In an interview with Raouti Chehih, CEO of EuraTechnologies, L’Atelier finds out about the highs and lows of startups going international.
San Francisco, Dubai, Shanghai, New York, and now Belo Horizonte in Brazil together with its partner ZoomLYD – Lille-based accelerator EuraTechnologies has expanded its activities worldwide. Below L’Atelier talks to its founder Raouti Chehih about best practice for startups looking to make it on foreign markets and learns about the obstacles Chehih and his team have had to face when setting up their operations overseas. He pulls no punches and tells it like it is!
L’Atelier: So why did you decide to go international?
Raouti Chehih: Well, we’re looking ahead. We’re laying the basis so that as soon as our companies are ready to do business abroad they’ll have the right support. They shouldn’t find that, once having decided to take that step, they’ve got huge competition from other players in their target countries. It’s vital to get them clued up well in advance, so that they can immerse themselves in and get to understand the local market and prepare products and services suited to it. Ensuring the right product-market fit is an enormous challenge and we put a lot of work into that. We try to think ‘international’ from the very start.
Silicon Valley was one of the first areas we explored. That’s where we learned a lot of lessons, and also where we really took a few tumbles. But you have to take risks. We’ve known how to do that since the very beginning. In Silicon Valley we work in partnership with a local accelerator called The Refiners. The Refiners helps us to provide startups with the right kind of support on the local market.
What obstacles have you encountered?
Setting up our programme in Silicon Valley and in China has been quite tough. There were cultural issues. We arrived with rather a naive attitude, thinking that China, with its population of a billion and a half consumers, would be fertile ground for launching a product. We told ourselves that all we had to do was to set up an acceleration programme. We soon realised that we were being too simplistic. In China it’s crucial to have a network and a good understanding of the local business culture. It’s a good idea to target a few local networks. That helps you to get going. Just rushing in there head-on is taking too great a risk.
We initially made mistakes in where and how we set up but we’ve learned from that. You have to make mistakes in order to learn! Today we’re in a better position to connect a company with a given geographical area. The difficulty today is to convince companies that there is actually a market.
The French Tech movement is not exactly brand new, but does the notion of French companies exporting tech products help you when it comes to setting up in other countries?
Well, you can say whatever you like about French Tech, but France is a country where people love to beat themselves up! One really good thing about the French Tech label – and there are no doubt other advantages – is that it has put France on the world map as a country that counts in the technology sector.
Look at the number of French people in top jobs in Innovation – the number three at Amazon, the co-founder of LinkedIn, Yann LeCun at Facebook, ex-Apple man Jean Louis Gassée, they’re all French. Lots of high-profile people in Silicon Valley are. The French Tech label has enabled this French expertise to win recognition – to put a name to it, to market this expertise, as it were.
When you set up in the United States as a French tech entrepreneur, that’s like an African tech entrepreneur setting up in Europe. Let me explain what I mean: African tech entrepreneurs setting up in Europe, even if they have the best technology in the world, are going to face some difficulties. And it won’t be because of any real weaknesses, it’ll be down to a lack of credentials.
A French person launching a startup in the US faces the same sort of problem. However, thanks to the French Tech label this is now much less often the case. The label is a way of uniting French players, of giving them recognition. Another advantage of French Tech is the federation of French communities abroad. French people wanting to do business overseas can get in touch with the French community there and obtain advice on how to set up locally.
The Chinese communities are a good example of this. When a Chinese entrepreneur wants to import goods, s/he tends to choose a place where there are already other Chinese so that s/he can make use of Guanxi – the networking approach, Chinese style.
Does having a foothold in Brazil, the US and China help you to identify foreign startups that you’d like to encourage to come to France?
Well, we’re still working on that but our strategy is definitely two-way. If we want to diversify our ecosystem, France must also become a country where foreign startups wish to come and set up. Brexit will perhaps provide an opportunity for all of us to attract foreign startups. And the best way to encourage foreign companies to come to a country like France is to persuade them that we’re very close to them from an intellectual and economic point of view.
Take South Korea for example. At EuraTech we work a lot with South Korean companies. Like the French, they’re very strong on R&D. They’re supported by their government and their incubators are state-run. In many ways, the South Korean approach resembles the French system. And those companies have the same problem as French firms, i.e. they don’t work abroad enough. From a technology standpoint they’re highly creative, but they have incredible difficulty getting into foreign markets.
And the best way to attract foreign startups to your area, region or country is to have companies working in their geography. You can’t have one without the other!