Five reasons that show that France does not have everything to gain from being a “start-up nation”

Formally, France has been a secular state since 1905. However a brand new cult that has appeared lately threatens this steadiness. It’s attracting increasingly more followers, even within the higher echelons of energy. Its followers use coded phrases – “pivot”, “disruptive”, ” enterprise angel »- and are present in temples with esoteric names – Station F, Numa. This faith is after all the ”
startups nation “, whose finest prophet is none aside from
Emmanuel Macron.

“I would like France to be a start-up nation, which works for and with start-ups, but in addition which thinks and strikes like a start-up” preached the pinnacle of state throughout his homily in June 2017 on the Vivatech present. It should be stated that a younger revolutionary firm, with robust progress potential (the essential definition of start-up), inevitably echoes the political journey of Emmanuel Macron.

Nonetheless, is celebrating “French Tech” – the French start-up motion – hoping to see the longer term Google or Amazon emerge there, is it reasonable? No, and it’s even harmful, primarily replies Michel Turin. In his new e book, “Begin-up Mania” *, the enterprise reporter warns of those that see start-ups as a brand new El Dorado. 20 minutes was in a position to learn the e book in preview and extracted 5 arguments that present why we should maintain a cool head within the face of the startup frenzy.

1. As a result of the atmosphere of start-ups typically resembles the Potemkin village

The expression “Potemkin village” designates a subterfuge geared toward concealing actuality. Amongst start-ups, this artwork can be practiced with nice care within the configuration of the premises. Michel Turin notes that they’ve their very own codes, midway between “the playground” (with desk soccer) and “the three-room-kitchen” imitating a kitsch condo.

Besides that behind the varnish, “bac + 5 recruited by start-ups typically discover themselves busy performing repetitive duties and with out a lot added worth,” writes the journalist. Worse, “the supposedly relaxed working environment and the supposedly heat open areas go the massive tablet of working situations close to slavery “. Nonetheless wish to play a recreation of desk soccer?

2. As a result of the “valley of loss of life” isn’t far-off

Within the jargon of start-ups, the “valley of loss of life” (Valley of Loss of life, in case you work in a start-up) signifies the second when the primary funds dedicated run out. At the moment, many start-ups, not but worthwhile, fail to persuade new traders
and are wiped off the map. Even when the accessible statistics are uncommon, the varied research put ahead by the creator point out a failure charge which oscillates between 70% and 90%.

Entrepreneurs ought to take it out on themselves: the e book cites the work carried out by CB Insights. The latter has studied the “causes of loss of life” of 100 start-ups, and says that “the absence of a market” is liable for 42% of “deaths”, forward of the shortage of cash (29%). “Fairly often, first-time entrepreneurs don’t grasp their topic,” says Michel Turin. They’re “rather more involved with looking for funding than with the necessity to answer a market want”.

three. As a result of start-ups have a really monolithic profile

The creativeness of the start-up means that anybody can begin a enterprise and make a fortune. Nothing could possibly be farther from the reality. A study by the conference of the grandes écoles reveals, for instance, that 79% of the founders of French start-ups current at CES 2016 in Las Vegas (the excessive mass for start-ups) had gone by a highschool.

One other examine from the French Tech Observatory dated 2017 revealed that 90% of start-ups were men. And lots of can rely on family members or well-to-do households to get began cheaply. “Begin-ups are usually not a social elevator”, asserts Michel Turin, who additionally recollects that girls who launch their tasks are sometimes victims of gender bias from French Tech traders.

four. As a result of they don’t enhance the economic system

By definition, start-ups typically have few staff (lower than a dozen). They’re typically a part of the digital sector, the place the “depth” of the workforce (the variety of staff wanted to provide) is low. Michel Turin quotes Patrick Artus, chief economist at Natixis: “The concept digital start-ups and jobs will wipe out unemployment is an phantasm.”

Equally, the e book recollects that the overall fundraising carried out by French start-ups in 2018 amounted to 3.2 billion euros. An quantity which will appear spectacular,
but which represents only 0.9% of new credits granted every year to all corporations.

5. As a result of they’re in a bubble that may burst

“When everybody goals of beginning a start-up, issues will quickly get dangerous,” warns Michel Turin. The financial journalist recollects that many start-ups accumulate colossal losses 12 months after 12 months, which may find yourself alerting traders. Uber thus misplaced a number of billion euros in 2019 and is barely concentrating on profitability in 2021. WeWork, specializing in shared workplaces, saw its valuation go from 47 to 8 billion in just a few months. “The query will not be whether or not it’s a bubble, explains the co-founder of a start-up interviewed within the e book, however whether or not it can final lengthy sufficient for me to surf on it.”

Begin-Up Mania, French Tech put to the check (In bookstores on February 5, 2020. Calmann-Levy, 18 euros).