Thoughts on Switzerland
European Straits #88
Dear all,
The feedback for the newsletter's new format has been all positive, so here we go again!
Thoughts on Switzerland
I spent the second half of last week in Switzerland, where I had the opportunity to talk about The Family and my book Hedge with various audiences in both Geneva and Zurich. Here are a few highlights:
My hosts in Switzerland are part of Temenos, a company specialized in providing software solutions to the banking sector. Ben Robinson and his team, among them Laura Kemp, Amal El Alami, and Dan Colceriu, are specifically working on developing the Temenos Marketplace, on which startups specialized in financial services can provide their solutions to Temenos’s corporate clients. I find it a sound strategy in the pursuit of staying relevant in a context of accelerating innovation. It’s for banking what Salesforce is for sales and Amazon Marketplace is for retail. It makes it possible for an established global provider to harness the power of 65+ new entrants (as of today) rather than competing with them. You can find more details here.
Most people that I met from the local startup community are focused on financial services. It’s clearly a Temenos bias, as Ben invited a lot of people with whom he's working as part of the company's marketplace strategy. It might also reflect the fact that we were in Switzerland: because the country as a whole is so specialized in finance, it makes sense that local entrepreneurs are interested in finance, too. What that will lead to is yet to be seen. Having powerful incumbents in a given industry can lead to two very different outcomes: it can make life difficult for startups, because incumbents resist innovation, just as it can make it easier if those incumbents are fostering innovation while also providing a local pool of talent.
In Switzerland’s case, I think the finance legacy is more an advantage than a problem for local entrepreneurs. One reason is because financial services is an industry already driven by technology, therefore you can expect even large players to be competing on that front. Another reason is that Switzerland has been loosening its famed banking secrecy since the financial crisis in 2008, which has deprived local players of their main competitive advantage, forcing them to reposition and seek new competitive advantages under the form of technology. From what I’ve sensed, there’s clearly a rush to explore new markets and new approaches that makes it particularly rewarding to be a FinTech entrepreneur in Switzerland.
I was especially interested in a segment described to me as “RegTech”, which means startups focused on making compliance easier. One example is Apiax, of which I met Andrew Campbell, a seasoned business developer. Apiax’s value proposition is to provide their customer in the financial services industry with advanced tools to master complex regulations, thus making “compliance lean and efficient again”. I’m glad I now have this example in mind, as it perfectly illustrates an idea first voiced by Marc Andreessen in this podcast: technology is so powerful now that software could swallow any rule and implement compliance right into any application, making it easy to satisfy local regulations in almost real-time and for a minimal cost.
Here are some pictures: at Spaces in Geneva, at Fongit (a leading Geneva-based startup incubator), at F10 in Zurich, and in the train between Geneva and Zurich. I'll share more about the Hedge-related discussions in the coming weeks.
Also, I’ll be back in Switzerland at some point in February 2019 to exchange more with my friends at the World Economic Forum. In the meantime, please reach out to me if you have interesting insights in that particular ecosystem. Above all, don’t miss The Family’s visiting Zurich on December 20 as part of our European tour! You can already register for the main event here. (And for events across the rest of Europe, check out https://www.thefamily.co/tour.)
***
Off to Berlin (and Paris)
Here are the next steps on my Hedge tour:
🇫🇷Tomorrow (September 27), I’ll be at Le Tank in Paris at 8:30am for a panel discussion with Henri Isaac (a former colleague at Université Paris-Dauphine, specialized in strategy and management) and Nicolas Vanbremeersch. You can learn more here (in French).
🇩🇪Next Tuesday (October 2) at The Family’s office in the Kreuzberg neighborhood of Berlin, we’ll discuss Hedge with Sandro Gianella, the Head of European Public Policy at Stripe. Here’s the link to get your ticket. I’ll be arriving in Berlin on Monday, so I’ll have some time on for meetings and learning more about the local ecosystem. Please reach out if you’re interested!
🇫🇷Finally, the following day (October 3) I’ll present Hedge in The Family’s office in Paris, along with several entrepreneurs of our portfolio who will detail how they’re working on solving some of the problems that call for a Greater Safety Net. Here’s the link to register to that one.
As always, for those of you who don’t yet have your copy of Hedge, simply click on the relevant Amazon link depending on where you are: 🇺🇸US, 🇬🇧UK, 🇫🇷FR, 🇩🇪DE, 🇮🇹IT, 🇪🇸ES.
***
Universities and startup ecosystems
My latest article in Forbes is dedicated to the contribution of universities to entrepreneurial ecosystems. Too many people, chief among them policymakers, still rely on the wrong idea that building a shiny university (surrounded by a technology park) is the first step to growing successful startups.
I, for one, think that we should cease obsessing over replicating what Stanford University did more than 70 years ago. That’s because we’re in a VERY different world now, in which the resources needed to innovate are much better distributed and innovation has therefore become much more ubiquitous.
Rather than building empty campuses and universities incubators and throwing more public money at an exhausted university system, it’s time we focus our energy on what really matters: rewarding entrepreneurship, fostering ambition, providing startups with resources to grow faster (and less regulatory obstacles), and above all letting entrepreneurs take charge (a simple, overlooked idea also known as Brad Feld’s “Boulder thesis”).
You can read my Forbes article here ➡️➡️ Startups Don't Need Universities As Much As They Used To 👀👀
***
More essential readings on universities and startups
How To Be Silicon Valley? (Paul Graham, May 2006)
The Secret History of Silicon Valley (Steve Blank, March 2009)
The Boulevard of Broken Dreams: Innovation Policy and Entrepreneurship (Josh Lerner, LSE Growth Commission and Institute for Government, 2013)
Enrico Moretti: The Geography of Jobs (Kathleen O'Toole, Insights by Stanford Business, June 2013)
Silicon Valley Can’t Be Copied (Vivek Wadhwa, MIT Technology Review, July 2013)
The myth of the science park economy (Paul Nightingale and Alex Coad, Demos Quarterly, April 2014)
Universities have a choice—partner with industry, or watch their best minds disappear (Vivek Wadhwa, The Washington Post, October 2015)
How To Make Pittsburgh a Startup Hub (Paul Graham, April 2016)
Your University Doesn’t Really Care About Your Startup (my colleague Mathias Pastor, who just joined The Family as a director, January 2018)
Universities’ Entrepreneurship Programs Are Rotten (my colleague Younès Rharbaoui, now with Lion Executive, February 2018)
Warm regards (from London, UK),
Nicolas