In 2016, Paris to be home to the biggest startup incubator in the world

http://www.rudebaguette.com/2013/09/25/in-2016-paris-to-be-home-to-the-biggest-digital-incubator-in-the-world/

by regisfoucault • 13 years ago

95 92 13 years ago

Magnifique

Let me be the classical Frenchy (i.e. never happy) here and point out that as long as the tax code, red tape and overall overwhelming paperwork entrepreneurs in France have to deal with won't be reduced or greatly simplified, having big incubators will be a nice touch but the road to growth will still be paved with unnecessary hurdles.

The task at hand is HUGE, one that not so many developed countries have to deal with, that is allowing SME/SMI and entrepreneurs to grow without hassle while still preserving the quality of public service we've grown accustomed to (which has a cost that everyone contributes to or is supposed to contribute to).

I hope we find a good middle ground there, cause the startup culture in France is still a decade behind compared to that of the US or Canada speaking for examples I've experienced first-hand.

EDIT: Still an awesome prospect though, kudos to all the people involved.

k-mcgrady• 13 years ago

Can you give examples of red tape/paperwork you'd like to see removed to help entrepreneurs in France?

TomaszZielinski• 13 years ago

I'm not from France but this doesn't look good: http://www.doingbusiness.org/data/exploreeconomies/france/ vs http://www.doingbusiness.org/data/exploreeconomies/unitedsta....

VeejayRampay2• 13 years ago

Let me clarify something first: I am not an entrepreneur myself. I don't deal with said paperwork, the people I currently work for or have worked for in the past do. I've had the same feedback from a lot of them, in small and bigger companies.

Basically the complaints are always the same: it's not necessarily the amount of paperwork, it's the fact that when interfacing with the various agencies (regarding legal, financial, bank-related, employment or health issues) you usually have to provide the same documents OVER and OVER (and interfacing with people who are not always accountable to someone given the number of layers in the French administration, creating a system where some people have a job for life, don't understand that the "state" is all of us and don't give their all).

It sometimes feels that it never ends and doesn't make sense. Since the system in France is very centralized and since all the different agencies ALL depend from the state, this should be centralized to a given location and then dispatched to the agencies upon request.

The bigger problem anyway (if you call that a problem) is that your social contract in France is that of a mutual network of citizens taking care of each other through taxation. This is great when it comes to a lot of topics (health, education, social services), but it naturally has a cost when you're competing against the likes of the USA who have made a clear choice that the private sector tends to come first. I've yet to think of a good way to have my lunch and eat it but this more often than not puts our SME/SMI in a difficult spot.

camus3• 13 years ago

All of it...The issue in France is politicians that create harsh constraints for entrepreneurs then architect "usines à gaz" for there friends to pretend they are helping entrepreneurs.

yardie• 13 years ago

Here is one. You start a small startup and you have to pay all your social charges for the fiscal year in advance. Say you project you'll make $200000€ the first year and need to pay 80000€ (just an example) before you can retain your first client. That is a huge chunk of change a lot of people don't have.

And if your company doesn't reach it's target and collapses too bad, at least you have health care paid up.

sassyalex• 13 years ago

In this startup incubator there will be a counter with administrative people to help us with all this paperwork. So less pain with all this formalities, we will just have to pay more as we are in France.

By the way, one more time, thanks Xavier Niel, he's the only one in France who invests so much money on things like this and taking so many initiatives to make things change.

He gave us the cheapest contract for mobile phone in the world, he offered us the 42 school (free school for computer sciences with an innovative learning method), he offers us the most efficient dedicated servers for a decent price (http://www.online.net/fr/serveur-dedie/comparatif-serveur-de...), and so much more.

Thanks Xavier Niel.

hershel• 13 years ago

Cold you tell more about 42 school and it's innovative learning method ?

pilooch• 13 years ago

I love rien, I am a Parisien ;)

theorique3• 13 years ago

While I applaud any efforts toward entrepreneurship, I can't help but think that these "megaproject" efforts kind of miss the point.

By their very nature, startups tend to originate from grungy, grassroots hackerspaces, undergrad dorms, shared apartments, graduate common rooms, and so forth. Places where weird and innovative ideas get cross pollinated.

I mean, yeah, "let a thousand flowers bloom", and all. But if France continues to be a place where 75% taxes are seen as a sane idea and bureaucracy holds sway over innovation ... well, good luck.

demallien2• 13 years ago

Well, I suppose one way to look at it is that, bearing in mind that taxes and bureaucracy are intensely difficult to change in the right direction in France, they should try and make things easier for start-ups in other ways. Subsidised office space, and easier collaboration are both good ideas, and are all the more necessary given France's problems in other areas. It should be noted that France turns out some really good engineers (my opinion, as an Australian in France), and it's just dumb not to benefit more from that.

The government has made some good changes in the red tape department too. For example, you can now kick off a one-person start-up by using the status of "entrepreneur" to start with, allowing you to start making money whilst holding down a steady job - once you've stabilized income at ramen profitability, you can then go and fight the red tape to become a proper business. Obviously this is not a model that works for all start-ups, but at least some are going to be able to get off the ground using this ramp.

fab13n2• 13 years ago

There are many things to fix in France to encourage start-ups, indeed. And containing bureaucracy will be harder than tax issues IMO.

However, what's very important in this endeavor this that it's 90% financed by Xavier Niel, a single private entrepreneur who's specialized in blowing up bureaucratic / oligopolistic businesses. He's pioneered minitel services (including sexual content, which got him some flak), then commoditized high-speed ADSL (we've had tens of Mbps for €30 for nearly a decade), more recently cellular phone (no contract, no subsidized phone, unlimited calls, 3GBytes of data for €20), has started messing with education (http://www.42.fr), and now incubation.

I'd have been _very_ skeptical of this without Niel's control over it. With him, I tend to be hopeful.

bsaul2• 13 years ago

same here. i was skeptical of Niel as well, but with 42 he really showed that he was honest with his intention to change the country's mentality.

i also saw an interview of fleur pellerin the other day and she seems like a "hands in the dirt" person. that's a real change from previous ministers in her position.

that's really the first time i'm optimistic about a state sponsored big project.

theorique3• 13 years ago

Cool, thanks for the context.

Don't get me wrong, I think it would be great for France and Europe to have a Silicon Valley-equivalent. So I don't mean to disparage. I've just heard some horror stories about the red tape that startups face in some parts of Europe. Glad to hear there are positive signs.

treelovinhippie• 13 years ago

The university in my local area is trying to do the same thing: they spend all of their time writing funding proposals for a new 3500m2, three-storey, $20m shiny glass incubator building in an area where the startup ecosystem is maybe 2 years old, and has zero angel/VC or mentor networks.

The people behind the project are all academics and have never launched a startup in their lives. They can't even fill a trial "incubator" (that is nothing more than a coworking space) they started two years ago that has a legal maximum of 25 people due to stairwell access. At any given time, there are maybe 6-8 people in there.

Meanwhile the entire startup community is like "WTF mate"!

arethuza• 13 years ago

That reminds me of when we tried to get some kind of help from a UK University in the mid 1990s - all they could do was offer a lease on a rather large building.

Of course, we said "no thanks" and went off and squatted in a couple of dingy rooms at a friendly company until we (after a couple of years) got VC money and got our own office space.

mjn• 13 years ago

If you look at the Valley as an example, it's a bit of both. The grungy garages are the most romanticized element, but there was quite a bit of large-scale institutional support. Stanford Industrial Park and the cluster around NASA's Moffett Field served as two anchors that were something like incubators, though focused on somewhat larger, more capital-intensive, engineering-oriented companies than what today's startup incubators tend to focus on.

loceng• 13 years ago

Just even the media of this will stir up the ecosystem and I imagine inspire would-be entrepreneurs into action.

WasimBhai• 13 years ago

> But if France continues to be a place where 75% taxes are seen as a sane idea

Can you put forward a link to some study that argues that 75% taxes, or huge taxations hampers innovation?

rguillebert• 13 years ago

This tax doesn't even exist, it has been rejected by the constitutional council (the French supreme court)

demallien2• 13 years ago

Ha! I bet Free employees (Free is Xavier Niel's main business) are a bit ticked off - Free is renowned for being cheap with regards to it's employees...

conradfr2• 13 years ago

ex Free here, yes Free is cheap (hence the ex).

And people don't understand that 42 is another way to bring cheaper developers in the market.

VMG2• 13 years ago

Are they still legally obliged to call computers ordinateurs and use Megaoctet over there?

medlazik2• 13 years ago

You know most people outside your country speak a different language than yours?

VMG2• 13 years ago

People speak other languages than German?? I'm amazed!

fab13n2• 13 years ago

You know just enough about Latin countries and their laws to be mislead. There are some puzzling rules and laws indeed, but there's this cultural notion that it's OK to flout inconvenient laws, rather than fighting them frontally to repel them. Among others, the laws intended to protect the French language from English (or more accurately Globish) are widely perceived as not-really-meant-to-be-enforced.

I know it's stupid, but that's the way it is, and it sort-of works. And before going all French-bashing about this, go and check the anti-sodomy laws that still exist in some bible-belt US states...

jpmatz• 13 years ago

That's in Quebec, the french-speaking Canadian area, not France

telephonetemp• 13 years ago

So, how long does it take to learn enough French to be dangerous :-) if you don't speak any Romance language?

bsaul2• 13 years ago

from english to french i would say a year. but that means you're completely immersed ( 0 english speaking).

now the great advantage with IT is that most people speak english, and most technical words are english.

astrodust2• 13 years ago

If you can handle English, French will be a breeze.

German would be harder, and Cantonese would be virtually impossible by comparison.

smandou• 13 years ago

3 years... this is definitely French. By the time, a dozen of bigger projects can show up in the world.

apierre• 13 years ago

It will not happen/work while Hollande is president

regisfoucault• 13 years ago

It will when Niel will be ;)

ashernor• 13 years ago

He doesn't seems to be liked by politicians ; neither does he seems to be fond of them.

majc2• 13 years ago

Really interesting, but a building != an incubator. Access to capital/investors is key and its unclear from the article if this is something they've got a plan to address.

ecaradec2• 13 years ago

Mr Niel is also the largest personnal capital investor in France.

csomar• 13 years ago

So there is 30.000m² of space, but it seems that most of it can't be used for actual work. It'd have been more beneficial if they used the money to build a building and have subsided apartments for start-ups. I think at a starting stage, I'm more in need for work space than an auditorium or another restaurant.

But this doesn't solve the problem for France. I'm (geographically) quite close to France but will incorporate my next start-up in Hong Kong. No Visa, much easier paper work, and easier to get a bank account; and also cheaper.

ecaradec2• 13 years ago

I agree, the building is beautiful, but it seems that there are no private office, so you are required to pick up all your stuff everyday, you can't have a good chair, or work on something other that a laptop. What do you do of your inevitable paper work, taxes, etc... We have a whole cabinet of these here for a 10 people shop. It's all fashion.

netcan• 13 years ago

Interesting, but I'm always a bit skeptical about projects that seem so architecture-ey. I like architecture, but it usually can't create communities or industries. It's like when cities decide to build artist quarters. It works when there are already artists n the area.

The website & press release are all about the building. Who are these startups 1000 startups & why are they going to choose to be there over other places?

hrvbr• 13 years ago

As an incubator, it will be judged on its results. One thing to note is that there's a lack of available and affordable space in Paris. I live in the middle-class suburbs, closer to the rural areas than to the center of Paris, and will probably set my company (if it happens) here than in the tiny overpriced offices of the city.

At least the government is using this huge building for small businesses and not another museum or mall.

hartator6• 13 years ago

I have a business in both Austin, TX and Paris.

I want to share my experience. France is doomed. Taxes and red tape are harder and harder every month. Just today, they have announced they want to raise a new tax on video games (wtf) and distribute the money to french video game large editor. (wtf) You can't do violent games or game that don't picture well the french culture. (wtf!) If you are an indie game developer in France, you are done.

Example of red tapes (someone asked):

- You can't fire anyone. - To hire someone, you have to face a handful of fake applications. (People who don't want to get the job but are afraid of losing their allocations) - You have to publish your statement of income every year. Even if you are full private LLC! - You can't do online banking. - You have to declare every websites you own to the gov. - Some crazy BS about keeping access logs of your websites for an insane amount of time.

Example of taxes:

- To pay an employee 1,000 Euros, you are paying 2,000. - They have a commission to monitor the evolution of work time and you have to pay them directly. Not even a scam. - You have to huge pay a tax on your server SSDs for P2P piracy even if you have a business that nothing to do with that. - VAT taxes are a painful process. - You have to pay 30% of your total assets if you want to live abroad, even if it's only for a few years.

Sure, this project seems great but it's again gov. money (Caisse des Dépots) wasted and it will only profit to some BS/political companies, so scr0w them.

seszett2• 13 years ago

Just answering one point here:

  > today, they have announced they want to raise a new tax on video games

You are confusing government announcing a decision with two senators from opposition making a proposition (which will not even be subject to vote anytime soon). EDIT: just to clear things up, contrary to some countries, in France opposition parties have very little power to push anything.

Which leads to me suspect you might also be confusing other things, especially regarding:

- online banking - most banks expose most of their services online

- declaring websites you own - maybe you are talking about having to declare informations systems that collect and process identifying information (access logs excluded)

- access logs - six months is not "an insane amount of time"

Among the remaining, some is true, some I don't know.

hartator6• 13 years ago

Sure, That's just my experience, I may have some facts wrong.

You are confusing government announcing a decision with two senators from opposition making a proposition (which will not even be subject to vote anytime soon).

In fact, this structure I've exposed already exists. The new tax will just double the budget they got. Regarding the new tax, I won't be surprised if it come in application in a form or another.

online banking - most banks expose most of their services online

By online banking, I mean full online banking. You can't do that if you are a business.

declaring websites you own - maybe you are talking about having to declare informations systems that collect and process identifying information (access logs excluded)

Even if it's a simple blog without comments, you have declared it to the C.N.I.L.

access logs - six months is not "an insane amount of time"

From the LCEN law, it's 1 year including user data, password hashes, raw passwords (you can demonstrate that you don't have them) and session data. Sure, everything is doable but that's an hassle.

maz-dev3• 13 years ago

Regarding the taxes, deal with it. full disclosure: I'm french and I like the healthcare system.

You can fire someone easily. You just have to provide a good reason for it. "Oh well, after all I shouldn't have hired him" or "This guys is not the best I could find, he doensn't give 120%" won't allow you to fire someone, no luck you're in France, labor code is sacred here.

VAT is not painful at all, even an accountant fresh out from school could handle this easily. Protip, hire an accountant. If you're a business, VAT is transparent for you. It only impacts french customers.

You don't have to declare every website to the government, you declare it to the CNIL which is an independent administrative body whose goal is to protect data privacy. I like them too.

Why setting up a business in France if you only see the drawbacks of being here?

Though I agree with you on the bullshit part. This incubator is a total waste of money.

vasilipupkin• 13 years ago

"This guys is not the best I could find, he doensn't give 120%" is a perfectly good reason to fire someone. What other reason could there be? that he or she stole the coffee machine ?

hartator6• 13 years ago

Regarding the taxes, deal with it. full disclosure: I'm french and I like the healthcare system.

Sure.. How long will it last?

VAT is not painful at all, even an accountant fresh out from school could handle this easily. Protip, hire an accountant. If you're a business, VAT is transparent for you. It only impacts french customers.

It's a myth. Companies pay VAT, you pay 19,60% of the value added by your company.

You don't have to declare every website to the government, you declare it to the CNIL which is an independent administrative body whose goal is to protect data privacy. I like them too.

They haven't stop PRISM. Nothing is independent, the CNIL gets its money from state taxes, it's government.

Why setting up a business in France if you only see the drawbacks of being here?

I am from france.

Though I agree with you on the bullshit part. This incubator is a total waste of money

We agree on something! :)

pcrh• 13 years ago

Oddly enough, even though France has this terrible reputation for red tape, the French themselves are quite well represented (possibly even over-represented) in the UK venture capital scene, at least in the area of biotech.

hbbio3• 13 years ago

Sadly, as a French entrepreneur, I would love to contradict you. But basically, you're right. It is much more difficult to create a startup in France rather than in the US for instance.

Read PG's http://www.paulgraham.com/america.html in perspective and it still stands 7 years later, especially when considering US vs. France.

kaffeinecoma• 13 years ago

Thanks for linking to this, I hadn't seen it before. Excerpt:

  Ironically, of all rich countries the US has lost the most civil liberties
  recently.  But I'm not too worried yet. I'm hoping once the present
  administration is out, the natural openness of American culture will reassert
  itself.

I would love to see pg revisit this topic, as this was written in 2006.

pietro• 13 years ago

Why do you even try? It doesn't make any sense to me. Moving to the UK or Scandinavia would be trivially easy, and you'd instantly find yourself in a super business friendly environment compared to France. Is it the food?

hme4• 13 years ago

Any serious entrepreneur in France can double the company income or raided funds with the help of national and local R&D grants, funds and tax credits (Crédit Impot Recherche). Add to that two years of salary for the founders paid by the agency the help unemployed people. It's super easy to get ramen profitable in France, and you don't really need to get angel funding. This is huge and often undervalued.

hartator6• 13 years ago

If you start just out of college your don't get unemployment.

Tax Credits comes with a lot conditions that a lot of startup can't afford. For example, you have to hired university PHDs to do mainly abstract research, startups don't have this kind of money.

kakoni• 13 years ago

Interesting. So you can get unemployed benefit and run a company at the sametime?

ximeng• 13 years ago

Economist has an article this week on French people being unhappy with taxes that may be of interest.

http://www.economist.com/blogs/economist-explains/2013/09/ec...

workhere-io2• 13 years ago

People reading the parent comment should be aware that labor laws are vastly different in Europe - even within the EU - so if you're from outside Europe, don't be scared to start a company in Europe just because of how things might be in France.

As an example, Denmark (also part of the EU) was named Best Country to Start a Business in a survey published in Wall Street Journal in 2010 (http://online.wsj.com/article/SB1000142405274870385920457552...).

mathattack• 13 years ago

I've spent some time working with Parisian based companies. To add to the above...

- It is VERY expensive to fire people. Something like 2 years of salary?

- The taxes rates can be borderline extortion. People are happy paying them because they see value, but it hurts competitiveness.

- There's more of a feel of us (workers) versus them (management) as opposed to esprit de corps. You see this in employee attitude as well as the government's view of business.

This is all a shame, because outside of work, it's a fascinating country, with great food and culture. The academic system produces a lot of well trained engineers that are very good at Math. (This is why most financial software firms either have a French office, French roots, or lots of French engineers)

What's this mean? I hope the project succeeds, but I don't think it will. It sounds like Malaysia's multimedia corridor of many years back. Unfortunately you can't centrally plan innovation.

forgottenpaswrd• 13 years ago

I prefer down-top approaches like YCombinator than top-down, central planning effort.

Ycombinator grew organically, as an experiment. This sounds to me like yet another bureaucratic effort to replicate Silicon Valley.

Politicians always think big, they don't want to fix holes in the roads, they want to make new super highways so everybody could see how great they are.

As European and entrepreneur I avoid France for any of my business work. Every French person enjoys life, wants to work the less they could and they feel entitled for everything. More than half the people there work for the government and are more worried about their rights than what they could do.

They could care less about competing with the world, they are living by increasing their debt, and believe that this is going to last forever, that probably Germany will support their lifestyle.

Don't get me wrong, I love France, speak French fluently, have lots of friends there.

camus3• 13 years ago

Every French person enjoys life, wants to work the less they could and they feel entitled for everything. More than half the people there work for the government and are more worried about their rights than what they could do.

I dont think so ,french people are not lazy at all , and it's common for employees in a private business to do extra hours FOR FREE !!! yes for free. And we dont take 3 hour breaks for lunch, we eat at the office. Whatever you heard about french public service is not true in any private business in France, people work very hard.

cdavid• 13 years ago

What a nonsense. Your facts don't even pass the smell test: around 25 % of people in age of working work as a public servant.

As for the working less than possible and the comment regarding Germany: French workers work more than German on average, thought that's likely skewed because 'forced' part time is more prevalent in Germany (http://stats.oecd.org/Index.aspx?DatasetCode=ANHRS). The whole idea of # hours as a meaningful metric is not a good one anyway: some of the countries from OECD that work the most ? Mexico, Turkey, Greece, etc...

lhnz2• 13 years ago

The perfect location for a startup would have:

    1. Low cost of living.

    2. Low house pricing/rent. (As rent-seeking forces people into being wage-slaves.)

    3. Low regulation and bureaucracy.

    4. Low taxes. 

    5. Educated, creative, and risk-taking workforce.

    6. Ease of finance.

I see so many countries trying to compete in the startup ecosystem by just trying to cargo-cult their way into it with a bit of investment and a brand. Far too many are not fit for purpose because there is too much power held by rent-seekers. It cannot be fixed by simply applying duct-tape to the problem.

Does anybody know a country which fits this specification?

untog• 13 years ago

What about the perfect location for startup employees? New York has an astronomically high cost of living, but it's not like people are somehow tricked into paying it. It also has world-class transportation, social scene, arts, etc. etc.

If you want a "low cost of living", you're going to pay the price for it in another way. Your "educated, creative" workforce might not be all that inclined to stay.

lhnz2• 13 years ago

That sounds correct, though there definitely has to be a location which is somewhere in between the two polar opposites. I find it hard to believe that Silicon Valley was always as expensive as it is now...

sanityinc• 13 years ago

In my personal experience, the UK ticks all these boxes, at least outside Greater London. Good state schooling and the NHS go a long way towards lowering the cost of living.

astrodust2• 13 years ago

Why do taxes matter for a start-up? They're usually not making much money anyway.

If you want a low cost of living, and low rent, you could always live in Mexico. Good luck with #5 and #6 though.

When you have #5 and #6, usually you have an in-demand area, which leads to #1, #2, #3 and #4 being much higher than they would otherwise be. Supply and demand rears its ugly head again.

workhere-io2• 13 years ago

Most places that have a low cost of living and low taxes are also high on crime, bureaucracy, and corruption, and have poor infrastructure (roads, Internet access, etc.). It sounds cool to open your business in a country with low costs - right until the local mafia pays you a visit and demands 50% of your income. And you'll need a thousand permits for doing anything business-related, and everyone involved in granting you those permits will need some money under the table.

CmonDev• 13 years ago

Let's put a bunch of geeks into a cozy office and let's see what happens!

swalsh• 13 years ago

I had this dream a few years ago, that it would fun to move somewhere other than the US, and start a business. I thought it was fun to experience a new culture, and maybe provide something useful. One of places I looked was France, because its the only other language i speak. The immigration laws seemed overwhelmingly difficult for someone like myself (I have a great engineering job in the US, but no degree).

In the end, I got married and bought a house. A different dream I suppose.

subsystem• 13 years ago

It's pretty difficult to immigrate to most "attractive" places without a degree, the US included.

DanielBMarkham• 13 years ago

This might be a good time to point out the differences between startup incubators that work and those that work politically.

Political organizations do things to create political impact. In their terms, a successful startup incubator would have a big building, be designed by a great architect, have funding for hundreds of teams at a time, get funding in memorable ways, and have lots of press-worthy events. In short, whatever it takes to look good on television. Political organizations do things for political reasons.

From what little we know, actually effective incubators emphasize failure, exist in a culture of mutual support, are part of a larger technically-inclined ecosystem, nurture small teams, and exist as a really low-key, ongoing creative chaos of conversations and contacts. In short, little and somewhat trivial non-press worthy things that accumulate when added together. This is why things like difficulty to start a business, or hire/fire employees, get mentioned so often. It's not that any one thing is a deal-killer, it's that a few dozen pains in the ass will destroy all the myriad low level contributors you need for a good startup ecosystem to work. It all adds up.

My goal here isn't to criticize the effort, simply to point out the difference between things that are newsworthy and things that might actually make a difference. I wish these Paris guys the best of luck in the world. Here's hoping they can work through whatever obstacles they find.

gbraad• 13 years ago

Enough time for any other city to become the largest incubator in, e.g. 2015

oscargrouch• 13 years ago

I just wanna say:

Good Luck France(really)! We need different cultures, distinct point of views, more tech jobs, and innovation

Also the Euro zone got to recover fast, we need this strenght, sophistication and experience to help us all to get in a better future..

I know the path is difficult, but i wish you all the best!

Sometimes, just a little optimism, can do wonders!

In 2016, Paris to be home to the biggest startup incubator in the world

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