What they don’t tell you about garage startups

There is more about successful garage startups than just the founder’s ingenuity and hard working. Most articles perpetually regurgitated by monopolistic media and various blog posts try to convince you that exactly only hard working and ingenuity is necessary to create a multibillion international company. I purposely refrain from listing examples, but they are so abundant that they can easily be googled. Even a facebook meme circulates probably repeatedly refreshed by Zuckerman’s robots.

Why however most of these garage startups are located in North America though ingenious and hard working people can be found everywhere in the world? A quick and shallow answer is white supremacy, but more subtle analysis quickly reveals that this cannot be the answer. There are thousands maybe even millions of startups worldwide but only a dozen became multinationals. In Europe those startups are easily out-competed or swallowed by existing monopolies. In Asia almost all of these companies stay at the garage level for ever while in Africa and South America most of of ingenious entrepreneurs encounter difficulties even to create or maintain a garage business.

Some of the reasons have been thoroughly analyzed in blog post by Ivan Raszl that I’m happy to link here. He points out the importance of a social environment that provides wealth, education and security.

It is the affluence that enabled a few geniuses to excel. Millions of people use their garage exclusively to park their car and their spare time to travel. Only a few motivated geniuses abuse their garage for experimenting in their spare time. I think the lack of proper space and time is the most prominent hurdle for successful startups in Africa and South America.

The next hurdle is crime or the lack of protection from it. While it is simple rubbery of typical criminals in Africa and South America, it works less openly in Europe and Asia though rubbery it is. It is rubbery taken to a new dimension which may be called organized crime. What I mean by that is not only the Mafia type found in Southern Italy, but also the various governmental organizations whose bureaucracy is stealing much of the success. And of course these governmental parasites effectively cooperate with existing monopolies that not only fear competition by want to receive their share by a non-friendly takeover. The existence of this rubber schemes in Europe and Asia is why startups are endorsed there but rarely reach international momentous.

As we learned so far in North America only, optimal conditions for startups to thrive seem to exist. Still this begs the question why did only so few recent startups in the United States make it to the wold’s top. Again there are a simple answer and a more thorough one. The simple answer is at the top there is space enough only for a small number of companies. That’s true but if we assume a fair competition in which only these few were the ultimate winners, we would still expect a lot more not so prominent winners. In fact we would expect a pyramid of winners with gentle slopes easy to climb up for newcomers, but what we see is exactly the opposite. The slopes are so steep that it is absolutely impossible for someone new in the field to compete with Microsoft, Amazon, Facebook, or Google.

This leads to the logical conclusion that the remarkable success of these companies was not accidental and cannot ascribed to an outstanding ingenuity, and the second answer is that the unique success of these companies was rather a strategic decision meticulously planned and executed.

For instance, Google’s supremacy is the results of a dot-com bubble burst. Before that Gooogle had many competitors, and it was a vibrant market every bright idea made it to a new search engine, algorithm were quickly copied improved and implimented, all in all a market far from being monopolized. Then bankers entered the scene. They began to hype dot-com stocks. Not only did they encouraged investors to buy such overpriced stocks but also they encouraged founders to create new Internet businesses and sometimes those businesses became rich literally overnight for almost nothing but a shady business plan. Then they let the bubble burst and the marked was purged as only Google mysteriously survived.

Great losses were also seen with Google and the question why they still survived is at least partially answered by Edward Snowden when he revealed the NSA connection of many such big dot-com companies that survived the crash.

Now that we logically proved that the garage startup is just a myth, the question remains why this myth is so resistant and so strenuously perpetuated? The answer is that in fact those statups produce a great share of our wealth and even more important is their share in achieving progress. They are desperately needed even by the parasites who feed on them, and the purpose of my post was not to discourage, but rather to encourage to keep the eyes open to the best conditions for those enterprises worldwide and to fight poverty and parasites that still are the greatest threat to human progress.

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