Paris Reflections: Entrepreneurship Past, Present and Future

Paris reflectionsI recently had the incredible opportunity to deliver the keynote presentation at the Paris School of Business’ symposium on Entrepreneurial Research: Past, Present and Future. First, I’d like to again thank the school for this experience and my gracious host, Dr. Adnane Maalaoui, for introducing me to his students and giving this first-timer a glimpse of Paris.

I had promised to share what I learned at the symposium, and I will attempt to give you the highlights. I found that there is tremendous research being done by doctoral students who want to make an impact on entrepreneurship education as well as to share the work of the researchers who came before them. (Interestingly, entrepreneurship as a research field has only existed for the past 30 to 50 years.) The students at the Paris School of Business and affiliated universities in Europe provided a look into the future of entrepreneurship education during the symposium, and it is bright:

  • The educational ecosystems is vibrant with dedicated students and educators sharing and building on entrepreneurship research;
  • Students globally continue to be interested in entrepreneurship, but the ecosystem isn’t developed enough to deal with failure and risk in many regions;
  • It is important to remember that although at MIT we focus on innovation-driven entrepreneurship, there are entrepreneurs around the world creating small sustainable business that support families and change the lives of many (but are not necessarily innovation-driven);
  • Current cases taught to students could be updated to better reflect the changing entrepreneurial ecosystem;
  • Financing ventures continues to be a struggle particularly outside the USA;
  • Food and wine can be enhanced by rigorous debate, even in France;
  • The Eiffel Tower is even beautiful in the rain, as I learned from our final night with a dinner cruise on the Seine with students and faculty.

As an entrepreneur in a vibrant MIT ecosystem where we teach students through experience, it was inspirational to meet some of the global educators and Ph.D. students who are continually doing research that helps prepare entrepreneurs to make an impact in the world.

When I decided to pursue my doctorate at the University of Pennsylvania, I had already been an entrepreneur and business executive, but I joined UPenn’s Chief Learning Officer program and focused on work-based learning and closing the 21st century skills gap – this led me to my current role at MIT which is all about creating a learning environment for entrepreneurs. The Ph.D. students and faculty I met in Paris are developing competencies in new venture development, resource management, micro, social and strategic entrepreneurship using analytics/statistics to evaluate interventions and outcomes based on those responses.  I was able to connect with so much of their research both on an academic and practical level.

Another exciting development for French entrepreneurship was the election of President Emanuel Macron on May 7, just before the start of the symposium.  President Macron ran on a platform to make France globally competitive and is enthusiastic about startups in France. Macron’s pro-technology and pro-entrepreneurship views are discussed in this  article and this TechCrunch interview  conducted at the Consumer Electronics Show in January Las Vegas, attended by 190 French startups (at the time, Macron was France’s Economy Minister). It will be interesting to watch how the French startup ecosystem progresses under this new president.

I’m also sharing some resources that may be of interest:

  • My presentation from the Symposium:

How Paris & Boston can learn from each other’s Entrepreneurship Communities,
by Trish Cotter

  • A presentation by Bill Aulet, Managing Director of the Martin Trust Center for MIT Entrepreneurship that also shares ideas on:

The Past, Present and Future of Entrepreneurship Education, by Bill Aulet

  • Great accounts to follow on Twitter:
    Paris School of Business @PSBeduParis, Grenoble Ecole de Management @Grenoble_EM, and Ecole de Commerce @EDCofficiel (The first is in in English, the second two are in French – but Twitter has a handy translate button.)

    Also, make sure you are following the Martin Trust Center at MIT … @EshipMIT !

In closing, I’ll share the words of Jean-Baptiste Say the French economist who first coined the word “entrepreneur” around the year 1800:

“The entrepreneur shifts economic resources out of an area of lower and into an area of higher productivity and greater yield.”

Bonne chance to all of our entrepreneurs!

 

A Discussion on French Entrepreneurship with John Chambers

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I recently had the unique opportunity to join selected MIT faculty, students, and staff to discuss the current business climate with John Chambers, the Executive Chairman of the Board and former CEO of Cisco Systems. He was the guest of honor at a recent MIT Leadership Center luncheon and it was pure luck that I ended up sitting next to him as our meal was served.

My question to John was: what he thinks we should be doing to educate entrepreneurs today (that is currently lacking). Although he didn’t answer that question directly, he did talk about the differences in East Coast and West Coast philosophies. The West vs. East innovation discussion is always a good one (see my blog on Massachusetts being ranked the most innovative state in America) and it was clear that John felt that in Silicon Valley, it is more important to be a founder/key engineer than is to be the CEO of a Fortune 100 company.

Paris conferenceWe then started discussing innovation in other countries, particularly France, in light of my upcoming keynote speech in Paris at the symposium on Entrepreneurial Research: Past, Present and Future. John remarked that the French entrepreneurial ecosystem is actually as large as Boston’s. I was a bit surprised, but also intrigued as I’ve been researching how the French approach entrepreneurship to prepare for my presentation.

Here are some of the highlights of my research I thought I’d share:

  • The French business environment has undergone radical change in recent years. Investment activity in French startups has been on a steady rise. Moreover, it is coming from all sides of French society – the government, the corporations, and the new wave of entrepreneurs. In addition, France has over 100 venture capitalists who invested more than $2 billion in 2016.
  • This activity has changed the general attitude among the younger generation towards entrepreneurship. Up until 2012, France’s best talent was driven to big firms. However, now more than 50% of young people between the ages of 18 and 24 want to start a business, and 1 in 3 of France’s 70,000 Ph.D. students also want to create their own business. At this moment, France has more than 50 startup accelerators, and more than 100 co-working spaces have opened their doors recently.
  • President Hollande’s socialist government has made fostering startups an economic priority with a cohesive policy that has included:
    • Tax incentives for new businesses
    • Government and public sector funding
    • Creation of Special Tech Programs on national and regional levels
    • New crowd-funding legislation
  • The weak point of French VCs is lack of sufficient capital for later-stage funding rounds, forcing many promising French startups to look abroad for their financing needs or get acquired by global multinationals.
  • According to French government, more than 550,000 startups are created each year. More than $2 billion was invested in French startups in 2016. Three startups raised more than $100M:
    • Sigfox (IoT ecosystem)
    • Deezer (Music streaming)
    • Devialet (Sound technology)
  • According to European Digital City Index (EDCI), Paris is the 5th best city for startups in Europe. According to the Compass 2015 Global Startup Ecosystem Ranking, Paris is the 11th best ecosystem for startups globally.
  • Brexit creates excellent opportunity for France to lure best tech startups from UK and transform itself into the #1 European and one of the leading global startup hubs.
  • The presidential elections that will be held in April and May 2017 should be carefully watched. The possible win of Mr. Macron could be a big boost for the French entrepreneurial ecosystem since his tenure as a Minister of Economy was huge boon for the French startup ecosystem.

As Americans we tend to critique French capitalism due to issues such as a high level of government intervention, inflexible labor laws, a fear of failure among entrepreneurs, and the lack of innovation.  However, all this is changing.

I look forward to my visit to Paris in the springtime and will share what I learn at the symposium.

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Chasing Unicorns or Planting Trees?

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unicorn12967178What does Entrepreneurial Success Look Like?  

In the business world, privately held companies valued at $1 billion or more are known as unicorns. Like unicorns, the billion-dollar startup was once only a myth. Now, all that has changed.

Fortune now publishes “The Unicorn List” that includes 174 unicorns. Uber tops the list, with Airbnb, Snapchat, and Pinterest also in the top 10. The Wall Street Journal also publishes a dynamic “Billion Dollar Startup Club” graphic that shows unicorns with their current value and region of origin – Uber’s current $68 billion valuation is by far the highest of the group.

Some rankings use just one criterion, such as venture capital funding to measure success. Although not necessarily the best measurement, it is an easy, publicly available figure, and there have certainly been unicorns that have failed. But, should valuation or the ability to raise money be the only measure of success?

What about the important success factors such as profitability, revenue, job creation, and even intangibles such as social good – giving back to the community or the world. The combination of these metrics provide a more holistic view to measure success.

MIT has been measuring entrepreneurial success for years, and our figures take into account job creation and revenues. According to our last update, companies founded by living MIT alumni have created 4.6 million jobs and generated nearly $2 trillion in annual revenues – that’s about the same as the GDP of the world’s 10th largest economy.

While the trajectory of the unicorns is impressive, a great number of unicorns aren’t profitable. Many startups and entrepreneurs have focused on “growth at all costs,” often operating at a loss to grab market share.  It’s not a surprise to learn that some unicorns are terrified when they have to think about profits for the first time.  (For more in-depth analysis, check out this blog post by well-known venture investor Bill Gurley.)

All of these issues are things that we think about deeply here at the Martin Trust Center for MIT Entrepreneurship. We certainly want the startups that we help launch to be successful, not just in venture capital raised or achieving unicorn status. More importantly, we want that success to be sustainable and we want the entrepreneurial skills that we impart to be deeply rooted.

Think about trees for a second. Yes, much less magical than unicorns, but a tree has deep roots, a solid foundation, and branches that grow over time. We believe that with the tools that we provide to our students: from the proven framework of courses; to state-of-the art facilities; to advisory services; to our own delta v student venture accelerator, we are planting the seeds to help that tree grow. Obviously, drive and passion are important characteristics of successful entrepreneurs, but we know that entrepreneurship can be taught with a systematic, disciplined approach.

In fact, learning solid entrepreneurial skills might be even more important than launching a successful first startup on your first shot.

How does MIT produce so many successful entrepreneurs? We believe it’s all about planting a tree, rather than chasing a unicorn.