This post originally appeared in the Rude Baguette Weekly Digest. You can sign up here to receive a nice packet of FrenchTech news every Monday morning.
I’ve found myself in one too many conversations starting with “What is a startup, anyway?” or “Why do journalists write about fundraising rounds?” or, on the polar opposite “I wish I could be successful like [startup that raised money],” so I thought I’d set the record straight for the French readers, and, for the non-French readers, this may be helpful as well:
A Startup has more or less 2 definitions that the majority of people (who matter) go by: that of Paul Graham (i.e: “Startup = Growth”), and that of Eric Ries (Startup = solving a problem for which the solution is unknown). They both tackle different aspects of a company, the search & the resulting growth, and so I use them interchangeably or in combination. More importantly, “Startup” doesn’t imply age, or revenue, or size; it does, however, most often imply scalability, and, thus, some technical component, even if the innovation is one of design and not of technical nature.
Success for Startups is absolute. It doesn’t have qualification. That is, being the leader of a specific market, when it implies that you are not the global leader, means that success lies in front of you. This is because the very Scalability element, which is a required component of a Startup, knows know language, no country border, and thus, inability to go global will ultimately result in a lack of defensibility against the inevitable competitor.
With that in mind, Startup Success is not equal to fundraising. Journalists write about fundraising – at least, some of us – because it is proof that someone who isn’t the founder has done enough due diligence and decided to put money into the venture, implying they liked what they saw. This is why the investors are just as important as the amount invested, from an outsider’s view.
So, while Vente-Privée does €1 Billion+ in turnover per year, the majority of that comes from France, despite being present in other countries; therefore, I would conclude that they Failed to go Global. The revenue amount is irrelevant, except to the founders and investors, who I’m sure are happy with their qualified success.
SIGFOX & Blablacar have raised $100M & €100M, respectively, and I’m sure that gives them fuel to attempt to grow globally; however, the idea that to be like SIGFOX or Blablacar is to be successful is flawed, as it misses the underlying risk associated with raising that much money – namely, that the people who gave them that money want it back, and they want it back with large multiples.