“Bienvenue en France, la Startup Republique!” For the past 18 months or so, since LaFrenchTech began to make noise abroad, I began hearing talk of the Startup Republique. A play off of Israel’s coined “Startup Nation” tagline, which has brought out voices in favor and in opposition on the topic. Contrary to the US, where waving its flag is akin to having a passport (which less than half of Americans have), the French flag has been associated with the extreme-right Front National party for some time, associating patriotism with an extreme right agenda.
As France comes to terms with the necessity to be proud of itself in order for others to be intrigued, we’ve seen various outpourings of opinions, calls to arms & mantras that seem to claim that French-bashing is so 2015, that 2016 will be the year that France becomes one big Silicon Valley. IDInvest’s Benoist Grossman’s latest tale of entrepreneurial feats compares Vente Privée’s Jacques-Antoine Granjon to Steve Jobs (he might be right, in the megalomania department at least), and it seems that Meetic’s Marc Simoncini serendipitously discovered that Facebook is a good tool for personal branding (if only it hadn’t come during the November terrorist attacks in Paris, it might have seemed less opportunistic). The ReviensLeon movement guilt-tripped French expats into returning home the same way my mother might send me a link to a San Francisco Chronicle article about how Google is hiring mathematicians now more than ever.
Most attempts at finding patriotism in France have been dismissed as personal branding; however, when Bpifrance’s Romain Serman published “France, the new Startup Factory” last month, it garnered enough positive momentum that I had to sit down and have a chat with Romain. I read up on his piece – and I suggest you do as well, if you haven’t already, before reading through our interview – and I challenged him on a few points, to dive beyond the ‘ra ra ra’ and get into the thick of it. Romain Serman heads up the French investment bank Bpifrance in the US (he compares it to Silicon Valley Bank in his piece, which we get into below).
How has France changed to become a “New Startup Factory”?
France produced many startups in the 2000s. Some strong and successful businesses have been built. Other countries have also emerged as “Tech Nations” over the last 15 years – Israel, but not only (Northern Europe, India, China of course). This said, the French Tech scene offers 3 characteristics that did not exist in a recent past : a) Magnitude. The number of newly created startups has dramatically increased ; b) Diversity. France produces startups in AI, Marketplace, IoT, Hardtech, Cloud, Infrastructure, Medtech, Biotech, Adtech, etc. I am convinced that the upcoming revolution will be based on “hard algorithmics”. France has a strong playing card in that game ; c) Globalization. French entrepreneurs think more and more global. That’s very good news.
Do you think Ecole42 will deliver on its promise to produce 1000s of top developers?
Ecole42 is disrupting education in many ways. I mentionned it as it shows that France is “boiling” and is capable of reinventing itself. Obviously, Ecole42 is not – or will not be, to be more accurate – the only source of engineering talents ! The question is not to produce talent “on-par” with any other school. The point is : France will have a growing engineering workforce with different skills, backgrounds, ambitions, mindsets, expertise and social origins. Diversity and quality are essential. France is strong in this regard. Even the Silicon Valley recognizes that. I live in San Francisco and I see tons of French amazing talents who graduated from Polytechnique, Centrale, Epitech, Epita, SupInfo, Supelec, SupAero, Telecom, and many-many other schools. Some entrepreneurs have no diploma at all. And this is fine. France must train all her talents for a digital economy and promote diversity and creativity. This is key to France’s future.
Will tech entrepreneurs in France ever be more famous than LVMH, Galerie Lafayette & Karl Lagerfeld?
This is an important point. Jobs or Zuck are superstars, so I am not sure they are great exemples to your point. I bet Steward Butterfield or Brian Chesky could sit on any MBA class in the US (except in Stanford, I admit !) and not have a single person recognize them either. This said, it is true that up to now, entrepreneurs are more praised in the US than in France, where we usually “prefer” singers, soccer players or actors. If you talk about the Silicon Valley, entrepreneurs are put on a pedestal, but this region is unique. Let’s not compare. It will take time but I think it’s coming. Look at Xavier Niel or Frédéric Mazella, to name just a few : they are now public figures. I am pretty sure that 20-year-old French students know them. And do not forget that CAC companies are 104 years old on average, whereas half of the 10 largest Market Caps listed on the Nasdaq and NYSE are US Tech Companies born, for the oldest, in the late 70’s : Apple, Alphabet, Microsoft, Amazon and Facebook. Therefore, it’s not surprising that old French money families, as you say, are more famous or well-known than tech entrepreneurs who only emerged some years ago. My bet : things will be different 10 years from now. In any case, tech entrepreneurs must be tirelessly promoted as role models and inspirational leaders. We strongly believe this is Bpifrance’s core mission.
What similarities do you see in SVB & Bpifrance?
Both banks provide debt, equity funding and fund of funds. Both institutions support entrepreneurs and help them grow. Both institutions are deeply rooted in the entrepreneurial ecosystem. Both institutions are backing startups alongside VCs and other traditionnal banking institutions. This said, there is one difference : venture debt. We do not provide exactly this kind of debt structure, even though our loan solutions end up the same for entrepreneurs. But this is true with almost every European financial institutions, which are not familiar with this product.
In the valley, they say that people won’t change products unless it’s 10x better. When will the labor market in France be 10x better in order to change people’s minds?
Personnal thoughts : a startup is all about speed. Adapt fast. Grow fast. Fail fast. Why not setting up labor laws’ thresholds and constraints based on the company’s age, not on its headcount ?
France differs from Israel in that it has both a domestic market that is big enough to exploit, and it also has a regional market (Europe) that theoretically surpasses Europe. Shouldn’t France seek to imitate the US model of “domestic R&D, domestic Top Management. Top Management goes where the growth goes.” ?
Except that the US represents 50% of the IT global market. The problem is : Europe, approx. 20% of the global market – I agree, this is big enough in theory to emerge as a leader – is not unified for IT companies : different languages, different regulations, different customer needs and requirements, different cultures. Selling to a Californian, a Chicagoan or a New Yorker is the same. Is it true for Portugese, German and Italian customers ? I may be wrong, but I still see Europe as 28 different markets.
I don’t say it’s worthless to conquer Europe. Not at all. I just say it’s much harder to expand to another European country than expand within the US. Therefore, I don’t think it makes sense for Europeans to imitate the US model. Is there much difference in terms of efforts and difficulty to launch in the US and in Germany ? For what rewards/pain ratio ? I stand to my point : in many cases, but not always (look at the marketplaces for instance, which are often “local” businesses), French companies have no choice but conquering the US to build strong and global businesses, especially for B2B. Which means : part of the Top Management in the US, R&D and – obviously – EMEA in France.
This said, having local businesses in France is great, and we need them : they also create value and jobs ; some others will thrive in the sole EU market or Asia, and this is great as well ! Now, I’m wondering : will the US model you mention evolve ? Will US startups be obliged to set up more and more of their R&D efforts abroad and adopt a distributed model ? Even if, we all know, distributed models make it harder to build a company culture.
The labor market for developpers is crazy right now in San Francisco and New York, and suffers a serious lack of talents. This may not be true for megastar Unicorns, which attract talents easily, but what about the hundreds of Centaurs ? I am convinced that France can also be home for US startups’ R&D. We must think both ways.
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