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.)

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

From Munich, Germany 🇩🇪

Nicolas

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Wish You Well (ft. guests Greta Lee & Jodie Turner-Smith; Robert Aramayo; Gillian Anderson)