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Has Paris FinTech scene finally kicked off?

Eiffel-Tower-Paris-France

This post was originally published on Medium.

Last week, not one but three Paris-based FinTech startups announced a fundraising: Finexkap completed a $22.5M fundraising to launch the first French on-line working capital financing platform, Lendix raised €7M to fuel the growth of their crowdlending platform for SMEs and Paytop received€3,3M from historical investor Truffle Capital (link in French) to scale its international payment card solution.

Until this year, I must admit that apart from first movers like Litchee(money pot collection) or KissKissBankBank (crowdfunding), the FinTech scene in Paris was almost nonexistent. According to an Accenture study, even less than 10 FinTech VC deals were done between 2004 and 2013. But it seems that 2014 is changing all that. Founded in March 2014, the Paris FinTech meetup now counts more than 350 members.

With this growing interest for FinTech, we’re seeing more and more startups popping up. The last time I counted, there were more than 50 startups just in Paris with my personal favorite being Marie Quantier andPayplug. On top of that, new regulations favorable to crowdfunding have opened the way to several crowdlending services like Lendopolis and Prêt d’Union.

Don’t open the champagne bottle just yet. Paris is still way behind London is terms of funding and valuation for FinTech startups, with the likes of TransferWise ($1B valuation) or FundingCircle (raised $65M earlier this year). And I’m not even talking about accelerator programs focused on FinTech like Startupbootcamp FinTech, Level39 and the Barclay’s accelerator (powered by Techstars).

Despite all that, it seems to me that the time is finally right for Paris to get into the race and host FinTech champions that could become as great as Criteo or Blablacar.

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Entrepreneurship at Supélec

Yesterday, for the second time this year, I was invited by the Supélec engineering school, to talk about tech entrepreneurship for 3 hours. As you can see below, my slides are very much inspired by Steve Blank’s Lean Launchpad course. Some thoughts and comments about this course:

  • 50 last year engineering students attended the speech and more or less half of them seemed interested by starting their company. That is way better than I would have thought
  • Students were much more interested by practical examples than concepts
  • I still get questions like: “should I start my startup in college?”, “what happens if I fail?”, “how can I work in a big company after a startup?”

All in all, it seems that more and more engineering students are interested by the startup world and it feels great :)


 

 

Start your company in college: a good idea?

This post was originally published on Medium.

French newspaper Les Echos published today a series of articles on student entrepreneurship. According to the article, 24% of new company founders in France are below 30 years old and 9% of them are below 25. In 2002, only 20% of founders were below 30. While the explanation of this new trend is relatively easy to find (more and more role models a la Mark Zuckerberg, using the auto-entrepreneur status to do freelance jobs, a desire of Generation X to be more in control of their lives), I wanted to take some time to reflect on starting a company while being in college.

When I started StartUp42 accelerator 2 years ago in partnership with EPITA, it was obvious to many that most of the projects we selected would be founded by EPITA students. In reality, and since we’re open to all, EPITA applications represent more or less 20% of all applications received and just half of them are founded by students (i.e. have not yet graduated at the time of application). Nevertheless, over the past 4 batches, we consistently selected at least 1 student startup per session (EPITA or not). Here is what I found out.

Why College is the perfect time to launch your startup

  • The trade-offs of starting a company are definitely lower: at 21, you don’t have a family to feed, a loan to pay back or already high living standards. So living of noodles until you startup grows and working nights and weekends will not affect much your lifestyle
  • The fear of failure is also lower: no one will ever blame you if you fail because, hey, who can blame a 20-something to start a company. More experienced people might fear for their reputation in the marketplace and difficulty to find a new job in case the startup fails
  • Everyone wants to help (sometimes not necessary the most helpful though)
  • With hundreds of other students, teachers, researchers, you’re in a perfect micro-climate to test your idea before releasing it to the world

Why College is not the perfect time to launch your startup

  • As very well said by Paul Graham in his recent guest lecture at Stanford (and subsequent essay), “starting a successful startup is similar to having kids in that it’s like a button you push that changes your life irrevocably […]. You can do things in your early 20s that you can’t do as well before or after, like plunge deeply into projects on a whim and travel super cheaply with no sense of a deadline.”
  • You only come up with ideas to change your life (I mean your student life) and miss out on an enormous amount of other business opportunities
  •  Some people want to take advantage of you, since they think you’re young and unexperienced (and they will probably succeed)

So?

Well I believe the answer is inside yourself and, as summarised by David Cohen in his Do More Faster book: “if you can quit, you should”. In other words, if you can’t stop yourself from starting your company, do it!

Why you should care about the Top 250

Last Wednesday, while most of Paris startup scene was attending (the very good) Paris Founders Event, another event, attracting a slightly different crowd, was taking place: the 4th edition of the Top 250 french software providers.

While the event was covered by “traditional” IT media like 01net or JDN, it seems to me that it went largely under the radar in the startup circles. Unless I’m mistaken, I didn’t find much mention of it in startup media, neither did I see of lot of social medial shares from public startup figures. And it’s a shame.

Co-organized by Ernst&Young and Syntec Numérique (the biggest digital trade union in France), the event’s purpose is to highlight and promote french software providers successes. And successes there are: more than 9€ billion in cumulated revenue in 2013 and more than 6% yearly growth for these 250 companies! The organizers also awarded prizes to Scality (innovation), Intersec (international),  Focus Home (video games) and FinalCAD (audience award). All these companies started out as startups, sometimes never raised external funding, and are now making serious revenue and kicking asses internationally. Intersec for example, created just 10 years ago, made €11,5 million in revenue last year and has 12 offices worldwide.

So why not talk about them? Of course, selling (mainly B2B) software is less sexy than raising funding from US investors, doing a KickStarter campaign or being acquired by Google. I get that. But, by overlooking the performance of these champions, young entrepreneurs may pursue the wrong objectives or replicate US models that don’t fit in France.

So if you’re all for french startups becoming big and making big revenue with not so sexy products, share this post!

Hello :(

Hello Show OrangeOn October 2nd, Orange held its Hello Show event to unveil their latest innovations and show their strategy. The show can be replayed entirely here, Olivier Ezratty wrote a very extensive review of the show on his blog (in French) and you can also find a short review by RudeBaguette (in English).

My general feeling about the innovations unveiled is not really good. While they preach for open innovation, Orange can’t really stop developing solutions internally. I’ve worked with Orange in the past and I’ve never seen a company so caught up with the “not invented here” syndrome. The result? It seems to me that Orange is playing catch up with a lot of solutions that already exist in the market like with Orange Drive (Waze, Maps), Mobile Connect (Dashlane) or Homelive (Archos).

Concerning Homelive, a box to control the connected objects in your home, it’s competing directly with the Home by SFR box released 2 years ago. And given the amount of commercials I’m seeing for this product right now, it seems that it’s not selling as much as expected. On a side note, with the big success of connected devices with machine learning capabilities (like Nest‘s products), I really don’t get why we should have to go on our mobile to turn on the heater or turn off the lights… It should be done automatically.

All in all, and even if they say otherwise, the message sent to startups by Orange is not very good: innovate, we’ll look at it and develop it internally.

Feedback on the Trophée Excellencia

(Trophee Excellencia Sept2014) Team Excellencia (2)I was very honored to be the master of ceremony of the Trophée Excellencia last Tuesday.

Co-organized by EPITA and the Syntec Numérique, the trophy main objective was to promote the digital sector towards young women, breaking stereotypes and raising awareness that the trades of new technologies are just as interesting as those of medicine, culture, media and sport.

Three trophies were rewarded during the evening

  • The digital entrepreneur trophy went to Agnes Jbeily of Datanoos
  • The digital women involved in a non-for-profit action went to Ludwine Probst of Duchess France
  • Three young women received scholarships from EPITA

We also used this event to echo the HeforShe movement started out last week by actress Emma Watson to push more men to support gender equality, in tech as well as in other sectors.

(Trophee Excellencia Sept2014) Veronique Torner et Philippe Montarges (Alter Way) et Daniel Jarjoura (Startup42) (3)

I must admit I was very fortunate to be at the forefront of this event and meet all these amazing and charming women. They really do break stereotypes and I hope this will inspire a new generation of young women to work in tech.

Last but not least, the highlight of the evening for me was definitely to receive a bouquet of roses from Véronique Di Benedetto, the President of Femmes du Numérique, as a thank you for hosting the evening. Women always receive roses at the end of ceremonies, now it’s men’s turn :) Thanks Véronique!

(Trophee Excellencia Sept2014) Daniel Jarjoura et Veronique Di Benedetto (4)

If you missed the event, Olivier Ezratty has, as usual, uploaded superb pictures of the event on his website. See you hopefully next year for an even bigger event!

Yet Another Startup Accelerator?

Startup Sauna Accelerator
Startup Sauna Accelerator

Back in 2013 when I launched the StartUp42 accelerator in Paris, I received so many “oh, another accelerator” comments that I was really wondering if I wasn’t too late in that space.

Since then, TheFamily, 50Partners and Microsoft Ventures launched, the city of Paris opened new incubators and Xavier Niel, France’s telecom mogul, announced 1000startups, the soon to be largest startup incubator in the world.

Corporates like media company Canal Plus or telecom giant Orange also opened their own incubators. Even the French government announced a 200M€ investment plan for private accelerators throughout France.

Are we in an accelerator bubble?

Olivier Ezratty, a long-time and well respected commentator of the French startup ecosystem seems to think so, based on his recent article (in French) about our ecosystem being overheated. And, apparently, this is not just in France.  Silicon Valley entrepreneur and strategy consultant, Sramana Mitra, also recently wondered about being in an accelerator bubble. I’m not even talking about bloggers like Craftsmanfounder’s Lucas Carlson with his “incubators are bullshit” piece. And more are coming.

While the exact number of accelerators is unknown, f6s.com, a website that provides services to accelerators (including us at StartUp42), lists more than 2,000 worldwide. In a HBR article, Sramana Mitra even talked about 7,500 business incubators globally. In Paris, the city hall’s MyStartupInParis lists 44 incubators as of today and I’m coming across individuals and corporations who want to launch their own startup program literally every day. So no questions asked here: we are definitely in an accelerator bubble.

Is it a bad thing?

Question: can you tell me which of the two pictures below is a startup accelerator?

Startup Office 2Startup Office1            None but anyway you wouldn’t know just by looking at the pictures. The main problem with having too many startup programs is that entrepreneurs don’t know which one to choose, especially if they decide to give away equity to the program. It’s like choosing a university after high school.

Each accelerator has its own model (non-profit/for profit, equity based or not, investing or not investing), its value added and it’s rather difficult to judge for organisations that mostly did not exist 3 years ago. The problem when it’s difficult to judge the quality of an accelerator is that entrepreneurs might lose some precious time (and sometimes equity) in a program that does not bring enough long-time value.

Without disrespecting some programs, I clearly see the difference between programs that are entrepreneur-friendly, mentorship driven and focused on results, compared to others that offer glorified office space and mentorship that look like (and sometimes is) McKinsey style consulting session.

But this is hard to see from the outside. This is clearly one of the reasons that pushed us to be a member of the Global Accelerator Network, which ensures that all its accelerator members fall into their vision (which I share) of acceleration.

Do we need startup accelerators?

Happy Startup SchoolBusiness schools emerged in the second half of the 19th century to meet an educational need not provided for by other institutions. Accelerators are trying to fill a similar gap today. So, while b-schools train future corporate leaders, accelerators train current entrepreneurial leaders. Accelerators are today’s e-schools. By providing hands-on advices from experienced mentors and networking opportunities to founders, especially those not very familiar with business topics (like technical founders), accelerators really fulfil this “educational” mission.

Accelerators are also a great way to shake up an ecosystem and help emulate  entrepreneurial vocations. But, on top of that, what I’ve found most valuable for the founders we’ve helped so far, is endorsement. Entrepreneurship is hard. You make a lot of sacrifices, especially social ones. Being selected in a renowned program, even if you’re still not making money, is already a great sign sent to your family and friends that you’re not doing all this for nothing.

Will it stay the same?

I think we’re going to see more and more accelerators in the short run. Driven by startup hype (and probably bubble) and growing interest from corporations (see this good piece by @jd on the subject), startups will now have more and more options in terms of support. Their success in the long run will depend on their business model.

Equity-based accelerators will need to have several successful exits to sustain their growth and convince LPs to keep investing (there will always be investors) while, for other models (like non-profit), it will really depend on the accelerator’s capacity to show value to their sponsors (or customers) over time. As of corporate accelerators, I doubt most of them will still exist in the next 3 years as they’re usually considered a cost and their existence is almost always tied to one executive sponsor internally (that will eventually leave).

As of StartUp42, our sustainability is tied to our ability to select and help future successful startups that will in return help the organisation, while at the same keep convincing sponsors that our position in the ecosystem (especially developers’ groups) is still relevant over the years.