Author Archives: Hervé Lebret

Zalando files to go public

Zalando, one of the very visible European start-up should become a public company on October 1st in Germany. It’s not so much the numbers which I found of interest, but how difficult it was to get them. As usual, Europe is showing less transparency. Finding the prospectus was not easy, and I am not sure I could have found it without claiming I live in Berlin. And still, I have no clue how much the company has raised, at which price and when. This is not in the prospectus – I just have all capital increases dates and shares number, it does not help much.

zalandoguys
Rubin Ritter, David Schneider and Robert Gentz

I could still build my usual cap. table and here is what it gives. Revenues are impressive, as well as losses. Founders have been diluted, btu given the capital increases and losses it is not so surprising…

zalando-captable

zalando-capital-increase

Stanford University, where Optimism Meets Empathy

People who know me well might be tired of my enthusiasm about Stanford University. My kids laugh at me, even some former professors do! Still, often, when I hear something about Stanford, it reminds me of the good old days. Not only. Stanford mostly looks at the future! I was reading yesterday night the Stanford Magazine and was attracted by two articles, which illustrate my nostalgia (and by the way, EPFL has some similar features today…):

– Stanford and Silicon Valley are not known for their interest in art. However, the university will open a new Art Gallery (close to the Rodin sculptures) on its campus, showing a major private modern art collection from the Anderson family. More in The Collection of a Lifetime

StanfordArtGallery
The New Anderson Collection building at Stanford University

– The President column also said very true things, such as “I’m often asked what sets Stanford apart. The university’s entrepreneurial spirit is certainly a distinguishing characteristic. But there is another vital component: the desire to make the world better for others.” Again one may laugh at this, but I really invite you to read “Optimism Meets Empathy” by John Hennessy.

John Hennessy
John Hennessy

Was Christensen wrong and is Disruptive Innovation a shaky theory?

Clayton Christensen has been one of my heroes. Will I have to kill this father figure? The often excellent New Yorker magazine published recently The Disruption Machine with subtitle What the gospel of innovation gets wrong. Author Jill Lepore knows a lot about the Innovation gurus from Schumpeter to Porter and Christensen and what she has to say is at least very disturbing.

NY-Disrupt
“Disruption is a theory of change
founded on panic, anxiety,
and shaky evidence.”

You have to read the article: Lepore seems to have strong arguments about the weaknesses of Christensen’s. In the Disk Drive industry, she claims, Seagate Technology was not felled by disruption. Same with Bucyrus and Caterpillar for the mechanical-excavator industry or “Today, the largest U.S. producer of steel is — U.S. Steel”. Difficult for me to assess the claims. I have to admit I had read more recent books of Christensen which were really disappointing but I thought his first breakthrough remained strong.

Funnier: “The theory of disruption is meant to be predictive. On March 10, 2000, Christensen launched a $3.8-million Disruptive Growth Fund. Less than a year later, the fund was quietly liquidated. In 2007, Christensen told Business Week that “the prediction of the theory would be that Apple won’t succeed with the iPhone,” adding, “History speaks pretty loudly on that.” In its first five years, the iPhone generated a hundred and fifty billion dollars of revenue.”

There has been a debate following Lepore’s claims which I will let you discover:

– Business Week: Clayton Christensen Responds to New Yorker Takedown of ‘Disruptive Innovation’: here.

– Forbes: What Jill Lepore Gets Wrong About Clayton Christensen and Disruptive Innovation: here.

– Slate: Even the Father of Disruption Thinks “Disruption” Has Become a Cliche: here.

PS: thanks to Martin for pointing that amazing article to me!

Brussels, Street Art and Space Invader

Two articles tonight on my blog. A serious one coming, a huge criticism of Christensen’s disruptive innovation and an equally important one on Street Art. Yesterday there wwa a magnificent athletics meeting in Brussels where two high jumpers soared ever higher, and tried in vain for the world record at … 2.46m. It was beautiful to see. It was the perfect opportunity to show the work of Invader in Brussels in March 2012.

01-Gallery3

Here is the pdf file: Space Invader in Brussels. He obviously did not fail to invade the symbol of the city!

05

Street art again: Space Invader in Grenoble

Street Art is a strange combination of references to art of course, but also to sociology, politics and economy. It might be why I became interested in the phenomenon and mention it here, in a blog related to start-ups which are also a strange combination of creation, social policy and economy. Both reconsider the established world, the institutions. Street Art interferes with private property and invades places it is not allowed to touch in theory. Street Art revisits consumerism and capitalism in a very interesting manner. And in the end, it became a part of consumerism, capitalism and the established art world. In a way, it’s exactly the same thing with start-ups. The successful ones become a part of the established economy. Also, both appeared without a clear objective. The computer, the Internet were nearly as useless as art in its first years. In the next picture, what does belong to advertising and what to art?

banksy-ad

Whatever I continue my virtual and real visits to street artists with Space Invader in Grenoble in 1999. As you may imagine, there is not much left, but still a lot online! Attached is my pdf compilation of Space Invader Grenoble invasion.

SI-Grenoble-Map

PS: You can find my compilations of Banksy in New York, the beautiful mosaic-mirrors of Pully and the invasions of Lausanne, Geneva, Bern, Basel, and Toyko under the tag Street Art.

The First Trillion-Dollar Start-up

Thanks to my friend Jean-Jacques for pointing to a nice historical article about the beginnings of Silicon Valley. According to The First Trillion-Dollar Startup, “measured in today’s dollars, we believe the firm [ Fairchild ] would qualify as the first trillion dollar startup in the world.” I will let you read the other findings and will not relate again a story I mentioned in The fathers of Silicon Valley: the Traitorous Eight.

The authors show that Silicon Valley did not exist in 1957. No company active in semiconductor was based there as the East Coast was still the center of high-tech. But the founders of Fairchild are directly or indirectly responsible for 92 companies in Silicon Valley, today listed on Nasdaq or NYSE, worth over $2’000 billion and employing more than 800,000 people.

Here is a nice illustration of their study,
endeavor-insight-sv-2-retina
but I still love this one, a famous poster created by the author of the term Silicon Valley; I scanned it a few years ago,

the image below is taken from the previous (left and halfway up – corresponding to 1957)

HDSVBSV
The full report can be downloaded in pdf format and I find interesting their 3 lessons:
1. Great companies can develop in unlikely and challenging places.
2. A few entrepreneurs can make a large impact.
3. There is a framework for success that leaders can accelerate: ambition, growth, commitment, reinvestment.
HDSVBSV-acceleration

Space Invader in Tokyo

Summer is not the season for start-ups, news is rather thin, with the exception perhaps of the GoPro IPO. I also use this blog to talk from time to time about street art and in particular of Space Invader. I also found an indirect way to discover a city, physically or virtually, is to start looking for these ephemeral works.

SpaceInvaderTokyo

Japan has always been an attracting place for me, so I became interested in what the artist has done there. There are dozens of photographs online, some maps, so I made ​​my own synthetic work in pdf format. [Other examples of SI fans in Tokyo include Nalice_Malice or True2death.]

Here is an updated version (May 2015) of my pdf file with more images.

I still have to make the actual discovery … Latest topic, Invader has launched its application for smart phone, Flash Invaders. It is perhaps this slight argument that will change my device!

flashinvaders

The (sad) state of high-tech IPOs on the Paris Stock Exchange

I just read an excellent article in the newspaper Le Monde: Investors get tired of IPOs.
LeMonde-July14

The first reading could suggest positive news, as shown in the following charts:
LeMonde-FrenchIPOs-2
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LeMonde-FrenchIPOs-3
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LeMonde-FrenchIPOs-1
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I looked in more detail at the IPO prospectus of 11 of these strat-ups. For reference, the 11 companies studied are:
Ask http://www.ask-rfid.com
Awox http://www.awox.com
Crossject http://www.crossject.com
Fermentalg http://www.fermentalg.com
Genomic Vision http://www.genomicvision.com
Genticel http://www.genticel.com
Mcphy energy http://www.mcphy.com
Supersonic Imagine http://www.supersonicimagine.fr
Txcell http://www.txcell.com
Viadeo http://fr.viadeo.com/fr/
Visiativ http://www.visiativ.com
and here I let you discover the 11 capitalization tables.

I show you here the two most successful and Supersonic Viadeo:

Supersonic-captable
Click to enlarge

Viadeo-captable
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Why did I feel the need to use the term “sad” situation? Because:
– Valuations do not exceed €200M
– Amounts raised do not exceed €50M
With such numbers, neither entrepreneurs nor investors can not be compared with their U.S. counterparts. (I refer you to my summary of U.S. IPOs, if you are not convinced).

And if you’re still not convinced, I refer you to an excellent debate on France Culture including Osamma Ammar, founder of The Family: Is France heaven or hell for start-ups? Osamma Ammar describes the historical weaknesses of the French system, too much government intervention, IPOs (like those Viadeo rightly) that are so low that they would not take place in the USA (whereas a French start-up such as Criteo could be quoted on the Nasdaq). There is much to say from the 11 IPOS, but I leave you to think about what they mean …