Rude VC: Regional incubators

Mar 26, 2013
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Friday I had the pleasure of spending the day at Cap Omega, regional-incubatorsthe Montpellier-based incubator of startups sponsored by the region of Languedoc-Roussillon. In conjunction with OSEO, many regions of France organize such events in order to enable the most promising tech startups of the particular region to meet investors and business angels from all over the country.

Although I have come out clearly skeptical of government attempts to replicate Silicon Valley in France, I do endorse such region-sponsored investor/startup meetups as a cost-effective expenditure of state funds.

Why ? Well, for historical reasons, France is an extremely centralized country. The centralization model began with the public sector but spilled over into the business sectors as well, with virtually everything passing through Paris. The old quip that the fastest train connection between Bordeaux and Marseille runs via Paris actually still holds true (think running two legs of an equidistant triangle to reach the third point). Even inside Paris city limits, practically all the VCs and many business law firms have their offices in the (culturally-challenged) 8eme arrondissement; the insurance companies are all in the 9eme, and so on…

This excessive centralization poses challenges for outsiders to rise in visibility. It’s probably the most legitimate reason that French startups relocate to Paris. As I explained in this space last week, the proximity concept is very powerful in creating a critical mass for creative combustion. Additionally, for startups selling to enterprises, the decision-makers of their prospects may be disproportionally based in Paris.

Yet, creativity also happens outside of Paris. In fact, being “on the fringe” in some form or another is often a key ingredient in producing new insights. It is where Clayton Christensen’s disruptive innovators are born. France’s regions are in many ways on the fringe of the mainstream groupthink of the Paris metropolitan area.

Moreover, each region has unique strengths that may be conducive to certain types of innovation. Languedoc-Roussillon, to cite just one example, offers an easy proximity to Spain (and Catalunya), an international community of talented people, some advanced educational and research institutions, and an international airport.

Hence the beauty of these regional meetup conferences is that in one day investors from out of town can obtain a synthetic glimpse of some of the most promising local startups. Region-sponsored incubators have already performed an extensive pre-selection and coaching process, an opinion I trust as they’re well-embedded in the local fabric. So hats off to the fine folks over at Cap Omega for their tireless commitment to promoting the Languedoc-Roussillon region’s startups !

{Disclosure: I happen to be particularly biased toward the Montpellier area for its favorited destination among professional triathletes and for its climate which resembles fairly closely my native Northern California. A West Coast reader of last week’s piece on Silicon Valley reminded me of this tune. Props to anyone who can guess it without searching: From LA to the Bay – what you say – all day… everyday… any damn day. Take a look around, we got the whole world locked down. Going on and on, it don’t stop, won’t stop, can’t stop…).