French government reveals plans to build “world-class” incubator for 1,000 startups in Paris

French government reveals plans to build “world-class” incubator for 1,000 startups in Paris
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In what seems to be a never-ending trickle of announcements from the government about their digital agenda, Fleur Pellerin announced in an interview this week with Liberation that she wants to create a ‘world-class’ incubator in Paris.  The incubator would have space for 1k startups and would be located either in the Hall Freyssinet in the 13th district (currently owned by SNCF and now being used as an event space) or in a suburb ‘close to Paris’.  The project would be financed by a group of French investors (no word yet on who these would be) and, possibly, the Caisse des dépots or others. Liberation posed a very interesting question during the interview, specifically asking whether this announcement is not just an attempt to throw additional support behind Anne Hidalgo’s campaign, Bertrand Delanoë’s heir apparent to succeed him as mayor of Paris.  Of course, Pellerin denied this charge and hailed Hidalgo’s and Delanoë’s ‘remarkable’ efforts on advancing innovation and digital technology in Paris.

The announcement does give a bit more clarity on what her Paris Capitale Numérique vision entails and, more specifically, where the heart of it will be. Although there’s a much bigger question as to whether the French government really has the capability, means, and responsibility to create a large tech hub, a lot of the debate has focused more around the location. There have been rumors that it would be in Ivry, just outside of Paris, or in Saclay, the future home of the government’s other big tech hub project. She has said previously though that she sees Saclay and Paris’ tech city as two separate but connected efforts that will ultimately work closely together.  Perhaps this announcement is also in response to the initial feedback she’s getting from her public call for input on the project, which is most likely encouraging her to locate Paris ‘tech city’ in Paris proper.

One big question still unanswered is what will happen to the current center of Paris’ tech ecosystem, Sentier, as well as all the organizations helping to nurture it that are also located there (e.g. Le Camping, Silicon Sentier, the new Microsoft Spark incubator, etc).  If the project ends up going ahead, does she expect that they’ll relocate?  Would the Sentier area be relegated to ‘mini-tech hub’ status?  Will there be an effort to connect the ‘old’ tech hub with the ‘new’?  As we’ve talked about many times here, it does seem like they’re forcing the issue.  As the saying goes,”‘if it ain’t broke don’t try to fix it”. Sure Sentier is constrained in terms of space, but it’s evolved into the physical and psychological epicenter of Paris’ tech community, which would be very difficult to replicate somewhere else.

While it is admirable that Pellerin wants to keep people up-to-date on the government’s progress on its digital agenda, it might have been better to have worked through some of the more pertinent details before putting too many random ideas and messages out into the public sphere which seem to have created confusion.

If you haven’t already, take a look at her interview in Liberation (here, available in french only) where she offers quite a bit of insight on the situation with Free, why it makes sense for the new ‘tech city’ to be in eastern Paris or nearby suburbs, the failures of the right (specifically, Sarkozy and members of his administration) in regards to tech efforts in France and why the left will do better, and her bold plan to create 15 ‘tech cities’ across mainland France.

10 Responses

  1. Avatar
    antoinebc

    “[Sentier] evolved into the physical and psychological epicenter of Paris’ tech community”
    I’m not sure it’s true. It just happens that 10th district and northern 2nd district provide a lot of small office space.
    I don’t think that start-up founders tell themself “Let’s find on office in Sentier because other startup are here”. It’s more “Let’s find cheap office space in proper Paris”.

    • Avatar
      LiamBoogar

      As someone who works for a Nantes-based startup, your view may be skewed, but I think, more importantly, you’re starting from the wrong premise.

      You assume that startups choose their location based on “where other startups are” – they don’t. They choose it based on where the talent, investors, customers, and the rest of the ecosystem is. Customers are in the sentier, because early adopters go to the tech events in the area. Talent is there because they are either at the aforementioned events or they are working for another startup/tech company. Investors are there because “the other startups are there.” And the rest of the ecosystem is there beause the startups and the investors are.

      The government’s mistake is thinking that they are “building an ecosystem.” A) Who’s going to choose where they go based on where the government tells them is the best place? (Not the best example of lean) Dublin rejected it and followed the private sector (docks vs. northern dublin), UK is rejecting Tech City, except for Google Campus, and Berlin has private initiatives popping up around the Mitte district. The key thing is that the best initiatives will be those that try to boost the progress in the direction it’s going in, not try to change the course of things.

      Who knows why startups first started popping up in Sentier (maybe it was the aforementioned small offices), but they are there and that’s why startups will continue to come there.

    • Avatar
      antoinebc

      I’ve done my time in a Paris start-up (10th district), and I can testify how cool it is to reach a tech-event/hackaton by feet!

      But I don’t think the government wants to “build an ecosystem”, because that’s just not possible. I may be wrong, but my call is that they just want to facilitate the growth of the existing ecosystem by providing (what they think is) suited infrastructure. I won’t blame them for that.

      And come on, Halle Freyssinet is not Saclay ! It’s just 5 km from the Sentier, and 20 min by metro : nothing that’s not manageable for a dynamic founder or investor 🙂

    • Avatar
      LiamBoogar

      Gilroy is just 20 minutes from Mountain View, but I think people would argue there’s a difference.

      You’re not arguing what the government is doing is good, you’re saying “they are giving it their best shot…. and isn’t that good enough?”

      My simple answer is no. We don’t need “good enough,” we need “good.” Name one startup, let alone an ecosystem, that succeeded through complacency. Strive for more.

    • Avatar
      Trista Bridges

      I think I’d would’ve agreed with the cost argument 10 yrs ago, but not today. I think it would be pretty hard to describe the office space (or residential space for that matter) in the Sentier area as ‘cheap’. The fact is that at the moment there’s a very high concentration of startups there and a good amount of ecosystem ‘activity’ happens there. So I think one can safely say that if Paris’ tech ecosystem has a center, the greater Sentier area (ie 2nd, 9th and 10th border) is it…

  2. Avatar
    Louis Dorard

    I think the main issue with this project is in understanding what the government is trying to do. PCN is not meant to be an incubator, as the title suggests (the consultation asks, among other things, if an incubator would be something to include to the project). I’m not sure the government is trying to build an ecosystem. It seems to me they are merely trying to provide a central space for startups and for all types of stakeholders in the digital sector, and public ones in particular.

    If the Paris startup community is meant to grow and the Sentier area is constrained in terms of space, PCN will have to be somewhere else.

    • Avatar
      tristabridges (@tristabridges)

      “I think the main issue with this project is in understanding what the government is trying to do.” BINGO … that’s the big question. What is the end goal of all this? One of the things that has been pointed out here in the past is that type of thing has been tried elsewhere in France (and beyond) which generally hasn’t worked. Should they simply keep trying the same thing over and over? All of this just feels forced.

      Also, we weren’t try to imply in the title that the new incubator = PCN. However, as most of the discussions coming from the government have been around ‘location’ and the ‘central place for startups’ concept, it’s clear that for the gov’t this incubator, one of the first tangible initiatives announced, would be core part of PCN.

      If PCN does move forward (which still remains to be seen), you’re right that Sentier probably won’t be big enough and they’ll have to look elsewhere. But before they go down that road, I think the gov’t needs to do a better job of clarifying and articulating the value of PCN (particularly as she’s relying on these still unnamed ‘french investors’ to pick up the bulk of the tab ;-))

    • Avatar
      Louis Dorard

      Will have to wait and see!

  3. Avatar
    David Jouarisse

    If Fleur Pellerin genuinely wants to support entrepreneurs, those creating jobs, revenues, profits – and in turn taxes necessary for the “national turn around” – she should certainly prioritize to re-establish the rate of FCPI back up to 25% (from the 18% level that Sarkozy put it down to, after it was 25% for more than 13 years of left and right governments…).

    I mean the collect of fund in 2012 us the lowest in 10 years: 374m€ while it was 1,2b€ three years ago.

    That amount of money available for investments in fast growing companies, of critical importance, is definitely something making the difference a lot more than an incubator of 1,000 start ups; if you compare the quality/cost aspect of both approaches, the efficiency of public spending €, which currently must be scrutinized and maximized!

    Luckily, several FCPR are to be raised in 2013, compensating this 10 years low in FCPI fundraising; but the compensation will be lasting only over 12-24 months (the time to make them realize?…), after, it will be the desert, “equity death-valley” (instead of “VC Valley”), you name it, while it had taken us more than 10 years to grow Paris as the European VC Valley (while London is the capital of public equity)!

    Let’s say this state of “European VC Valley” of PARIS was not well known and – just a lack of PR around it – like the English know so much more about than us… so let’s do PR, SEO, whatever… let’s show more the facts and figures, make them internationally known…

    The list of already-existing incubateurs is already impressively long: http://www.mon-incubateur.com/site_incubateur

    I precise some people make a big difference in terminology – and philosophy of action – by speaking of “accelerator” instead of “incubator”… This is not a minor difference after all.

    I don’t blame the good underlying intention, it can be smart to gather a few of them to make a more efficient use of public spending and trigger more frequent and intense interactions between the supported companies; from those maximised interactions stem positive contradictions and challenges, opportunities not considered before (complementarities in recruitements, positioning, upsells, cross sells, partnerships..) and eventually value creation.

    They need presence of quality students and corporates at minimum through the presence of representing delegates if not by finding the place at an optimum short distance of all (shouldn’t it be in center of Paris or should we dare outside by Saclay to be consistent with previous years of public action?…) to create a “complete and consistent ecosystem”…

    Some incubators will prefer to keep their philosophy “Low volume, High touch” acting on small amount of companies but highly involved… it is true it is not about quantity, there is a risk that can be put under control only through cautious spending of public money, processes and the quality of people involved.

    The camping, Elise is doing very well at connecting to accelerators abroad. It is a good example that should be watched but they are definitely not in quantity, but in quality.

    To end this contribution, I re-iterate this is a lot more important that the government put the tax incentive rate (in FCPI and FIP) back at 25% as it was before Sarkozy (desastrous “loi de finance” in Dec 2010) very seriously damaged it while it had taken 10+ years to build that VC ecosystem; it was normal evolution that the first funds did not deliver the best performance but after 10 years “learning curve” the performance of those funds is now good, the processes are good, the teams are better, the ecosystem became mature and efficient; making good investments, creating value, revenues, generating higher taxes for the state in a way that it is definitely more a “tax productive system” rather than yet another tax niche reducing collect of taxes for the state!

    It is one of its best investment and way to come into play indirectly to create growth!

    “La croissance c’est maintenant!” So they can prove their determination by putting this rate back to 25%!!

    That they invest 10m€ in PR to let know the rest of the world that Paris is the European VC Capital (thanks to those FCPIs along with FCPR) could almost be a better idea than to be spent it in yet another incubator, sustaining low-production of taxes startups (I mean, you need to see if you invest public spending in taxe-generating start ups or not… FCPI is investing in companies selected to grow fast in revenues and EBITDA, is it really the same logic with incubators => no!.. CQFD).

  4. Avatar
    peter

    Here’s an “incubator” idea that will certainly shock the French: Less government.

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