European Straits

The Agenda 👇

* The Building Bridges podcast: a conversation with Azeem Azhar on his book Exponential 🎧

* My latest Sifted column about French startups raising money like never before

* Thumbs up/down for the last weeks

* A list of recently unlocked essays from the archive

📓 What a journey! My first encounter with Azeem Azhar, writer of the Exponential View newsletter and author of the recently published eponymous book Exponential, happened on Twitter a few years back, right after I had settled in London with my family. At the time, I think Exponential View was in its infancy and Azeem was still writing a regular column for the Financial Times.

* We exchanged messages on Twitter about the future of trade unions—which ended up inspiring me with the idea of “exit unions”, discussed here and here, as well as in my book Hedge.

And that is how the connection was made. I believe Azeem and I have only met once IRL, but we’ve kept reading each other, and then Azeem invited my wife Laetitia Vitaud and me to contribute one of the summer editions of Exponential View, which we dedicated to... the future of workers’ rights and trade unions in the platform economy. You can read it here: EV #179 Platforms & workers.

* More recently, Laetitia was a guest on Azeem’s own podcast, an episode dedicated to discussing craftsmanship as the best paradigm to imagine the future of work. Here’s the link: Technology and the New World of Work 🎧

It was only logical that with Azeem publishing a book (his first!), he had to be a guest on our own Building Bridges podcast. Here’s what Laetitia wrote about their conversation:

The pandemic provided us with ample evidence about our being ill-equipped to grasp exponential change. At the beginning of each new wave of contamination, policy makers fell into the same cognitive trap. They ignored exponential growth at the beginning. The early points on any exponential curve look so unimpressive at first that everybody (except for epidemiologists or financial experts) will fail to pay attention to it. So people aren’t ready to adapt to exponential change.

At school, classes are often taught as if Google and Youtube didn’t exist. Our tax systems largely ignore the specifics of our digital economy and fail to properly grasp the value created by digital giants. Labour unions fail to target the growing precariat of our day and age. More people fall through the cracks of the safety net we designed for the industrial age. Even the way we measure and analyse economic value is more and more beside the point. The list could go on and on…

That’s why I was particularly satisfied to find out that this gap had been given a name: the Exponential Gap. In [his] must-read book titled Exponential, Azeem explains that in our Exponential Age, technological change is exponential whereas institutional change is only linear, which results in a fast-growing gap between the two.

👉 You can listen to Azeem and Laetitia discussing the advent of the Exponential Age using the player above 👆 or on Apple Podcasts or Spotify.

Bonus: For those who prefer to listen to French, Laetitia and I will discuss Azeem’s book in the next “À deux voix” episode of our Nouveau Départ podcast, to be published tomorrow. Time to subscribe to our French-speaking platform 🇫🇷

🇫🇷 Last week was quite big for French startups, with a handful of them announcing unprecedented megarounds over the course of just 48 hours. This is the topic of my latest column in Sifted, published this morning, in which I make two points:

* Yes, the French entrepreneurial ecosystem is starting to compound, with the first generation of successful entrepreneurs finally paving the way for the next generations, following a process well documented by analysts of successful entrepreneurial ecosystems.

* However, we should be wary of a typical French trait known as “toxic positivity”: the idea that everything is going well, everyone is doing things right, and France will inevitably grow its own tech giants—like it once grew landmark companies like LVMH, L’Oréal or Air Liquide.

Put simply: there’s no guarantee that because a country was among the most advanced in a given paradigm (that of the Fordist Age), it will remain so in the next one (the Entrepreneurial Age). French founders have to keep pushing, looking outward, and connecting with the rest of the world.

👉 Read more in It's been a record year for French Tech; what's next? 🇫🇷

😀 Echoing my early discussions with Azeem about the future of trade unions, here’s a fantastic contribution by Li Jin (alongside Scott Duke Kominers and Lila Shroff), recently published in Harvard Business Review. This niche topic has become a global conversation, effectively in sync with profound transformations on the labor market. Read more in A Labor Movement for the Platform Economy.

🙂 A gem I discovered: Tyler Cowen on reading fast, reading well, and reading widely. You might remember Tyler being a guest on the Building Bridges podcast a few months ago (here 🎧). He’s known as one of the most effective and efficient readers there is. In this article, discovered via Trevor McKendrick, he explains his approach to books and to absorbing what’s in them. 

😏 This tweet was my most popular in recent memory: worth reading the thread, and the article that’s linked in it—a discussion between George Kankou Denkey and Howard French about urbanism in Africa:

😐 I call it “The Great Fragmentation”. David Halpert of Prince Street Capital calls it “Digital Decolonization”. And this article published in Bloomberg discusses an interesting variant, which they call “Westlessness”. Give a read to “Westlessness” Is the Word if the Old Established Alliances Fall Apart:

While it lasted, the West — not in an ethnocentric but in a normative sense — made the world, on balance, a better place. Its ongoing fragmentation therefore bodes ill for stability and peace. The U.S. should keep trying to salvage this West, even as others, like the U.K. and Australia, are wise to draw up a Plan B. But ultimately it’s the Europeans who have to decide what they want — and then do what it takes to become credible.

😒Another one along the same line: Who needs expats? (from The Economist). It discusses trends that I already covered in my 2015 essay The Power of the Tongue: English in the Digital Economy, and I’d like to share this fascinating quote:

This speaks to a broader economic shift that has dented the need for expats. Once upon a time they used to be the ones able to facilitate access to foreign capital and know-how, often from Western sources. Now money is abundant and the most exciting business opportunities are emerging markets doing business with other emerging markets, particularly in Asia. You don’t need a Westerner to show you how to do that. The world they understand is no longer as relevant.

😖 For a few weeks, everyone was wondering if the fall of Chinese real estate behemoth Evergrande would precipitate a global financial crisis. It appears China tackled the matter and prevented the situation from degrading further. The whole episode was an opportunity to learn more about real estate in China as well as the (mostly negative) role it plays in economic development. I loved this essay by Noah Smith (paywalled, but worth subscribing!): China's real estate trilemma 🇨🇳

China’s government now has to decide what to do, and quickly. It doesn’t lack for policy options. The problem is that there are a number of competing concerns here, and figuring out which to prioritize is not an easy problem. Basically the three concerns are: 1. Short-term economic growth; 2. Middle-class wealth; 3. Long-term productivity growth and structural economic transformation. Let’s talk about all three of these goals, and why China probably can’t accomplish all of them at once.

📚 I unlocked two more essays from the European Straits archive recently:

⚖️ Principles for Capital Allocation (April 2020) 

👾 Unai, VR, and the Hardware Lottery (September 2020)

And here’s the whole Twitter thread including all unlocked essays since last June:

Sign up to European Straits if you don’t want to miss the next issues 🤗

From Munich, Germany 🇩🇪 

Nicolas

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.europeanstraits.com

The Agenda 👇

* Chris Bruntlett talks about cycling in cities in the latest episode of the Building Bridges podcast

* A complementary reading list on the future of urban transportation

* Thumbs up/down for last week, and a few unlocked articles from the archive

Here’s my investment thesis in a few bullet points:

* we long thought that the only playbook to build tech companies was that of Silicon Valley;

* but then China opened our eyes to the existence of a very different playbook;

* since these two radically different playbooks co-exist, maybe there are many others;

* in particular, there must be such a thing as a European playbook, which we still have to discover.

When I voice this thesis, people immediately jump to the next round of questions: What’s this uniquely European playbook? What makes Europe different from the US and China? What are our strengths and how can we Europeans play on them?

This, I must say, is the holy grail of investing in Europe. Any investor with a deep understanding of what makes Europe unique has an edge over US competitors and any locals that don’t know how to do anything other than to emulate Americans.

* Plus, learning to differentiate your approach to the market in Europe is good training for doing the same in the many other regions in the world where successful tech companies are now growing at a fast pace. Again, the key to success in venture capital at the global level is not to replicate the same approach everywhere, it’s to understand the local context and adjust investment decisions accordingly. It’s true in Europe, but it’s also true in Southeast Asia, the Middle East, Latin America, Africa, and elsewhere.

But still, what about Europe? One of my findings is that the best way we Europeans can learn about ourselves is by asking outsiders what they think, whether they’re from the US, Asia or other parts of the world.

* Another finding is that what Americans, in particular, admire the most about Europe is our cities: their density, their vibrancy, the quality of their infrastructure, the beauty of their architecture, and generally how rewarding and convenient life can be when you live in a large European city.

If you follow that path, a key to understanding Europe’s entrepreneurial potential is to get a better understanding of what makes its cities different—whether that’s housing, retail, healthcare, proximity services, transportation, or any other aspect of urban life. And since I came to this realization, a big part of my thinking as a European investor has been focused on cities: what makes them different from cities on other continents, and what unique opportunities can be seized by European entrepreneurs as a result?

All of this is why I was especially interested to listen to my wife Laetitia Vitaud’s conversation with Chris Bruntlett, a cycling enthusiast, the Marketing Manager at the Dutch Cycling Embassy, and, together with his wife Melissa Bruntlett, author of several books about urban mobility. Chris is a Canadian who moved to the Netherlands specifically because he was attracted by the Dutch urban way of life and what makes it so unique: the key role that bicycles play in day-to-day transportation. As Laetitia wrote on the Building Bridges website,

When you look at the infrastructure decisions made in the Netherlands in the 1970s, you see that they were designed as very democratic and inclusive infrastructures: the old use them, people with disabilities use them, so do families with children. Cycling is cheap. And it has the potential to transform our (work) lives for the better.

👉 You can listen to the whole conversation between Chris and Laetitia by using the player above 👆 or on Apple Podcasts or Spotify.

As a complement to the Building Bridges podcast with Chris Bruntlett, please enjoy this reading list on the future of transportation in cities:

* This is the year a major European city will ban cars from its centre (Martin Mignot, Wired UK, January 2020)

* 11 cities that have joined the car-free revolution (Adele Peters, Fast Company, January 2020)  

* Coronavirus: a huge push for cycling to work (Robert Wright, The Financial Times, May 2020)

* Bikes starting to push cars out of cities thanks to COVID-19 (Florence Schulz, Euractiv, May 2020)

* Now is the moment for European cities to get a move on and leave cars behind (Emily Brooke, Sifted, May 2020)

* Cities Have a Small Window to Save Themselves From Cars (David Zipper, Slate, May 2020)

* Why We Need Feminist Cities (podcast w/ Leslie Kern—Laetitia Vitaud, Building Bridges, October 2020)

* Mass Transit Is the Way to Get Cities Moving Again (Lionel Laurent, Bloomberg, July 2021)

* Welcome to the 15-minute city (Natalie Whittle, The Financial Times, July 2021)

* The Gender Divide in Transport Is Starting to Crumble (Carolynn Look and Elisabeth Behrmann, Bloomberg CityLab, July 2021)

* How to end the American dependence on driving (Gabby Birenbaum, Vox, September 2021)

😀 After 10 years in Paris (from 2006 to 2015) and then 5 years in London (from 2015 to 2020), my family and I have been experimenting with escaping from the big cities, moving from London to rural Normandy at the start of the global pandemic, and then from Normandy to suburban Bavaria in November of last year. Read a few related ideas in my Household Finance in the Entrepreneurial Age. 

* Another interesting experience of escaping the Big City has been that of my friend Stefano Bernardi, an investor who’s been living in the Dolomites (from San Francisco) for several years, and has now launched a project named Trento Remote to provide everyone with the opportunity to join him in this experience. Read Stefano’s announcement here: Launching Trento Remote: a curated batch for remote mountain living ⛰

🙂 They did it again! Our friends at Index Ventures have been at the forefront of pushing for simpler, better approaches to granting stock options to employees of European tech startups, most notably with the #NotOptional campaign about which I wrote in my 2019 essay Why Employee Equity Matters. Now the very same team has launched a powerful tool to help early-stage founders plan and execute on bringing their early employees in as shareholders. Check it out here: Index Ventures OptionPlan.

😏 A recurring theme of this newsletter is the transition from the Fordist Age, which was dominated by manufacturing, and the Entrepreneurial Age, which is dominated by tech companies. A recurring objection from my readers concerns today’s equivalent of the working class: what will replace those steady, high-quality jobs that manufacturing used to provide? Well, it seems we now have the answer—it’s Amazon: Amazon’s New ‘Factory Towns’ Will Lift the Working Class.

😐 If you want further proof of that trend, just consider how hard Amazon and Walmart are competing on the labor market, as suggested by this article: Amazon and Walmart are Winning the Labor Market Wars. It’s good news for workers, as they can play on the competition so as to obtain higher wages and better benefits. It’s bad news for many other employers in proximity services, who now have to renounce treating workers like crap. Not sure what kind of news it is for us consumers, though! 

😒 Luckily for workers at Amazon and Walmart, their jobs tend to be located far away from the dense and expensive metropolitan areas. On the other hand, many workers in proximity services continue to suffer from unaffordable housing and/or long commutes because not enough has been done to build housing over the past decades. It’s a problem that’s at the core of the current malaise within the Western middle class (and beyond!), and hopefully one that can be solved in time. Read more in  Sam Bowman, John Myers & Ben Southwood’s The housing theory of everything.

😖 I admit defense industry contracts between France and Australia has never been at the top of my interests. But last week’s cancelling of such a contract in favor of Australia’s partnering with the US and the UK caused such a stir that I had to pay closer attention to the whole thing and its implications from a geopolitical perspective. For a glimpse into how the French reacted to the setback, read Rory Medcalf’s What does the new Aukus alliance mean for global relations? And for more in-depth analysis and commentary, follow Bruno Macaes’s Twitter account:

Sign up to European Straits if you don’t want to miss the next issues 🤗

From Munich, Germany 🇩🇪 

Nicolas

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.europeanstraits.com

The Agenda 👇

* I spoke with Toni Cowan-Brown about everything that’s changing in F1 🎧

* Thumbs up/down for last week

I’m very happy to publish what will be the last episode of the Building Bridges podcast this season: a wide-ranging conversation with Toni Cowan-Brown about the fascinating world of Formula 1 🎧

Toni is the first repeat guest on Building Bridges, since Laetitia already interviewed her a few months ago about being a European in Silicon Valley. Being a Nation Builder alumnus, Toni’s main focus is the intersection of tech and politics. She’s currently the publisher and/or co-host of several inspiring lines of content, including her personal newsletter Idée Fixe; the podcast Unapologetic Women, which she co-hosts with Sorcha Rochford; and the podcast Another Podcast along with Benedict Evans.

As I explain in my opening, my personal story with Formula 1 can be divided into two parts. The first was my growing up in 1980s & 1990s France and cheering for 4-time world champion and local hero Alain Prost. Prost’s popularity was such at the time that I was watching as many races as I could and knew quite a lot about the teams, the rules, and obviously the drivers.

But then Prost retired after winning his fourth world championship in 1993, and like most of France I became bored and disengaged from Formula 1. In fact, I stopped following the sport altogether until I discovered Netflix’s (excellent) Drive to Survive earlier this year—effectively a 28-year gap between being a Prost cheerleader and enjoying the popular Netflix series about current seasons!

Hence my very first question to Toni: What has happened in Formula 1 over the past three decades? Quite a lot, it turns out, between the evolution of the power unit, the constant shortening of the pit stops, and many other things that you’ll discover if you listen to the podcast.

In our conversation, Toni and I cover the following topics:

* What matters the most, the car or the driver? Hint: it’s both, and so much more!

* Why spec series (that is, series in which cars are all the same) are the best opportunities for women to break into motorsports.

* Why the UK is the core of the Formula 1 world, and all about Motorsport Valley, a small area in England where (almost) all the teams are headquartered.

* Why Formula 1 teams are the best illustration of French economist Philippe Aghion’s concept of a “neck-and-neck firm”. 

* What the Formula 1 overlords are doing to try and win the interest of the American audience—including Drive to Survive, which has been tailored for the US.

* Why Formula 1’s weird (and sometimes dark) politics is being turned upside down thanks to social media (hello, Lewis Hamilton!).

* Who and what you should follow if you want to dig deeper and engage with the sport.

👉 Listen to my conversation with Toni Cowan-Brown in the latest episode of the Building Bridges podcast using the player above 👆 or on Apple Podcasts or Spotify.

Also here are a few videos that Toni mentions in our conversation:

* Jos Verstappen F1 Pit Fire (full) (1994)

* Formula 1 documentary | Pit Stop in Two Seconds (December 2019)  

* Lewis Hamilton’s eyes get fully open when F1 V10 sound blasted past behind (December 2020)

* Over 4 Minutes Of Bono Coaching George Russell Team Radio 2020 Sakhir GP (December 2020) 

And don’t forget to check out some of Toni’s other works on Formula 1:

* A 3-part essay about Formula 1 as part of Toni’s newsletter Idée Fixe: part 1 (the basics), part 2 (the driver or the car?), part 3 (sponsorship & big tobacco).

* A conversation with Benedict Evans (Another Podcast): F1, the plane that never takes off 🎧 

* An episode of Unapologetic Women about athletes becoming activists 🎧

😀 The Dealroom team is doing an excellent job, along with Sifted and the European Commission, on documenting European tech and outlining the challenges it needs to tackle to get even better. After an excellent report on Corporate Innovation in the Entrepreneurial Age, they’ve just released another great report on Startup Cities in the Entrepreneurial Age 👉 Read it all here 👀

🙂 Our friends at Stripe recently launched a product called Stripe Tax—which, as you can guess considering the company and the product’s name, is about helping startups and small businesses comply with differing tax rules when doing business across borders. Read all about it here. Also, this:

😏 The piece I wrote last year about the future of construction featured a French entrepreneur, Pascal Chazal. Interesting that Pascal’s insight was that retail chains would take the initiative in disrupting the housing market, and now there’s this: John Lewis plans to build 10,000 rental homes.

😐 Everyone is finally awakening to the idea that venture capital is eating financial services. It’s a phenomenon that I call The Diffraction of Venture Capital (see this list of curated links on the topic), but now it’s made its way into the Financial Times: The new world of venture capital.

😒 There was a debate recently about Western European VCs writing (much) more than their counterparts in Central & Eastern Europe. Fortunately, Marcin Szelag, a VC investing from Poland, is remedying this with his newsletter CEE Venture Rounds Review. Keep writing, Marcin!

😖 I once wrote about investors needing to switch from a country risk paradigm to one focused on widespread uncertainty. The examples I used were Brexit and the CCP’s crackdown on Hong Kong. But this is also relevant: Didi Crackdown: Wall Street Should Have Seen the Regulatory Risks Coming.

From Country Risk in an Uncertain World (July 2020—just unlocked):

In the past you could confine your business within the limits of the vaguely global part of the economy in which risks could be assessed and managed. Today, the Great Fragmentation is destroying even that “globaloney” corner—starting with Britain, Hong Kong, and even the US—and forcing everyone to realize that uncertainty, not risks, rules the world economy now.

Sign up for European Straits if you don’t want to miss the next issues—starting again in September 🤗

(Credit: Franz Liszt, Angelus ! Prière Aux Anges Gardiens—extrait du disque Miroirs de Jonas Vitaud, NoMadMusic.)

From Normandy, France 🇫🇷 

Nicolas

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.europeanstraits.com

The Agenda 👇

* Laetitia spoke with Bloomberg Beta’s Roy Bahat about everything future of work 🎧

* My latest column in Sifted is about publicly traded VC firms in Europe

* Thumbs up/down for last week

* Recently unlocked essays from the European Straits archive

For the latest episode of the Building Bridges podcast, Laetitia interviewed our friend Roy Bahat, an SF-based venture capitalist with Bloomberg Beta and an inspiring leader on the future of work. Here’s what she wrote about their conversation:

For this new episode of the Building Bridges podcast, I’m excited to share my interview with Roy Bahat, who as the Head of Bloomberg Beta has been “obsessed with how we make work—the thing we do with more waking hours than any other—better”. He’s been an inspiration for me at least since I watched this video in which he speaks about two key drivers for workers: “Stability and dignity”.

Roy is used to making short, insightful and actionable pieces of content about work, careers, entrepreneurship and personal development. I recommend his series of to-the-point #thisisnotadvice interviews which you can watch on Twitter. They cover a wide range of topics like “Should I mentor someone and, if so, how do I do it?”or “How can I be the type of founders that VCs want to fund?”.

But I confess I wanted more time with him. I wanted to hear him in a longer format so he could tell his career story, what it means to be a VC specialised in the future of work and so we’d still have time left to speak about the future of work and how we can prepare for it. I’m so grateful he accepted!

As he explains in this podcast, he hadn’t planned to become a VC, let alone one who focuses on the future of work! But after doing tons of reading, talked to thousands of people and given the subject a lot of thought, you could say he’s become quite the expert. (More exactly, he’s reached that level of expertise where you become humble again. It’s a bit like Japanese martial arts: when you reach the highest level, you can wear a white belt again like a beginner!)

I simply love how he adresses the most simple yet profound questions. Here’s how he sums it all up neatly on his LinkedIn profile:

I've had a messy, hand-wringy career (in non-profit, professional services, city government, big media, video games, academia, day-zero startup, investing), where I was never hired for any job for which I was qualified (including starting a company, where I guess I sort of co-hired myself and was still unqualified). Only later did I realize the one thread that tied it all together -- making work better.

In 2013, Bloomberg L.P. gave me the opportunity to turn my obsession with the future of work into my job when we created Bloomberg Beta. I believe the fastest way to make change is to build extraordinary technology companies (and, these days, machine intelligence companies in particular).

We talked about a lot of things, including feminism and why it’s important to embrace it. Among the many themes covered were also the skills of the future. How do you make yourself “futureproof” in a fast-changing world? I asked him because in his book Futureproof, NYT journalistKevin Roose thanks Roy profusely for the inspiring conversations he had with him. (Check out this article I wrote about the book.) Here’s Roy’s conclusion:

How do we prepare? Most of the past thinking about preparation for the future that I learned growing up what “point preparation”—”here’s what the world’s going to be like: prepare yourself for it” (…) But if you believe that the pace of change is going to be more rapid, then learning is the most essential skill, rapid reinvention… In the tech world, I call this being the CIO of your own life… constantly looking for new tools and trying to integrate them and experiment with them. Another one is setting your own priorities. We don’t learn in school that this is a skill. The third one is the scientific method applied to everything around us. If the world is going to keep changing, scientific method is our best way of understanding how.

👉 Listen to Laetitia’s conversation with Roy Bahat in the latest episode of the Building Bridges podcast using the player above 👆 or on Apple Podcasts or Spotify.

Normally when we talk about startups and IPOs, it’s in the context of which VC firms have won a big payday after making a bet on a company that grew large enough to go public. In my Sifted column this week, I look at a situation that reverses the roles a bit: VC firms that themselves go public, raising money from public markets and thus giving access to VC performance to a wider swath of investors. While it’s still a relatively rare occurrence, I believe we’ll see it happening more and more, all part of venture capital taking a more central role in the financial services industry.

👉 Read more in Startups IPO. Why shouldn’t VCs?

😀 Lots of interesting discussions recently over turning traditional companies into tech companies. It’s a topic I’ve covered a lot (see All About Shifting Patterns Across Industries). More recently I was interested in Dealroom’s report about Corporate Innovation in the Entrepreneurial Age and the latest episode of Another Podcast w/ Toni Cowan-Brown & Benedict Evans, about digital transformation 🎧

🙂 A while ago I wrote about the opportunities that European founders should pursue in Asia: read Should European Founders Look to the East?, as well as Martin Pasquier’s reaction in Another Round on Expanding in Asia (both unlocked). It turns out one of our portfolio companies, WeMaintain, just applied the playbook: Are Asian markets the secret to European proptech success?

😏 Lego is one of the most fascinating companies around—especially from a European perspective! Last year I contributed to covering it with my 11 Notes on Lego. More recently, there were lots of echoes in the media about their move to recycle plastic and turn the legendary bricks into more environmentally-friendly stuff. See Lego's lesson in innovation (Financial Times).

😐 I didn’t comment much on the Chinese Communist Party celebrating its 100th anniversary, but you can definitely find many pieces of background history. Here are some that are worth your attention: China’s Leaders – from Mao to now (The Guardian); The Chinese Communist party: 100 years that shook the world (The Guardian); and my own Primer on the Chinese Communist Party (unlocked) 🇨🇳 

😒 Andy Jassy has now succeeded Jeff Bezos as Amazon’s CEO. You can read related articles in the Financial Times, the Wall Street Journal, and Bloomberg, as well as my own 11 Notes on Jeff Bezos (unlocked). Also read this illuminating blog by Steve Blank about what happens when the visionary founder passes the baton: Why Tim Cook is Steve Ballmer and Why He Still Has His Job at Apple. 

😖 Maybe it’s simply me succumbing to the gloom that accompanies the never-ending COVID-19 pandemic, but I find that the awareness of climate change and its catastrophic consequences has gone up to eleven, and it’s definitely affecting everyone’s morale. Have a look at this in the FT: How to cope with the climate apocalypse. And this, by the ever-gloomier Umair Haque. And this about Europe. 

📚 Since the paid version of European Straits has been discontinued, I’m gradually unlocking the entire archive so that everyone can read and share. It’s not systematic in any way, but rather I unlock essays when they’re relevant and I want to quote them either here or on social media.

Here are the ones that you can now discover if you weren’t previously a paying subscriber:

🇬🇧 Notes on Britain in the Entrepreneurial Age (June 2020) 

💰 Notes on Revenue-Based Financing (July 2020) 

🇨🇳 A Primer on the Chinese Communist Party (September 2020)

🌏 Should European Founders Look to the East? (October 2020) 

🇨🇳 Industrial Policy: China Gets It, We Don't (October 2020) 

🏗 Why Software Has a Hard Time Eating Construction (October 2020) 

🇪🇺 European Tech's Forgotten Stories (November 2020)

🌏 Another Round on Expanding in Asia (November 2020) 

🗺 Business Strategy at a Small Scale (January 2021)

🇮🇳 A Great Writeup About India's Startup Scene (January 2021)  

👨🏻‍🦲 11 Notes on Jeff Bezos (February 2021) 

🕰 "Be Patient" | A Conversation About Angel Investing w/ Pascal Levy-Garboua (Part 1 & Part 2) (February 2021) 

Sign up to European Straits if you don’t want to miss the next issues 🤗

(Credit: Franz Liszt, Angelus ! Prière Aux Anges Gardiens—extrait du disque Miroirs de Jonas Vitaud, NoMadMusic.)

From Munich, Germany 🇩🇪 

Nicolas

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.europeanstraits.com

The Agenda 👇

* I spoke with Nils Gilman of the Berggruen Institute about intellectual history and the state of the world 🎧

* Thumbs up/down for last week

* Thread of the week: about productivity and work-life balance

* A new essay by Younès Rharbaoui about “time-variant business models”

For the latest episode of the Building Bridges podcast, I interviewedNils Gilman, who leads the research program at the Berggruen Institute, a think tank based in Los Angeles and Beijing.

Nils and I met in February of last year at Tim O’Reilly’s Social Science Foo Camp. We had an initial discussion in which I discovered that I had read his book Mandarins of the Future, an intellectual history of modernization theory—the framework designed by the US government in the 1950s and 1960s to offer countries in the Global South a capitalist path to prosperity. For several years now I’ve been interested in everything that relates to economic development, the global economy, and America’s role in the world. Therefore it was easy for Nils and I to connect and exchange ideas!

Indeed, Nils’s expertise in intellectual history was one reason why I wanted to have this interview with him. As software is eating the world, there’s necessarily much focus on entrepreneurs and the companies they build. What people don’t realize, however, is how much beliefs, perceptions, frameworks and, more generally, ideas determine the direction in which our economy is headed as we shift from the Fordist Age of the 20th century to today’s Entrepreneurial Age.

* A new paradigm, after all, is nothing more than a new representation of the world. It’s not the world that changes as much as the way we see it—and the words we use to describe it!

In this regard, I was very interested in the part of the conversation in which Nils describes the interactions and differences between “modernization theory” (the framework he discusses in his book), the strategy that was actually implemented by successful Asian countries such as Taiwan and South Korea in the 1970s, the neoliberal “Washington Consensus”, and the relevance of it all in today’s world. 

* As it turns out, there’s a collective job to be done: the world might only change slowly and at the margins, but our representation of it needs a radical upgrade!

And then there’s more to our conversation. On top of being a historian, Nils has had a career that spans across very different worlds and disciplines: the tech industry, in which he spent several years some time ago; national security, a field in which he co-founded a consulting firm in the wake of 9/11; and higher education, in which he once served as chief of staff to the Chancellor of UC Berkeley.

* Today, Nils puts his experience and knowledge to great use in tackling problems as head of research at the Berggruen Institute, focusing not necessarily on the most pressing problems of our time (like climate change), but rather on problems that are so elusive that we don’t even have the right words or frameworks to analyze them and understand them—as is the case with the declining legitimacy of democratic systems, for instance.

All in all, there was some very broad ground Nils and I could cover, and one hour wasn’t nearly enough. In our conversation, we also discuss the following:

* Nils’s birth in Denmark, his fluency in the language, and what it was like to discover that he speaks Danish “like the Queen” (which is not necessarily meant as a compliment).

* Why criminal organizations excel in arbitraging our cross-countries differences in legal norms and moral values—a phenomenon he calls “deviant globalization”.

* The respective positions of the US, China and Europe on the global stage, and the challenges that each region must tackle if it wants to succeed moving forward.

* Why the current transition calls for a new social contract and why Nils, along with his colleague Yakov Feygin, thinks we must build a new “mutualist economy”.

Here are the various ways in which you can dig deeper into Nils’s work:

* His book Mandarins of the Future: Modernization Theory in Cold War America (2007). 

* The (excellent) magazine Noéma, published by the Berggruen Institute, of which Nils is the deputy editor. 

* A few works by him that I liked a lot: The Twin Insurgency (The American Interest, 2014). The Official Future Is Dead! Long Live the Official Future! (The American Interest, 2017). The Long Shadow Of The Future (w/ Steven Weber, Noéma, 2020). Governing In The Planetary Age (w/ Jonathan Blake, Noéma, 2021). Who Controls The Past Controls The Future (Noéma, 2021). 

* His newsletter Small Precautions and, of course, his Twitter account—a place where he’s very active and doesn’t hold back.

👉 Listen to my conversation with Nils Gilman in the latest episode of the Building Bridges podcast using the player above 👆 or on Apple Podcasts or Spotify 🎧

😀 I loved this recent Bloomberg article by Karl Smith about the radical shift that’s happening in the US housing market. In short, the market has been made more liquid by tech companies such as Zillow and Opendoor. The ‘downside’ is that houses get more expensive (liquidity premium!) and, more and more, only institutional investors can afford them—which is why renting might be the future.

🙂 More interviews with Marc Andreessen! Here’s one (in written form) with Noah Smith (who was my guest on the podcast a few weeks ago), another (audio) with Patrick O’Shaughnessy as part of the Invest Like the Best series, and a third one (written form) by Antonio García Martinez of The Pull Request. Enjoy!

😏 About the Diffraction of Venture Capital, I was interested in this Financial Times article about Baillie Gifford, a Scotland-based investment firm that makes tech-related bets on public markets. It’s interesting for two reasons: it’s made in Europe, and it’s happening on public markets—far away from the small, opaque and illiquid world of traditional venture capital.

😐 A new chapter in the series “Our Elite Is Failing Us”. Martin Gurri, the author of The Revolt of the Public and once a guest of mine at The Family in 2019, published a new essay about scientists not being better than the rest of the elite in sharing information and interacting with the public. Read it here: The Enemies of the Open Society - Discourse. 

😒 Wealth anti-management. A few years ago, I asked myself a question: if the wealth management industry keeps innovating, does that mean that wealthy families will stay wealthy forever? (Read my answer in The Future of Wealth Management.) In fact, however, there are many reasons why wealth evaporates over time. Here’s one: Rich professionals are scammers' favourite targets.

😖 We’ve seen this in Europe: the harsher the US gets on its own tech companies (see my column last week in Sifted), the more legitimate European democratic governments feel in implementing tough regulations that apply to the tech sector in general. Well, now it’s happening in authoritarian countries, too: Facebook, Twitter Critics in US Are Giving Ammunition to Authoritarian Leaders.

🕰 My colleague Younès Rharbaoui has a new edition of his Chasing Paper. Taking its impetus from the new series Loki, he thinks about how companies prosper by exploiting the potential of cross-border and/or time-sensitive arbitrage to discover business models that nobody thought were possible. Check it out (and the examples, including our own The Family) in Time-variant business models. 

From Marc Andreessen's Latest Lesson in Strategy (August 2018): 

The deepening of strategic thinking is always a sign of the maturity of a techno-economic paradigm. In his masterful The Lords of Strategy, Walter Kiechel tells the story of the big thinkers who revealed the complex secrets behind corporate success in the 20th century. But there are striking differences between the past age of the automobile and mass production and the current Entrepreneurial Age when it comes to strategy. Many of those can be found in the discipline itself, which has been radically reshuffled. Some differences also exist in the speed and ways strategic thinking is reaching maturity.

Sign up to European Straits if you don’t want to miss the next issues 🤗

(Credit: Franz Liszt, Angelus ! Prière Aux Anges Gardiens—extrait du disque Miroirs de Jonas Vitaud, NoMadMusic.)

From Munich, Germany 🇩🇪 

Nicolas

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.europeanstraits.com

The Agenda 👇

* Laetitia spoke with author and speaker Sophie Wade about everything future of work 🎧

* A new “Long Read” format: first up on the list is Formula 1 🏎 (in progress)

* Thumbs up/down for last week, as well as recent news.

For the latest episode of the Building Bridges podcast, Laetitia interviewedSophie Wade, a speaker, writer (and podcaster) about the future of work, who is the author of the bookEmbracing Progress: Next Steps for the Future of Work. Here’s what Laetitia wrote on the Building Bridges website:

Sophie was born in England but now she lives and works in the US. She lived in many countries before that, therefore she has a multicultural approach to the subject that I was especially drawn to. She worked as a consultant with numerous executives and acquired a broad, deep knowledge of work-related issues, such as corporate culture, recruiting talent, leadership, transformation and now “hybrid work” and how to make it right. We talked about all these subjects that are part of my own daily research too. She is adamant: working with empathy is the future!

What’s the most unexpected work-related transformation brought about by the pandemic? What does “hybrid” look like? What are the challenges associated with it? How do we make the workplace more inclusive in this day and age? How should leadership evolve? How does one change their mindset to become “future proof”? And how much of all this talk about the future of work is determined by culture? What can intercultural comparisons teach us?

A few years ago she published this book titled Embracing Progress in which she presents empathy as the solution to a lot of the problems faced by organisations. When it comes to leadership, for example, the battle between ego and empathy is the single most decisive battle. It involves “shifting identity and choice”:

The “ego” of the emerging brand of leadership is not the “command and control” type of autocrat that this word has evoked in the past. Now, it’s more about empathy—creating an environment based on trust and respect—in order to engage the workforce and improve employee ego, stimulating self-awareness and self-worth. Ego here is also about the company’s identity, the values and purpose that the leadership aligns with.

When leaders understand the identity of their company and the workers that comprise it, leading people is more about engaging and guiding them. Values echoed by the leaders of a company offer a clear and more “natural” direction for the workforce to follow in their own actions, relating to everything from daily tasks to long-term goals and career planning.

👉 Listen to Laetitia’s conversation with Sophie Wade in the latest episode of the Building Bridges podcast using the player above 👆 or on Apple Podcasts or Spotify

As announced a few weeks ago, soon I will relaunch the long-form 10- or 11-point essays that many of you have enjoyed in the past. It will be occasional (I expect a monthly frequency on average, in addition to the weekly edition) and will cover a broad range of topics related to the Entrepreneurial Age, viewed from Europe.

The one I’m working on at the moment is “11 Notes on Formula 1” 🏎

Like almost everyone I know, I’ve been watching and enjoying Netflix’s Drive to Survive. It pushed me to go much deeper: going down the rabbit hole of F1 YouTube, listening to related podcasts, speaking a bit with experts I’m connected with, such as former podcast guest Toni Cowan-Brown, and realizing that a lot of what’s happening in the F1 world resonates with what we tech people have become accustomed to.

Below is the provisional list of notes I’m currently drafting:

* A manufacturer’s championship. You may primarily know about the drivers, but it’s the cars that make all the difference—and the various manufacturers taking part in the competition are required to design and build key parts of the car themselves.

* What about the drivers? Yes, they’re very popular, extremely competitive, and certainly accomplished athletes—but the harsh truth is that, contrary to other disciplines in motorsports (again, it’s a manufacturer’s championship), they’re only as good as their cars.

* The role of regulation. F1 provides the perfect illustration of the concept of a “neck-and-neck firm”—a business which, when confronted with pressure and challenges, doubles down on innovation. This is exactly how the best teams react to the FIA tightening regulations.

* An entrepreneurial ecosystem. Did you know that there is such a thing as Motorsport Valley? It’s located around Oxfordshire and the Midlands in England, and its very existence explains why Britain is the core of F1 (notwithstanding the occasional French term: grand prix, parc fermé).

* The importance of process knowledge. Usually when there’s such a thing as an entrepreneurial ecosystem, the pieces fit together thanks to people passing process knowledge from one to another. This is a very important feature in a manufacturing world such as F1’s.

* The importance of feedback loops. In an ecosystem in which process knowledge makes all the difference, it is absolutely critical for a firm to intensify said knowledge and circulate it as quickly as possible on the inside. This explains the downfall of certain teams recently.

* The dependence on the supply chain. There are many innovations that don’t endure in F1 because it’s impossible for the manufacturer that’s trying to race forward to force innovation on suppliers up the stream. As is often the case, the first-mover advantage is a myth!

* And then there’s Ferrari. It’s different in many respects, obviously because it’s located in Italy rather than the UK, but also because it’s strengthened by its position as a full-stack manufacturer that builds both the engine and the chassis—and its domestic base of supporters (the tifosi).

* The audience. F1 was a fringe discipline in the sporting world until a guy named Bernie Ecclestone forced it onto everyone’s small screen. It made the sport accessible to literally billions and radically changed the business equation. But what about the transition to social media?

* We need to talk about the US. Just like football (well, soccer), F1 is extremely popular all around the world, except for the US (whose audience seems to be more interested in disciplines such as NASCAR and IndyCar). Why is that? And can we expect changes in that regard?

The 11th note is always a reading list, of which I’m happy to share an extract here to tide you over (thanks to Toni for most of these links 🤗):

* Britain's Motorsport Valley – the home of Formula 1 (Lawrence Barretto, BBC, June 2013)

* Business lessons from Formula One (Alessandro Marino, ResearchGate, October 2015)

* The Top 50 F1 drivers of all time, regardless of what they were driving (Mike Hanlon, New Atlas, May 2016) 

* Being a Formula 1 Tire Supplier Takes Far More Than You Ever Imagined (Máté Petrány, Road & Track, September 2016) 

* Business isn't rocket science; it's formula 1 (Rafael Aldon, VenturesOne, March 2018)  

* The game changed and they didn't: The true cause of Williams' decline (Dieter Rencken, RaceFans, March 2019)

* The Motorsport Valley®: The biggest hub of motor racing in the world (Williams Johnson, Medium, July 2019) 

* Driving Growth: 5 Marketing Lessons From Formula 1® Racing (Yannick Bikker, Start it up, August 2019)

* Idée fixe 4.1: Formula One (Toni Cowan-Brown, Idée Fixe, June 2020—see also part 2 & part 3)

* Engineers, not racers, are the true drivers of success in motor sport (The Economist, October 2020)

* F1 - the plane that never takes off (podcast—Toni Cowan-Brown & Benedict Evans, Another Podcast, November 2020)

🎧 Also I plan to invite Toni back on the Building Bridges podcast to go through the whole discussion with her, so expect more than one round on this fascinating topic and its relationship to tech startups.

😀 Sajith Pai’s in-depth writeup about India’s entrepreneurial ecosystem made a big impression on me a few months ago (and I wrote about it here). Sajith just published another great essay about an entirely different matter: 'Exhaust Fumes', or, Understanding Startup Valuations.

🙂 Here’s a phenomenal Twitter thread by Steven Sinofsky, formerly at Microsoft, about the emergence of remote work and the future of work in general:

😏 Sometimes you read an article and learn a new word or concept that you can then put to great and frequent use. Today it’s “toxic positivity”, which comes from Sophie Lawson via Ian Leslie (in this case, about women’s football). I immediately thought about the Paris tech scene. Everything’s going well there, right? Especially with all those unicorns lately. Well, no, everything doesn’t always go exactly well, and it would go better if it was possible to say so, which it isn’t—and that’s “toxic positivity” for you 😨

😐 I’m always on the lookout for interviews with Marc Andreessen, not least because they’ve gotten so rare recently. But here’s a recent and VERY bizarre one (which Tyler Cowen says is authentic): The Dubrovnik Interviews: Marc Andreessen - Interviewed by a Retard.

😒 I wrote a long-form essay about Y Combinator last year. Some of the latest news about it centers on the apparent internal tensions around what can and can’t be said by members of the founder community. Here’s an overview in TechCrunch: Does what happens at YC stay at YC?

😖 I already mentioned Katerra last week—the SoftBank-backed company that was supposed to disrupt construction and is now bankrupt. Here’s a long inside look by a former employee (via Byrne Hobart)—interesting strategic deep dive: Another Day in Katerradise.

🦁 My colleague Oussama Ammar’ post in The Family’s daily newsletter this week, quite simply a book reading list for the summer: Summer is coming! 📚

From 11 Notes on Goldman Sachs (May 2017): 

What’s remarkable is how much Goldman Sachs enables innovation with specific features when it comes to design and architecture. First, there’s the managerial legacy of John Whitehead, a key contributor to making more room for innovation through scientific management and designing virtuous financial incentives for employees. Second, there’s the strong, cohesive culture that enables the retention of talent and more fluid communication: together these make it easier for the firm to move toward unknown territories. Third, there’s the preference for innovation rather than entrenchment every time that Goldman Sachs is facing danger or uncertainty. In that regard, Goldman Sachs is really what Philippe Aghion calls a “frontier firm” or a “neck-and-neck firm”, one for which “competition may increase the incremental profits from innovating, and thereby encourage [innovation] aimed at ‘escaping competition’.”

Sign up to European Straits if you don’t want to miss the next issues 🤗

(Credit: Franz Liszt, Angelus ! Prière Aux Anges Gardiens—extrait du disque Miroirs de Jonas Vitaud, NoMadMusic.)

From Munich, Germany 🇩🇪 

Nicolas

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.europeanstraits.com

The Agenda 👇

* I spoke with investor Saul Klein about European tech and the New Palo Alto 🎧

* My latest column in Sifted is about the capital deployed in grocery delivery startups

* Thumbs up/down for last week, as well as recent news.

I’ve been connected to Saul Klein for quite some time, because he was a partner at Index Ventures when the VC firm invested in my firm The Family in 2013. But I really got to know him after I moved to London in 2015. His name simply kept coming up as the person I should meet.

* Someone even told me “Saul is the London version of you”. I must say I’m lagging far behind in terms of track record, but it’s true Saul and I have many shared interests: not only startups, but also ecosystem building, the geography of entrepreneurship and venture capital, and the many (and overlooked) interactions between the worlds of tech and policy.

There’s a reason Saul’s name is mentioned so often in London, indeed. He was present at the creation of the contemporary UK tech system, as the founder of Lovefilm and an active angel investor. He then joined Index Ventures, arguably the most accomplished European VC firm, as a partner, before founding his own firm, LocalGlobe, with his father Robin Klein—another prominent figure in London tech.

* In between, Saul was also instrumental, as a cofounder, in launching projects as diverse and impressive as Seedcamp (one of Europe’s most successful seed funds), Zinc (a mission-driven firm that aims to tackle societal challenges), and Newton (a training program for VCs, LPs, angels, accelerators, and tech transfer officers worldwide).

Needless to say he and I talked quite a lot over the years about many tech-related topics. Our conversation in this podcast, however, is focused on something that really stands out in my view: LocalGlobe’s investment thesis, which I wrote about in On Trains and Geography (October 2020), 

Part of Saul’s investment thesis is that his firm should invest in tech startups within a 4-hour train ride from London—which includes cities as diverse and interesting as Cambridge, Manchester, Paris, Brussels, and Amsterdam. Here are his arguments:

* 4 hours is far from being a random number. It’s enough time to reach a given destination without being away from the office for too long. You can travel 4 hours to your destination, have a 2-hour meeting, and then travel back to sleep in your own bed, back with your team the next morning. (A bit extreme, but it’s doable.)

* You can actually be productive when traveling by train. Not only is it easier to get an Internet connection when on a train (either through wifi or 4G), but traveling by train also comes with many fewer interruptions than traveling by plane.

* Finally, Saul’s is a bet on the future. From what he told me, he expects plane travel to be less and less tolerated in a business context due to climate change, and at some point governments could decide to revisit the whole cost structure (from tax and other perspectives) so as to make planes more expensive...and trains cheaper.

A key implication of this thesis is that tech people in London and Paris, which despite Brexit are still well connected by the Eurostar, can work on building The New Entente Cordiale 🇬🇧🇫🇷 (in reference to a famous episode in the history of European diplomacy): merging the two ecosystems into one, building on each city’s relative strengths and advantages and ultimately building what Saul calls the “New Palo Alto”. It’s a compelling vision which, I believe, really deserved an in-depth conversation!

In the podcast we also touch upon the following:

* How Saul came to work in tech, what he saw in the growing London ecosystem over the years, and his vision of venture capital as a business.

* LocalGlobe’s office, Phoenix Court, and why Robin and Saul decided to settle in the London ward of Somers Town.

* David Ben Gurion’s lesson on innovation, and why Europe, long a frontier market, is finally becoming an emerging market.

👉 Listen to my conversation with Saul Klein in the latest episode of the Building Bridges podcast using the player above 👆 or on Apple Podcasts or Spotify.

(For unknown reasons, the sound is rather bad on my end (microphone saturation) but I did as much as I could to mitigate it, and Saul’s doing most of the talking anyway 😉 Enjoy!)

Even within a generally hot fundraising environment, one sector has stood out in the EU tech scene lately: grocery delivery. Some might look at it as just another part of a broader bubble, but I think there’s something else going on: namely, investors have realized that the narratives that dominated just 5 years ago, such as that around Uber’s presumed destiny as a global leader, have not come to pass. As such, they’ve seen that there’s room in various markets for great companies—and grocery delivery is one sector where that is being borne out.

👉 Read it all in my latest column for Sifted: How much is too much when investing in grocery delivery?

😀 A new essay by Jerry Neumann about uncertainty in entrepreneurship! It’s a topic I covered a lot in the past, and this time it’s been prompted by a guest post by Bill Janeway in my own newsletter. Go and read Jerry’s Embracing Uncertainty in Entrepreneurship Pedagogy.

🙂 The Great Fragmentation, as illustrated by… football. Europeans and Americans still see Asia as the market they need to conquer so as to scale up their business. I still think there’s something there, but in football it’s not working so well: Football’s relentless search for the ‘Asian fan’

😏 There’s this idea of the “Red Queen hypothesis”: the fact that in the Entrepreneurial Age, constant innovation is mandatory if a business wants to stay in the game and not go bust. Here’s an illustration: Microsoft stumbling with Skype and missing the COVID-19 opportunity that Zoom ultimately seized.

😐 Remember the passion economy? I wrote about it here. And you might know that the craft beer movement has long been the most analyzed case study in that field. Alas it seems to not be going so well at the moment: Britain’s craft brewers forced to confront sober reality. Also read this in-depth piece.

😒 Here’s an in-depth discussion by The Economist on how and why Europe is lagging behind in the global corporate world, all accelerated by the shift to the Entrepreneurial Age. Sad, but definitely worth a read (contrasting with Saul’s optimism): Europe is now a corporate also-ran. Can it recover its footing?

😖 Last year I wrote about startups tackling the challenge of making construction cheaper, faster and more convenient. Well, the flagship company in that space, Katerra, just filed for Chapter 11, which I think will mark an acceleration of the shift 🤔 Read it all in Axios.

🦁 My colleague Oussama Ammar’s post in The Family’s daily newsletter this week: How do you know when your startup idea has failed?

🇫🇷 Nouveau Départ (our small French-speaking family media operation). Check out my conversation with writer Gaspard Koenig about spending half of 2020 crossing Europe on horseback 🏇 and the liberal tradition in France: La liberté après la crise.

From Notes on Britain in the Entrepreneurial Age (June 2020):  

It took the financial crisis to change the situation in the recent period. So many bankers lost their jobs and were suddenly deprived of the perspective of getting rich quick that they had to consider founding a startup—which, although ridden with uncertainty, can generate great wealth. Hence a certain archetype on the London tech scene: the former banker attracted by the hype in financial services who then jumps to the next big thing (startups) and successfully raises capital from his (it’s almost always a “his”) former colleagues with a clean-cut business plan backed up by detailed spreadsheets 😅 (This is made all the easier because the infamous EIS, despite its obvious flaws, hedges angel investors against any downside.)

Sign up to European Straits if you don’t want to miss the next issues 🤗

(Credit: Franz Liszt, Angelus ! Prière Aux Anges Gardiens—extrait du disque Miroirs de Jonas Vitaud, NoMadMusic.)

From Munich, Germany 🇩🇪 

Nicolas

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.europeanstraits.com

The Agenda 👇

* Laetitia spoke with author and Financial Times columnist Simon Kuper about what cosmopolitanism means these days 🎧

* Thumbs up/down for last week, as well as recent news.

* All in all, this week’s a short one 😉

My first memory of Simon Kuper is a column he wrote in November 2013 in The Financial Times about The great middle-class identity crisis. It made a deep impression on me, as we had just started The Family in Paris. The structural shifts impacting the middle class that Simon had written about were the very same I was witnessing working with early-stage startups.

* By definition, a paradigm shift is all about a changing representation of the world, and a corollary is that we often lack words to describe what we do and who we are.

Here’s an excerpt from Simon’s foundational column:

That’s been the middle-class experience for ever: people have a professional identity. We are what we do. We choose professions that suit our identity, and then those professions enhance our identity… But that era is ending. With the economic crisis and technological change (robots are taking over the world), ever fewer of us have satisfying jobs or stay in the same profession for life. People are ceasing to be their jobs. That is forcing them to find new identities.

Over the years, I kept quoting this column over and over, including in my book Hedge (about designing a new social contract for the Entrepreneurial Age):

Today the vast majority of people in the West still identify as middle class. But the very concept of the middle class has evolved through time. When I grew up in the 1970s and ’80s, the cardinal value of the middle class was stability. Most people had a fixed place in the world and defined themselves through what they were doing in life.

As for today, being part of the middle class looks more like the main character in Steven Soderbergh’s Magic Mike: laboring during the day as a construction worker, making money as a stripper in night-clubs and private parties, and steadily describing himself as an “entrepreneur”.

As in the case of Magic Mike, gone is the sense of economic security that provided middle class workers with a clear identity. Now we live in a world where job situations are unclear. People are no longer certain about what the future holds or even what their occupation is. Is Magic Mike a construction worker, a stripper, or an entrepreneur? Nobody knows, and so he is forced to decide for himself—in what the Financial Times columnist Simon Kuper calls the “great middle class identity crisis”. 

All these years, I had no idea that Simon was in fact so close to my world: he had been living in Paris the whole time; he is married to Pamela Druckerman, whose best-selling book French Children Don't Throw Food (Bringing Up Bébé in the US) was often mentioned in French society (we can only rejoice in a book that makes the case that we French are better at raising children). And we’ve had common friends, such as the historian Patrick Weil.

* Then, more recently, my wife Laetitia read Pamela’s latest book There Are No Grown-Ups: A Midlife Coming-of-Age Story, after which she came to me and said “These people are like us in so many ways! We should really try and connect with them.”

Well, now it’s done: Laetitia just interviewed Simon, and I’m set to interview Pamela in just a few weeks. Below is what Laetitia wrote about her conversation with Simon on the Building Bridges website 👇

For this new episode of the Building Bridges podcast, I’m happy to share my interview with Simon Kuper, a British author, Financial Times columnist, and cosmopolitan intellectual whose latest book The Happy Traitor deals with the story of a British spy, George Blake, who defected to the Soviet Union.

Simon lives in Paris but is about to move to Spain with his family for a new experience of cultural immersion. We talked about building bridges across cultures, his multicultural life and identity, multilingualism, mobility… and a few other fascinating subjects (including football).

Many years ago, he moved from London to Paris surreptitiously because he thought his life had become “too comfortable” and he needed a bit of foreignness to make things more challenging. Thus he became a working-from-home pioneer, paving the way for future generations of mobile workers in search of foreign adventures.

Born in Uganda, raised in the Netherlands, educated in the UK, Kuper is convinced there’s no point in learning a language badly and sticking to superficiality. Instead you should go for excellence:

If you do learn a language, go for excellence. If you have children, immerse them in it from birth. Wall Streeters sending their kids to Mandarin-speaking preschools may be hilarious, but they are choosing the most efficient route (…) A multilingual person can be multiple people, inhabiting multiple worlds. As the linguist Nick Evans wrote, “we study other languages because we cannot live enough lives. It’s a multiplier of our lives.”

Incredibly productive during the pandemic, he has worked on multiple books. His latest book The Happy Traitor was published a few months ago. It deals with George Blake, “a one-man Netflix series, whose life tracked many of the dramas of the 20th century”:

When the 98-year-old double agent George Blake died in Moscow on Boxing Day, my biography of him was long since ready. (…) A Briton raised in the Netherlands, he was a teenage courier in the Dutch resistance, joined the British secret services, converted to communism while a prisoner in North Korea and became a spy for the KGB. He then sent dozens of agents working for Britain to their deaths. His crime so shocked Britain that when he was finally unmasked, in 1961, he was given the longest sentence in the country’s modern history — only to escape in a jailbreak so spectacular that Alfred Hitchcock spent his final decade trying to turn it into a film.

👉 Listen to Laetitia’s conversation with Simon Kuper in the latest episode of the Building Bridges podcast using the player above 👆 or on Apple Podcasts or Spotify.

😀 Foreign languages  are a topic I wrote about in the past (here and here), always mentioning the terrible thing that is dubbing foreign movies in the local language. Well, there’s room for progress: Can A.I. help Hollywood dub The Rock into another language? This startup thinks so.

🙂 I was pleased to be intermittently involved over the past years in the project A New Moral Political Economy led by Margaret Levi and Federic Carugati at Stanford University’s CASBS. The whole effort has now turned into a book, a free version of which is available until June 8 on the Cambridge University website (via Tim O’Reilly): A Moral Political Economy: Present, Past, and Future.

😏 In 2019 my colleagues and I hosted new media analyst (and CIA alumnus) Martin Gurri in Paris and London to discuss his book The Revolt of the Public. We’re now 7 years after the first edition of the book, and Martin just wrote a short sequel: The Establishment Strikes Back—For Now.

😐 The cloud is a good thing because it makes computing cheaper for businesses, right? Not so fast, write Sarah Wang & Martin Casado of Andreessen Horowitz in The Cost of Cloud, a Trillion Dollar Paradox. It explains why large companies such as Dropbox have moved away from AWS.

😒 More Dominic Cummings! Long gone are the days when he was tackling the challenge of reshaping the British state. Now that that state has utterly failed countering COVID-19, Cummings tried to explain to Parliament why: read details here and Ian Leslie’s commentary here. 

😖 Is it 2020 all over again? Now that many think the pandemic is over, people in the West have stopped taking precautions, even though they’re not vaccinated. It might lead to a new wave of infections, this time affecting primarily young people: Covid-19: UK in early stages of third wave - scientist.

🦊🦁 My colleagues’ posts in The Family’s daily newsletter this week: The courage in choosing (by my colleague Alice Zagury) & What's changed in entrepreneurship? (by my colleague Oussama Ammar). 

🇫🇷 Nouveau Départ (our small French-speaking media operation): give last week’s edition about Royaume-Uni : le parti travailliste est-il fini ?  a listen; also check out Laetitia interviewing Judith Aquien about La grossesse : nouvelle frontière du féminisme.

From What Language Should Startups Speak? (November 2019):

I’ve long been obsessed with foreign languages. I grew up speaking only French, then had hours of useless language classes in high school. Later, I got rather serious with learning German. And now I obviously can speak and write in English, but I often have to pause to reflect on how best to convey my thoughts; I make the occasional mistake (which my colleague Kyle is kind enough to correct when it’s in written form); and I’ll never be able to speak with a perfect accent, which is a shame (and a bit of a mystery—why are accents so difficult to erase?).

Maybe I could have done better. It’s true that I never lived outside France until the age of 21, and my family never travelled much. Yet several relatives have always lived abroad. And as I grew up, my grandfather Xavier, a devout Catholic, was dutifully learning Italian from his home in Normandy so as to be able to read L'Osservatore Romano and to listen to Radio Vaticana! So I didn’t lack role models—people close to me who were mastering foreign languages.

Sign up to European Straits if you don’t want to miss the next issues 🤗

(Credit: Franz Liszt, Angelus ! Prière Aux Anges Gardiens—extrait du disque Miroirs de Jonas Vitaud, NoMadMusic.)

From Munich, Germany 🇩🇪 

Nicolas

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.europeanstraits.com

The Agenda 👇

* I spoke with Emily de La Bruyère about industrial policy in China—and how it’s a challenge for the West 🎧

* My Sifted column this week is about Tiger Global and the many deals they’re doing in Europe these days

* Thumbs up/down for last week, as well as recent news.

I first discovered Emily de La Bruyère, a US-based analyst focused on industrial policy in China, through Jordan Schneider’s ChinaTalk podcast. What she had to share was so enlightening I even dedicated an entire edition to it, Industrial Policy: China Gets It, We Don't (now accessible for all).

The key idea that stood out in Emily and Jordan’s conversation was the following:

What matters today is the applications of science and technology––the sort of networks you build with it.

For example, your ability to deploy telecommunications. It’s not that you got the patent; it’s that you’ve got its application internationally.

To do that, what matters is capturing scale and being able to build and deploy. If that’s what you’re going for, it’s okay to have a slight lag in when you get the patent and when you get the really cutting edge, as long as you can apply it to scale to the most people efficiently.

The Chinese orientation appears to be focusing on that rather than on basic R&D, which creates this tremendous asymmetry vis-à-vis the U.S. and really vis-à-vis the entire global system because there’s just a different competition underway.

And that absolutely changes how the U.S. can or should respond to the extent that this is a scientific and technological contest because it’s not a matter of just pouring resources into basic research: it’s about competing for applications.

Emily and I are following up on that in this new episode of the Building Bridges podcast. I was especially interested in her idea that the current industrial competition between nation states at the global level is happening in two dimensions:

* One is about securing control of essential resources, especially energy sources, which fosters a traditional zero-sum competition from a geopolitical perspective.

* But then there’s another dimension, which is about controlling networks and the data that flows  through them—which gives rise to a very different kind of competition globally.

I find that there’s no better lens to understand the current rivalry between the US and China in the tech space and beyond. In addition to these, Emily and I discuss the following points:

* How she ended up focusing on industrial policy in China, and what it’s like to study China from a distance, all based on open source material.

* Why international standards matter from an industrial policy perspective, and why it’s about much more than a spy game between great powers.

* What advice Emily would give if she joined the Biden administration to advise the US President on America’s competitiveness on the global stage.

* Why the West remains a thing, and why the US is better off counting on Europe as a strong ally as networks and data redraw the global map of power.

* Why we shouldn't rely on a Cold War framework when reflecting on the state of the world, and why all of this matters for entrepreneurs building companies on the ground in Europe.

👉 Listen to my conversation with Emily de La Bruyère in the latest episode of the Building Bridges podcast using the player above 👆 or on Apple Podcasts or Spotify.

⚠️ My column today in Sifted asks a few million (billion?) dollar questions: How is hedge fund Tiger Global’s blazing arrival on the EU tech scene going, and what will happen to the companies it’s investing in when today’s macroeconomic context of enormous amounts of capital reverses?

* It’s a fascinating example of how venture capital is being upended by the arrival of major players from other financial realms. I’m very curious to see how VCs that are active in Europe, especially tier-1 firms, react to this kind of unconventional investor, both now and in the future. 

👉 Read it all in Tiger Global: What happens when ‘normal’ returns? 📈📉

😀 Nathan Benaich of Air Street Capital is at it again! After an op-ed in the FT about European universities’ bad practices when it comes to spinning out startups (which in turn prompted my own Sifted column on the topic), he just shared the longer, more detailed version on his firm’s blog: 

* Related: Bessemer Ventures’s Gaby Goldberg’s thoughts about Stanford University and its relationship with the VC industry: After a decade of VC influence at Stanford, what’s next?

🙂 About that, an account of my previous writing on deep tech startups, a common friend recently introduced me to Massimo Portincaso, the chairman of Hello Tomorrow and a co-author of this recent report: The Deep Tech Investment Paradox: a call to redesign the investor model (highly recommend).

😏 My colleagues at The Family and I have long been convinced that European founders should focus on ‘hybrid’ startups bringing technology to traditional industries. Well, Roy Bahat and James Cham of Bloomberg Beta came up with a name for exactly that: “hot-swap startups”.

😐 Cryptos: there are booms, and then there are busts. But beyond  that, as I’ve argued many times in the past, there’s a dynamic that’s bringing about many innovations when it comes to network protocols, software architecture, and the financial system. My colleague Younès Rharbaoui, CFO at The Family, wrote about the implications in the realm of corporate finance: The DeFi Frontier.

😒 Corporate venture capital is a tough nut to crack, between the conflicting goals and the bad practices when it comes to leading investments and rewarding those who are in charge. Here are some nuances in Institutional Investor: Families Make Corporate VC Investments Better, Research Shows.

* Related: Check out this article about tech companies such as Stripe, Netflix, and Carta setting up their own CVC funds: Complements and Constraints. 

😖 Trump did a lot of bad things, and some of the things he broke may be beyond repair. But a positive aspect of his legacy is his ability to inspire engagement on the liberal side, be it on climate change, racial justice, or building liberal institutions in general (via Byrne Hobart): 2016: The Turning Point.

😴 I didn’t contribute to The Family’s daily newsletter this week, but make sure to check out my colleagues’ posts: Employee-friendly fundraising (by Balthazar de Lavergne) and 399 ideas that didn't work (by Oussama Ammar).

🇫🇷 Nouveau Départ (in 🇫🇷): yesterday’s edition was on Warren Buffett : une introduction🤑 and last Thursday’s was on Écriture : nos histoires & nos conseils📝 Also give a listen to Laetitia’s conversation with Fabienne Broucaret: Télétravail : le bon environnement💻.

From Industrial Policy: China Gets It, We Don't (October 2020): 

I don’t think you can understand China’s industrial policy if you don’t realize that it’s all pulled forward by the impressive growth of the Chinese tech giants. First, you need the downstream companies discovering new models and new usages and exploring new markets; then you can invest up the stream so as to ensure your nation’s competitive advantage in cutting-edge technology.

This doesn’t necessarily have to be consumer-facing companies. Back in the 1960s in the US, it was the military and the goal was to prevail over the Soviet Union. More recently, in the case of Huawei in China, we’re talking about a company that needs technological assets to deploy telecommunication networks rather than serving consumers. But whatever it is (public or private, consumer or enterprise), you need that direction provided from down the stream.

Sign up to European Straits if you don’t want to miss the next issues 🤗

(Credit: Franz Liszt, Angelus ! Prière Aux Anges Gardiens—extrait du disque Miroirs de Jonas Vitaud, NoMadMusic.)

From Normandy, France 🇫🇷 

Nicolas

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.europeanstraits.com

The Agenda 👇

* Laetitia spoke with historian Anton Howes about innovation and the Royal Society of Arts 🎧

* My essay published last week about the categories of ‘Diffracted Venture Capital’

* A Twitter thread lamenting politicians botching the vaccination campaigns

* Thumbs up/down for last week: female VC partners, university spinouts, the Paris ecosystem

* Five of my tips about how you can become more productive

There are a few institutions in London that no one interested in innovation can afford to miss, and one of them is the Royal Society of Arts (RSA). I’m not sure how my wife Laetitia and I first crossed paths with the many great people working there, but at some point we were quite engaged with the community.

* My first encounter, I think, was when I met Anthony Painter within a Fellowship we both participated in at the Oxford Internet Institute. Then on several occasions Laetitia and I were invited to contribute to the RSA’s Center for the Future of Work: see one of my contributions here, and Laetitia is now a member of the RSA Future of Work Advisory Board. Finally, following a co-optation by the late Miranda Bertram (who was my public speaking coach at the time), Laetitia and I both became Fellows of the RSA sometime in early 2018.

These are all the reasons I was amazed to discover that Anton Howes, the author of the newsletter Age of Invention, which I had been following with great interest from the beginning, was in fact the RSA’s ‘historian in residence’, and working on a book that has since been published: Arts and Minds: How the Royal Society of Arts Changed a Nation. Needless to say, when Anton and I recently interacted over Zoom (via the Entrepreneurs Network), I immediately followed up to ask him if he would be a guest on our Building Bridges podcast.

* He graciously agreed, and Laetitia interviewed him a few weeks later. Below is what she wrote on the Building Bridges website 👇

Anton Howes is fascinated with the process of invention and what fuels it. I recommend his Substack newsletter, Age of Invention, which is full of interesting pieces about “the origin of patents”, “the birth of the business corporation”, and the maritime technology of the late 16th century.

His current research focuses on why innovation accelerated in Britain in the 18th century, i.e. why the Industrial Revolution happened there and not elsewhere:

One of my key findings is that innovation is a practice that spreads from person to person. I argue that people became innovators because they adopted an improving mentality - and that Britain experienced an acceleration of innovation because its innovators were committed to evangelising that mentality further.

I asked Anton why Britain became the cradle of the Industrial Revolution, if it could have happened elsewhere, who were the entrepreneurs of that time, what motivated them, and what Britain’s institutional recipe was. And of course he talked about the RSA, this “extraordinary society that has touched all aspects of British life”:

From its beginnings in a coffee house in the mid-eighteenth century, the Royal Society for the Encouragement of Arts, Manufactures and Commerce has tried to improve British life in every way imaginable. It has sought to influence how Britons work, how they are educated, the music they listen to, the food they eat, the items in their homes, and even how they remember their own history.

If Britain prospered the way it did, it’s because it developed powerful institutions—norms, best practices & organisations like the RSA—to sustain that prosperity. That history is full of lessons for today as it helps us to understand how innovation works and how we can encourage it.

👉 Listen to Laetitia’s conversation with Anton in the latest episode of the Building Bridges podcast using the player above 👆 or on Apple Podcasts or Spotify.

💸 Diffracted Venture Capital: The Categories

The shift to the Entrepreneurial Age means many positions are being shuffled around, some moves being made earlier in the cycle, some later. One of the industries in which the ongoing shuffle has become quite evident lately is investing, as we’re seeing what used to be a relatively straightforward activity (‘venture capital’) become quite diffracted: VCs expand the scope of their operations and non-VCs push into areas where previously they would have never dared roam.

In a changing environment it’s a good idea to have a map to understand the lay of the land. But before that map can be made, we need accurate categories to describe the ways in which VC is being diffracted; to that end, I used last Thursday’s essay to begin listing the categories I’ve been noticing lately.

These categories are quite diverse, ranging from large-scale indexing (similar to what is being done on the stock market) to revenue-based financing that has emerged with the maturation of the SaaS model. That diversity is also reflected in the types of players involved, from traditional private equity firms to solo capitalists. All in all, it’s a signal that we really are in a world where startups can tackle virtually any industry, especially those that were previously seen as too difficult to break into. And it’s also a signal that there’s a growing need for ‘digestive pills’ that can help software continue eating the world 😋

👉 Read the whole Diffracted VC: The Categories (unlocked for everyone 🤗)

😀 The lack of female VCs in Europe was already pointed out in my What I Learned Curating 32 Editions of Capital Call, and Willy Braun and Vincent Touati-Tomas and I have built a Twitter list to try and have a more comprehensive view. Sifted is now adding firepower to the effort!

🙂 I once wrote that we needed more controversies if we ever wanted Europe to make progress on the tech front. Well, we just had a good one—on university spinouts! Check out Air Street Capital’s Nathan Benaich’s initial op-ed in the FT, my own contribution in Sifted, and this follow-up by Nathan, responding to Alice Gast, President of Imperial College London:

😏 In my essay on The Future of Wealth Management (April 2019), I was wondering if innovation in helping rich people staying rich would contribute to ending upward social mobility. As written by Chris Giles in the FT, we’re very far from it: Relax: trust fund kids are not taking over the world.

😐 In these times of botched vaccination campaigns in continental Europe, there’s a lot of talk about how startups could help governments deliver better public services. I liked this a lot—by Chris Yiu, of the Tony Blair Institute. Also, there’s this in Fortune: Investing where the government is falling short.

😒 Dragos Novac of the (excellent) Sunday CET wrote a whole section on the French entrepreneurial ecosystem and the fact that repeat founders tend to stay as far from it as possible. I couldn’t help but send him my views on the matter, which he quoted (with my permission) in his latest edition:

I think the most critical issue is the cultural and political inward-lookingness (for lack of a better word).

The key to early success in France is to pay tribute to the powers that be: bad angel investors, bad VCs, Bpifrance (the government's investing arm), corporates, even cabinet members (they'll invite you for dinner or events if there's local buzz about your startup), and of course Macron himself. At this point, you may have the impression that your startup is successful but:

* your cap table is a nightmare

* everyone in the company speaks French

* you're failing at international expansion

* in general, you're resting on your laurels

There are very few French founders who are aware of this trap. And those who are are in for a lot of pain, because France will make you pay for your desire to escape and look beyond its borders 😞 (and it'll be impossible to attract international talent anyway, so succeeding at outgrowing France usually means relocating elsewhere, typically the US).

😖 You may have noticed the recent controversy about Antonio García Martínez being abruptly fired from Apple because (?) of a few paragraphs in his (highly praised) semi-fictional book Chaos Monkeys. I don’t know Antonio well (we merely have friends in common), but I feel very sorry for what just happened to him—see my previous writings on related matters: cancel culture and workplace politics.

🏋🏻‍♀️ In my latest contribution to The Family’s daily newsletter, I reveal all my secrets for getting better at what I do everyday 😉 How to be more productive. 

🇫🇷 Nouveau Départ (in 🇫🇷): yesterday’s edition was on Qu'est-ce que la culture d'entreprise ? and last Thursday’s was on Taiwan : nouvelle ligne de front ? Also give a listen to my conversation with Thibauld Favre, CEO of our portfolio company Fairmint, about everything crypto: Tout sur les cryptos. 

From Munich, Germany 🇩🇪 

Nicolas

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.europeanstraits.com