At the Hardware Club, we distinguish ourselves as an early-stage investor in the new generation of hardware startups in many different ways, including investing globally with the same community-driven method.
As we do things globally and naturally are present everywhere, one of the most common questions that I get is: "Why are you based in France?"
While I have full confidence that 5 years from now people will have recognized France as a real birthplace for great hardware startups that will become successful global brands, I do feel that many signs are already quite clear now for that reckoning, especially for people inside this weird industry called Venture Capital.
To simplistically answer the "Why France?" question, just take a look at the CES 2016 number. After an already huge turn-out in 2015, the country of real liberté-égalité-fraternité upped the game by having 190 startups in presence, good for No. 2 position in terms of nationality accounting for 33% of the startup in CES 2016, trailing only the you-know-which-country at 41%. Or put it this way: together USA and France accounted for almost 75% of all the startups in CES 2016, leaving only 25% to everyone else.
However, unlike some VCs who chose to move to Silicon Valley to gain that prestigious postal address – or to Sand Hill Road if they really really desire to feed the fat belly of the landlords – we were born here in Paris. We have been feeding our energy to and getting fed with the energy from the Parisian hardware entrepreneurs for roughly 3 years. We were not follower but rather witness and contributor to this renaissance that's spelled in French. Even though now we diversify to global deals, we continue to see great startups with potential coming out of France – the deals obviously flow to us by default these days. With the right execution and the right investors, they have every bit as high a chance to become the next Nest, GoPro or Fitbit.
Therefore, I feel the question "Why France?", though kind of a passé within our firm, is definitely worth a explanation, for the sake of the foreign VCs that are puzzled by this phenomenon as well as our EMS and retail partners around the world.
Fundamentally I would attribute the relatively surprising rise of the French hardware startups to five factors:
- Human touch
Some among you probably experienced French people's penchant in many of these aspects through your personal interaction. Here I'll put them into context. Your personal mileages of course would vary.
Like my home country Taiwan, France's education system focuses a substantial amount in engineering. Note that we're not talking about "coding" in the sense of today's "Everybody is a coder" world, but rather we're talking about fundamental engineering such as electrical, electronics, mechanical, civil, etc.
This respect for engineering stems from its largely centralized education system as well as a long history with respect for engineering – the prestigious French engineering school École Polytechnique was founded in 1794 and transformed into a military/engineering school by Bonaparte Napoleon in 1804, for example.
Unlike United States where the students' choices of majors tend to get influenced by the job market trends, running in the French blood is Immanuel Kant's categorical imperative, in the sense that something has to transcend all calculation and be obeyed as a human being. The pursuit of pure science and engineering excellency is no doubt part of this fundamental belief in the general French philosophy, which is why despite the relatively low and stagnant salaries, many brilliant young French still choose engineering as a career path.
While in lean startups this pool of talent is not particularly useful in negating the disadvantage of a relatively small domestic market, in consumer hardware startups, however, the pool has proved to be and continues to show promise in driving great products that could be sold globally.
There's probably no need to explain why design is fundamentally integrated in this beautiful country, especially here in Paris. In addition to its long beautiful history of arts, architectures, fashion, pastry, cuisine and movies, France is also a country that does not shy away from its preference over beautiful things, sometimes rather politically incorrectly.
The obsess for beautiful things, beautiful people and in general beautiful ways of living makes most of the French entrepreneurs fundamentally sensitive to designs. "Substance over form" is never even a valid sentence in the quotidian languages here. Even the geekiest founder here can't stand putting out an ugly slide deck – our good friend and long-time Hardware Club member Steve Anavi, co-founder of Smokio, even told me once that he does not consider any person doing presentation with Powerpoint respectable.
"How could one not use Apple Keynote?" He murmured, fully aware that I just did a presentation using Powerpoint in front of a full house of 150 people including him.
It's also the same insistence in beauty that led Pierre Lebeau, founder & CEO of our portfolio company Keecker, to pursuit a beautifully curved shape for even its first robotic prototype, despite that he is a software engineer his whole life and this was the just 1st prototype when they were burning money with no visible revenue back then.
Marketing may have been invented in US but by all means many modern French entrepreneurs are as deep in marketing intuition and as adept in using modern tools to achieve that. Most of the time the founders are already pretty fervent about marketing themselves, always thinking about new ways to round up the brand image and never satisfied.
This should hardly come as a surprised as France has been the leader in a couple of industries where marketing reigns supreme – fashion, luxury and cosmetics. You could even add tourism into that list as French are so good in behaving French in every aspect that really gives tourists a coherent image – good or bad.
Having grown up consuming fashion, luxury and cosmetics products grown out of their home country and having conquered the world, many French have a fundamental intuition for organic marketing and they could acquire skills in using growth hacking tools through proper training without losing their marketing instinct.
I haven't even mentioned that Frenchness is actually quite effective in making some of the startup products stand out!
Having lived in US for a couple of years and then in France for almost 4 years now, I could tell you without any hesitation that French people are the most human-oriented I've ever met.
In France, people always come before transactions. This is why if you walk into a store and forget to say "Bonjour !" to the staffs or owners, you get at best a look of disdain and at worst a lecture. On the contrary, if you remember to salute the people, they don't even care if you actually shop or not.
And their care for people just comes in many different forms that it's almost worth a book of its own, especially for someone who's more used to the utilitarian angle in the core of the general Anglo-Saxon culture.
This is also the only people that I know that truly fully believe in the three fundamental values in human society: liberté (liberty), égalité (equality) and fraternité (fraternity). One not only sees such engravings on buildings everywhere, French people are also the only one that I know that will not sneak in a smirk when pronouncing the three terms. They really fully believe in these values.
As a result, when they create products they also subconsciously build that human touch into it. Such is evident in our portfolio company Prynt when Clément and David built the AR video playback functions to their product design more than one year before Apple (copied it) and announced their Live Photo features with iOS9. Clément and David were not just building a small printer. What they held dearly to their heart is the treasured memories, which led to this wonderful feature that kicked there product viral.
My partners hate it when I use this term even in a positive way, but I'm gonna use it anyway, because almost all great startups were created initially with some seemingly irrational decisions: Facebook's insistence on real identity of some sort, Skype's insistence on giving away the service for free, Airbnb's idea of having a paying stranger sleeping in your couch (and potentially consume all of your peanut butter in the refrigerators in the middle of the night), etc...
The truth is, if a startup is created only rationally and logically, it's either working on a solution that's already being tackled with by 20 other similar startups or copycats will just come up very quickly. Only when a startup's product is not entirely obvious or straight-forward would they be able to avoid copycats in the early stage and build traction and hopefully defensibility before the copycats catch up.
And French have that irrationality built into their DNA without a doubt! This is not exactly due to what most France-bashers would claim "French are just weird". In fact, most of it derives from a society that has the most ubiquitous philosophy education.
When you have studied Friedrich Nietzsche or Jean-Paul Sartre in high school, it's kind of difficult for you to believe that there's still a universal meaning for life, or in the famous French phrase, raison-d'être. Logic would also have been destroyed at least as an objective tool. You learn from the book, from your parents and from many other sources that to maintain a certain aspect of irrationality is the only way to stay alive.
In other words, blending Dionysus with Apollo in life is not only a good thing, but almost a raison-d'être in itself here in France.
This is why almost all the French I know are crazy about something outside of their work: if not wine than cuisines, if not cuisine then sculptures, if not sculptures then cinéma, if not cinéma then theater, if not theater than music, etc. — one of my MBA classmates loves theater so much that he actually joined a national tour performance of "La Nuit de Valognes" by the famed French playwright Éric-Emmanuel Schmitt when he should have been actually looking for a new job!
Imbued with this irrationality that's born out of the philosophical environment, we see lots of French entrepreneurs that are able to turn a seemingly mundane idea into a brilliant "Oh so that's what you meant!" and then into "Darn, why didn't I think about that?"
For example, the startup I just mentioned, Smokio, is a smart electronic cigarette that helps smokers quite smoking – "What?" I know your feeling. Why on earth would anyone want to do a product whose purpose is to kill itself? But that's how Smokio gained traction and grew fast enough to allow Steve and his co-founder to sell the company.
The truth is quitting smoking is very hard. Most programs that help smokers quit smoking have a step-by-step approach to lower the volume to reach the eventual complete quit. Smokio basically gets into that step-by-step part of the progress and allow many smokers to substantially lower their smoking amount with the monitoring app as well as the help from the friends/family/community on the app. They might never reach that final stage of quitting but just the fact that they could lower the amount to a much healthier level is already a big plus!
Why not France?
Any 3 or 4 of the above factors would have already inspired a nice hardware product, but almost all French entrepreneurs I've had the pleasure to meet and work with encompass all 5 factors. The uniformity is simply amazing and that's probably why we're seeing France being so strong in this new wave of hardware startups.
With the right execution and the right investors to help them, I have no doubt that some of them will become internationally known brands or even exit as a unicorns. For me the real question is hence "Why not France?"