Yahoo Finance Paris Sets Its Sights on Being a Start-Up Hub
PARIS -- Imagine having a friend who really knows the City of Lights and who always -- literally, 24 hours a day, seven days a week -- has time to chat.
Louisa Mesnard, a Franco-Irish 25-year-old businesswoman is making sure it's not just a dream. Together with her team, she created Citron, a Facebook ChatBot that makes its business knowing every hidden jewel in Paris: the café in Montmartre where the fictional Amélie Poulain worked as a server, the hole in-the-wall bar with the working phonograph and the old-fashioned cocktails, or the lunch place on the Left Bank that has both good Wi-Fi and a fireplace.
On top of knowing all those things, Citron is unfailingly polite, witty and interactive. After being tested in French for months, Citron earlier in April began bantering and suggesting places in English, too.
With its social-media dependent, millennial-targeting and highly scalable profile, Citron seems to come from Silicon Valley. But it is actually being developed in France, a place that Mesnard says is one of the best places on the globe to start a business.
This summer Citron and its team will move to Station F, an ambitious project being billed as the world's biggest incubator. The space also is emblematic of a larger cultural shift taking place in France. The land of the three-hour lunch is poised to become the European hub of the frenzied-paced, hyper-capitalistic world of start-ups, according to experts here on entrepreneurship.
"Given the situation with Brexit, given the situation in the U.S. with Donald Trump, we see a lot of entrepreneurs re-evaluating the go-to places," says Roxanne Varza, an American who is a Silicon Valley veteran and the director of Station F.
With its 35-hour workweek, lifelong employment contracts and heavy social taxes, France was once perceived as decidedly business unfriendly. The country has weathered the financial crisis, but its unemployment rate of nearly 10 percent is one of the worst in Western Europe and is a major issue in this spring's presidential elections.
Youth unemployment in France is even worse, hovering just below 24 percent, a sign of what experts call the dual labor market, where insiders are protected and "outsiders" -- young people, foreigners or the uneducated -- face greater obstacles finding long-term and well-paid work.
When finished, Station F will be a 366,000-square-foot space that will help incubate up to 1,000 start-ups, have room for 3,000 desks, house more than 10 international start-up programs and an onsite "fab lab," a workshop where prototypes of new products can be built.
Setting the conditions for Station F are a changing work culture, an increase in investment, tax directives supporting research and development, a good -- and relatively inexpensive -- supply of top-notch engineers and, above all, a powerful nascent culture of entrepreneurship, say experts.
"The main asset in a start-up company is people, and there is real entrepreneurial drive in France in these last years," says Etienne Krieger, a director of the entrepreneurship program at HEC Paris, one of the top business schools in France and a partner in the incubator.
France is fertile ground for entrepreneurs, says Patrick Riley, an American venture capitalist and the head of the Global Accelerator Network, a global network of investment accelerators that has been responsible for more than $4 billion of funding.
"The laws are good, the regulations are good and the people starting those operations in France are really good operators," he says, conceding that funding is still an issue.
Still, more work remains to foster a start-up culture in France. The country ranks No. 29 on the World Bank's annual "Ease of doing business" ranking, well behind competitors such as the U.S. (8), the U.K. (7) and slightly behind Germany (17). The Global Entrepreneurship and Development Institute, which compiles a Global Entrepreneurship Index, ranks France at 13, still behind the U.S., the UK and Germany.
About 0.03 percent of France's gross domestic product is invested in start-ups. In the U.S., where modern start-up culture began, the number is closer to 0.33 percent of GDP, according to Krieger, who credits research tax credit and the investments by para-public Banque publique d'investissement for increasingly better funding opportunities.
Riley, who regularly travels to France to meet with young entrepreneurs, says the country might have a leg up on certain aspects of the start-up process. For one, he says French entrepreneurs give themselves more time to get a business off the ground.
"The French are able to take the long-term view; in the States, if you don't have your business up and running in three months, it's no good," he says, noting that French entrepreneurs will sometimes take two years to get a company started.
Arthur Menard, 26, whose start-up Spartan designs and sells boxers that shield men's reproductive areas from cellular and Wi-Fi radio waves -- a Faraday cage for the crown jewels, as one reviewer put it -- says the past half-decade has seen a shift in how start-ups are viewed in France.
"Back then it was quite weird; now it's something quite chic, young people in France see as quite desirable."
Citron, the conversational intelligence software, has a potentially high value. Getting users to share their experiences will grow Citron's local knowledge. Letting users interact conversationally with the program -- which is accessed on Facebook's messenger -- will allow people to actually find what they are looking for. Once Citron is fully operational, a small cut in booking fees -- besides suggesting places, Citron will eventually assist in actually booking them -- will finance the business.
Station F will open after extensive renovations are made to a historic building in a commercial district in the 13th Arrondissement in the south of Paris, not far from the hip Butte-aux-Cailles neighborhood. Befitting its new role, the structure was the first major building in France built in 1929 from pre-stressed concrete by the very inventor of the now-ubiquitous material, Eugène Freyssinet.
Although named after Freyssinet -- the original name "Halle Freyssinet" was abandoned in favor of Station F because it proved difficult for foreigners to pronounce -- the hub's patron saint and principal backer is Xavier Niel, a notable French entrepreneur. Niel was not only instrumental in several telecommunication ventures, but has also founded 42, a private non-profit coding school with campuses in California and Paris.
"Xavier loves to take projects and scale them up," says F Station director Varza, who compares Neil in stature to Richard Branson.
With its international talent, investors and appeal, Station F appears headed to become quintessentially Parisian. Its unique sensibilities, however, aren't preventing French entrepreneurs to look to the U.S.
Referring to the founders of Evernote and Facebook, two Silicon Valley success stories, Menard says of the giant French incubator: "It's going to be the closest thing that we have to San Francisco, where you might be having coffee next to Phil Libin or Mark Zuckerberg."
More From US News & World Report
