I was consulting for an Indian entrepreneur who had decided to start up a company in France in imports. He told me that there is a saying in his business circle that goes, “if you can make a company work in France then the rest of Europe is simple.” That is why he had decided to start with France. When I met him, he had been working on the project for three years and still had not found the right mix. I told him that the next time he heard that phrase to answer by saying “the Germans have an expression, too, to live like gods in France!” Of course he did not understand my private joke so I had to explain it.
France is a lot of things for a lot of different cultures. The English love hating them as a people, but become good friends with every single one of them they ever get a chance to meet. Americans find them obnoxious, impolite and aloof, but budget the most expensive vacation of their lifetimes around just a few days in their capitol or their Mediterranean beaches. The Germans dream of living like gods in France, but have invaded the country three times in the last century and a half. When I ask my German friends why they do not just move here, most of them say that they love vacationing but feel the French are too undisciplined. That, in part for me, explains the last two World Wars. There is no culture in Europe that does not have a paradoxical set of stereotypes in regards to the French. And there is no culture I have ever encountered that resembles them in any way or has any desire to do so. That’s just fine for the French. They have a reputation to uphold. They are different. “Viva la difference!”
There is a key to understanding why companies are so hard to start up in France. Two thousand years of culture is France’s largest economic asset and Tourism their top market. Any business venture, no matter how profitable or even how useful for the French citizen, must be checked and tested to make sure that it does not damage in any way whatsoever the country’s capital base. It took McDonald’s a decade in order to get a foothold. Burger King tried hard and failed. It took Disneyland Paris the twenty years I have been here to make their mix work, and the French themselves still never go there. I have waited just as long to be able to buy a bottle of cranberry juice off the shelf in a supermarket.
There are no laws prohibiting a new idea or concept to open up for business in France. They do not need them. The entire collective consciousness of the country is trained to keep things out, starting with the consumers. They are the mass, but they have their champion defenders in every professional walk of life from civil servants, administrators, and banks to buyers, wholesalers and traders. There is no surer way to fail in France than to announce that you have the newest, coolest thing, unless you are Steve Jobs. And I am sure that even he takes France seriously enough not to count on the market to meet his break-even targets. The only other way to lose French consumer sympathy is to treat them as if they are conservative.
France is tricky. It takes more money and more time than anywhere else in Europe to make something happen. Whatever you want to do here, you need to make sure that it does not mess with the capital base. Never undermine the pride they have in their own culture. They have a reputation for being a tough country to crack and they are proud of that reputation. That, too, has become a part of their culture, and therefore is now a part of their capital base.
Radja, the Indian businessman, laughed at my explanation. He related with it all too well, coming from a culture that could boast 5000 years of civilization. He told me that in India they were not afraid of losing their cultural heritage, because they knew that is was something that could not be lost, even if you try. That is when I laughed. Venerable cultures like his own, had a whole different set of problems and traditions to deal with when doing business, and the thing he was most afraid of was project lethargy. I told him that France was going to continue to be frustrating for him. In order to keep projects rolling here, you need long-term financing, local partners and three-year objectives. In sum; a great deal of patience and determination. That was when he asked me which bank was best to use. I answered by asking him if the Bank of India had an office in Paris.
Friday, September 18, 2009
A complicated and serious thing
I moved to France in 1988. I was still in college. I had already comfortably launched and closed two small and profitable little companies on Nantucket Island, Massachusetts. I had created them to help pay tuition and the costs of going to university. They were summer companies, the kind in the United States that you start up just to make a little money to pay off day-to-day debts so that you could start September classes with a healthy set of credit cards. I caulked windows with the first company, and sold cable television advertisements with the second. I closed them both because I had other stuff to do; like going back to school, falling in love, and moving to France.
My model for creating a company was simple. You found or invented a service that people might need. You figured out the right price for that service. You went door to door to see if people would buy it, and if they did, you went to work. The whole process took between three days and three weeks. You were in business. Once the money was coming in, you had the time and means to learn all of the more complicated stuff like how to collect money from bad payers, how to open a bank account, and how to fill out company tax forms for your end of the year statement. By the age of 23, I considered creating a company to be a little less complicated than learning how to drive a car, and a little more complicated than learning how to make a good Daiquiri. Then I moved to France.
I had been in France for just over two years when a Portuguese friend of mine, who I had been teaching English, came up to me and asked me if I would like to start up a company with him. I said, “Sure! What do you want to sell?” He sat me down and told me not to say “yes” that quickly. Two hours later, after explaining in great detail his model and what he wanted me to do in the company, he asked me again. My answer was the same. He then said something prophetic. “Kurt, you’re not in America. We’re in France. Starting up a company is a serious and complicated thing here. I want you to think about it.”
I had thought then that José was just trying to make sure that I was committed to his project. I assured him that I would do everything I promised to do. And I did. I was brought up that way. Moreover, banking in a project with José was a no-brainer for me. He had all the leadership qualities that I considered necessary to make a business work. First of all, he was a no bullshit communicator who never let sleeping dogs lie. If there were a problem, he would tell you. That meant that you could fix it. Second of all, he was cautious: he never bought anything that he had not already sold. That is a risk limiting philosophy that I find fail-safe for business. Quality number three; he was a good short and long-term negotiator. He always looked for a win-win deal (for the French reading this blog, a win-win deal is an agreement where both sides of the table go away feeling like they have gained something), or he would not make it. And last of all, he knew his market and his business model. He had been working in computer parts since he was sixteen years old. Unfortunately, for both of us, and the partners he and I brought in, in order to make a business work in France those four qualities are useless.
Had we started up the same company in Portugal, the United States, the U.K. or even Belgium I know his life and mine would be different today. It might have eventually failed, because of the quickly changing computer parts market, but we would have made some money, and learned enough to move into something else as entrepreneurs. As it turned out, José, a natural entrepreneur, never started up another company after we closed his first one. Pragmatic in the end, he got a job… like most sane people in France. I, on the other hand, had not learned my lesson. I would go on to be a part of seven other start-ups, all opening their doors and bank accounts in Paris. They have all had different destinies, some “succeeded” while some “failed”. Though they were all tremendous learning experiences, I have never had the impression that I had built something worthy of all the energy, time, money and determination I had put into it.
I have lived in France for twenty years, and I have finally figured it out. Just don’t do it! Don’t! It is both complicated and serious, and if you are not a complicated and serious person, it is not a good idea.
This nation and this culture has something against those crazy few that want to build from scratch a successful profit-earning enterprise. I secretly believe that they regret having locked up the guillotine, and because of that they have collectively, albeit subconsciously, created a series of obstacles so insurmountable that if you were ever able to get through them all, you would have to become a proletarian idealist with a strong appreciation for chic and luxury. You would have for all good purposes become French. Becoming French is nothing that any sane entrepreneur would ever want to do. France’s greatest and most brilliant entrepreneurs all went to the United States to get their projects off the ground… and became American. Nevertheless, only you can answer this question for yourself. If after reading this blog and its 50 reasons for not creating a company in France, you still want to do it, then I wish you luck. You are someone special. I wish you double luck if you already were French when you started reading this blog. You are going to need it even more.
My model for creating a company was simple. You found or invented a service that people might need. You figured out the right price for that service. You went door to door to see if people would buy it, and if they did, you went to work. The whole process took between three days and three weeks. You were in business. Once the money was coming in, you had the time and means to learn all of the more complicated stuff like how to collect money from bad payers, how to open a bank account, and how to fill out company tax forms for your end of the year statement. By the age of 23, I considered creating a company to be a little less complicated than learning how to drive a car, and a little more complicated than learning how to make a good Daiquiri. Then I moved to France.
I had been in France for just over two years when a Portuguese friend of mine, who I had been teaching English, came up to me and asked me if I would like to start up a company with him. I said, “Sure! What do you want to sell?” He sat me down and told me not to say “yes” that quickly. Two hours later, after explaining in great detail his model and what he wanted me to do in the company, he asked me again. My answer was the same. He then said something prophetic. “Kurt, you’re not in America. We’re in France. Starting up a company is a serious and complicated thing here. I want you to think about it.”
I had thought then that José was just trying to make sure that I was committed to his project. I assured him that I would do everything I promised to do. And I did. I was brought up that way. Moreover, banking in a project with José was a no-brainer for me. He had all the leadership qualities that I considered necessary to make a business work. First of all, he was a no bullshit communicator who never let sleeping dogs lie. If there were a problem, he would tell you. That meant that you could fix it. Second of all, he was cautious: he never bought anything that he had not already sold. That is a risk limiting philosophy that I find fail-safe for business. Quality number three; he was a good short and long-term negotiator. He always looked for a win-win deal (for the French reading this blog, a win-win deal is an agreement where both sides of the table go away feeling like they have gained something), or he would not make it. And last of all, he knew his market and his business model. He had been working in computer parts since he was sixteen years old. Unfortunately, for both of us, and the partners he and I brought in, in order to make a business work in France those four qualities are useless.
Had we started up the same company in Portugal, the United States, the U.K. or even Belgium I know his life and mine would be different today. It might have eventually failed, because of the quickly changing computer parts market, but we would have made some money, and learned enough to move into something else as entrepreneurs. As it turned out, José, a natural entrepreneur, never started up another company after we closed his first one. Pragmatic in the end, he got a job… like most sane people in France. I, on the other hand, had not learned my lesson. I would go on to be a part of seven other start-ups, all opening their doors and bank accounts in Paris. They have all had different destinies, some “succeeded” while some “failed”. Though they were all tremendous learning experiences, I have never had the impression that I had built something worthy of all the energy, time, money and determination I had put into it.
I have lived in France for twenty years, and I have finally figured it out. Just don’t do it! Don’t! It is both complicated and serious, and if you are not a complicated and serious person, it is not a good idea.
This nation and this culture has something against those crazy few that want to build from scratch a successful profit-earning enterprise. I secretly believe that they regret having locked up the guillotine, and because of that they have collectively, albeit subconsciously, created a series of obstacles so insurmountable that if you were ever able to get through them all, you would have to become a proletarian idealist with a strong appreciation for chic and luxury. You would have for all good purposes become French. Becoming French is nothing that any sane entrepreneur would ever want to do. France’s greatest and most brilliant entrepreneurs all went to the United States to get their projects off the ground… and became American. Nevertheless, only you can answer this question for yourself. If after reading this blog and its 50 reasons for not creating a company in France, you still want to do it, then I wish you luck. You are someone special. I wish you double luck if you already were French when you started reading this blog. You are going to need it even more.
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