As is usual when I take a long break from writing, my blog posts end up becoming insanely long. Take it as you will, but I’ve tried to make it as coherent a post as possible. P.S. this is a post written under de cover of my “leave of absence,” which means I still write, but less frequently. – - Vincent.

A good friend of mine, Zihni Ozdil from the Netherlands / Turkey, Historian Extraordinaire, is now publishing his wisdom online. If history, politics, and culture (“beyond the superficial”) is something you find interesting, I encourage you to check it out. On his site, I found an article entitled ‘the real Evil Empire,’ which, ignoring the provocative title, deals with the interesting topic of the cold war and the ‘demonification’ of Russia and communism at that time.

Yesterday, I had an interesting discussion with some Canadian Swedes that moved to Florida with their kids and had trouble finding a school. The only way, it seemed, to guarantee that their kid ended up in a good one is to have an A-class school in your district (which you can find via a website that profiles attendees according to race and economic background… wow…) and to have paid your electricity bills. It worked out well for them, but clearly suggests the underlying problem of a long-term selection bias.

Last night, meeting the Canadian Swedes, where I was also in the company of a Russian and a Japanese, I noted that it was strange that while both Russia and Japan, being superpowers in their own right, have infamously challenging education systems, which result in some pretty smart people graduating from either country, the US does not seem to follow that pattern, at least not at the high school level, and certainly not across all demographics. Yet, by all accounts, the US is a superpower, if not the superpower of this and the last century.

My post today is not about comparing countries’ education systems, it’s more about the strategic purpose of education. Many people don’t know this about me, but I don’t vote and I don’t generally care about (regional) politics. To me, our planet should be one country, where anyone can move and work anywhere, and services don’t have to be moved just because you physically moved  XX km/miles to another country. But I do recognise the power of competition and how that can lead to excellence. Versus a ‘group think’-like mediocrity where everyone just tries to be like everyone else and no one exceeds. So, in a way, I endorse a system of divided regions, because I think it leads to competition and thus excellence.

Education plays a strong role on the competitive advantage of nations, as it does in certain companies. Last year, applying to a lot of consultancy companies and working as one myself, I was struck at the importance that the accumulation of knowledge plays in this industry. If I were to start my own consultancy, continuous education of the staff would most certainly be a cornerstone of the business strategy, because knowledge is your product as a consultant.

I know that this thinking plays a strong part in government circles as well: how to make your/our country as strong as possible, not (just) in military terms, but in the sense of knowledge, mostly measured by the no. of graduates and the no. of patents that are published every year (as well the commercialisation thereof, which doesn’t go quite as smoothly).

I know that the no. of graduates coming out of Chinese universities is tremendous, and the no. of patents coming out of US ones is among the highest in the world also. So clearly, the US, superpower extraordinaire, is doing something right. I don’t however entirely understand why the primary/secondary school system is so abysmal then in the US. My only explanation is that, in academic circles, there are no national boundaries, and a Russian researcher can just as well (if not better) produce patents in the US as anywhere else.

There are other dimensions to the US superpower status as well, of course. It’s a military superpower, it is a cultural superpower (in terms of films, music, and literature), it has a large consumer-base. These three dimensions—safety through military strength, an easily adopted culture, a consumer’s paradise—also have the effect that they serve as an attraction point for outside academic or other talent. And while other countries may have strong educational bases, the other aspects are perhaps ignored just a little too much, still making the US a prime export location for knowlegde.

In the strategic literature, there is the concept of the resource-based view, which stipulates that company strategies are nothing more than a collection of resources, some of which are internalised and some that are not. I think that in the context of the US and education, the resources that must be internalised are those that lead to the commercial exploitation of technological advantage, which sounds abstract, but basically means making sure that the best technology/knowledge is produced in-house and generates economic benefits in-house as well.

But there other resources that must most certainly not be held onto in-house. These include standards, which facilitate the assimilation of knowledge. In education, the standards that we use are the bachelor-master-phd system, which can easily be studied in different combinations and locations. And text-books, which as many students know, are often from US-origins.

In many ways, the cultural exports from the US—movies, music, literature—are nothing more than the spreading of a standard, that of a language and a way of thinking, which makes assimilation of outside talent easier. And as long as that outside talent is used for the benefit of the US, in the form of patent exploitation, the US benefits, even if their own primary/secondary education system is quite uneven.

As mentioned, I don’t care about politics, country-differences, or governments. But if my logic is correct, I wonder if a metaphor exists for commercial superpowers, i.e. companies that are market leaders and remain so by attracting the greatest talent and finding ways to turn that into economic benefits.

Organisations are not complete economies like governments are and also have the benefit of being mobile—by law they are considered single persons, which have residence, pay taxes, etc. just like everyone else. So, as long as they obey the law, they can choose where they stay and choose to ignore local conditions, much like, I theorise, some governments do, instead focussing on the bottom-line: attracting excellence and turning that into profit, while keeping ‘unnecessary’ expenses as low as possible. Well, at least that is the stereotype of an organisation, while pressures have certainly lead some to adopt a more socially-responsible attitude.

Clearly, the question of talent, whether attracting or training it, remains a vital one for both countries and organisations. But I don’t think there is necessarily a correlation between talent and local conditions.. at all.. though local conditions do play a part in the quality of life, or lack thereof, which affects the talent’s in question desire for a certain location.

Vincent out.

(Picture courtesy of thehindubusinessline.com)

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Where does most radical innovation come from? Where, as an individual, can you expect to get plenty of access to that type of information? If your answer isn’t universities, please let me know!

As promised, I’ll be focussing more on innovation on Tech IT Easy these coming months, and you can be sure that my search for content will focus on universities and other institutes, rather than the internet.

It’ll be interesting challenge for sure, particularly as I’ll be reading a whole bunch of dry scholarly articles and dissertations, as well as tracking down interesting organisations for interviews, to hopefully produce something of value for you and me.

As I’ve asked before, if you have interesting ideas for content of this nature, or even want an interview, article, or thesis (summary) of your own to be published here, please drop a comment or mail!

Bookmark this site for more info!
Vincent

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I usually don’t ’steal’ posts from others -especially without adding any value-adding comment, but I couldn’t help sharing this one – found on Richard’s blog thanks to Twitter (follow him). Here’s a very inspiring slideshow by Index Ventures VC & founder of Open Coffee Saul Klein:

[slideshare id=58242&doc=nextweb2007-saul-1518&w=425]

The slideshow speaks for itself, doesn’t it? And even if you don’t chose to become an entrepreneur yourself at this very moment, in Europe or elsewhere, my take is that you should join an early-stage startup. Let me tell you a quick story about this.

The first time I thought of leaving MS to start a startup (a thought that never occurred again, believe it or not, before I actually walked out to either join another company or take the big plunge), I hadn’t even joined Microsoft. I was at Capital IT, a major VC forum in Paris, as a Microsoftee although I was due to join the company a few days later. There I met, for the first and last time so far, Pascal Mercier, a French fundraiser whose firm Aelios Finance is pretty successful at matching the best entrepreneurs and smart money (to my knowledge both angels & VCs). I was introduced as a recent graduate and the second we met, Pascal Mercier asked: “Why didn’t you choose to join a startup rather?”. The best answer I found was: “but I do work for startups!” Which I thought was true since 1) MS is just a damn successful startup (you would be surprised to see the easy-going startup atmosphere within the company); 2) I was part of the team that took care of emerging ISVs in France. Acknowledging reason #2 only I guess, Pascal nodded and we parted ways. I later realized though that working for startups, and working in a startup, are clearly two different things. When you represent Microsoft, you may call whoever you want and the door will be opened the next day. Your brand power is so strong that at the end of the day, you never know whether you achieved great things because you’re damn so good, or because your company is so powerful in its industry. As an entrepreneur, and I’ve been facing this issue already, you need to fight like a pitbull to get passed through the right person on the phone, and fight again to get an appointment. I should also mention that you’ll need to deliver the best pitch of your life, after waiting for an hour in the lobby without even being served a cup of coffee, to actually get to the point where you may pretend to try and sell your solution. This struggle for survival is real life and that makes entrepreneurs fully accountable for their success or failure.

The same rationale goes for early-stage startups, without a brand name yet: life will be tougher for sure than if you worked for a big name, but the impact you can have on such companies is huge (eg double revenues in 6 months, etc. something unachievable in an 85K-strong corporation like Microsoft – or even at Google, a 20K-strong company & definitely not a startup anymore). Whether you want to be an entrepreneur or join a larger group later in your career (or both), an unknown and yet ambitious startup is where you should start your career to acquire the right survival toolkit. By the way, did I mention the stock option plan?

My two cents…

Addendum 11am: check out comment #3 to discover how to spot startups that will pay you better than large corporations and resign from consulting, banking and Fortune 500 companies to join them!

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 In chess, a gambetto – say it with an Italian accent, consists in sacrificing a piece at the beginning of a game to gain a competitive position on the exchequer – for example through the control of the center of the chessboard or one of the long diagonals.

Getting back to business (we’ll get back to the gambetto later), it is very common to say that the state of an economy is reflected by the strength of its currency when the Euro currency is weak – and hence that the economy of the EU are in poor shape. However, when the Euro gets stronger, companies and officials claim that corporations are constrained in their efforts to export goods and services and that the situation should be reversed or the EU will soon enter an economic turmoil.

I think this is all too easy and bullshit.

God Dollar used to be the only viable currency in international trade, until the Euro came out of nowhere in January 2000 (2001 for actual pocket coins and bills). The European Union is the world’s largest consumer market, and a gateway to the Middle East and Africa for American companies. Although the Dollar still dominates international transactions of goods (slightly) and financial transactions (easily), the Euro has emerged as a tangible alternative considering the political stability of the region.

Consequently, the Euro vs. US Dollar exchange rate has kept growing insanely from 1 EUR = USD 0.85 in mid 2000 (1 EUR = 1.19 USD on January 1st 2000) to 1 EURO = USD 1.47 USD today. Althoug I acknowledge the trickiness of the situation for export businesses, high tech or not, I see very few corporations have implemented hedging strategies or make proper use of forward contracts – which is a shame. Still, instead of lamenting, I believe economic decision makers of both the US and the EU should roll up their sleeves and act in such a way (hell yeah I’m even givin’ lessons now, love blogging…):

For US High Tech companies: go for internationalization. Acquiring hardware, software, telco devices, consumer electronics and services labeled in USD has never been cheaper. So why wait? I’m pretty sure any potential buyer would understand this reasoning. A weak USD is a fantastic opportunity for American exporters to thrive abroad, and win strategic, long-term projects. It doesn’t matter whether the profitability of these projects is low: what matters is to build reputation on new markets, or to highlight your competitive advantage against local players. Remember, the gambetto? Be ready to sacrifice a few cents today (anyways, the dollar rates so low that it’s no big loss whatsoever) to be in the real race when that moment comes.

For European high tech ventures: shop for intellectual property and talents in the US since the Euro has never been so strong against the US Dollar – which will make acquiring quality companies cheap, and build production capability in China and India (or go and get cheap but excellent developers in Eastern Europe, before the Euro comes there, or Israel) to reduce the cost of goods sold, enhance their competitiveness and therefore be ready for a shift during harsher economic times or win back market share on their competitors’ behalf. EU corporations, especially the big ones, find it hard to tear the P&L from the balance sheet and should learn to make better investments. Remember when the VCs said that few large European high tech corporations had a real, sound external growth strategy? Even though making the quarter may seem tough because of a strong Euro, acquiring today technologies that will generate tomorrow’s revenues boils down to ’sacrificing’ a small slice of the pie to weaken the competition, and build a better product offer for tomorrow. Gambetto again.

Now waiting for the Chinese Yuan to offer a third way…

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In response to Ouriel who claims he found the best jazz piano – voice extract ever, here’s Tuck & Patti (I saw them live in Paris @ Vincennes floral park in 2006, and they’re just amazing) performing a jazzy medley of bluesy Jimmy Hendrix’s Castle Made of Sand and Little Wing. This is probably the best guitar – voice duo I’ve ever heard. While I’m flying away on vacations, with no access to emails for 2 weeks, enjoy!

[youtube=http://youtube.com/watch?v=M56QwDjE6PQ]

Bonus on the house for those who like soul music: Feel like making love, by D’Angelo. Nothing to do wih duos.

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This another part in the saga of my thoughts on ‘Grinding it out‘, an account of Mcdonalds, written by Ray Kroc. I’m about 3/4 into the 210-page book. Let me start with a disclaimer: ‘Grinding it out’ is a book written to promote the McDonalds way and aimed at motivating existing staff and operators, as well as attracting new blood of course. I feel like I should tell this to any person thinking about reading the book, because I don’t want to write or promote an informercial on McDonalds. Let me also say that I’m a vegetarian since a few years ago and my opinion of McDonalds is somewhat flavoured – I respect the business but I only eat there once a year.

That said, it’s not a bad book at all. In it, you will learn what made McDonalds great and much of what made Ray Kroc great. I wrote a little about him a few days ago – a blue-collar worker, who excelled in sales and at smelling opportunities. He was an operations-freak, planning out every step from the potato to the french frie or from the cow to the burger, and from the food to customers’ mouths. But it all started with location-location-location, planting a restaurant in the right spot, attracting the talent to run it, and promoting the McDonalds way. This book is a perfect example of that.

McDonalds is a complicated business, wrapped up in a simple package. Many people eating at McDonalds think the restaurant is owned by the company and all the staff works for them too. They may even think that McDonalds has farms growing potatoes and herding milkshake-cows, I’m not sure. But it’s not like that. At the time the book was published (the last edition in 1992), the company owned less than 30% of the restaurants around the world, and I’m sure it’s around the 20% mark or less today. The rest is composed of franchises, owned by independent operators, who, like entrepreneurs, have to turn an empty building and a name into a thriving ecosystem.

But the advantage of being a franchisee, especially a McDonalds-one, is that you are not really alone. Sure, you invest a considerable amount of cash into the venture and you bear most of the risk, but when you sign up for a franchise, you get working experience at a running McDonalds-restaurant, training at McDonalds-university, also for your staff, and the purchasing- and marketing-power that makes McDonalds great.

Something about purchasing-power. The last book I read on McDo was in the form of ‘Fast Food Nation‘, a drastically different view of the company. If ‘Grinding it out’ is a picture of heaven, this book presents it as hell. Some of the criticisms in that book were about the way that food was artificially flavoured to make better smelling food (I forgot how that was bad), and on how the power of McDonalds both lead to lower wages in America and the destruction of the farmer. On that last point, I think that’s probably right, then again, whether there is still space for the traditional farmer is another discussion all together. McDonalds has a lot of purchasing power, it has deep and privileged relationship with its suppliers, which result in cheaper and (hopefully) better food. This translates into an easier experience for the franchisee.

From my reading, I think there are following sub-groups in the McDonalds-umbrella, which make up the ecosystem. These are: the corporation, which runs marketing (think Ronald McDonalds), decides on real-estate locations, and maintains some (not all) of the relationships with suppliers. Then there is McDonalds University, which trains operators and staff to maintain a smooth operation and to always keep smiling. There are the suppliers, which are located all over the world. There are the franchisees. And there are the customers. In one package it a near-perfect picture of the American global capitalist system.

Well what do you know, Jeremy is a Microsoft-head, and I’m turning into Mcdonalds-one. One of several keys to franchising, I learned in a course I did with Jeremy, is to make every step so explicit, that you can write a manual about it an other people can follow it. This book is an example of evangelising a business-idea. And it’s great at that. Perhaps more to follow as I read the last pages of the book. All opinions on McDonalds aside, franchising is a great and easy way to get into running your own business, and a great way for your business to grow big.

Vincent is a co-author on Tech IT Easy. You can find out more about him on this blog’s initial announcement or on his blog. He enjoys a (fish-)burger and a milkshake about once a year. Ps. I’ll be leaving for a holiday in a few hours, so any responses to comments will be delayed by a few days.

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Tech IT Easy is dead, long live Tech IT Easy!

Today is our Independence Day: this blog is now fully accessible through www.techiteasy.org. All existing jeremyfain.wordpress.com/something trackbacks are automatically redirected to www.techiteasy.org/something. Our search engine referencing might suffer for a couple weeks, but since I noticed we have quite a captive audience (people coming back every single day are very, very numerous – like 600 / 900), it’s not going to get too bad.

Step by step, you will see my personal references (Flickr feed, CartoReso maybe, Developer Pages, Del.icio.us, blogroll) vanish to leave the Tech IT Easy community do what it has to do with this very blog.

When I find some time (most probably in July or August), the template will evolve and integrate external widgets.

Back to the Tech IT Easy vision:

A community blog where professionals passionate about technology (software, web, consumer electronics, eCommerce, media, hardware, robotics, telecommunications, computer networking – from both market & technology view points) share their thoughts and analyses with the world. The only rule that applies to all contributors is that there should be no rule whatsoever: no control, no hassle, no constraint. Once you’re in the community, you’re there forever unless you decide to leave it. The idea is not to go after TechCrunch, TechMeme, GigaOM, VentureBeat, Read/Write Web and their likes: rather than information, we deliver original content deeply rooted in the background of the authors. To say the least, we should complement existing tech information blogs rather than compete with them. On top of that, we are all amateurs and none of us blogging full-time, this should position us in quite a different way. Last but not least, we enjoy answering valuable comments and emails: one thing we all share is our willingness to stay close to our readers.

PS: just opened my personal blog in French, named Jeremy Fain in French. Accessible right here. I’ll be testing a new open source platform, after Wordpress for Tech IT Easy: DotClear2.

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Yesterday, while browsing Facebook, I decided to test my market traction: I turned my availability details from “in a a relationship” to “single”. Just to check. I was far from imagining that it would put me back in the poker game so quickly.

Today, although I hardly checked my personal emails and mobile voice mail, I received no less than:

• 9 friends left me voice messages
• 1 actually reached me at lunch time
• 2 left me text messages
• 2 friends of my girlfriend tried to reach me but left no message
• my sister sent me a text message and called me to see what was going on
• 3 of my girlfriend’s friends sent me private messages on Facebook (2 had actually guessed I was kidding)
• 1 friend sent me a wall message on Facebook
• at least 15 people tried to reach me via instant messengers (MSN & Skype)
• 7 emails or private Facebook messages from girls I had met maybe once and had hardly spoken to since then or haven’t spoken to in years – that’s my favorite bit. That’s very reassuring: thank you, I just don’t deserve it. I understanding why dating websites cash in so much money: the dating market is hot! Women are like vultures (actually, Paris is piece of cake compared to Tel Aviv or New York).

Now that I think about it, I wish I had planned this all with telco service providers. Getting a commission would have definitely helped me being able to afford these Paris Opera tickets I’m dying to buy for my girlfriend & I for the next time she is in Paris.

When all’s said and done and to get back to the core business of Tech IT Easy rather than personal considerations, Facebook looks to me as an impressive self mass media. By the way, can you think of a way for startups other than human beings to test their market traction in such an easy way?

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” Message from Jeremy : For those new to Tech IT Easy, who could obviously not remember the initial announcement, I have invited my friend and fellow Alexandre Lucas to help me try to provide you, dear readership, with everyday better analyses on software, telecom & Internet trends. Alex’s mission statement is basically to go further into the details, from both a financial and a strategic angle. Alex, the floor is yours…”

 Invited by Jeremy, I recently went to the SME Day organised by Microsoft in Brussels. Being a novice in the field of new technologies, i was impressed by the organisation and the atmosphere and tried to grasp the opportunity to network and take hold of some interesting ideas. Here is a quick overview of these two days spent at an event intimately tied to Microsoft’s “Ecosystem”:

1. Meeting with the entrepreneurs was probably the greatest pleasure. I was mostly impressed byPierre-Antoine Durgeat and Gilles Barbier of TellMeWhere ( wait for it to wait) and had a great talk with Aymeric Mollet of Excentive, both sponsored by Microsoft and looking forward to raise funds. With TellMeWhere, i will be at last able to found my own global network of fans of sushi restaurants and always know where they are thanks to a great map system! This website, a sort of a mix of Wikipedia and Mappy, just blew my out. Excentive was quite impressive for one who studied business and works in an investment bank. It offers an HR solution to corporates to manage complex variable remuneration packages. Apparently, the solution is fully compatible with other HR solutions and is a leader its niche.

 2. I met some Venture Capitalists, a dominant species at the forum, and must admit that their company was rather pleasant. Jeremy introduced me to Said Sebti from Ventech, Nicolas Celier from Alven Capital and Michel de Lempdes of Credit Agricole PE. They all insisted on the lack of interesting investing opportunities, either in the field of software or hardware. Being a banker, i inquired whether there were opportunities for potential IPOs and advisory on trade-sales. Interestingly, there appears to be some possibilities for larger investment banks with IPOs but only when the market capitalisation is above €200m, which allows a >€50m float.

3. Craig Mundie, Microsoft’s Chief of (Long Term) Strategy, explained that the challenge for the computer world will be in mastering ‘ManyCore’ processors over the next 5-10 years. From his point of view, the hardware solution exists but the software means to effectively transform processing power into powerful applications remains unsolved. According to him, the founders of a solutions which allows to use multi-core processors will be the stars of tomorrow. It would be great to have the opinion of the TechITEasy community on the question, and especially on what i think to be the key element in this field : patents & Microsft’s interest in developing such a solution or helping its players of its ecosystem to do it.

4. A presentation made by, Roger Franklin a research fellow of Library House on Venture Capital in Europe put forward an interesting idea. Trying the explain the lack of fruitfull innovation in Europe, Dr. Franklin pointed at a lack of capital for ’seed’ financing in Europe, which prevent structured projects to even reach first round financing stage. In fact, Europe doesn’t lack of capital, at least when the need is assessed at first round of financing. Again, the debate which this statement created was to see whether state intervention could be a solution, making grants available for entrepreneurs to explore their ideas and formalise the project for further financing. The study shows that Israel and the US, the most successful countries in terms of innovation, have implemented a structured public policy to do so. Tax incentives as a solution to this problem have been also mentionned by a panel member. Again, some reactions are welcome on this.

As a conclusion, I hope that Microsoft will continue cultivating its Ecosystem in the future, and that i will be invited next year!

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I found through Cyril Attias’s blog (in French) a funny website named MyHeritage. MyHeritage has a buzz feature named MyHeritage Face Recognition, that tells you which celebrities looks like you most.

As far as I’m concerned, I’m not especially proud of the results – except for Dudi Balsar, an Israeli lawyer and model that according to what my search engine tells me, often finds himself elected the sexiest man in Israel. Just like I do on a regular basis in France.

Anyways, leaving aside my own results, I found you might find funny to give MyHeritage Face Recognition a try. It’s all here.

Going back to more serious issues, I admire these companies who find ways to attract bloggers and generate a buzz through building nice little apps: Microsoft built PopFly to create mash ups in a sec, IBM built Development Engagement Service (the name really sucks though), Criteo built the Autoroll and made it quickly on the consumer market despite a DNA anchored in enterprises, U.[Lik] built an amazing widget that may easily plug onto your blog and show your virtual library, etc.

Can you think of companies that owe a good deal of their success to initially non-core business gadgets, widgets, plug ins & features?

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I’m very impressed with what IBM Research Lab based in Haifa, Israel, just came out with: an Ajax-powered web app that allows non developers to build form services.

I’ve been playing with IBM Development Engagement Service (lousy name though) and indeed, built in 3 simple & natural steps:

1. Name your application and describe it (max. 3 minutes)
2. Create a form definition (max. 45 minutes)
3. Publish the newly created application (max. 2 minutes)

Even dummies are able to publish web forms in less than an hour.

Remember, I was talking a few days ago about PopFly – a killer web app made by Microsoft to empower non developers with a tool to help them devise their own mash ups.

Now it’s IBM’s turn. And I can assure you one can tell the elephant can dance indeed. To give IBM DevEngage a go – which I highly recommend, click here.

It’s late and I’m too tired to write a short analysis about software giants (IBM is second to Microsoft on the software market) putting on efforts to become more agile against the new competition from the web (mainly Web 2.0 consumer apps & enterprise SaaS). But I’m sure you’ll do it in the comment section of this post. Enjoy the discussion!

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I had recently posted a few excerpts of an interview, given at a venture capital event in Paris, of Bernard Charlès, the CEO of Dassault Systèmes. This time this post is about Dassault Systèmes, a world leader in product life cycle management (PLM) solutions aimed soon to turn to B-to-C 3D environments.

An public company listed (Euronext), Dassault Systèmes is a spin off of jet manufacturer Dassault Aviation – born after a bunch of people decided to market outside the company the CAO software they had devised for internal purpose. 60% of Dassault Systèmes is owned by a number of historical, managerial & institutional investors. Thanks to its locked capital structure, Dassault Systèmes engineers don’t get disturbed by M&A rumors such as Business Objects software guys, which helps the management (Charles Edelstenne, a chartered accountant and significant shareholder, as a President & Bernard Charlès as an executive director) execute their very conservative and yet aggressive acquisition strategy (DS is hot on acquiring strategic targets; e.g. SolidWorks in 1997, MatrixOne in 2006, etc.).

DS competitors include AutoDesk, PTC, SofTech, EDS-PLM Solutions, MSC Software, Aras Corp, Arena Solutions, Agile Software Corporation & Unigraphics on a fast, 2-digit growing but yet cyclical market. Indeed, in case of an economic downturn, R&D budgets are likely to be cut first (which I think is dumb, but what can I do about it?). And since PLM is aimed at R&D departments…

Dassault Systèmes is truly international software company: 60% of its revenues are generated in Asia & the Americas. Unlike a majority of software publishers who prefer to keep product development centralized at corporate headquarters (such as Microsoft does), Dassault Systèmes has R&D centers spread all over the world (France, USA, India, Israel, etc.) – which I think is good in the business of technology: it fosters competition, diversity, creativity & innovation.

Dassault Systèmes has one of the best software development teams worldwide: their people are highly knowledgeable in a number of areas such as C++ programming, 3-D modeling & mathematics, industrialization processes, & mechanical engineering. Oddly enough, and although Dassault Systèmes isn’t famous for paying software developers so well (compensated by a highly technical culture within the company & a number of perks such as preferred shares, no work on week ends, etc.), staff turnover is extremely low. Headhunters spend a lot of time trying to recruit these high flyers for their software clients, but it’s no piece of cake: Dassault Systèmes’ technology is cutting-edge in the industry. DS engineers know too well about their technological competitive advantage and are, as far as I know, usually proud of their company.

DS’s product portfolio include 5 brands: CATIA, DELMIA, SIMULIA, SolidWorks & ENOVIA. Each one of these address specific market segments & functional needs. See for yourself: product engineering for CATIA, life cycle management & product data for ENOVIA, manufacturing process simulation for DELMIA, physical phenomena simulation for SIMULIA, etc.. In total, DS’s 5 brands have been packaged into 400 different products!

Dassault Systèmes’ 90,000 clients include Boeing, Embraer, Airbus Industries, Toyota, Smoby, Essilor, Nordica, and, this is pretty new, a number of pharmaceutical companies. One of Dassault Systèmes’ major upcoming challenge, considering the sector diversity of its clients, will be to integrate its clients’ know-how into DS products.

When it comes to distribution & integration, DS rests on a vast ecosystem of local VAD and global partners. The most noticeable of these partners being IBM: Dassault Systèmes & IBM Software Group have been working together for more than 25 years. The latter is responsible for marketing & deploying the solution to Fortune 500 corporate accounts – which enables DS to focus on its core business: crème-de-la-crème product development.

A few figures now: DS is to generate US$ 1.5 bn of revenues this year, representing a US$ 6.5bn market cap. Its business model is one of the most profitable in the entire software industry, with gross margins reaching 48%. DS employs 7000 people, amongst which 3000 are R&D engineers (1,700 of them are located just outside Paris, in Suresnes).

Let’s add to it some corporate bullshit: DS’s vision is that “3D opens the door to the world we imagine“, and its mission is to “enable people to create innovative products & experience the whole life cycle to build a better environment for the future“.

Last but not least, Dassault Systèmes has always led market trends: I take the company’s ability to drive strategic shifts successfully very seriously. Check this out: in the 1970s, DS was in 2D CAD; it turned to 3D CAD in 1985. It turned to process modeling in 1995, and packaged the whole thing into PLM solutions in early 2000. Now the company’s been focusing on integrating more client knowledge into its products. Its roadmap include turning to realistic simulation and 3D collaborative tools at the 2010 horizon.

Dassault Systèmes has always operated in the B-to-B market, leaving a share of the pie to its value-added resellers. At Capital IT in Paris recently, CEO Bernard Charlès announced Dassault Systèmes was to turn in the short term to the consumer market. In Bernard Charlès own words, DS is to come out very soon not with a Second Life-like, but with a “First Life”. The underlying rationale of this strategy being to provide a tri-dimensional environment to everyone. Turning to B-to-C is so exciting! Considering the tradition of the company to deliver top quality products, I hardly see any market adoption risk.

Needless to say, I purchased 50 Dassault Systèmes shares @ a EUR 40.55 price each, after running the company numbers thoroughly. I’m confident on the company’s long term potential, and I’m holding the stock until it reaches EUR 65 – which according to my financial forecast & crash test should occur within a 24 months time line.

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Unlike in the software industry, 0-default in terms of integration is the quality standard of aeronautic giants Airbus, Boeing, Dassault, Cessna and Embraer.

It takes thousands of suppliers to manufacture a plane. And guess what? Suppliers don’t immediately get paid for their work. Airbus, for instance, has built risk sharing partnerships with all its suppliers to reduce its working capital and enhance interest alignment.

But what is a risk sharing partnership? Basically, for each plane sold to an airline company, the supplier gets a percentage of the revenues corresponding to the relative value in complexity and workload it has put into the project. As an example, Messier Bugatti wouldn’t get paid when it ships carbon brakes, but would receive x% of all revenues derived from Airbus using Messier Bugatti’s aeronautical braking systems – x most probably being the result of both a negotiation and a cost breakdown analysis.

When it comes to hacking code, it seems so many complains about offshore development quality that it’s the responsibility of both software module suppliers and their clients (quality’s usually good when the client know what it takes to manage a project) to define new business models to align interests of all parties involved in information system projects. For instance: fee per SQL request, percentage of each transaction, percentage of each sale in B-to-B markets, etc. I don’t abide anymore by the paid-per-man/day dogma: it lacks the handcuffs to help invisible contractors turn into business partners.

In my opinion, risk sharing partnerships represent an elegant solution to the drawbacks of offshore development.

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Whilst taking a look at my Silicon Valley study trip announcement published a few days ago, Conor O’Neill from Web 2.0 Ireland, an excellent blog for those interested in the developments of technological start ups in Ireland, decided he too was ready to lead such an initiative if you people were willing to join (group likely to depart from Dublin). I guess this information is especially relevant for the many of you who came too late to register (about 25 people! I could’ve organized 3 trips of 20 people…).

For those of you interested, Conor’s post about an Irish Silicon Valley trip (as opposed to the French trip ) is right here.

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Kari (TeliaSonera) and I (Delta Airlines) have complained about these companies doing a very, very bad job at treating their customers well. Just for them to know: a company without a customer is a failed company. If there’s one thing entrepreneurs should do, even before cranking a decent product, it well is in showing respect for their customers. During my time at AFIDORA, a Paris-based MidEast geopolitics think tank (based on the idea that passion could be replaced by facts when dealing with conflicts in the Middle-East) I cofounded in 2002 and worked on growing until September 2006, an executive team member (could be myself or my partners Jeremy Ghez & Steve Danino, or other staff members) would systematically answer all requests (complains or praises) and try to solve problems ASAP. We used to pride ourselves on being very agile, respectful and reachable when dealing with ‘the outside world’: namely our customers (AFIDORA publishes geopolitics research papers on its website and organizes public debates and events).

All lessons given, I had a wonderful purchasing experience with a language learning software company based in Harrisonburg, VA: Rosetta Stone. Rosetta Stone, a product of Fairfield Language Technologies, is already a brand in the world of software-backed language learning: its client portfolio include the NASA & CIA, many Fortune 500 companies, etc. Plus it was elected fastest growing software company in Virginia and included by Deloitte in the Virginia Fast 50 index back in 2004. So one might think Rosetta Stone doesn’t care about generating one more sale from a single customer like me. Well, if I actually thought so, but they proved me wrong.

Upon ordering Hebrew language lessons Level 1 about 15 months ago (when I left Tel Aviv to move to New York City), I had incidentally asked whilst completing my purchase whether there would soon be a Hebrew language lessons Level 2 version (I had just spent 5 months in Israel and had found the trial lessons pretty easy to say the least). I got a personalized answer the next day: “we hadn’t actually thought about it yet, but that may be a good idea“. Well, at least they read and answer e-mails (and respect the time of the people who take time to write to them).

Pleased with their reactivity and happy about my purchase (Level 1 helped me consolidate in the short run what I had learnt, although I never had time to complete the full set of lessons), I received maybe 3 months ago (1 year after my suggestion) a marketing e-mail: “we’re pleased to announce the release of Hebrew language lessons Level 2; as an early adopter gift, you’re entitled to a 20% discount should you choose to proceed your purchase within 3 weeks”. Which I did!

Well, I have to admit that spending 6 months in the US, 3 months in Spain and being back to France for 4 months where I was studying information technology hard after spending 5 months in Israel had not helped my Hebrew skills at all, so I shall start with Level 1 right from the beginning rather than tackling Level 2. But I was so glad I had maybe contributed to this product launch that I purchased Level 2, although I’m sure not good enough in Hebrew anymore to follow it properly.

Anyways, 1 year between a customer suggestion and a product release makes it likely that my e-mail took part (if not initiated) of Rosetta Stone team’s decision-making process to start building or not a Hebrew language Level 2 package.

Frankly, I’m glad to see some companies actually listen to their customers out there in the jungle, and I’m ready to bet on such companies (as a stockholder, business partner, customer, employee, contractor, etc.): say Rosetta Stone goes public some day, I would for sure buy as much stock as I can, certain of their success in the long-run.

It’s the customers who make companies exist, not the other way around.

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