Monthly Archives: July 2013

Does the Swiss culture tolerate failure?

Here is my fourth contribution to Entreprise Romande. I realize now it is often about failure and innovation. This new article maintains the tradition. And because it was a special issue about failure, let me provide a translation of the editorial.

ER_20130705

Entreprise romande – July 5, 2013 – Véronique Kämpfen, rédactrice en chef:

Tolerance for failure favors growth

We are not all equal vis-à-vis failure. The fact is confirmed by a detailed study published by Barclays in late 2012. First, Europeans have more difficulty seeing failure as positive (69%) than Americans (71%), Asians (80%) and Middle Easterners (91%). Second, entrepreneurs have a less negative attitude towards failure than the rest of the population. They often think that failures have shaped their character, that this event has taught them a lot and they were able to bounce back quickly. Entrepreneurs are also far more optimistic than the rest of their fellow citizens. This phenomenon is described in the medical literature: it seems that a high number of successful entrepreneurs are characterized by a genetic form of psychiatric bias, which predisposes them to be creative, enthusiastic and somewhat less apprehensive vis-à-vis risk taking. John Gartner, the psychiatrist at the origin of this study, highlights the specific features of these characters: “Having that kind of confidence can lead to blindness when facing risk, because these individuals do not believe they can fail. (…) However, if they fail, they will not stay down for long and will soon be energized by a completely new idea”.

More generally, the Barclays study shows that tolerance for failure is essential to growth. The process of “creative destruction”, that is obsolete ideas, technology and business models give way to new impulses, is essential to economic progress and job creation. For this process to be effective, we need entrepreneurs who want to take risks, and an environment that supports their efforts. Until now, Switzerland seems to have done OK, as evidenced by its economic health and its high ranking in terms of innovation and competitiveness. As the Swiss are not the champions of tolerance for failure, they must be supported by appropriate framework conditions and encouraged so that those who have the entrepreneurial spirit may try … without taking too much risk! These topics are covered in great detail in the Magazine Entreprise romande. The taboo of failure and bankruptcy is analyzed in all its forms and put into perspective with practical advice and testimonials from entrepreneurs. Happy reading … enjoy the summer!

and here is my contribution:

Does the Swiss culture tolerate failure?

“The Swiss Society gives us so many slaps in the face through education that we are afraid of being creative, because we show then our weaknesses. By expressing our dreams, we do an intellectual striptease; it is feared that others see them as bad, not good, not nice and not fair.” So speaks Elmar Mock, inventor of the Swatch and founder Creaholic. The Swiss school system is indeed not known for its creativity. The famous (in French speaking Switzerland) « faut se gaffer » (“don’t be goofy”) might make you smile. Our teachers too seem to give more importance to the rigor than to the creativity of our little darlings. The room for error is unconsciously repressed. If one accepts the idea that innovation is above all creating in situations of uncertainty, the statement is worrying. Yet Switzerland is world champion of innovation in almost all global reports. Is there a contradiction?

Innovation is a subtle thing. Innovation is not limited to invention and innovation is not about technology only; it is the result of a process, following which are created products, services or new processes that will have to demonstrate that they answer a (commercial or non-commercial) need. The process leading to innovation is long, unpredictable and hard to control, innovation cannot therefore be planned and we have to accept failure.

Clayton Christensen, a professor at the Harvard Business School, built a theory explaining the process of disruptive innovation, the one innovation which allows the emergence of new revolutionary products such as the Internet, the mobile phone, but also the low-cost airlines, the one innovation which also allows new players to emerge and replace their older competitors. According to Christensen, disruptive innovation cannot occur within established institutions. The best companies are listening to their customers and those only want to improve existing products and will rarely desire new products. The U.S. has seen more than 80 major new companies emerge since 1970, and France, only 4. And Switzerland?

Switzerland is world champion of innovation firstly because the framework conditions are excellent. Everything is done for businesses to succeed, minimizing barriers and constraints. Then, because there is a culture of work well done. Apprenticeship, in the early years of training, helps in maintaining this tradition and Swiss companies are known to be listening to their customers in order to improve existing products in the right direction. But what kind of innovation are we talking about? Probably not about the one which enables technology breakthroughs. No, rather of a different type of innovation, incremental innovation, made of “gradual, continuous improvement of techniques or existing products; usually incremental innovation does not fundamentally change the dynamics of an industry, or does not require a change in behavior,” according to wikipedia. Switzerland is champion of incremental innovation through a dense network of highly performing SMEs. Failure is relatively absent, when the attention to every detail is permanent. But is it enough?

Not only the Swiss school system is not known for its creativity, but furthermore our academic spin-offs create few jobs. If we accept the corollary that innovation is a source of growth and new jobs, we might not be as innovative as it might be desired. We are obviously efficient for incremental innovation, but certainly not as good when it comes to disruptions. Except for one example that comes easily to my mind, the Swatch. But Nicholas Hayek was not the product of the Swiss culture! I could add Nespresso, but Eric Favre, inventor of the product, had suffered a strong initial reluctance from Nestlé to the point of saying: “The Swiss economy lacks real entrepreneurs!” The difficulty of integrating risk and radical innovation can make anyone short-sighted when experiencing ongoing changes and cause much bigger failures, as evidenced by the grounding of Swissair, which was seen as a national trauma. The United States has lost TWA and PanAm, but Americans have invented the concept of low cost airlines with Southwest or JetBlue, which have happily replaced the old players. In Europe, EasyJet and similar companies only followed the American model.

The Swiss start-ups never die. They have a survival rate of 90% after 5 years. Whereas across the Atlantic and even in Switzerland for traditional businesses, this rate is less than 50%… This may mean, quoting Xavier Comtesse, that “startups are protected by the academic system or federal funding.” Because failing is an unacceptable stigma? Or because taking risks, an inevitable cause of a greater failure rate, would be too dangerous? Without being so pessimistic, I would add that our start-ups are often excellent engineering offices, with great know-how. With a service business model eventually outweighing new products, the company survives without significant creation of jobs and without growth. I often asked entrepreneurs who failed to share their experience. A real failure! Our experts and mentors do not grow our young entrepreneurs in this direction, and I have heard it so often that I almost got used to it. Our business angels have a great distrust of more aggressive venture capitalists and they fear their more binary approach of “make it or break it. ”

Daniel Borel, the iconic entrepreneur: “In our industry, if we do not innovate constantly, if we do not have the courage to take risks, we disappear. This is why I prefer to get into seven projects even if it means failing three, as not to fail in anything, by chance, having focused on a single project.” […] “We only learn from our failures, rarely from succcess. Success can be your worst enemy: it makes you think you are strong, very strong; you could even walk on water. And it is at this point that you drown. ”

The Swiss culture has certainly a very small tolerance for failure. It promotes a type of innovation (incremental) which may explain its strengths. Its network of strong SMES is probably the result of this conservative and demanding culture. There is reason to be proud of it. But I like the quote from the former star of Hockey, Wayne Gretzky: “I skate to where the puck will be, not where it was.” The question is whether Switzerland will be tomorrow at the right place to get the puck …

When Science Looks Like Religion: The theory That Would Not Die.

It is the third book I read about statistics in a short while and it is probably the strangest. After my dear Taleb and his Black Swan, after the more classical Naked Statistics, here is the history of the Bayesian statistics.

mcgrayne_comp2.indd

If you do not know about Bayes, let me just add that I like the beautiful and symmetric formula: [According to wikipedia]
For proposition A and evidence B,
P(A|B) P(B) = P(B|A) P(A)
P(A), the prior, is the initial degree of belief in A.
P(A|B), the posterior, is the degree of belief having accounted for B.
the quotient P(B|A)/P(B) represents the support B provides for A.
Another way of explaining it mathematically is Bayes’ theorem gives the relationship between the probabilities of A and B, P(A) and P(B), and the conditional probabilities of A given B and B given A, P(A|B) and P(B|A).

I was never really comfortable with its applications. I was probably wrong again, given all what I learnt after reading Sharon Bertsch McGrayne’s rich book. But I also understood why I was never comfortable: for three centuries, there’s been a quasi-religious war between Bayesians and Frequentists on how to use probabilities. Are these linked to big, frequent numbers only or can they be applied for rare events? What is the probability of a rare event which may never occur or maybe just once?

[Let me give you a personal example: I am interested in serial entrepreneurship, and did and still do tons of statistics on Stanford-related companies. I have more than 5’000 entrepreneurs, and more than 1’000 are serial. I have results showing that serial entrepeneurs are not on average better than one-time, using frequency and classical methods. But now I should think about using:
P(Success|Serial) = P(Serial|Sucess) P(Success) / P(Serial)
I am not sure what will come out, but I should try!].

If you want a good summary of the book, read the review by Andrew I. Daleby (pdf). McGrayne illustrates the “recent” history of statistics and probabilities through famous (Laplace) and less famous (Bayes) scientists, through famous (the Enigma machine and Alan Turing) and less famous (lost nuclear bombs) stories and it is a fascinating book. I am not convinced it is great at explaining the science, but the story telling is great. Indeed, it may not be about science at all. But about belief as is mentioned in the book: Swinburne inserted personal opinions into both the prior hunch and the supposedly objective data of Bayes’ theorem to conclude that God was more than 50% likely to exist; later Swinburne would figure the probability of Jesus’ resurrection at “something like 97 percent” [Page 177]. It obviously reminded me of Einstein’s famous quote: “God does not play dice with the universe.” This is not directly related but for the second time in my life, I was reading about links between science, probability and religion.

The cradle of European Innovation

Sometimes, giving an interview has interesting and strange results. I do not read Korean so I cannot really help! But apparently what was kept from the conversation is that “it is important to make a culture where we are not afraid to fail”. As well as ” Culture is important to propagate entrepreneurship in universities. Even if the (academic) system is very good, it might be far from starting a business without this culture.” I had learnt my name is Russian was Эрве Лебре. Now I know it in Korean: 에레 레브레. And what about my new look according to a Korean photographer… Here is the full article.

◆ 창조경제의 요람 유럽대학 ① ◆

기사의 0번째 이미지
“대학에 기업가정신을 퍼뜨리기 위해서는 문화가 중요합니다. 제도가 아무리 좋아도 문화가 뒤따르지 않으면 창업은 요원한 일입니다.”

스위스 로잔공대 이노베이션파크에서 만난 이노그랜트 프로그램 총괄 책임자 에레 레브레 박사는 “유럽의 대학생들도 한국과 마찬가지로 기업가정신이 부족한 편”이라며 “미국 실리콘밸리처럼 기업가정신이 대학 곳곳으로 퍼질 수 있는 문화를 만들어야 한다”고 강조했다.

이노그랜트는 창업을 원하는 교수나 학생에게 조건 없이 창업자금을 지원하는 프로그램이다. 2005년 스위스의 한 은행이 학교를 위해 내놓은 100만달러를 종잣돈으로 삼아 만들어졌다. 레브레 박사는 “로잔공대에는 기술사업화와 창업을 지원하는 다양한 프로그램이 있었지만 `스타트업`을 중점적으로 돕는 프로그램이 필요하다고 판단했다”며 “이노그랜트 프로그램을 만든 뒤 지난 7년간 56개 아이디어에 자금을 지원했고, 이를 통해 25개 새로운 회사가 탄생했다”고 밝혔다.

이노그랜트 펀딩의 대상자가 되면 교수와 학생을 구분하지 않고 1년간 창업에만 열중할 수 있다.
창업에 실패한다고 하더라도 받은 돈을 학교에 반납할 필요가 없다. 레브레 박사는 “이노그랜트의 펀딩을 받으면 연구나 수업에서 제외된다”며 “1년간 생활자금을 지원해 주기 때문에 돈 걱정 없이 창업 준비에만 신경을 쓰게 된다”고 했다.

이 같은 혜택에 힘입어 이노그랜트 프로그램에 창업을 하겠다며 지원하는 프로젝트는 연간 40~50건에 달한다.

[로잔(스위스) = 원호섭 기자]
[ⓒ 매일경제 & mk.co.kr, 무단전재 및 재배포 금지]
http://news.mk.co.kr/newsRead.php?year=2013&no=583051

Korean-lebret

After posting this article, I received an English translation from the author. here it is:

Create a culture that is not afraid to fail
(This article is a part of the special series of articles titled “Visit European universities, Cradle of the creative economy”)

The EPFL is a unique place of innovation and competence. The EPFL handles innovation through its VPIV. The VPIV is responsible for the technology transfer, supporting start-ups through the Innogrants program and the coordination of all relationships between industry and EPFL. The EPFL turned out 156 new companies between 2000 and 2012. Hervé Lebret, the manager of the Innogrants said “Even if there was a best system, startups are still far-off without culture. It’s about culture. Just like Silicon Valley, we have to make a culture which can spread the entrepreneurship throughout the university.” The Innogrants were created by the EPFL in 2005 to encourage the entrepreneurial spirit and support start-ups. To date, 56 ideas were funded which enabled the creation of 25 start-ups. An Innogrant is a 12-month salary for the project owner in an EPFL laboratory and the beneficiary is freed of teaching or research activities so that the project owner fully concentrates on that project.

Slicing Pie – Part 3 (or How Startup Funding Works)

A colleague of mine at EPFL just mentioned a new nice infographics about sharing equity in a start-up: How Startup Funding Works. It has apparently its roots with famous entrepreneur Paul Graham. It could be indeed based on his essay written in 2005. Nice piece of vizualizing. Thanks Sanna 🙂

So following many posts about equity splitting including the one about the nice book Slicing the Pie, here is the visual solution.

how-startup-funding-works_51db987f390b4

Love, America, Technology, and Art

What have these 4 things in common? I am not sure. But in the last 12 hours, I had to put this 4 things together. My professional life is about technology, but I am not a technophile. I do not have a smart phone. But I like people and I strangely rediscovered it through high-tech entrepreneurship. There are many, many more important things. I will give you two examples with Bruce Springsteen and Jonathan Franzen, two known supporters of Barack Obama, whom I have mentioned a couple of times here. These are just two (therefore three) examples of why it is possible to like America… follow me, you don’t have to agree.

(Let me just add 5 minutes after publishing this article that we are on July 4!)

Springsteen-geneve

Yesterday, I was in Geneva for one of the best concerts of my life. The Boss and his sixteen musicians gave a nearly 3 hour-long show with a generosity I had never seen on stage. I did not know about his “sign requests”. His fans showed him signs with song titles and he picked a few, which he would later sing. Not the kind of music machines I am often used to experience. A kid went on stage and sang alone for a while. This was unique too. He is 63-year old and has the energy of a youngster, the generosity of a wise man. No naiveness. “We have a job to make here tonight.” What a job! I found a site which gave a short account including the songs he chose yesterday (including the signed ones – see in the end). Springsteen belongs to the group of people which show why we can love America.

I also like Jonathan Franzen. I may have read all his writings, The Corrections remains my favorite one. I am currently reading his latest essays. He also shows suffering, misery, hardship in America. A different kind of suffering, but in the end, it is probably the same. Americas is great when it shows its weaknesses. But neither Sprinsteen nor Franzen are depressing, because they are generous, they are passionate. I don’t see any cynism. Hopefully, I am not naive. In one of his latest essays, a commencement address at Kenyon College, he links technology and love… The title is PAIN WON’T KILL YOU and in the NYT he made another version entitled Liking Is for Cowards. Go for What Hurts.

franzen-time

Here is the NYT full version. I think it is worth reading it. But you can use the two previous web links too. I will try to provide my French version later…
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Liking Is for Cowards. Go for What Hurts.
By JONATHAN FRANZEN
Published: May 28, 2011

A COUPLE of weeks ago, I replaced my three-year-old BlackBerry Pearl with a much more powerful BlackBerry Bold. Needless to say, I was impressed with how far the technology had advanced in three years. Even when I didn’t have anybody to call or text or e-mail, I wanted to keep fondling my new Bold and experiencing the marvelous clarity of its screen, the silky action of its track pad, the shocking speed of its responses, the beguiling elegance of its graphics.
I was, in short, infatuated with my new device. I’d been similarly infatuated with my old device, of course; but over the years the bloom had faded from our relationship. I’d developed trust issues with my Pearl, accountability issues, compatibility issues and even, toward the end, some doubts about my Pearl’s very sanity, until I’d finally had to admit to myself that I’d outgrown the relationship.
Do I need to point out that — absent some wild, anthropomorphizing projection in which my old BlackBerry felt sad about the waning of my love for it — our relationship was entirely one-sided? Let me point it out anyway.
Let me further point out how ubiquitously the word “sexy” is used to describe late-model gadgets; and how the extremely cool things that we can do now with these gadgets — like impelling them to action with voice commands, or doing that spreading-the-fingers iPhone thing that makes images get bigger — would have looked, to people a hundred years ago, like a magician’s incantations, a magician’s hand gestures; and how, when we want to describe an erotic relationship that’s working perfectly, we speak, indeed, of magic.
Let me toss out the idea that, as our markets discover and respond to what consumers most want, our technology has become extremely adept at creating products that correspond to our fantasy ideal of an erotic relationship, in which the beloved object asks for nothing and gives everything, instantly, and makes us feel all powerful, and doesn’t throw terrible scenes when it’s replaced by an even sexier object and is consigned to a drawer.
To speak more generally, the ultimate goal of technology, the telos of techne, is to replace a natural world that’s indifferent to our wishes — a world of hurricanes and hardships and breakable hearts, a world of resistance — with a world so responsive to our wishes as to be, effectively, a mere extension of the self.
Let me suggest, finally, that the world of techno-consumerism is therefore troubled by real love, and that it has no choice but to trouble love in turn.
Its first line of defense is to commodify its enemy. You can all supply your own favorite, most nauseating examples of the commodification of love. Mine include the wedding industry, TV ads that feature cute young children or the giving of automobiles as Christmas presents, and the particularly grotesque equation of diamond jewelry with everlasting devotion. The message, in each case, is that if you love somebody you should buy stuff.
A related phenomenon is the transformation, courtesy of Facebook, of the verb “to like” from a state of mind to an action that you perform with your computer mouse, from a feeling to an assertion of consumer choice. And liking, in general, is commercial culture’s substitute for loving. The striking thing about all consumer products — and none more so than electronic devices and applications — is that they’re designed to be immensely likable. This is, in fact, the definition of a consumer product, in contrast to the product that is simply itself and whose makers aren’t fixated on your liking it. (I’m thinking here of jet engines, laboratory equipment, serious art and literature.)
But if you consider this in human terms, and you imagine a person defined by a desperation to be liked, what do you see? You see a person without integrity, without a center. In more pathological cases, you see a narcissist — a person who can’t tolerate the tarnishing of his or her self-image that not being liked represents, and who therefore either withdraws from human contact or goes to extreme, integrity-sacrificing lengths to be likable.
If you dedicate your existence to being likable, however, and if you adopt whatever cool persona is necessary to make it happen, it suggests that you’ve despaired of being loved for who you really are. And if you succeed in manipulating other people into liking you, it will be hard not to feel, at some level, contempt for those people, because they’ve fallen for your shtick. You may find yourself becoming depressed, or alcoholic, or, if you’re Donald Trump, running for president (and then quitting).
Consumer technology products would never do anything this unattractive, because they aren’t people. They are, however, great allies and enablers of narcissism. Alongside their built-in eagerness to be liked is a built-in eagerness to reflect well on us. Our lives look a lot more interesting when they’re filtered through the sexy Facebook interface. We star in our own movies, we photograph ourselves incessantly, we click the mouse and a machine confirms our sense of mastery.
And, since our technology is really just an extension of ourselves, we don’t have to have contempt for its manipulability in the way we might with actual people. It’s all one big endless loop. We like the mirror and the mirror likes us. To friend a person is merely to include the person in our private hall of flattering mirrors.
I may be overstating the case, a little bit. Very probably, you’re sick to death of hearing social media disrespected by cranky 51-year-olds. My aim here is mainly to set up a contrast between the narcissistic tendencies of technology and the problem of actual love. My friend Alice Sebold likes to talk about “getting down in the pit and loving somebody.” She has in mind the dirt that love inevitably splatters on the mirror of our self-regard.
The simple fact of the matter is that trying to be perfectly likable is incompatible with loving relationships. Sooner or later, for example, you’re going to find yourself in a hideous, screaming fight, and you’ll hear coming out of your mouth things that you yourself don’t like at all, things that shatter your self-image as a fair, kind, cool, attractive, in-control, funny, likable person. Something realer than likability has come out in you, and suddenly you’re having an actual life.
Suddenly there’s a real choice to be made, not a fake consumer choice between a BlackBerry and an iPhone, but a question: Do I love this person? And, for the other person, does this person love me?
There is no such thing as a person whose real self you like every particle of. This is why a world of liking is ultimately a lie. But there is such a thing as a person whose real self you love every particle of. And this is why love is such an existential threat to the techno-consumerist order: it exposes the lie.
This is not to say that love is only about fighting. Love is about bottomless empathy, born out of the heart’s revelation that another person is every bit as real as you are. And this is why love, as I understand it, is always specific. Trying to love all of humanity may be a worthy endeavor, but, in a funny way, it keeps the focus on the self, on the self’s own moral or spiritual well-being. Whereas, to love a specific person, and to identify with his or her struggles and joys as if they were your own, you have to surrender some of your self.
The big risk here, of course, is rejection. We can all handle being disliked now and then, because there’s such an infinitely big pool of potential likers. But to expose your whole self, not just the likable surface, and to have it rejected, can be catastrophically painful. The prospect of pain generally, the pain of loss, of breakup, of death, is what makes it so tempting to avoid love and stay safely in the world of liking.
And yet pain hurts but it doesn’t kill. When you consider the alternative — an anesthetized dream of self-sufficiency, abetted by technology — pain emerges as the natural product and natural indicator of being alive in a resistant world. To go through a life painlessly is to have not lived. Even just to say to yourself, “Oh, I’ll get to that love and pain stuff later, maybe in my 30s” is to consign yourself to 10 years of merely taking up space on the planet and burning up its resources. Of being (and I mean this in the most damning sense of the word) a consumer.
When I was in college, and for many years after, I liked the natural world. Didn’t love it, but definitely liked it. It can be very pretty, nature. And since I was looking for things to find wrong with the world, I naturally gravitated to environmentalism, because there were certainly plenty of things wrong with the environment. And the more I looked at what was wrong — an exploding world population, exploding levels of resource consumption, rising global temperatures, the trashing of the oceans, the logging of our last old-growth forests — the angrier I became.
Finally, in the mid-1990s, I made a conscious decision to stop worrying about the environment. There was nothing meaningful that I personally could do to save the planet, and I wanted to get on with devoting myself to the things I loved. I still tried to keep my carbon footprint small, but that was as far as I could go without falling back into rage and despair.
BUT then a funny thing happened to me. It’s a long story, but basically I fell in love with birds. I did this not without significant resistance, because it’s very uncool to be a birdwatcher, because anything that betrays real passion is by definition uncool. But little by little, in spite of myself, I developed this passion, and although one-half of a passion is obsession, the other half is love.
And so, yes, I kept a meticulous list of the birds I’d seen, and, yes, I went to inordinate lengths to see new species. But, no less important, whenever I looked at a bird, any bird, even a pigeon or a robin, I could feel my heart overflow with love. And love, as I’ve been trying to say today, is where our troubles begin.
Because now, not merely liking nature but loving a specific and vital part of it, I had no choice but to start worrying about the environment again. The news on that front was no better than when I’d decided to quit worrying about it — was considerably worse, in fact — but now those threatened forests and wetlands and oceans weren’t just pretty scenes for me to enjoy. They were the home of animals I loved.
And here’s where a curious paradox emerged. My anger and pain and despair about the planet were only increased by my concern for wild birds, and yet, as I began to get involved in bird conservation and learned more about the many threats that birds face, it became easier, not harder, to live with my anger and despair and pain.
How does this happen? I think, for one thing, that my love of birds became a portal to an important, less self-centered part of myself that I’d never even known existed. Instead of continuing to drift forward through my life as a global citizen, liking and disliking and withholding my commitment for some later date, I was forced to confront a self that I had to either straight-up accept or flat-out reject.
Which is what love will do to a person. Because the fundamental fact about all of us is that we’re alive for a while but will die before long. This fact is the real root cause of all our anger and pain and despair. And you can either run from this fact or, by way of love, you can embrace it.
When you stay in your room and rage or sneer or shrug your shoulders, as I did for many years, the world and its problems are impossibly daunting. But when you go out and put yourself in real relation to real people, or even just real animals, there’s a very real danger that you might love some of them.
And who knows what might happen to you then?
Jonathan Franzen is the author, most recently, of “Freedom.” This essay is adapted from a commencement speech he delivered on May 21 at Kenyon College.
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More for myself! (A blog is also my personal journal) Bruce Springsteen in Switzerland: Dedicates ‘Land of Hope and Dreams’ to Nelson Mandela. Bruce Springsteen and the E Street Band were back in action again on Wednesday, playing a 26-song, two-hour-and-52-minute show at the Stade de Genève in Geneva, Switzerland. Highlights included “Frankie” which was played for the first time in 2013 and for only the fifth time this tour and the encores started with Bruce playing “The Promise” solo on the piano, “Youngstown” and “Murder Inc.” were also played. It was the first show this tour that “Wrecking Ball” was not played. In the 118 shows so far this tour, three songs still have perfect attendance: “Waitin’ on a Sunny Day,” “Born to Run” and “Dancing in the Dark.” Bruce dedicated “Land of Hope and Dreams,” the final song of the main set, to Nelson Mandela. Show began at 7:40 p.m. local time (six hours ahead of New Jersey)
Set list
1. Shackled and Drawn
2. Badlands
3. Death to My Hometown
4. Out in the Street (sign request)
5. Hungry Heart (sign request)
6. Candy’s Room (sign request)
7. She’s the One
8. Because the Night
9. Spirit in the Night
10. Frankie
11. The River
12. Youngstown
13. Murder Incorporated
14. Darlington County (sign request)
15. Working on the Highway
16. Bobby Jean
17. Waitin’ on a Sunny Day
18. The Rising
19. Land of Hope and Dreams (dedicated to Nelson Mandela)
Encore:
20. The Promise (solo piano)
21. Born in the U.S.A.
22. Born to Run
23. Dancing in the Dark
24. 10th Avenue Freeze-Out
25. American Land
26. Thunder Road (solo acoustic)

In Innovation Quest, Regions Seek Critical Mass

Very good article by the MIT technology review about technology clusters: In Innovation Quest, Regions Seek Critical Mass. Nothing really new, but it shows again and again how difficult it is to build such clusters and to promote an innovation culture. I just extract a few quotes:

“Clusters exist—it’s empirically proven,” Yasuyuki Motoyama, a senior scholar at the Kauffman Foundation, told me. “But that doesn’t mean governments can create one.”

The problem for governments is that they often try to define where and when innovation will occur. Some attempt to pick and fund winning companies. Such efforts have rarely worked well, says Josh Lerner, a professor at Harvard Business School. Governments can play a role, he says, but they should limit themselves mostly to “setting the table”: create laws that don’t penalize failed entrepreneurs, reduce taxes, and spend heavily on R&D. Then get out of the way.

But can entrepreneurs succeed in creating clusters where governments have had so much difficulty? “The conflict now is between two logics on how to create an ecosystem,” says Fiona Murray, a professor at MIT’s Sloan School, who consults as a kind of therapist to clusters, including London’s TechCity. One is “a government logic that says it’s too important to leave to entrepreneurs, and that you that need specialized inputs, like a technology park.” The other is “purely focused on people and their networks.” Murray believes the answer lies somewhere in the middle. Governments are good at organizing but poor at leading.

I will finsih by reminding you the power of SV in the cluster leadership…

WinnerTakesAll

Neolane, the latest French success story

France is often criticized for its apparent weakness in entrepreneurship and of its start-ups, but it is clear that the reality is not as negative as the perception; Kelkoo in the past, Criteo probably in a few months as well Deezer. And last week Neolane. I hear the critics say: “Yes, but this is the web.” It would mean you forget Parrot, Soitec, Envivio, Sequans Ymagis, Qualys, Inside… France is quite impressive (at the European level) for its start-up scene.

Neolane is the story of three friends who met at Centrale (one of the top French engineering schools). They co-founded a first start-up just out of school, which they sold before the Internet was really born. They launched a new one, Neolane, in 2001, with the support of Auriga Partners in 2002. Neolane raised more than €15M before being acquired last week by Adobe for €460M. It should not be very far from the largest M&A value of a French start-up. Again the acquirer is from the USA, as it is mostly the case with start-up acquisitions. Let us hope the jobs will not disappear, but it is certainly good news for France and Europe to enjoy such success. And sincere congratulations to my friends at Auriga Partners (I am not sure if they will appreciate or not this article…) Comments welcome!

neolane-founders
The founders of Neolane. From left to right, Benoît Gourdon, (Director of Operations for Europe), Stephen Dietrich (President of North America), Stephane Dehoche (CEO) and Thomas Boudalier (CTO).

As you can imagine if you know my blog, I had to build the capitalization table. I decided to focus here on the VC returns, i.e. both multiples on the investments and IRR. This is an interesting exercise as they were many rounds including partial sales. I have always been confused by the difference between multiples and IRRs. Multiples are what matters but IRRs also count as a relative measure of return (if compares with other assets).

neolane-vc-returns

NB: all data come from French register of commerce. Some numbers were missing so it is a best effort exercise and it was not the easiest I had to do…

neolane-captable2