we'll make sure that it goes to the right places. And also, on the 30th of June, we will do a big research release event, where we're going to invite people from Brussels to actually come to Amsterdam, meet the founders, share the stories from our survey, meet them in person, and really kind of like
build that gap, like uh, build that bridge between Brussels and real tech communities, because they do say they want to talk to founders. They have it as a nice PR stand, but do they really talk to founders? I don't really think so, but we'll try to make it happen, at least small steps. So, yeah, we would really appreciate if you could, uh, contribute, and then also maybe
send it to some people for whom it's relevant. I think we're good.
