France Digitale, your co-chair, will soon celebrate its 10th anniversary. Is the French tech entrepreneur today the same as ten years ago?
No, because there are many more, and the entrepreneur’s work has become very attractive, including students coming out of Grandes Ecoles. Previously, young people did not want to do business, it was considered very risky, because usually you could not afford to pay for a few years. Ten years ago, entrepreneurs were more “self-made-man”, and some became successful as well, like Jacques-Antoine Granjon or Marc Simoncini.
We created France Digitale in 2012 because there was really no organization to help the start-up ecosystem. Many incubators were gradually built and the number of investment funds increased. Today, it is easier to finance the early stages of a business because there are many seed funds. When I raised 1.2 million euros to ISAI in 2010, I already had 400,000 subscribers. Now you can raise money on slides and without clients. It’s been cool to practice in tech.
Does graduating from a Grande Ecole help entrepreneurship?
When you become an entrepreneur, you have to start small. The question of diplomas often arises: do you need diplomas to succeed? But we see the topic upside down: you have to start with a lot of effort to succeed in getting good diplomas … Those who get to good schools work hard, and when you’ve got the fold, you move on. Then, these schools will give you the right vocabulary and the codes that will allow you to show pitch that lasts.
Why do we fall so far behind the United States?
What slowed us down was our misunderstanding in the bubble of the 2000s. The United States took it as a “speed ticket”. They saw the potential of the Internet before us because they had already seen what it had to offer Amazon, Microsoft or even Google. In Europe and especially in France, when the 2000 bubble burst, we were told it was over, that the Internet was a mirage, and so on.
When I wanted to open a bank account for BlaBlaCar in 2006, I went to see seven banks. You said “Internet”, they shut you down … I was finally able to open an account with Banque Postale without pronouncing the word Internet. The crisis in 2008 exacerbated this delay. True, companies like Meetic, Veepee or even AlloCiné have continued to grow, but there has been a huge decline in investments.
Are we still paying for this delay?
Yes. It’s getting gradually, but you need to project yourself more, expect. In the United States, there are 650 unicorns, in France, 27. If we apply the factor x5 [en proportion de la population, NDLR], we should have 130 unicorns in the house. Let’s say that if we were in tennis, the United States would lead 6-1 against us. We won’t go back lost, but we have to try not to lose in the second set.
Hope depends on our ability to create and innovate. Large groups will not move on their own. Over the past 15 years, Gafam has bought hundreds of companies. They are very good at doing M&A, putting together teams and growing the businesses they buy. Facebook didn’t invent Instagram, it bought it. Same thing with Google and YouTube. France’s problem is that it doesn’t have tech giants, only telecom operators.
France’s problem is that it doesn’t have tech giants, only telecom operators.
Has the relationship between start-ups and large groups changed in ten years?
As Jean-Baptiste Rudelle said [cofondateur de Criteo, NDLR] in your columns, “la French Tech” no longer makes you laugh. No more distance or lack of consideration. Large groups take the time to look at what start-ups and scale-ups are doing. The concept of disruption is on the minds of all large groups, even the oldest. Some have made great acquisitions: Cegid at Talentsoft, or more recently Renault and Fixter.
As Renault’s board of directors, I can also assure you that Luca de Meo is in the process of positioning the company for the future. To avoid finding itself in the same situation as terminal manufacturer Nokia, it puts “Renaulution” specifically into mobility services, along with its brand new Mobilize. Eventually, this will generate 20% of the group’s turnover.
What are the biggest mistakes an entrepreneur should avoid?
Above all, don’t believe that you will succeed the first time! It doesn’t exist. You have to try many things. Again I will take a metaphor on sports. When you play golf – which I don’t – you don’t put the ball in the hole the first time. You clap in one direction, then slowly come closer and finally get there.
Burn less money, streamline your operations.
We entered a period of reluctance that changed valuations and a slowdown in fundraising. What advice would you give to an entrepreneur?
Burn less money, streamline your operations. We took a long time to search for growth at all costs, which was expensive. Some valuations reach up to 40 times the profit! You may need to return a multiple of 10. You also need to pay attention to the cost ratio.
In the first six to eight years of BlaBlaCar, I stick to one simple rule: I always keep the ratio to two, meaning we only allow ourselves to spend 200 if we have at least 100 in revenue. Because if you have to reduce the sail, you will split in two and you will stay alive. With the massive fundraising we’ve seen in recent months, some companies have even surpassed this slider.
What hinders the growth of a start-up?
Recruitment is the most difficult for many reasons. First you need to be attractive, and secondly you need to succeed in building the team at the right speed. I was a bit ahead of the curve when I launched the Reviens Léon movement in 2015 to increase the attractiveness of the ecosystem.
Then when you recruit, you also shouldn’t get into bulimia. It is tolerable to double your workforce every year, but it is more dangerous in terms of stability and team cohesion … You need to recruit temporarily, especially since when a new employee arrives, he or she must be trained by someone who therefore not 100% in his work.
Is it harder to recruit now?
Yes, the market is very tense, especially with new professions like “product manager” and data analyst. The BtoB selling profession is also suffering from a shortage. Many of us are looking for the same profiles…
What is most lacking in our French ecosystem?
There’s a big gap: we don’t have world-class clouds. OVHcloud and Scaleway do a great job, but we can see a difference in the structure: they don’t have a real global commercial customer, when AWS serves and belongs to Amazon, and Google Cloud serves and owns Google. This is a possible weakness. For example, I want to see a Mirakl form a cloud.
What is still missing for French Tech to eventually overtake the United Kingdom?
Many American companies have always seen the UK as their gateway to Europe. Obviously it is easier for them to live in a country where English is spoken, where the culture is closer. An event like VivaTech shows that France is not Franco-French, that the ecosystem here is international.
Europe generally buys American and Chinese whereas it should strive to buy most of Europe.
We are punished by the fact that there is no unified European market. There is a real lack of standardization in terms of regulations, taxation, even labor law. It is easier to export from one American state to another than to go from France to Poland. We should also encourage public procurement from French tech companies. Americans do this hard at home. Grant money only facilitates cash flow, when money from a customer or public order is also used to promote the product. Finally, Europe generally buys American and Chinese while it should strive to buy most of Europe.
If you were to be appointed Secretary of State for Digital, what would you do first?
I will begin with a major awareness campaign exposing everything new digital companies bring to our country, both in terms of purchasing power for each of us, and in terms of job creation. We must stop making fun of the “start-up nation”.
Today, three in four French people use the services of our start-ups each month, saving time or money, and the digital ecosystem is extensively creating jobs in new professions. High wages and digital services are affecting all sectors of activity, from public services to health, education, industry and transportation. There is a lack of talent, which opens up huge career opportunities for the new generation, that is good news.
But I am not a candidate for the job! …
Frédéric Mazzella founded the carpooling site BlaBlaCar in 2006, while studying at Insead. Before entering the prestigious business school, he studied at the Ecole Normale Supérieure (physics) and Stanford (computer science). Ten years after creating the start-up, he left his position as general manager to become president. In 2018, Frédéric Mazzella was elected co-president of the France Digitale association and member of the Polytechnique board of directors. Since April 2021, he has been a member of Renault’s Board of Directors. Alongside his commands, Frédéric Mazzella regularly invests in start-ups.
Frédéric Mazzella was re -elected as a member of France Digitale. The association, which brings together entrepreneurs and investors in French tech, will celebrate its tenth anniversary next September. In January, he published “Mission BlaBlaCar” (Eyrolles Editions), a book that chronicles his business adventure and provides advice to those who want to get started.