What the new French President means for startups

Yes, that’s right, over the weekend France elected a new President, François Hollande. It came as a bit of a surprise to many, as the country has not has a Socialist President since François Mitterrand in 1995 – nor has a President only served 1 term since Valéry Giscard-d’Estaing left office in 1981. Still, clearly France made the decision to move on and turn a new page.

Um…what does this mean for startups?

I published a post on The Kernel earlier today with some of my thoughts on what the new President could mean for startups. Overall, it actually is pretty unclear, as neither candidate really had a strong program for innovation and the development of the digital economy. While they were both very active on Twitter, Facebook, Instagram and the likes, neither of them really stopped and asked why those types of companies were not being bred in their backyard.

Not so black and white.

Still, regardless of the fact that the entrepreneurial crowd may be somewhat in the dark as to what to expect, I think many publications have been quick to jump to the conclusion that François Hollande and a Socialist President naturally mean that the country is going to slow down.

Nobel prize winning economist Paul Krugman was one of the first to point fingers at some of the publications, namely The Economist, which called him a “rather dangerous Mister Hollande.” Even The Guardian – which definitely didn’t seem too supportive of the President-elect, affirmed that this still “doesn’t mean that a Socialist presidency is as dangerous as too many like to say.” Though I think that the journalist, Frédéric Filloux, goes a little overboard in his criticism and ignores that some of the problems he mentions are not specific to France nor to a Socialist President. For example, VCs around the world would likely agree that the industry hasn’t performed well as a whole – it is not necessarily specific to France.

More than Carla Bruni.

Sarkozy definitely didn’t have the highest ratings, but I do think that he should be credited for some of the improvements he made, which include everything from softening the famous 35-hour workweek to raising the retirement age to developing the famous auto-entrepreneur scheme for individual entrepreneurs. While it’s easy to point fingers and say that the administration has done very little for innovation, there was more to his presidency than Carla Bruni.

E-health and video games.

It’s definitely unclear how things will play out for the entrepreneurial crowd, especially since Hollande became increasingly pro-innovation and investment towards the end of the campaign. Let’s just hope it’s not a coincidence and that there is actually some truth to the story. And while it’s difficult to distinguish the political jargon from actual promise, his digital advisor, Fleur Pellerin, did make it clear that the priority sectors would be e-health and video games should he be elected. Regardless, the local tech crowd, while optimistic, seems a bit blasé. Rather than putting their hope in the new administration, many entrepreneurs say they’d rather focus on simply building great products. And who can blame them?

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8 thoughts on “What the new French President means for startups

  1. It will take a lot more than changing of president of the Republic, to make real changes to the French Startup scene. There are so many more factors and differences there, compared to the USA: Socio-economic, consumer spending trends, disposable income, the public embracing technology, and more. I am very curious if there will be change in the short term at all.

    – Richie

  2. Honestly nothing really change here (in France):
    -the first year, you have to pay 4500€ to URSSAF (a kind of tax), 9000€ the second year.. no matters if you earn money or not, you can even loose money than URSSAF don’t see the problem.
    -the laws about tax change every year, may be several times by year (world record !!).
    -when you pass from 49 employees to 50, you have 37 new laws to apply.

    A new President, a new government, some new tax … nothing new. 😉

  3. “neither of them really stopped and asked why those types of companies were not being bred in their backyard.”
    Hello Roxanne. Do you have some ideas on the main reasons why those types of companies rarely appear outside of the US?

    • Great question – which deserves a very long, elaborate answer because many factors (in my opinion) come into play.

      Some of it is historical/cultural but ultimately, I think the incentive structures in Europe are very different from those in the US (for an entrepreneur/investor).

      In addition, there are many barriers/hurdles in Europe (from cultural/linguistic fragmentation to regulation/legal etc.), which makes developing a product that can work across the same size market as the US far more challenging in Europe.

      And then there’s the exit market, which is far less developed in Europe (this falls under the incentive structure I mentioned earlier). That said, there are some fabulous examples of successful exits from Europe (SAP, Skype) which I wrote about here.

      http://www.kernelmag.com/comment/opinion/1823/where-are-the-1-billion-european-acquisitions/

      There are tons of reasons why – although I do think Europe is making a lot of progress as a whole and is finally becoming more in tune with entrepreneurship and supporting innovation for the economic growth of the continent.

    • I permit me to add my answer:
      theses companies often appear outside of US (less i agree), take a look on Japan or Korea if you have a doubt.

      The differences are:
      1/ except Japaneses, who speak japenese ?? (copy/paste with French/German/…)
      2/ France: 65M people/ USA: 310M people : 1% in France isn’t equal to 1% equal in USA !!
      3/ SV is a magnet, like Paris for painters during the end of 19th-century (check Bateau-Lavoir)
      4/ Americans have “the settler spirit”: when an American have a problem, he find a solution. Opposite to our “state spirit”: when an European have a problem, he ask the state.

      1/ and 2/ are just a problem of language and distribution, Internet resolve this.
      Some new magnet appear but 3/ still true.
      And for 4/ … thank for the debt crisis !! The state is out !!

      Ps: Roxanne is contaminated, she speak too much about politics !!! Science-Po effect ??

  4. Pingback: Entrepreneurs, if you could change one thing about France what would it be? « TechBaguette

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