Category Archives: Silicon Valley and Europe

The Swiss innovation model: is it the best?

Very interesting presentation by the newspaper Le Temps and Xavier Comtesse about innovation in Switzerland (compared to the USA). (Thanks to Pascal for giving me the link :-)). The article is entitled The Swiss innovation model is it the best? (Same document on Prezi)

Before you view or read the content of the contribution by Comtesse, here is my reaction: it is indeed an excellent analysis, but the conclusion can be misleading! One could get the impression that the U.S. does not have large innovative companies like Switzerland has with Novartis, Roche or Nestlé. But I fear that it is a misleading view. The U.S. does not have that start-ups only and our are not growing. Not to forget, the topic of job creation, see Job creation: who’s right? Grove or Kauffman

Now here is a summary translated from Prezi: For several years, Switzerland has been at the top of the world rankings for innovation, this was not always the case especially during the 90s. So … Are we better than Silicon Valley?

Silicon Valley has developed a model in 8 strengths
– Excellent local university system
– Transfer of knowledge to the economy – technoloy parks, coaching, awards, etc..
– Powerful venture capital
– Start-ups that grow quickly and innovate in disruptive fields
– An effective IPO or M&A market (Exit Strategy)
– Large expenditures in R&D
– A high rate of patents per capita
– A strong entrepreneurial spirit per inhabitant

The 7 strong points of the Swiss model: Switzerland has a very different system of innovation from Silicon Valley but ultimately just as effective, especially for large companies.
– No federal masterplan for Innovation
– A concentration in life sciences
– A innovation driven by large companies
– Incremental innovation more than disruptive
– A quality education at all levels
– Framework conditions very favorable to the economy
– A high performance system of transfer of knowledge / technology

What are the strengths and weaknesses of Switzerland?
– Yes, our universities are excellent:
More than half of young Swiss university follow the one hundred best universities in the world, no country has such a result
– No, the Venture Capital industry is very low in Switzerland:
Switzerland underperformed largely in the area of venture capital (investment in Switzerland in 2011: 737 Million for USA 29,500 million).
– No, our start-ups do not grow fast enough:
The excellent survival rate is suspect, this means that start-ups are protected by the academic system or federal funding
– No, there is little IPO in Switzerland:
A small number of IPO (Initial Public Offering) shows weak growth start-ups or SMEs in Switzerland
– Yes, private R&D is very important but for large firms rather than in SMEs:
The share of the private sector is very important in Switzerland, particularly in the life sciences (pharma, biotech and medtech, etc.).
– Yes, we file a lot of patents:
but again it is primarily large enterprises, the proportion of patents is very important in Switzerland, this is partly due to the strong presence of very large firms
– No, the Swiss create firms twice less than the US:
the ntrepreneurial culture is very strong in the U.S., more than double that in Europe,
– Yes, the general conditions of business creation are very favorable:
Switzerland does better than innovative small countries such as Finland, Sweden and Israel
– Yes, technology transfer takes place in Switzerland:
Switzerland has fifty incubators, TechnoParks or other transfer centers Switzerland Silicon Valley

These two models as we have seen are very different. They work well both but the objective differences do not make possible to compare them as is done ll too often, especially in the field of start-ups …

Safe choices aren’t always good choices

1 Reply

I am reading I’M Feeling Lucky – Falling On My Feet in Silicon Valley by Douglas Edwards. I thought it might be just another book about Google. It is not. The lessons are amazing. And I will come back with many things I liked. One deserves a full article, and it is about “Safe choices aren’t always good choices”. The story is covered on pages 256-258.

When Google finally recognized its failure in implementing a CRM software to manage customer emails, “composing a list of CRM vendors didn’t take long. Fewer than half a dozen major players offered stable, well-tested systems. […] Larry has a college friend, David, who would advise us on desirable features and then added, by the way, he and a buddy were building a CRM product called Trakken. […] Interested? Interested in an untested CRM product still in development with one tiny client? Sure that’s just what I was looking for – another risky technology with no support and no track record behind it. I thanked David for his help and, because he was a friend of Larry, assured him we’d be happy to send him our request for proposal. [Meanwhile they analyzed established players.] I felt confident I could convince Larry and Sergey to loosen the purse strings and do it right this time: spend money for a high-quality, stable system from a respected vendor. I hoped Larry’s friend had taken the hint and forgotten about us. [He had not] I didn’t want him to complain to Larry when his hopes were dashed. I decided to head him off at the pass by talking to Larry myself. “Actually,” Larry recommended “you should hire these guys. They’re really smart. They’ll work hard to build the product and we can invest in their company. […] They’ll be very responsive.” I could say I was stunned, outraged, incredulous, but that would be an understatement. I couldn’t believe Larry was going cheap again instead of buying reliability. When I informed the other vendors, they thought I was either corrupt or an idiot. […] “If you can believe you can build an email tool like resembling ours in thirty days, you are mistaken. It has taken us four years and twelve hundred customers.” […] I’d still be cursing Larry’s decision today if not for one small thing: Larry was absolutely right. […] Within a couple of months we had the CRM system we wanted built to our specs, fully stable and intuitive to use. […] So what did I learn from all this? I learned that obvious solutions are not the only ones and “safe” choices aren’t always good choices. I had thought that due diligence meant finding the product most people relied on, then putting pressure on the vendor to cut the price. It never occurred to me to talk to Larry not to do that. We had different tolerances for risk and different ideas about what two smart people working alone could accomplish in a complex technical area – and that is why I spent seven years working in mainstream media while Larry found a partner and founded his own company. Two smart guys working on complex technical problems, it turns out, can accomplish a hell of a lot.

Failure is a learning experience

Leave a reply

This is my third article in the journal Entreprise Romande (and thank you to them for editing my work and for the opportunity given to talk about topics that are dear to me.)

Every entrepreneur knows that failure is an integral part of business: a contract breach, a lost customer, a unsatisfactory hire… So why is failure so stigmatized in the European culture, and especially in Switzerland? Freeman Dyson, ths famous physicist explains it more clearly: “You can’t possibly get a good technology going without an enormous number of failures. It’s a universal rule. If you look at bicycles, there were thousands of weird models built and tried before they found the one that really worked. You could never design a bicycle theoretically. Even now, after we’ve been building them for 100 years, it’s very difficult to understand just why a bicycle works – it’s even difficult to formulate it as a mathematical problem. But just by trial and error, we found out how to do it, and the error was essential.” The example of the bicycle is just perfect: who would blame a young child for his multiple drops wjile learning who to ride it?

FAILURE AND CREATIVITY

Silicon Valley is known for its tolerance for failure, which, far from being a stigma, is even valued. “In Silicon Valley, if we had not tolerated failure, we would not be able to take risks and we would have many fewer entrepreneurs than we have today. If you fail for good reasons, that is to say almost all, except to be corrupt, stupid or lazy, then you have learned something that will make you more useful,” says Randy Komisar, based in Silicon Valley, as are the other people mentioned in this article. “You’d be amazed at how many investors prefer to back someone who has tasted the bitter fruits of failure. In failing you learn what not to do. Get your skin in the game and there is no failure—you have opened your mind to growth and yourself to reinvention,” adds Larry Marshall.

The fear of failure has deep roots. The school system encourages the child not to try or say anything if she does not know the answer rather than testing hypotheses, for fear of reprimand. Experimentation, creativity, the “process of trial and error”, are never quite encouraged in favor of more rational disciplines. “Indeed, we have psychological and intellectual difficulties with trial and error and with accepting that series of small failures are necessary in life. “You need to love to lose”. In fact the reason I felt immediately at home in America is precisely because the American culture encourages the process of failure, unlike the cultures of Europe and Asia where failure is met with stigma and embarrassment”, says Nicolas Taleb, essayist of Lebanese origin and writer of The Black Swan.

The European start-ups do not fail! Their survival rate is 90% after 5 years of existence. But is it good news? In the first months of Google,co- its founder Larry Page considered a success rate of 70% of individual projects was ideal. Asking for more, “we would take too few risks.” And failure is so digested that Americans have created the FailCon (a conference on failure) in 2009. By sharing their experience of failure in public (because failure is still a taboo even in the United States), participants learn from their peers and leave strengthened. The famous entrepreneur and investor Vinod Khosla admitted to have failed more often than he was successful. “Failure is not desirable, it is just part of the system, and it is high time to accept it.” Would this explain why we do not create any Google Switzerland and Europe?

PREPARING FOR SUCCESS

Nevertheless, the failure will always be unpredictable. “Of course, business, just as life, is never a smooth curve. Failure can come as quickly, and more unexpectedly, as success. But true success is management of failure. Every time you hit a bad patch you must be able turn your fortunes around. That’s why it’s important to be always prepared for failure and build strong teams. To be a successful entrepreneur, venture capitalist or philanthropist, you must bring together people who know there will be problems, love to solve problems, and can work well as a team.” … “It reminds me not to be too proud. I celebrate failure — it can temper your character and pave the way for great achievement.” notices Kamran Elahian.

So, should we be not afraid to fail? A short and most moving answer comes from Steve Jobs, who – we must not forget – failed to grow Apple in the 1980s: “I didn’t see it then, but it turned out that getting fired from Apple was the best thing that could have ever happened to me. The heaviness of being successful was replaced by the lightness of being a beginner again, less sure about everything. It freed me to enter one of the most creative periods of my life.” And even better: “Remembering that I’ll be dead soon is the most important tool I’ve ever encountered to help me make the big choices in life. Because almost everything — all external expectations, all pride, all fear of embarrassment or failure – these things just fall away in the face of death, leaving only what is truly important. Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart.”

When will a FailCon be organized in Switzerland?

A Chinese student introduced me to a few years ago the following proverb: “Shi Nai Bai Zhi Gong Cheng Mu”, which means “failure is the mother of success.” Asia might learn perhaps faster than Europe this important concept.

New rankings of the best technology clusters: the USA still leads.

1 Reply

There are so many articles, studies about technology clusters or ecosystems that I am not sure exactly why I write this. The only explanation is that I have read a couple of simultaneous studies, all mostly going in the same direction. Whereas there’s been a trend claiming the decline of the USA in favor of Asia or predicting the decline of Silicon Valle (SV), these ones show the opposite: the USA still leads, and among the American clusters, Silicon Valley is by far #1.

The first study is the Startup Ecosystem Report 2012 by the StartupGenome. You can read for example what techCrunhc says about it: Startup Genome Ranks The World’s Top Startup Ecosystems: Silicon Valley, Tel Aviv & L.A. Lead The Way.
The following table was kind of a surprise to me, not because SV is leading (this has been obvious for me for many years), but because Boston is #6 only.

I read the report and changed the ranking method with their own data and got the following new graph. I basically weighted all parameters (Output, Funding, Performance, Mindset, Support, Talent, Trendsetter, Differentiation to SV) on the horizontal axis, but deleted the last two ones on the vertical axis as I was not convinced about their role. It obviously shows there is a lot of subjectivity in rankings! The only thing which does not seem to be debatable is that SV is number 1.

There’s been another interest study: Ecosystem 101: The Six Necessary Categories To Build The Next Silicon Valley. It’s a good complement to the Startup Genome work, which is weak on Asia. The criteria here are Market, Capital, People, Culture, Infrastructure and Regulations. Again the USA leads, but weakness here is that we do not have a more detailed description of local clusters.

Finally, there’s been a strange analysis comparing US universities, whowing that Stanford leads and MIT is not even number 2. This is about VC money. The University Entrepreneurship Report – Alumni of Top Universities Rake in $12.6 Billion Across 559 Deals

Well, Silicon Valley might be declining, btu my feeling is it will be a long time before it loses its #1 position…

A Quiz to New 2012 EPFL Students

Leave a reply

Each year, I have a small tradition of giving a start-up-related quiz to new EPFL students. Here it was:

I was in Helsinki last week and there, the chairman of Nokia gave a talk. “The world is in crisis and the only way we will solve our challenges is with creative people and entrepreneurs. […] Therefore entrepreneurship should be cherished, it is not a profession, it is a state of mind. […] Again it is a state of mind.”

EPFL 1st mission is teaching, its 2nd mission is research. Its maybe-lesser-known 3rd mission is innovation and technology transfer, which includes entrepreneurship. If you have creative ideas, we are here to support you. More on http://vpiv.epfl.ch/innogrants

To show you that that has been understood at the top of the best universities, both the President of Stanford University and the President of EPFL have been entrepreneurs, they have been the founders of 3 start-ups each. I will offer a bottle of champagne to the first student who sends me via email the names of these 6 companies. I am Herve Lebret and I support entrepreneurs at EPFL.

The answer may be found here, and more importantly, I will come back on Risto Siilasmaa’s talk – the chairman of Nokia.

The State of Innovation

Leave a reply

After my summer break, I received mails from friends and colleagues, all related somewhat to new (in fact old) trends in innovation. Thanks to Jean-Jacques, Andrea, Will and Martin :-). The four articles I read are:
– Les Misérables – Europe not only has a Euro crisis, it also has a growth crisis. That is because of its chronic failure to encourage ambitious entrepreneurs from the Economist (July 2012).
– Small is not beautiful from the Economist again (March 2012).
– In bid for start-ups, venture capitalists elbow their way into the spotlight from the International Herald tribune, (not freely available online).
– In Silicon Valley, Chieftains Hold Sway With Few Checks and Balances from the New York Times (July 2012)

The second one is probably the easiest to summarize and it is such an important message, that it needs to be hammered again: Innovation is not about large or small companies (SMEs), it is about fast growth (gazelles, start-ups). And let me add, it is also about a culture of trying and risk taking. “Rather than focusing on size, policymakers should look at growth.” […] “In a healthy economy, entrepreneurs with ideas can easily start companies, the best of which grow fast and the worst of which are quickly swept aside. Size doesn’t matter. Growth does.”

The first article is more complex to describe and I really liked only the first half. The second half explains that Europe struggles because of bad laws on bankruptcy, bad access to finance and bad labor laws. I am not sure these are the causes of our innovation crisis. I preferred the first part such as: “Europe’s culture is deeply inhospitable to entrepreneurs; wanting to grow a start-up into a behemoth is quite as countercultural as piercings and performance art.” […] “They will struggle to hire professional managers to help their firms grow, because European executives are extremely risk-averse. Their young firms will quickly find that established European companies tend not to like dealing with tiny ones.” And as a consequence, “the giants are all ageing”.

“Europe gave birth to just 12 new big companies between 1950 and 2007. America produced 52 in the same period (see chart above).” […] “Many aspiring entrepreneurs simply leave. There are about 50,000 Germans in Silicon Valley, and an estimated 500 start-ups in the San Francisco Bay area with French founders. One of the things they find there is a freedom to fail.” The answer is not simple, but there is hope: “There are schemes […] to get academics to hate business less, to expose schoolchildren to entrepreneurial notions.”

The last two articles are probably less important but give interesting new trends in Silicon Valley. One shows that the venture capitalists are becoming more visible (in order to court entrepreneurs) and mostly thanks to or because of new fund Andreessen Horowitz. But there is also debate (and I agree with the following comment): ‘‘I don’t quite understand the venture capital celebrity. We should be supporting actors. The entrepreneurs do the work and deserve the credit.’’ But Andreessen adds an interesting comment about the dynamics of venture capital: “Each year 15 deals account for 97 percent of all venture capital profits. To be successful, they would have to pursue those 15 companies. And they would do it by aggressively marketing their expertise to the reporters and bloggers who follow start-ups.” The final paper complains about the dangers of too much control to founders and managers vs. board or shareholders: “Since Google went public in 2004 in a way that maintained control for its founders, the leaders of Silicon Valley have been chary about shareholder voting rights.” […] “Directors are meant to act as a check on executives or at least add their expertise and advice to big decisions. In the Valley, however, the idea of the visionary chief executive dominates, and there may be little room for input from directors.” […] “So the new thing in Silicon Valley appears to be for public companies to be run as private ones without significant input from boards and shareholders. This leaves the wunderkinder of the Internet free to run their companies without interference. The question is whether this is merely a bubble in corporate governance or a trend that will spread to the rest of corporate America.”

Start-ups hiding six feet under

1 Reply

Here’s my 4th contribution to EPFL‘s “start-up of the month”

03.06.12 – The fear of failure probably explains the absence of a “European Google”. Whereas, on the other side of the Atlantic, start-ups are born and die in full view of everyone, their counterparts in Europe hang on for dear life, sometimes even when it doesn’t make sense to do so.

The fourth start-up of the month doesn’t exist! At least not at EPFL, nor in Switzerland or in Europe. I mean those start-ups that fail. European start-ups are a real paradox. We often complain about not being able to create successes like Google, Apple or Facebook, but on the other hand we don’t have any big failures either! In his doctoral work published in 2011, Sven de Cleyn – a researcher specialized in technology transfer – demonstrates that less than 10% of European academic start-ups close down [1]. In a survey dating from 2008, ETHZ produced similar metrics, with an activity rate of 88% [2]. EPFL is therefore no exception to the rule.

In fact, this strange phenomenon can easily be explained. European start-ups focus on survival, to the point that Sven de Cleyn had to use this parameter to define success. Failure is so culturally stigmatized that it must be avoided, almost at all cost. This is one of the fundamental reasons behind the difficulties we experience. In the excellent film Something Ventured, the Californians, followers of a Manichean way – success or death – call start-ups the “living-dead”!

Yet, failure is far from being a bad thing – it is actually necessary. Who didn’t fall several times while learning to ski, roller-skate or simply ride a bike? How could we manage not to fail in the far more complex task which involves bringing a technology or innovative product on to the market? Schumpeter, the famous innovation economist, had created the concept of “creative destruction”, explaining that the new replaces the old, and that this is in fact a good thing. He used a striking image to illustrate this: “It’s not an owner of stage-coach lines who is going to build railways!”

In his famous speech at Stanford in 2005, Steve Jobs echoes this sentiment: “Remembering that I will soon be dead is the best tactic I have ever used to help me make the important choices in my life. Because almost everything – expectations, pride, fear of embarrassment or failure, all these things – evaporates in the presence of death, leaving only what really matters. Remembering that you are going to die is the best way I know of avoiding the trap of thinking that we have something to lose.”

So, you may say that that’s easier to say than to do! It’s certainly very difficult to bring up past failures or to cite examples, as entrepreneurs are reticent to confess such things. I could mention a few myself, but without having the consent of the people concerned. I could almost have called this article “Desperately Seeking Start-up Failures”!

It seems that start-ups, like the mythical thorn birds, look to hide away in a thorn bush and impale themselves. We never organize proper funerals for those who fail, but now FailCon has done away with this taboo. This one-day conference is aimed at technology entrepreneurs, investors, developers and designers. It’s dedicated to the study of their own and others’ failures, as a preparation for success. During the first event held in San Francisco in 2011, Vinod Khosla, the famous venture capitalist, admitted having more often failed than succeeded. Failure in not desirable, it’s just part of the system, and it’s high time we integrated it accordingly. When will there be a FailCon in Switzerland?

[1] Sven H. De Cleyn, The early development of academic spin-offs: holistic study on the survival of 185 European product-oriented ventures using a resource-based perspective.University of Antwerp, 2011
[2] Oskarsson I., Schläpfer A., The performance of Spin-off companies at the Swiss Federal Institute of Technology Zurich. ETH transfer 2008.

Edouard Bugnion at EPFL: back to Switzerland!

Leave a reply

If you do not know Edouard Bugnion, you can read the article I had published in 2010, a Swiss in Silicon Valley. Edouard was at EPFL last week and gave a great technical talk about VMWare and virtualization, in fact a summary of his PhD thesis. The full text comes below.

Edouard Bugnion with the author in the middle of « cubicles » at Nuova in May 2006 (Picture: Mehdi Aminian).

For the anecdote, you can notice than Ed began his PhD in 1994 and will only finish it in 2012! As Martin Vetterli, dean of Computer Science at EPFL, said “at least he is finishing it, contrarily to the Yahoo or Google founders!”. The reason why it took Ed so much time is that he co-founded VMWare and Nuova in between… I have such a friend from Stanford who was doing his MS / early PhD in 1990-92 and obtained finally his diploma in 2004. He also had his start-up journey in the middle. (Faster though, Michael!) This back and forth adventures are not very common in Europe…

I noticed 2 other great lessons from Ed’s talk:
– as mentioned below “Virtual machines quickly lost popularity with the increased sophistication of operating systems” and it did not prevent VM to become a great market through VMWare success. Market dynamics are never simple and great opportunities may come from less explored areas of technology.
– Ed also explained that they did not or could not partner with established players (microprocessors or OS vendors) for various reasons. You can imagine the big players did not care, or would not change / adapt their (strategic) products or features. So when Ed was asked if this was not risky, he answered, risk is (sometimes) good.

Once again, this proves first that SV success comes also from immigrants and second, we need these people and their experience back! Hopefully we will have him at our ventureideas conferences. Invitation launched!

EPFL IC Seminar : “Using Virtual Machines in Modern Computing Environments with Limited Architectural Support”
By Edouard Bugnion, Stanford University

Abstract
Virtualization has gone through a full “popularity cycle”. Originally conceived in the mainframe era, virtual machines provided an efficient, isolated, and compatible duplicate of the hardware of the underlying machine. Virtual machines quickly lost popularity with the increased sophistication of operating systems, and subsequent processor architectures were designed without consideration for virtualization.

In this talk, I propose to use virtual machines to address limitations of commodity operating systems on modern architectures, even in the absence of architectural support for virtualization in the hardware. The primary technical contributions of the work were developed as part of two systems, each built for platforms with limited architectural support for virtualization. First, Disco ran commodity operating systems on scalable MIPS multiprocessors. Disco enabled virtual machines to form a virtual cluster that could transparently share the resources of the underlying multiprocessor. Second, VMware Workstation is a successful commercial product that allows multiple, unmodified operating systems to run concurrently on the same x86 system, allowing users to decouple their guest operating systems from the underlying hardware. VMware Workstation was the first 32-bit virtual machine monitor for the x86 architecture, and demonstrated that the x86 architecture was indeed virtualizable, despite a lack of architectural support.

Today, and in part because of the impact of Disco and VMware, virtual machines once again play a foundational role in Information Technology, and current-generation hardware provides architectural support for virtualization, similar to what already existed decades ago on mainframes.

Biography
Edouard Bugnion started his Ph.D. at Stanford in 1994, and is expecting to finish it this month. In the meantime, he co-founded two successful companies: VMware and Nuova Systems (acquired by Cisco). At VMware from 1998 until 2005, he served multiple roles including CTO. At Nuova/Cisco from 2005 until 2011, he built the core software team and became the VP/CTO of Cisco’s Server, Access, and Virtualization Technology Group, a group that brought to market Cisco’s Unified Computing System platform for virtualized datacenters.

His research interests include computer systems, datacenter and cloud networking, as well as technology entrepreneurship. For their work, Bugnion and his colleagues have received the ACM Software System Award (for VMware) and the ACM SIGOPS Hall of Fame Award (for Disco). Edouard was raised in Neuchatel, Geneva, and graduated from ETHZ.

Start-Up of the Month: Kandou and the Investors

Leave a reply

Here is my new “Start-Up of the Month” chronicle, published by EPFL.

22.04.12 – Which investors trusted their money with Kandou? This startup, active in the high-tech domain, knows how to find financing.

In November 2010, EPFL celebrated its thousandth invention. I’ve extracted a passage from an article published on this occasion: “Kandou, invented by Harm Cronie and Amin Shokrollahi of EPFL’s Laboratory of Algorithms, enables processors to communicate with their peripherals (memory, printers or screens) faster while using less energy. A small revolution in the field of computer science, but which comes from mathematics!”. In March 2012, the start-up resulting from this invention announced that it had raised 10 million dollars. Some news (or rather an absence of news!) which is intriguing: this young company has very little to say about its investors. “They are private investors, not institutions or industrial concerns”, explained Harm Cronie briefly in the newspaper Le Temps. Even more surprising, this first raising of funds has already ushered in a second, which is already being organized. “I can’t say any more about this at the moment, as we are currently discussing with the investors,” he concludes.

This is not the first such venture for Amin Shokrollahi. Digital Fountain was sold to Qualcomm in 2009 – since 1998 it had raised over 50 million dollars. The start-up had support from Cisco, Sony and TI, but also trust funds such as Matrix and Granite. With Kandou, he has changed his strategy. He knows that institutional investors have constraints which force the entrepreneur to have a more mature strategy than with private investors, whereas business angels can act out of passion, and are not accountable to their own lenders.

As I mentioned in the introduction to these columns: you have to think global. For Kandou, the first partners may be called IBM or Intel. If an innovation is solid enough, clients can be located anywhere (unfortunately, however, rarely in Europe when it comes to high-tech). However, it took nearly 18 months to move forward to this acceleration phase. Kandou knew how to use the richness of the eco-system; including the EPFL spin fund, which is similar to Innogrants, venturekick or FIT. Giving birth is not instantaneous – experience shows that you need between 1 and 3 years.

Amin Shokrollahi and Harm Cronie

Moreover, Amin is not on his own: there is also Harm Cronie, co-founder and former student. The professor-student pair is one of the most conventional. It’s certainly not the most common – the partnership made up of two young entrepreneurs is probably the most-well known type (at least in the United States with Google, Yahoo, eBay, etc.). But perhaps we are forgetting that Netscape was founded by Marc Andreessen and Jim Clark, professor at Stanford and also founder of Silicon Graphics. In addition, Amin has been able to benefit from the advice of his mentor, Steve Papa. The latter founded Endeca, an American success story, which was sold to Oracle in October 2011 for over 1 billion dollars. Mentors are essential to entrepreneurs, as the latter are often isolated and must take critical decisions from the very first days of the start-up’s existence. Friendly and experienced advice is therefore very welcome. Thus, Steve Jobs could rely on Bob Noyce, the founder of Intel, during his first years as an entrepreneur.

Kandou prepared the ground to be born under a lucky star. A breakthrough technology responding to a market-driven demand, a friendly eco-system, a very talented team and investors prepared to support ambitious growth. All the necessary ingredients are there!

European Founders at Work

1 Reply

European Founders at Work is a very interesting book. It is the perfect complement to Founders at Work, particularly for the European dimension.

One comment though, I noticed 8 UK projects out of a little more than 20 and these 20 are mostly Software or Internet. More diversity may have been great. This being said, the lessons are great! Here are some… (and you will learn much more by reading the book entirely!)

About the US Market (for Europeans)

“I think that Europe has a lot of credibility in certain sectors, particularly media and the creative industry, but I think that in technology, generally, most of the world’s biggest companies were founded in the US and, therefore, the expectation in the US market is that in technology, they are going to be talking and buying from US companies. […] it’s important to become a US team in the US market. […] I think you need to be prepared to make a pretty big investment in the US and you need to be prepared to build up the business for several years,” Jos White – MessageLabs

“I would say that the IT sector, and especially enterprise software, is extremely global but remains dominated by US companies. There are very, very few examples of European IT and software companies that have managed to go global. I believe, the only way to make that happen is to go global very, very quickly, as we did from the outset.” Bernard Liautaud – Business Objects

“In my experience, if you come from a smaller European market, like Hungary or Sweden, you tend to think that it’s a nice next step to go to UK or Germany. The issue is that if you become successful there, it is still only a sixth of that of the US market. So, if you get a US competitor, you immediately become a regional player instead of a global player. So, very early on, I said we shouldn’t even be thinking about opening up offices in Frankfurt or in London because the way to make it globally was to first prove that we can make it on the world’s biggest market, which is the US. That’s going to be the truth at least for the next ten to fifteen years.” Peter Arvai – Prezi

“I think the reality is that it’s not about Europe vs. Silicon Valley. The best entrepreneurs in Europe understand Silicon Valley very well. They have spent time in Silicon Valley and developed relationships in Silicon Valley. Take all of that and all of the value that comes from that because you’re a fool if you think that Silicon Valley isn’t the most sophisticated, vibrant place for technology start-ups on the planet. It probably will continue to be so for the next twenty-five to fifty years because of the network. And the ecosystem is so profound there and keeps on getting stronger with Zynga, with Twitter, with Facebook, etc. I think any European entrepreneur or any entrepreneur in this space that doesn’t want to spend time or learn from Silicon Valley is foolish. But I think there’s a lot of things that you can learn and be aware of as an entrepreneur if you’re not in Silicon Valley, that you can use to your advantage.” Saul Klein – LoveFilm

The interviewed entrepreneurs

About success and failure

“Any successful entrepreneur knows that it was a combination of skill and attitude, with luck, that really leads to success. And there are very fine lines between success and failure” Jos White – MessageLabs

“I learned that the game is never over: you should never give up, stubbornness is somehow a requirement to lead a company to success, and the road to success is inevitably paved with failures. When things start to go wrong, the worst thing to do is panic and change everything.” Olivier Poitrey – DailyMotion

“I think as an entrepreneur you fail all the time. You’ve got failure built into your business. Right? So you don’t really keep track of failure. You never really fail. I think that’s essential when you’re an entrepreneur, that you’re not afraid of failure. You embrace failure. Your whole business is based on trying out stuff, being ready for stuff to fail and just taking the next step as soon as you fail.” Boris Veldhuijzen van Zanten – The Next Web

About ambition

“Come up with an idea which is impossible then try to find somebody who can make it un-impossible and then do deals which have never been done before.” from the Shazam founders

“[A new trend is] You definitely see entrepreneurs being extremely ambitious.” Reshma Sohoni – Seedcamp

“I guess one advice is it’s more exciting if you feel like you’re changing the world in a positive and innovative way. So we’d love to see more of those out of Europe.” Brent Hoberman – lastminute.com

“But it is probably harder in Europe in that it innovates less, because you have less-crazy investors financing crazy entrepreneurs. [Advice:] One, international. Two, innovation and no copycat. And then, three, big ambition.” Loic Le Meur – Le Web

About the team

“There are very few founders that stay with their businesses beyond five years and quite often, in my opinion, it’s because they didn’t manage to surround themselves with the right team.” Bernard Liautaud – Business Objects

“But also obviously you hire people that are better than you” Ian Dodsworth – TweetDeck

“I also learned how hiring the right people from the start is key: the very first people to join will shape the company’s personality. And finding talented people you are pleased to work with is very important to generate emulation from new hires. Olivier Poitrey – DailyMotion

“A common mistake is building the team. If they’re quite scared to part with something … Like when they’re quite scared to part with equity or bringing on mentors. “Do you want to be a big fish in a small pond or a big fish in a big pond?” They’re too closed with their equity and they try to do everything.” Reshma Sohoni – Seedcamp

“Another common mistake is like a cliché now, but it’s just the classic: “I’ll just build another feature and I’ll focus on my product.” Alex Farcet – Startupbootcamp

About entrepreneurship

“The main advice is just start. Many people have hundreds of ideas, but they never really start their own project. And if you fail, start again. Entrepreneurship is, in my point of view, the best and the only way to personal development” Lars Hinrichs – Xing

“There are a lot of moments like that where you don’t know what you’re doing, but this was the whole point.” Giacomo Peldi Guilizzoni – Balsamiq

“ “Do it.” It’s the best decision I’ve ever done in my whole life. […] And I was studying engineering as well, and I had one hundred classmates. And I know that almost zero of them actually went on to start a company, which is kind of crazy because I know a lot of them have good ideas. But none of them quite felt that they were able to pull it off.” Eric Wahlforss – Soundcloud

“I have been lucky enough to be born with optimism.” Richard Moss – moo.com

“Hang in there. Don’t give up. I heard that most start-ups fail because the founders stop working on them.” Richard Jones – last.fm

“I would be realistic and I would say, “Look, if you think you are the lucky sperm that’s going to get the ovule, go ahead and start the business.” It’s a very difficult thing to do with a very high probability of failure. But it is essential for society and even those who try and fail are also helping society. So I encourage people to try, but at the same time warning them how difficult it is. I am tenacious and I am sometimes lucky and I’m good at spotting trends. But I was also lucky. Most people who try businesses fail. That’s the truth and people should be warned about that.” Martin Varsavsky – FON

As a conclusion let me quote Saul Klein in his foreword… “Right now, Silicon Valley is peerless at both supporting innovation and creating serious scale. There’s been no master plan, but the 60-year interplay of government as an early catalyst; academia and established companies as early customers and sources of talent; and of course, investors willing to take risks and a long term view, have given entrepreneurs fertile ground to sow seeds and try to grow monsters with dragon’s teeth ready to conquer the world.You need every element of this ecosystem working perfectly to create monsters. This is serious progress. But the straight facts are that while we are unquestionably masters of invention in Europe, we don’t yet have the ecosystem— or perhaps the attitude. […] For me, the big question is if we are truly able to do this.”

Post Scriptum: I am not finished yet. I love to add cap. tables and not so many of these entrepreneurs are running a publicly quoted company. Strangely enough, one is Russian, Yandex. Its foudner and CTO says something great about sales: “I think one of them is when you create a software product, you have to learn how to sell it, you have to learn how to make it a product. It’s a very basic skill. I think every engineer has to try that at least once, to sell the software he created, regardless of how bad it is. No matter how unpolished your product is, you have to try to explain why it is good for someone else.”

Here is Yandex amazing cap. table…

Click on picture to enlarge