Tag Archives: Switzerland

What makes an entrepreneurial ecosystem by Nicolas Colin

Great analysis by Nicolas Colin (The Family) in his article What makes an entrepreneurial ecosystem? If the topic interests you, it is a must-read.


in a nutshell, the entrepreneurial ecosystems need 3 ingredients – I quote:
– capital: by definition, no new business can be launched without money and relevant infrastructures (which consist of capital tied up in tangible assets);
– know-how: you need engineers, developers, designers, salespeople: all those whose skills are necessary for launching and growing innovative businesses;
– rebellion: an entrepreneur always challenges the status quo. If they wanted to play by the book, they would innovate within big, established companies, where they would be better paid and would have access to more resources.

This reminds me of two “recipes” I often mention. First the “5 needed ingredients of tech. clusters”
1. Universities and research centers of a very high caliber;
2. An industry of venture capital (i.e. financial institutions and private investors);
3. Experienced professionals in high tech;
4. Service providers such as lawyers, head hunters, public relations and marketing specialists, auditors, etc.
5. Last but not least, an intangible yet critical component: a pioneering spirit which encourages an entrepreneurial culture.
in “Understanding Silicon Valley, the Anatomy of an Entrepreneurial Region”, by M. Kenney, more precisely in chapter: “A Flexible Recycling” by S. Evans and H. Bahrami

Second, Paul Graham in How to be Silicon Valley? “Few startups happen in Miami, for example, because although it’s full of rich people, it has few nerds. It’s not the kind of place nerds like. Whereas Pittsburgh has the opposite problem: plenty of nerds, but no rich people.” He also added about failed ecosystems: “I read occasionally about attempts to set up “technology parks” in other places, as if the active ingredient of Silicon Valley were the office space. An article about Sophia Antipolis bragged that companies there included Cisco, Compaq, IBM, NCR, and Nortel. Don’t the French realize these aren’t startups?”

Many toxic friends of entrepreneurial ecosystems have not understood this. But for those who have understood, building lively ecosystems remains a real challenge: bringing the rebellion, the culture, diminishing the fear of risk taking without stigmatizing (not rewarding– here I disagree with Colin) failure remains highly challenging whereas finding know-how and capital is not easy but feasible with some hard work…

Finally, I copy his diagrams which show ideal and less ideal combinations of capital, know-how and rebellion, adding my exercise for Switzerland.


Switzerland is probably 80% Germany and 20% France…


(A short addition on Oct 29, 2015) – The best description of Switzerland was given by Orson Welles. It explains a lot of things…

“In Italy, for thirty years under the Borgias, they had warfare, terror, murder and bloodshed, but they produced Michelangelo, Leonardo da Vinci and the Renaissance. In Switzerland, they had brotherly love, they had five hundred years of democracy and peace – and what did that produce? The cuckoo clock.” in The Third Man, said by Holly Martins to Harry Lime.

Can the next google come from Europe? An answer by Fathi Derder

Fathi Derder, a young Swiss politician and former journalist, gave his views in the book Le prochain Google sera Suisse (à 10 conditions). [The Next Google will be Swiss (provided 10 conditions)].


I recognized some of my concerns in the foreword of the author, in his frustrations and his hopes. “Our start-ups do not grow in Switzerland. No trace of a Swiss Google. The last major Swiss success was Logitech, thirty years ago. Our start-ups are certainly good. But when it comes to grow rapidly and on a large scale, they leave Switzerland”[Page 9]. And his answer? “[…] If Switzerland wants to remain prosperous, if it wants to be able to anticipate and invent the world of tomorrow, we need two basic ingredients: memory and craziness” [Page 11].

Switzerland is not world champion of innovation

Derder is concerned about the lack of interest of the media and politicians because everything would be fine in the best of Swiss worlds…but: “The rankings are misleading and based on an abuse of language: we are certainly world champions in education, research, science and patents (from the multinational corporattions). But not in innovation. These are two different things. But in terms [of innovation] (the transformation of ideas into products and services that create value), there is much room for improvement” [Page 18-19].

To have the next Google in Switzerland, you need to have to the three “C”, Capital, Cerveaux (brains) and a Culture of failure and risk [page 35].

This certainly reminds me the “How to be Silicon Valley” by Paul Graham: “Within the US, towns have become startup hubs if and only if they have both rich people and nerds. Few startups happen in Miami, for example, because although it’s full of rich people, it has few nerds. It’s not the kind of place nerds like. Whereas Pittsburgh has the opposite problem: plenty of nerds, but no rich people.”

In this book of almost 180 pages are listed the ten conditions:
• Attracting the best talents
• Boosting venture capital (and encourage investment in SMEs)
• Simplifying the lives of entrepreneurs (and of investors)
• Providing resources for basic research
• Bringing universities and businesses together
• Developing thematic centers of excellence
• Establishing a national digital strategy
• Committing the state (and the army) to the ecosystem
• Enhancing data protection (and encouraging citizens to protect them anonymously)
• Valuing the Swiss success stories (and make them popular)

Derder is a super supporter of start-ups and his book is a great addition to understanding why start-ups are unique and essential. I believe however that the challenges are mostly cultural as I wrote recently in Why doesn’t Europe create any Google or Apple? You will not be surprised therefore if I prefer to stop with his 3 “C”s. In a presentation I recently prepared, I gave my ten conditions for innovation, all linked to a culture of innovation:
• Collaborate, even with Competitors
• Be Trustful
• Have a healthy disrespect for authority
• Do not lie (to yourself)
• Believe in your Instinct …
• … and have Courage
• In Innovation, the example comes from above
• Bet on Talent (and Youth)
• Do not fear Failure
• Be passionate

Up to you to choose…

Biocartis, the (could have been) Swiss success story

Biocartis might have been a Swiss success story but most of the company is now based in Belgium. Probably not a decision of investors (as people think when company move) but from management! One of the founders is from Belgium and an impressive serial entrepreneur: Rudi Pauwels. Here is what you could read in the IPO document:


Still the numbers are interesting. The company has raised more than €200M before its €100M IPO this week. Despite such huge amounts the founders have kept about 5% of the company. Its IPO prospectus is available on the company web site. It has signed deals with Philips, Hitachi, Biomérieux, Abbott, Janssen and Johnson & Johnson and counts Swiss-based Debiopharm among its mains shareholders. Here is my usual cap. table:

(click on image to enlarge)

Recent exits in Swiss biotech show interesting features

In the last 12 months, 3 biotech start-ups from the Zurich area have experienced an exit. Molecular Partners went public on the Swiss stock exchange (see my post from Nov. 21) and two other start-ups have been acquired, Covagen by Janssen (see news release dated August 2014) and GlycoVaxyn by GSK (news release from Feb. 2015), both for about CHF200M. I had already written a post entitled Swiss Founder’s Dilemma in Decembre 2013. But I had not at the time published precise individual capitalization tables. Here they are.

Covagen cap. table – click on image to enlarge

GlycoVaxyn cap. table – click on image to enlarge

The next table compares some interesting features such as levels of investments and dilution:
click on image to enlarge
I could have added the university equity which was in the 5-8% range at incorporation to be reach 0.2-1.8% range at exit. An interesting additional point is that the IPO seems to induce less dilution and more value creation than the M&A.

The liquidation preference is another interesting feature. The Glycovaxyn case was interesting with a complex mechanism. Despite its complexity and because the acquisition price was much higher than the amount invested by the VCs, the resulting stakes were similar to a plain vanilla prorata shareholding.

I just added these companies with a couple of others to my series of cap. tables and updated my file soon!

In the French speaking part, EPFL has enjoyed some exits too in the last two years: Jilion, Sensima, Aimago, Composyt. Interestingly the exit values were lower and VCs non-existent. But VCs have been active too in the last 5 years. Hopefully some nice outcome will happen in the near future…

“You have money, but you have little capital”

Here’s my most recent contribution to Entreprise Romande. Thanks to Pierre Cormon for giving me the opportunity of this opinion column.


“You have money goal you-have little capital.” This is essentially the phrase that the US ambassador in Switzerland, Ms. Suzie Levine, delivered at a ceremony in honor of the ventureleaders alumni – a group of young Swiss entrepreneurs – last November 15 in Bern. She said she remembered it after hearing it from one of her recent contacts. I also quote her from memory and since then, I thought about it many times, trying to understand it.

“You”, of course, is Switzerland. We have money, for sure. Switzerland is rich. It is doing well socially, economically and financially. And Swiss companies invest wisely. It would not be fair to take “little capital” at face value, if one defines the capital by what is invested. I feel compelled to repeat “You have money, but you have little capital. »

The first explanation, the most obvious probably is due to the factual finding of the weakness of the Swiss venture capital. The figures vary from 200 million to 400 million per year, depending on whether one defines venture capital as the money invested in Swiss companies (regardless of the origin of the capital) or capital invested by Swiss financial institutions (regardless of the geography of the companies). For comparison, venture capital in Europe is of the order of 5 billion and in the US of 30 billion, or 75 times less in Switzerland than in the US, while the population is 40 times smaller.

A second explanation, perhaps less known, is related to the relative lack of “business angels” (BAs). While Switzerland has the highest density of “super-rich” and one of the highest living standards in the world [1], investments by individuals in Swiss start-ups are limited. Swiss startups unfortunately do not benefit from this potential windfall: the amounts invested by BAs are around 50 million per year and 30 billion in the US. And the situation is even worse: most of the US investment is made in two regions (Silicon Valley and Boston), which does not allow anymore to poner the figures in relation to the population size.

Some players such as SECA, the Swiss association of private investors, or the Réseau through its “manifesto for Swiss start-up” [2] are conscious of the deficit. They lobby to create new venture capital funds of funds and favor private investment in start-ups with lower taxation.

Finally, but this in itself would be the subject of another article, the transition from business angels who provide the first funds (up to a million in general) and venture capitalists who are involved from 5 to 10 million is much less natural than in the US because of a lack of trust and mutual understanding.

However, I fear that the citation / title of this article can not be explained solely by the finding of simple numbers. The third explanation, I should say interpretation of the word capital is that of human or cultural capital. The strength of the US investment in innovation was not financial only. It requires individual attitudes more than economic reasonings.

One note: it may be useful to recall that institutional venture capital – funds from pension funds and corporations – was born out of the vision of a few individuals who believed in the potential of innovation in entrepreneurship; it is the business angels who created the venture capital (not the reverse). This vision comes from a typical American optimism and also more prosaically from the fact that these first business angels had made money by betting on innovation.

The Swiss money is less adventurous and above all – this is often said to me – from a capital creation of more traditional and maybe less innovative economic value. It is also transmitted by inheritance. As it is more hard-won, the fear is stronger of losing it and the confidence lower to make it grow again. Risk taking and lack of stigma associated with failure are typical features of American entrepreneurship, this is well known. We can better understand the (good) reasons for this larger Swiss (and European) conservatism.

Worse: because the financial capital travels easily and many Swiss start-up entrepreneurs look for their investors in London, Boston and San Francisco, this cultural capital is lacking in Switzerland. I do not speak of the quality of the executives in the large companies and SMEs, who perfectly manage their businesses and rarely leave them (rightfully maybe!) to create their businesses. I speak of the non-existence of men and women who have succeeded in the world of startups. One could become tired of always refering to Daniel Borel as the “role model” of Swiss high-tech entrepreneur. Silicon Valley has created in the same period thousands of millionaires in technology, wealthy individuals who systematically reinvest their money, and their time most importantly, in new adventures.

I had found the quote a little unfair, when I first heard it, because I had misunderstood it and at worst easy to fix if it referred to a lack of financial capital. I realize it refers to an even more serious situation as it takes time if we want to change a culture.

[1] Le Matin (May 2012): http://www.lematin.ch/economie/suisse-affiche-forte-densite-superriches/story/25762272
[2] Bilan (June 2014) http://www.bilan.ch/node/1015095

PS: the following table was not in the article but I had included in my book to explain the “cultural” differences between American and European venture capital.

Cruttenden VC US  Europe 2006

A Look Back at the Swiss February 9 Votation

Here is my regular column in Entreprise Romade. This time, the impact of the vote on February 9…


So much has has been said and written about the impact of the vote on Feb. 9 on academic research and education, that I have hesitated before writing this column. Freezing of the exchange of students through the Erasmus + program and the access to ERC grants for top researchers; degradation to the rank of third country in the Horizon 2020 research programs. All this was well explained and should be known to those who are or feel concerned. Foretold disaster or major constraint to which Switzerland will adapt through its own genius, the future only will tell. Finally, the people are sovereign and the concerns expressed trhough the vote are fairly shared, in Europe and even in the USA. Europe suffers probably more than Switzerland and our neighbors have shown their misunderstanding rather than frustration.

So I will just try to illustrate here the reasons for my sadness. A simple anecdote to start: I arrived at EPFL in 2004. The first file on which I worked was the project of a young Spanish student, Pedro Bados. He had just finished his master’s thesis as part of an exchange program and his work had produced some nice results. These results were patented, and the student turned into an entrepreneur when he founded NEXThink which today has about one hundred employees. The start-up, which is headquartered on the EPFL campus, is supported in part by foreign capital due to the weakness of the Swiss venture capital scene.

Mr. Blocher had told Radio Suisse Romande he did not believe in big European projects that do not work. It is true that innovation can not be planned and very clever is the one who can predict the future. But Pedro’s innovation is real however and simply would not have existed without Erasmus. NEXThink is not the only Swiss company founded by a migrant. Biocartis has raised over CHF 250 million and its founder Rudi Pauwels, is Belgian. He is a “serial entrepreneur” who had come to seek inspiration at EPFL after a first success. More than three quarters of the spin-off EPFL have foreign founders, and half are European.

Another anecdote: Switzerland is a model for its neighbors in academic matters and for its innovation performance. Many universities and representatives from European regions visit the EPFL campus. For six months, I have been working on a project with three other European technological universities on high-tech entrepreneurship. Without accepting the intiative on mass immigration, we would have been the project leader of an exchange program for entrepreneurs. We will not be better than a third country and I can not work with my Swiss colleagues from the private sector who have a good knowledge in the internationalization of entrepreneurship. We will adapt…

The problem is not so much economic as Switzerland contributed largely to the funding of these programs. It is human. In a recent debate in Neuchatel, Peter Brabeck, chairman of Nestlé, said: “75% of people working in Switzerland in our research and development teams are foreigners; this vote is creating a lot of uncertainty for them. But I can assure you of one thing: Nestlé will not lose a single one of its scientists. But Switzerland perhaps. Because if I do not have the right to employ them in Switzerland, so I will have them work elsewhere on their projects” [1]. Novartis had already made long ago the choice to open a research center in Boston. On a smaller scale, HouseTrip, a recent success story from the Lausanne Hospitality School, moved to London, because of the lack of local talents.

Last anecdote: I arrived in Switzerland in 1998 and the process of obtaining my work permit took more than six months…; it was not an easy arrival. The entry into force of the bilateral agreements, in 2002, certainly simplified the decision of Pedro Bados to create his start-up in Switzerland; no doubt. I have no idea how future young foreign entrepreneurs will experience our new situation. Switzerland will probably adapt here too! But I do not see who wins anything at complicating the arrival of talents whereas they leave very easily.

I finish on a more symbolic dimension by quoting a participant in another debate on the subject [2]: “And to return to the question of research, EPFL has not only research capacity, it has a serious mission in training. I’m an engineer and I am amazed to see that the very notion of engineer is disappearing when the EPFL is now staking everything on biotechnology. I’d like to see EPFL still train people how to build bridges.” If the academic world has been so little audible despite its attempts, it is perhaps because it is not as well liked as you might think. Switzerland does not like elitism. One prefers established SMEs to start-ups, which do not make people dream as in Silicon Valley and pension funds do not support the venture capital. When I attended a selection committee of promising young people, I heard the jury member smile while indicating that only 2-3% of Swiss students benefited from Erasmus and if it was for them to live what describes the movie “L’Auberge Espagnole” (The Spanish Inn), this may not be so bad. Yet high-tech entrepreneurship also concerns only 2-3% of our students. Scarcity and elitism, I think, are more important than you think.

EPFL did not stop training specialists of concrete or mechanical structures. Academic research has even improved the quality and cost of bridges. But the world is changing too. Bioengineering, computer science are promising and future innovations in these disciplines will be much larger than those that improve our bridges and tunnels. One does not need to be a genius to understand this. Except if we have lost faith in science and technology? I can tell you that Asia and America have not lost that confidence. Would Switzerland be like Europe?

I understand that the initiators of the referendum are sticking to their positions and consider that the country’s problems were more important than the consequences thereof. Expressing a frustration in front of a Europe in crisis or a concern for the future is one thing. Minimizing the impact this will have on Switzerland seems to be a risky bet. I respect the decision, but I regret it… badly.

[1] http://www.arcinfo.ch/fr/regions/canton-de-neuchatel/a-neuchatel-le-president-de-nestle-peter-brabeck-s-inquiete-des-consequences-du-vote-du-9-fevrier-556-1271025

[2] Florence Despot on the RTS: http://www.rts.ch/info/dossiers/2014/les-consequences-du-vote-anti-immigration/5619927-playlist-immigration-suites.html?id=5598709

After Banksy and Invader, Pully’s Mirror Mosaic Man…

What is fascinating with Street Art is that you might not be aware of it but when you begin to see it, it does not stop appearing in front of your eyes. After following Banksy in New York and then discovering Space Invader’s work in Switzerland (Lausanne, Geneva and Bern), a colleague mentioned to me the poetic mirror mosaics in Pully. I spent a few hours walking around and they blossomed everywhere!


The beauty of life also comes from chance as Paul Auster artistically expresses it in his novels (check The Music of Chance). While I was taking a picture of one of these mirrors, someone behind me asked “So you like my snail?”. It was “Mirror Mosaic Man”. We had a short chat. I mentioned Space Invader in Lausanne and Pully’s artist told me I should contact Pierre Corajoud who publishes very nice little books about walks around Lausanne. Pierre Corajoud had indeed published a small booklet about Invaders in Lausanne. I thank him here again for offering me a copy because unfortunately, many works have been destroyed or stolen after its publication and Corajoud took his book out of the shelves. A pity! I hope the mosaics will not disappear… Here is the map though.

Afficher Mirror Mosaic Man on a bigger map

Finally here is a pdf document with all the works I saw or found online. But the best is to go and find them directly on site!

also on Scribd:

Bern Space Invaders (and in the Rest of the World – including Paris, Basel, Ravenna…)

A very short post which is a complement to Space Invaders in Lausanne and in Geneva.


Space Invaders arrived in Bern in 2000 and for those passionate by his work and close to Switzerland, he was also in Basel in 2013 and Anzère in 2014…


Here is the map and you can also have download my pdf which includes what I have found so far… An update will come when/if I go to Bern!

PS: I went to Bern on June 15, 2014. A strange coincidence étrange is that I finished reading that day La Vie mode d’emploi by Georges Pérec. I thought then that Bartlebooth is a kind of analogy for Street Art and its fans… I just updated also the pdf above and here are the ones which survived after nearly 15 years. Another coincidence: they are 8 surviving pieces out of 29, similarly to start-ups where 50% still survive after 5 years and about 25% after 15 years…


PS2: from time to time, I add chapters to my Space Invaders discoveries. Here is a synthesis essentially based on the artist site and using other passionate data: SpaceInvaders around the World (pdf – 8Mo)

You may find in other posts data about Lausanne, Geneva, Basel, Grenoble, Brussels. In September 2014, I began to compile data about Paris. Here are pdfs files about specific arrondissements:
the 1st,
the 2nd,
the 3rd,
the 4th,
the 5th,
the 6th,
the 12th,
the 13th,
the 14th,
the 15th,
the 16th,
the 17th
and also the 1000+ Paris Invaders. Below is my Paris map.
You will find more recent Paris data here.

In October 2014, I followed in invasion of Ravenna. Here is what I found on line: Space Invaders in Ravenna.

The Immigrant, Factor of Creation

Here was my last column in 2013 for Entreprise Romande, with a subject that is dear to me, the importance of migrants.


The paths of innovation and entrepreneurship are paved with a myriad of dilemmas. Clayton Christensen a few years ago had explored the first topic in his Innovator’s Dilemma and last year Noam Wasserman has published the interesting Founder’s Dillemmas. The uncertainty of the market, youth vs. experience, disruptive vs. incremental innovation, the new vs. the established are just a few examples of these difficult choices. A more controversial and politically sensitive subject is the contribution of migrants and foreigners in the field of creation.

Just when he debate is growing in Europe as well as in Switzerland about the threat that would represent those who are different and come from elsewhere, it is perhaps worth remembering more positive elements about the importance of openness to outsiders. The Swiss history [1] reminds us that the watch industry is linked to the arrival of the Huguenots in the sixteenth century; a part of the textile industry in St. Gallen has its origin in England. There is also a French origin in the Basel chemical industry. Perhaps it interesting to recall that Christoph Blocher has distant German roots. But what about Nicolas Hayek, the savior of the watch industry, rocked by his Lebanese and French cultures.

Much further, Silicon Valley, the world champion of innovation and entrepreneurship, owes much to its migrants. Of course America is a land of pioneers, but the San Francisco area pushed the logic to an extreme. More than half of the entrepreneurs in this region are of foreign origin and for example Google, Yahoo, Intel had founders with foreign roots.

While Europe has a temptation of closing its doors due to its economic difficulties, in the United States, the Start-up Act 2.0 intends to streamline visas for foreigners and to regularize children of migrants to enable them to enter higher education. Japan was another major country for innovation a few decades ago nut it may have suffered from its low level of migration; the country is aging and has not really reinvented itself.

Switzerland is a land of migration, let us not forget it. This is one of its strengths. Today, the campus of EPFL and ETHZ have a great deal of students but also of researchers and teachers with foreign origin. The proportion increases much more if you focus on those who create businesses. For those who have received an entrepreneurial scholarship to EPFL, the proportion rises to 75% including 25 % of non-Europeans.

Would foreigners be more talented and creative? The answer is rather a larger experience of what is unknown and uncertain. Migrants have agreed to leave their homeland, sometimes leaving everything behind. And they know by experience that we can recover from this loss. They know well that it is always possible to start again and the fear of failure is reduced. He also learned to domesticate novelty. It should be added that a migrant has less access to established circles and is stuck by “glass ceilings”. They must often build they destiny. From this point of view, they do not take the jobs of anyone, they create new opportunities, that will become beneficial to others!

[1] http://histoire-suisse.geschichte-schweiz.ch/industrialisation-suisse.html

Space Invaders were also in Geneva

It was tough not to add the Geneva invasion by the Space Invaders after the one in Lausanne (After Banksy in NYC, Space Invader in Lausanne). But this one is far from perfect, many images are missing and I did not take the time to go on site.


Still, you can download my pdf compilation of what I found online as well as a Google map of the places.

Afficher Space Invader Geneva sur une carte plus grande