For French Startups To Succeed, This Will Need To Happen

Danielle Beurteaux

As TechCrunch reported, there were a whole crowd of French startups at this year’s CES – 190 booths were for French companies. Some were sponsored by La French Tech, a government-backed organization with the purpose of promoting and supporting French startups around the world.

The advantages French startups have include world-class engineering schools and design chops – all strengths for the burgeoning Internet of Things market. The French are more bullish on entrepreneurship as well, with 25% of HEC (a top business school) saying they want to start their own companies post-graduation.

With the French economy in a state of emergency, according to president François Hollande, French tech is looked upon as being one way to save an economy with an unemployment rate in excess of 10%.

Timo Elliott, SAP senior director and global innovation evangelist, has lived in Silicon Valley and currently calls Paris, France, home. We spoke about what it will take for French startups to become successful on a global scale.

Encouraging entrepreneurs

France’s big government approach might seem anti-entrepreneurial, but they’re trying to reassure the global startup ecosystem – those starting companies, those looking to invest in them – that they’re committed to supporting French business. This has included a number of changes to laws, including some involving taxes and investing.

There is also change being pushed from the private sector. One example Elliot points to is the founder of telecom company Free.fr, Xavier Niel, who funded coding school 42.fr, “That’s a great example of how France is trying to do things in new ways,” says Elliott.

Broader investing options

Another problem French startups must overcome is lack of financing. They’ll often look to government for that, says Elliott. “We have a fairly successful startup program around our HANA technology, especially with B2B startups. In France, every presentation would start with, ‘We’d like to thank this European fund for this and a French fund for that.’ I know, in fundraising, people’s instinctive reaction is, which government body is going to fund this thing?”

But the past decade has seen growth in the number of venture capital and angel investors in Europe. “The European VC has gotten a lot stronger over the last decade,” he says. “There were two or three of them … There are lots of VC companies now. So you can get investments. There are more angel investors.”

Improving competitiveness

France also has a reputation for being a very protectionist business environment, but that legacy has, in some notable examples, turned out to be an advantage, says Elliot. Uber has had a tough time in Paris, but its presence did motivate other taxi companies to launch their own apps and improve service. Collaboration is also a strength – call it la nouvelle collaboration. “With new technology, collaborative companies are making a comeback. Blablacar (a ridesharing company valued at $1.5 billion after a funding round last fall) could be called an example of that because it relied heavily on ambassadors driving the cars.”

Another example is when laws were passed banning mobile phone and provider tethering. The result was “a massive explosion in competition and the price is much less for mobile communications than in the US,” says Elliott. “What is ostensibly an anti-capitalist and anti-competition economy can show that the right type of government intervention, in this case, forced a much better market and more competition.”

Plugging the talent drain

ReviensLeon.com is an organization aiming to stop France’s talent drain. All those ambitious university graduates and entrepreneurs who’ve headed to Silicon Valley, New York, and London – they want them to come home.

But in today’s global work environment, does it matter where they are geographically? Apart from being good engineers, French graduates are appealing because they’re bi- or multilingual and global, often a weakness for American companies, says Elliot. “I think the biggest hope is getting around the system and creating international companies where you don’t really care where people work because they have this incredible talent.”

What they’ve got locked in: productivity

There’s that mythic 35-hour work week at which (some) Americans scoff. But the French are onto something: Less work and more relaxation makes for healthier, happier workers. Elliot says French workers are actually very productive. “They’re way more productive than the Americans,” he says. “French people are better at their jobs, and the vacation seems to help, and the 35-hour work week just shows that you can do the same amount of work in less time.”

Knowledge- and data-sharing doesn’t always come naturally to traditionally competitive companies, but collaboration is the key to getting ahead in today’s world. Learn more in our special report, written with The New Economy, Our Digital Planet: Collaborating For Success.


Danielle Beurteaux

About Danielle Beurteaux

Danielle Beurteaux is a New York–based writer who covers business, technology, and philanthropy. Her work has appeared in The New York Times and on Popular Mechanics, CNN, and Institutional Investor's Alpha, among other outlets.