As reported on TechCrunch.
by Romain Dillet
This is the story of a city that keeps reinventing itself. Over the past three weeks, I’ve been walking around Paris to meet with the brightest minds of a tech ecosystem in the making. My experience is as personal as it is relevant about what makes a startup ecosystem work, and why Europe is the next frontier.
When I first decided that I wanted to move to Paris, I was anxious and excited at the same time. I used to write for TechCrunch in New York, in a perpetually effervescent ecosystem. But I wanted to try something new. Many things got me excited about France — TheFamily created a good-looking accelerator, LeWeb remained an unmissable event, and Europe as a whole was getting more exciting. Even more importantly, annoyingly good French entrepreneurs kept creating amazing stuff.
I didn’t get it. Then, probably due to FOMO, I chose to get involved. And I don’t regret doing this at all.
I recently talked with a VC-turned-entrepreneur about the seismic changes in the tech scene. According to him, France has the potential to become a new startup nation.
You can receive up to 70 percent of your salary for up to two years when you create a company. Moreover, a lot of public money has been injected into VC firms or directly into VC-like public institutions over the past few years.
As a business angel, when you invest in a startup, you will pay less tax. As an entrepreneur, when you create a company and hire people, you will pay less corporate tax for the first few years. All of this is mostly unknown when you aren’t French, but it’s about to change.
Building An Ecosystem
An ecosystem is a four-sided network — you need entrepreneurs, VC firms, schools, and journalists. France is lucky enough to have some of the best schools in the world. That’s why many great engineers and smart investors come out of France’s school system. Many have been working in the Silicon Valley for decades. But many choose to work in Paris now.
What about entrepreneurs? While French people are historically risk averse, it is starting to change. Cass Phillipps and Roxanne Varza have hosted a few FailCon editions in Paris, it’s an encouraging sign.
And there is a broader shift happening in tech — startups are increasingly becoming a mainstream cultural element. It’s not as obvious as in the U.S., but huge exits (like Google buying Nest) now make the front page of Les Échos, and a good part of business coverage is now focused on startups and innovation.
In other words, people are interested in startups. Every day, I’m surprised to find out that a friend of mine is listing “startup” as one of his or her interests on Twitter or LinkedIn. 31 percent of French people eventually want to create or lead a company.
But I think one thing is still missing.
In Europe, most startup coverage on TechCrunch and other tech blogs focus on London and Berlin. The main reason behind it is that (surprise, surprise) English-speaking bloggers usually live in the U.K. And Berlin has more English-speaking entrepreneurs and investors than Paris.
It has to change. French entrepreneurs, if your product has no geographical constraint, release it in English and localize it in French. Your company blog should be in English. Startup events should be in English as well. Think big, France is a small market after all.
As I mentioned at the beginning of this post, Paris is an incredible city to start a company, but this is mostly unknown as most of the information that you can find about the tech scene is in French. There are a few exceptions, but the vast majority of content is still in French.
I want to change that and find the best hidden gems this country has to offer and share them to the world on TechCrunch.
France’s Hidden Gems
Most of the news that comes out of France isn’t attractive. Yahoo wanted to acquire Dailymotion, but it was kiboshed by the French government. Apple pulled Appgratis from the App Store, and French minister of the digital economy Fleur Pellerin then stated that Apple didn’t “behave ethically.” Urban transportation services like Uber and LeCab now theoretically have to wait 15 minutes in France before letting a customer in the car — as a result, protesting taxi drivers recently attacked Uber cars.
But even all that was just a rough start for the Government — at first, it probably didn’t understand what startups wanted, but things are about to improve. I’m very optimistic with the new French Techlabel. Aside from giving money to startups and investors, the French Tech ultimate goal is to greatly improve the image of France when it comes to startups. Everything is here to turn France into a startup nation, now everybody needs to act accordingly.
More importantly, it doesn’t prevent French entrepreneurs from doing great stuff. Compared to American entrepreneurs, I meet entrepreneurs who don’t have the same access to tech bloggers. But they are working on incredible stuff and they give me an exclusive look into their ideas. There’s nothing better than seeing something special and knowing that many people will eagerly read your post about a previously unknown startup.
Every startup has a story to tell. And it’s even more interesting than simply presenting a product.
For example, video sharing app Mindie is a neat little app with a great user experience, but it doesn’t end here. The small and young team first worked on Ever, a storytelling app that wasn’t very good. It had to restart from scratch to come up with Mindie, the new MTV for the mobile generation. It quickly became an App Store hit and a Silicon Valley darling, snatching $1.2 million in funding. It’s a great comeback story.
Another example, when everybody in France took a vacation, Lima launched a Kickstarter campaign without really knowing what would happen. The $69 adapter seamlessly transforms your USB drives into a personal Dropbox for all your devices. When I first talked with co-founder and CEO Séverin Marcombes, he said he really didn’t know how much the team would end up raising. In 36 days, the device broke into the top 10 most-funded Kickstarter campaigns in the technology category. These French engineers working in their garden ended up raising $1.2 million on Kickstarter and didn’t really understand why they were so lucky.
There are many crazy startups as well, with bold ideas and smart entrepreneurs. Dymant works with craftsmen to sell very luxurious items to its club members — its co-founder and CEO David Alexandre Klingbeil told me “What do you give your wife when she already has three Hermes handbags?” Another crazy startup, Bunkr wants to kill PowerPoint. It sounds easy, right?
These are only a few of startup stories that keep impressing me. I know many people working in Paris have already heard about these promising teams, but many international readers and investors are always asking for more content about what’s happening in France.
When you don’t work in the French tech ecosystem, the wrong idea would be to think that nothing is happening in France. The reality is very different. Many things are happening and succeeding, it’s just that the world doesn’t know about it yet.
Good Looking Europe
Can Silicon Valley find Europe? Most VCs are eager to learn new things. That’s the reason why seeing people like Fred Wilson and USV turning their attention to Europe is a great sign.
But the most important question remains: what’s missing here?
We all know some great companies that came out of Europe: Skype, Spotify, SoundCloud… There are a few big tech companies in France, such as Criteo, Dailymotion and Deezer, but it’s still very early. There is no acquisition market with good valuations in France right now. So there’s no incentive to sell your startup to a big French company.
Similarly, it’s hard to get funding for Series B and C rounds, because French VC firms are smaller than expected. But if you’re working for a successful startup that needs to raise a Series B round, you won’t have any problems finding right people in France or elsewhere.
In many ways, France is now a little like the New York startup scene was a few years ago. Young and passionate people are trying to create a working and coherent ecosystem. It’s an exciting time to be part of the French ecosystem. And I hope that I can contribute in some way now that I’m here. If you think we should talk, get in touch with me.
What’s missing then? Not much, we just need to work hard and be patient. We are building something great. And this is just the beginning.
(Photo credit: Michael D. Hill Jr., Benh LIEU SONG, Alvesgaspar)