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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Learning from the Silicon Valley Entrepreneur Community

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The MIT Sloan Fellows recently traveled to Silicon Valley to “live and breathe” the culture of the leading innovation center in the world. It was a fascinating few days focused on innovation in the startup ecosystem that accounts for one-third of all the venture capital investment in the U.S. Coming from another renowned area of innovation, this was a fantastic opportunity to learn from each other and to think about ways in which the culture of innovation can be spread throughout the world.   I joined the trip as a faculty member, and wanted to share my experiences.

The MIT Sloan Fellows Program is a one year full-time MBA or MS program for executives with exceptional promise.  The program focuses on three pillars – Leadership, Innovation and Global perspective. This year we have 121 MIT Sloan Fellows from 38 countries with an average of 14 years of work experience.

Our four days in Silicon Valley were jam-packed with learning experiences – visiting startups and established companies, venture capitalists and research facilities – all playing a role in the innovation ecosystem.

Throughout our trip the theme of innovation was a constant, and we learned from accomplished leaders. Their outstanding leadership skills enable them to embrace innovation while building for the future, taking risks, creating and fostering experimentation, and attracting, retaining and motivating talent. Each and every day they work toward their innovative missions while still tackling the day-to-day.

If our trip could be summed up in an equation, it would be:

Innovation = Invention x Commercialization

Here’s a recap of who we visited, and how their invention and commercialization is driving innovation:

Coupa Software

Coupa is the leader eProcurement which improves visibility and control of indirect costs. The company focuses on Savings as a Service. CEO & President Rob Bernshteyn focused on the importance of people and aligning the core values of the company to employees, suppliers and customers as they all learn from each other.

His take was innovation is not just for the sake of innovation it is focused on results and a differentiated approach creating a unifying platform. Customers only stay if you provide value.

GE

CTO Dave Bartlett discussed Predix which provides the technical foundation to power industrial applications that drive outcomes ranging from the reduction of unplanned down time to improved asset output and operational efficiency. He also discussed Ecomagination which is a focus on developing solutions to enable economic growth while avoiding emissions and reducing water consumption, committing to reduce environmental impact. The essence of his briefing was that GE is an analytics company and is partnering with companies to solve some of the toughest environmental challenges.

Intuitive Surgical

Intuitive Surgical is the global technology leader in minimally invasive robotic-assisted surgery. The company has a surgical system called da Vinci. The system features a magnified 3D HD vision systems and tiny wristed instruments that bend and rotate far greater than the human hand resulting in surgeon enhanced vision, precision and control.

stem, Inc.

stem is a company that creates innovative solutions of energy distribution and consumption through learning software and advanced energy storage. Chief Commercial Officer Karen Butterfield shared her experiences in building an energy company that focuses on software, control, analytics and is technology agnostic.

Karen shared her experiences as it relates to attracting, retaining and motivating talent. Her belief that transparency is key, alignment with mission and inspired R&D is how she was able to manage growth from 40 people to 110 in 8 months.

AnswerLab

We met CEO and Founder Amy Buckner Chowdhry who bootstrapped her company which creates more engaging digital experiences based on user experience research and recommendations for Fortune 1000 clients. She recruits PhDs in cognitive science, cognitive psychology, human-computer interaction, and computer science that have done a lot of work in their academic field.  Amy, co-founder Dan Clifford and their teams were able to provide the right research methodology to bring an objective view so organizations could focus on the voice of the customers.

Beepi

We met Alejandro Resnik a graduate of MIT Sloan (2013) that started a company after purchasing a car that was a lemon.  Resnik and his co-founder, Owen Savir, have raised close to $150M to create a transparent and easy way to buy and sell cars online and via your mobile phone. The car is fully detailed and wrapped in a big bow for delivery with a 10 day money back guarantee. The customer stories are posted as “Love Stories” on the website. Alejandro stated that innovation belongs to the disciplined, tough minded, relentless, optimistic entrepreneur.

Highland Capital

Partner Peter Bell, who was an early employee at EMC, is focused on companies in the information security, e-commerce, cloud infrastructure, mobile, enterprise software, and communication industries. He talked to the students about what they should look for in an investor. The investor needs to be relevant to them, an expert in the sector, have a good network, access to customers in the segment, and someone who can systematically help build your team.  The investors are looking for relevant, hungry and compelling teams.  Innovation is the life blood of growth and change.

eBay

We met eBay’s Chief Product Officer RJ Pittman who is responsible for design, product, and engineering for eBay’s worldwide commerce experience. RJ is working on platform experiences for connecting customers to make the business more competitive and personalized service globally. The growth will be through mobile so the look and feel of the end to end user experience aligned with eBay’s brand. RJ is bringing the customer into the narrative and creating the eBay commerce experience through simple, engaging personalize and multi-screen. He pointed out that fast movers need to have grit. It is your job to swing the bat as many times as you can.

Lawrence Livermore National Laboratories

We met with Richard Rankin, Director of Industrial Partnerships Office and Economic Development Office. This was a different spin for the Fellows as they saw a broader focus on pure research versus commercialization. The mission of LLNL is to strengthen the United States security by developing and applying world class science, technology and engineering. The labs have history of developing, deploying and delivering innovative technology.

We concluded the week speaking with innovator Una Ryan. Una talked about her experience looking through an electron microscope, and how that set her path for science. She is a British-American biologist who was awarded the Albert Einstein prize for her development of new vaccines to combat global infectious diseases. She has worked on clean water solutions and inexpensive diagnostics test for developing countries.  She has is now an angel investor as well as an artist.  Una takes electron micrographs of living cells, including mitochondria, nuclei and vesicles and composes each image with colors of the earth viewed from space, bodies of water or land masses. This was fascinating to take the micro and match with the macro to create a connection and see the majesty yet fragile fundamentals of life.  Una also spent considerable time taking questions from Sloan Fellows on how she negotiated her career, family, science and investment community.

We thank all of the innovators we visited! We are sure that this year’s MIT Sloan Fellows learned a lot that they will incorporate into their own future as innovators!