Startups

A French School for Entrepreneurs


Burdensome regulations and risk-averse lenders make France a place that is, at best, challenging for tech entrepreneurs. The country’s biggest tech companies, such as Alcatel-Lucent (ALU) and Vivendi, trace their roots back more than a century. In the U.S., it’d be as if the tech landscape were still dominated by IBM (IBM) and Xerox (XRX).

Xavier Niel, 43, one of the few French Internet billionaires, seems to think he can change this by force of will. In recent years, Niel, the founder of one of France’s biggest broadband providers, has become a prolific supporter of young tech companies, investing about €50 million ($71 million) a year. Now he’s joined with two other French Internet moguls to start a professional school for Web entrepreneurs, scheduled to open this fall in the building that once housed the Paris stock exchange.

One of Niel’s partners in the venture is Jacques-Antoine Granjon, founder of vente-privee.com, an online fashion retailer. Another is Marc Simoncini, founder of Meetic.com, Europe’s biggest dating site, which was recently purchased by Match.com in a deal that valued the company at $496 million. The trio represents “a first generation of Web entrepreneurs who have succeeded, made money, and understood they have every interest in” helping to build France’s technology sector, says Guilhem Bertholet, who runs an incubator at the HEC business school outside Paris. “We’re trying to feed an ecosystem,” says Niel. “It’s coming, step by step.”

The three-year program, known as the European School of Internet Professions, will teach topics including programming, Web design, and online marketing to an initial class of 100 to 200 high school graduates. Students will pay €6,500 a year, and each of the three Web moguls has donated €500,000 to get the project off the ground. That’s not much in terms of U.S. philanthropy, but in France, where individual giving to education is rare, it’s remarkable.

Niel is the most successful—and colorful—of the partners. His first business foray, in the 1980s, was a sex-chat service on Minitel, a French precursor to the Internet. He later invested in a group of sex shops and in 2004 was briefly jailed when one was investigated for prostitution. He was eventually exonerated and joked that prison helped him lose weight and catch up on sleep.

In 1999, Niel founded a broadband service, Iliad’s Free, to take advantage of deregulation that forced the former state monopoly France Telecom (FTE) to open its network. It became the first company in France to offer broadband packages combining Internet, television, and telephone service, and its low prices helped it grab 21 percent of the market by 2010, according to Enders Analysis. The company has begun expanding into mobile service, and Niel’s 63 percent stake is now worth $4.2 billion.

In turning his attention to philanthropy and startup investing, Niel has earned some respect from France’s conservative business community. As recently as last year, the long-haired, tie-shunning Niel was referred to as “that peep-show guy” by President Nicolas Sarkozy. When Niel stood onstage alongside Granjon and Simoncini to announce plans for the Internet school on June 6, Industry Minister Eric Besson joined them and called the trio “heroes.” Niel says he’s motivated by a desire to help young French math and science whizzes, who generally end up in blue-chip companies such as Vivendi rather than pursuing their ideas for the next Google (GOOG) or Facebook. Since last year, Niel’s main fund, Kima Ventures, has invested in more than 90 young tech companies, about a third of them French. “The real force of Silicon Valley is the mentality, the spirit,” Niel says. “There’s no reason at all that can’t be replicated in Paris.”

Rajesh Chandy, a professor at London Business School who studies innovation, points out that Paris is not the first place to try to import Palo Alto’s entrepreneurial mind-set. “To say that it’s been tried before would be an understatement,” says Chandy. “I’d be much more excited about an effort to target a new space,” rather than the hyper-competitive consumer Internet sector, he adds. Stéphane Richard, the chief executive officer of France Telecom, says it “is impossible to replicate” the je ne sais quoi of Silicon Valley.

Niel admits that France has a long way to go. He describes Deezer, a Paris-based music-streaming site he’s backed that was valued at about $115 million last year, as “a classic success à l’américaine.” Then he adds: “I hope one day we’ll be able to say something like that is a success à la française.”

The bottom line: Niel is investing about €50 million a year in startups and €500,000 in a new professional school to create a class of French entrepreneurs.

Campbell is a reporter for Bloomberg News in London.

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Companies Mentioned

  • ALU
    (Alcatel-Lucent)
    • $3.73 USD
    • -0.01
    • -0.27%
  • IBM
    (International Business Machines Corp)
    • $194.57 USD
    • -1.21
    • -0.62%
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