The Real Reason Italy Sucks at the Startup Game

For a long time now Italy has been experiencing political and economical turmoil that would require several drastic changes in order to reboot it. Italy needs a new class of politicians who truly care about the real problems that the country and its people are facing everyday. It desperately needs to reform the educational, tax, and labour systems, as well as a substantial reduction of bureaucracy at every level.

In his famous 1961 inaugural speech John F. Kennedy said to his fellow American citizens, “Ask not what your country can do for you – ask what you can do for your country”. In the same spirit I can’t help but ask myself, what would it take to modernize and restart Italy?

Though easy solutions do not abound, there is something that young Italians can do to greatly help this situation: create startups. Over the past 30 years American startups have generated 44 million jobs. Starting a company is perhaps the most noble act Italians can do to improve their country and their own economical condition, while at the same time helping to create jobs for their fellow Italians.

I know that starting a company is not an easy or straightforward process in Italy. Doing so means facing a labyrinth of laws (plus very high taxes). The fiscal system is inefficient and often rewards tax evaders with a laissez-faire attitude, while showing a cruel persistence against honest small business owners.

It’s also hard because there are virtually no angel investors or venture capitalists. Though parents are sometimes seen as angel investors (of sorts), to some, for providing young Italians with a place to stay rent-free well into their twenties and sometimes even thirties.

The existence of obstacles shouldn’t be a good enough reason to prevent you from trying at all though. When you have very little to lose, because you’re already unemployed (or are not making anywhere near enough to get by), why not try and start something of your own? It’s obvious that without an initial capital, funds, or credit you can’t launch a physical retail outlet or start having goods manufactured for you in China.

Thanks to the web however, it’s possible to bootstrap a company and encounter relatively negligible monthly costs. The only real capital required is knowledge, which is freely obtainable online, paired with the ability to work both diligently and smartly towards a goal.

With rampant unemployment in Italy, particularly in the south, one would expect a huge surge of technical startups in Italy. You’d imagine people staying up until 3 AM in order to fulfil their dream of running their own business. Sadly, these are not the droids you are looking for. Unemployment figures are appalling, yet there are very few self-employed people or entrepreneurs to be found throughout the country.

The real limit is the mentality that most young Italians have.

Risk aversion. Even when there is very little to lose and you’re 20-25 years old and without a family of your own to sustain yet.

Recently a great deal of people from all over the world applied to temporary leave their respective countries to go to Chile, in order to create a startup and take advantage of a $40,000 fund for startups that the country is offering without any strings attached. Americans jumped at the occasion, despite the availability of local funds. How many Italians have gone so far? Very, very few. And yet they are the ones who could truly use – and need to avail of – chances like this.

Fear of failure. Italian society has never come to terms with the fact that failing is an opportunity to grow and try again. If you fail once in Italy, you are often seen as a failure forever (short of doing amazingly well later in life).

In North America it’s pretty much established that statistically you’ll fail a few times before getting it right. Nobody would attach such a negative label to you because you tried to create something of value and didn’t end up succeeding. You’ll be respected far more than timid souls who neither know victory nor defeat.

Real experts are usually people who have failed more than most people and have learned important lessons in doing so. This is true in any field, not just the business world.

Sense of self-entitlement. People in Italy still expect to obtain a long term post office or government job where you’re unlikely to get fired and will remain there for 40 years, just because they got a college degree.

I’ve interviewed several Italian job applicants throughout my life, and it’s not unusual to see them become visibly upset when a fellow Italian wouldn’t hire them over someone from a different country (simply on the merits that we’re both from Italy) – even when they’ve never written a single line of code outside of their university courses.

Fatalism. In Italy there is the belief that your future doesn’t depend on your own efforts, rather that it’s mostly influenced by impregnable external forces. When you are not convinced that you can take charge of your life, it becomes really hard to make the sacrifices and jump through the hoops required to achieve success.

Why work like a dog if you don’t believe in your heart that you can change your life and live the Italian take on the American dream? (I refuse to believe that the real Italian dream is to become a soccer player or a show girl, or to have a unionized job where you can’t get fired no matter how bad you behave.)

The following chart shows the results of some research that was carried out by the the Hoover Institution at Stanford University. As you can see, many Americans, Swedish, and English people replied “no” to the question, “Does success depend on forces outside our control?”. Italians however showed their fatalism, with more than 70% replying “yes”.

Does success depend on forces outside our control?

(By the way, tip of the hat to Fabrizio Capobianco for spotting this image on a slide by Richard Boly.)

I understand that as a whole a strongly catholic country may hold onto the popular belief that everything comes down to “God willing”, and that in many fields corruption and nepotism are the norm, not the exception. However it must be really sad to live a life in which you don’t believe in your ability to change your own destiny. Real change often derives from the ambition and desire to improve one’s situation in life.

Cynicism and envy. In Italy, people tend to ridicule, envy, or be distrustful of those who actively want to create a better future for themselves or to change the status quo.

When Mashape’s founders wrote an open letter to the Italian tech community in which they suggested that they were leaving Italy for Silicon Valley, people mocked them to no end. Many derided them and said they’d be back in a year with their tails between their legs and nothing to show for leaving Italy. What actually happened (as non-Italians might expect) is that they received $1.5 million from some of the largest investors in America, and in the process were able to get more investors to pay attention to wannabe Italian entrepreneurs.

This story speaks of a generation of cynics and discouraged people who not only struggle to produce something of value themselves, but who also actively sabotage others so as not to look incapable or lazy by comparison.

Overall Italians are a smart and (in the technical field) a generally talented group of people. Perhaps Italy will never have its own Silicon Valley, but it has a huge amount of human potential that should be put to good use. Change and innovation in my native country must start from the ground up, beginning with the attitudes and belief system of its youth.

I urge fellow Italians to fight these negative tendencies and stop, once for all, looking for excuses. If you wait for the ideal conditions to come along, you’ll never achieve anything important in life.

All change requires is for people to start taking action and trying for real. After all, just look around at the way Italy is these days: you don’t have a lot to lose. Yet there is so very much to potentially gain in the fight to reshape and transform Italy into the country it truly deserves to be.

[An Italian version of this article is available on Stacktrace.]

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