Can the EU Compete?

In North American tech circles, there's a lot of talk about how Europe struggles to stay competitive. I've thrown in my fair share of critiques, but it's worth noting that some European policy choices—whether unintended or part of a trade-off—have made it tougher for growth companies to thrive there. This has played a role in Europe's slower economic growth compared to the U.S. Back in 2011, the 27 EU countries made up about 21.4% of the world's output, almost neck and neck with the U.S. at 21.1%. Fast forward to last year, and the U.S. has jumped to 25.8%, while the EU has slipped to 17.6%.

Just recently, the European Commission put out a report by Mario Draghi that digs into the EU's competitive position and offers some ideas on how to boost it. What's interesting is how practical the report is—it starts the energy discussion with natural gas and leaves the long-term renewable plans for later. It really sheds light on where Europe stands in terms of competitiveness and how it might step up its game.

To understand how we got here, let's take a quick look at some long-term policy decisions made by the EU and other countries:

First off, wealthier countries outside the U.S. often choose more leisure time as their GDP grows. That means shorter work hours, longer vacations, and earlier retirements. The U.S. is kind of an outlier here. For instance, the difference in GDP per capita growth between Japan and the U.S. can be entirely chalked up to work hours and labor participation. Both countries saw their output per hour grow at about 1.7% annually, but the U.S. has a younger workforce and works longer hours. So, moving toward shorter workdays and earlier retirement might dent GDP per capita, even if people end up enjoying life more.

But when things settle, these two factors play out differently. Working fewer hours cuts down output and probably slows growth, partly because getting better at something often comes from putting in the hours. If you work 10% more, you're practicing 10% more, which helps you get better faster and gives you more time to mentor others. On the flip side, retiring earlier has mixed effects. If people retire at 60 instead of 65, they'll consume less each year—they save more while working and spend less during retirement because their spending habits are already set. The extra output doesn't just vanish; it's saved instead. Over their careers, they'll save more, and their retirement savings will be bigger and last longer. If there are good investment opportunities, earlier retirement could actually boost growth since more output gets invested rather than spent. Over time, you'd see an economy that's more focused on capital than labor, which is something we see in some of the world's most productive economies.

Another issue, especially in Europe, is trying to make the labor market stable at the individual level rather than overall. It makes sense to protect workers from being easily fired—a company losing one person out of 500 isn't a big deal for them, but for that worker, it can be tough. Same goes for landlords raising rents; they can handle an empty unit better than a tenant can handle losing their home. But when laws make it hard to fire people or raise rents, it effectively becomes a tax on offering jobs or housing, and there's not always a subsidy to balance that out. In the U.S., we've more or less accepted these kinds of market frictions.

This ties into another problem: while U.S. immigration policies can be messy, our growth industries are great at hiring highly educated immigrants. Companies like Stripe and Tesla are now worth more than half of the total market value of their founders' home countries. This means a lot of talent that could've built up local companies is instead boosting U.S.-based multinationals, which might not have much to do with their countries of origin.

At the same time, European tech protectionism often looks like punishing successful foreign companies after the fact rather than helping local ones grow from the start. Even rules that seem neutral, like GDPR, end up hitting global companies harder—fines based on global revenue are like an extra tax on companies doing business worldwide compared to those operating locally. Draghi's report gently critiques this, saying things like "while the ambitions of the EU’s GDPR and AI Act are commendable..." The report subtly contrasts this with China's strategy of supporting local companies while making it tough for foreign ones, especially in key areas. China might not lead in extracting certain minerals, but they control over 50% of the processing for cobalt, lithium, and rare earth metals, and they handle all the graphite processing.

One of the report's sharpest insights is how the U.S. has pulled ahead partly due to handling volatility in energy and crucial technologies. Back in the early 2000s, the U.S. was vulnerable to swings in energy prices and global politics. When things got shaky—like with China's rapid growth pushing up commodity prices—U.S. consumers felt the squeeze. This was somewhat balanced by rising asset values, especially in real estate, and financial tools that turned housing gains into spending power. It wasn't sustainable, but fracking turned things around by boosting domestic energy production.

Not many countries benefit from global instability, but as a net oil producer and the world's top military power, the U.S. is better positioned to handle it. Investors looking for good returns with less risk find the U.S. more attractive now than it was 15 years ago, even if the fundamentals haven't changed drastically.

Volatility matters, but so do actual levels. It's costlier to transport natural gas as LNG than through pipelines. Europe was okay with this when Russian gas was plentiful, but that's changed. Now, European gas prices are three to five times higher than in the U.S. Europe has energy-heavy industries like steel, cement, and chemicals, and it also imposes higher carbon taxes. While that's great for the environment, it means they're paying more to essentially shift emissions elsewhere.

The report offers some solutions. Like many in the U.S., they want to speed up the permitting process for renewables and electricity transmission projects. They also suggest easing up on environmental rules that slow down renewable energy projects. One bold idea is to use Ukraine's natural gas storage to build bigger reserves, which could help buffer price swings. They mention providing "counter-guarantees to de-risk gas storage in Ukraine," though it's not entirely clear what that entails. Another suggestion is to form an Organization of Natural Gas Importing Countries so the EU can collectively negotiate long-term gas prices. While this might prevent countries from outbidding each other, it doesn't eliminate price volatility, and long-term contracts usually follow market rates. The EU could buy LNG at variable prices and offer fixed-price contracts to domestic firms, funding the difference with EU-wide bonds—a method they used during the pandemic. This wouldn't make energy cheaper overall, and could even raise costs by shielding users from volatility. But it would spread the impact across the EU economy instead of hitting specific sectors hard, which might help keep important industries afloat.

Surprisingly, the report puts a spotlight on telecommunications. It's unexpected because telecoms don't seem like a huge driver of long-term growth. Sure, we use more bandwidth as we get richer, and smart devices need more data, but the way the report analyzes the telecom sector is intriguing. It feels like a global investor pointing out that Europe could get a great return by reshaping its telecom industry. There's even a chart showing that the industry's return on capital has been below its cost of capital for the past decade, meaning it's been losing investor money, and it's getting worse.

The issue comes down to policy choices. The EU promotes competition in telecoms, leading to many small companies, especially in smaller countries. This keeps prices low for consumers but also means less investment, so Europe ends up offering decent service at good prices but falls behind in innovation. If there's a limit to how much economic benefit you get from more bandwidth, then this policy makes sense. But it also means betting against future advancements. Interestingly, this report didn't really move the stock prices of small European telecom companies, even though there are too many of them. Collectively, European telecoms valued under $5 billion trade at about 6.2 times EBITDA, lower than any big U.S. carriers, with many at even lower multiples. I'll dive deeper into potential opportunities here later this week.

It's a bit of a Kalecki-style argument: business returns can be limited by access to resources and comparative advantages, but profits are also shaped by policy choices. If Europe wants a denser telecom network, it needs to make sure the telecom sector isn't where money goes to waste, which might mean shifting some costs from households to companies.

Out of all the proposals, easing up on M&A restrictions in the telecom sector seems the easiest to tackle. Draghi's suggestions are practical: if the EU is one market, then competition among mobile carriers should be considered across the EU, so it's okay for smaller countries to have fewer providers. If mergers end up hurting competition, regulators can step in after the fact rather than blocking them upfront. Even if a merger means fewer choices for consumers, it could lead to better infrastructure and more R&D, giving people fewer but better options.

The report also highlights some success stories, like the space industry, where European companies are doing well, and defense, where the issue has been more about demand—Europe makes weapons but exports almost 40% of them. Pharma is another area where European companies compete globally, though there's room to grow.

In the end, it's hard to say if these recommendations will be put into action. Defense is gaining traction now, and space has long-term drivers, but both need time. Energy costs are a big concern, but practical solutions that involve a gradual shift from fossil fuels aren't as exciting as going all-in on renewables, even if a fully renewable grid is a long and pricey road. The telecom M&A idea seems the most likely to see quick movement since regulators just need to signal they're okay with major telecom companies consolidating the market. While this wouldn't revolutionize the EU economy, it would show that Draghi's report is being taken seriously.

Mario Draghi has a lot of political clout—he's often called "the man who saved the Euro." At 77, he probably won't be in government much longer, so lending his name to this report is a way to use his influence while he can, similar to how the Volcker Rule outlived its namesake's tenure.

Every country aiming for economic growth has to figure out how to handle the bumps along the way. Reading this report, it seems like the EU has been acting as if those bumps don't exist: relying on Russia for gas, assuming Chinese electric cars won't compete with European ones, and thinking that occasional fines can address the dominance of American tech giants. In the U.S., the federal government and the wealth of the super-rich often absorb these shocks—they have deep pockets and usually take bigger hits during recessions or industry shake-ups. This report is a call for the EU to acknowledge that volatility and uncertainty are real but shouldn't be reasons to stand still.

Learn from the "L"

In leadership, setbacks are inevitable, but they offer some of the greatest opportunities for growth. It’s easy to feel discouraged when things don’t go as planned, but moments of defeat can serve as powerful catalysts for innovation and transformation. As a leader, learning from what doesn’t work can be just as valuable—if not more—than celebrating what does.

Last Saturday wasn’t the best night for us Calgary Stampeders fans. Our Stamps fell to the BC Lions, losing 26-17 in their first defeat of the season. The game was marked by a few moments in the red zone where the team was just yards short of scoring—literally and metaphorically dropping the ball.

While it’s tough to see a team you support fall short, the loss got me thinking about the power of defeat. More importantly, the power of how we respond to defeat. As leaders, we often celebrate the wins. We highlight successes within our teams and chase those moments of triumph. But just as crucial is our ability to lean into the losses and see them as opportunities for growth.

In both sports and leadership, success can sometimes lull us into complacency. When things are going well, we assume our strategies, processes, and decisions will continue to deliver. We stick to what has worked before, and it feels safe. But when defeat hits, that’s when the real work starts.

When we lose—whether it's a failed project, a missed target, or an unexpected hurdle—it forces us to ask tough questions: What went wrong? What did we miss? How can we improve? These moments are invitations to challenge our assumptions, question our methods, and make changes for the better.

To truly learn from setbacks, leaders can adopt several strategies. First, create a culture that normalizes failure as part of the innovation process. When failure isn't feared, your team will feel more comfortable experimenting and taking calculated risks. Second, engage in a post-mortem analysis of failures without assigning blame. Encourage open dialogue, focus on root causes, and identify actionable insights. Finally, use setbacks as an opportunity to pivot. Don't just bounce back—shift your approach, update your playbook, and demonstrate resilience by adapting faster and smarter than before.

The Stamps have a bye this weekend, but they’ll be back stronger when they face the Winnipeg Jets next week. They’ll learn from their loss, adapt, and come back ready for the challenge. And no matter what happens, I’ll be cheering them on.

As we move into the last half of the year, I encourage you to reflect on the "losses" you and your team may have experienced recently. What are these setbacks teaching you? How can they inspire new strategies and approaches?

The season isn’t over. Whether in football or leadership, every setback is a chance to rewrite the playbook.

Discover your Ikigai

 “Ikigai” is a Japanese concept that translates to “reason for being” or “purpose in life.” Rooted in the Okinawan culture, where people are known for their longevity and happiness, ikigai is believed to be a key factor in living a fulfilling and meaningful life. The idea is that everyone has an ikigai -something that gives them a reason to get up in the morning and face the day with enthusiasm. It’s the intersection where passion, vocation, profession, and mission meet, guiding us toward a more purposeful existence.

Inspired by Mark Manson’s framework to find your life’s calling, this exercise simplifies the search for your own ikigai into four easy steps. In just about 20 minutes, you can start to uncover what truly motivates you and how you can align that with what the world needs, what you’re good at, and what you can get paid for.

Step 1: List What You Love Doing

Grab a pen and paper and jot down everything that brings you joy, big or small. Think about the little things, the activities you enjoyed as a kid, hobbies, or even the random moments that make you smile. Be specific. The more detail, the better. Bonus points if you include things you love that most people don’t!

Step 2: Identify What You Could Get Paid For

Look at your list and start crossing off anything that probably won’t pay the bills (unfortunately, “eating tacos” might not make the cut ). The goal here is to be realistic but also to recognize just how many things you actually enjoy.

Step 3: Pinpoint What You’re Great At

Now, look at what’s left and ask yourself, “What am I better at than most people?” Consider what your friends, family, or coworkers often turn to you for help or advice on. This is all about recognizing your strengths, even if you’re still working on some of them. Cross off anything that doesn’t really apply.

Step 4: Determine What Benefits the World

Finally, circle the things that can make a positive impact on others. It doesn’t have to be something huge-small contributions matter, too. Cross out whatever doesn’t fit this criteria.

What’s left should be a powerful combination of activities that bring you joy, are financially viable, align with your strengths, and can positively impact the world.

Why It Works

This exercise helps you find the intersection of four key areas:

• What you love
• What you can get paid for
• What you’re uniquely skilled at
• What’s good for the world

When you combine these, you’ll uncover your personal ikigai — a unique purpose that gives you an edge because no one else can be you. But discovering your ikigai is only the beginning. Living it has a cost — it requires effort, dedication, and sometimes struggle. There will be moments when it feels difficult, frustrating, or even painful, and you may be tempted to give up. But if you stay committed to your ikigai, you will grow wiser and more resilient. Over time, you’ll appreciate your life more deeply, knowing you’ve given your best to pursue what truly matters.

As Naval Ravikant says, “No one can compete with you on being you.”

Building Trust, Belonging, and Purpose: A Leadership Roadmap

In 1943, Abraham Maslow introduced the concept of the Hierarchy of Human Needs, explaining how our behavior is driven by our needs. At the core, we seek food, safety, and warmth. As those basic needs are met, we yearn for love, esteem, and ultimately, self-actualization—where we strive for growth, fulfillment, and reaching our potential.

Leadership is a lot like this. Just as humans move through stages of needs, leaders must also progress through certain layers of development to truly make an impact. Here’s how Maslow’s framework applies to leadership and how you can climb that hierarchy to unlock your full leadership potential.

1. Personal Mastery: The Foundation of Leadership

Your leadership journey starts with personal mastery. This aligns with Maslow’s physiological needs. At this stage, leaders need to develop the core skills to excel in their roles. This is about being competent in your industry and constantly investing in self-improvement. Whether you're leading a team or working strategically, the foundation is building mastery in leadership and self-awareness.

You must understand your strengths, weaknesses, and motivations to grow. It’s about being honest with yourself and committing to continuous learning.

Action Steps:

• Master the core skills in your domain.
• Keep deepening your expertise and knowledge.
• Embrace self-awareness and seek feedback.

2. Building Trust: The Cornerstone of Team Stability

Once you’ve established personal mastery, the next level is fostering trust. Like Maslow’s safety needs, trust is the foundation for a secure and stable team environment. Without it, teams fall apart.

Building trust is about creating a space where people feel safe to voice their thoughts, take risks, and hold each other accountable. Patrick Lencioni’s “Five Dysfunctions of a Team” highlights that an absence of trust can cripple a team’s effectiveness. Your job is to ensure your team feels secure enough to collaborate openly.

Action Steps:

• Cultivate an environment of psychological safety.
• Encourage open dialogue and transparency.
• Lead by example through authentic communication.

3. Fostering Belonging: Creating a Connected Team

Next, leaders must foster a sense of belonging within the team, aligning with Maslow’s social needs. Humans are wired to connect, and as a leader, your role is to build community and collaboration.

Your team needs to feel valued, not just as employees but as people. When individuals feel they belong, they’re more engaged, motivated, and committed to the organization's goals. Promote inclusivity and celebrate diverse perspectives to strengthen this sense of belonging.

Action Steps:

• Promote inclusivity and celebrate the diversity of ideas.
• Create opportunities for team bonding and collaboration.
• Build a “one-team” mindset to align goals and efforts.

4. Recognition: Fuel for High Performance

Recognition speaks directly to Maslow’s esteem needs. Everyone wants to feel appreciated for their efforts, and as a leader, you’re responsible for creating a culture where contributions are acknowledged.

Recognition isn’t just about rewarding success—it’s about motivating your team to push further. Publicly celebrate both individual and team accomplishments and provide consistent feedback that helps people grow and feel valued.

Action Steps:

• Regularly recognize both individual and team achievements.
• Encourage your team to take on bigger challenges.
• Provide meaningful feedback to keep your team on the right path.

5. Vision: Leading with Purpose

At the top of Maslow’s hierarchy is self-actualization—the pursuit of purpose and meaning. For leaders, this translates into providing a clear, compelling vision. This is where you challenge the status quo, inspire innovation, and guide your team to realize their full potential.

Leadership at this level is about more than just running a team. It’s about giving your people a sense of purpose. It’s about painting a picture of the future that inspires them to contribute at their highest level and helping them see their place in that vision.

Action Steps:

• Develop and communicate a compelling vision that inspires.
• Encourage innovation and risk-taking.
• Foster a culture of purpose, meaning, and impact.

Leadership isn’t static. Like Maslow’s hierarchy, it’s a journey of continuous growth. By mastering yourself, fostering trust, building belonging, recognizing achievements, and leading with vision, you can create an environment where you and your team can thrive. Aim high, stay grounded, and lead with purpose.

The Quiet Revolution: Authentic Leadership in a World of Noise

We owe a lot to our ancestors. Behind each of us is a lineage of hunters, gatherers, warriors, and survivors. Their skills helped them endure, and those traits still influence us today. But some of what we’ve inherited can lead us astray.

Our instincts, shaped long before civilization, can override logic. For example, we often gravitate toward taller or more confident leaders, assuming they’re more capable. This can lead us to mistake style for substance. How often does someone win leadership simply by saying the right things, while real competence takes a backseat?

If we’re not mindful, we fall into these traps. We focus on appearing in control instead of actually being effective. Over time, we polish our image, but the real skills that matter get left behind.

The trap of appearances

As a leader, it’s easy to feel vulnerable. You want validation because so much of what you do goes unnoticed. Good leadership is often invisible, rooted in the long-term, not flashy actions. And when the going gets tough, it’s tempting to chase recognition.

But you’re not leading for applause. You lead because it’s the right thing to do, and that’s what matters. Leadership is about results measured over the years, not in quick wins or daily praise. Chasing external validation can lead you to measure success with the wrong metrics.

Embrace vulnerability

It’s uncomfortable to look foolish, especially as a leader. It can feel like you’re losing credibility. But the truth is, those moments where you admit fault, ask for help, or don’t know something are incredibly valuable.

Each of these moments compounds, making you a better leader over time. The small risks you take to look a bit silly allow you to build wisdom and experience. If you can stomach these short-term hits to your ego, you’ll unlock a deeper understanding that will serve you and your team in the long run.

Leaders don’t just theorize—they jump in, make mistakes, and learn. Those who avoid looking foolish often avoid growth. And that’s a far greater loss than a moment of embarrassment.

Set the tone for growth

As a leader, you set the tone for your team. When you embrace discomfort and pursue improvement, you inspire others to do the same. This creates an environment where people feel empowered to grow and take risks.

You won’t always get recognition for this, but that’s not the point. You’ll get something far better: a team that trusts you and thrives under your leadership. Watching them reach their potential will be far more satisfying than any superficial praise.

Drop the ego, build real trust

This week, drop the ego and be real with your team. Forget about trying to look perfect or always being right. Instead, show up with honesty and let people see your true self. That’s what builds real trust and drives progress.

People aren’t paying as much attention to you as you think—they’ve got their own problems. What they will notice, though, is whether you know your stuff and can make the hard calls. You can’t fake that, and that’s what really matters in the end. So, stop chasing empty praise and focus on growth. No matter what happens, you’ll know you gave it your all.

Embracing the Beginners Paradox

"I think it will start poorly, but who knows how it will end." This quote encapsulates a fundamental truth that often goes overlooked: the beginner's paradox.

The idea is simple: to achieve greatness, one must first embrace the discomfort of being a novice. Every expert, every accomplished individual, began their journey as a learner. It's those who not only acknowledge but embrace this initial stage who are most likely to succeed.

The feeling of being a beginner, often accompanied by embarrassment or self-doubt, can be a powerful catalyst for growth. It fosters a sense of curiosity and a willingness to learn. Think of a child exploring the world for the first time; their excitement and enthusiasm are boundless. Similarly, those who approach new challenges with a childlike wonder are more likely to thrive.

Embracing the beginner's paradox is more than just accepting your limitations. It's about recognizing that failure is an inevitable part of the learning process. The path to success is often paved with missteps and setbacks. Those who can navigate these challenges with resilience and determination are more likely to achieve their goals.

So, the next time you find yourself feeling inadequate or embarrassed about your lack of experience, remember: it's a sign that you're on the right track. Embrace the beginner's paradox and let it fuel your journey towards greatness. As the quote reminds us, "I think it will start poorly, but who knows how it will end."

Mastering Cycle Time

In my years of experience, I've come to realize that cycle time governs not just the speed of execution but also the satisfaction of a team. It's the heartbeat of organizational efficiency, and mastering it can transform your company's performance.

I've seen it time and again: as companies grow, they build processes to keep different parts aligned. But these processes often break down at scale, becoming slower and more cumbersome. This shift pushes teams from being proactive to reactive, undermining their ability to build conviction in decisions and threatening overall cohesion.

So, how can you improve cycle time?

I've found that cycle time is primarily a function of vertical leaps in discussions and the number of people involved at each level. The most impactful change is to push decision-making down. We're not aiming for a true "bottoms up" culture, but rather one of strong local leadership. This reduces vertical leaps and accelerates decision-making.

Senior individual contributors should own more decision-making. More senior managers should lead smaller teams. I believe performance management should focus on "return on investment" rather than "absolute impact." This approach minimizes the slowdown caused by management overhead.

When vertical leaps are necessary, I've seen great success in escalating early and often. Assigning a Single Threaded Owner for critical areas - someone 100% focused on the task - can significantly reduce latency in escalations.

I applaud the instinct towards inclusion, but I've learned that if every discipline is in every meeting, execution suffers. We need representation, not direct inclusion of everyone. I've found that leveraging roles like product managers to represent multiple perspectives can be highly effective.

To avoid repeating cycles, I've found it's crucial to make decisions more durable. In my experience, basing decisions on demos and prototypes rather than docs and decks leads to more concrete and lasting choices.

I've observed that most companies suffer from excessive parallelization and insufficient prioritization. Doing less, but with better focus, can dramatically improve cycle time.

Identifying critical stakeholders early and keeping them informed is vital. I've seen too many projects derailed by late-stage input, so sequencing involvement is crucial.

While good processes accelerate progress, I've learned they need regular updates. Be vigilant about retiring or updating processes as your organization evolves. In my experience, the cost of a bad process far outweighs the benefit of a good one.

Focusing on strategies for improving cycle time isn't just about speed - it's about transforming your team from reactive to proactive, from hesitant to confident. I've seen firsthand how mastering cycle time can boost team satisfaction, enhance decision quality, and drive organizational agility.

Remember, the goal isn't to work harder, but smarter. Start implementing these changes, and you'll see your team's effectiveness and satisfaction soar. In today's fast-paced business world, mastering cycle time isn't just an advantage - it's a necessity for success.