This blog contains original articles as well as articles from the book "Start-Up", by Hervé Lebret, which exists both in English & French. It is available on Amazon as well as in electronic versions. To buy it, click here.
Follow hlebret on Twitter rss_logo-st-book amazon-sq-logo-gb

My top 10 (must-read) (business) books

January 22nd, 2015 Comment »

After reading a couple of top 10 and must-read list of books, here is an exercise I had never done. I went through my past readings and quickly built my own top 10 / must-read – business books. If you want an exhaustive list you could have a look at all the Must Watch or Read articles on this blog. here is my ranking:

#1: The Four Steps to the Epiphany by Steve Blank,
(subtitled Successful Strategies for Products that Win)

Four-Steps-to-the-Epiphany-5th-edition

Although it is rather painful to read because of the density of advice and check-list, it is the must read book for any entrepreneur who must understand the complex relations between building a product and service and selling to customers. Here is my post, dated November 2013.

#2: The Hard Thing about Hard Things by Ben Horowitz.
(Building a Business When There Are No Easy Answers)

thehardthing

A honest and toughest account about what entrepreneurship means. As the great Bill DAvidow was saying, “Being an entrepreneur is not for the faint of heart”. More about my account dated May 2014.

#3: Regional Advantage by AnnaLee Saxenian.
(Culture and Competition in Silicon Valley and Route 128)

Not a book about entrepreneurship but about high-tech clusters. Saxenian explained (already) in 1994 why Silicon Valley had won. It is the book to read to understand what start-ups really are and why they are important. A short indirect account dated October 2011.

#4: The Black Swan by Nassem Nicholas Taleb.
(The Impact of the Highly Improbable)

It is not directly related to innovation and entrepreneurship, but successful start-ups are highly improbable events with huge impact. A fascinating book I first talked about in July 2012 but I mention the concept and author so many times you could also check the tags Black Swan and Taleb.

#5: The Man Behind the Microchip by Leslie Berlin.
(Robert Noyce and the Invention of Silicon Valley)

The Man Behind the Microchip

The best (in fact nearly the only!) biography of an entrepreneur I read so far. It’s great, moving and full of information. You can read my short account dated February 2008 but you could also read more in The Tinkerings of Robert Noyce dated August 2012.

#6: Founders at Work by Jessica Livingston
(Stories of Startups’ Early Days)

FoundersAtWork-2015

Great interviews of start-up founders with an account dated June 2008. I had read before and I read since many other books built with such interviews. No doubt this is the best one.

#7: I’M Feeling Lucky by Douglas Edwards
(Falling On My Feet in Silicon Valley)

I could not have a top 10 list without a book about Google! This is my favorite one (but close to #8). When a marketing expert is hired by two crazy founders and learns he does not kwow so much about marketing and many other things. And in addition, it is the funniest business book I have ever read. My account is dated December 2012.

#8: How Google Works by Eric Schmidt & Jonathan Rosenberg, with Alan Eagle.
(The rules for success in the Internet Century)

HowGoogleWorks-cover

I initially thought a book written by the chairman and former CEO of Google would not be very enlightening. I was totally wrong. great lessons. great advice. A recent account dated November 2014.

#9: The Art of Start by Guy Kawasaki.
(The Time-Tested, Battle-Hardened Guide for Anyone Starting Anything)

artofstart.jpg

The best book about what you need to say with a powerpoint pitch or write in a business plan. A simple, direct to the point about launching any venture. One of my oldest (and shortest) posts, dated March 2008

#10: Against Intellectual Monopoly by Michele Boldrin and David K. Levine.

9780521879286

An important analysis of the crisis of intellectual property: “It is common to argue that intellectual property in the form of copyright and patent is necessary for the innovation and creation of ideas and inventions such as machines, drugs, computer software, books, music, literature and movies. In fact intellectual property is a government grant of a costly and dangerous private monopoly over ideas. We show through theory and example that intellectual monopoly is not necessary for innovation and as a practical matter is damaging to growth, prosperity and liberty.” I wrote many posts about it, the latest being dated May 2013.

#11: Something Ventured

It is so difficult to build such lists, I cheat twice! First with the greatest ever video document about Silicon Valley. You must watch and listen to Sandy Lerner, the co-founder of Cisco. And it is freely available on youtube, so no excuse not to watch this fascinating movie. My account is dated February 2012.

#12: The Unfinished Debate about the Individual and the State between Peter Thiel and Mariano Mazzucato

Thiel-Mazzucato

My second extension to the top 10 is made of two books! Peter Thiel is the author of Zero to One (notes on start-ups or how to to build the future). Mariana Mazzucato wrote The Entrepreneurial State (debunking public vs. private sector myths). But again, I produced so many posts on the topics they address you can also check the tags Mazzucato and Thiel. After the terrible events “Je Suis Charlie” which happened in Paris in early January 2015, these two books remind us about the complexity of analyzing how individuals and groups (societies, institutions, states) interact (with some tension) to create and innovate.

The Dark Net by Jamie Bartlett

January 16th, 2015 Comment »

I did not think when I bought this intriguing book about the hidden faces of the Internet that I would relate it to my three previous posts. The world is dangerous, the physical world is dangerous as we all know and as it was confirmed in Paris last week (A tribute on Jan. 8, We are all sad on Jan. 7). It is also known that the online world may be dangerous as illustrated by Jamie Bartlett in The Dark Net. I am not sure that the authors of How The Web Was Born (Dec. 2) had envisioned such possibilities.

the-dark-net-bartlett

Bartlett is not really pessimistic about the web. In his conclusion, he states: Technology is often described as “neutral”. But it could be more accurately described as power and freedom. […] The dark net is a world of power and freedom: of expression, of creativity, of information, of ideas. Power and freedom endow our creative and our destructive faculties. The dark net magnifies both, making it easier to explore every desire, to act on every dark impulse, to indulge every neurosis.[…] Each individual responds differently to the power and freedom that technology creates. It might make it easier to do bad things but it’s still a choice.

In his book Bartlett talks about the trolls (you may also want to read the recent MIT Tech Review article – The Troll Hunters), the lone wolves (such as Berwick), about Tor Hidden Services, about Bitcoin, about illegal sites selling drugs such as Silk Road, about online pornography and paedophilia, about self-harm and finally about transhumanists against anarcho-primitivists. Written this way, I am not sure I am doing a good marketing for the book, but the truth is that with the exception of terrorism, the author addresses many dark sides of the internet. It is a fair and good description of what the Internet hides (“close to its surface” [Page 238]).

These are important topics about freedom, about the evolution of our world, and I can only quote a famous French thinker: on France Culture, earlier this week, coming back about the Paris terrorist attacks, Regis Debray explained that the Western world is the primacy of the individual over the group. The Eastern world it is the reverse.” And I am not sure I understood if there was a value judgment or not, he added: “And the West today represents modernity.” I strongly believe in these values and I understand the risks linked to them, but I do not think we have much choice. You may want to read The Dark Net if these topics are of interest for you…

A tribute

January 8th, 2015 Comment »

Hommage-CH2

We are all sad…

January 7th, 2015 Comment »

NousSommesTousC

How the Web was Born

December 2nd, 2014 Comment »

How the Web was Born is a book I bought recently while visiting CERN in Geneva. It was written by James Gillies and Robert Cailliau and published in 2000. If you like history, you will appreciate this detailed account of more than forty years of technology developments. I am not yet finished, but there were a couple of things I wanted to mention here.

howthewebwasborn

– Public funding, mostly through (D)ARPA has been critical for the emergence of the Internet.
– Xerox PARC with its freedom to explore in the 70s has also been instrumental even if it did not directly benefit from its innovations. I did not know key people were coming from ARPA (again).
– When in 1987, CERN needed equipment that could guarantee and secure data transfer, it used he a small 3-year old company… Cisco.
– They were similar experiments to ARPANET in the UK and France, but with different dynamics… [In France] “this apparent success is tempered by the fact that CII had been selling its products at a loss, despite billions of francs of state investment, and the resulting company, again called Bull, is but a small player on the world stage. American success stories like DEC and Apple were launched for the equivalent of less than a single day’s funding of the French Plan Calcul and that from private funds. The lesson to be learnt is that state investment alone isn’t the answer. France’s Délégation à l’Informatique included not a single computer scientist, and was motivated by national pride rather than economic viability, noted a 1997 French government report. Partly because of this, ‘the failure of CII was written in its genes’, one former director of Bull was moved to say. The American approach, on the other hand, most strongly expressed through ARPA, had been to support good ideas coming from the ground up rather than trying to impose something from the top down.” [Page 58]

Indeed the TCP/IP protocol won because it worked but not because it was planned… The Internet is an amazing innovation which does not belong to anyone but is the result of collective endeavors. Again, the role of the state is shown as a friendly enabler more than a direct actor. Interesting lessons (or at least useful reminders)…

Celebrating a (too rare) Swiss IPO: Molecular Partners

November 21st, 2014 Comment »

I could have said: Celebrating a (too rare) European IPO. Molecular Partners is a spin-off from the University of Zurich, founded by Professeur Andreas Plückthun, Christian Zahnd, Michael Stumpp, Patrik Forrer, Kaspar Binz and Martin Kawe in 2004. It was funded by private investors: a first round of CHF18.5M in 2007 and a second round of CHF38M in 2009. Molecular has also signed a number of agreements with pharmaceutical companies, which explains the high income for a biotech start-up. The University of Zurich is also a shareholder thanks to a license agreement signed in 2004, through which it also receives royalties.

Molecular-CapTable
click image to enlarge

I think it is interesting to illustrate the evolution of its ownership trhough the financing rounds, including the IPO that has brought about a hundred million to Molecular.

Molecular-Dilution
click image to enlarge

I also like to mention the age of the founders. The IPO document provides data and I “guesses” the others from the academic career (based on a age of 18 at university entrance…) It gives an average of 33 with a range of 20 years between the extremes. I know that money is a taboo; Europeans do not like to disclose their wealth, which remains highly theoretical, because one does not sell shares in a biotech as easyly as a Facebook employee… But it seems to me important to celebrate the success of founders and their investors … Congratulations to all!

Molecular-Founders-Age

Something rotten in the Google republic?

November 20th, 2014 1 Comment »

I should have added a point of disagreement or discomfort in the analysis made by the authors of How Google Works. On page 125, there is a short section called Disproportionate rewards:

“Once you get your smart creatives on board, you need to pay them. Exceptional people deserve exceptional pay. Here again you can look to the sports for guidance: Outstanding athletes get paid outstanding amounts. […] Yes they are worth it (when they perform up to expectations) because they possess rare skills that are tremendously leverageable. When they do well, they have disproporationate impact. […]

You can attract smart creatives with factors beyond money: the great things they can do, the people they’ll work with, the responsability and the opportunities they’ll be given, the inspiring company culture and values, and yes, maybe even free food and happy dogs sitting desk-side. […] But when those smart creatives become employees and start performing, pay them appropriately. The bigger the impact, the bigger the comp. Pay outrageously good people outrageously well, regardless of their title or tenure. What counts is their impact.”

HowGoogleWorks-cover

I am in fact coming back to Capitalism in Silicon Valley following my contribution on France Culture. My French culture naturally favors the collective rather than the individual, while America has a reverse culture. However, the excellent exchange between Xavier Niel and Edgar Morin (l’école de la vie) shows that the borders or at least the analysis are moving. “What can a young French do if he wants to get rich, which is not to be despised? Not much. So he/she leaves. If a young suburban, if excluded from the school system, he/she only has small jobs or illegal dealing. And it is tragic. […] The problem is that the state has no money. No money, no reform. There is no more vision and courage to face corporatism.” And there’s the problem of Republican elite which is out of breath. “The social elevator is not working anymroe. We have the worst grade among the OECD countries in this area. The elites are very little renewed. What hope can have a growing number of young people who will find it difficult to benefit from a system monopolized by a few self-proclaimed castes and other great public servants of the state, which management has also been poor?”

In California, Google also stirs controversy. The exclusivity and exception create exclusion. How to correct it? Picketty and others respond with tax. But Google and others do not pay (enough) taxes … And Eric Schmidt does not addresses the issue of the collective and Google uses the law to optimize taxation. The “exceptional” and “outrageously” can become outrageous…

My discomfort is amplified by the notion of merit. In the field of science, one “grows up on the shoulder of other giants” and many have been forgotten. Albert Einstein. Didn’t he owe anything to Mileva? These exceptional individuals. Don’t they owe nothing to the surrounding environment, which may have helped? I’m much more sensitive to the other argument the authors use: “fight for the Divas” (page 48). I believe that in science, we have not listened enough to the exceptional behaviors such as Perelman and Grothendieck, two mathematicians who have withdrawn from the world.

I do not have answers and just intuitions. Between the elite, the exceptions, the rare individuals, and the collective, society, people, there must be a better balance. Between the negative taxes that the multinational corporations pay and the higher-than-the-annual-income taxes of some wealthy entrepreneurs, there must be a wise mid-point, which should help solve some issues of Silicon Valley on one side and Europe on the other side…

My coming out – in the world of start-ups

November 20th, 2014 Comment »

No it is not a true coming out à la Tim Cook, but a much less spectacular message… I woke up early this morning very disturbed. As you can see below, the ecosystem to support entrepreneurs at EPFL (finance, coaching, exposure and office space) is rich and complex. Yet our results are average not to say mediocre… all this is in fact useless without the ambition and risk-taking of enthusiastic and passionate individuals.

I’m not talking about people, but the system. A few days ago, I said to colleagues I was a matchmaker. I encourage meetings and I put the oil in the wheels. Then I smiled, thinking – I’m usually not too vulgar – that I offered vaseline for introducing investors. Fifteen years ago, an entrepreneur who had enjoyed a chat told me that I made him think of a prostitute but hidden behind me, there were nasty pimps…

Two days ago, I was lucky to listen at EPFL to a Nobel Prize in economics who explained that the Western world is in decline, that the crisis can be explained in part by a weak innovation. Corporatism and financiarization are some reasons of this. Then there was a shocking message from another speaker. Switzerland would be fine because it is hard-working while its neighbor would go wrong because its workers start their weekend on Wednesday at noon. Who can believe that unemployment and bankruptcy in Detroit would come from the laziness of the automobile workers and the success of Silicon Valley because of workaholic nerds. Things are much more complex! Just see in particular the recent analysis of Thomas Picketty or the related MIT Technology Review Technology and Inequality.

Four days ago, I listened to the US ambassador to Switzerland and Liechtenstein. Suzi Levine knows the world of start-ups. She is therefore interested in the situation in Switzerland. I noticed two of her messages:
– First “you have a lot of money but little capital”, I leave you to think about the message that was given to her at EPFL I think, “you have a lot of money but little capital”.
– Second, the weakness of the female presence in this entrepreneurial world. She therefore particularly appreciated that the Prix Musy be created this year. But our efforts will be useless, if we do not encourage and allow the emergence of passionate and adventurous entrepreneurs that create wealth and value… it’s not just about women, but diversity in general which should not be hindered by corporatism and financiarization.

EPFL-VoD-funding

More on the EPFL support to entrepreneurs

EPFL-VoD-support

Patrick Modiano, Nobel Prize in Literature

November 20th, 2014 2 Comments »

I remember a conference by Carlos Fuentes at Stanford University in 1989 or 1990. The Mexican writer said there that literature had become mixed. I did not find any trace of this conference, but some traces of a similar conference.
carlosfuentes
“Our future depends on the freedom of the polycultural to express itself in a world of shifting, decaying and emerging power centers.” He talked about the voices in literature today – Third World writers such as Salman Rushdie and V. S. Naipul – whose works reflect a diverse world that is no longer bipolar in terms of power and culture.

I took my courage in both hands and lined up to talk to him for a short moment. I asked him when my turn came what he thought of French literature. He told me that in this trend of global mixing, it was less visible except some authors such as Michel Tournier and J.M.G. Le Clézio. He did not mention Patrick Modiano but he should have! Nothing is more mixed as the writing of Modiano from La place de l’étoile until aptly titled Un pedigree. And nothing beats the most surprising opinion on this great author than François Mitterrand and Frédéric Mitterrand.

Frédéric Mitterand: “He received the Nobel Prize because, in my opinion, he permanently searches the Western guilt about the behavior of each other in times of totalitarianism, cruelty, and maltreatment from the state. […] he does not know why good people have become collaborators and bastards, resistant and what is perhaps the key to the deep melancholy and poetry that emerges from his books is that he does not know exactly.” (Minute 0:56 of the video below)

As for François Mitterrand, the archive dates back to 1978 when Bernard Pivot asked the man who was not yet President of the French Republic to invite four authors. He invited among others Patrick Modiano and Michel Tournier also! From minute 56:10, we could hear an amazing exchange … “There is a great clearness of style, which can deceive. Rue des boutiques obscures, it is an interesting story of someone who, in search of himself – he has amnesia, he does not know who he is – falls on Russian picturesque, families… But this is just a simple story. And then we get to the end […] and suddenly you realize that it’s not a simple story, it’s not a clear story. […] We realize that we are projected into another story; this man who is looking for himself does not just have amnesia – or so we all amnesic: who are we? […] This is a great classic French style and then we realize that there is some Russian under this. These are people who talk like Dostoevsky would do, but in the style of Stendhal or of a detective novel. »

When you know the relationship also ambiguous and far from simple between François Mitterrand and the Second World War, the exchange is amazing. I do not know if Modiano was surprised by the invitation. He was to receive the Prix Goncourt a few months later and the Nobel Prize some 25 years later…

NB: Fuentes and Tournier did not recieve the Nobel prize, but Le Clézio and Modiano did. If I had to bet, the next French writer on the list might be Michel Houellebecq.

NB2: when available, I will add here Modiano’s speech in Stockholm for his Nobel Prize.

Venture capital

November 14th, 2014 Comment »

I was asked this week about how big venture capital is in Switzerland. And also in Silicon Valley. So I checked the data and found what comes below. But try to ask yourself how much money is invested in countries such as Germany, France, the UK, and regions such as Silicon Valley or the Boston area. Any clue? Before providing some answers, I should clarify one point: there are at least two definitions. How much money is raised by funds located in a given area. And how much money is invested in companies established in that area. I focus on the second one as funds can artificially be established in strange places such as Jersey for example. Then you have to remember that money can be invested in a Swiss start-up by Silicon Valley investors. It therefore shows the dynamism of entrepreneurs, not of local investors.

venture_capital_superhero

A second point I want to mention again is that high-tech start-ups and venture capital are about exceptions. If you are not convinced, read Peter Thiel or what follows. Marc Andreessen pronounced this at class 9 of How to Start a Startup: “The venture capital business is one hundred percent a game of outliers, it is extreme outliers. So the conventional statistics are in the order of four thousand venture fundable companies a year that want to raise venture capital. About two hundred of those will get funded by what is considered a top tier VC. About fifteen of those will, someday, get to a hundred million dollars in revenue. And those fifteen, for that year, will generate something on the order of 97% of the returns for the entire category of venture capital in that year. So venture capital is such an extreme feast or famine business. You are either in one of the fifteen or you’re not. Or you are in one of the two hundred, or you are not. And so the big thing that we’re looking for, no matter which sort of particular criteria we talked about, they all have the characteristics that you are looking for the extreme outlier.”

Now the numbers through tables:

VC-US-Figure

VC-US-Table

VC-Eur-Figure

VC-Eur-Table

Many striking facts. Not new ones, I knew about them. but still…
– Silicon Valley leads. By far.
– There had been a bubble in 2000! But the amounts of VC funding post 2000 have remained extremely high compared to the 90s. Would there be too much money?
– The USA easily recovered from the 2008 crisis. Not Europe…

NB: I had done the exercise in 2011 in Venture Capital according to WEF. Let me just add again this table. Notice the numbers are not fully consistent with what I showed above. Just an illustration of the difficulty of definitions (stages, origins…) but the order of magnitude is what matters.