Six Lies French Entrepreneurs tell about France

European StartUp Scene


This article is the opinion of the writer and no one else involved with The Rude Baguette.
Last week, Betabeat’s Adrianne Jeffries published an article entitled “French Startups Take Refuge in New York” – you can imagine how interested we were in this. The article consisted of an interview with prominent New York Entrepreneur Ilan Abehassera, the French native who founded Producteev. Ilan Abehassera, who also makes occasional appearances in a video segment for FrenchWeb called Pomme-i, tells Betabeat that the USA “have much better entrepreneurs than in France.” 

*gasp* Stop the presses!

….Seriously, stop the presses. The article mentions exactly four New York Startups with French founders: ProducteevFreshPlanetDashlane and Totsy – four French startups does not an exodus make. My graduating high school class has gone on to start more startups than that! You see, the article makes its most important point in the first few sentences, when it disqualifies Ilan as a judge of the French startup scene: he has been in the USA since 2004. That’s pre-twitter, when Facebook was sweeping college campuses, and when Myspace wasn’t owned by Justin Timberlake. Ilan is not a French Entrepreneur – in fact, even his personal website is called NYC Entrepreneur. This is not to say he’s any less incredible – he’s done a lot with his company, and has served as an inspiration to many French entrepreneurs looking to go west – but he’s about as French as Jeff Clavier in the startup scene.

Six lies Ilan tells in his Betabeat article

  1. “France is not a country where they really promote entrepreneurship” – Sarkozy appeared last December at the opening of Google France’s new building in Paris, during which he gave a one hour press conference, and talked about how entrepreneurship was the future of France, and how the French needed to stop being so risk adverse. Later that week, he invited the technorati of LeWeb to the Elysée (read: French White House), where he gave a similar talk. The Paris, the Ile-de-France, and the larger French government provide grants to French startups, as well as financing events, co-working spaces, incubators, and accelerator programs. The French government is currently considering a project called SOHO 2014, which would create nearly 100 offices within downtown Paris, and would also provide housing to the companies working there. So yeah, France is not really promoting entrepreneurship.
  2. “Starting a company in France, it takes a month and a half.” – Perhaps this was true when Ilan lived in France before 2004; however the wonderful lawyers at Morgan & Lewis would beg to differ. Yes, it still costs roughly 1200 euros (+ initial capital investment and lawyer fees) and takes 7 to 10 days to create an SAS, but neither this nor a theoretical ‘month and a half’ wait is a big enough deterrent for an entrepreneur starting a tech company.
  3. “…high taxes…” – You will pay higher taxes in France than in Delaware or Ireland, where most American companies host their European headquarters; however, I have been told by several entrepreneurs that startups can wait 18 months after filing for incorporation to start declaring their financials (feel free to call me out on that). In addition, these high taxes are the same high taxes that allow entrepreneurs in France to live off of a 70% unemployment salary for 18 months after they are let go from their company. What goes around comes around.
  4.  “…small pool of hiring talent.” – For a long time, France has had trouble retaining its talent pool, but there is no doubt that France puts out some of the best developers in the world. The CEO of a 12-person development firm in Strasbourg told me that Square offered to relocate his entire team to San Francisco to work for them; he told them no; he loves the hot wine too much. The point is, there was a time when developers fled to the Silicon Valley, when they were treated less like worker monkeys and more like engineers. I think France has paid the price for this and has learned from its mistake; good talent is being paid better everyday, and as that number starts to equal out with salaries in the US, the incentive to go west will diminish.
  5. “If you don’t get along with someone you just hired and it is often the case, there is no way you can let him go. He will tell you basically, ‘I will stop working, I will leave every day at 5 p.m.,’ and you can’t have nothing to do. If you fire him, he will put you to court and he will win.” – well, unless of course, you have a periode d’essai (“trial period”) written into the contract (which is the case ~100% of the time), which allows you to let go of an employee with little to no notice for the first three months. Oh, and you can also request to renew the trial period for an additional three months, legally – but you know, if you suddenly hate your employee after six months, well then, buddy, you’re S.O.L.
  6. “You do have innovation, but like, just name one French startup that you know. You can’t!” *takes deep breath* Vente-Privee, Criteo, Comuto, Dailymotion, Netvibes, Kwaga, AllMyApps, Shopmium, Super Marmite, Balloon, BuzzCar, JolieBox – oh, and that’s just in Paris. You were saying?

The points Ilan makes represent France back in 2004 – that’s an easy argument to agree with – but he’s doing his country a disservice by standing on a soapbox and proclaiming that’s still that way today. I was surprised to see that the FrenchWeb even ran a story on the same subject one day later. The companies he mentions are great companies, he is an intelligent entrepreneur, and New York is a great city to do a startup, but these facts don’t line up to an exodus to New York.  I was happy to see that Sam Bessalah, a loyal Rude Reader, was first to comment on the article, though he may have gotten a little too RUDE in his comment.

C’mon Betabeat – can we get some journalistic integrity up in this scene?

I think the article is indicative of a bigger problem; the fact that this was able to run. The title sounded catchy enough, the argument had the standard three examples, and it featured someone from a big enough company that their opinion is validated. I don’t like to cut down journalists, but Adrianne Jeffries put so little of an effort into writing the article that I was tempted just to ask her to send the two email exchanges she had with Ilan over to me instead. Current news sites like Betabeat have their writers writing 4 articles a day – how much investigative journalism can you actually do when you have to put out 20 articles a week?

The Loic of the East

I get what Ilan is trying to do – he’s trying to become the Loic of the East. It’s smart. I did the same thing: you play the foreigner card, and use it to get your voice heard. It won’t make up for a lack of talent, but it will open doors that would otherwise be closed. Ilan has a group, New York French Geek, and he’s doing a little comm. about it, in order to get Frenchies in New York and France interested in it. Ilan made the mistake, however, of burning the very bridge/card he was playing at the same time. “Not many have taken notice but NYC has indeed become de rigueur with us French tech geek entrepreneurs,” – Perhaps no one has noticed, because it’s not true. I wonder what Loic le Meur, Jeff Clavier, Philippe Jeudy, Benjamin Renaud, Phillippe Bossut, Bertrand Diand and Miguel Valdes Faura would say about it?

19 Responses

  1. Fred Destin

    Wow you manage to turn this into a debate on journalistic integrity ???? If you think we don’t Need more flexible labour laws, a better legal framework, more engineering talent to hire etc in Paris, you are sadly deluded. Better focus on what can be done to improve the ecosystem than shoot the messenger.

    • Olivier Issaly

      Actually I agree, French labour law are not that flexible compared to other countries. But I am so bored reading this is so much an issue for start-up.
      The reality is that if you manage your human ressources rigorously, this is not really an issue. From my point of view and experience, it just forces you to be rigorous in your management, and this is not the least competency you expect from founders. 
      Again, there are some law that can be boring even for rigorous manager, but way less than what we can read in this kind of common rant about France…

    • Fred Destin

      I agree fully. There are ways around the law. But it should not a required core expertise of early stage managers to know the runarounds…. They should be building/selling product. It also makes it much harder to sell companies because foreign acquirers are nervous about acquiring French businesses for exactly those reason. Trust me I have been there

    • Olivier Issaly

      I don’t even mean to circumvent the law. Just use the tools the law
      provide, especially for firing someone. For this kind of issue clearly
      the law & legal precedents do not tolerate amateurism. You must
      handle issues each time they raise with the proper tool, you can’t wake
      up a morning 6 months later and decide “enough of this person”…
      I agree this bad image probably hurts us for international transaction, I
      don’t have this experience but I can imagine unfortunately. But having
      french entrepreneur progagating false idea like ever ranting it’s
      impossible to fire in France is counter-productive. We should rather
      explain the contrary: if a french company succeed with this constraint
      of labour law, they’re more likely to have a strong/rigorous management
      than in other country, aren’t they ? 🙂
      Regarding early stage manager, I experienced that (I had not even
      previous corporate experience as employee before). I get your point, but
      if founders/management aim to build a great/big company, sooner or
      later they’ll face the management issues. What is definitely needed is a
      good consultant on HR/labour law so you can focus on product and learn
      also to manage rigorously. But it has a cost not all start-up may
      afford…

    • Liam Boogar

      Fred, the article is not meant to be an attack on journalistic integrity – I was merely pointing out that the article reads like a cut and paste of an email exchange.
      The point is not that these things are all fine and dandy – but it’s the same recycled ‘France is hard” message. I highly doubt that it’s easier for a startup to move from France to the USA, take care of Visa and legal requirements, emerge into the country’s culture and adapt their product and sales strategy to the new cultural preferences – all that instead of adhereing to more difficult labor laws?
      French startups are building a tougher skin – and what used to be a hurdle is slowly turning into a speed bump. If learning how to deal with the legal system is a barrier, let’s make it more easy for people to learn this information by talking about it than constantly suggesting that French startups move to the US. How many extremely successful startups started in France and moved to the US? Are they really doing that much better?

  2. Olivier Issaly

    About point #2, it took us half a day in 2005 to start a company, and less than 100 euros (plus the capital you want, 3k€ for us at that time but it can be lower)). Just buy standard corporate status for an SARL at the “Chambre de Commerce”, take an hour to register, and go back working on your product. You’ll have time later to refactor your legal document if needed, when you actually have a good product/growth…

  3. David Bruant

    About point #5: ““If you don’t get along with someone you just hired and it is
    often the case, there is no way you can let him go. He will tell you
    basically, ‘I will stop working, I will leave every day at 5 p.m.,’ and
    you can’t have nothing to do. If you fire him, he will put you to court
    and he will win.””
    => Additionally to the trial period Liam mentioned, there is also short term contracts (CDD). You don’t have to hire anyone for an unlimited period (CDI).
    And last advice: be careful about who you hire!
    Unlike what the misleading expression “human resources” is suggesting, humans aren’t a resource like a printer. If you’re being a dick, then yes, people will be dicks to you, duh!
    If you were being careful about who you hire and not being a dick with who you hired, it would probably be less “often the case” that you don’t get along with someone you hired and that you want to fire them.
    Hiring is harder than choosing a printer. If you don’t understand it, you’re in a bad situation, regardless of the labors law in the country you’re in.
    Moreover, changing an employee is hard and takes resources, because the new employee does not have the knowledge and experience the previous employee had. The time spent to adapt is time the previous employee didn’t have to spend.
    @Holman (github) has an excellent presentation on the topic: http://zachholman.com/talk/scaling-github
    Content of one slide:
    “We’re at 56 employees, We haven’t lost one, This is a huge, massive competitive advantage”.

  4. Ilan

    Liam,
    First, let me start by saying that even though I left France a long time ago, I am still tightly connected to the startup scene there, and I am friends (yes, real friends) with a bunch of prominent french startuppers.
    I am nobody to give a judgement on France’s politics about startups and entrepreneurship, so most of my arguments are actually coming a lot of endless discussions I had with them along the past 3/5 years. My point definitely isn’t that we don’t have fantastic entrepreneurs in France, because we do, and I am not only thinking about the big names in Tech that we keep mentioning over and over (Vente Privee, Meetic, PriceMinister…), I am talking about the new generation of tech entrepreneurs emerging in France (you mention some of those startups in #6).
    Most of them are brilliant, they really are. But bottom line, really few of them end up building tech giants. Why? Because of some of my points. I love France, and I wish this can become a fantastic country to start a tech company (not talking about other industries), but it still has a long way to go as Fred Destin says.
    Some of what you describe as “lies”, are actually incorrect, so there we go :
    French startups in NYC : Those 4 that she’s quoting are the most well funded ones I guess. But I know many others: Odealarose, Peerform, LesHoraires, Topi… And I am meeting with a bunch of others every single week. She probably could have interviewed other entrepreneurs though. Agreed on this.
    #1 : Come on, do you really believe that France promotes entrepreneurship, and has been doing so for a while? Pdt Sarkozy is hosting geeks for LeWeb, and is announcing his willingness to promote entrepreneurship 6 months before the presidential campaign, makes France a pro-entrepreneur country? Really? France is a country where it’s still much easier to be an employee than an Entrepreneur. They do offer grants like Oseo and others, which is a fantastic initiative (that we don’t have in the US btw), but on a day to day basis, being an Entrepreneur in France is tough. 
    #2 : Like you said, it differs. I’ve witnessed all kinds of situations, but it seems to be a rather longer process that anywhere else in Europe still. As a point of comparison, incorporating a company in the US, takes 30mns online on MyCorporation.com
    #3: I was talking about taxes on salaries. It was taken out of its context. A talent in France is very expensive.
    #4: small pool of hiring talents, never said that (we talked on the phone for this interview, so tough to remember everything), and that’s not true. France is full of fantastic engineering talent for example. For the record, almost all of our engineers at Producteev are French.
    #5: Again, sorry, but you know it’s not true Liam, otherwise you don’t talk to enough entrepreneurs in France. Getting rid of bad employees is almost mission impossible in France. Trial period… Come on. Isn’t it easy to fake it for 3 months to get your CDI? This is the biggest entrepreneur’s pain IMHO.
    #6: Again, out of context. I actually asked the question to the journalist if she could mention one French tech startup, and she couldn’t. Not my fault. And among those startups, some are indeed doing well. It wasn’t my opinion, just a question to a US journalist.
    The Loic of the East: I do admire what Loic has accomplished here in the US, but first, I’m just on my first startup and don’t have any success under my belt yet, and second, everything I am doing communication wise, is to promote my company (not myself, not saying Loic is btw), and to help other French startuppers better understand the ins and outs of the US market, because I’ve gone through this.
    PS: Published this comment on my blog as well : http://startupzz.com/how-is-it-to-be-an-tech-entrepreneur-in-franc

    • David Bruant

      “Getting rid of bad employees is
      almost mission impossible in France. Trial period… ”
      => Seen my comment?
      How come you hire “bad employees” in CDI? Why don’t you hire in renewable CDDs? If you don’t trust people, don’t give them the opportunity to sign a contact legally requiring you to keep them. Maybe it’s just me, but I have the impression it’s just common sense.
      Hiring is hard. Take the time to know if someone is a good fit for your company.
      How come Github has 56 “good” employees (source: http://zachholman.com/talk/scaling-github) without firing any and you seem to have recurrent issues with hiring (“it is often the case”)?
      Maybe you should just reconsider how you hire instead of complaining about how hard it is to “get rid” of employees.
      Regardless of legislation constraints, hiring is an act of trust, it’s not something you can do as lightly as choosing an ISP provider. Unlike most things, employees are not resources you put money into so that they create some value. They CARRY the value of your company.
      If your entire office burns down, you can find another place and start over with new people pretty quickly. I’m not sure it’s that easy if all employees leave at once.
      “Come on. Isn’t it
      easy to fake it for 3 months to get your CDI? This is the biggest
      entrepreneur’s pain IMHO.”
      => I’m in a small company where I’ve recently been hired. Two new guys are joining the tech team soon. At no point we’re afraid they’ll “fake” anything. They are just good at their job, they are motivated by the company project.
      Maybe hiring is just considered differently.

    • Sylvain Gendrot

      Honestly, I’m boring to hear “it’s toooo hard to launch a company in France, it’s tooo complicate”.
      Because it’s easier to develop if my room is in NY and not Paris ???
      Because it’s easier to sell something if i’m on the 5th than rue Rivoli ??
      Because it’s easier to defeat my competitors if i’m launch my product from NY than Paris ??
      I don’t believe, but if it’s true tell me, I move to NY !!
      I agree the french laws are complex, but it’s the problem of my lawyer, not mine.
      It’s complex to fire someone, but with a lawyer it’s easier. But my real problem it isn’t fire the bad guys, it’s hire the genius.
      For the flexibility, you can “hire” freelance. It’s different than hire someone and fire him one month later, but it’s work !!
      But anyway, forget it. I have just one question:
      I use Producteev since a moment and I have a problem. In the account page, when a click on language, I just see English ??? You’re french, but Producteev is in english …. may be, I say may be, the real problem in France isn’t what you say but our language … the world speak english but we speak french …. damn, I’m remembering something, Rude is in english not in french …

  5. Marc Brandsma

    Oh gawd!
    Another transatlantic controversy. I remember when Loic Le Meurt did the same on purpose rant against France (was it a year ago?). Pointless.
    If there are structural reasons why France can’t produce billion dollars companies that are specific to the country, then you should observe many of these high-flying birds in the skies of other european countries. Unfortunately, there are none. Lack of european champions in internet/software/whatever is not country specific. Get that right, Ilan. And don’t come back with Skype, Spotify and MySQL, yawn…
    As regards the entrepreneurship climate in France, there are good and bad things. Sure, we would occasionally dream of an ecosystem where you can hire/fire at will and get access to smart capital just by asking. Would that make more successes? No. Not a single additional one.
    There are deep roots to the discrepancy between Europe and the USA when it comes to entrepreneurship. Main one being that the USA have 15/20 more years of accumulated experience acting as a strong competitive advantage. And there’s nothing you can do about that. They’ll always be ahead of us. All buyers of high-tech companies are from the USA. Want more proof?
    The best we can do is to play our advantages: more educated workforce, lots of creative power, better sense of collective mindset, incredible depth of historic background, aso. Turn all this to purposeful goals like preserving our environment and having a better, meaningful and longer life, and may be Europe will surpass the USA.
    That said, who cares about this BS?

    • Zsalloum

      Actually Loic is or at least used to be very vocal in criticizing the french startup ecosystem and gov policy. I remember the thing you talked about, I guess it was in the Leweb 2009.
      But he is not the only one,  Marc Simoncini attacked the system too, even Christine Lagarde (minsiter of economy at the time) criticized the system

  6. Nicolas Metzke

    There is a lot of talk about the labor laws and the firing problem in France in this trail. I think it misses two important points.
    #1. La rupture conventionnelle
    No doubt that the laws are strict and made to protect the employee, but don’t think that it’s significantly different in Germany, the UK, Italy, the Nordic countries. Since a few year France has a new law that allows a termination of a working contract if both parties consent to it (la rupture conventionnelle -> http://www.travail-emploi-sante.gouv.fr/informations-pratiques,89/fiches-pratiques,91/rupture-conventionnelle-du-contrat,1208/la-rupture-conventionnelle-du,8383.html).
    I don’t know how many people know about it, but this law is useful for small companies who don’t have the resources (money, time, knowledge, …) to go through a long firing process. It also creates a legal frame onto things that happen on a day to day basis anyway, when both parties agreed to separate, but the employee does not want to miss out on his unemployment rights. Before that law you had to strike some kind of deal and hope that nobody would dig into it afterwards.
    No reasonable entrepreneur wants to fire someone anyway. But whether you did a hiring error or your business doesn’t develop as planned, those situations happen, and this law is good as it makes the separation process easier and grants the fired employee full protection. Been there, done it. Trust me.
    #2. The cultural issue
    Sometimes it seams to me as fighting for your severance pay is a national sport in France, coming right after football and rugby.
    By default the public opinion in France is that companies are bad (yeah, they are making too much profit that is not distributed in fair way) and the employee is good (unrelated form his professional performance; measuring performance doesn’t mean much anyway, right?). So when you’re on your way out, getting fired, and if you’re not agreeing mutually to it (see point #1 above), then many people I have seen in France develop an incredible energy to fight for their severance pay. Sometimes you wonder why they never showed so much dedication in their job, as they can unfold in this process. Instead of looking towards the next possible professional opportunity many people look backwards trying to maximize the money they can claim from the soon-to-be-past employer. They need this money because it’s likely that they don’t find a job very quickly. This is a cultural phenomenon I have seen in France that I did not see in any other country before.
    This makes the entire firing process very painful for everybody. It certainly is not a pleasant situation for the employee, but it also is a real obstacle for the company and everything but a pleasant exercise. Hiring the right talent is already very difficult for a small company, and knowing that eventually it will be come painful to fire someone makes me think twice before I hire.
    The restrictive laws are one aspect, but they aren’t much restrictive than elsewhere and with the recent evolution (see #1 above) at least some cases can be addressed. But the other, equally important element that we have to address in France is to change it’s attitude towards the “bad” companies who always want to terminate employment contracts without reason.
    It is good and very important to protect employees’ rights, but everyone has to understand that hiring and firing is part of the life-cycle of a company and both are tied. The labor market and its high unemployment rate can only benefit if this attitude changes and France develops some sort of more flexible hiring-and-firing culture. Because once the “firing” becomes less painful the hiring will also become more interesting for smaller companies.

  7. Zsalloum

    #3 
    “…high taxes…” 
    A friend of mine who started his TPE (Très petite entreprise) two years ago told me that he has been so intoxicated by “le système solidaire” that he thinks that the last step remaining for him to express his solidarity is to go to the streets and distribute money. 
    Personally I don’t have the experience to give an objective opinion, however from what I hear around me, taxes are high

  8. Viken Kojakian

    ” I have been told by several entrepreneurs that startups can wait 18
    months after filing for incorporation to start declaring their
    financials”
    So when you create your company you start declaring your financial only 18 months after the creation ?

  9. [email protected]

    “the same high taxes that allow entrepreneurs in France to live off of a 70% unemployment salary for 18 months”
    This is, in my opinion, one of the main strengths: Basically, France gives you a 18 months salary, good enough to live, just to build your business. Isn’t it incredible?
    And, believe or not, you can ask to get 50% of the unemployment fees in once and invest them in your start-up!!!
    If only more people were using it for this purpose….

  10. The Pirate King

    I’m an entrepreneur from NYC living in Paris and not listening to a word he says.

  11. Ox000000 (@Ox000000)

    I’m amazed by your article.
    That reverse sheep-thought-stream pearl of yours is brilliant!
    French bashing is so hype those days, But hey, I’m happy paying a rough 60% on my stock-options where my children get top quality public med services and schools. Every french self centered entrepreneur is happy in Murica until they get sick and fly back home to enjoy the advantages.
    One other point is you don’t have to create a SAS to begin a startup: there’s an hassle-less status called ” autoentrepreneur ” – some financial details differs: you’ll have to switch to SAS in case your startup is successfull.

  12. Michael Cohen

    I think we really miss the main point. It’s way more difficult to build a tech giant in France as it is almost impossible to raise a significant amount of funding to achieve big visions.
    A very fast car with no fuel can’t compete with the same one with the tank full.
    And the main reason for this lack of investment from VC besides the culture or risks is the small amount of European companies that can acquire you at 10x/20x your series A valuation.

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