We wrote this week about AppGratis being pulled from the Apple App Store unexpectedly last weekend. CEO Simon Dawlat later came out and said that he was utterly confused as to why Apple would do this, and that there was zero communication around the subject. If you’d like to catch up on the other side of the story, former OMGPOP CEO Dan Porter did a great guest post on AllThingsD called “App Non Gratis,” in which he talks about how Apple is trying to keep the App Store a meritocracy, and some apps (such as AppGratis) were essentially selling Top 10 placement on the App Store. 148Apps confirms this sentiment and even goes so far as to share what they say are emails forwarded by a prospect AppGratis client from the AppGratis sales team essentially quantifying how much it would cost to get on the top of the App Store.
So, you’re caught up with that, now let’s jump to the story: Fleur Pellerin, Minister Delegate with responsibility for SMEs, Innovation & the Digital Economy, is now on the attack against Apple for booting AppGratis from the App Store.
Let’s put aside the fact that this is an appointed official in charge of 90%+ of employment (that which is produced by SMEs) who has taken up the charge for a total of 45 employees – let’s pretend that’s normal – this is NOT the point at which a government intervention is appropriate. The Minister, who is threatening to look into any and all ways of punishing Apple, uses such amazing arguments as “there are plenty of apps like AppGratis on the App Store” to defend her claim. So now she’s not only negating the very INNOVATION her title dictates that she defend, but she’s actually suggesting that if Apple is going to boot AppGratis, they should boot ’em all. Hmmm, I wonder which “similar apps” she’s referring to – maybe Appsfire (Paris), or maybe AppTurbo – hell, maybe she wants to eliminate the entire App Discovery sector that France is doing so well in.
Now, I don’t know who reached out to whom, but this is terrible press for the French startup scene. It summarizes the very heart of the problem in France – that the French can’t accept failure, whatever the cause, and move on. I think the most healthy thing in this situation would be to let AppGratis sort out its situation on its own, for better or for worse, instead of having the Minister come to the AppGratis office like she was paying tribute to a fallen soldier.
The worse part about this is that she has literally no power over the situation, and it is just another case of Pellerin talking without action – I’m not calling her to action, mind you, just saying that she needs to learn to stay out of things. Remember the Google Tax she was pushing for? Never happened. What about the 1000 Startup Incubator she said would finally create a startup ecosystem in Paris? That died down just as soon as it appeared last month. This government is coming up on the end of its 1st year in office, and I honestly can’t think of a single thing that Pellerin has done for SMEs, Innovation, or the Digital Economy. The 75% tax was ruled unconstitutional – Pellerin didn’t say a word against it – and it was France Digitale that pushed measures through to give startups more benefits. Pellerin did help launch the SayOuiToFrance campaign – however, it came just after the announcement of the 75% tax when international news was all about how France was killing innovation, so that big 1 page NYTimes ad they took out probably fell on deaf ears.
The only thing worse than France’s inability to give credit to successful entrepreneurs when they succeed – Dailymotion, Deezer, Viadeo, Criteo, Blablacar, Free – is their inability to just let someone fail. Worse comes to worst, Dawlat has probably the best cop-out for his startup not succeeding – Apple killed them at their peak – and will easily be able to raise funds for a second startup. Obviously, Dawlat is exploring every option – launching on Android, focusing on their emailing list and web origins, etc. – but you can bet Iris Capital, who fronted their most recent $13M investment, is seeing this news as a big blow, and it’s really either all or nothing here.
So Fleur, my dear sweet Fleur: instead of fighting for 45 jobs, or attacking giant Tech companies that are holding up the entire Digital Economy – why don’t you do one of the following:
- Eliminate taxes for any startup with private investment, foreign or domestic (you’ll get your money back if they succeed)
- Push for a startup visa to allow any developer based in the US to come to Paris and work – I can’t think of one Silicon Valley person who doesn’t secretly wish they could do a year abroad in Paris
- Remove all the tax-incentivized VC funds (more than 50% of funding is coming from abroad anyway), so we can rebuild our VC structure from the ground up to support startups, instead of keeping VCs steadily employed and risk-averse
I know, those things are hard – but every entrepreneur learns from day one that you should look your to-do list in the face and pick the three most difficult things and do them straight away, because they are always the things that will have the biggest impact. You’ve got four years left – which of those things can’t be done in four years?
Photo courtesy of Yahoo!
She also asked publicly of Facebook to explain itself regarding the non-story of the private message leaks http://www.techweekeurope.co.uk/news/facebook-privacy-timeline-france-93872
I can not agree more, great! The other question is how can the investor can put 10 millions in such company without knowing the risks, who were already very high (several sign of the end of their golden age were raising in the last monthes)
French believe they are above the law. Terms and conditions of the Appstore? Not for us. They simply believed that Apple will skip and forget.
I am french, I agree with apple descision but I can’t agree “French can’t accept failure” , it’s right in many cases but not all> I just can’t undestand in this case that he raised 13 mUS$ a few months ago
The real problem here is that App Store sucks so much, and it’s now illegal to try to make it sucks less.
If it didn’t suck that much, the algorithm wouldn’t push “apps free for a day” on top of the list.
Wondering if AppGratis had a buying offer from Apple, were too greedy, and now are crying foul play… That would explain a lot I think.
I do agree : France and French freak out when someone fails. Failure is unacceptable in France, all is made to hide it, it’s so a shame to fail. I see it more like an opportunity to improve (unfortunaltely I haven’t fail so far 😉 so it’s only theorical). But even if the vision is changing, especially for “young” entrepreneurs, it’s slow. (I’m french)
You know why Apple (really) rejected AppsFire?
Because AppsFire makes so much money (1M$/month) without paying anything in return to Apple.
That’s it. The rest is literature.
Moral : pay your due (30% of your profit) to Apple or your fired.
Apple did not reject “Appsfire”…you are “confused”
AppGratis I mean. SORRY !!!
Excellent post and insights!
Tough decision for the startup, but how many startups on Earth still have more or less $10M in the Bank to pivot? I’m not afraid for them…
Not to be overly sensitive, but as a female reader the following phrase couldn’t help but jump out at me “So Fleur, my dear sweet Fleur”. I think if you asked yourself if you’d say that to a man, the answer would be no. It comes off as patronizing (which I’m guessing you intended) and sexist (which I’m guessing you didn’t).
It’s interesting you took a cultural point of view about failure (I truly think no one likes failure especially not in the US) and after reading the AppGratis CEO post, It seems he reacted quiet well, with a positive spirit (considering what he is facing). To me, the surprising thing is to have a secretary of states (the same happend with Montebourg) explaining to a company how they should run their business. While fighting a monopoly is understandable (I’m not saying it’s the case here), I would not underestimate the symbolic fight of a relatively small business (40+ people) vs Apple. Socialists by nature wants to protect the weakest (or Mittal vs Florange etc…) this is not about failure, this is about social-democracy in a capitalistic world… What is happening here is logic, the real question is do you want to change that or not… And the correct answer in a democracy is to vote…
At first glance I thought this was a bit rude of the rudebaguette… and after reading, I kinda feel like it might be a bit more of a rude awakening for someone in Fleur’s position who thinks they’re doing what’s best.
It’s a jungle out there at times…
The title was so promising that I couldn’t resist reading this… 🙂
Apart from the fact that this is the most insightful yet sarcastic post i’ve ever read from you Liam, I have to say I do agree on the fact that my beloved compatriots freak out when it comes to a dead end… who loves that?
For the time I’ve been enjoying the US, and your compatriots entrepreneurial spirit I would say that they are equaly reluctant to fail tho,
The only difference is that on this side of the ocean, most failure makes you radioactive to any other person if you just even think about tryin to get back on your feet and start all over again.
You guys know that failure is just the end of a chapter, we fear that it could be the end of our existence.
Great article, totally agreed on that one!
amen.
habemus papam. great article
Great post. The French are indeed absolutely unable to accept failure and deal with it. So they pretend there is no failure, or that it can be somewhat corrected, and when it becomes painfully obvious nothing can be done (e.g. Florange), the situation has degraded a lot.
This country has fallen to what Chris Dixon calls “the credentials trap” (http://cdixon.org/2013/02/13/the-credentials-trap/, summary: http://tldr.io/tldrs/511b48acf1d6771d55000003/the-credentials-trap)
You’re wrong, French actually do love failure…when they see it happen to the others 😉
Hello all,
I read the article, I totally disagree with the opinion. It is totally biased.
Firstly, Mrs Pellerin didn’t attack Apple on its decision to remove appsgratis from store but raised the fact that when a company has a monopole, any decisions can be really critical and should be taken wisely. In appgratis case, there isn’t a failure but, in contrary, such a success that it started to show the weaknesses of Apple Appstore!
Secondly, following the appgratis CEO blog post (http://appgratis.com/blog/), the decision was totally arbitrary and sudden. When we create a startup, we all know that our environment is unpredictable and hostile but in that case, it looks that Apple is killing every apps that doesn’t generate direct revenues or ,worse, creates competition.
If appgratis exists, it’s mainly because Apple designed a poor appstore to promote the right apps to the right user! So instead of killing competition, Apple should question why so many apps like appgratis are relevant to end users.
As a representative of a dynamic ecosystem of startups in France, Mrs Pellerin is acting right. She warns Apple that they cannot behave as they did. Today, only 45 jobs are in danger … how can you develop a sustainable ecosystem if the rules change regarding your success… The question is important.
I’m pretty sure if Apple said, at least 3 months in advance, that they won’t tolerate appgratis like applications, everything would have been different …
At last, the comments about Mrs Pellerin let think that the author is more an opponent of the current government than a supporter of French Startup ecosystem.
“What about the 1000 Startup Incubator she said would finally create a startup ecosystem in Paris? That died down just as soon as it appeared last month” -> how do you know that ? You have more information ? Please be more precise because such a plan cannot be realised in just a month!
I believe the CEO of Appgratis will pivot and succeed again (apparently he has cash).
And for your information, I really don’t like the appgratis business. As an app developer, I felt like being robbed by those companies … but the reality is that if you want to promote your app massively, you have to use them!
Thank you for your attention.
David A.
I agree with you. I works for apple as a supply chain manager which ordinate with suppliers in Taiwan and china. I look down the way apple treat those suppliers. I think Pellerin just does the right things.