Tag Archives: Entrepreneurship

Xavier Niel – A real desire to cause trouble

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I listened to Xavier Niel on France Culture on December 6th and I had the confirmation of a relatively atypical character. Asked in particular about Elon Musk, here is his answer: Xavier Niel distinguishes between the entrepreneur, “probably the best in the world”, and the character, “completely crazy and potentially dangerous”. He praises his willingness to consider savings for the American state: “if he applies these savings in a reasoned way, to reduce the operating costs of the American state, I am sure that it will go very well. If, after that, we start to overflow, that’s nonsense!”, he qualifies. According to Xavier Niel, it is not so much the fact of paying fot Twitter 45 billion to own the social network that poses a problem, but rather the fact that the product takes on the image of its owner, “which is less exciting”, considers the boss of Free. The price doesn’t shock me if he sets up a plan that will make this company generate money. The purpose of a company is to bring together three parties: employees, customers and shareholders. Consequently, these three parties must be happy. However, the customers are not happy in his case.” In the dialogue he establishes with Jean-Louis Missika, we find a rather fascinating character who uses “ouais” (yeah) and “nan” (nope) as if he were still the kid from Crétail where he grew up. The character is a billionaire but his career has not prevented him from (or perhaps helped him to) staying down to earth unlike some of his counterparts in Silicon Valley.

I liked this book which doesn’t give advice but allows you to understand certain things about his character and his vision of entrepreneurship. A first example: I believe that youthfulness as a state of mind is essential. It is found more often in young people, because when we get older, we become richer, we harden. Youthfulness allows you to create incredible things. You don’t yet have the constraints that are imposed on you when you get older. With age, society imposes limits on you, you no longer have the optimism or the attitude towards risk that you had in youth. Whereas when you are 20 years old, when you leave school, you want to eat the world; you want to do crazy things. [Page 35]

Beyond the usual explanations about this world, Niel expresses unfailing optimism. When I started investing in startups, I was convinced that all entrepreneurs were going to be successful, that they were all going to create huge companies. Well, there were a few disappointments, but you get the idea. In another genre, I thought that Putin was threatening to invade Ukraine but would never act. Just like I thought that Covid would be over in 3 days, and that Brexit would never happen. I am a walking disaster when it comes to forecasts, because I am too optimistic. There are people who use the word “genius” to talk about me; it’s ridiculous, I am absolutely not a genius. I have two strengths, which are based precisely on my lack of intelligence: the simplification of problems, and naivety. […]
JLM: And when it fails?
XN: And when it fails, I forget and move on. Because if you let yourself get discouraged by your failures, or if you listen to everyone who tells you “it’s impossible”, you do nothing. […] When I created Station F, I hoped to welcome 1000 start-ups. And François Hollande, to whom I presented the project, said to me: “But are you sure there are 1000 start-ups in France?” Well, you know what, at the time, I had never asked myself the question! Yet it’s a logical question, I should have thought about it, done a market study, that kind of thing. [Page 39]

The important thing is not the project, it’s the founder. [Page 133]

With Kima, yeah, we have a method. We spread the risks. We invest small amounts – around 150,000 euros – in a hundred start-ups each year. Between failures and trade sales, we must have 1,500 participations.
JLM: Less than fifty that work out of 1,500, that’s not a lot…
XN: It’s part of the game. Yes, you’re wrong, and you’re wrong often. […] We don’t finance success, we finance progress. […] Of all my investments, [Square] is the most spectacular performance. I think we did x1,000. […]

The Americans I know who had success with their start-ups were all developers. [Page 139]

Not only did they have the idea for their product, but they also developed their own software, website or app. Google, Facebook, Snapchat, they were all created like that: by people who coded their own products. Hence this idea that a start-up has a better chance of succeeding when there is a coder among its founders. That’s why I created 42.
[whereas] unicorn founders, I love them, but they always have the same faces: three white guys who went to business school [page 145]

Being an entrepreneur is [page 146]

choosing what you do during the day. If you don’t want to make something, you don’t do it. You create your own job. There’s no greater freedom. Is that okay, is that convincing enough?
JLM: Rather. But you’re forgetting the pressure…
XN: That’s not what’s important. What’s important is what you’re capable of creating. […] For me, this desire to create something from an idea, to bring together different people to bring something to society, create value, invent a different product, help the most disadvantaged. Entrepreneurship is an attitude, a state of mind. You don’t need to start a company to be an entrepreneur. Are you launching an association, a project, a social media account with a real editorial line? For me, you’re an entrepreneur. Entrepreneurship isn’t just about business. You can be an entrepreneur in humanitarian, social, educational, environmental, and so on.

A desire for revenge? [Page 204]

The taste for the game is enough in itself. No need for psychology. Everyone likes to play; it’s the playing fields that differ. Mine was the telecom market. Everything is a fucking game. An eternal game, that people have been playing since the beginning of the world. So I play, and whatever the game, I want to win. I want to be first. It’s more or less long, sometimes you get overtaken. And then you catch up. That’s what gives life spice.

[…] When I try to understand why I failed, it’s not because I regret having lost money. It’s because I want to be number one. […] Nope, I just like winning. Money is just a signal that you have won a game, because you are playing with money. [page 205]

Niel is not naive. He is even a fighter. When he returned to Créteil to talk to the “kids” It is not easy to catch their attention. We are mostly white, old, even old fools. So I have a trick to wake them up. I tell them: “I also went to school here in Créteil, and then I went to jail.” And then all of a sudden, the kids wake up. [Page 22] He also admits “Me, since I was little, I wanted to earn money” [page 15] while his first words of the interview are “Frankly, I had the happiest childhood in the world. We were a very close-knit family. I swear, everything was perfect. I was so happy that I thought I was the king of the world, and that my parents hid it from me so that I could have a normal life.”

My closest friends are entrepreneurs, some are Americans, some of whom have created social networks or others are investors. I like entrepreneurs because they are different, because they have a little grain of madness, because I am never bored with them: people see me as a billionaire, but I see myself as an entrepreneur. [Page 222]

How do you explain the excesses of entrepreneurs? [Page 227]

JLM: When Elon Musk challenges Mark Zuckerberg to an MMA fight, everyone laughs but he ridicules the ecosystem. In a less visible way, the positions taken by Peter Thiel or Marc Andreessen are just as sulphurous, and give the impression of a caste that believes itself above ordinary mortals. You know them a little, how do you explain these excesses?

XN: The people you mentioned are very different from each other. There are some who are a little crazy and who believe they have superior intelligence. And there are others who are a little like children in the playground. It’s… special: But that doesn’t prevent them from having their charm and being interesting. […] But they’re not all like that. And besides, they left Silicon Valley. It’s a part of the ecosystem. Very noisy, yes, but only a part of it.

JLM: We don’t hear the others anymore. They’re nowhere to be seen.

XN: That’s not true, they just do something else. And then if you take the current boss of Google, Sundar Pichai, he’s an Indian immigrant who doesn’t consider himself superior to the rest of humanity. I don’t know his political ideas, but I’m sure they’re quite different from Elon Musk’s. […] Elon Musk only represents himself. He’s locked himself into a transgressive extremist persona and I don’t know how he’s going to get out of it, because by talking bullshit, the time comes when you pay for it. The moral is that you can be both a brilliant entrepreneur and a dirty jerk.

You know when you talk to them, you find yourself in an unreal world, where disruptive innovation is always for tomorrow morning. How many times have I heard that nuclear fusion is in a year. Same for carbon capture. That’s what makes entrepreneurs strong: for them, if you don’t try, you have no chance of succeeding: So they try, again and again. That’s why, despite all their questionable attitudes, I love these people so much.

As a conclusion

I have already discussed the excesses of Silicon Valley, for example here. Its excesses sadden me and yet, I have a certain fascination for the achievements of its entrepreneurs. This is probably the same reason why I also enjoyed reading Une sacrée envie de foutre le bordel (A real desire to cause trouble). We may not agree at all with Xavier Niel. We may not agree with everything Xavier Niel says. The book is full of exciting anecdotes and also of questionable points of view, we must simply remember that the man is optimistic and defends freedom almost without limits. His limit is the law, and even that… not at the beginning.

I take a step aside. My darling made me discover the beginnings of the MGMT band through an article of FIP MGMT: a magical video of “Kids” in 2003 surfaces

Xavier Niel’s book has a bit of this effect. We often find the child behind the billionaire, his style, his passions. We discover that the entrepreneur is a cataphile. He ventures there about once a month, much more when he was younger…

The last sentence of the book [page 300]: F…!, it’s still indecent, how lucky I was!

PS. For those interested in politics and Silicon Valley, a seminar throughout the first half of 2025 seems to have an enticing program, Digital Capitalism and Ideologies.

The Cockroach’s strategy according to Serge Kinkingnéhun

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I regularly follow the publications of Serge Kinkingnéhun, whose strong statements are such as “I apply the properties of the cockroach to startups to make them invulnerable” so I read with delight his recent book La stratégie du cafard (The Cockroach’s strategy), which subtitle is also strong: “Cockroach perhaps, but I create profitable startups”

So why such a love for cockroaches (rather than unicorns)? The author refers to an article by Catarina Fake dating from September 2015: The Age of the Cockroach from which I take a brief extract: A Plague is coming to kill off the Unicorns. Inflated and unsustainable valuations, a shaky stock market, a weak China, and the aftermath of excessive enthusiasm are all pointing to the inevitable. Who will survive? As always, the less glamorous, but very hardy Cockroaches.

He could have cited Paul Graham who wrote on his blog in 2008: Fortunately the way to make a startup recession-proof is to do exactly what you should do anyway: run it as cheaply as possible. For years I’ve been telling founders that the surest route to success is to be the cockroaches of the corporate world. The immediate cause of death in a startup is always running out of money. So the cheaper your company is to operate, the harder it is to kill. And fortunately it has gotten very cheap to run a startup. A recession will if anything make it cheaper still. And related to the topict, the founder of AirBnB was proud to be treated as such by the founder of YCombinator: Surprisingly, Paul [graham] said, “If you can convince people to pay $40 for a $4 box of cereal, maybe you can get strangers to stay in other strangers’ homes.” He also liked that we were resilient, calling us “cockroaches.” In the midst of an investment nuclear winter, he believed only the cockroaches would survive, and apparently, we were one of them. More here.

Serge Kinkingnéhun dedicates his book to all entrepreneurs who want to remain free! adding Live Free or Die. Does he want to indicate that being a cockroach is a way of being happy because it is invulnerable? The author pertinently recalls a certain number of fundamentals of entrepreneurship. Its chapter 2 is entitled A startup is first and foremost a business [Page 20]. However, this is not exactly what Steve Blank explains here. Whether a startup is a business or a business in the making, there is a consensus on the necessary survival of the organization and that its main fuel is money, the use of which must be optimal.

Serge Kinkingnéhun gives a multitude of excellent advice such as the answer to the title of chapter three When to start your startup? [Page 103]: as late as possible, that is to say when cash flow requires the creation of a bank account. He explains How to sell without a product or service (Page 27]. He also explains How to find non-dilutive financing [Page 129] And he has numerous examples such as KFC, Free by Xavier Niel, MailChimp, CoolMiniOrNot (CMON) for what is the crowdfunding strategy of the latter.

I must not give the impression of an excessive fascination with cockroaches. Indeed ! The book remains very focused on a particular and very French situation; namely that the state through subsidies (multiple grants) and favorable taxation (the Research Tax Credit for example) allows businesses to survive. I’m not sure it promotes growth, even slow growth. Furthermore, the examples given are always fascinating but not necessarily exemplary. Cmon, Mailchimp, Free seem to have been possible because the founders had (had) an entrepreneurial activity which facilitated the launch of the new one. The world of food and/or mass distribution shows a very large proportion of unlisted companies as indicated on Wikipedia, companies which in their own way undoubtedly started like Serge Kinkingnéhun’s cockroaches without ever external funding but bank loans.

In reality, entrepreneurs are often cockroaches. In high-tech, there was more than just MailChimp. There was GoDaddy, Navision, or even more famous Oracle or Microsoft, companies which were able to grow their revenues without using (or very little) fundraising. There is no doubt that this is the strongest way to grow. I am not convinced that all of the world’s technology could have reached this stage without the particular model of venture capital, the limits of which the author clearly shows. Investors are impatient, sometimes incompetent. It is therefore better to know who you are dealing with and how.

But I remain cautious about the fact that inventiveness and frugality would be exclusive alternatives as promising as what venture capital has brought to the world of technology over the past fifty years. VC has a history and a reason for existing. It has excesses too. But I still think its existence stems from a need to find a way to launch a business before customer revenue is a possibility. Intel, Apple, Google were undoubtedly born from this constraint. Inventiveness and creativity have also been part of their history. I am therefore not convinced that we can systematically create quickly profitable startups (at least in high-tech).

(And on another sidenote which would deserve an article, I just like unicorns as little as I like cockcroaches, as they are the result of a deviation from the world of startup financing, by the arrival of exuberant actors who have forgotten or did not know the rules of financing of startups, based in fact on inventiveness and frugality… but that’s another subject. You can for example read How Venture Capitalists Are Deforming Capitalism)

Another important nuance: I am not an entrepreneur and Serge Kinkingnéhun is. There is probably neither a single typology of entrepreneurs as the author indicates. What is important is that the actions are in harmony with the personality, ambitions and intentions of the actors.

PS: In an article on LinkedIn, the excellent and funny Michael Jackson mentions the scarcity of IPOs in software in recent years.

The reasons for such scarcity have to do with startup funding and exit modes on markets such as Nasdaq. It would be interesting to check how many of them were cockroaches. I do not have the answer. More broadly, I noted that of the more than 900 startups whose capitalization table I recreated, only 6 had not raised funds from private investors.

The Science of Startups: The Impact of Founder Personalities on Company Success

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When a young colleague of mine (thanks Amine!) mentioned a paper entitled The Science of Startups: The Impact of Founder Personalities on Company Success, I was intrigued not to say interested. You can find the version published on Nature here and the one on arXiv there.

When I look back on the 741 articles of this blog, 118 are tagged with founders, coming only second after Silicon Valley. Most of them deal with facts and figures but 38 mention the term personality. For example:
– Knowledge, skills and personality of entrepreneurs (dated March 2021) https://www.startup-book.com/2021/03/19/knowledge-skills-and-personality-of-entrepreneurs/ where it is claimed “There’s an entrepreneurial character.”
– The Founder’s Dilemmas – The Answer is “It depends!” (dated December 2013) https://www.startup-book.com/2013/12/12/the-founders-dilemmas-the-answer-is-it-depends/ where the claim is “There are no real pattern in becoming a founder (age, experience, childhood influences, personality, family status, economic status), however early influences and natural motivations seem to be important.”
– Larry Page and Peter Thiel – 2 (different?) Icons of Silicon Valley (date October 2021) https://www.startup-book.com/2021/10/30/larry-page-and-peter-thiel-2 -différentes-icônes-de-la-silicon-valley/
and I would advise anyone interested in the topic to read the book Founders at Work. I put my long notes about this great book at the end of this post.

This new article is long and a little complex. So I just took notes directly in the text and paste them here. But the article is worth reading if you have the time and interested.

Attention has increasingly considered internal factors relating to the firm’s founding team, including their previous experiences and failures, their centrality in a global network of other founders and investors as well as the team’s size. […] The effects of founders’ personalities on the success of new ventures are mainly unknown. […] Here we show that founder personality traits are a significant feature of a firm’s ultimate success.

[…]

Key personality facets that distinguish successful entrepreneurs include a preference for variety, novelty and starting new things (openness to adventure), like being the centre of attention (lower levels of modesty) and being exuberant (higher activity levels). However, we do not find one Founder-type personality; instead, six different personality types appear, with startups founded by a “Hipster, Hacker and Hustler” being twice as likely to succeed. Our results also demonstrate the benefits of larger, personality-diverse teams in startups.

[…]

In this article, we analyse a variety of firm-level, founder-level and founder-team-level determinants of the success of startups, which are by their very nature experimental, high risk and likely to fail.
Firstly, we examine a range of firm-level determinants of startup success, including location, industry and age of startup to explore to what extent these factors are associated with success. Then building on our previous occupation-personality fit research, we use a large collection of public data on startup companies from Crunchbase to examine the detailed personality profiles of founders.

[…]

Firm-Level Factors of Startup Success. On a country level, chances for success are highest in the US, Japan, West Europe, and Scandinavian countries. Firms from the payment and software industries have high chances of success. Chances of success are positively related to a firm’s maturity, with firms that are seven years or older having higher chances of success.

[…]

Does the combination of founders and their personalities play a role in startup success, and is there any evidence to support the commonly held view in the venture capital investment community that startups require three types of founders: a Hacker, a Hustler and a Hipster?

[…]

In technology, the categorical roles of Hackers (skillful computer programmers and developers) and Hustlers (entrepreneurial leaders able to win over customers and investors to new
products and ideas) have been around for decades, with […] oppositional tension. For example, when Steve Jobs announced he would take medical leave from Apple in January 2009, Mat “Wilto” Marquis described him as a hacker and a hustler in a well-wishing tweet. However, the first use of Hacker and Hustler in conjunction with Hipster in the context of the putative startup founder dream was coined by influential venture capitalist Elias Bizannes in 2011. It was then popularised in 2012 by an address at the influential technology conference South by Southwest by Rei Inamoto and in a subsequent Forbes article “The Dream Team: Hipster, Hacker, and Hustler”. Hipster is a broad term used to describe members of an urban subculture in many cities in the US and other countries who are design conscious and favour non-mainstream fashions, trendy foods and alternative music. Bizannes co-opted the term to reflect what he perceived was the increasing need for successful startups to have a founder with design-savvy, aesthetic imagination and insider knowledge (Hipster) in addition to the traditional roles of someone good at selling things (Hustler) and creating technology products (Hacker).

[…]

While recent research has demonstrated that many employees in the same occupations share similar personality traits, being a startup founder is not a conventional job. we inferred the personality traits across 30 dimensions (Big 5 facets) of a large global sample (n=4.4k) of successful startup founders.

[…]

Using two samples together: Successful Entrepreneurs and Successful Employees (unlikely to be founders), we trained and tested a machine learning random forest classifier to distinguish and classify entrepreneurs from employees and vice-versa using inferred personality vectors alone. As a result, we found we could correctly predict Entrepreneurs with 77% accuracy and Employees with 88% accuracy. Thus, based on personality information alone, we correctly predict all unseen new samples with 82.5% accuracy.

[…]

Adventurousness— the key feature

We explored in greater detail which personality features are the most important in distinguishing successful entrepreneurs from successful employees and found that the subdomain or facet of
Adventurousness within the Big 5 Domain of Openness was both significant and had the largest effect size. The facet of Modesty within the Big 5 Domain of Agreeableness and Activity Level within the Big 5 Domain of Extraversion was the subsequent most considerable effect. All thirty dimensions of the Big 5 facet were found to be significantly different in their distribution, with ten features having large effect sizes. […] Adventurousness in the Big 5 framework is defined as the preference for variety, novelty and starting new things

[…]

Six types of startup founders

Once we understood that startup founders have distinctive personality features that are different from regular employees, we explored whether there are distinct types of personalities among startup founders.

[…]

We discovered clear clustering tendencies in the data. Then, once we established the founder data clusters, we used agglomerative hierarchical clustering; a “bottom-up” clustering technique that initially treats each observation as an individual cluster and then merges them to create a hierarchy of possible cluster schemes with differing numbers of groups. And lastly, we identified the optimum number of clusters based on the outcome of four different clustering performance measurements. We found that the optimum number of clusters of startup founders based on their personality features is six (labelled #0 through to #5).

[…]

Together, these six different types of startup founders represent a framework we call the FOALED model of founder types—an acronym of Fighters, Operators, Accomplishers, Leaders, Engineers and Developers. Each founder Personality-Type has its distinct facet footprint. Also, we observe a central core of correlated features that are high for all types of entrepreneurs, including intellect, adventurousness and activity level.

[…]

By analysis of the six types of startup founders in our FOALED model within the broader Occupation-Personality landscape, we identify three types to be characterised as types of Hackers (Fighters, Operators and Developers) and two as Hustlers (Accomplishers and Leaders). The remaining type is different in personality to both Hackers and Hustlers. It is more of a subject matter expert whose insider field knowledge and problem-solving design strengths can be seen as a type of Hipster (Engineer). When we subsequently explored the combinations of personality types among founders and their relationship to the probability of the firm’s success, adjusted for a range of other factors in a multi-factorial analysis, we found significantly increased chances of startup success for Hipster, Hacker and Hustler foundation teams.

[…]

Our modelling shows firms with multiple founders are more likely to succeed, as illustrated in Fig. 3a), which shows firms with three or more founders are more than twice as likely to succeed as solo-founded. The benefits of larger and more personality-diverse foundation teams can be seen in the apparent differences between successful and unsuccessful firms based on their combined Big 5 personality team footprints, illustrated in Figure 3b). Here maximum values within each startup for each Big 5 trait for any of its cofounders are mapped, and the spread of these between sucessful firms — those who have IPOed, been acquired or acquired another firm and the other firms are shown. […] We found that ten combinations of founders with different personality types were significantly correlated with greater chances of startup success when accounting for other variables in the model. The coefficient of each of these factors is illustrated concerning other features that were also found to be significantly associated with success in Figure 3c.

[…]

We have learnt through this research that there is not one type of ideal “entrepreneurial” personality but six different types. Many successful startups have multiple co-founders with a combination of these different personality types. Startups are, to a large extent, a team sport; as such, diversity and complementarity of personalities matter in the foundation team. It has an outsized impact on the company’s likelihood of success. While all startups are high risk, the risk becomes lower with more founders, particularly if they have distinct personality traits. Our work demonstrates the benefits of diversity among the founding team of startups. Greater awareness of these benefits may help create more resilient startups capable of more significant innovation and impact.

More figures

Is there anything to conclude? Are the authors right or wrong? Can this be used for prediction? I do not know. The authors admit themselves there are biases in their research (it is based on the Twitter accounts of the founders…). I missed the element of the relationships between founders and I am a little skeptikal that more founders is better beginning with 3 or 4. My experience is that a team of 2 founders is ideal (you could chekc my long series of studies on startup data here. But who am I say this today ? What is certain is that the article is interesting and its ambtion to be praised !

Founders at Work - May08

A Library of Books about Startups, High-Tech, Innovation

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I began this blog in July 2007, so more than 15 years ago. I began my professional activity around startups in September 1997, so more than 25 years ago. So many adventures, so many great moments. And so much book reading! I revisited these pages and did an exhaustive list of the books I could remember reading. Most have a post somewhere in the blog.

I created a little artificially 6 categories:
– About Google and Apple
– Entrepreneurs’ Biographies
– Startup Stories and Analyses
– Ecosystems and Innovation
– Venture Capital
– How to
– Fictions / Thrillers (or close)

Here they are… Enjoy (maybe!)

About Google and Apple

  • Goomics, Google’s corporate culture revealed through internal comics, Manu Cornet
  • In the Plex, How Google Thinks, Works and Shapes Our Lives, Stephen Levy
  • How Google Works, Eric Schmidt, Jonathan Rosenberg
  • Dogfight, How Apple and Google Went to War and Started a Revolution, Fred Vogelstein
  • I’M Feeling Lucky, Falling On My Feet in Silicon Valley, Douglas Edwards
  • The Apple Revolution, Steve Jobs, the Counter Culture and How the Crazy Ones Took Over the World, Luke Dormehl
  • Work Rules! Insights from inside Google that will transform how you live and lead, Laszlo Bock
  • The Google Story, David Vise
  • Return to the Little Kingdom, How Apple and Steve Jobs Changed the World, Michael Moritz

Biographies

  • Elon Musk, Tesla, SpaceX, and the Quest for A Fantastic Future, Ashlee Vance
  • Steve Jobs, La vie d’un génie, Walter Isaacson
  • Inside Steve’s Brain, Leander Kahney
  • The Man Behind the Microchip, Robert Noyce and the Invention of Silicon Valley, Leslie Berlin

Startups Stories / Analyses

  • Trillion Dollar Coach, The Leadership Playbook of Silicon Valley’s Bill Campbell, Eric Schmidt, Jonathan Rosenberg, and Alan Eagle
  • L’entrepreneuriat en action, Ou comment de jeunes ingénieurs créent des entreprises innovantes, Philippe Mustar
  • Chercheurs et entrepreneurs : c’est possible ! Belles histoires du numérique à la française, Laurent Kott, Antoine Petit
  • Bad Blood, Secrets and Lies in a Silicon Valley Startup, John Carreyrou
  • Bienvenue dans le Nouveau Monde, Comment j’ai survécu à la coolitude des startups, Mathilde Ramadier
  • Les start-up expliquées à ma fille, L’entrepreneuriat vu de l’intérieur, Guillene Ribière
  • Startup, Arrêtons la mascarade, Contribuer vraiment à l’économie de demain, Nicolas Menet, Benjamin Zimmer
  • No Exit, Struggling to Survive a Modern Gold Rush, Gideon Lewis-Kraus
  • The Hard Thing About Hard Things, Building a Business When There are no Easy Answers, Ben Horowitz
  • Zero to One, Notes on Startups, or How to Build the Future, Peter Thiel, Blake Masters
  • Startupland, How Three Guys Risked Everything to Turn an Idea into a Global Business, Mikkel Svane, Carlye Adler
  • European Founders at Work, Pedro Gairifo Santos
  • Founders at Work, Stories of Startups’ Early Days, Jessica Livingston
  • The Monk and the Riddle, The Education of a Silicon Valley Entrepreneur, Randy Komisar
  • Once you’re lucky, Twice you’re good, The Rebirth of Silicon Valley and the Rise of Web, Sarah Lacy
  • They Made It! Angelika Blendstrup
  • Betting It All, The Entrepreneurs of Technology, Michael Malone,
  • In the Company of Giants, Candid Conversations With the Visionaries of the Digital World, Rama Dev Jager, Rafael Ortiz
  • Startup, A Silicon Valley Adventure, Jerry Kaplan

Ecosystems and Innovation

  • From the Basement to the Dome, How MIT’s Unique Culture Created a Thriving Entrepreneurial Community, Jean-Jacques Degroof
  • The Microchip Revolution: A brief history, Luc O. Bauer, E. Marshall Wilder
  • The Code, Silicon Valley and the Remaking of America, Margaret O’Mara
  • Loonshots or how to nurture crazy ideas, Safi Bahcall
  • Troublemakers, How Generation of Silicon Valley Upstarts Invented the Future, Leslie Berlin
  • The Rainforest, The Secret to Building the Next Silicon Valley, Victor W. Hwang, Greg Horowitt
  • The Innovators, How a Group of Hackers, Geniuses, and Geeks Created the Digital Revolution, Walter Isaacson
  • The Entrepreneurial State, Debunking Public vs. Private Sector Myths, Mariana Mazzucato
  • Genentech, The Beginnings of Biotech, Sally Smith Hughes
  • Science Lessons, What the Business of Biotech Taught Me About Management, Gordon Binder
  • Le prochain Google sera Suisse (à 10 conditions), Fathi Derder
  • Prophet of Innovation, Joseph Schumpeter and Creative Destruction, Thomas McCraw
  • Start-up Nation, The Story of Israel’s Economic Miracle, Dan Senor, Saul Singer
  • Boulevard of Broken Dreams, Why Public Efforts to Boost Entrepreneurship and Venture Capital Have Failed–and What to Do About It, Josh Lerner
  • The Innovation Illusion, How So Little is Created by So Many Working So Hard, Fredrik Erixon, Bjorn Weige
  • Un paléoanthropologue dans l’entreprise, S’adapter et innover pour survivre, Pascal Picq
  • Against Intellectual Monopoly, Michele Boldrin and David K. Levine
  • The New Argonauts, Regional Advantage in a Global Economy, AnnaLee Saxenian
  • Regional Advantage, Culture and Competition in Silicon Valley and Route 128, AnnaLee Saxenian
  • Silicon Valley Fever, Growth of High Technology Culture, Everett M. Rogers, Judith K. Larsen
  • Creating the Cold War University, The Transformation of Stanford, Rebecca S. Lowen
  • Nurturing Science-based Ventures, An International Case Perspective, Ralf Seifert, Benoït Leleux, Christopher Tucci
  • Entrepreneurship and Innovation, Peter F. Drucker
  • The Gorilla Game, Picking Winners in High Technology, Geoffrey Moore
  • Inside the Tornado, Strategies for Developing, Leveraging, and Surviving Hypergrowth Markets, Geoffrey Moore
  • Crossing the Chasm, Marketing and Selling High-Tech Products to Mainstream Customers, Geoffrey Moore
  • The Founder’s Dilemmas, Anticipating and Avoiding the Pitfalls That Can Sink a Startup, Noam Wasserman
  • The Innovators Dilemma, When New Technologies Cause Good Firms To Fail, Clayton M. Christensen
  • Accidental Empires, How the Boys of Silicon Valley Make Their Millions, Battle Foreign Competition, and Still Can’t Get a Date, Robert X. Cringley

Venture Capital

  • The Power Law, Venture Capital and the Making of the New Future, Sebastian Mallaby
  • The Masters of Private Equity and Venture Capital, Management Lessons from the Pioneers of Private Investing, Robert A. Finkel
  • The Startup Game, Inside the Partnership between Venture Capitalists and Entrepreneurs, William H. Draper III
  • Creative Capital, Georges Doriot and the Birth of Venture Capital, Spencer Ante
  • The Business of Venture Capital, Insights from Leading Practitioners on the Art of Raising a Fund, Deal Structuring, Value Creation, and Exit Strategies, Mahendra Ramsinghani
  • The New Venturers, Inside the High-Stakes World of Venture Capital, John Wilson

 

How To

  • The Mom Test, How to talk to customers & learn if your business is a good idea when everyone is lying to you, Rob Fitzpatrick
  • Straight Talk for Startups, 100 Insider Rules for Beating the Odds, Randy Komisar, Jantoon Reigersman
  • Measure What Matters, OKRs, The Simple Idea that Drives 10x Growth, John Doerr,
  • The start-up of You, Adapt to the Future, Invest in Yourself, and Transform Your Career, Reid Hoffman
  • Don’t f**k it up, How Founders and Their Successors Can Avoid the Clichés That Inhibit Growth, Les Trachtman
  • How To Start a Business That Doesn’t Suck (and will actually turn a profit), Michael Clarke
  • The Four Steps to the Epiphany, Successful Strategies for Products That Win, Steve Blank (NB: the book has been updated and renamed as The Startup Owner’s Manual, The Step-by-Step Guide for Building a Great Company, Steve Blank, Bob Dorf)
  • The Lean Startup, How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses, Eric Ries
  • Business Model Generation, Alexander Osterwalder and Yves Pigneur
  • Slicing Pie, Funding Your Company Without Funds, Mike Moyer
  • Getting to Plan B, Breaking Through to a Better Business Model, John Mullins, Randy Komisar
  • Winning Opportunities, Proven Tools for Converting Your Projects into Success (without a Business Plan), Raphael Cohen
  • Start-up, (anti-)bible à l’usage des fous et des futurs entrepreneurs, Bruno Martinaud
  • The Art of the Start, GuyKawasaki

 

Fiction / Thrillers or close

  • Drop by Drop, Keith Raffel
  • Smasher, a Silicon Valley Mystery, Keith Raffel
  • dead, a Silicon Valley Mystery, Keith Raffel
  • The Ultimate Cure, Peter Harboe-Schmidt
  • The First $20 Million Is Always The Hardest, Po Bronson
  • The Nudist on the Late Shift, And Other True Tales of Silicon Valley, Po Bronson

A MIT entrepreneurial history – Epilogue : The Impact and some lessons learnt

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Degroof has produced one of the best books describing entrepreneurial ecosystems as I have already mentioned in 2 previous posts including Part 2 : Ecosystems & Culture.
In the last part of his book, he switches to the impact of MIT and its ecosystem.

This is a well-known topic as you could read in Entrepreneurial Impact: The Role of MIT. Degroof reminds us (pages 183-89) of the biotech startups around Kendall Square (Biogen, Genzyme) as well as the R&D of big pharma relocating around, such as Swiss Novartis. It’s not only about biotech as Lotus Development or Akamai exemplify. He also mentions some alumni who became famous entrepreneurs or investors, Hewlett (36), Perkins (53) or Swanson (69). He does not mention Noyce (53) though, and his tinkerings (more here and there) or Haren (80) for French people. There could be hundreds of others!

He also adds about the impact of local accelerators from CIC in the late 90s to MassChallenge and TechStars. I am a little less convinced about the international impact MIT had in a more topdown institutional way. What is the exact outcome of partnerships in Singapore, Hong Kong, Abu Dhabi, Spain or Portugal. The Deshpande Center certainly inspired many initiatives including the Innogrants I managed at EPFL in the mid 2000s or even what I do today.

Degroof also develops the importance of teaching and training: “In trying to reconcile the tension between rigor and relevance, Aulet argues convincingly that entrepreneurship should be framed as a craft as opposed to a science or an art. Like a craft, it is built on fundamental concepts. A potter, for instance, needs to master the basic mechanical and chemical principles of his craft. Knowing those does not guarantee success, but they considerably improve the chances. Like a craft, entrepreneurship is best learned through apprenticeship, or learning by doing, rather than relying only on lectures or manuals.” [Page 212]

Again I am a little less convinced about this generally-mentioned point: “There is a strong belief at MIT that entrepreneurship is a team sport. It is based on the evidence that teams of founders tend to perform better than individual founders, and that complementary teams tend to do better than homogeneous teams. Following on the heels of the I-Teams class, nowadays, most teams in entrepreneurship-related courses or contests are required to be composed of a mix of engineering or science students with management students. This has become an important feature and a great strength of entrepreneurship training at MIT. Both groups benefit from each other’s contributions. Engineering and science students discover the market dimensions of the projects with the help of their peers from the business school and learn that it is not enough to build a better mousetrap, while the latter benefit from scientific and engineering insights. Both groups are forced to deal with cultural differences and with more complex team dynamics than what occurs in homogeneous teams. The results are stronger teams and more effective projects.” [Page 214]

Entrepreneurship is a complex venture and entrepreneurial ecosystems are complex and fragile settings. Degroof convincingly describes why Boston has become a model. He does not really develop why it has not been as succesful as Silicon Valley, with a similar culture though. Paul Graham’s Ycombinator had moved from Boston to Silicon Valley as mentioned in Why Boston Should Worry. When I visited Novartis people in Boston, some claimed that Silicon Valley was to Boston what Boston was to Europe. Yes, Boston was more innovative than Europe and that is why Novartis moved some R&D to the West, but when Novartis bought Chiron in Silicon Valley, Novartis discovered going further West was again more adventurous. (See Myths and Realities of Innovation in Switzerland).

But these debates are secondary to the lessons learnt and synthesized by Degroof. A lot of inspiration is to be found. And coming back to the great foreword by Metcalfe : recreating MIT’s renowned entrepreneurial ecosystem is not a simple task. There is no copying MIT’s ecosystem and pasting it into another institution. The founding principles and unique cultural elements that came together to create the “secret sauce,” as Jean-Jacques calls it, the ground-up nature of what has grown and thrived at MIT, are not easy to duplicate. That does not mean that there are no concrete lessons to be learned, that there is not knowledge that can be translated and adapted for other universities and economies. Today, as a successful and seasoned entrepreneur, I still frequently look to MIT in my efforts to build a thriving entrepreneurial ecosystem at the University of Texas. I don’t hesitate to reach out to my extensive network at MIT for answers to questions of theory and practice. From there, I have been able to make great strides in my goal. I may not be recreating MIT, but I am modeling what I do after the very best and adapting it to the specifics I have here in Austin.”

A MIT entrepreneurial history – Part 2 : Ecosystems & Culture

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I continued reading the excellent From the Basement to the Dome by Jean-Jacques Degroof and found more inspiring elements about ecosystems, culture and also technology transfer from academic institutions after my first post. Here they are:

6 ingredients of the MIT ecosystem

Degroof gives us the cultural elements of the ecosystem: But what is it about this culture that has been supportive of entrepreneurship? The argument of this book is that entrepreneurship is particularly congruent with at least six elements of MIT’s culture: a well-ingrained, bottom-up organizational dynamic; excellence in all things that one studies or attempts to do, as well as a belief in hard work and fortitude; an interest in problem-solving and having a positive impact on the world; a belief in experimenting and a tolerance of failure; the pride of being viewed as rebels, sometimes eccentric and even a bit geeky, pursuing unconventional solutions; and the tradition of a multidisciplinary approach to problem-solving. [Page 90]

Why startups?

Here is an interesting comment about academic technology transfer: “Established firms are seldom interested in licensing emerging technologies from academia for several reasons. They don’t understand the potential of the technology; the time frame to develop the tech into a viable product exceeds the time horizon that most firms are comfortable with, or else they fear that they could cannibalize their existing business. As a result, in 1987, the TLO’s new director, John Preston, took the initiative to license technology to new ventures in exchange for equity, first as an experiment because there was a great concern at MIT about potential conflicts of interest. During the first year of this policy, six companies were formed based on such licenses, including ImmuLogic and American Superconductor. Sixteen more companies were formed during the second year. [Page 34]

Degroof then describes the multitude of ecosystem tools, all in a bottom-up logic, with serendipity (chapter 6) as a fairly common mechanism. The beginning of chapter 8 on technology transfer with the example of Amberwave is another must-read:

Often the initial performance of the new technology is either lower than that of existing solutions or not high enough to justify the switching cost for potential clients. As a result, established companies often don’t see the potential of new academic technologies. Moreover, in the few cases when the technology’s advantage is obvious or clearly promising, established companies are often concerned lest they cannibalize market share from their existing technology—a technology in which they have invested time and money, and around which they have built whole supply chains and other infrastructure.
It is estimated that an investment equal to 10 to 100 times the cost of the academic research is needed to bring an academic technology to market. This process also requires patience and perseverance. It can take at least two to three years for a patent to get issued once it is filed. When a company finally licenses a technology, it might take an additional five to ten years before it generates revenue. All in all, the uncertain performance of developing academic inventions, the associated costs, and the time lag between invention and revenue generation make investing in embryonic academic inventions extremely unattractive.
This does not mean that large firms never license patents from universities, but more often, inventors are the only ones to understand and to believe in the commercial potential of their technology. They are, therefore, frequently the only candidates interested in founding (and sometimes funding) a company to commercialize their technology. This process involves obtaining a license for the patent or patents based on their invention from their university, since, following the Bayh-Dole Act of 1980, the university owns the intellectual property of government-funded research. The edge that inventors have is the extensive and unique knowledge that they have accumulated through their research efforts and exposure to industry over the years. [Page 156]

Managing technology transfer

And more interesting information here about avoiding conflicts of interests at MIT: Policies do not allow faculty members to use students for research and development (R&D) related to a start-up in which that professor has equity, nor may students be employed by such a start-up. A start-up in which a professor has an interest is not allowed to fund research in that professor’s lab. Similarly, a professor is not allowed to conduct federally funded research in collaboration with such a start-up, with the exception of SBIR and Small Business Technology Transfer (STTR) funding. A start-up venture may not be located in a lab. Employees of a professor’s start-up may not be involved in the research activities of the professor’s lab. Research in the lab may not be influenced by a professor’s other professional activities. A faculty member’s full-time employment at MIT prohibits significant managerial responsibilities in a start-up. [Pages 161-62]

Or about making money with Technology Transfer: Many universities expect their technology transfer activities to be profitable and bring in revenue. Although MIT is one of the most successful and experienced universities in terms of technology transfer, its experience shows that this kind of financial gain is a misleading expectation. “Any university that counts on its tech transfer to make a significant change in its finances is statistically going to be in trouble,” said Nelsen. To that end, her motto during her tenure as head of the TLO was, “Impact, not income.” [Page 162]

Many startup stories

Degroof adds anecdotic descriptions of individual companies, rich with lessons: these are BBN (1948), Teradyne (1960), Analog Devices (1965), Prime Computer (1972), Apollo Computer (1980), Thinking Machines (1983), Harmonix Music Systems (1995), Amberwave (1998) ThingMagic (2000), Momenta Pharmaceuticals (2001), SmartCells (2003), Ambri (2010), Firefly Bioworks (2010), Sanergy (2011), Wecyclers (2012), Nima Sensor (2013), Bounce Imaging (2013), ReviveMed (2016), Biobot Analytics (2017), not forgetting Robert Langer’s 40+ spinoffs from 1987 to today!

Internal venture capital – The Engine

My experience with academic venture capital funds is mitigated to say the least. So this is an interesting experiment: Faced with this perceived market failure, MIT’s leadership pointed to the need for patient capital to bring ventures that are trying to commercialize tough science and need more time than do digital businesses to reach a stage where they are ready for venture capital. […] In October 2016, President Reif announced the creation of The Engine, https://www.engine.xyz , a for-profit but public benefit corporation, separate from MIT, that would act as an accelerator for start-ups trying to commercialize “tough techs” by providing advice and physical facilities, as well as an investment fund of patient capital. […] In addition to going against MIT’s policy of not funding entrepreneurial projects, The Engine also broke with Institute tradition by incubating the entrepreneurial projects of its members, which certainly raised substantial objections within the MIT community. [Page 64]

The Engine has a double bottom line: it seeks financial returns and it seeks impact. The Engine raised $200 million for its first fund, with MIT contributing $25 million. […] The fund invests from $250,000 to $2 million per venture, and its investments are not exclusive to MIT-related firms. The investment is made with a time horizon of eighteen years, rather than the typical five to eight years given in the case of venture capital funds. […] Second, The Engine gives start-ups access to infrastructure, such as expensive, specialized equipment, including some from MIT, that otherwise might represent a barrier to entry to firm foundations. The Engine’s facility was initially located in 26,000 square feet of space in Cambridge, with the ambition of expanding to 200,000 square feet through a network of offices, labs, and prototyping and makerspaces a few blocks from Kendall Square. […] Third, the new initiative comes with a network of professionals and mentors in the so-called hard-tech space. [Page 173]

In 2020, The Engine raised a second $250M with $35M from MIT and Harvard University joined as a new LP. Is this different than VC? Will it succeed? Time will tell…

A MIT entrepreneurial history by Jean-Jacques Degroof

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With an impressive foreword by Bob Metcalfe (the inventor of Ethernet et cofounder of 3Com) who rightly renames MIT a “Innoversity”, Degroof explains in From the Basement to the Dome that entrepreneurship is engrained in the MIT history and culture, not so much from a political decision but from serendipitous events.

Its motto (Mens et Manus, “Mind and Hand” in Latin), its logo, the right given to professors to spend 20% of their time in consulting since the 20s and the creation of the patent committee in 1932 are all indications that practice is as important as theory in engineering science. The importance of military funding through the creation of OSRD was also critical to the richness of MIT’s inventions.

The culture is exemplified by Ray Stata, a cofounder of Analog Devices : “It’s like ‘monkey see, monkey do.’ If you see others start companies and become successful, you say, ‘If they can do it, so can I.’ Whereas if you don’t see that up close and personal, there’s a fear and a mystery about how to do it. The entrepreneurial spirit at MIT gives you confidence.” [Page 17] And what about his experience in business: “I don’t have a clue about how to be a president, but I’m going to take the next twelve months to learn. And if at the end of that twelve months you guys collectively decide, or if the board decides, that I’m not the person who can provide leadership, I’ll step down. But in the meantime, while I’m learning, you’ve got to help me.” Fortunately, Stata’s direct approach worked. “Everybody dug in, and there was then no way I could fail. Over the next twelve months I learned how to be a president, and that process has continued for four decades.” [Page 18]

If you didn’t know Ray Stata, you might have known the building on MIT’s campus with his name.

I wondereed before beginning the reading if Degroof would mention the debate about why Boston did not end being as successful as Silicon Valley. And he does! Early in his book, on pages 24-25. This is a must-read and I am not finished yet. Degroof quotes famous Regional Advantage by AnnaLee Saxenian. I will let you discover.

This table that I had copied a long time ago is another illustration of the differences, not so much between Stanford/Berkeley and MIT/Harvard but about the number of firms spun-off from established firms. Just compare what happened at IBM on the west and east coasts. (PS: I had not initially mention the source of the table, it is part of High-Tech Startups and Industry Dynamics in Silicon Valley, Public Policy Institute of California, Junfu Zhang (2003) San Francisco, California.)

Let me finish this 1st part with another quote by Lita Nelsen, former head to MIT’s Technology Licensing Office: “People say to me, ‘Does MIT have an incubator?’ And my classic answer has been, ‘Yes, it’s called the city of Cambridge.’” [Page 26] This reminds me a quote of Richard Newton, a former professor at Berkeley. He had written stating a colleague of his: “The Bay Area is the Corporation. […When people change jobs here in the Bay Area], they’re actually just moving among the various divisions of the Bay Area Corporation.” This is a critical explanation of ecosystems, they are not so much about institutions but about the fluidity of exchanges between individuals.

Philippe Mustar – Entrepreneurship in Action – final episode

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Here is my last article on the excellent Entrepreneurship in action of which you will find the 5 previous articles with the tag #entrepreneurship-in-action. Here are some final notes:

The ingredients of success

But, those who fund this project are not doing it just for the skills and experience of the three entrepreneurs. They show other qualities that convince to follow them: their passion, their motivation, their ambition. Investors know that these qualities will allow the team to stay focused and better deal with the many uncertainties that lie ahead. To a student who asked a venture capitalist what are the three most important qualities that a project must have to be financed; he replied: the first is the team, the second is the team, the third is the team. Another joke, common in this industry, says that investors prefer to finance a good team with a bad project rather than the other way round (because a good idea carried by a team whose skills do not match those necessary to developing it is unlikely to go far; while a good team will always be able to modify, transform or change an initial idea of ​​low quality). The rest of the story shows that these statements, usually made in the tone of a joke, apply particularly well to Criteo and that those who make them, the venture capitalists, will have to believe in them and hold onto them firmly for several years. [Page 220]

Some criteria explaining success (according to one of the co-founders of Criteo):
– Have been able to focus on a single product
– Aim for excellence in all areas of the company
– Find the right cursor between managing daily problems and anticipating the future
– The ability to make difficult decisions
– Trust in technology

And finally Mustar returns to this process of innovation which looks like anything but a mechanical process:
– A long and winding process, made of many transformations
– An emerging process
– An experimental process
– A process filled with uncertainties, choices to be made, decisions to be made
– A collective process and a distributed action
– A social process

What is an entrepreneur? Are you born an entrepreneur or do you become one?

Mustar addresses in his conclusion a topic as old as startups with all the humility and caution, because it seems like we don’t really know (even if many claim they do know). Apart from the tautological definition, the entrepreneur is the one who creates (and builds) a business, it seems very difficult to find common traits and qualities specifically for entrepreneurs. Still, I am less confortable with his reminder of Peter Drucker’s claim. “Most of what you hear about entrepreneurship is all wrong. It’s not magic; it’s not mysterious; and it has nothing to do with genes. It’s a discipline and, like any discipline, it can be learned.” [Page 287]

I’m a little more comfortable with Komisar’s point of view in How Do You Teach High-Tech Entrepreneurship according to Randy Komisar.

There is no such thing as a monolithic entrepreneurial condition. Even among the very small number of first-time entrepreneurs I interviewed, there is a very diverse range of relationships with entrepreneurship. What characterizes them, beyond the great diversity of their profiles, their temperament, their way of behaving, is more a desire to do, to learn, to succeed, a great capacity for work, listening to others, ambition… but this is by no means specific to entrepreneurs. We find these same desires or aptitudes among employees, executives of large companies, philanthropic activities, athletes, artists, etc. [Page 289]

This journey with these young engineers allowed me to get rid of a conception of entrepreneurship that separates on the one hand an entrepreneur or a team, and on the other an activity of creating a new product and a company. The entrepreneur and the company are built together, in the same movement. [Page 290]

Philippe Mustar – Entrepreneurship in Action – episode 5

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This new episode of Philippe Mustar’s book relates to the history of Criteo, a startup already mentioned on this blog here and there.

For once, I disagree slightly with a quote from the book (which is not from the author): “The profile of the team formed by the three creators of Criteo is a perfect example of the one described theoretically by Kathleen M. Eisenhardt (Professor of Management at Stanford University and Co-Director of the Stanford Technology Ventures Program) as “the best it can be.” Kathleen Eisenhardt, based on a lot of research on the subject, defines (somewhat mechanically she herself admits) what a great team is:
– it initially consists of three, four or five people. If there are only two, it is not enough because there are so many things to do in a start-up and above all, being two does not offer a wide enough diversity of opinions, of points of view. If there are six, seven or eight, it is no longer a team, it is a group whose management and coordination take too much time.
– it is multidisciplinary and transversal, that is to say it combines skills in engineering, marketing, finance. But, these skills must be real, that is to say not based only on a diploma, but on actual experience.
– it includes people who have already worked together, this is an important asset because the creation of a start-up is made up of stressful situations, which are easier to share with people you know.
– finally, and this is more surprising, the “best teams” are those which have people of various ages, not only young people in their twenties but also others who have more experience. This often allows you to see different aspects of the same problem.
For Kathleen Eisenhardt, teams that meet these criteria are the ones that perform best. ” [Page 199]

As much as I can agree if we talk about the management team, I believe that at the time of creation, the founders have different pedigrees. As I wrote in my own book in 2008, “A start-up is a baby created by its parents – the founders. They are responsible for its development and to help it adapt to an evolving world. It does not mean that a founder has to give up control of his start-up. Would a parent give up his child just because he has no experience in feeding and educating? Is the analogy of little value? There is also a responsibility in succeeding in the development. Experts will be used, medical doctors, teachers for the child, professionals, and consultants for the start-up. The Google founders kept such “ownership” during the company’s growth. Eric Schmidt has become CEO but he is more a partner of the two founders. Start-ups seldom develop that well and investors sometimes have to make tough decisions when they take away the “parent” power from the founders. Investors do not like to do this in general and only do it when they consider it absolutely necessary. This is an ideal world but everyone knows reality is more complex”. And I could add, two parents is probably the ideal model.

On the other hand, I fully agree with the sources of innovation: The sociology of innovation has shown that the sources of innovation, like those of the Nile, are multiple and sometimes difficult to identify. It also pointed out that ideas for new products or services are the most common things in the world, and even that they are always bad, always poorly framed and approximate at the origin. As Bruno Latour says: “All important discoveries are born ineffective: they are hopeful monsters,“ promising monsters ”. [Page 251] and the French text by Latour http://www.bruno-latour.fr/sites/default/files/P-92-PROTEE.pdf . [A short parenthesis about Hopeful Monsters, a term I knew only from one of my favorite novels, and I blogged about it here.]

Philippe Mustar – Entrepreneurship in Action – episode 4

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Following two previous articles here and there and there again about this very interesting book, here are a few more lessons.

About selling a product

Expliseat is as rich as DNAScript in lessons especially about the description of how 3 young people with no experience in the field will find and bring together the skills to design, produce and sell. We also see one of the founders leaving the ship without the adventure stopping and finally page 186: During these years, Benjamin also learned that the only economic argument (“we make you earn money”), and more broadly those which are purely rational, are not sufficient to convince the customer:

“If you come up with a purely rational product, it’s not a good product, because the buying process isn’t one hundred percent rational. It was important for us to understand this. With the […] then the […], we said: “this is the best […] on the market”, but for the customer, the best […] is also a [product] which is beautiful, which one desires, which inspires confidence … It requires commercial work on the product to make it attractive. The end goal is that people no longer just buy a [product], they buy [our product], something that is beyond the product, they buy a brand, an industrial experience, a purchasing experience, a customer experience, an after-sales service… This is typically what you do when you buy an iPhone, you don’t buy a phone, you buy an Apple, you buy an experience, well it’s the same thing in industry and B2B ”. [Pages 194-5]

The “process of innovation”

What surprises about this story is the apparent mix of genres: the [product] is not yet certified, nor realized and entrepreneurs are already selling it. We are witnessing a real whirlwind in which the team experiments, manufactures, sells, tests, collaborates with various actors, negotiates certification, modifies the project, transforms the [product], changes alliances, partners and market, goes back, takes a detour to a research laboratory abroad, develops a new prototype… We are far from the classic model of innovation, a linear model where distinct stages follow one another: research, then experimental development, prototyping, industrialization and, last step, commercialization. In such a process, the customer or user is passive, she or he enters at the end and the only room for maneuver is to accept or refuse the innovation.

This linear process is a kind of relay race where the end of one stage marks the start of the next stage; and, within the company, each of these steps is the result of a different department: research department, design office, production department, then marketing and commercialization … This sequential vision has been widely criticized by literature, whether it is evolutionary economic theories, the sociology of innovation or the management of technology.

About the market

Expliseat seems to be coming at the right time in their [market]. Often companies with their innovation arrive too late or too early in the market they are targeting. The Greek word kairos [1] qualifies this moment, it is the time of the right moment, the instant of the opportunity. [Pages 195]

[1] The Greek god Kairos is the winged god of opportunity, to be seized when it passes. He is represented by a young man who has only a tuft of hair on his head. As he passes nearby, either you don’t see him, or you see him and do nothing, or you reach out and grab his hair, thus seizing the possibility, the opportunity.

I’ll let you explore the author’s use of the Scrabble metaphor to show you that there is no real innovation process out there, nor opportunity there, but permanent construction from next to nothing.

About decision making under uncertainty

The founders’ ability to act is found in particular in the multiple choices they are faced with, and in the variety of options available to them. For what type of aircraft can this ultralight seat be produced? What form should this take? What materials to use? Which shareholders to bring into the capital? Where to install the company? Should we do it or have it done/outsourced? Which subcontractor to work with? Which research laboratory should be mobilized to solve a specific problem? Which engineer to recruit? What modifications should be made to the structure of the seat? With which industrial partner to enter into an alliance? Which business strategy to choose? Which business model to adopt? At what price to sell the seat? How to organize the business? Etc.

Along with the diversity of actors that we have highlighted, the process I am studying is also populated with a multitude of choices. These are many options that entrepreneurs explore. Here too, they are as much technical as they are economic, organizational or social. The story of Expliseat is the story of an expedition, its actors engage in unknown territory: which options to choose, which to close, which to open or re-open? “To govern is to choose”, says the maxim of the Duke of Lévis. Many options explored in this story lead to dead ends, others that will be exploited lead to failures, and finally others lead to success – and one could say, after the fact, but only after the fact, that “it was the right choice”. [Pages 203-4]