Proof Of Attractiveness Of EU Tech Ecosystems (ex. France) = Non-local / International Inflow

I posted the following on the Acquired.fm Slack Channel in response to a discussion about impressions about the France/Paris tech ecosystem:

The thread about starting tech businesses in Europe (ex. Paris) and Europe-US (business) cultural differences are subjects I think about a lot.

I am originally from Seattle but have lived and worked 15+ years in 8 countries across Europe, among them in France: I was in Paris 1999–2002 during the first internet bubble and 2017–2019 at a SaaS company in Lyon. I am currently back in Seattle.

The advantages/disadvantages between different countries/cities in Europe, and compared to the US, for starting companies are debated ad infinitum. At the end of the day, there is no one answer about where the best place to start a tech company is: each person decides based on her/his personal + professional circumstances where to go (or stay).

In my view, the biggest impediment for European companies competing at scale on the world stage is fragmentation: literally, in terms of the regulatory patchwork of markets across Europe, and figuratively, in European minds, which have the patchwork of countries and their attendant cultural cliches imprinted upon them.

At the bottom of this post is a link to an excellent general analysis of the strengths & weaknesses of the French tech ecosystem.

So I will offer some food for thought on points which are rarely talked about when people discuss entrepreneurial ecosystems, using France as an example. I am writing not just from my experience as an American in France, but also how things might be for people from other European countries considering France, too:

The Fantasy Of Living In A Cool City (ex. Paris).

Cities across Europe market themselves as cool, hip and leading-edge for tech. For the most part, they are marketing to emotional responses of the cool-factor of a city. For people from outside that ecosystem, it is usually based on a person’s fleeting (holiday) experience of the place.

The French government is on a charm-offensive to promote France as a great place to base a tech company. That dovetails with the positive thoughts many Americans have of their vacations in Paris/France. (Barcelona and Lisbon are two other prime examples.)

But actually moving to France, or to any other country, to start a business (or live your life) is nothing like the fantasy one may have of the place, or that is being sold by marketing (ex. La French Tech).

What Do You Think When You Think Of Paris? Part I: Running A Business

- h.e.a.v.y. administrative burden to run a business. Especially the HR part of it, but all interfaces a business has with the French government.

The marketing message from the right hand is that France is a leader in tech businesses. But the infamous French bureaucracy over on the left hand has not been modernized to support the needs of quickly evolving (tech) business. And seems to have little interest in doing so.

- trouble attracting experienced talent from outside France. From the employee perspective this is due to low-ish salaries, unclear career progression opportunities, and the major adjustments necessary to set up a personal life in France.

What Do You Think When You Think Of Paris? Part II: Life In Paris/France As A Foreigner

From my experience as a non-French person living in France, I think of the many hassles a person deals with to have a smoothly running life there.

This is largely related to French state administration (ex. getting your residence card/number, setting up services for your apartment, health insurance, going to the doctor, getting a bank account). But it significantly also includes securing a place to live (it is nearly impossible for a non-French person to get a great apartment in central Paris).

If you didn’t grow up in France, for up to the first 12 months you will spend/waste much time dealing with administrative paperwork. You will be doing this basically all in French.

Then there is daily life. Just one example of many: imagine the whole process of finding + going to the dentist, or getting a health checkup, if you are not fluent in French, or don’t have an established history in the French social security system.

Add on top of that finding friends and having a social life outside of work, which is heavily influenced by how good your French is.

Expat life is always different than living in the country where one grew up, but some countries in Europe are easier to integrate into than others. France is low on the list, in my book.

Not-funny example: I have had my American driver’s license for more than 30 years. However, I was not allowed to directly exchange my Washington State driver’s license for a French one. So I had to earn a French driver’s license from scratch, i.e. take the written & practical driver’s license tests (in French) — which took 5 months + cost more than 600 Euros. Upon completion, under French law I was considered a “new” driver, which means extra-strict driving laws are applied to you for the first 3 years of having your driver’s license.

(By contrast, in Germany I could have simply filled out some forms and exchanged my Washington driver’s license to a German one for around 50 Euros).

Proof Of Effectiveness / Attractiveness Of An Ecosystem = Non-Local / International Inflow

To me, the best measure of how good/attractive an ecosystem is, is by how many non-locals move there to start companies. And secondarily, how many people move there to work there.

Using Station F as an example:

* How many non-French founders have moved to Station F from other EU countries to start a company?

And how good is a place for building a scalable business?

* How many French startups/Station F companies have 50% of their sales from outside France and Belgium? Or even 30% from outside France/Belgium? (especially in Germany?)

As I thought about what to write in response to Pauline’s question of what impressions people have of France, I came across this post, “The French Startup Ecosystem: At a Tipping Point” which basically covers all that I would say myself, as a general look at the advantages/disadvantages of the current tech business climate in France.

— except that it was written in 2014! Six years ago!

Yet, in my view, it could have been written 6 weeks ago and still be accurate. This to me exemplifies how the French ecosystem is perpetually “just about to turn the corner”.

I believe France (as an example of any European country) will have arrived as a tech business powerhouse when there is notable data (as opposed to anecdotes) of non-French people moving to France to start companies, as well as people moving to France to work in tech.