If a startup wants to reach a similar customer base as a startup in the US it will always have to deal with 50 different markets with 50 different legal systems, 50 different marketing channels, and 50 different social networks. Starting a complete web-based company like Spotify or Soundcloud may still be possible because itunes has paved the way to organize media rights efficiently, but as soon as you touch the bricks and mortar world it becomes a different story. The startups I know were first of all focused on their home country and became international only much later, after building local representations in the different countries, and then they had to deal with the local competitors and became successful in only a subset of these countries.
I don't think you understand how the EU works. You don't have to "deal with... 50 different legal systems" just the one you are based in. That's the beauty of the EU, free movement of goods, people and capital.
You can manufacture a car in Austria and sell it in Portugal without there being ANY barriers, except those imposed in Austria... which is the same legal framework as in Portugal and the rest of EU countries.
The EU economic and trade integration is in many cases more homogenous than that in the US between states.
That's not really true. While there are EU-wide standards for many products and regulations, which can make this job easier, there's not a true single legal framework. Look at Google in Germany for example.
Do not confuse the right and freedom to do business and sell your products/services with lawsuits (not established laws & regulation) that may arise from specific regions. Lawsuits != law & regulations.
In the US, when Google got sued for tracking Safari users when they had opted out, Google didn't have to settle in all US states but only some. This "Germany example" is no different.
"If a startup wants to reach a similar customer base as a startup in the US it will always have to deal with 50 different markets with 50 different legal systems, 50 different marketing channels, and 50 different social networks."
* You don't need 50 markets to get to the same size, you need 5. The population of the just the 5 main Western European economies: UK (63m), German (82m), France (66m), Italy (61m) and Spain (47m) totals (317m) which is more than the US (314m). The GDP per capita in the US is slightly higher ($49k in US versus $41k in Germany, $39k UK, $40k France) but at roughly the same level.
* Under EU laws, you have free movement of goods and mostly (almost) a single legal system covering things like e-commerce.
* Language is not really a barrier. For B2B stuff, depending upon your industry, then English alone is probably sufficient. Translating a product or marketing material is hardly a difficult task these days.
* Assuming by social networks you mean things like Facebook/Linkedin/Twitter, then they are the same across the EU.
Your GDP per capita numbers do not appear to be accurate. There is a substantial difference in the per capita incomes; off the top of my head I think the countries you list are about 1/3 lower (or their per capita has to climb 50% to match the US). This by itself is a big deal when sizing up a market.
It's also worth noting that you can relatively easily reach into the wealthy Canadian market if you're targeting the US; Canada's economy is larger than Spain's.
The numbers you cite are PPP (Purchasing Power Parity) which is not really relevant to this discussion about the size of a market as it weights GDP by cost of items/living etc.
With "social network" i ment the "real" network, not the technology (which is the same as you point out). People in Germany talk less to people in Poland, for example, than people in neighboring US states. Citation missing.
"50 different markets with 50 different legal systems"
The EU mitigates this somewhat, but you do have a point. You can run into the same problems with US states too though; obtaining a license to become a money transmitter is one example that I can think of.
