
Macron Secures €5B Investment to Boost French Tech Startups - pinouchon
https://www.wsj.com/articles/macron-secures-5-billion-investment-to-boost-french-tech-startups-11568749343?mod=rsswn
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arnaudsm
I worked in both French and US startups, and the french startup ecosystem felt
like cargo cult.

Our business school culture is so prevalent, techies are always ignored.
Engineers are poorly paid, if not at all. And the rare VCs have zero tech
knowledge too, resulting in poor investment choices.

It's a cultural problem, and throwing money at it won't solve it.

~~~
pnako
In France, if you are an engineer (Grande Ecole), you go work for companies
like EDF, Thales or Safran. If you're BTS/DUT (c'est ca la puissance
intellectuelle... bac + 2, les enfants), go work for a small company,
preferably outside of Paris. But never work for a bunch of assholes from HEC
who are copy/pasting some American ride-sharing or social media startup.

~~~
Blackstone4
What is BTS/DUT? What's the advantage of working for a small company outside
of Paris?

~~~
yaantc
The English "engineer" is split into three in French: 1) technicien, 2)
technicien supérieur and 3) ingénieur. DUT is for techniciens, BTS is for
techniciens supérieurs. Ingénieur can come from university, but most come from
a side system (grandes écoles), with the écoles further split into 3 tiers
depending on selectivity and prestige. Complicated? Yes... Even for most
French ;) But in the business world in France this is all known and will
influence your career.

A technicien is supposed to be on top of ones field techniques, and know how
to apply them. A techicien supérieur is the same but for more advanced and
complex fields. An ingénieur is not only supposed to understand the "what" and
"how", but also the "why" and be able to evolve things, of design from scratch
when needed. That, of course, is the theory: there are plenty of techs with an
ingénieur mindset (good), and unfortunately plenty of people with an ingénieur
degree who couldn't innovate out of a paper bag.

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jacquesm
People taking money from French state related funds should be very careful
with the small print and study the case of DailyMotion with great attention to
detail. Lest you too end up being deprived of a well deserved exit.

~~~
m000
Does it really have to do with receiving money from state-related funds? It's
not unusual for a government to stop foreign acquisition of companies they
consider a strategic asset for the country. E.g. Donald Trump recently
rejected the acquisition of Qualcomm by Broadcom.

~~~
srbby
Do you really think DailyMotion is a strategic asset for... anything? They
most likely stopped the acquisition because they didn't want the founders to
profit from something they built using state money (and maybe rightly so)

~~~
m000
DailyMotion can be a strategic asset for a country like France. E.g. if they
project a steep decline of broadcast TV and a YouTube monopoly, having a
French-controlled video streaming alternative laying around may become
important in the case of a USA-EU "cold war". The chances for this scenario
may be very slim, but countries at the level of France would want a
contingency plan anyway.

~~~
jacquesm
I think that's reaching. That's not just 'slim', that's vanishingly small, so
small that such a factor would never make it to consideration in a case such
as this. The real truth is that it was the first time that France had a name
on a website that had international recognition and they didn't want to lose
that.

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goatinaboat
The French model of innovation is very much that it is a thing that happens in
a lab buried deep in the bowels of a giant state-backed enterprise, by
salaried workers with absolute job security but no equity participation.

The entrepreneurial French all leave for London or Berlin.

~~~
jacquesm
Or Amsterdam, or Barcelona. If they stay in Europe. But the vast majority
leave for Silicon Valley if they are skilled enough to get hired by any one of
the larger players.

~~~
yaantc
Can you call them entrepreneurs if they want to be hired by a large player?

That entrepreneur leave France is almost a meme, and I know it happens and
have some friends among them, but not everyone leave either. I have the chance
to regularly meet French entrepreneurs staying in France. It's certainly
harder than in the US but definitely possible. The thing is, most are not in
areas that can massively scale. It can be very high tech, with international
exposure, but it will never become a Google or Amazon. It tends to be
specialized tech that can sustain a small to mid company, but not a massive
one. And as a result, it tend to stay under the radar when discussing start-
ups and everyone having the GAFA in mind.

~~~
jacquesm
I know quite a few founders in France and elsewhere.

First off - and I hate doing this - there is the definition game at play here.
I sincerely loathe how the start-up community has decided to redefine the word
start-up to mean 'business with very large scaling potential' or something to
that effect. This removes a lot of the companies that one would normally
consider to be start-ups from the equation and also from many discussions.

Of course if your start-up does not have the potential to become a billion
dollar company that does not help. So for the moment let's assume those are
all still 'in'.

Then, of those companies that you refer to: high tech with international
exposure that can sustain a mid-to small company is precisely the sweet spot,
SME (small-to-medium sized enterprises), it is the backbone of the economy in
many places.

But hardly any of those will be names that people recognize. In Europe we had
several of those, and Dailymotion was one of them.

There are quite a few EU based brands that have global recognition: Nokia,
Airbus, TomTom, TeamViewer, Skype, HelloFresh, N26, WeTransfer, Revolut,
Deliveroo and so on all - maybe except for the first two - at some point in
time could claim 'startup' status according to the HN/YC definition of the
term.

But for every one of those there are 1000's that do just fine in their local
eco-system. The important point is that France is quite underrepresented in
that segment, and that is something worrying. More capital isn't necessarily
going to solve it, for France to thrive in this sense it would have to change
a lot more than just to hold out a bag of money.

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new_here
SeedTable sent out a newsletter last Friday about this but with additional
insights on the French tech scene. Also worth a read: [https://us8.campaign-
archive.com/?u=32b602d9ab9d238ceb45e3f0...](https://us8.campaign-
archive.com/?u=32b602d9ab9d238ceb45e3f05&id=3522e9805f)

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pnako
This is just a gimmick. France is not America. That does not mean it doesn't
work; it's just a different model. The focus should be on improving the
current system rather than trying to import a model that is too culturally
incompatible. The current system is essentially a technocracy, with the
government and a few large companies working together (but in a different and
much better way than they "work together" in America). So far, it has remained
mostly meritocratic, with a few exceptions, naturally. This has produced
amazing stuff; the Minitel (first nationwide computer network in the world, as
far as I can tell), focus on nuclear power, high-speed trains, Airbus, an
entirely indigenous launcher and defense program and so on. And a generous
welfare system that used to work.

Him mentioning "unicorns" is just silly in a country where almost no one cares
about the stock market. It would be more sensible to focus on SMEs and catch
up with Germany and Italy, that have a more robust network of middle-sized
industrial companies.

~~~
tyingq
They do seem to be dominating the no-frills end of server hosting with OVH and
Online.net/Scaleway. Perhaps an exception, but it's interesting that they have
little US competition in that niche.

~~~
pnako
Well, the French and American approaches to customer service are different, to
say the least. So if you can't compete on customer service, you compete on no
customer service :D Meaning costs and technical aspects.

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zoobab
No money for small companies, only for scale-ups.

~~~
yaantc
There is money for small companies already, with seed funds, business angels
and regional funds. It's after that it's getting harder, so it makes sense to
me to focus on the scaling part.

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buboard
Startups need a fertile market to thrive

~~~
onion2k
Plenty of startups coast along on VC money for a _really_ long time before
admitting they're not actually thriving and shut down.

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dogma1138
Not sure how smart it is for insurance and pensions companies to invest their
endowment and policy funds in startups.

~~~
osrec
It's actually pretty smart, especially if, for example, an insurance industry
incumbent invests in a promising insure-tech business to further bolster their
own future position in the industry.

~~~
dogma1138
They can use their own money to invest in those and they do, not policy funds.

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rapsey
Getting funding in EU right now typically involves miles of red tape and/or
friends in the right places. Hopefully they address these issues. Would not
hold my breath though.

~~~
jacquesm
That's nonsense. Lots of start-ups are getting funded in the EU without' miles
of red tape and/or friends in the right places'.

I see lots of them (50+) every year.

~~~
littlestymaar
Early funds are easy here in Europe. But exit over 100M are scarce and often
involve an American big corp.

~~~
nicoburns
Do we actually want people to "exit" in this way though? That seems to just
make more millionaires, and further centralise control of good technologies /
ideas.

~~~
littlestymaar
Personally no, I don't and I consider the whole start-up culture harmful.

But I wanted to highlight the key difference between European and American
start-up ecosystem regarding funding.

~~~
jacquesm
> I consider the whole start-up culture harmful.

I don't think it is quite that black. There are plenty of good companies and
nice people that make bank from starting new companies. The hype and the bro-
culture are not the only faces the start-up community has and if that all you
see then you're missing a lot of the good that is happening: Female / minority
participation in start-ups is substantially above country average for most
countries in Western Europe, there are quite a few start-ups that are working
hard to achieve something good for the world, but not in an 'Instagram' like
manner kind of 'good for the world'.

SMEs are the backbone of private enterprise in Europe, they create more jobs
and employ more people than all of the enterprises _combined_. They are the
backbone of the economy and I'm more than happy to see a thriving eco-system
around them.

~~~
littlestymaar
SME aren't startups, quite the opposite. And my gripe with startups lays in
the difference between those two. A regular company makes business, at some
scale, and sometimes grow because they were efficient and profitable. They are
the realm of people knowing their business and their market.

Startups raise funds, try to build a big scale business as fast as possible
and sometimes become profitable because they became big enough fast enough.
Move fast, break things (first websites, now satellites and automated cars,
YOLO) and become rich ASAP please.

~~~
jacquesm
> SME aren't startups, quite the opposite.

That's what people are trying to tell each other but it's BS. For every start-
up that made it there are 1000 SME's that didn't. Usually you only know that
your company has the potential to succeed big quite a few years after you've
started it.

The whole idea that world wide scale companies are the only ones that deserve
the label 'start-up' should die, it's a SV born re-purposing of words to suit
a particular agenda.

> Startups raise funds, try to build a big scale business as fast as possible
> and sometimes become profitable because they became big enough fast enough.

They can, but they don't have to.

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baybal2
I have hard time seeing why state needs involve itself in private market
financing.

> “We need to create our champions,” Mr. Macron said, adding that his goal was
> to have at least 25 French tech unicorns by 2025, referring to companies
> with valuations exceeding €1 billion.

I see this as a rather futile endeavour, and a little bit of a personal
insecurity manifestation. Just like as when Xi Jinping vent to California,
been dined with all those "smart startupers," and then it hit him "Americans
have startups, lets make some too!"

Second to it, why such fixation on the most egregious forms of "tech craze?"
France has strong position in materials, chemicals, which strike not less hard
economically, and are not less "tech" than cat video websites valued at $1B+

It is a foregone conclusion to me that $1B+ webdev weekend projects have no
true economic backing behind them, and they are just artefacts of speculative
expectations runaway.

~~~
hos234
Agree. I have seen Airbus trying this 'lets do what the Americans startups do'
model for a few years now and it went no where. It's not their strength.

