Author Archives: Hervé Lebret

Tinkering and Innovation (without forgetting Christensen)

Tinkerings is not a word, I think, that is easily or commonly associated with innovation. And yet! It appears several times on this blog as indicated by the #tinkering tag. And here is the reference to a nice article by Paul Millier entitled The engineer, the tinkerer and the innovator (L’ingénieur, le bricoleur et l’innovateur). I’m not sure if you can have free access so here is a brief excerpt:

The other way of innovating is that of the “Tinkerer” [1], who, on the contrary, collects pieces to get an idea of ​​the whole. He collects disparate elements from the left and the right which he preserves “in case it could be useful”. He brings them together, he assembles them, he organizes and reorganizes until suddenly – almost surprisingly – it makes sense and the innovator can say “eureka”. Damn, but it’s obvious! How had we not thought about it before? The suitcase and the wheel existed separately from each other until the day when someone brought them together to make the suitcase on wheels. How could we imagine traveling without a suitcase on wheels today? This is a radical innovation.

[1] The term “Tinkering” used here has no derogatory character, quite the contrary. It corresponds to a profound distinction proposed by Claude Lévi Strauss in “La pense sauvage” (1962) between two approaches (both valid) that of the “scientist”, of the “engineer” who defines himself by a project, and that of the “Tinkerer” who deals with the “means at hand” (and therefore with the client in the case of innovation). This term is quite positive for this author as for all those who, in strategic analysis, semiotics or sociology, have appropriated this notion.

The word “Tinkering” in innovation, I discovered it with a magnificent text by Tom Wolfe, The Tinkerings of Robert Noyce, which I strongly encourage you to (re)read!

PS: Not mentioning the death of Clayton Christensen on 23 January 2020 would have been a mistake and just mentioning it as a postcript here is probably another one, but I could not say anything better than
1- The Economist –
2- or Nicolas Colin –
If you did not know Clayton Christensen, you are lucky, you can now discover his work!

The largest technology companies in the last 10 years in China and in Biotech (Part 2)

Following my recent post, The largest technology companies in Europe and the USA in the last 10 years, I needed to add a quick follow-on which comes from the fact that many people asked me two additional questions:
– but what about China?
– but what about biotech?
I am not a specialist of either dimension but I tried to do a similar exercice in the past and yesterday. Here are the results:

Top China 2020

Top China 2016

Top Biotech 2020

Top Biotech 2016

Top Biotech 2007

I have a small doubt about the year of that last table (best effort only…) and all the data in a single pdf here: Top China and Biotech

Also a short synthesis to be compared with the previous post:

The largest technology companies in Europe and the USA in the last 10 years

It’s just after reading on Twitter that Google had just become a trillion dollar company (In honor of Google becoming a $1T company today), and also after reading Nicolas Colin’s concerns about European technology companies (Will Fragmentation Doom Europe to Another Lost Decade?) that I remembered I used to compare US and European tech former startups.

So here are my past tables and also a short synthesis in the end. The full data in pdf in the end too.

USA vs. Europe in 2020

USA vs. Europe in 2018

USA vs. Europe in 2016

USA vs. Europe in 2014

USA vs. Europe in 2012

USA vs. Europe in 2010

USA vs. Europe: the Synthesis over the decade

If you prefer to download it all and a little more: Top US Europe (in pdf)

Deirdre McCloskey, a libertarian economist of another kind/gender

This article is linked,even it may not look obvious, to the previous one, Talent vs Luck: the role of randomness in success and failure.

By Yann Legendre for Le Monde

I recently discovered in newspaper Le Monde the economist Deirdre McCoskey. I am apparently not the only French person to have ignored her: “The last in a series of 18 books (while waiting for a 19th that she is about to publish, and a 20th that she is in the process of completing), many of which have marked economic science and have been translated into a dozen languages … but not into French. Markus Haller, eponymous boss of the Geneva publishing house, translated one, The Secret Sins of Economic Science (2017 – the original was published in 2002!): “French publishers are flocking to French economists who have become stars in the United States but superbly ignore the American economists who generate the most debate.” I will definitely have to make the effort to read her. The article Deirdre McCloskey, économiste libertarienne d’un autre genre is available for a fee on Le Monde, here are two extracts …

More than the neoclassical equation “capital x labor x technological innovation = wealth”, more than the advent of the rule of law, of democratic institutions or the modern state which the “institutionalists” defend, it is, she says, the production of intellectuals and artists who create a shift in the ethics of time to make freedom, creativity and individual innovation the new moral virtues in place of honor, rank and submission to the Church and to the prince.

Liberal values freed successively white men, slaves, Irish Catholics, Jews, victims of fascism, colonized people, women, victims of communism, gays and … transgender people. Neither slavery nor the exploitation of workers has made us wealthier, she says; on the contrary, it is their liberation that makes us all richer, more creative. Quoting the African American poet Langston Hughes – “Let America return to the land where every man is free” – and she adds, “And every woman”.

NB here a link to Let America Be America Again By Langston Hughes:

Talent vs Luck: the role of randomness in success and failure

I must thank my friend and colleague Fuad for pointing to me a remarkable research article entitled Talent vs Luck: the role of randomness in success and failure. You can find the paper on Arxiv in pdf format.

I must say this resonates with research I did in the past on serial entrepreneurs, where I discovered there was no real correlation between experience and success in high-tech entrepreneurship. Here is a link to this work: Serial entrepreneurs: are they better?

If you are interested, just download and read the paper. Here are some short teasers from their paper:

It is very well known that intelligence (or, more in general, talent and personal qualities) exhibits a Gaussian distribution among the population, whereas the distribution of wealth – often considered a proxy of success – follows typically a power law (Pareto law), with a large majority of poor people and a very small number of billionaires. Such a discrepancy between a Normal distribution of inputs, with a typical scale (the average talent or intelligence), and the scale invariant distribution of outputs, suggests that some hidden ingredient is at work behind the scenes. In this paper, with the help of a very simple agent-based toy model, we suggest that such an ingredient is just randomness. [Page 1]

There is nowadays an ever greater evidence about the fundamental role of chance, luck or, more in general, random factors, in determining successes or failures in our personal and professional lives. In particular, it has been shown that scientists have the same chance along their career of publishing their biggest hit; that those with earlier surname initials are significantly more likely to receive tenure at top departments; that the distributions of bibliometric indicators collected by a scholar might be the result of chance and noise related to multiplicative phenomena connected to a publish or perish inflationary mechanism; that one’s position in an alphabetically sorted list may be important in determining access to over-subscribed public services; that middle name initials enhance evaluations of intellectual performance; that people with easy-to-pronounce names are judged more positively than those with difficult-to-pronounce names; that individuals with noble-sounding surnames are found to work more often as managers than as employees; that females with masculine monikers are more successful in legal careers; that roughly half of the variance in incomes across persons worldwide is explained only by their country of residence and by the income distribution within that country; that the probability of becoming a CEO is strongly influenced by your name or by your month of birth; that the innovative ideas are the results of a random walk in our brain network; and that even the probability of developing a cancer, maybe cutting a brilliant career, is mainly due to simple bad luck. Recent studies on lifetime reproductive success further corroborate these statements showing that, if trait variation may influence the fate of populations, luck often governs the lives of individuals. [Page 2]

So here are some striking results:

But to understand the real meaning of [these] findings it is important to distinguish the macro from the micro point of view. In fact, from the micro point of view, following the dynamical rules of the model, a talented individual has a greater a priori probability to reach a high level of success than a moderately gifted one, since she has a greater ability to grasp any opportunity that will come. Of course, luck has to help her in yielding those opportunities. Therefore, from the point of view of a single individual, we should therefore conclude that, being impossible (by definition) to control the occurrence of lucky events, the best strategy to increase the probability of success (at any talent level) is to broaden the personal activity, the production of ideas, the communication with other people, seeking for diversity and mutual enrichment. In other words, to be an open- minded person, ready to be in contact with others, exposes to the highest probability of lucky events (to be exploited by means of the personal talent). On the other hand, from the macro point of view of the entire society, the probability to find moderately gifted individuals at the top levels of success is greater than that of finding there very talented ones, because moderately gifted people are much more numerous and, with the help of luck, have – globally – a statistical advantage to reach a great success, in spite of their lower individual a priori probability. [Page 14]

The authors draw some practical recommendations: for example, for strategies about funding research among a diversity of talented people looking at the table [below], it is evident that, if the goal is to reward the most talented persons (thus increasing their final level of success [C]), it is much more convenient to distribute periodically (even small) equal amounts of capital to all individuals rather than to give a greater capital only to a small percentage of them, selected through their level of success – already reached – at the moment of the distribution. The histogram shows that the “egalitarian” criterion, which assigns 1 unit of capital every 5 years to all the individuals is the most effcient way to distribute funds. [Pages 17-18]

Finally, the environment may have a role, such as improbing education, hence talent: Strengthening the training of the most gifted people or increasing the average level of education produce, as one could expect, some beneficial effects on the social system, since both these policies raise the probability, for talented individuals, to grasp the opportunities that luck presents to them. On the other hand, the enhancement in the average percentage of highly talented people who are able to reach a good level of success, seems to be not particularly remarkable in both the cases analyzed, therefore the result of the corresponding educational policies appears mainly restricted to the emergence of isolated extreme successful cases. […] Also, it results that increasing the variance without changing the average, enhances the chances for more talented people to get a very high success. This, on one hand, could be considered positive but, on the other hand, it is an isolated case and it has, as a counterpart, an increase in the gap between unsuccessful and successful people. Increasing the average without changing the variance induces that also in this case the chances for more talented people to get a very high success are enhanced, while the gap between unsuccessful and successful people is lower than before. [Pages 20-21]

As a stimulating conclusion, the authors write: Our results highlight the risks of the paradigm that we call “naive meritocracy”, which fails to give honors and rewards to the most competent people, because it underestimates the role of randomness among the determinants of success. In this respect, several dfferent scenarios have been investigated in order to discuss more effcient strategies, which are able to counterbalance the unpredictable role of luck and give more opportunities and resources to the most talented ones – a purpose that should be the main aim of a truly meritocratic approach. Such strategies have also been shown to be the most beneficial for the entire society, since they tend to increase the diversity of ideas and perspectives in research, thus fostering also innovation. [Page 23]

Are GAFAs threatened? Their growth is still steady

It’s by reading Nicolas Colin’s always interesting newsletter, European Straits #149, 10 Tech Giants That Are (Almost All) in Bad Shape that I decided to revisit quickly the growth of 3 tech giants that I have been following for many years now: Google, Facebook and Tesla. And here are their numbers in terms of thousands of employees, revenue and profit in $M.

If you really love numbers, here is a little more: their average growth of 5 years is about 20% for Google, 40% for Facebook and about the same for Tesla (except that they never made a profit). Google is older so it is not a fair comparison. here is a more precise analysis.

So are the three tech giants threatened? I am not sure given this steady growth.

Titles in Start-ups

I had a few days ago a conversation about why I thought titles such as CEO or CTO were not such a good idea in start-ups. I thought this was a close debate and apparently not. So let me try to elaborate.

A good quote – I just found trying to structure my thinking – is “CEO means in a startup Chief Everything Officer”! CTO means someone who does not want to interact with customers while Business Development means the opposite. But you would not use VP of Sales in a small team…

In the book Startup Nation, there is something similar: “The multitasking mentality produces an environment in which job titles — and the compartmentalization that goes along with them — don’t mean much.”

There are two articles worth reading: first, my favorite start-up guru, Steve Blank, Job Titles That Can Sink Your Startup. Second, Start-ups should eliminate job titles by Jeff Bussgang.

Steve Blank explains titles are for established companies with knwon business models and known processes: Companies Have Titles to Execute a Known Business Model. […] Therefore the job title “Sales” in an existing company is all about execution around a series of “knowns.” [For example] Did he have a repeatable and scalable business model? Did he have a well understood group of customers? […] Startups Need Different Titles to Search For an Unknown Business Model. You didn’t need a VP of Sales, you needed something very different. Searching around a series of unknowns. You needed a VP of Customer Development

I am not sure I am allowed to do the following but here is a long extract from Bussgang: “Job titles make sense for mature companies, not for start-ups. […] At business school, I learned all about titles and hierarchies and the importance of organizational structure. When I joined my first start-up after graduation, e-commerce leader Open Market, I found the operating philosophy of the founder jarring: He declared no one would have titles in the first few years. If you needed a title for external reasons, our founder told us, we should feel free to make one up. But we would avoid using labels internally. In other words, there would be no “vice-president” or “director” or other such hierarchical denominations.

Why? Because a start-up is so fluid, roles changes, responsibilities evolve and reporting structures move around fluidly. Titles represent friction, pure and simple, and the one thing you want to reduce in a start-up is friction. By avoiding titles, you avoid early employees getting fixated on their role, who they report to, and what their scope of responsibility is – all things that rapidly change in a company’s first year or two.

So when I co-founded Upromise, I instituted a similar policy. We had an open office structure and functional teams, but a fluid organizational environment and rapid growth. One of our young team members changed jobs four times in her first year. Only after the first year, as we settled into a more stable organizational structure and I recruited senior executives who were more obviously going to serve as my direct reports on the executive team did I begin to give out titles (CTO, CMO, CFO, etc.). But you can establish role and process clarity without having to depend on titles.

Here is Steve Blank visual summary of all this:

In his four steps to the epiphany, he adds a quick check list about this:
Goal of phase O-b: Set up the Customer Development Team. Agree on Customer Development team methodology and goals.
Author: Whoever is acting as CEO
Approval: Entire Founding Team/Board
Presenter: CEO
Time/Effort: 1/2-l day meeting of entire founding team
A- Review the organizational differences between Product and Customer Development – Traditional titles versus functional ones.
1. No VP of Sales
2. No VP of Marketing
3. No VP of Business Development
B-Identify the four key functional roles for the first four phases of a startup
1. Who is the Business Visionary
2. Who is the Business Execution
3. Who is the Technical Visionary
4. Who is the Technical Execution
C-Review the goals of each of the roles for each of the four Customer Development phases
D-Enumerate 3 to 5 Core Values of the Founding Team
1. Not a mission statement
2. Not about profit or products
3. Core ideology is about what the company believes in
Phase O-b Exit Criteria: Buy-in of the team and board for functional job descriptions, right people in those jobs, core values

PS: you may find more interesting advice from Steve Blank in
How To Find the Right Co-Founders? –
Why Founders Should Know How to Code –
Building Great Founding Teams –

and you may want to listen to Randy Komisar about entrepreneurship skills

PS2: I revisited my blog and saw the tag “team” was also relevant, direct link is here

More data about equity in about 525 start-ups

Here is an updated version of my equity tables from startups which filed to go public at some point. There are about 525 individual companies as well as just below statistical synthesis relatively to fields, geography and periods of time about VC amounts, time to IPO, levels of sales and income at IPO (as well as PS and PE ratios), age of founders, number of founders, ownership in companies by catagories. I think ths may be of interest for some of you…

Another Giant of Venture Capital is Dead – Don Valentine

I just learnt the death of Don Valentine, the founder of Sequoia. For those of you who may not know him, you could visit my previous posts that mentions him, either through tag #sequoia or even better search Valentine. Just be aware he invested in Atari, Apple, Oracle, Cisco, Electronic Arts…

Or you may just read some of my favorite quotes of him:

“There are only two true visionaries in the history of Silicon Valley. Jobs and Noyce. Their vision was to build great companies … Steve was twenty, un-degreed, some people said unwashed, and he looked like Ho Chi Minh. But he was a bright person then, and is a brighter man now … Phenomenal achievement done by somebody in his very early twenties … Bob was one of those people who could maintain perspective because he was inordinately bright. Steve could not. He was very, very passionate, highly competitive.”

“Well, look, we’ll put up all the money, you put up all the blood, sweat and tears and we’ll split the company”, this with the founders. Then if we have to hire more people, we’ll all come down evenly, it will be kind of a 50/50 arrangement. Well, as this bubble got bigger and bigger, you know, they were coming and saying, “Well, you know, we’ll give you, for all the money, 5 percent, 10 percent of the deal.” And, you know, that it’s a supply and demand thing. It’s gone back the other way now. But, in starting with a team, it’s a typical thing to say, well, somewhere 40 to 60 percent, to divide it now. If they’ve got the best thing since sliced bread and you think they have it and they think they have it, you know, then you’ll probably lose the deal because one of these guys will grab it.”


A letter to and about America

While looking at old files, I found a letter, written by a family member in october 1993. At the time, I was living in California. I read it again, loved it so much for personal reasons but also found it so farseeing that I decided to share it here. Hopefully some of you will like it. If you read French, go to the French page, if not forgive my awkward translation…

Tell me, my good friends, what is America? The roughness of the confines, this impossible frontier where humans find themselves by violence stripped of lies, where the truth is revealed? The old southern lands, so carnal, so indolent, so cruel? The devastating wind gusts and hurricanes in the business that are moving people across the country? The Blacks, the Yellows, the Darks, the Goldens and the Indians who open casinos in their reservations, just to take some power from the Whites? The Indians are a faded dream, like Route 66, like the Rocky Mountain train. In Europe, paradoxically, we experience America in a visual mode more than in writing or thinking. Everyone does not read Tocqueville, but then, who is Tocqueville’s successor? There remains the image. Fake images where violence and melodrama reigned, between popcorn and ice cream, the tanned men of westerns, statues of dust and wind, the dazzling comedians of the musicals, Miles Davies, head down, dark glasses, emaciated face, pushing on his trumpet in a corner, excited suffragettes and delusional sodomites. The true and the false mix, merge. The memory stutters. De Niro continues to return to his companions, the steelmakers, on a rainy night, climbing a muddy street lined with small pavilions, in the blue-gray, monstrous and motley decor of foundries; Kennedy collapses again in the back of his big convertible car, under the bewildered look of Jackie; and I still go around Long Island and Brooklyn to approach the arrogant challenge of the Manhattan Towers. Or I fly high mountains, deserts, lakes, endless plains, where the eye hangs, staking the immensity, pressed and tight clusters of skyscrapers, mounds of the day, monuments of glass and concrete in the silence of nights, built to the glory of which unknown dead god.

I watch sometimes CBS Evening News, I see people worry about everything and anything, to the obsession. Haunted by cancer, cellulite, poisoned milk, fast weight loss, tobacco smoke, the nimble hands of men and the eyes of others. I wonder: what has become of proud America? Or did it ever exist only in presidents’ speeches on the state of the Union? What is America? Thoreau and the transcendentalists, Charles Ives, the musician insurer, who has captured better than anyone else the roar of the choral society, the feast and the provincial slowness, the immensity of the lands and the simplicity of the beings? Or Blacks who are perhaps the most American of Americans since they have really lost their roots (Africa is not a place, but a myth and rhythms while emigrants still have families, which in Sicily, which in Korea, which in Mexico, which in Ireland)? Or this “melting pot” that does not mix, but that unites because in the manner of the feudal society, the membership is aimed at people, the sworn faith, requests the individual to the noblest of itself? (Perhaps we should not laugh too much at the Bibles deposited in the hotel rooms, which symbolize the direct and intimate relationship that Protestants establish between man and his creator. Transposed, we perceive the direct relationship, transcendent of all the administrative, legal, institutional mediations that unite the American man to America: God is America. Like God, would it be inaccessible to our intellect?) We find everything, apparently in America. Would it be the store of the creator, La Samaritaine of eternity? Is America out of time? Alice in the land of rubble wanders among abandoned silos, deserted factories, discarded jerrycans, worn tires, rusted bodies, to discover in the spreading fields the unexpected, the surprising, the eternally new. America, pioneering and tired.

I say this to myself, but maybe I’m wrong. The ambiguous attitude that we Old Europeans have towards America is rather a parent-child relationship that combines ambition, hope, expectation and disappointment, surprise and misunderstanding, rapture and exasperation, tenderness and anger. Recognition, ignorance. A new being has come out of us, which prolongs us but which is not ourselves and whose destiny escapes us. America, America, the dream of the emigrant, but also in some way our dream to all of us. The new Jerusalem or the new Babylon. Something strikes, if one tries to fly over the centuries. The other side. The other side of the hills, the other side of the mountains. We are people of little witnesses, of limited horizons. Who have often quarreled, fought, gorged from valley to valley, from castle to castle, from village to village, from country to country. Less to take, if not rapine, less to enlarge than to establish a place, a domain, a territory as part of oneself, from which the other will be excluded, tolerated at best, always in an extraneous situation. And suddenly, these Lilliputians are leaving. Do you realize, my friends, what such a departure represents? It is not exactly a question of travel, of the traveler’s curiosity – there has always been Herodotus, Marco Polo. No more the trade or the wandering that follows the path of exchange. Demographics, economics, politics of the powers, religion can nourish the motivations and satisfy the historian. Still, there needs to be a higher determination that guides choices. How to name it? The call of the unknown, the will to force the destiny, the ability to face the mystery? We are lacking beings, says the philosopher. Beings of desire. To miss is to have the desire of something else, which can not be defined since one has a negative idea of it. An incredible audacity: to deny the present to open oneself to the mystery. Standing, eyes open on the horizon. To confront the immensity of the ocean and its fury, to approach lands as vast as the sea, to sink deep in immense forests, shadow cathedrals swarming with a strange life, to follow the trace of the sun in the mirages of gold of the desert, to discover bizarre, incomprehensible, wild manners, and peoples more numerous than grains of sand on the beach. But above all to be in front of the excess in the excess without yielding. And to stay, or to come back, with in the head, the distant little world, so far away, left so long ago, whose tiny outlines slowly become numb in the sleep of remembrance. What was at the heart of this obstinate will? Perhaps the secret trace of a very long memory. After all, each of us goes down more or less from distant invaders. Celts, Franks, Germans, Goths, who were our ancestors? And have we kept in the recesses of our desires the imprint of these ancient migrations?

Asia, Africa, America, all these continents were not equally offered to the coming settlers. Asia, Africa, worlds too full already or natures too difficult, too hostile. There remained America, and particularly North America, with a cowardly occupation whose Atlantic coast, at the 40th parallel, was not altogether so exotic for Europeans. The spirit of enterprise of Protestants did the rest. One could build a New England and imagine that one would reproduce while purging it in a sort of Virgilian dream the old mother Europe. What is America then? Viewed retrospectively, it can appear as the development of a simple historical conjuncture, as the fruit of chance and necessity. Or would one say such was the fate inscribed, almost from all eternity, on this piece of continent? Why do I think that, thinking of America, I have the feeling of an infinitely old reality and an unfinished promise? In this sense, if America stems from a destiny, this destiny is always to come, always remains an opening on the unexpected.

This for example, which is about understanding. We Frenchmen have the religion of a well-conducted text, according to the order of the reasons: we like a well-conducted reflection and what is more amiable than to go from the idea to its consequences; we are legislators of writing. American pragmatism tends to advance general ideas that are supported by the analysis of facts. [I put this in bold, it was not in the letter.] This does not free them from prejudices, but gives them a powerful mobility and protects them against the excess of systems. But I believe that in the intellectual crisis that we are going through, we will not be able to find the way if we do not find a satisfactory understanding of the multiple and multiplicity, which is blocked, or at least thwarted, by the need for a unitary interpretation, a deeply rooted need as it comes from Christian theology and its Hebrew antecedents. Because America is essentially multiple, because the unitary is at home only the means to associate and coordinate these multiplicities in the faith in America and the faith in the individual, perhaps the novel thoughts will come from across the Atlantic. And as usual, we will systematize them. For the pleasure of order. Eternal youth of America? But what is America?

Forgive me for writing to you so late. (I hope this overloaded letter will come to you.) Thank you for giving me some news. So few people do it. But I am a bad letter-writer. I run after the money that runs after clever evils and I miss the time.
I kiss you,
Georges, October 2, 1993.