
French President announces pro-business measures - waxzce
http://www.rudebaguette.com/2013/04/30/10-pro-startup-measures-francois-hollande-announced-this-week/
======
babarock
To me, the most important thing is that he's closing the "040" indicator used
by the banks to index the entrepreneurs who previously failed.

It's virtually impossible to get help from a bank if your previous startup has
failed. There's a bigger picture here. France is so incredibly intolerant of
failure it's not funny. There's the rampant myth of the "genius superstar that
never fails" and you only get one chance to prove yourself. It's no surprise
that people will (generally, there are exceptions) prefer steady and safe
employment in big corporations.

I think the best thing we can do for entrepreneurs is to encourage people to
take risks and fail a few times. But this needs a major overhaul of the
mentality in the country. I'm glad to see the government is taking a first
step.

~~~
MetaCosm
In the US -- we look at some of our most successful businesses and a ton of
them had bankrupt companies in their past...

Ford (cars), Disney (media), Lincoln (president), Heinz (condiments), Hershey
(candy), Twain (author), Fox (media) -- tons of others...

~~~
watsonc73
Great point - Unfortunately, it's endemic in European society that bankruptcy
should be labelled as a permanent branding of failure for an entrepreneur.
Until this year in Ireland, an adjudicated bankrupt could not apply for €630
credit without disclosing his status as a bankrupt (which could last for up to
12 years!)

I'd bet that the countries with the lowest barriers to exiting bankruptcy (eg
6 months in the US) also have the highest start-up success rates.

Bankruptcy laws are inversely proportionate to an innovative start-up
ecosystem.

Getting rid of the '040' label is definitely a step in the right direction and
I'm delighted to see that Hollande recognizes how important it is to remove
this stigma.

On a side note, Liam Boogar, the editor of the Rude Baguette (source of this
article) is an absolute gentleman who works tirelessly to better the fate of
French start-ups. Keep up the great work!

~~~
Silhouette
_I'd bet that the countries with the lowest barriers to exiting bankruptcy (eg
6 months in the US) also have the highest start-up success rates._

Perhaps, but someone is still footing the bill for those failures that were
able to write off debts they couldn't afford, so I wouldn't be too quick to
assume a very liberal culture with regard to bankruptcy is always better.

Remember, bankruptcy doesn't just mean a company failed to make money, it
implies that the company ran out of money without even paying its debts. In
this context, that usually means taking on a bigger loan than it could afford
to repay.

If banks are going to lend more money to businesses run by people who make
that mistake, they're probably going to be putting up interest rates on loans
across the board to pay for it. That's going to hit other businesses that are
borderline successful in their early days instead, possibly even killing them
off before they become established and sustainable.

I know it's popular around places like SV and around HN to talk up failure
like it's a badge of honour and guarantees you'll have valuable experience to
learn from for next time, but a failure is still a failure. Even if most one-
time failures shouldn't merit the end of someone's entrepreneurial career,
banks _should_ lend responsibly and be hesitant about lending to someone with
track record of not repaying their debts.

------
jacquesm
When French entrepreneurs move to Berlin and London to work on their companies
you know you have a problem.

France's capital gain taxes are a real issue, and even the new, changed and
improved rates will not do much to counteract this.

And that's just one of the things working against French entrepreneurs, the
various employment laws don't help a whole lot either.

It would be fair to class France as start-up hostile at the present date, but
the situation is improving. Which gives me all the more respect for those
French entrepreneurs that succeed.

~~~
kybernetyk
> When entrepreneurs move to Berlin to work on their companies

I'd say you have a real problem if that happens. Germany is pretty
entrepreneur unfriendly (source: I'm an entrepreneur in Germany) and if your
country is even worse ... well.

~~~
archivator
Huh, I've heard only good things about the startup scene in Berlin. What are
some of the main issues from your perspective, if you don't mind elaborating?

~~~
MetaCosm
Insiders only need apply. The over-regulation does nothing but protect the
existing players and stifling start-up competition across dozens of
industries.

------
yardie
That is swell and everything. But why doesn't the president fix his crazy tax
scheme, first. The pigeons have already left the roost and now he's set his
aim further down the tax bracket.

Apologies, I just received a letter saying I owe the impots an additional
400€. For reasons I can't imagine since my salary hasn't appreciated that
much. Entrepreneurship is hard enough already, the government taking more
money doesn't make it any easier no matter how many visas they grant.

~~~
subsystem
Back taxes has very little to do with the system and very much to do with your
employers bookkeeping?

~~~
yardie
I've been with my employer for 6 years and have never had a problem such as
this. I also pay my taxes in monthly instalments that is predetermined by the
fonctionnaires.

~~~
protomyth
In the US, I've noticed following the instructions on the W-2 to pick your
deductions (and set how much of your check is taken in taxes) does not give
the correct amount with some employers. I am not sure if its software or just
poor accounting. I started just putting 0 and calling it a day.

good luck with yours

------
alexei18
French startups. Bunch of pissy little whiners. They cry when nothing is done
to help them, cry louder when something is done to help them. And the same
people who spend so much energy bashing any government, left or right, cry
like babies to get any state subsidies for their failed ideas. And they dare
call themselves entrepreneurs. I wonder how do so many foreigners succeed to
start their business in this country.

~~~
geal
Easy to see: despite all the whiners and the bad reputation, you can find good
people to work with in France.

------
bradfordarner
This is phenomenal news for France! After having married a French woman, lived
in France and subsequently we moved back to the U.S., I realized how far
behind France was in the entrepreneurial game when compared to the States.
Yet, there are really brilliant people in France! These measures are
definitely a step forward. I will be interested to see if they speak about it
on Le Grand Journal this evening. Once we have children, we have thought about
moving back to France because the education system is so good but, we have
been very pessimistic about doing so because entrepreneurship is so looked
down upon.

Unfortunately, I don’t think Hollande’s efforts are going to have too great an
effect long-term. My experience has indicated that the French system is set up
in such a way as to reward people who don’t take any risks. It is not simply
the banking system or taxes that is to blame. There is a cultural stigma
against taking risks that does not exist in the States. The education system
is at least 100x better than the best schools in America, yet good test score
count for very little when it comes to the hustle required in
entrepreneurship, much less web based entrepreneurship where everyone is
brilliant and hard working. There is simply not the same commitment to
innovation. I often felt that I had made a faux pas when I lived in France and
spoke about different business ideas at dinner or a party.

Unfortunately, politics is not the only problem holding the many brilliant
people in France back from innovating and changing the world. In France, it is
not culturally acceptable to want to be like Elon Musk.

~~~
ferrantim
+1 my wife is French too and we are also contemplating moving back when our
kids are school age. The big risk is the business climate but more and more
I'm feeling excited about going to France and helping change the culture in
small ways. Just like the French chefs who came to the US and turned our
culinary world upside down, us based tech entrepreneurs can introduce some of
what made the valley so successful. France is such an amazing culture. Glad to
see that Hollande is taking steps to make it easy to fail and succeed.

~~~
bradfordarner
Agreed. That is the frustrating part. The education system is so great and
their health system is incredible. I really liked living in Paris. It is
without a doubt the most beautiful city that I have ever lived in. Plus, I
absolutely love the French language.

We are sort of in the same position. We would like to head out to Silicon
Valley get some experience there and then move back to France and become
involved in entrepreneurship in Paris while our children would finish high
school and go to university.

------
steeve
Lots and lots of good things: more stable tax rules, reinforcing and
stabilizing the JEI (which is a HUGE win, since it was changed every year...),
right to fail, startup visa.

Also, creating incentive for big companies to work with startups is awesome.
The bigcorp/startup link is almost non-existent here (compared to the US for
instance). This one alone will help the ecosystem big time.

------
tekahs
From a french guy : We are so late on this. imo, it's just an adjustment
compare to other country (like US).

There is also a lot to do to change the mentality, because the crowd don't
believe in "entrepreneurship" and prefer to work directly in big company.

~~~
rikacomet
from a Indian guy, planning on coming to France for Higher Studies: France is
sprinting now, when others are exhausted (USA, UK, China, India).. France is
where it is right now.

~~~
VSerge
Making generalizations is not my thing but I know two things.

1) A crisis and less jobs means more and more young people here are just
saying "fuck it, let's startup my own business".

2) Some French startups have done great and became global players in the last
couple years, like Criteo, and there are plenty new and fast growing companies
that are recruiting talent not only in France but from all over Europe.

I should know, I work for one such company, it's called Pretty Simple, and its
hit social game of investigation is in the top 5 Facebook games. And we're
recruiting like crazy (jobs@prettysimplegames.com), from iOS devs to game
artists to game designers. We have self-taught people as well as engineers.
We're nothing like the outside cliche of France would have you believe, and
we're kicking ass with an international team that speaks English
interchangeably with French.

Also, Paris is one hell of a cool city to live in, we've got good food, good
parties, good benefits, and good people, and living here is not that expensive
either when compared to London or the Valley.

~~~
rikacomet
Sorry, I should have been clearer. I'm a aspiring entrepreneur, and yes, I
want higher education if possible from select people in france, but I don't
want to stay in France, or any western country right now.

India's Purchasing power is 3rd highest in the world, yet its actual GDP is
only 7-8th largest. India, is where I would be, but not right now. Not for
post graduation, quality education is something hard to find, due to such
intense competition in India, your chances of getting into a IIM, is lower,
compared to getting struck by a truck.

------
civilian
The visa thing is nice. Simplifying capital gains tax is awesome.

I can't say that I'm a big fan of the tax breaks though. We shouldn't
subsidize any business, they should fail or succeed on their own merits.

~~~
fab13n
> Simplifying capital gains tax is awesome.

It _would_ be, but that's the part I'm the least confident about. Simplifying
goes against the DNA of both France and bureaucracy, so I don't expect much of
French bureaucracy about this; I expect the ministère des finances to
reintroduce at least as many byzantine rules as they're forced to abrogate.

The ministère is stuffed to the brim with [ENA
alumni]([http://en.wikipedia.org/wiki/%C3%89cole_nationale_dadministr...](http://en.wikipedia.org/wiki/%C3%89cole_nationale_dadministration)),
i.e. people extremely well connected and well versed in stealth sabotaging of
unwanted reforms. They've a strong track record of politically killing finance
ministers who wanted to "simplify" them.

> We shouldn't subsidize any business, they should fail or succeed on their
> own merits.

Indeed, but big companies have an unfair advantage over small ones: they're
able to influence regulation (especially if they can afford to hire ENA
alumni). In a heavily regulation-prone country such as France, this advantage
is so important that it stifles SMEs; some countermeasures are needed.

------
waxzce
So sorry about some French habits : many of bad comments are made by French...
In fact, some French guy like French bashing, in public international place,
but it doesn't sounds good for business isn't it ?

We have also great entrepreneur with great exits or great companies. And some
of us are business ready and don't complain all the time. Such a shame nobody
ear of them...

------
smoyer
I remember hearing about France's 35-hour work-week (in the mid to late '90s I
believe) and I'm curious if some of the Frenchmen here can tell us how
eliminating that cap has affected the economy. Are people simply working more
hours? Has unemployment gone up since a business needing X number of hours a
week needs less workers? And most importantly, was that limiting the ability
to create start-ups?

~~~
yardie
I work in France and I'm still trying to wrap my head around the 35-hour rule.
I've only worked PMEs (<50 empl.) so I don't know how big companies manage,
once you get over 50 different rules kick in.

* General salaries are sort of trapped outside the big cities. You can work 35-hours but don't expect any pay raises. I think the avg salary is around 1500€/mo. I would say most people have built there lives around the 35-hour week and even though it's not an upper limit anymore I haven't noticed an uptick in working hours.

* There are so many things wrong in the French economy you can't really site a single source. Sluggish economy, automation, globalisation, all play a part. Do remember that after 35 hours that extra time is voluntary, as Apple is finding out. A smart manager wouldn't build a work schedule around 40 hours knowing the workers can legally walk off at 35.

* Startup culture was much harder in the past. Where would you live? No property owner would rent you a flat because you don't have a "real" job. Bankruptcy was devastating, that 040 code. And then you have the social charges. The government wanted you to pay your pension, insurance, and the other social charges, in advance. Imagine what it costs to create a startup? Now imagine having to pay an entire year of taxes before you can sign your first customer. And the other thing was bureaucracy, lots of it.

The government tried to make inroads on the tax charges by allowing them to be
delayed for 2 years. And a lot of companies failed at 2 years for this
reason.[1]

[1] this was told to me by a political activist friend.

~~~
smoyer
Thanks for the information ... After working 60-80 hour weeks on the start-ups
I've done, I just couldn't imagine how it would have been possible with the
old laws.

~~~
yardie
You could, but that is a very big brass ring to put in front of your
employees. If you are working that many hours there better be a good reason,
like a big payday. Startups are different than PMEs because the only way you
would even think about working 60+ hours is if you have some equity in the
success of the company.

There are 2 ways the 35 hour week works:

1) You are paid for 35 hours/wk and work as much as you want all year long.
December arrives and you go full RTT. You basically take a vacation while the
company pays you the balance of those over 35 hour weeks. I've been in a few
places where half the office is gone for the entire month of December, and
sometimes November. If you don't use all your RTT by 31/12 you've basically
worked for free.

2) Overtime. In my case my CDI (employee contract) is for 35 hours + 4
overtime hours that I've agreed to. Say the company only wants me to work
35hours/wk one month, too bad pay me 35+4. And if I go over 39 hours? RTT.
Depending on the workplace, this can either get collegial or hostile very
quickly.

Also, when it's 7-8 hours of work the french really do work those hours. This
is in contrast to my American observation of working 6-7 and goofing off for
2-3. But then you're always having to stay late. This pacing requires proper
project management, something that was really lacking in most of my american
bosses (Americans tend to inherit the manager job, to go cadre in France you
actually have to take courses on managing people).

~~~
loup-vaillant
And then there's the typical programmer under the SYNTEC union convention, who
is paid for 37.5 hours/wk, with only 10 days off for RTT per year.

But in reality, we work the full 39/40 hours, because we're paid by the day,
and there's much work do be done anyway. So, we're averaging 35 hours on
paper, but more like 37.5 in reality.

I guess that's just something to keep in mind while negotiating the salary.

------
Variance
Some nice minor gestures, but these will hardly "redefine French business as
we know it."

------
nraynaud
I have to check again, last time I called my lawyer, the tax on my income was
14% and the tax on an share sale would have been 42%, so I'm really in favor
of having both at the same rate.

------
mathieuruellan
Bullshit! A french teacher can't learn entrepreneurship. Most of them have no
idea what is a company and what is business!

~~~
waxzce
but entrepreneur can do it :-)

------
negrit
Beside the "040" indicator everything else sounds like golden bullshit to me.

------
damient
These measures are extremely favorable to entrepreneurship in France. They
will help people to create companies, to develop them, and even to bounce back
if they fail \o/

~~~
tpainton
Yes, it's about as reassuring as the Treaty of Versailles.

------
lifeisstillgood
Americans (and the Vulcans) have a saying:

    
    
      Only Nixon could go to China.

------
tpainton
and #11, if you are successful, we take most of your money.

------
LekkoscPiwa
75% tax rate. He is a sociallist big time. He hates free market economy. Now
confronting public outrage he puts some lipstick on a pig and it still doesn't
look good as he doesn't get the markets.

75% tax rate, who is he kidding? Who wants to work for free for years on their
startup and sacrifice their savings, their social life, sometimes their
family, just to be hit by 75% tax at the end of the journey?

No thank you Hollande, but no thank you.

~~~
qwerta
75% tax rate is very common in Europe even for workers with average salary.
There are many hidden taxes such as 'social security insurance payed by
employer'.

~~~
vacri
A load of tosh. "Income tax rates in France" in google gives you them with
ease.

[http://en.wikipedia.org/wiki/Taxation_in_France#Taxes_on_inc...](http://en.wikipedia.org/wiki/Taxation_in_France#Taxes_on_incomes)

In order to hit 40% income tax, you have to be a single on 70k or a nuclear
family on 210k. Even if they have 20% VAT equivalent, that only works out to
another 10% of what's left, leaving 50% as disposable income. And that's the
highest tax bracket, and given that the average wage in France is supposedly
~30k euro, that's less than half the highest bracket cutoff.

~~~
ovi256
>There are many hidden taxes such as 'social security insurance payed by
employer'.

He's taking about hidden taxes such as this one, which is paid by the
employer, so many French people I've talked to about it seem to think it's
somehow magically not money out of their pocket.

~~~
varjag
You can see those as compulsory 401(k), health and disability insurance.

------
LekkoscPiwa
There is a reason for which there have been no big French or European company
founded after WW2 (1945). The reason is called socialism. Think about it. BMW,
Mercedes, Siemens, Loreal, Peugot, you name it! No Google from Europe, no
Microsoft, no Oracle, or Tesla, or whatever. Not a _single_ big company from
the EU after 1945. Especially overregulated places like France.

I met a French clothes designer in New York recently. He told me he escaped
Paris and France because he couldn't afford to open fashion house in Paris. He
told me that just to open a fashion design shop in France he would need to pay
15,000 euros (about 20,000 USD) in fees in taxes to the Government. Just to
obtain a few pieces of paper from the Government to be able to start the
business. Just to open. No profit yet, doesn't know if it will work out or
not, has no customers. Using his life savings or going into debt to start his
own business and contribute to the society. Penalized to the point he said
good bye. He escaped to the USA. Good job Hollande!

~~~
jgrahamc
_There is a reason for which there have been no big French or European company
founded after WW2 (1945)._

So, the following don't count?

Bouygues (<http://en.wikipedia.org/wiki/Bouygues>) founded in 1952. Large
conglomerate with 130,000 employees world wide.

Capgemini (<http://en.wikipedia.org/wiki/Capgemini>) founded in 1967. One of
the largest IT consulting firms in the world.

Carrefour (<http://en.wikipedia.org/wiki/Carrefour>) founded in 1958. It is
the second largest retail group in the world.

JCDecaux (<http://en.wikipedia.org/wiki/JCDecaux>) founded in 1964. The
largest outdoor advertising firm in the world.

Sodexo (<http://en.wikipedia.org/wiki/Sodexo>) founded in 1966. One of the
largest food service companies in the world.

etc.

~~~
seanmcdirmid
> Sodexo (<http://en.wikipedia.org/wiki/Sodexo>) founded in 1966. One of the
> largest food service companies in the world.

I now can blame the French for the spotty food service in my company.

