I am writing this article with the Paris startup ecosystem in mind, but based on the results of HowToWeb (C’mon Croatia, another event app ?), I’m going to go out on a limb and say that other emerging startup ecosystems are having similar problems….
LeCamping‘s Job Fair looked more like a therapy session this past weekend as “Job Providers” pitched to rooms of other job providers, with a handful of already employed “job seekers” looking to leave their day job to jump into the so-called startup world. Looking on, I couldn’t help but think “This ecosystem is sick…” and I began thinking…
“Well… What are the symptoms of a sick startup ecosystem?”
There is no priority of symptons – each ecosystem will present its own symptoms first and in their own order, but they will all revolve around similar principals:
Job Supply/Demand is Off
Keeping the supply and demand of job seekers vs. job providers is crucial, and going either way can be a problem. When there aren’t enough jobs available for those who want to work in startups, clearly your startup ecosystem is weak – it probably needs steroids to boost it into place. The current problem in Paris is quite the opposite: too many jobs. The most common response I hear to this is “oh, well, everyone’s searching for a developer and so it’s hard to find one…” I say Bullshit.
In an emerging startup ecosystem, we are very supportive of startups, so supportive that we’ve encouraged everyone to do their own project. At LeCamping Job Fair, I saw 16 teams, each with only 2-3 people, looking to hire everything from Biz to Design to Dev guys. Between those 16 teams, I saw the potential for 3-4 great startups, with all the skillsets necessary to innovate in whatever space they decided to… but that brings me to the next sympton
Forget loving the problem, you have to love startups
Over in the Holy Land of the Silicon Valley, we hear phrases like “don’t fall in love with your solution, fall in love with the problem.” The idea is: if you’re unwilling to see that your solution could be wrong, you won’t be able to pivot when the metrics suggest it. However, there is another assumption underneath, which is that A) The problem is a problem and B) You are the one most capable to find the solution. I think that, for a blossomed startup ecosystem, this idea holds true – that being said, I think the rule needs a bit of an augmentation:
Young French entrepreneurs are falling in love with problems, but they are getting hooked on that problem. One company I’ve given advice to is LeCamping’s HereWeDate, who are looking to change the way people date – the site is oriented around men proposing date ideas, and girls selecting the person based on their date. I think the idea is great, but not one founder has worked in online dating before, which is the equivalent of a giant neon saying reading “warning, we do not know our space.”
France has encouraged entrepreneurship to the point where there are clearly enough companies – I think we need more entrepreneurs who fall in love with working in startups, not with a problem (and, as always, NEVER with a solution).
Hurt their feelings
Entrepreneurs in emerging ecosystems are being grown, like flowers: but their gardeners are afraid to prune them, for fear that they’ll kill the flower. But an experienced gardener knows that a flower grows bigger, stronger, and lives longer if you prune it as needed.
John Lewis, a LeCamping mentor, told me recently that he has been helping startups from the first season of LeCamping after the session ended, and he has found that those startups who are failing now are failing harder, because they are waiting longer to do so. I think that Mentors are afraid to say “No. Your idea won’t work” because they think that to discourage them will drive them away from entrepreneurship. I say Fuck that. I’ve heard French mentors say “the French take failure very personally, so we don’t want them to feel bad.” If you can’t handle someone telling you your idea is worthless, you shouldn’t be an entrepreneur.
The other end of that, of course, is being over-confident in your idea. While I was chewing out startups on Saturday at the job fair, I saw so many people giving demos of their product in the back of the room – those are startups i’m no longer interested in. If you don’t think criticism of another startup relates to your startup, you are going to fail.
This brings me to my last point:
“SO…. how do we cure a sick ecosystem?”
Simple: Honesty.
At the end of the job fair, we ripped apart 3 startups for 20 minutes each, in a “no bullshit” pitch session. One startup,AugmenteDev, had one sole founder, a developer, and he had come to the Job Fair looking to find another Dev to develop on iOS or Android using this AMAZING technology (seriously, the technology’s great). But, as we talked about the idea more, we broke down flaws in his perception of how the product would be sold – as it turns out, developers are not business guys (go figure). He learned that until he knows how he’s going to sell his prodcut, there’s no point in putting it on 1 or 20 platforms, because he’s nearly sure to have to pivot his development strategy. So after 20 minutes, he said “Ok, I guess I’ll find a Biz co-founder” and he ended up talking with someone in the room about working together.
I think you will be hearing a lot about AugmenteDev in the next coming months, if they can get their selling strategy together. That was a simple case of education in how to do a startup – complete your team before you expand one aspect of it. While Lars Hinrichs can call Developers artists of the 21st century all he wants, the fact is that even artists need patrons, curators, and galleries in order to sell their art.
The other side of Honesty is telling a team when they are going to fail in six months. What is the value-added of them learning that 6 months down the road, when you can have them figure it out now and pivot or join another project now? Don’t waste Founders’ time by letting them fail later.
Let’s wrap this Therapy Session Up…
So here’s the breakdown: I am vowing to be Rude, because I want startups in my ecosystem to succeed. If your idea is fundamentally flawed, I’m going to tell you to quit. If you’re a biz guy looking for developers, find them from another startup. Mentors: You need to be Rude, too. I started by pointing out “pressure points” to startups, but I’m realizing that it’s easy for a startup to overlook advice that is presented nicely.
If you want honest advice about your startup, contact me any time. I’m no mentor, but if you can’t convince ME your product can succeed, how’re you going to convince your users, or worse, investors?
The Rude Baguette 
I agree that honesty is important in here. However, this is not an exact science. Even when some “professionals” think that the startup won’t make it, this is not necessary the ultimate truth.
Maybe the best example to that is twitter. Apparently, at the start, it was not well received: Remember When Twitter Was A Joke? (http://techcrunch.com/2011/07/06/all-the-presidents-tweets).However, two years later it started to make the difference, and almost everyone who needs to be followed has an account on twitter.
There are several other examples where startups made it, against all odds, and without changing the core idea. I think I have read few examples of that on Don Dodge blog.
You know – this is part of the problem. People read Twitter’s history, and think “I can be like that.” No one reads into the experience of the founders, the mentors who shot down their idea, told them what about it sucked, and made them trim it to something that worked.
If European Entrepreneurs start producing Twitters, then the ecosystem will no longer be sick – but for now, I find it hard to answer the question “What are some good startups in France?”
As I said I agree with you about hard work and mentoring, but what took my attention is mostly this
“If your idea is fundamentally flawed, I’m going to tell you to quit.”
Quitting the idea by someone who really believes in it is not easy and might not be the best solution since no one can really predicts the future. On the other hand being flexible in manner to make it more appealing to people is probably a better solution than quitting.
The assumption there is that the entrepreneur in question has the knowledge-base to “make it more appealing” (a very general idea that does not discuss the execution skills required).
I think that the ideas you have been taught, and are espousing here, a very good in theory – but the assumptions are that A) Anyone can be an entrepreneur B) Anyone can find the solution to a problem if they put their mind to it.
I believe there are great entrepreneurs in Europe, but the practicality of the matter is that the lessons we are being taught can equally keep someone working on a project that ultimately won’t ever succeed – and this kind of ambiguity is not acceptable in an emerging ecosystem. I think that France’s problem, at least, is not that people are quitting too much, but that they aren’t quitting early enough. Admitting failure is a form of education – reiterating stubbornly is not.
Honesty won’t be enough to fix a broken ecosystem. A combination of education, regulation, and private funding, would be faster and more efficient. If the only thing we’re lacking of is honesty, then either it is embedded so deep in French mentality that the ecosystem itself is doomed, or, more likely, some people are more straightforward than others, and some entrepreneurs, the good ones I guess, can tell constructive criticism from non-constructive criticism. They, and their companies, will eventually save the ecosystem.
As for your final advice : convincing users is always far more important than convincing investors. Go figure.
My 2 cents of honesty : you can fix the grammar and spelling there :
-symptoms, not symptons
-its own, not it’s own
-will all revolve, not will all revolved
-there aren’t, not they’re aren’t
-supportive, not supporting
-suggest you to, not suggest you, too
-they are waiting, not they waiting
keep it up though, the post is interesting 😉
First off: spelling mistakes updated.
I’m not too sure you’ve sited enough evidence for your counterpoint “then either it is so embedded…. or…” but i’ll take a stab at it anyway.
” A combination of education, regulation, and private funding would be faster…”: Education? I have met enough entrepreneurs and seen enough student education events to know that there is enough education out there (not that we should stop, just that it is not the least common denominator in the ecosystems advancement). Not to be cocky, but this IS the education for entrepreneurs. There is no good source “how to turn an emerging startup ecosystem into a successful budding one.” Regulation: not sure what kind of regulation you’re talking about… Private Funding: Prove to me that investors are missing out on opportunities to invest in GOOD startups, and i’ll start blaming the private funding. I have this crazy idea that good startups get funded when they want it. Can you name me a startup that deserves funding that hasn’t got it? Can you name a VC firm/business angel who has said “I would invest in that startup, but there’s just not enough education or regulation in the ecosystem..” Blaming private funding for startups not succeeding is like blaming “the Man” for keeping us down. It’s a cop-out.
My point on convincing people is that, mainly, if you can’t convince anyone to become a co-founder, how are you going to convince users or investors. If no one will sell your product that you’ve developed, maybe your product/market fit is off. If no one will develop the ‘amazing idea’ you came up with in business school, maybe it’s not as amazing as you think
You’re completely right : I said that these ingredients make a good ecosystem, but I never said that they were absent in France. Hence the ecosystem is not as broken as you might think.
There are a lot of really good and true points in this article.
However, I don’t think that you’re describing the symptoms of sick ecosystems but just of an emerging ones (and you used the term). Ecosystems where entrepreneurs, mentors, investors (and even customers) are learning and therefore make more mistakes than in a mature ecosystem.
Regarding your second symptoms, I would say that it’s by focusing on the problem and having this obsessive will to find a way to solve it that young entrepreneur will eventually create a solution and then a startup around it and then finally falling in love with working in startups.
Then I do agree with the first part of your sentence “I think we need more entrepreneurs who fall in love with working in startups” but I would replace the end by “by focusing on problem that REALLY matters to them”. It can be for personal reason or because they have some kind of unfair advantage in broaching this problem due to their working experience, life experience, team, etc
OK for the symptoms, but then again, what can we/anyone do to make “people fall in love with working in startups” ? It’s the duty of the entrepreneur to convince people to join his boat. There is not much to be done, but wait.
“There is not much to be done, but wait” … A startup ecosystem is a startup as well, where its founders are early entrepreneurs. I argue we need to Build–>Test–>Learn (i.e: Lean Startup). There is no ‘waiting’ to be done. If we are not testing and learning, we are not advancing.
Too many people in Europe waiting for one French startup to become big, so they can say “see. France can do it, too!” – I don’t wait. I reiterate.
In fact, this is my point exactly – am I the only one that thinks that there is an assumption that every entrepreneur can solve any problem in the sentence “…it’s by focusing on the problem and having this obsessive will to find a way to solve it that young entrepreneur will eventually create a solution and then a startup around it …”
This idea that “if you spend enough time working on something, you WILL come up with the solution” promotes finding a problem, and working on it whether you’re the right person for it or not. I agree that picking something that “really matters” helps, but that’s not an easy thing to define, and it leaves too much ambiguity.
I am not worried about great startups being discouraged from their idea – I am worried about bad startups being encouraged to continue. I think there is much more for young entrepreneurs to learn by jumping into a startup of 10 people than by grabbing their developer friend and trying to build a startup from two people, learning every mistake in the space they tackle.
The idea of “Fail quickly” is great, if you can actually Fail and actually pivot from it. Show me a startup founded in the past two years in France that has genuinely pivoted? Are young entrepreneurs capable of seeing when the metrics tell them to pivot?
I’m not convinced that our incubators, accelerators, co-working spaces and “you can do it” attitude are the best medicine.
PS: An emerging ecosystem is always sick, just like a baby is always sick. Unless you spend every day watching it and curing it’s small colds, it can easily die. Thinking that “strong startups will always emerge” is like saying “the best babies will survive despite having no immune system, and they’ll be stronger for it.”
dashlane (www.dashlane.com) did. They went from a one-password-for-all-accounts type of product, to a frictionless service for e-retail. They have a strong technology, a lot of funding, and are expanding geographically. This is only one example, but you only wanted one.
You said it : those who must fail, will fail. Either it is now, or in 6 months, makes very little difference. Even the accelerators, co-working space et al., if they are not helping startups create value, will also fail. Now or in 6 months, or a year or two. And others will take over, more efficient, more “honest”, with a better vision, etc. You have to let the individuals learn from their mistakes and hope that they make the good decisions at the proper time. If they do, they live another 6 months and get another chance to win big. If they don’t, they die, employees go back to “normal” jobs or join the succeeding startups, and so on. There is not much to be done here, I’m afraid ; that’s how an ecosystem is supposed to live.
I think you’re right that “thos who must fail, will fail” – but it is not necessarily true that “others will take over,” or at least, not in the sense that it will happen within the same country/regional ecosystem. Yes – perhaps french startups will fail and SV startups will rise in their ashes. I don’t think that’s what we want in France, nor is it necessary.
If you do not tell a startup they are failing when you think they are, then you are only hurting them. I’m not here to hurt startups.
First of all I want to say that I am not for the promotion of working trying to solve a problem if you’re not the right person to solve it.
BUT by doing so you will learn the process of creating a startup whose main goal is to solve a problem, learning all the difficulties that there is around it (the ones that only the first two or three founders know). Therefore if you fail you will know how important it is to work on a problem that matters to you.
We need people to work on 10 people startups, I agree I think this is better than working on consulting, finance, etc but in terms of learning how to build a startup then how to build a startup but this in not greater than learn. But this is not the BEST way to learn how to build a startup from scratch.
PS : Come on, you don’t say a nine month old baby that he’s sick because he can’t walk!! You wait three more month and then he walks 😉
10-person startups. I like it.
You get straight to the point Liam! On the one hand I do agree on the baby metaphor and that accelerator are no panaceas… I also completely agree on the Fail part of the article, namely what it means in French culture, therefore the FailCon was made to change minds.
On the other hand (it’s a business school student stake), I think your view on the Dev recruitment part is quiet simplistic, and I do believe that it’s a more tricky issue nowadays for 2 reasons:
1) It’s quite hard for business school startup founder to assess a dev’s skills, and overall to know what he really needs when it comes to hacking.
2) Money: If you’ve made a wrong choice for 1) you’re in deep shit for you may pay a lot for nothing (a good dev from the top 3 cost ± 30/40K€ a year) = you won’t go far, or worse you may have given him shares = beter do yourself hara kiri right now…
That’s why education regulation might be THE real solution.
Business schools and engineering schools must mix up right now. The split between them is counterproductive for entrepreneurship. Each part doesn’t really understand how the other works from day-to-day. We must get rid of the “bullshiter” vs “geek” thing, and strive for more complementarity. How many balanced founding teams do you know? You may only choose between a I’m-not-a-businnessman-geek or a geeks-are-manufacturers-business-school-prinks leaders… Where do we go wrong?
That’s why I advocate a new “Grande Ecole” model, it may happen in the future with the “Plateau de Saclay” project aka la “silicon valley à la française” (so French… http://grandparis.blogs.liberation.fr/vincendon/2010/09/sarkozy-%C3%A0-saclay.html) with Université Paris 11 Orsay and Ecole Polytechnique, plus a HEC-ESCP fusion (long time rumor)? THAT would be a breeding eco-system!
I agree the its hard to assess a dev’s skills – but I feel that if you’re developing a technical product, even if you’re a biz guy, you should at least understand what the technical requirements are, and therefore, what you’re looking for (if you don’t know, learn).
I agree that your school system sucks – I don’t know if the ONLY problem is that engineers and business students don’t mix. It’s not as if I spent my college years in “startup club” … I don’t know if that’s the cure – but i agree that your system needs to change.
For education, I get a lot of guff for saying this, but I think it’s great that it’s hard to learn how to make a startup, sometimes: it stops people with too little motivation from wasting other people’s time
There’s definitely a difference in mindset here in Paris versus Silicon Valley. The latter has 20+ years experience of being the hotbed of innovation for the country (and the world) whereas here things are just getting started.
When you work in a startup — on the “tech” or the “biz” side — you are in boot camp for running a company. You play this game for long enough and you get a pretty good idea of how things work. Which is why engineers from the valley generally know quite a bit about subjects like marketing, accounting, and finance. On the other end, you see more and more “biz” guys who can fix a broken CSS style sheet, who dabble in JS or take programming courses in their free time.
As far as the french educational system goes, I can’t speak as much of an authority (I was educated in the valley). I did, however, start an MBA here last year at the École des Ponts ParisTech and I can say that the curriculum here is definitely pointing in the right direction… they even offer a concentration in Technology and Entrepreneurship[1]. I have also met a lot of graduates of the HEC programs who are doing innovative work in the startup space.
Regarding the Private Funding issue, might we argue that it’s a chicken and the egg issue? No, not all the startups today are going to be twitters, but the VC model is built on 9/10 failure, right? The externality of the VC system is that the 9/10 failures are still boosted by the cash and come out stronger as they go into their next company.
Nobody would argue against the frugality of the “lean startup” model, but it seems to me like a lot of the startups I’ve seen are trying to do everything on extremely limited budgets, relying on competition prizes or govt. grants for funding. Keep in mind that the cost of living in Paris is outrageous, not to mention the heavy burden of social charges and the government’s byzantine tax and accounting requirements. This makes it extremely hard for early-stage startups both to optimise use of their current resources but also to hire. These companies could grow faster, solve more problems and attack more markets if they had the convenience (luxury) of the extra cash earlier on in their development.
[1] http://www.enpcmbaparis.com/programs/mba/technology-entrepreneurship
I’d love to talk to the single Technical founder at AugmenteDev – completely disagree the guy needs to go out an find a business oriented co-founder. He needs to develop an amazing product – do that and then find your business guy. What do all these business guys do while the coder is building the product? Rewrite their marketing plan over and over?
What you mean to say is he doesn’t need a biz guy if he has the resources of, say, HackFWD, showing him how to create a product that is ready to go to market?
I might be biased or only had few bad experiences. My own vision of business guys, especially early on in the dev process, is that they make the devs’ life miserable by demanding more and more “killer features” while there is no real evidence that the market really need them.
I have worked for several startups in the past and figured out the way biz guys think.
They keep increasing the volume of “supposedly market need”, so when they fail to sell they have someone to blame for not providing the right product.
Can you imagine that a biz guy, after failing to sell one copy of the product, telling the startup they did not make a real market study to assess the market need, while he was pressing the dev team for a full year to add more features!?!?!
PS. I apologize if some biz guys are reading this post 🙂
Biz guy is a broad term, describing anything from an accountant to a marketer to a sales guy.
I’ve seen bad biz guys, I’ve seen bad designers, and I’ve seen bad developers. A good biz guy can not be replaced by a good dev, nor can a good dev be replaced by a good biz guy
You should define what you mean by “biz guy”. Because nobody does, and it’s a big mistake.
What should a “biz guy” at a startup do? Design the product? Deal with company-related administrative tasks? Find customers and sell? Have the “vision” (and a card that reads “I’m CEO, Bitch!”)?
Those are completely different jobs. Also, from what I’ve seen, French business schools prepare to *none* of them, except the administrative one in rare curricula.
Moreover, technical people can often deal with “vision” and especially product design better. If I had money to invest, I’d rather put it in a company driven by someone technical. I wish someone explained all those wannabe “biz guys” with no experience that lurk in Startup Weekends that there’s no reason why their ideas would be better than those of a developer.
Some people were talking about the difficulty to assess a dev’s skills. It’s hard, it’s true. But it’s even harder to assess those of a “biz guy”, meaning someone who can help you improve your product and/or sell. There’s only one good way to do this I know: look at his track record. But if he has a good track record and you’re really in need for a “biz guy” odds are he doesn’t want to work for / with you…
I agree. Article to come in the next week.
“I’ve seen bad biz guys, I’ve seen bad designers, and I’ve seen bad developers”
True, but there is an important difference. You can spot a bad dev from the first day at the earliest or three months at the latest. However, a biz guy can suck up the startup money for a complete year (maybe more) until you discover his true talent.
That sounds like a generalization born out of experience. Perhaps the problem isn’t the elusive “biz guy,” and more the ability to assess the value of one.
I think a single technical founder needs a business oriented (and I don’t mean a business-school) co-founder to know what product to build. A technical guy can build great technology but he would probably miss the product-market fit.
I’m here !
First, thanks Liam for the post, it summarizes very well the good talk you gave at the (job) fair.
I agree with you David. The reason why I’m looking more for developers than biz-guy is that I already have some customers waiting for my product for some months now. All I need to do to start selling is to finish the product. And to do that I need more developers.
If I had a biz guy, all he could do would be to find more customers waiting for the product, and putting more pressure on the dev team (me in this case).
Moreover, I’m a little hesitant to let someone else take care of talking to the customer, and then do the reporting. Having a clear view of what the code is, and what the customer wants, I can quickly tell if it fits in the roadmap, even with some tweak, or if it’s not possible in the current state of the technology. And if I hear repetitively something I can always think of that in term of code or data structure and can quickly turn things around. Something that even the best biz guy couldn’t do because things that seem far apart from what the app is currently doing can be really close in term of code. And at the opposite something that looks like a little tweak to the functionalities can be a dramatic modification of the structure.
So I’m more in the approach of building something with a vision, and then bring in a biz guy that will find a way to market it, find the best price, the best communication and the right words to tell to the world what it’s doing.
And I know that I need to get regular feedback from the market, that’s why after 3 months of development I was already on the road, showing the prototype to potential customers. But I guess that something a biz guy could also have done, letting me more time for the development. Although I quite like the part when we are out of the building 😀
@Liam – No I don’t mean to say he doesn’t need the “biz-guy” if he has the resources of a program like HackFwd. What I mean to say is that in many cases – this depends on the problem you are trying to solve and the market you are trying to address – the best thing you can do as a developer is build your product and get it out there. Launching a beta of an internet consumer focused product doesn’t require the skills of a “biz guy”. Take an obvious example – Google – they didn’t have a business guy until employee #12. They built something very useful and people started using it – that’s what you want to achieve.
Don’t discredit a developer’s potential to identify problems and build products to resolve them. They are extremely well positioned to do so.
I also have to agree with Pierre and Ziad – evaluating the “biz guy” is exponentially more difficult than the developer.
I will address this more in an article, but the purpose of a biz guy is to streamline the development process. Taking care of things like incorporating, having Internet, and making sure that devs can develop as fast as possible.
I would have to say that while a biz guy is absolutely not essential to getting a working product out there, having someone who is externally focused and good at delivering the product to the world (potential investors, the media, customers) can make a difference in an increasingly competitive market. Sure, it may be clear to you as the person developing the product that you are solving an important problem in an innovative way, but these benefits have to get to the right people somehow. Unless the developer has aspirations of moving into marketing and sales, someone’s going to have to be in charge of the business side of the project before long.
A Google happens once in thousands of successful startups; what most people are building is a product and never had or will have the same potential. Products need the business guys, because getting them to the customer is a full time job.
Disclosure: I’m a business guy