Minutes of the IE-Club lecture at Microsoft France on European Rising Stars of the Internet
Before we get started, I suggest you print this article out. It’s objectively interesting, but it’s too long a post and your eyes probably don’t deserve such a special treatment.
As promised to Julien Codorniou during the cocktail that followed the lecture (NY friends will feel some relief at last, as well as Valley angel P.K. – thanks for your encouragements, and Damien who slightly put pressure on me), here are the minutes of the lecture on ‘the rising stars of the Internet’ I went to this Tuesday, which occurred at Microsoft’s Business Center in the very center of Paris, next to Invalides (see picture, taken 2 minutes before I arrived at Microsoft).
I had an appointment slightly in advance with blogger and student Hadrien Simon (see picture, Hadrien (left) and I speaking whilst sipping a drink – a picture taken by a photographer from Journal du Net, a French Internet e-zine). 
Whilst actually shaking hands with Hadrien, I briefly got to meet with blogger and high-tech manager Louis van Proosdij Duport – who is by the way looking for business angels. Former Marketing director of MS France, blogger and now Innovation Strategies consultant and lecturer Olivier Ezratty was also there. You’ll get a chance to read more about Olivier since he’s currently teaching a tremendously interesting course on innovation strategies in my program. I’ll make sure I blog about innovation strategies as soon as the class is over.
Hadrien and I felt we needed to thank Julien Codorniou, a blogger and Microsoftee – dealing with the MS software start-ups ecosystem and VC-community relationships, who organized the lecture and very kindly invited us as students and bloggers, but we had a hard time trying to catch him. After introducing ourselves, Julien recommended us we should get a seat quickly in order not to stand during the whole event. Wise piece of advice – the place was packed indeed.
Before getting started for good with the minutes, a little disclaimer: I apologize in advance for the inaccuracies you may find in this text. My notes might well not be all mighty…I spent my time taking notes and I guess I missed very few of what was said – but then I have to translate it from Molière to Shakespeare and, you know, I sometimes tend to get lazy when some parts interest me less. Anyways, feel free to leave comments if you feel I missed a point or didn’t make clear a specific stance. One last thing: (my personal comments, remarks, criticism, praise, will appear just like this into brackets and in italic font).
There you go with IE-Club at Microsoft’s lecture “Tomorrow’s Stars of the Internet”.
Julien Codorniou: “We’re all here tonight to introduce some of the most amazing entrepreneurial stories in France, and see by ourselves what it takes to build a Kelkoo. 20 employee-strong French start-up companies are now selling to large corporate accounts – a rather unlikely fact a decade ago. Moreover, Venture Capital money’s largely available since financial institutions have been thriving recently. Both are willing to invest in good projects. But what makes a good project? Human capital of course. Human sharing is key to success. Nowadays, there might be few business angels, but they are every day better. The more successful entrepreneurs rise, the more excellent business angels you’ll find. Indeed, a new ‘race’ – if I may say so, of French angels have emerged. Former entrepreneurs having turned business angels create value, and I insist on this point. My take is that one dollar from an investor who knows how to conduct a business to success creates more value that one dollar from a VC or perhaps a client. Hence the new French entrepreneurial drive. We’ve been recently witnessing a shift in mentalities and perspectives, and we can all just wish that things will occur right here as much as they already happen in Palo Alto or Boston.
Let me now introduce you to our first special guest Pierre Chappaz, a former successful entrepreneur at Kelkoo (sold to Yahoo!), now a VC at Index Ventures, a Co-CEO at Netvibes and a founder and CEO of Wikio.”
(Julien actually knows Pierre Chappaz pretty well for having written a book about the Kelkoo success story: the “Kelbook” – it hasn’t yet been translated into English but I suggest those who master French just rush and buy the book: you’ll get insights on the private and professional thoughts of a successful entrepreneur, Pierre Chappaz, during the new economy bubble burst).
Pierre Chappaz (getting ready on the picture whilst Julien Codorniou’s finishing his introduction speech): “I’m not a star tomorrow but more a star of yesterday…unfortunately! Internet business models should be cristal clear from scratch, in other words..profitable. This Web 2.0 thing has seen a new generation of sites growing at three-digit rates. User experiences have been changing: Internet is now a mature media, and users ask everyday more services from the Internet. Fortunately, several new technologies are alllowing such changes. For instance, Internet citizens want to use the WWW as a communication tool, their own communication tool, and hence create a blog. Blogs put you on the map, whilst personal websites were seldom and rather inward looking.
This actually is the first, out of two, big Web 2.0 shifts: there are 5 million blogs in France. The youth spends its time chatting on MSN, sending SMSs, and commenting blogs. Half of all teenagers have opened a Skyblog. Some Web 2.0 ventures allow for photo (Flickr) and video (YouTube, Daily Motion, etc.) sharing. Internet is now 100% multimedia. Expert bloggers for instance both develop a professional network and spend have fun.
The second major Web 2.0 trend is related to personalization. We used to go to a different portal every time we needed a specific service. No, we can chose the content and integrate it in a single interface. Technologies matter: RSS (a sort of web esperanto) and AJAX (allowing launching many applications in just one browser window) help people read contents from many media without actually going the the actual websites of these media! Content distribution has turned indirect – and Wikio surfes on this long-run trend.
I discovered Netvibes surfing on Live.com. I immediatly fell in love with its graphical homogeneity: Netvibes is in many ways the Macintosh of the Internet. I started as an investor in Netvibes, until Tariq Krim asked me to help him develop the company. So I took the job, instantly becoming a co-CEO of the company. People need new information searching tools, there are just too many sources available. Many are crap, and some blogs for instance are really good. Where do you find these? On Wikio, which semantics search engine brings top articles from both the blogosphere and the traditional media. Furthermore, the system allows for user-experience value creation and feedback.
All in all, the Web 2.0 hasn’t come up with anything new: the Web 2.0 made the Internet match its users expectations. And most financiers are ready to invest in the very best breed of Web 2.0 projects.”
Drew Graham, from the Kelkoo team, then asked a question to Chappaz: “How does the Web 2.0 get monetized?”
Pierre Chappaz: “e-Commerce is booming so, through commissions. And when it comes to Netvibes, we’ve been contacted by many established websites willing to pay to integrate Netvibes’s technology. Many people wrongly believe that Web 2.0 companies don’t make money, but did you know that YouTube makes 10 m$ every month?”
Eglantine Denjoy (journalist from IE-Club, always asked excellent questions): “Could you please introduce yourselves and your company one by one in no more than one minute?”
Tariq Krim: “At the time of Napster, I was a consultant and a blogger. I noticed one day that Google search results actually put my blog before mainstream websites. So I decided I would monetize my blog, and it worked! I made money out of it. Google doesn’t quite fit Web 2.0 needs. And Web 2.0 services redefine user relationships.”
Pascal Lorne: “Miyowa, a cell phone video broadcast start-up, is the second company I’ve started. Miyowa takes part of the Microsoft start-up ecosystem program. I had started a first company in the Internet cartography business quite a while ago. When I exited, I decided to travel the world. I hence went to California, the Mecca of high-tech, and Japan, where the mobile consumer market is 24 months ahead of Europe. I spent most of my time listening to users during that time period. Then I started Miyowa, which means in Japanese ‘viral, intimate and addicting’. Miyowa doesn’t do anything revolutionary, but rather executes what it does perfectly: we’re in the video and Instant Messaging business.”
Stéphane Bohbot: “The company I’m the chairman of, Modelabs, surfes on new telecom industry trends. The mobile industry used to be a manufacturing industry, and it has slowly evolved to become a consumer industry: people almost want their cell phone to look like them! So what Modelabs does basically is to create tailor-made cellphones. Its business model is based on partnerships with consumer brands.”
Philippe Bernat: “My company, Kayentis, mixes both of Gutenberg and Bill Gates’ worlds. You can’t believe it, right? Well you should…Thanks to Kayentis, a mere sheet of paper becomes your PDA! Everything you write on this specific sheet of paper with this specific pen gets geolocalized and digitalized. Kayentis makes of a simple sheet of paper a user community. So far, we’ve been involved implementing our service in both the corporate world and the medical doctors world (more than 3,000 worldwide).”
Pierre Krings: “I’m the COO of PriceMinister, a company founded by Pierre Kosciusko-Morizet (who couldn’t make it tonight) and I in end of 2000. At the worst time. Pierre and I had met in the US, we were colleagues at a highly successful Internet bank. When the bubble burst, we decided to open an e-Commerce third party of confidence service in France: PriceMinister was born. Prior to this, I was managing different railroad projects in the UK, Syria and Iraq for a major French transportation company before taking an MBA at INSEAD Fontainebleau. When setting up PriceMinister, we had a very simple motto: look for financing and come up with a profitable business model. Today, Price Minister heavily relies on its role of referee and its user community. One day of sales today generate more revenue than our first year in business. When it comes to technology, our business is not to lead trends in this respect. We rather focus on leaving competitors behind. Venture capital fund 3i invested last year in PriceMinister to support our growth and European expansion. Our team just went from 40 to 120 in about a year, and as I’m talking right now we’re opening PriceMinister in Spain, Italy, and implementing new community services on the site.”
Dominique Agrech: “I’m a board member at XAnge Private Equity, the investment arm of La Poste and former ABN Amro VC branch. I was surprised to be invited to speak since a Venture capitalist is not supposed to become a star. I see myself more like a producer in Hollywood: the real star is the actor – or the entrepreneur. If I may briefly introduce XAnge, we basically invest in the world of exchanges and trade. We may invest in Web 2.0 companies, but not exclusively: at the moment for instance, we’re scanning business who ease and securize trade.”
Eglantine Denjoy: “Is prior start-up experience a prerequisite to being successful today and becoming a star tomorrow?”
Stéphane Bohbot: “I had just finished technical studies when I arrived in Paris. I was 22. I was obsessed with one project: developing the mobile rings downloading market. I didn’t even know what a business plan was, but still, I found a listing of investors and started sending e-mails. Their answers were ’send us your business plan’, but since I didn’t have any (and had I had one, I wouldn’t wanted anyone to steal the idea from me)…Fortunately, an amazing man, Jean-Paul Boulan, agreed to invest 12K€ as an angel in my project. A few years later, we sold the company for 30m€. In the time between, I had to write a business plan. But I always had too bullish expectations. For instance, I had written on my first 2-page strong business plan that incomes during the first year would reach 8m€. Fortunately, my business angel taught me how to do business.”
Pascal Lorne: “Miyowa is my third company. Back in 1995, I had started a company in Brazil. Since then and in my other ventures, AXA has been a premium partner in everything I did. In the best as well as during the worst conditions and I thank AXA for that. In my second company, our headcount went from 2 to 150 in 1.5 year, before plummeting down to 10 in 5 more years. We exited not making such a great profit. But we saved face as it was a reverse IPO. I’d like to emphasize on the human aspect of entrepreneurial adventures: it is not how much? but who? that counts most.”
Tariq Krim: “After graduating from an engineer school (addendum: ENST or Telecom Paris), I found an internship at Sun, in the Valley. I was living right in front of the office building of a very young start-up company: Google. At Sun, I learnt about processes, software ecosystems and I could see how much people in the Valley had faith in the Internet and technology in general. In the Internet world, a good idea and some clever targeting ease the creation of a buzz and its bottom line: organic growth. You’ll always find the best opportunities in a downturn. Netvibes has been a very structured company since its first day. We reached 1 million users after spending a few thousand dollars only. You can start today, recruiting developers on eLance. In order to be successful, you need a good network. VCs usually bring in an impressive network. I was lucky enough to get Pierre Chappaz, Mark Anderson and Martin Varsavsky (addendum: take a look at my blogroll. Martin’s blog is one my favourites of the whole blogosphere) onboard. Furthermore, I got Daniel Rimer, who is very well connected, to invest in the project on behalf of Index Ventures. People matter! When Google or eBay buy out a start-up, they buy the people as much as the actual business. Two last things: don’t skip any of the investing stages. First, love money and seed capital to develop the platform. Then, angels to test market traction and start growing. Last, find some good VCs that wil help you bring the concept abroad, structure your business model and extend your capital expenditure. Last thing: today, I spend half of my time looking at tons of CVs to recruit the very best AJAX developers. People matter more than anything else.”
Eglantine Denjoy: “Isn’t it tricky to recruit the right people at the right time?”
Pierre Krings: “We started with a bunch of people. We had little money, and looking back, I think we’ve been very lucky to succeed. Choose the horses you’re going to ride with well, make sure you trust them and they trust you because you’ll undergo excellent as well as bad times. As I said before, we recently had to manage an extremely steep growth curve (from 40 to 120 employees in about a year). It was the first time after 5 years in business we had to structure the way we were dealing with human resources. Digesting new people is becoming critical and we spend a lot of time thinking about it. Pierre Kosciusko-Morizet had initially brought in an excellent advisory board thanks to his HEC network. Indeed, INSEAD alumni were very helpful too on my side. Price Minister’s 2 key factors of success were right from scratch: 1) the fact that the founding team trusted each other; 2) excellent advisors.”
Dominique Agrech: “You first have to build your ecosystem. Let me take an example: XAnge is an investor in Kayentis. I’d say the 3 key factors of success are: 1) market needs; 2) the timing and planning of releases; 3) the technology, and in this respect, Philippe has the right combination of skills and knows how to recognize people he should get onboard.”
Eglantine Denjoy: “Should the project be profitable in the short run?”
Dominique Agrech: “It all depends whether you believe a 3 to 5 years period of time is short term or long run.”
Someone in the audience: “When is Web 3.0 for?”
Tariq Krim: “Probably when everyone will be connected permanently to the Internet. When you’re offline, you have no access to your mailbox if you use, say, Gmail.”
Someone else in the audience: “Will devices be connected amongst each other through the Internet one day?”
Stéphane Bohbot: “At Modelabs, we devise cell phones that create value to the customers who belong to our target. For instance, MTV wants to monetize content and build a better relationship with its audience. Modelabs is involved in the product-service business, something really new. So yes, we connect devices and people and help them interact.”
Pascal Lorgne: “Miyowa has set up the Mobile 2.0 trend. We sit at the crossroads of the Internet and cell phone technologies, where the convergence is currently happening. For 9 months, mobile instant messaging has been a reality in Europe and Asia. Mobile technologies allow for every day more interactivity and instantaneity: you may upload a picture live, etc. Historically speaking, the first breakthrough occured when DSL took over regular RTC landlines. e-Commerce as well as the “community” buzz word boomed. Today, UMTS technologies are taking over GSM standards. software will get to communicate more and more, and people are already getting permanent Internet connexion, through their cell phone.”
Pierre Krings: “It is already possible today to scan a barcode of a product on your cell phone camera and put it for sale online. New technologies allow for creating links between people and devices.” (I had actually written a litle something about Amazon Japan RFID expertise, click here to take a look at the post)
Eglantine Denjoy: “Let’s now leave the floor to Marc Simoncini, the founder of public dating service Meetic, for the closing speech.”
Marc Simoncini: “I’m a star of yesterday too. Back in 2000, I was running a Web 2.0 company, iFrance, and now I manage a Web 2.0 company. I’d like to emphasize on two major aspects of success and failure in the Internet world: technology and entrepreneurs.
On technology first: when I started my first company, a long long time ago, the bandwidth of most communication devices hardly reached 1200 bds. I was then working on UNIX-based teleservices in Dijon, France. Then, it raised to 9800 bds. And since displaying a map of France on a Minitel became 8 times faster, we thought we had reached a peak in technology: for us, back in the beginning of the 90s, it was like having launched Google Earth. Then France Telecom launched its fast network RNIS, expensive and unreliable – it never picked up. In 1998, I discovered a worldwide Minitel working with an IP protocol and a browser, Mosaic. Internet technologies are extremely down-to-earth and simple. To a certain extent, you can do today on the Internet what you could do 20 years ago on a Minitel. The first revolution I noticed was the digital photography hype. All of a sudden, everybody was posting one’s pictures online. Then, if you ask me what is Web 2.0, I’d say Web 2.0 is tighted with the democratization of videos. Web 3.0 will be a reality the day we’ll be able to broadcast video in real time, or live, from a wireless remote device. In a decade or so I guess. Technology would’ve then experienced its high peak.
About entrepreneurs now: I used to see a ‘boss’ when I thought entrepreneurs, a ‘boss’ with assets, clients, etc. A ‘boss’ in the property business. I don’t know why, it sounded like serious to me to be in the construction industry. Maybe too serious…In the second half of the 1990s, being an entrepreneur suddently sounded cool, trendy, fashionable. When I started up Meetic, I went to my banker, at Banque Hervet not to name it, to secure a 7K€ loan, but I was quickly turned down…There’s something today that we never had. Web 2.0 also represents a balance we’ve stroken, a balance between:
- what the opinion thinks of entrepreneurs;
- the skills of entrepreneurs;
- the mature technologies available;
- and VCs willing to invest.
I had never seen it before. These are the 4 things France and Europe need to see great companies emerge from the UE mainland. In the meantime, even the government pushes to create ‘gazelles’… I’d be afraid if this optimal state was broken. We don’t want this balance to be history, and I definitely wouldn’t wait 2 more decades to see it coming back. Thank you very much. Any question in the room?”
(To my non-French readers: google ‘Minitel’ if you don’t know what it is. If you’re too lazy to check by yourself, post a comment and I’ll answer to you.)
Julien Codorniou: “How do you resist exiting and cashing in big bucks when you receive a bid from the US on your desk?”
Marc Simoncini: “Meetic operates in 15 countries, on 3 continents, we have a great team, great people, etc. Why would you want me to exit? I’m having fun. I wouldn’t have time to do this twice in my lifetime. And I probably wouldn’t be patient enough anyways…”
Tariq Krim & Pierre Chappaz, together from their seat: “The answer is: don’t look at the amount, don’t open the envelope.”
Pierre Chappaz, having joined Marc Simoncini on stage (see picture): “It’s not so easy to turn down an offer. We didn’t even ask for the amount when a US player bidded for Netvibes.”
Someone in the audience: “Do you think an Internet industry European champion will emerge one day? eBay, Yahoo!, Google, Amazon are all Americans. And Skype was bought back by eBay.”
Marc Simoncini: “We need to work on 2 major points in Europe: lower the barriers, for instance taxation in France is high, and make sure we have enough business angels and VCs to finance the best people. But then, there’s something magical about the Internet: Wikio is a young company, but it is a worldwide company! All you need to reach the US mass market is a cable.”
Pierre Chappaz: “Most VCs are not doing a good job. If you want to be a bad VC, invest for a 3 to 5 years period of time. But if want an example of great VCs, look West: in the US, the VCs who had invested in Google and Yahoo! only exited at IPO time. In Europe, we’re far away. VCs should focus on long-term value creation in an industrial adventure.”
Marc Simoncini: “One last thing. Believe in what you do, believe in you. Everything’s possible. The French mentalities have been evolving positively, and I feel all the more enthousiastic about my job.”
Maurice Khawam: “I’m the Chairman of the IE-Club and partner at NexTFund Capital. Thanks to everyone for coming. I’m glad to notice for instance that it’s the third time representatives from PriceMinister actively attend an IE-Club event. The IE-Club is about people and ideas. We’re a non-profit organization willing at creating a proper government-companies-people-money ecosystem for dynamic SMEs and start-ups. I’d like to point out 4 topics we’ll soon discuss, at soon-to-come events:
- Asia. Sure, it’s a challenge. But we shouldn’t believe we’ve lost before playing the game. In May 2007, we’ll organize something about India and the way French SMEs should enter that market;
- R&D in France;
- The future of the EU. We should think EU from scratch, France is too small to grow big fast.
- How SMEs should interact with MNCs. We’ve got so many innovating SMEs in France…It’s a pity that so few become leading MNCs.”
I got to meet very cool people during the ending cocktail: I’m glad I met Bertrand Lazare from coaching and consulting firm Operaction (who told me about an Internet neighborhood community I fell in love with: peuplade.fr), who shared his interesting opinion about technology; Benjamin Gauthey – a young Microsoftee and blogger (a blog both about software development and Microsoft products) and Tariq Krim, who is a very laid back person, both confident in the future and very humble at the same time. Perhaps two qualities entrepreneurs need to work on more in order to be successful.
My call about the IE-Club event at Microsoft France’s Paris office:
Julien Codorniou had written on his blog (in French) that students like me would learn more about business in one single event than in 3 years of business school studies. This is obviously wrong (and I’m sure Julien knows it): studies and attending such meetings to get to see how things are in the real life are both necessary. Whilst listening to all these successful entrepreneurs of yesterday, today and tomorrow, I couldn’t help, as written in a precedent post, to feel some sort of pride for France and Europe. At last, we made it: we’ve got great, driven entrepreneurs; VCs have cash available to invest; and we’re working hard to get better and better through the transmission of these values. This latter point was the raison d’être of the event. And the event was a big success.
Believe it or not, the world is to hear more and more of the Greater Paris Silicon Valley…France is back, I’m telling you. Things are today very different from what they used to be. Ironically enough, France was criticized today at the World Economic Forum in Davos, Switzerland, for lacking innovation and productivity drive.
Addendum: two more good blogs, Marc Simoncini’s (new in the blogosphere) and Pierre Chappaz’s.
Related posts:
- An amazing IE-Club event at Microsoft France's business center in Paris – France strikes back!
- Tomorrow night at Microsoft's Paris office for a symposium on "Tomorrow's Stars", meet me there
- Lessons from Microsoft's acquisition of ScreenTonic
- Microsoft IDEAS software startups web 2.0-style
- Study Trip to Silicon Valley / San Francisco
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Many thanks Jeremy for this note. And many thanks for the time and thoughts we shared last Tuesday together.
I don’t know if you’ve seen this, but the Journal du Net has captured on camera two of tomorrow’s most talented entrepreneurs, check it out! http://www.journaldunet.com/reportages/06/0609-ieclub/11.shtml
Ok sorry but it was just amazing to find this.
Keep blogging!
Nice report Jeremy,
You’re right, things are happening here in France. Particularly with companies like Miyowa growing so fast and making >90% of their revenue outside France. It’s just the new reality of this “flat world” where business are run. You can’t anymore build a fast growing business, at least in technology space, without becoming international very fast.
Olivier
Hadrien> Have a deeper look at my post: I had already included that link.
Olivier> I believe you’re right. But I wouldn’t totally agree since going international fast doesn’t apply to all sorts of businesses. Look at PriceMinister: they’ve been operating for 6 years and are opening their first subsidiary abroad (in Spain) at the moment. PriceMinister needed to consolidate its customer base in France against the fierce competition of, for instance, eBay before spending resources to develop outside markets.
The ‘go international from the start’ rule seems to apply perfectly to extremely technology-intensive companies, a groupe to which Miyowa definitely belongs.
An excellent job… as usual.
I love the second sentence which is deeply true.
Belle retranscription de ce bon moment
Bravo
GFA, M. Lazare> Thank you. M. Lazare, I love your blog. It is quite a pity that you blog in French only since I’m sure its main topic (IndiAlley, a pretty telling name) would be of interest to many.
Nice report Jeremy, long and detailled. A propos, you say “france is back”. Have you seen the last article from Guy Kawasaki about France ? Some people do not agree with you and serve again old ideas… http://blog.guykawasaki.com/2006/10/top_ten_quotes_.html
Well France was never gone, as far as innovation is concerned. They have many years of funding their national champions to thank for that. But as far as entrepreneurship is concerned… this BW article is not exactly positive.
Vince, I wrote that:
1) there is currently a generation of great people, willing to ‘entreprenendre’; they’ve done it successfully during the hype, they are the ‘fittest’, as Darwin would put it.
2) France doesn’t lack funding anymore. VCs are actually competing hard to invest in the best breed.
3) Mentalities have changed: entrepreneurs have been considered as crooks for a long time. Today, entrepreneurs are not called heroes (yet?), but the French society is keener on clapping at people who take risks.
As far is the government and public policy is concerned, I totally agree with you: apart from cosmetic measures like this Gazelle labeling thing, French politicians ignore the economic future of France, which lies in its ability to help the best companies grow international. The taxation system doesn’t encourage the wealthiest (more likely to invest as business angels) to remain in France, nobody takes the pain to teach the people about the opportunities lying in setting up one’s own venture, etc. It’s a shame that the people less active when it comes to entrepreneurship in a country are actually its governing ‘elite’, as they call themselves.
[...] I recently told you how bullish I was when taking a look at the entrepreneurial landscape in France: great people, great technologies, cash available for new venture initiatives, international ambitions, and so on and so forth. [...]