Captain Train, Withings … Can a growing French company grow on its own?
I note several handicaps that our French companies are facing. First of all, French companies are structurally having great difficulty crossing borders to conquer America and Asia. There is clearly a market size problem between the domestic market and the world market. France is a very small market. In fact, succeeding in France does not automatically confer legitimacy to succeed in the world. We are experiencing what Israeli start-ups are experiencing in a way. The fact that a company comes from France does not mean that the success will be global while in the US the market being very large allows from the start, to benefit from a real proof of concept.
We can be a French champion and still be a “dwarf” worldwide. Big ones success stories French women who succeeded globally, they settled early in the US and raised funds from American investment funds. It is necessary to think internationally when considering the activity and business model of a company.
The second handicap is the very strong lack of funding / capitalization. Today, the big raises of 50-100 million euros are not found on the French market. In fact, companies that are born in France are born poorly capitalized. It is the opposite of what American societies experience. But the venture and venture capital market is getting organized year after year in France. We have more and more material to finance a business from an early age. It is therefore moving in the right direction.
The third handicap is a cultural problem, but it is gradually diminishing. Until today, French companies with strong growth have culturally very difficult to overcome the opening of their capital and to export. There is also the language barrier with a real weakness, on the part of the French, to speak foreign languages and understand local cultures. An example of a notable difference: from their studies, Israelis are educated to do business development abroad. So it’s inherently in their DNA. An Israeli entrepreneur will always think international. In France, this is not part of our reflexes but there is an evolution in this direction because all engineering and business schools now require their students to stay abroad. As a result, the new generation is thinking more and more international.
For the three reasons mentioned above, it is difficult to create digital leaders in France. When they reach a certain size, our companies hand over to a larger structure (multinational or American company) which has the size to make it a world champion and which will strongly support them in its international development. For example, Private-Sale which is a world champion, profitable and in strong growth, does not manage despite this to become an Alibaba or Amazon … Our companies unfortunately, to date, have difficulty in conquering the main markets, in exporting their know-how, to expand their activity. Either they end up being bought out so that a larger structure can develop them, or they change country (see Private-Sale). Few French companies other than multinationals, to date, have succeeded in conquering the American market. To this day, there are still cultural, financing / equity and market obstacles that we will have to overcome quickly.