Creating a pan-European legal entity, the right way

How about instead of scaling up, try scaling-in? Promise superior internal market services and local storage/processing instead of competing on the global square. Kagi's subscription model comes to mind.

The myth of infinite start-up scaling is just that, a myth. We need a more pragmatic, context sensitive startup market, not one chasing scale-up stories.

That works until the American megacorp comes along, copies your business idea and outscales you.

This is a good point. Too much emphasis is placed on conquering THE WORLD (tm). This encourages a mindset of domination in which either you beat them by conquering the world, or join them by becoming an employee. Not everything has to be "global". It also produces a world of centralized services and products instead of flexible ecosystems that can cooperate.

Another benefit of decentralization is resilience to global market forces. As an example, look at Polish economic growth in 2008. It was the only EU member to avoid the recession. Why? Because of a strong domestic market.

A unique strategy (and sign) of the times, let's see how many start-ups are willing to get bought out.