Fred, thanks for such an amazing post. There are plenty of great insights in there, and I'm happy to see that, unlike too many French people, you don't report as bleak a picture as could be. I'll almost certainly have more elaborate thoughts later in the day, maybe on my blog. Overall I definitely think you get the picture right.
So, the big question: anything you're going to invest in?
fredwilson
· 1 year ago
To soon to tell on the investment front
stephanelee
· 1 year ago
Fred,
Once again, right on the spot. As a fan of your blog, I do look forward to meet you on the Solferino Passerelle. See you soon.
Stephane.
Oleg
· 1 year ago
Very interesting post, Fred. Are you going to pay a visit to Israel in the same manner?
By the way, Discus login/registration does not work in Opera 9.51
fredwilson
· 1 year ago
I will alert them about opera
I will do israel soon but not this month
Jeremie Berrebi
· 1 year ago
Will be happy to meet you in Israel when you will be there
surprised to see that 10 of the 16 had a global market focus, thanks for pointing that out. I'm interested in hearing you compare that trend to the focus of the companies in your Berlin meetings today, which have traditionally seemed to be more global in focus...
WayneMulligan
· 1 year ago
Fred,
As a US investor (investing with US dollars) would it even be appealing to invest in a Euro-country? The exchange rate seems like it would dramatically affect the potential rate of return on the investment.
-Wayne
fredwilson
· 1 year ago
I guess it all depends on where the currencies go from here. We could also hedge the currency risk
flyintiger
· 1 year ago
Yes, it will affect returns...but upwards! Unless you think that the USD is going to get much stronger in the future, so far, the only way is down...which -as Euro investors- penalizes our USD investments.
pd0
· 1 year ago
Thank you Fred. I've been waiting for a comparison like this from you. As a swedish entrepreneur I find it interesting and I think you've pinpointed a lot of how european startup climate is.
Fabrice left France years ago and he is now a happy and succesfull US entrepreneur - it is up to us, the people he left behind to ensure that the cliché he's carrying around are all but true - and we're moving in the right direction
wanderingstan
· 1 year ago
Glad that you got to talk to Leafar at Ulik, I had intended to recommend it. The excitement when I speak to him is palpable, as is his frustration at not having a larger community of entrepreneurs--or a supportive cultural climate. I fear that by being in Paris, Ulik missed the chance to become what iLike is on Facebook now--they had a huge headstart when the FB platform came out.
alexlines
· 1 year ago
It's been great hearing about the startup scene in europe. I especially enjoy hearing how people are working on similar problems around the world. There are not a lot of unique ideas; chances are good that if you've thought of it, then 5, 10, 100 other people have too. Some people find that a depressing prospect but I enjoy having the perspective of participating in an ecosystem much larger than myself, it's one of the things that I love about living in New York. It also helps you realize how hard you need to work to stand out.
fredwilson
· 1 year ago
Indeed
Fabrice Epelboin
· 1 year ago
Refreshing point of view, thanks for that. True, it ain't always easy being an entrepreuneur in France, and taxes are less a problem than the overall risk aversion culture, but still, they're some great tech guy and cool ideas to transform into great startups... Focusing on something else than a local (small) market is definitely the key to success if you're starting from France, that's for sure.
Hootan
· 1 year ago
Fred, having lived in Europe for several years, I always wondered why there were not more musicians coming out of the west European nations. My thinking was, musicians in the US suffer because they're broke, but European artists could really focus on their art due to the social democratic net that they could rely on. I guess not.
As a broke, nutty NYC entrepreneur, I wonder whether the pressure of our American free-market system and the need to survive economically independently is a part of the equation that fosters our entrepreneurial culture more than elsewhere. Perhaps the lack of this pressure, compounded with the tax issues you mention, just dampens the spirit in Europe. Damn shame given the fantastic lower education there. Our country has its roots in Puritanism and risk-loving cowboys. I'd like to think we entrepreneurs keep the American cowboy tradition alive!
Mikko
· 1 year ago
Sounds pretty familiar. In Finland, we live in the shadow of Nokia and the government's efforts to boost entrepreneurship are not really startup friendly. The VC scene is almost nonexistent and the few players are very risk averse.
Luckily, even without the conventional support structures, an enthusiastic startup culture is growing and plenty of people with strong web/mobile backgrounds (everybody seems to have at least couple of years of mobile experience in this country) are starting their own companies. And because the country is so small, we have to think global from the get go.
leafar
· 1 year ago
Wanderingstan I do appreciate your intention of recommending us and the part on our excitement. Regarding our potential (missed ? not sure at all) let me make a few remarks:
- iLike is a about flux (scrobbling) like last.fm which is very different from our stock approach. We have a lot of users coming from last.fm and they call us the last.fm for the rest. We do a complementary job. - Building an intelligent, warn and personalized database is an amazing opportunity on many verticals not yet addressed. - I do feel a bit of frustration with the ecosystem in France but i't's getting better : people start to feel the urge and work on it a lot with opencoffee for example. Fred coming to visit us is also a great signal - I was very impressed by the vision he has for NY VC and European opportunities. - Europe is also a incredible blessing. I've written about it one year ago ( http://ub0.cc/1k/p ). Language Barrier, Cultural differences, Time, Feedbacks from USA... etc - We've learned to be frugal and resilient, though road with great sightseeings ! - OpenSocial & FB Connect have great potential to compensate the headstart you're talking about. And there are still lot of SN available to stricke this kind of deal. - UGC take time (when not on the edge of "piracy") and meanwhile we've been building technologies that will have great potential while we wait for the Grail of pure semantics. Micro Collaborative Filtering, Natural Language Classification (We've been living with Dewey Decimal Classification for two long and since everything is miscellaneous there's a lot of disruption possible here, look at librarything amazing achievements) and a few other librarian tricks.
--> U.[lik] will finally have a proper website (seed is possible) in a few weeks, hope you will like it as well as all our improvements.
There's nothing like a good fight and Babel is like Roma (not built in one day) ;-D Always a pleasure to exchange ideas with you.
Solomon
· 1 year ago
Fred,
Did you discuss the French payroll tax as a barrier to developing your business? For an employee to pocket 40,000 euros the real cost is 70,000.
jerome camblain
· 1 year ago
Two things worth mentioning: 1- the French ASSEDIC (the state agency that pays out the unemployement benefits to job seekers) is by far the biggest French VC!!! Indeed, having lost a job, one can start a company while still receiving a large percentage of his/her former salary during two years (as unemployement benefits), as he/she works for no salary in setting up the new business. It is a scheme set up to promote entreprneurship in order to create new jobs. It is not a direct investment, but it is economically very similar.
2- the current stock market turmoil will help start-ups hire better trained employees. Indeed in France as the risk appetite is low (as you wrote) the best engineers choose to join large listed firms for the prestige on their resume. The stock options were acting as golden hand cuffs as noone would change jobs and lose the virtual capital gains as long as the market remained high. As the options are under water, we see greater career mobility and smaller firms now get a chance to strengthen their human capital. The low markets has started to give us (entrepreneurs) an easier access to human capital, let's hope it does not cut access to funding.
Solomon
· 1 year ago
Jérôme,
That only works if you are laid off. If you quit your job to start a company, you won't get a dime.
jerome camblain
· 1 year ago
Sure, but it is still a very neat measure.
otherwise, usually one can bargain with HR : I resign - you want a very well managed transition- so you draft the paper as a firing for divergence of opinions, no extra cost to the firm & a very fine transition (I wait until you find replacement and I train that person)
Solomon
· 1 year ago
That is definitely a common bargain. I see the proliferation of these workarounds as a symptom of the problem: broken incentives.
ACCRE is a very appreciable government help (zero payroll tax on founder salaries for the first year), but the conditions for eligibility are too tight.
All Comments
So, the big question: anything you're going to invest in?
Once again, right on the spot.
As a fan of your blog, I do look forward to meet you on the Solferino Passerelle.
See you soon.
Stephane.
Are you going to pay a visit to Israel in the same manner?
By the way, Discus login/registration does not work in Opera 9.51
I will do israel soon but not this month
Jeremie Berrebi
French/Israeli entrepreneur
Zlio.com
As a US investor (investing with US dollars) would it even be appealing to invest in a Euro-country? The exchange rate seems like it would dramatically affect the potential rate of return on the investment.
-Wayne
Thanks!
Focusing on something else than a local (small) market is definitely the key to success if you're starting from France, that's for sure.
As a broke, nutty NYC entrepreneur, I wonder whether the pressure of our American free-market system and the need to survive economically independently is a part of the equation that fosters our entrepreneurial culture more than elsewhere. Perhaps the lack of this pressure, compounded with the tax issues you mention, just dampens the spirit in Europe. Damn shame given the fantastic lower education there. Our country has its roots in Puritanism and risk-loving cowboys. I'd like to think we entrepreneurs keep the American cowboy tradition alive!
Luckily, even without the conventional support structures, an enthusiastic startup culture is growing and plenty of people with strong web/mobile backgrounds (everybody seems to have at least couple of years of mobile experience in this country) are starting their own companies. And because the country is so small, we have to think global from the get go.
Regarding our potential (missed ? not sure at all) let me make a few remarks:
- iLike is a about flux (scrobbling) like last.fm which is very different from our stock approach. We have a lot of users coming from last.fm and they call us the last.fm for the rest. We do a complementary job.
- Building an intelligent, warn and personalized database is an amazing opportunity on many verticals not yet addressed.
- I do feel a bit of frustration with the ecosystem in France but i't's getting better : people start to feel the urge and work on it a lot with opencoffee for example. Fred coming to visit us is also a great signal - I was very impressed by the vision he has for NY VC and European opportunities.
- Europe is also a incredible blessing. I've written about it one year ago ( http://ub0.cc/1k/p ). Language Barrier, Cultural differences, Time, Feedbacks from USA... etc
- We've learned to be frugal and resilient, though road with great sightseeings !
- OpenSocial & FB Connect have great potential to compensate the headstart you're talking about. And there are still lot of SN available to stricke this kind of deal.
- UGC take time (when not on the edge of "piracy") and meanwhile we've been building technologies that will have great potential while we wait for the Grail of pure semantics. Micro Collaborative Filtering, Natural Language Classification (We've been living with Dewey Decimal Classification for two long and since everything is miscellaneous there's a lot of disruption possible here, look at librarything amazing achievements) and a few other librarian tricks.
--> U.[lik] will finally have a proper website (seed is possible) in a few weeks, hope you will like it as well as all our improvements.
There's nothing like a good fight and Babel is like Roma (not built in one day) ;-D
Always a pleasure to exchange ideas with you.
Did you discuss the French payroll tax as a barrier to developing your business? For an employee to pocket 40,000 euros the real cost is 70,000.
1- the French ASSEDIC (the state agency that pays out the unemployement benefits to job seekers) is by far the biggest French VC!!!
Indeed, having lost a job, one can start a company while still receiving a large percentage of his/her former salary during two years (as unemployement benefits), as he/she works for no salary in setting up the new business. It is a scheme set up to promote entreprneurship in order to create new jobs.
It is not a direct investment, but it is economically very similar.
2- the current stock market turmoil will help start-ups hire better trained employees.
Indeed in France as the risk appetite is low (as you wrote) the best engineers choose to join large listed firms for the prestige on their resume. The stock options were acting as golden hand cuffs as noone would change jobs and lose the virtual capital gains as long as the market remained high. As the options are under water, we see greater career mobility and smaller firms now get a chance to strengthen their human capital.
The low markets has started to give us (entrepreneurs) an easier access to human capital, let's hope it does not cut access to funding.
That only works if you are laid off. If you quit your job to start a company, you won't get a dime.
otherwise, usually one can bargain with HR : I resign - you want a very well managed transition- so you draft the paper as a firing for divergence of opinions, no extra cost to the firm & a very fine transition (I wait until you find replacement and I train that person)
ACCRE is a very appreciable government help (zero payroll tax on founder salaries for the first year), but the conditions for eligibility are too tight.