Drift Signal

The Agenda 👇* Global investor Chris Schroeder about startups in the Middle East and beyond* Today’s column in Sifted: would Stripe have succeeded without Silicon Valley?* A deep-dive into the future of consulting, inspired by the book (and movie) Moneyball* A curated list of all my past writings related to companies going public* A Q&A with a research firm about how governments are faring in the Entrepreneurial AgeThis week I’m delighted to share a conversation I had with Chris Schroeder, an American entrepreneur, global investor and author of the book Startup Rising about the thriving entrepreneurial ecosystem in the Middle East. Chris and I met 2 years ago when I was visiting Washington, DC, where he lives, all thanks to my friend Ian Hathaway (co-author of The Startup Community Way with Brad Feld).Chris, Ian, and I share a deep interest in entrepreneurship as a global phenomenon, specifically the fact that as technology becomes available across the globe, founders can succeed not only in Silicon Valley, but in every entrepreneurial ecosystem that’s emerging on the global map. Chris was led to write his book (whose first edition dates back to 2013) after attending a startup event in Dubai where his mind was blown by the sheer scale and passion of the startup community he encountered there.* His background was also a contributing factor, however. Before becoming an entrepreneur in the media industry and later focusing on investing in startups around the world, Chris worked as a staff member for then-Secretary of State James Baker, right when the world was undergoing the most radical transformation in our lifetime. He criss-crossed the world with his boss, practically witnessing the fall of the Berlin Wall, the collapse of the Soviet Union, the first Gulf War that the US waged against Iraq and Saddam Hussein’s brutal regime, and many other (incredible) things.As he tells me in our conversation, Chris emerged from this experience with an unapologetic global outlook and a deep interest in what is happening in the rest of the world. It was only a matter of time before this interest converged with his passion for entrepreneurship, and now he’s one of the best experts and practitioners I know when it comes to knowing entrepreneurial ecosystems and working with founders based all over the world—a rather unusual positioning for an American.I hope you like this podcast! If you want to dig deeper into Chris’s thoughts and works, check out his newsletter as well as his book, now in its second edition, Startup Rising: The Entrepreneurial Revolution Remaking the Middle East.👉 Listen to my conversation with Chris using the player above or on Apple Podcasts or Spotify 🎧The latest headline-grabbing fundraising round happened this week, with global payment company Stripe raising $600M in a round that values the business at $95B.Founded by the Irish brothers Patrick and John Collison, Stripe is an example of a startup with European roots that has found success in the US and is now aiming directly at Europe as its second base (and key market). Those European roots have put a big question out there: Can a European startup follow a Stripe-like path to success, but without the (long) detour in the US?👉 Read it all in Could a Stripe today succeed without Silicon Valley?⚾️ Moneyball in Consulting ServicesMy Thursday deep dive last week looked at how an industry that has never enjoyed increasing returns to scale, namely consulting, could perhaps find new business models in the Entrepreneurial Age that would allow for those higher returns–even in the face of their clients’ desire to pay less while simultaneously demanding more of them than ever before.Building and/or working at a successful consulting services firm was long one of the easiest ways to get rich, particularly during the latter half of the 20th century. Clients were willing to pay very high fees, fresh talent was continually knocking at the door, and since one of the services you were providing was plausible deniability for the client in case things went wrong, nobody was particularly upset if they did.But now all of that has changed. Since 2008, clients aren’t willing to pay exorbitant fees anymore; talent has much better options for building an exciting career (not least in the startup world); and both clients and the public-at-large are starting to really hold consulting firms to account for both their advice and who they provide it to. So the question is looming larger and larger: Can the industry find new approaches that allow it to move from the market economy to doing capitalism?👉 Read the details in Moneyball in Consulting Services (free for everyone!)💸 All About Companies Going Public On Friday, I curated an edition that is a critical part of developing startup ecosystems and successfully investing in tech companies: IPOs and other methods of taking a company public. The reason why it’s so important is because it directly relates to injecting liquidity into the system. Without companies going public, you can have a lot of value being generated, but that value won’t contribute much to increasing the velocity of money flowing within the system.I started writing more frequently about this topic back in 2019, when the market for taking companies public was still stagnating and where the one big potential IPO–WeWork–turned into a catastrophe. Since, quite a bit has changed, as the IPO market loosened up, several key companies went public via direct listings, and the SPAC craze arrived as well.No matter how it’s done, it’s clear that a critical step in the development of the European tech ecosystem will be finding ways to generate the liquidity that arrives by taking companies public. Doing so will provide a big boost in creating a self-sustaining virtuous circle, with founders, employees, and investors encouraged to utilize their gains to invest in the next generations of startups, and the public at large seeing that there is indeed a great deal of value being created and realized all around them.👉 Dive into the journey in last week’s ‘Friday’s Digest’: All About Companies Going Public.🏛 Government in the Entrepreneurial AgeI recently sat down for an interview regarding how governments are adapting to the digital age. It’s not necessarily an easy topic, as there can be a real disconnect between how governments frame their efforts and advances and how things are actually changing in the everyday lives of citizens and residents.I saw that gap, for example, while living in the UK for five years. Although the UK is relatively strong at communicating regarding their desire to innovate via technology and digitize services throughout the country, the truth is that I still found myself often having to wait in line, or bring a printed document to a particular office, or wait for a password to be delivered by post, etc. And while many governments try to explain this away in the name of “privacy” (or even, in the case of a country such as France, “equality”), the end result for the user continues to be one that comes up very short and only inspires more mistrust in citizens who don’t believe the government can deliver what they really need.So what would an advanced government look like, digitally speaking? In my eyes, it needs to fulfill three key demands that every individual now has with the arrival of the Entrepreneurial Age: being convenient, customizable, and responsive.👉 Read the full Q&A in Government in the Entrepreneurial Age. Sounds interesting? Subscribe to European Straits and let me know what you think!📺 We at The Family are now hosting a weekly show, In Good Company—two directors at a time. I was a co-host in the latest two editions, where we were with Christoph Janz, a founder & partner of the seed VC firm Point Nine Capital, and then John Thornhill, the innovation editor at the Financial Times and cofounder of the pan-European startup outlet Sifted. You can watch the videos here:* In Good Company w/ Christoph Janz (hosts: my colleague Balthazar de Lavergne & me)* In Good Company w/ John Thornhill (hosts: my colleague Alice Zagury & me)🇫🇷 Latest podcasts (in French) with my wife Laetitia Vitaud on our family media operation Nouveau Départ: Enfance : les transitions de la famille 🧒 Médias : la nouvelle génération 🗞 Productivité : pas de recette miracle 😵🚀 My latest contribution to my firm The Family’s newsletter is about the critical difference between customers and clients—and why it matters for founders: It’s better to serve customers than clients.From European Startups as an Asset Class (February 2020): There is now a plurality of models when it comes to growing tech giants (Silicon Valley, China, Southeast Asia, the Middle East, soon Africa), and so there’s no reason why Europe can’t discover its own, different way. Another argument, echoing Christensen’s theory of disruptive innovation, is that Silicon Valley is doing so well that it’s bound to be disrupted by rising entrepreneurial ecosystems (and their happy investors) elsewhere in the world.All recent editions:* Government in the Entrepreneurial Age—for subscribers only.* Moneyball in Consulting Services—for everyone.* All About Companies Going Public—for subscribers only.* Playing Video Games w/ Rachel Kowert. Consumption. Delivery. Profitability.—for everyone.* Funding Profitable Businesses—for subscribers only.* All About Delivery—for subscribers only.* The Future of Consumption—for subscribers only.* More About SPACs. The 'K-Shaped' Recovery. Crypto Digest. A Tribute to Texas.—for everyone.(Credit: Franz Liszt, Angelus ! Prière Aux Anges Gardiens—extrait du disque Miroirs de Jonas Vitaud, NoMadMusic.)European Straits is a 4-email-a-week product, and all essays are subscriber-only (with rare exceptions). Join us!From Munich, Germany 🇩🇪 Nicolas This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.driftsignal.com/subscribe

The Agenda 👇* Rachel Kowert on why we should let children play video games 🎧* What becomes of consumption in the Entrepreneurial Age* Everything I ever wrote about the delivery business* Indie.vc is closing shop, but I’m sure they’ll be back at some pointOur children spend too much time staring at screens—at least, so “they” say. The debates around screens have only intensified in the context of the COVID-19 pandemic. Lockdowns and school closures have contributed to increasing screen time at all ages, adding fuel to parents’ worries as well as to the debates among researchers.* My first reaction, nonetheless, is skepticism. The debate around screens certainly didn’t wait for the pandemic to come to the forefront. We’ve always wondered whether our children aren’t passing too much time in front of the TV, too much time in front of the computer, too much time on their phones, too much time playing video games.The same fears even existed prior to the invention of screens. As my wife Laetitia Vitaud notes in her conversation with American research psychologist Rachel Kowert on the Building Bridges podcast, at one point we were saying that some children (and here we can include Laetitia’s own mother’s experience) were spending too much time reading books, instead of being outside playing with the other kids!Where do these debates come from? These days, they’re nourished by various articles suggesting a link between time spent playing video games and rising violence in our societies. Another factor are best-sellers by authors such as Nicholas Carr, who ask whether the internet isn’t working to make us all a bit stupider. And then, a few years ago people were debating the ways in which some Silicon Valley personalities raise their children. Even if these people owe their fortunes to the time that we all spend looking at the screens they’ve dreamed up and using the apps they’ve developed, it would seem that some forbid their own children from using screens!* But once again, this kind of “revelation” left me skeptical. To me, the journalists writing about the subject tended to pass into generalities quite quickly thanks to the anecdotes found in a few particular cases. Before turning the decisions a few billionaires make in banning (so they say) screens for their children into an example to follow, shouldn’t we wait to see what happens to those children once they’ve become adults? (And, at any rate, can we really extract many lessons in terms of childhood education when starting from a sample that is in no way representative of the rest of society?)The reality is that there doesn’t seem to be any causal link between screens or a lack thereof during childhood and later experiences as an adult. I myself was largely deprived of television when I was a child; we did have a TV set in the house, but besides the fact that it was in black-and-white (the 1980s!), it was shut up in a cupboard, only making an appearance for a few very specific shows.When I later met my wife, she explained to me how she had passed a great deal of time during her childhood and adolescence in front of the TV set. And if we look at her success in terms of schooling and professional life, it would be difficult to draw the conclusion that time spent watching television will be a problem later on! And if I look back on my own experience, I’d be hard pressed to say that I somehow did better than Laetitia, and certainly not because I was kept far from the TV during my childhood.Beyond that, one essential lesson I’ve seen with my own experience as a parent is that there’s nothing that makes young children happier than imitating their parents (with the means at their disposal, of course). If the parents spend most of their time in front of a screen, which is the case for both Laetitia and me, then you can easily predict that the children will do the same.Children’s mimeticism goes much further, though. A screen doesn’t have one single use: we can use it to learn new things, to discover new information, to watch films and TV shows, to talk with friends, to try to gain social clout. This is why it’s important to never underestimate kids: if they see their parents spending lots of time in front of a screen, they’ll want to do the same; but they’ll also imitate their parents and try to spend that time in more or less the same ways. It’s always a good idea for parents to learn to ignore splashy, alarmist headlines and instead take a clear look at what they themselves are doing: what example are they setting for their kids? And on this specific subject, it’s right to not worry. The serious research on the subject shows that there’s no link between screen time (for example, playing video games) and individual fulfillment. That’s exactly what Rachel Kowert explained in detail with Laetitia in the interview of this episode of Building Bridges.👉 Listen to Laetitia and Rachel’s conversation using the player above 👆 or on Apple Podcasts or Spotify 🎧💐 The Future of ConsumptionMy Thursday deep dive last week looked at a topic that is a central part of many discussions taking place these days: on the environment and climate change, social justice, the relationship between work and personal lives, and simply the arrival of the new paradigm brought on by the Entrepreneurial Age. Just as production patterns are changing, our consumption patterns, in terms of both goods and services, are also changing quite dramatically.* Using my “11 Notes” format, I looked at various aspects of what exactly is changing. This includes blurred lines between production and consumption, the shift in power as consumers become part of the multitude, new definitions of quality, and the impact of data that lets consumers better understand their own behavior.The key takeaway for startup founders is that we’re still directly in the middle of a shift that is remaking the entire economy. Changing consumption patterns create a feedback loop that is only becoming more and more powerful, reaching into every corner of our everyday lives. This is also a cautionary tale for any legacy businesses and institutions, who are running out of time to apply the old adage of “Adapt or die”. 👉 Read the details in The Future of Consumption. 🚴‍♀️ All About Delivery On Friday, I curated an edition focused on one of the industries that has clearly accelerated during the pandemic: delivery. Restaurants, groceries, e-commerce… they’re all predicated on the very detail-oriented and labor-intensive (for the moment) world of delivery.* My own writings on the subject date back to 2015, and it’ll come as no surprise that a large part of that was looking at the development of Amazon. But that really was just the beginning, and not just for new players. While several major retailers have been unable to make the transition to the Entrepreneurial Age, there are also quite a few others, including Target and Best Buy, that are far from giving up in the battle for consumers’ hearts and dollars.One interesting thing to note is that delivery is one of the few areas where a European champion has acquired a major US-based player, with Just Eat Takeaway’s purchase of Grubhub last summer. Having a business grown in Europe win out over one developed in the US is a happy moment indeed, and one that can serve as encouragement for the current and coming generations of European entrepreneurs.👉 Discover the implications in last week’s ‘Friday’s Digest’: All About Delivery.📈 Funding Profitable BusinessesIt was a sad day in the venture capital world recently when a bold yet obvious experiment in finding different ways to fund businesses, Indie.vc, announced it was closing down. Part of Tim O’Reilly’s AlphaTech Ventures, Indie.vc was dedicated to funding businesses that arrived at profitability much earlier than traditional VC-funded companies—an example that I often cited of how the venture industry was diffracting and experimenting with new ways of investing capital.* Unfortunately, the Indie.vc example seems to be (for the moment) an example of how innovation can run up against obstacles coming from many different directions. In their case, it wasn’t a problem relating to returns, per se, but rather reluctance on the part of Indie.vc’s own limited partners to have exposure to those kinds of businesses rather than more traditional VC-compatible companies. Put simply, institutional LPs weren’t enthusiastic about steady smaller profits when compared to the possibility of exponential returns.I do wonder, however, if this isn’t more of a pause for Indie.vc (or other efforts following a similar path) rather than a complete cancellation. After all, the wildly hot markets, both public and private, that investors are currently enjoying when it comes to tech companies will, at some point, cool off. And at that point the lessons learned by Tim, Bryce and the rest of the team at Indie.vc could prove quite attractive indeed.👉 Get more details on how it all happened in Funding Profitable Businesses. Sounds interesting? Subscribe to European Straits and let me know what you think!🕹 Want to dig deeper into video games? Read my wife Laetitia Vitaud’s latest edition of Laetitia@Work, published last Thursday: Video Games: my new frontier?Also have a look at my colleague Younès Rharbaoui’s excellent edition of Chasing Paper on the topic: 10 Thoughts on the Gaming Industry 🎮 (June 2020) 🇫🇷 You’d rather listen to our (=Laetitia and I) conversations in French? Give the latest editions of Nouveau Départ dedicated to Tout comprendre sur la crise au Texas 🤠 Notre nouveau projet : "La Flamme et le vent" 🔥 Vaccins : pourquoi les États-Unis vont-ils si vite ? 💉a try.🚀 My latest contribution to my firm The Family’s newsletter is about the impossibility of knowing if your business will be scalable or not at the early stage. Have a look: The quest for scale.🦊🦁🦢 Finally, don’t miss the latest installments of The Family’s newsletter:* Vote for entrepreneurs!  (Alice Zagury)* The explosion of weirdness (Mathias Pastor)* The rise of the software conglomerates (Balthazar de Lavergne)* Thinking patterns (Oussama Ammar)   All recent editions:* Funding Profitable Businesses—for subscribers only.* All About Delivery—for subscribers only.* The Future of Consumption—for subscribers only.* More About SPACs. The 'K-Shaped' Recovery. Crypto Digest. A Tribute to Texas.—for everyone.* We All Need a Lone Star State—for subscribers only.* All About Crypto—for subscribers only.* How Governments Can Deal With the 'K-Shaped' Recovery—for subscribers only.* Europe & Silicon Valley w/ Toni Cowan-Brown. Capital Call. AI. International Expansion. Consumer Goods.—for everyone.* Some Quick Notes on SPACs—for subscribers only.* Vaughn Tan on Uncertainty—for subscribers only.European Straits is a 5-email-a-week product, and all essays are subscriber-only (with rare exceptions). Join us!From Munich, Germany 🇩🇪 Nicolas This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.driftsignal.com/subscribe

The Agenda 👇* Toni Cowan-Brown’s insights on overcoming cultural differences 🎧* What 32 editions of Capital Call reveal about venture capital in Europe* Why AI is overrated and companies might prefer to serve their users well* How to reflect on your startup’s expansion in the US, with Dominic Jacquesson* Why startups in the consumer goods industry are embracing vertical integration🎧 The most recent Building Bridges podcast is out, featuring Toni Cowan-Brown, a San Francisco-based NationBuilder alumnus and content producer who works at the intersection of tech and politics. I admit I discovered Toni quite recently, listening to an episode of Another Podcast (a podcast she’s co-hosting with Benedict Evans) about “Is Europe a Market?”—a topic that’s very much in sync with this newsletter!* One example, among many, of what struck me in the Another Podcast episode: how difficult it was for Toni to market NationBuilder in Europe! In the US, it’s introduced as “software and community for leaders”. But when the company decided to expand in Europe, Toni was the one in charge of explaining that such a value proposition was impossible to convey in both Germany and France—in the latter because ‘leader’ is a word that simply doesn’t have a French equivalent, and in the former because, well, the official translation for ‘leader’ is... ‘Führer’ 😨Then I said to my wife, Laetitia Vitaud “This person, Toni, should definitely be a guest on Building Bridges”, to which Laetitia replied: “I know, and by the way, we’re already in touch”. So it goes, and it’s a fascinating conversation which I urge you to listen to as it highlights so many topics I’m used to covering in European Straits: cross-cultural frictions, Europe as an integrated region, the relationship and (many) differences between the US and Europe, and where Silicon Valley is headed after a full year of pandemic.As Laetitia wrote on the Building Bridges website,Toni is a true European at heart (albeit with a British passport) who’s lived and worked in San Francisco for a few years. She’s one of those few people who loves to compare and confront cultures the way I do. Perhaps it’s why we just couldn’t stop talking!She used to work for a startup called NationBuilder which develops software for political campaigns. (She was in charge of its European expansion). And she continues to see herself as being at “the intersection of tech and politics”.At this intersection we had a long chat about how she experienced the pandemic in San Francisco, her view of the US healthcare system and how the Valley was impacted by everything that happened in California and the world in 2020.And so be prepared to learn about many things: what it’s like doing business across the Atlantic in the tech sector; what it’s like to be a British citizen growing up in Brussels; why Toni feels more European than ever even though the UK has now officially left; why conversations between women are different and why that’s hard to process if algorithms are biased toward men; and what it’s been like to go back and forth between the US and Canada during a pandemic.👉 Listen to Laetitia and Toni’s conversation using the player above or on Apple Podcasts or Spotify 🎧🇪🇺 What I Learned Curating 32 Editions of “Capital Call”As you know, the drive behind this newsletter is my conviction that “working in public” is both important and beneficial. It’s similar to what we at The Family tell entrepreneurs about putting their solution into the hands of actual users: it’s the only way to get the real feedback that lets you constantly iterate toward an ever-improving product.Capital Call, a weekly newsletter that I curate with Willy Braun of Gaia Capital Partners and Vincent Touati-Tomas of Northzone, is meant to amplify what startup investors throughout the European ecosystem are saying and to thus encourage that “working in public” ethos. In doing so, the whole community can better understand what’s happening across the continent, and hopefully keep pushing the quality level ever higher.We’ve been publishing Capital Call for almost an entire year, and so I wanted to take a look back at the numbers to see what they revealed. One interesting aspect, for example, was that while there is indeed a marked gender imbalance in terms of who is publishing content (less than one-third of those featured in Capital Call are women), that imbalance was actually quite small considering the industry’s ongoing issues of diversity. And in terms of emulation, it is all to the better if more women in the VC industry can be showcased as they publish their thoughts!👉 I break the numbers down in What I Learned Curating 32 Editions of Capital Call.🤖 A Business Perspective on AI Regular readers know that for me the foundational idea of the Entrepreneurial Age is that there’s more power outside than inside organizations. This is why businesses today have to make a pact with the multitude, all those individuals equipped with powerful computing devices that allow them to connect with one another via powerful and wide-reaching networks. The strength of the multitude means that businesses today are in constant fear of a potential “revolt of the public”, to use Martin Gurri’s term.The need to perpetually maintain one’s good standing with the multitude is a key reason why businesses today are so interested in AI. Instead of relying on the fickleness of the crowd, businesses are drawn to the idea that by using AI and the right data sets, they’ll be able to once again escape to a world in which they can rely on machines rather than networked individuals.But is AI really a viable option? The amounts being invested are becoming more and more incredible as time goes on; at some point the question must be asked if it isn’t a better idea to just continue working diligently to strengthen a mutually beneficial alliance with consumers, rather than hoping machines can one day provide the leverage necessary to thrive.👉 I pose several other questions, including one on antitrust, in A Business Perspective on AI.🌐 Dominic Jacquesson on International ExpansionThe final “Friday Strategy” workshop with The Family’s current batch of startups hosted Dominic Jacquesson, VP Insight and Talent at leading VC firm Index Ventures. Dominic has led several Index initiatives over the past few years, namely a campaign promoting better practices when it comes to employee equity, and recently a handbook for European founders wanting to expand to the US.This latter topic was the focus of our discussion last week, and Dominic’s experience and close relationship with founders has let him develop an expansion taxonomy, the four categories of companies when it comes to how they approach expansion both in terms of go-to-market and team. Still, he was careful to note that these categories don’t necessarily give companies wanting to expand internationally a simple step-by-step framework to follow.One key aspect that he did emphasize, though, was just how much a successful international expansion depends on the founders and how they decide to operate throughout the move. For early-stage investors, understanding founders’ motivations and willingness to pick up and move (since that’s often what it will take, at least for some members of the founding team) is critical when evaluating how a startup’s story could play out.👉 I also note one area where we have differing opinions, namely the Great Fragmentation and how it will affect cross-border business, in Dominic Jacquesson on International Expansion.☕️ Upstream Value in Consumer GoodsOne startup in our current batch is Spaō, a company offering a superfood alternative to your morning coffee. As I recently talked with Charles, Spaō’s founder, I was intrigued by a turn our discussion took, namely on the possibility of a consumer goods company to be valued like a tech company—assuming it can pull off the feat of controlling its entire value chain, from sourcing materials at the top to owning the relationship with the consumers at the bottom.This is interesting because in some ways it goes against much of the history of capitalism, which for a long time could be seen as a history of vertical disintegration. Companies long sought ways to find outside providers to take over various aspects of the value chain, maintaining control over what were understood to be key leverage points while avoiding the trap of becoming too bulky and overweight.The idea of the Entrepreneurial Age now providing at least the possibility of reversing that trend is intriguing indeed. By taking control over each aspect of the value chain and relying on constantly improving technology, in a field such as consumer goods a company could manage to build a structure that remains agile while also capturing profit margins at each level of the chain!👉 Still, there’s a lot that goes into making it there, some of which I discuss in Upstream Value in Consumer Goods.Sounds interesting? Subscribe to European Straits and let me know what you think!🦢 Those of you who regularly read this space know that we directors at The Family send a daily newsletter focused on startup mentality and lessons. Over the past week, we’ve covered:* Every startup ecosystem’s need for a first wave of determined founders, by me.* The future of online events and how we’re organizing Demo Day, by Mathias.* The underrated importance of loving your niche, by Balthazar.* How startups can hunt for scale from anywhere, even Martinique, by Alice.* And the importance of practicing entrepreneurship as something active and alive, rather than just a theory, by Oussama.💰 I’d also like to point your attention toward this superb eight-part video series about Venture Capital in the 21st Century by Bill Janeway, brought to you by the Institute for New Economic Thinking. 🇪🇺 Finally, it’s still time to register for the Building Tech Ecosystems in a Distributed World event by Sifted, Dealroom, and European Startups and to attend the session I’ll be participating in at 4:15pm CET with Kim-Mai Cutler of Initialized, Gerard de Graaf of the European Commission, and Pat Wilson of the State of Georgia. Here’s where you can save your seat: HOPIN.From Thoughts on Value Chains, and Why You Really Need To Get a 'Grip' (June 2020): Value chains are here to stay if you realize they’re all about connecting raw resources at the top and a job to be done at the bottom. The boundaries between them might be blurred by software eating the world, tech companies turning into giant conglomerates, and multi-sided businesses becoming the norm. But you need to see beyond the hype and the complexity and realize there is still such a thing as value chain analysis.All recent editions:* Upstream Value in Consumer Goods—for subscribers only.* Dominic Jacquesson on International Expansion—for subscribers only.* A Business Perspective on AI—for subscribers only.* What I Learned Curating 32 Editions of “Capital Call”—for subscribers only.* Clubhouse in Europe. All About Angel Investing. Vaughn Tan on Uncertainty. SPACs.—for everyone.* Some Quick Notes on SPACs—for subscribers only.* Vaughn Tan on Uncertainty—for subscribers only.* “Be Patient” | A Conversation About Angel Investing w/ Pascal Levy-Garboua (Parts 1 and 2)—for subscribers only.* The Digital Economy w/ Bill Janeway. Reinvention. Bezos. Musk. Communications.—for everyone.European Straits is a 5-email-a-week product, and all essays are subscriber-only (with rare exceptions). Join us!From Munich, Germany 🇩🇪 Nicolas This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.driftsignal.com/subscribe

The Agenda 👇* Bill Janeway’s vision of the state of the world 🎧* Should investors partner with corporates in their efforts at reinventing themselves?* Jeff Bezos is stepping down. A few thoughts on his life and legacy.* Lessons shared by my friend Martin Schmidbaur on communications.* Jerry Neumann’s “productive uncertainty”: Tesla as a business case.🎧 I recently sat down for a conversation with Bill Janeway, an economist, faculty member at Cambridge University, and author of the landmark book Doing Capitalism in the Innovation Economy.* It’s a book that really has had a profound influence on me—basically containing everything you need to know about how venture capital came to be and why it’s so relevant today in the context of the transition to the digital economy.Bill’s long career in venture capital, primarily with Warburg Pincus, and his academic work let him comment on today’s economy from both a business and an institutional perspective. And I consider myself, and the world at large, really, to be quite lucky that he is also such an affable person and generous with his time and thinking.Our conversation spanned how he’s experienced the very strange year that was 2020, his thesis regarding the retreat from hyperglobalization, the consequences of Joe Biden’s election on America, the world at large, & the tech industry specifically, how he sees Europe’s future, and much more.👉 Listen to our podcast by using the player above or go listen on Apple Podcasts or Spotify 🎧🎊 Co-Investing in Corporate ReinventionI’ve never hidden my skepticism regarding corporate venture capital, that idea that somehow corporations can invest in outside startups as a solution to their need to innovate and find new business models. I’m skeptical because the alignment of interests is oftentimes non-existent, if not impossible, and as someone who works with early-stage founders on a daily basis, I’ve often seen it quickly turn into a case of ‘be careful what you wish for’.A different approach to that same problem, however, could be having outside investors such as PE or VC firms brought into a corporation’s internal efforts at reinventing themselves. This is similar to what was seen with KKR’s investment in Bertelsmann, which led to the successful development of BMG Rights Management in the music industry.I like this idea because unlike corporate venture capital, it’s an approach that can much more easily align the two parties’ interests. Because both have their own (significant) strengths, finding and working toward a shared goal becomes much more viable. And I wonder if my readers have any other examples that come to mind of similar experiments, whether successful or not?👉 My interest in entrepreneurial investing continues in Co-Investing in Corporate Reinvention.🧗 11 Notes on Jeff Bezos  The big piece of news in the tech world last week was that one of the contenders for greatest CEO of all time, Jeff Bezos, would be stepping down at Amazon later this year. Bezos will become Amazon’s Executive Chairman, handing the reins over to the man who’s built up Amazon’s increasing returns on the Southern Side of the business, current CEO of AWS Andy Jassy.I’ll admit that coming up with an “11 Notes” for Jeff Bezos wasn’t particularly hard, as his 25+ year reign at Amazon has provided more than enough material for anyone who enjoys thinking about how businesses can be built and run. From his ability to allocate capital, to control his shareholders and even his decision to base the company in Seattle, he’s given a master class on being a CEO.Of course, the one thing that pretty much everyone knows about Bezos is his obsession with constantly improving the customer experience. Yes, that made him an extremely difficult taskmaster (as Steve Yegge recounted brilliantly regarding the birth of AWS), but it also allowed him to create the first hybrid tech giant. And yet he still managed to find time to drive Donald Trump absolutely crazy 😉👉 Read more in 11 Notes on Jeff Bezos.📸 Martin Schmidbaur on CommunicationsAs I mentioned last week, part of our work with The Family’s current batch of startups is having conversations with effective operators, and I was glad to recently have my friend Martin Schmidbaur of Milltown Partners come in to talk about communications. Similar to business strategy, one could question the need for early-stage founders to think about communications; but also similar to strategy, there are multiple reasons why it’s a useful practice from the very beginning of a founder’s journey.That’s because PR and communications both benefit from one thing: practice. In terms of communications, founders need to tell their story over and over; they need to pitch their company to customers, investors, people on the street; they need to learn what resonates and what doesn’t. And in terms of PR, founders should be trying to build relationships, which will always have much more value when you want to announce something than a bland ‘press release’ that will stay in a journalist’s inbox for about as long as it takes them to hit ‘delete’.Martin also had several key insights that will serve founders well as their companies grow and scale. For instance, he talked about the importance of making sure that your communications serve actual and current business goals. And he noted that you need to constantly pay attention to what’s working today. After all, a few years ago labeling your solution as the ‘Uber for X’ was quite effective; today, that’s certainly not the case, and it could even be quite counterproductive!👉 I share more of what Martin said and some related thoughts in Martin Schmidbaur on Communications.🎢 Does Elon Musk Master Productive Uncertainty?The standard answer for what venture capitalists are seeking is “exponential returns”. That’s why software businesses that look capable of providing increasing returns to scale by reaching a point where they can add more and more customers without expanding their costs are widely considered the holy grail.More and more, however, we’re seeing venture capital supporting businesses that don’t necessarily have those fantastic returns at the top end. In fields such as AI, consumer goods, hardware, biotech and more, exponential returns are expected less in terms of a business model, and more in terms of an overall market that’s growing exponentially.Tesla is an excellent example. Car manufacturing can enjoy increasing returns… to a certain point. Elon Musk knows this, which is why he continually pulls on other levers (social media, surfing technological trends like cryptocurrencies, etc.) to increase the value created at Tesla by boosting the overall market for electric cars. And no matter what one might think of Tesla’s current valuation, it’s undeniable that Musk has had an incredible personal impact on the growth of that market, which by all indications is about to grow exponentially.👉 I go for another round inspired by Jerry Neumann’s concept in Does Elon Musk Master Productive Uncertainty?Sounds interesting? Subscribe to European Straits and let me know what you think!🇫🇷 In addition to European Straits, I also publish Nouveau Départ, a French-speaking media with my wife Laetitia Vitaud, dedicated to commenting on the pandemic and the paradigm shift it’s contributing to accelerating (the shift to the Entrepreneurial Age 😉).We typically send one editorial and an interview to everyone each week, and then two conversations between the two of us on timely topics that are for subscribers only. Here are the topics we’ve covered recently in these “À deux voix” conversations:* Jeff Bezos : sa vie, son oeuvre* Logement : tout ce qui change avec la pandémie* GameStop : la révolution sur les marchés financiers* 🇺🇸 Joe Biden et le monde 🌐* Pandémie et démographie🦢 Also, my fellow directors and I at The Family have resumed our daily newsletter, aiming at providing early-stage founders with timely and sound advice. Check out this recent edition by my colleague Balthazar de Lavergne: Ecosystem velocity is key.From DeepTech: Many Roads May Lead There, But There's Only One Rome (Bill Janeway, January 2020): The “deep technology” that has continued to enrich and extend the digital environment has emerged both from established incumbents (Amazon’s suite of cloud resources, for example) and from startups (from Salesforce to Databricks); the “Division of Innovative Labor” identified by my friends at Duke suggests that startups take on more of the “exploration” risk while incumbents, take on more of the “exploitation” risk, often by acquisition.All recent editions:* Does Elon Musk Master Productive Uncertainty?—for subscribers only.* Martin Schmidbaur on Communications—for subscribers only.* 11 Notes on Jeff Bezos—for subscribers only.* Co-Investing in Corporate Reinvention—for subscribers only.* The New Welfare State w/ Hilary Cottam. Remote Work. Business Strategy. GameStop. Jim Simons.—for everyone.* A Few Notes on “Crossing the Chasm”—for subscribers only.* Ben Robinson on Business Strategy—for subscribers only.* Everyone Wants To Be a Capitalist—for subscribers only.* Doing Capitalism in Financial Services (Round 1)—for subscribers only.* London & Paris Together. Business Strategy. Peak Bay Area. Lobbying Regulators.—for everyone.(Credit: Franz Liszt, Angelus ! Prière Aux Anges Gardiens—extrait du disque Miroirs de Jonas Vitaud, NoMadMusic.)European Straits is a 5-email-a-week product, and all essays are subscriber-only (with rare exceptions). Join us!From Munich, Germany 🇩🇪 Nicolas This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.driftsignal.com/subscribe

The Agenda 👇* Hilary Cottam’s inspiring map for reinventing the welfare state 🎧* My latest column in Sifted: remote work as the new frontier on the labor market* What quant investor Jim Simons reveals about capitalism on financial markets* My take on GameStop, and how the little guys took on large hedge funds* Lessons shared by my friend Ben Robinson on business strategy* Why Geoffrey Moore’s Crossing the Chasm still matters for startup founders🎧 The most recent Building Bridges podcast is out, featuring Hilary Cottam, author of Radical Help. I first wrote about Hilary’s book back in 2018 (in Le Monde, no less!), remarking that,For Cottam, the solution isn’t to reform the current system but rather to invent a new one. She believes that the most important question is how to correct the original sin of the welfare state’s transactional nature, whereby it does not take into account the relationships between individuals themselves. The fact is that most people are surrounded by a group, whether large or small, of family and friends. But this group is in no way an actor within the social protection system. We are covered individually, but the system does not take into account the other individuals to whom we are connected.Needless to say, I find her approach fascinating, and highly recommend giving a listen! Use the player above or go listen on Apple Podcasts or Spotify 🎧⚠️ In my latest Sifted column, I talk about a big opportunity that governments—including that of the EU—could take advantage of: the acceleration of remote work and the need to adapt institutions to facilitate remote work for both employers and employees. Of course, even with institutional changes there will still be significant questions that remain, such as wage rates based on location. But if governments confront issues such as payroll taxes, social security, and labor law in a way that turns remote work from an HR headache into a banal fact of the 21st century economy, it could provide a real competitive advantage in terms of economic development.👉 Read the whole column on the Sifted website: Remote work: HR nightmare?🐳 Doing Capitalism in Financial Services (Round 1)Given that it deals with, well, capital, you’d think that financial services would be a place where capitalism naturally has the upper hand on the market economy. Yet much of the industry really does exist in the simple logic of ‘buy low, sell a bit higher’. And that is about as simple a definition of the market economy that one can have.For a long time, there weren’t many (if any) spaces where you could insert capital into the financial services production process in order to escape to the promised land of increasing returns to scale. Even today, it’s not that easy—just ask any startup founder who’s trying to find the right business model that can unlock that door, whether in financial services or elsewhere.In this edition, I provide some early notes on a book I’ve been reading recently, Gregory Zuckerman’s The Man Who Solved the Market. It shows how traders back in the latter half of the 20th century started to have ideas about how financial services could move from the market economy into capitalism, but also how those often brilliant minds had to wait until digital technology caught up and made it all possible.👉 I look at why the industry is still very much within that transition, highlighting the story of Jim Simons’s Renaissance Technologies, in Doing Capitalism in Financial Services (Round 1).👑 Everyone Wants To Be a Capitalist  The one thing I’m quite sure of regarding the GameStop story is that we haven’t seen the end of it yet. One reason why is because it has been driven (even without falling into the facile idea of “little guys vs. hedge funds”, which has been pretty well shown to not be the case) by the ‘multitude’: those billions of networked individuals who can now exert power in the Entrepreneurial Age.It shouldn’t be a surprise that many members of the multitude were drawn towards trading over the past year. After all, while much of the world’s market economy has been effectively halted by COVID-19, it’s been only too evident that the capitalist side of things has been doing quite well. That left a ripe environment for what my friend Martin Gurri calls “The Revolt of the Public” to make its way to the heart of Wall Street (which, as it turns out, is located less in Zuccotti Park and more in Bloomberg terminals 😉).In the end, it’s not simply that barriers to information have been taken away. It’s that without those barriers, the multitude is able to coordinate in ways that were never before possible. It’s no guarantee that ‘the people’ will win against hedge funds; but at the very least, it’s a guarantee that there’s a new player in the game who must be accounted for.👉 I give my contribution to the financial story of the week in Everyone Wants To Be a Capitalist.♛ Ben Robinson on Business StrategyWith The Family’s current batch of startups, we hold regular private meetups with entrepreneurs, operators and investors who can provide key insights on various aspects of building an ambitious business. This past week, I invited my friend Ben Robinson of Aperture to join us to discuss one of my favorite topics: business strategy.Specifically, we talked about how business strategy is no longer only for big corporations, but can also function as a guiding principle from the very earliest of stages. Having strategy ready to serve as a kind of guide can even be critical in the early days, since a startup is necessarily dealing with a high level of uncertainty on a daily basis. The areas where strategy can come into play are many: from choosing your market to structuring operations, from building your brand to properly valuing engagement. Each area may require its own approach and have its own lessons to learn; but if you have a clear and coherent strategy in mind, it can serve as the unifying link between them all.👉 I  provide ten highlights from the talk in Ben Robinson on Business Strategy.💼 A Few Notes on Crossing the ChasmOne feature of many business books is that you don’t really need to read the whole thing to understand the key point. That could sound like a critique, but the truth is that many of those key points really are important, and I’m often grateful that they’re out there circulating, even if the book itself might not lend itself to a second reading (or even a complete first reading).Geoffrey Moore’s Crossing the Chasm is one of those books for me. The framework that Moore develops, clearly outlining various customer segments and what drives their purchasing behavior, is highly valuable for an entrepreneur. Knowing which niche you’re focusing on at the moment, and then later figuring out how to adapt your sales pitch for the next group you’re targeting, is critical. After all, if you’re not speaking to people in a way that understands their behavior, you aren’t going to get very far in selling to them.And I think there’s something there that might be a universal trait of great entrepreneurs: they always seem to understand exactly what category their interlocutor belongs to, and thus they know how to sell their product. So while a young entrepreneur needs to learn thousands of things in hundreds of different domains, I’d still say developing that particular skill would be a good one to focus on!👉 I cite some other thinkers as well in A Few Notes on “Crossing the Chasm”.Sounds interesting? Subscribe to European Straits and let me know what you think!From The Networked Welfare State (November 2018): The digital transition allows Hilary Cottam to bring forward her vision with a great deal of optimism. Thanks to digital tools, the idea of inventing a networked welfare state isn’t just a utopia, but instead a promising possibility. The digital world connects individuals, circulating information between them and calling on them to contribute where needed to better cover and help the others. It doesn’t require one to renounce national solidarity, but rather to realize that individuals covered by the welfare state can form an active network rather than a passive queue in front of an office door.All recent editions:* A Few Notes on Crossing the Chasm—for subscribers only.* Ben Robinson on Business Strategy—for subscribers only.* Everyone Wants To Be a Capitalist—for subscribers only.* Doing Capitalism in Financial Services (Round 1)—for subscribers only.* London & Paris Together. Business Strategy. Peak Bay Area. Lobbying Regulators.—for everyone.* A Founder’s Handbook for Lobbying the Government—for subscribers only.* Away From the Bay Area—for subscribers only.* Business Strategy at a Small Scale—for subscribers only.* The New Entente Cordiale—for subscribers only.* Gender Equality w/ Nina Goswami. India. Financial Loops. Rich People. War & Inflation.—for everyone.European Straits is a 5-email-a-week product, and all essays are subscriber-only (with rare exceptions). Join us!From Munich, Germany 🇩🇪 Nicolas This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.driftsignal.com/subscribe

The Agenda 👇* Nina Goswami on how to make progress on the diversity front* A fascinating take by Sajith Pai on the Indian startup scene* McKinsey shifting from the market economy to capitalism* Do startups really want rich (European) people’s money?* After war comes inflation—and then the stock market collapsesDiversity isn’t an easy topic in many industries, and the tech/VC worlds are certainly no exception. There are, however, a growing number of resources that really can help, and I think that the latest episode of Building Bridges can be included in those.🎧 My wife Laetitia Vitaud sat down to talk with Nina Goswami, the BBC’s Creative Diversity Lead and head of the 50:50 Project. 50:50 is dedicated to creating content that accurately reflects our world, with significant lessons for why diversity makes good business sense.You can listen to their whole conversation in the player 👆 above, here on the Building Bridges website, or on Apple or Spotify 🎧🌏 A Great Writeup About India’s Startup SceneIn the context of the world’s ongoing fragmentation, understanding individual countries is all the more critical. Over the past few years, I’ve done a series of dives into the situations in the UK, Israel, Italy, Switzerland, China, and many more. In that effort, I’ve danced around India’s startup ecosystem a bit, but it remains a country where I’m always on the lookout for intelligent takes from real insiders.That’s why I was so pleased to come across Sajith Pai’s article, The Indus Valley Playbook, on LinkedIn. Sajith traces India’s tech history all the way back to the original dotcom bubble, when the situation largely played out as it did in Europe: a tiny ecosystem finding itself wiped out and eventually needing to start again virtually from scratch, not having built up enough strength to withstand the bubble bursting.There are many insights to be found in the article, which I encourage you to read in its entirety. From the stark division existing in India’s consumer market to the false sense that many of us have regarding the potential to use English as a means of accessing the broader Indian population, the viewpoint of an experienced VC like Sajith provides significant value for both investors and laypeople simply trying to better understand how India works.👉 And of course, I also noted some other highlights that relate to Europe in A Great Writeup About India’s Startup Scene.🌀 McKinsey’s Financial Loops  A writer can never be entirely sure of which piece will really strike a chord in their readers—it’s only visible in retrospect. My first article focusing on McKinsey demonstrated exactly that, becoming one of my most-read pieces ever. Its popularity has led me to continue digging into the McKinsey case, which is why a tweet signaling the consulting firm’s foray into acquiring SaaS companies caught my eye.As a firm, McKinsey is firmly in the market economy, as defined by Fernand Braudel. You’re buying something at one price (in McKinsey’s case, consultants) and selling it at another (to their clients for specific missions). Being in the market economy doesn’t prevent you from building a massively successful business, but it does keep you within a certain realm, given the lack of increasing returns to scale.But by using some of its profits to acquire SaaS companies, McKinsey is redirecting part of its efforts into capitalism, where deploying capital in the right area can allow you to enter the realm of increasing returns to scale. Software companies can generally aim for much higher returns since at a certain point they can continue adding customers and generating more revenues without increasing their costs. Will McKinsey be able to pull off such an integration, melding their consulting culture with the tech culture found in the SaaS industry?👉 I look at why the answer is “maybe” in McKinsey’s Financial Loops.🎩 On Rich People and StartupsIf you look closely at the world’s global savings glut, you’ll certainly find that a lot of money is sloshing around European pockets. Yet very little of that cash is today being allocated to the asset class of startups, and some people want that to change. After all, there are all those stories about Jay-Z and Ashton Kutcher investing in startups; so why not Gerard Depardieu?But there’s a lot of pushback from people in the European tech ecosystem, people who should ostensibly want more investments made in startups and who are yet very against seeing Europe’s rich entering the startup game. The reason is evident if you’ve been involved in startups for long enough: the traditional investment attitude driving most of Europe’s HNWIs is incompatible with the new behaviors needed to be successful in startups.This is why it’s so important to distinguish between mature vs. immature startup ecosystems. In Silicon Valley, the ecosystem has developed to the point where it’s the startup founders and professional investors who can dictate terms to LPs, even those individuals worth hundreds of millions of dollars. In Europe, founders are still struggling to build up their knowledge and capabilities, meaning that they’re overly susceptible to toxic influences coming from bad investors.👉 I look at both sides of the argument in On Rich People and Startups.📖 War, Inflation, and the Stock MarketThe inspiration for the most recent edition of European Straits came from one of my favorite sources: my subscribers! One of them recommended Adam Fergusson’s When Money Dies, a study on inflation in post-WWI Germany. From its opening pages, the book points to a problem that has some troubling implications for today’s world: Germany’s excessive use of debt in propping up its economy, as contrasted with Britain’s use of higher taxes on industries that had benefited from the war effort.Unfortunately, it’s quite evident that today’s decision-makers find it easier to rely on debt, particularly in this low-interest-rate environment, rather than taking on the political and social minefield of raising taxes. And there are some ways in which that could turn out to be OK—assuming that those higher taxes on the winners come into play eventually.There are more and more voices, however, who don’t think the situation will be kept in hand, with some people worrying specifically about the stock market and the impact that the abundance of cheap capital has on it. Legendary investor Jeremy Grantham recently published his take on why this long bull market has now turned into a massive bubble, to his eyes one of the largest in history—wow!👉 I delve further into some very scary questions in War, Inflation, and the Stock Market.Sounds interesting? Subscribe to European Straits and let me know what you think!From Women and The Family (March 2018): We have a much better grasp of the many tools and methods that can be used to promote diversity and gender equality. In this recent article about behavioral economics, my wife Laetitia Vitaud discusses how social science helps us to spot patterns that contribute to discriminating against women and correct biases so as to promote them instead. In another, What If Women Learned to Ask?, she explains how managers can avoid courses of action that so many times entrap women on the losing side of professional opportunities.All recent editions:* War, Inflation, and the Stock Market—for subscribers only.* On Rich People and Startups—for subscribers only.* McKinsey’s Financial Loops—for subscribers only.* A Great Writeup About India’s Startup Scene—for subscribers only.* The EU as a VC. DeepTech Is Complicated. Making Vaccines Work. Haven Failed. Inflation.—for everyone.* Will Inflation Make a Comeback?—for subscribers only.* Why Did Haven Fail?—for subscribers only.* A Few Thoughts About Vaccines and the Healthcare System—for subscribers only.* DeepTech: Many Roads May Lead There, But There’s Only One Rome—for everyone.* My Worldview in 10 Ideas—for everyone.European Straits is a 5-email-a-week product, and all essays are subscriber-only (with rare exceptions). Join us!From Munich, Germany 🇩🇪 Nicolas This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.driftsignal.com/subscribe

The Agenda 👇* Laetitia Vitaud interviewing Andrew Scott about the “new long life”* What this newsletter, European Straits, is about in 10 ideas* What’s coming in 2021: podcasts, a book club, and moreThe new episode of the Building Bridges podcast, brought to you by Laetitia Vitaud, is an inspiring conversation with Andrew Scott about the topic “Age Isn’t Destiny”. Let me quote Laetitia:I discovered Andrew’s work (and that of his co-author Lynda Gratton) a few years ago when I read their book The 100-Year Life: Living and Working in an Age of Longevity. This book influenced my own work profoundly as I became more and more convinced that increased longevity and the ageing of the population play a huge part in shaping the future of work.The second book they wrote together was published in 2020. The New Long Life: A Framework for Flourishing in a Changing World is as good as the first. It offers a more practical roadmap for individuals and governments. Adapting to the age of longevity involves all the dimensions of our lives (love, leisure, family life, savings, training, health...). It would be much too shortsighted to be content with just forcing people to postpone retirement.🎧 You can listen to the whole conversation by using the player above or, if you prefer, on Apple Podcasts or Spotify.I’m lucky to have engaged subscribers who contribute with quite a lot of feedback. For newcomers, however, what this newsletter is all about can sometimes be a bit unclear: What’s this “Entrepreneurial Age”? How does viewing it from Europe make a difference? Is it even relevant for non-Europeans? For a long time, the whole thing didn’t even have a title! It was just a channel through which I shared personal thoughts about entrepreneurship, finance, strategy and policy—all in connection with my work as a director of my firm The Family.But as time passed, a few recurring themes, ideas and concepts emerged, and I finally realized that it all revolved around two things:* It’s about our economy shifting from the Fordist Age (that of the automobile and mass production) to the Entrepreneurial Age (that of ubiquitous computing and networks).* And it’s about providing a European perspective on this shift—one that I find is missing from the global conversation about tech startups and venture capital 🇪🇺These, however, can take us in many different directions, and so as we’re entering a new year I thought I would highlight ten ideas that recur in my work 👇1/ A transition from one paradigm to anotherI’ve been describing the current period as a “revolution”, “transition”, or “paradigm shift” since at least 2012. But it was only a few years later, thanks to my friend Bill Janeway, that I discovered the inspiring work of economist Carlota Perez. Absorbing Carlota’s thinking helped me better understand what’s going on in the world from an entrepreneurial perspective. In short, it goes like this:Every 50-70 years, a technological revolution brings about a new techno-economic paradigm—that is, a new approach to consumption, production and work. It starts with a scientific breakthrough, then it’s accelerated by a financial bubble that eventually bursts, giving way to what Carlota calls the “deployment phase”: the new paradigm gradually spreads out across every dimension of the economy, revealing a new way of life which then requires building a new socio-institutional framework that makes life better for everyone.Carlota’s system inspired me so much, it now shapes my thinking in every dimension. Here’s an example (although I hadn’t yet settled on Babak Nivi’s concept of the Entrepreneurial Age at the time): 2/ More power on the outsideHow can you sum up the Entrepreneurial Age in just one sentence? Quite simple:In the Entrepreneurial Age, there’s more power outside than inside organizations. I expanded on that big idea (which has remarkably stood the test of time) in many essays across the years, including this one written in 2018 for the Global Drucker Forum:What exactly is the nature of that outside power? Today’s power is vested in the mighty “multitude”—the billions of individuals who are now equipped with powerful computing devices and connected with one another through networks.And it inspires a lesson in strategy and management that every corporate executive needs to keep in mind: the businesses that succeed in the digital economy are the ones that realize how power has been redistributed outside of their organizations.The winners are not the companies who use the most technology. Rather, they are the companies that best use technology to harness human power, which in turn fuels growth and generates profits.3/ It's the same pattern across every industryMost of what I know about how industries are transformed by the current paradigm shift I learned while studying the music industry in 2009. I wrote about it here:Studying the music industry taught me almost everything I know about a legacy industry shifting to the Entrepreneurial Age. It all started in 2009.At the time, I was working in Paris in the French ministry of finance. My boss at the Inspection générale des finances (a kind of in-house consulting firm that works exclusively for ministers), knowing that I was interested in technology, offered me a position as the co-chief of staff of a task force formed to ‘save’ the music industry in the face of online piracy.Then I started to look elsewhere and I realized the same kind of change was happening in every single industry, albeit at a different pace depending on the presence of tangible assets and hardened regulations. This realization led to designing a general framework that I laid out in The Five Stages of Denial (2016). It became the foundation for all my subsequent work on business strategy in the Entrepreneurial Age, which I recently compiled in Shifting Patterns Across Industries. 4/ Capital allocation is keyOne big problem in the tech world is that too many people are interested in the technology and not enough people pay attention to what, according to me, really matters when it comes to building successful tech companies: things like design, marketing, sales—and, yes, capital allocation.I discovered the importance of capital allocation while studying the deformation of industry value chains in the context of the paradigm shift. What I realized is that the tech companies that win excel at capital allocation—case in point: Amazon. Meanwhile, the incumbents that lose do so because they use the wrong financial tools—which Clay Christensen once called “innovation killers”. I wrote about it in Finance: The Secret Key to Becoming a Tech Company (2018):Now all corporate CEOs and CFOs should adopt Bezos’s playbook. If they don’t want to wake up one morning leading the next GE or Toys “R” Us, they need to take the initiative, focus on the transition as a financial challenge, and redouble their efforts at actually tackling that challenge. No more hackathons, open innovation b******t, or learning expeditions in Palo Alto, Shenzhen, and Tel Aviv. It’s time to finally open the playbook of corporate strategy in the Entrepreneurial Age and translate it into straightforward and convincing financial terms.You can discover a compilation of all my writing regarding capital allocation here: All About Capital Allocation. 5/ There's a difference between risk and uncertaintyWhy is capital allocation so critical? Mostly because the shift to the Entrepreneurial Age confronts every company, whether new entrant or incumbent, with widespread uncertainty. The problem is that our entire financial reasoning revolves around the notion that allocating capital is about managing risks or hedging against them. And yet there’s a profound difference between risk and uncertainty, as I’ve recently understood thanks to authors such as Vaughn Tan and Jerry Neumann.I first wrote about it in Country Risk in an Uncertain World (July 2020):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.If you’re interested in this topic, I strongly recommend listening to the podcast conversation between Vaughn Tan and my wife Laetitia here.You can also review a collection of my essays about risk and uncertainty here: All About Risk and Uncertainty.6/ Venture capital is diffractedVenture capital matters because it’s the approach to funding businesses that best deals with the uncertainty of our time. Indeed the fact that we’re about midway through the current paradigm shift explains why traditional venture capital is growing in relative terms within the financial services industry. * But there’s another trend at work that has raised my interest: other segments of the financial industry are emulating venture capital more and more.This whole phenomenon is what I call The Diffraction of Venture Capital (July 2020):Traditional VC ([Carlota Perez’s] “financial capital”) was fine for funding the installation of the Entrepreneurial Age. But now that rudimentary form of financial capital is in the process of expanding, diversifying, and specializing, which gives birth to a whole new financial services industry whose goal is to serve an ever increasing number of tech companies across various geographies and industries. This marks the rise of “production capital”—and this is causing the current diffraction.You can discover everything I have written on the topic here: All About Diffracted Venture Capital. 7/ The world is fragmentingDiffraction on one hand, fragmentation on the other: not entirely unrelated to the paradigm shift is the fact that the world economy is less and less global—what I call The Great Fragmentation. * The fact that crossborder frictions are bound to increase matters a great deal for tech entrepreneurs and investors. We tech people need to understand what’s going on: the Great Fragmentation is happening for both geopolitical reasons and the fact that software is eating the world, entering industries that are structurally more local than global.It especially matters from my European perspective because this represents an opportunity more than a threat for local tech ecosystems in Europe. The more fragmented the world is, the easier it is to grow local tech champions without necessarily competing with the likes of Tencent or Facebook.* Of course, those successful tech companies that benefit from the Great Fragmentation won’t have a shot at dominating at a global scale; but if such domination has become impossible in general, growing at the continental level is still an optimum—and it’s the new framework within which European tech people must now build.Read more about it all in All About the Great Fragmentation.8/ Industrial policy matters“Industrial policy” is the not-so-fancy word to suggest that governments have a role to play in supporting businesses during the paradigm shift. That’s even more true in a fragmented world where it’s more about every country for itself, so why shouldn’t the government try to make a difference?The problem is that, like everything else, industrial policy needs to be reinvented for the new age. It can’t be the same policy that contributed to rebuilding Europe after World War II or developing the economies of South Korea and Mainland China from the 1970s onward. A new industrial policy needs to be invented for the Entrepreneurial Age: one that fits the new techno-economic paradigm as well as a more fragmented world economy, to which we’re still not accustomed.These topics are a frequent focus of this newsletter, you can enjoy an overview here: All About Industrial Policy.9/ Institutions matter, tooOne outcome of a successful industrial policy is the building up of good institutions—ones that support ambitious entrepreneurs while making sure the economy is as inclusive and sustainable as possible. What I see, considering the most recent waves of tech companies entering new industries, is that institutions matter a great deal. In fact, you need institutional innovation by the government, civil society, and the business community itself for tech startups to have a shot at toppling incumbents! It’s especially true in Europe for at least two reasons.* One, Europe is lagging behind in embracing the new paradigm, therefore it’s now catching up at a stage when it’s less about financial speculation (we’re not in the 1990s anymore) and more about institutional innovation, as seen in industries such as transportation, financial services, agriculture, healthcare, and construction.* Second, for reasons that are both institutional and cultural, the European approach is less focused on the prowess of individual entrepreneurs and more focused on how society needs to change in every dimension. It makes Europe slower when it comes to radical change. But you could argue it’s getting there, albeit with a more multi-dimensional approach.Institutions are more than regulations: sometimes, it’s simply about precedents, best practices, and customary behavior, and I’ve written about many aspects of them—from the social safety net in my book Hedge to regulating industries in Regulating the Trial-and-Error Economy (2016) to antitrust in this 2018 article published in Forbes.10/ The view's better from EuropeTo this day, the broader history of tech companies is dominated by two nations: the US and China. For a long time, many people even thought it was only about the US. But now that the tech landscape is polarized, it’s become critical to understand what’s happening on both sides: Americans invest a great deal in learning more about China, and the Chinese have been practicing Jiang Zemin’s “go out” policy for quite some time now, learning everything they can from the countries that are racing ahead.We Europeans have an advantage here: we’re exactly midway between the two from a geographic perspective, and we’re not really sure if we want to pick a side. This provides us with a unique view on the state of technology at the global level, and I’m a firm believer that analysis conducted from Europe can be useful, not only for Europeans themselves, but also for those who, either in the US or in China, are engaged in this race for global tech domination.I don’t find that there are many newsletters out there offering this perspective for a worldwide audience, and with European Straits, I’m humbly trying to fill that void 😉If you want to dig deeper, have a look at All About the US-China Rivalry 🇨🇳🇺🇸.And if you’re not a subscriber yet, please consider today’s special offer: £99 for an entire year instead of £150! It’s on until next Sunday (January 10) ⏰Just a few words about the coming expansion of European Straits. On top of the essays and syndicated podcasts, this is what I’m about to launch in the coming week:* My own podcast, with the primary focus of interviewing non-Europeans on technology and startups in Europe. It will be published here, alternating with the Building Bridges podcast.* A book club: I intend to share insights and thoughts about a book I’ve read at least once a month—only for paying subscribers, though.* And many other things that are still in preparation for 2021.Don’t forget that you can also find me in Sifted (where I write two columns a month), Nouveau Départ (in French 🇫🇷—with my wife Laetitia), Capital Call (where I curate what European venture capitalists think, in their own words, with my friends Willy Braun, a cofounder of Daphni, and Vincent Touati-Tomas of Northzone), and in my firm The Family’s newsletter, where I write the occasional short essay for ambitious tech entrepreneurs around the globe.From European Startups as an Asset Class (February 2020):Asset allocators are following a known and safe playbook by overlooking European startups (like Christensen’s integrated steel companies). But that then becomes an opportunity for new (disruptive) allocators (Christensen’s minimills) who are willing to make an early bet on these “lesser” startups, grow from there, and then eventually compete with established players for the best, most lucrative deals at the high end of the startup market in Silicon Valley.All recent editions:* A Few Notes on Israel 🇮🇱—for subscribers only.* COVID-19: A Retrospective—for subscribers only.* All About Industrial Policy—for everyone.* All About Capital Allocation—for everyone.* All About the Great Fragmentation—for everyone.* All About Risk and Uncertainty—for everyone.* All About Diffracted Venture Capital—for everyone.* All About the US-China Rivalry 🇨🇳🇺🇸—for everyone.* The Uncertainty Mindset w/ Vaughn Tan. Automation creating jobs. Financial loops. Industries shifting. Most read essays.—for everyone.* Shifting Patterns Across Industries—for everyone.* My 10 Most Read (Paid) Essays This Year—for everyone.European Straits is a 5-email-a-week product, and all essays are subscriber-only (with rare exceptions). Join us for £99 instead of £150 (until Friday, January 8)!From Munich, Germany 🇩🇪Nicolas This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.driftsignal.com/subscribe

The Agenda 👇* A conversation with Vaughn Tan on his book The Uncertainty Mindset* Why automation creates more jobs than it destroys* Learning from the best in capital allocation* My 10 most read paid essays this year* A retrospective of my work on business strategy* More insights for entrepreneurs from The Family🎄 Merry Christmas 🎄 My wife Laetitia Vitaud’s latest guest on the Building Bridges podcast was Vaughn Tan, author of The Uncertainty Mindset. After spending years visiting the kitchens of some of the world’s most innovative restaurants—a voyage that started with a meeting with José Andrés and went on to include restaurants like Noma—, Vaughn developed some key insights on how organizations can confront one of the key features of the Entrepreneurial Age: uncertainty.His discussion with Laetitia spans the differences between “risk” and “uncertainty”, balancing efficiency and innovation, and how his “Does this seem fun?” approach to life has led to a vibrant path, taking him from Google to Harvard to France.👉 Listen to the podcast using the player above, or on your favorite platform: Apple and Spotify 🎧🤖 Automation Creates Jobs: Here's Proof!As subscribers to this newsletter, you’ve also seen some of the other gigs that I’ve launched over the recent period, including the Building Bridges initiative (seen above featuring Vaughn Tan)  that I work on with my wife Laetitia. One key thing for us from the beginning of the project was needing to make sure we automated as many tasks as possible, since we both have full-time jobs that keep us very busy.And in truth we do automate much of what goes into producing and sending out the podcasts, for example by using tools that automatically produce a transcript of each podcast discussion. These SaaS tools are quite robust, and yet we’ve found that the work doesn’t end there. Indeed, as we’ve automated more and more aspects of production, we keep finding new jobs that then subsequently need to be done. Taking the transcript example again, once the SaaS has worked its magic we still need to go through that text, correct it for context and readability, and then have it translated (since we’re trying to reach as many European audiences as possible). These tasks, being quite delicate, require human intervention—and so we’ve found that our automation process really does create even more jobs to be done!👉 I outline how we’ve developed our process in Automation Creates Jobs: Here's Proof!💰 Every Successful Business Has Two Financial Loops  Most people’s thought process regarding a given business doesn’t go beyond the simple relationship of supply and demand: customers want a product, and the business is there to provide it. On the other hand, few people think about the financial loop underlying a McDonald’s hamburger—yet even with billions and billions served, we can say that the business hasn’t been built on just the beef itself.In fact, businesses that are successful over the long term almost always have two financial loops that nourish each other. One is the short-term ‘trading’ process that generates free cash flow. The other, oftentimes hidden from customer view, is found in the long-term game of doing ‘capitalism’. This involves finding ways to insert capital into the value chain in order to enjoy increasing returns to scale.For an entrepreneur, it’s important to understand how your business can build up those two interacting loops. There are many examples from which to take inspiration: the aforementioned McDonald’s and its real estate division, Goldman Sachs and the shift from advisory to investing, and of course Warren Buffett’s Berkshire Hathaway and its legendary “insurance float”.👉 Read more about effective capital allocation in Every Successful Business Has Two Financial Loops.📖 My 10 Most Read (Paid) Essays This YearIt’s always interesting, as a writer, to see which pieces resonate the most with one’s audience. One benefit of taking a break at the end of the year is going back into the data and seeing which articles were most read and shared (and which ones weren’t 😢).My first ‘vacation edition’ this year consisted of the list of my most read paid essays this year. There isn’t necessarily a pattern in terms of topics: they cover everything from liquidity and exits to my own methodology for writing about investment opportunities.The one pattern I do note is that all of the most-read essays came from the latter half of this year. And I suppose that goes to show that the real key to pulling more eyeballs to a given topic is simply having a growing subscriber base. So check them out, and hopefully one or two could give you that extra push to become a paid subscriber in the new year!👉 I link to them all in My 10 Most Read (Paid) Essays This Year—curation accessible to everyone.💼 Shifting Patterns Across IndustriesI’ve long been interested in how certain patterns are seen over and over again as the current paradigm shift impacts individual industries. Some industries shifted earlier than others, as seen with music and advertising changing earlier than, say, construction and healthcare. But that simply means the framework that was revealed in those earlier industries can now be used to predict the future of the late-comers.It’s a topic I’ve been writing about for over 5 years now, as it touches so many aspects of doing business in the 21st century, ranging from management to customer care to corporate finance. And I’ve been very pleasantly surprised to see how a framework that I first developed to explain the music industry can be applied to education, wealth management, restaurants and more.And it’s in those industries that have resisted (relatively speaking) the transition to the digital age where I believe my framework can be most useful to budding entrepreneurs. After all, there are still many opportunities out there waiting to be seized by ambitious entrepreneurs 😉👉 I included quite a few resources in Shifting Patterns Across Industries—curation accessible to everyone.Sounds interesting? Subscribe to European Straits and let me know what you think!🎄 We’re almost to Christmas, which means The Family’s daily newsletter has almost completed its advent journey. We’ve been sharing a daily startup lesson in preparation for the start of our newest batch of startups in January. Over the past week my fellow directors and I have talked about topics including:* Fate is everything.* Tech care.* It’s ok to sell.* Send. That. Update.* It takes a community to beat toxicity.From On Jerry Neumann's “Productive Uncertainty” (Round 1)Jerry Neumann is an infrequent but consequential blogger. His 2015 article Power Laws in Venture is a must-read in the venture capital world. More recently, he’s expressed his interest in the concept of uncertainty as a potential cornerstone for rebuilding the discipline of business strategy. However it was difficult to dig into the details of his thinking since he effectively stopped publishing for several months—basically the entire period during which the world has been struck by COVID-19.All recent editions:* Shifting Patterns Across Industries—for everyone.* My 10 Most Read (Paid) Essays This Year—for everyone.* Every Successful Business Has Two Financial Loops—for subscribers only.* Automation Creates Jobs: Here's Proof!—for subscribers only.* The mirage of deep tech. Bob Dylan. Atomico on Europe. Building IRL bridges. Selling short.—for everyone.* Shorting Companies in the Transition—for subscribers only.* Infrastructure and Growth—for subscribers only.* On Atomico’s 2020 State of European Tech Report—for subscribers only.* Five Trends Revealed By the Music Industry—for subscribers only.* Reinventing the State w/ Mariana Mazzucato. The gig economy. Brexit. Silver Lake. Tony Hsieh and Las Vegas.—for everyone.European Straits is a 5-email-a-week product, and all essays are subscriber-only (with rare exceptions). Join us!From Munich, Germany 🇩🇪 Nicolas This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.driftsignal.com/subscribe

The Agenda 👇* Mariana Mazzucato on how to create value post-COVID-19* We need to turn gig work into good work* Tony Hsieh’s legacy in Las Vegas* Why is Brexit happening, exactly?* A prelude to “11 Notes on Silver Lake”* Next week: The Family’s Go-To-Market workshop* More insights for entrepreneurs from The FamilyThe latest Building Bridges podcast is out, featuring one of the world’s most in-demand economists: UCL professor and founder of the Institute for Innovation and Public Purpose, Mariana Mazzucato. My wife Laetitia spoke with her about her previous books on the relationship between entrepreneurship and the state and how we assign value to things, as well as the ways in which the world can build back better in the wake of the COVID-19 pandemic. You can listen to their discussion using the player above, or by following this link: Rethinking the State 🎧📳 No, Gig Workers Are Not Your ServantsFor years, there has been an argument floating around that tries to shame users of the gig economy into not participating in it. But it’s a flawed argument that is actually quite destructive, as it presupposes that it’s impossible to turn gig economy jobs into good work via an upgraded social contract. As I’ve been arguing for years, including in my book Hedge, this simply isn’t true—and the history of factory jobs proves it.The fact is that the gig economy provides vital services to many middle-class households, acting as a powerful mechanism in the fight against what Elizabeth Warren calls the “two-income trap”. And it’s also true that the resistance of such service jobs—in restaurants, ride hailing, human services, and many more—to Taylorism meant that they have long remained poor quality, and it’s no surprise that workers accustomed to the steady jobs in factories are reluctant (at best) to shift into those sectors.But once again, the answer isn’t in shaming those who are using products that provide better, much-needed personal services. The answer is in upgrading our social contract and taking advantage of the entrepreneurial opportunities afforded by today’s increasingly powerful technologies. In doing so, a productivity surplus can be generated, one that matches (or exceeds!) the surplus generated by Taylorism during the 20th century.👉 I went further in No, Gig Workers Are Not Your Servants.😔 Tony Hsieh’s Other Legacy  Over the past week, the tech world has been mourning the passing of Tony Hsieh. As CEO of Zappos, Tony was one of the few that really redefined what e-commerce could be, to the point where the undisputed king of that arena, Amazon’s Jeff Bezos, bought Zappos back in 2009 and left Hsieh in charge, apparently expressing a desire to learn from how he achieved his radically customer-focused growth.There was another project that Tony devoted himself to that greatly interested me a while back, when Alice, Oussama and I were thinking about what it takes to develop a tech ecosystem in a given location: the Las Vegas Downtown Project. His goal was to revive an area that had been largely abandoned as Las Vegas developed along the Strip, relocating Zappos headquarters there and pushing to build a community that embraced not just like-minded tech people but also local stakeholders.It’s not an easy task, as many cities around the globe can attest. Sure, the Las Vegas project is largely seen as a success. But there were certain factors linked to how life in the US is organized that could have made it easier to pull off there than in a European city such as London or Paris.👉 Read more about a man who left a mark on virtually everyone he met in Tony Hsieh’s Other Legacy.🇬🇧 First Manufacturing, Then Financial Services, Then Brexit, Then What?It’s hard to believe given what the world has gone through over the past four years, but Brexit was voted through prior to Donald Trump winning his term in the White House. Today, Trump is on his way out (slowly but surely 😉), but Brexit is still up in the air, with negotiations dragging on and the prospect of no-deal looming large.And really, perhaps that shouldn’t come as a surprise. If we look at Britain’s history, it’s clear that Brexit came along as a new solution to a recurring problem: How can the UK continue to find the productivity gains that have made it prosper over the past centuries? That savior role was played by manufacturing during the Industrial Revolution, an empire of trade during the 19th century, and financial services at the dawn of the 20th century.Unfortunately for the UK, times have drastically changed. The world is pulling back from globalization; over-reliance on financial services has widened an inequality gap that in turn has created many very angry voters; and the EU seems entirely disinclined to leave its banking apparatus in a country that has made clear its desire to go its own way.👉 I looked at why Brexit appears so clearly anachronistic today in First Manufacturing, Then Financial Services, Then Brexit, Then What?💼 On Jerry Neumann’s Productive Uncertainty (Round 2)Silver Lake has been on my radar for some time, and I’ve decided to use its example as I push forward with my “11 Notes” series. That’s just one more effect that reading Jerry Neumann’s “Productive uncertainty” essay had on me: his thesis, together with some of Bill Janeway’s thinking, can serve as a productive framework for understanding Silver Lake and today’s private equity environment.At its heart, the uncertainty that drives the bets made in venture capital is generally anathema to private equity investors, who see their job as properly assessing risk, with uncertainty being a direct contributor to losing money. In this context, how can private equity participate in the portion of the economy where most profits are currently being made, i.e. the tech sector? Well, Silver Lake is making moves to deepen its exposure to the sector. And my suspicion is that there’s something important here for European startups. There could be a way to mitigate uncertainty due to the more fragmented markets that they’re aiming at, while also opening up new funding possibilities beyond traditional venture capital.👉 I keep “working in public” on this topic in On Jerry Neumann’s Productive Uncertainty (Round 2).Sounds interesting? Subscribe to European Straits and let me know what you think!🏝 Next Wednesday will bring the latest in my firm The Family’s online workshops, this time focusing on Go-To-Market. The Entrepreneurial Age is bringing forward lots of tools to help make entrepreneurship easier, but one simple fact always remains: you have to find, nurture, and grow your customer base. No matter how good your product is, that’s a challenge.* This is a 2-hour workshop featuring my fellow directors Oussama, Balthazar and Mathias discussing errors to avoid, B2B and B2C strategies for bringing your product to people and more, including networking time with your fellow participants. Tickets are free, sign up here.📖 And as you’ll have likely noticed over the past few weeks, my fellow The Family directors and I are sharing startup lessons as we move towards the end of the year and the beginning of our newest batch of startups in January. Over the past week we’ve covered:* A critical social topic for founders: Diversity is not an option.* Understanding one big distinction in a common piece of startup advice: Blindness is bliss, ignorance a curse.* Thinking long-term when it comes to fundraising: In fundraising, trust comes before FOMO.* Why entrepreneurs shouldn’t be worried about competition: Competition doesn't kill startups.From Industrial Policy: China Gets It, We Don't (October 2020):China is doing everything right [when it comes to industrial policy]: they have the drive from both a government focused on building and very large downstream tech companies that are racing ahead of the technological frontier. They also have the means to invest in basic research and the Communist Party providing a capacity to coordinate the efforts between the private and public sectors and ensure that the direction is clear for everyone (and that it serves China’s strategic interests relative to the rest of the world).All recent editions:* On Jerry Neumann’s Productive Uncertainty (Round 2)—for subscribers only.* First Manufacturing, Then Financial Services, Then Brexit, Then What?—for subscribers only.* Tony Hsieh’s Other Legacy—for subscribers only.* No, Gig Workers Are Not Your Servants—for subscribers only.* What to Make of Low Interest Rates—for subscribers only.* Remote Work. Stories. Opportunities in Asia. Productive Uncertainty. Low Interest Rates.—for everyone.* On Jerry Neumann’s “Productive Uncertainty” (Round 1)—for subscribers only.* Another Round on Expanding in Asia—for subscribers only.* European Tech’s Forgotten Stories—for subscribers only.* Around the World w/ Bruno Maçães. America's Strength. SaaS. The New Wise Men. Democratizing Upside.—for everyone.European Straits is a 5-email-a-week product, and all essays are subscriber-only (with rare exceptions). Join us!From Munich, Germany 🇩🇪 Nicolas This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.driftsignal.com/subscribe

The Agenda 👇* Building Bridges with Bruno Maçães 🎧* Can America cling to its technological lead?* SaaS startups are everywhere* Who will historians be writing about in thirty years?* Spotlight on The Family’s portfolio company Fairmint* Recruiting From AnywhereOn the most recent episode of Building Bridges, my wife Laetitia Vitaud spoke with political scientist and former Portuguese minister Bruno Maçães, whose inspiring writing about the state and future of the world makes frequent appearances here in European Straits 🌐* Bruno is one of the few thinkers who studies both the United States and China in great depth, while also having the perspective of a native European. Therefore he’s a must-listen when it comes to geopolitics and how things are likely to develop in the future!🎧 Listen to their conversation by clicking on the player above, or at the source right here.🇺🇸 America As a Technological ChampionLast week, I talked about a coming age where we see America as a technological laggard. As expected, that thesis generated some pushback, including from good friends (and more importantly, excellent thinkers!) like investor and author Bill Janeway. The subsequent discussion revolved around questions of basic research and tinkering, the latter of which has had a long history on the American continent (and the former, not so much).* In the 19th century, America’s technological advances didn’t come from advanced scientific research. Rather it came from tinkerers operating far from Europe’s cutting-edge research labs. It was only following World War II and during the Cold War that basic research became a fundamental part of United States history thanks to massive government funding through the likes of DARPA and a growing network of higher education.Now, though, the question is whether that tinkering tradition will continue, particularly in a world where America no longer stands as a shining beacon for immigrants coming from anywhere and everywhere. But there is a significant advantage that the US has today that it didn’t in the 19th century, namely its place as a financial powerhouse.  👉 I revisit the discussion in America As a Technological Champion.🏭 SaaS Is the New Manufacturing (Round 1)  During the past five years, one category in the startup world has really stood out: Software as a Service (SaaS). These are all the companies building tools that truly fit the Entrepreneurial Age, for a simple reason: they make it easier for people to become entrepreneurs and harness the power of tech.In some ways, it’s a bit of a problem now, because as startups move into more tangible industries and face different regulatory regimes, much of what we’ve become accustomed to with SaaS startups is being applied in industries where it doesn’t make nearly as much sense.Still, SaaS certainly isn’t going away—indeed, it’s only destined to grow larger as we advance further into this new era. I’m even wondering whether SaaS companies would serve the same role as did manufacturing over the previous two centuries: a key value creator that, even though it employs a minority of the workforce, drives the development of both our economies and our social contracts.👉 I start the discussion in SaaS Is the New Manufacturing (Round 1)🧙‍♀️ Where Are America's Wise Men & Women?While history is not just a question of Great Men, there are certain people occupying certain positions at certain times that end up having an outsized impact on what happens next. Walter Isaacson and Evan Thomas wrote about a group of these people who shaped American ideas and actions when it came to facing the Soviet Union following World War II in their 1986 book, The Wise Men.Having read it earlier this year (and almost 35 years later, it still holds up!), I’m now considering the opportunities inherent in any new presidency—particularly one coming after the upheaval that has been President Trump. Specifically, I’m wondering who those key actors today might be. And given both history and current events, I do hope that they will be people with real business experience.Why? Because business tends to be much more able than the government to establish a long-term direction. Whereas every change at the top of government can indicate a sharp turn in how a given country will act, people at the helm of a business know that the goal is improving on what came before without completely overhauling everything. Let’s face it: a business-inspired consensus could provide some much needed stability in these politically perilous times.👉 I looked at who these people were and might soon be in Where Are America's Wise Men & Women?📈 Why Don't Uber Drivers Own Shares? Now They CouldAs someone who has worked on a daily basis with early-stage entrepreneurs for over 7 years now, I can say just how difficult it is to sometimes see where founders are really heading. Sometimes you don’t know the market at all, sometimes you learn about problems you didn’t even dream could exist… It’s a constant learning process.And then sometimes there’s a startup that becomes very obvious, very fast. That’s the case with Fairmint, one of our portfolio companies, which is focused on providing a new way for entrepreneurs to fund their growing businesses. Along the way, they’re also solving one of the conundrums of today’s investing world: how to easily give all of a company’s stakeholders a shot at benefiting from the upside?We know that the beating heart of companies like Uber, Airbnb, and Reddit are drivers, hosts, and commenters, respectively. Yet while those stakeholders benefit from the value they contribute to adding, there really isn’t a way for them to access the growing value of the companies themselves.* Fairmint’s new CAFE—continuous agreements for future equity—can do exactly that, opening a whole new realm of possibilities both for growing a business and sharing its benefits with anyone who is interested. 👉 I went further into why Fairmint could be a truly game-changing company in Why Don't Uber Drivers Own Shares? Now They Could (which is accessible for everyone 🤗)Sounds interesting? Subscribe to European Straits and let me know what you think!🏝 On Wednesday Dec. 2, my firm The Family will be hosting our next online Summit event, this time focusing on Recruiting From Anywhere. Since moving 100% of our operations online, both internal and external, we’ve been developing events to help entrepreneurs manage the changes brought on by the COVID-19 pandemic, including Summits on Fundraising, Working From Anywhere, and Customer Experience.* This time we’ll have experts giving the behind-the-scenes of what it really takes to effectively recruit when both talent and company can be located anywhere, never meeting IRL. Tickets are free, sign up here.📖 With my fellow Directors, our daily newsletter sharing startup lessons is still counting us down towards Christmas. If you’ve missed any of them, lately we’ve covered:* Why you should always Wait until the money is in the bank account.* Signposts for When should you raise?* The perils of selling too soon and learning to eat Risk for lunch. Reward for dinner.* The need to Always be closing... on Zoom.From 🇺🇸 A Reading List on America (November 2020):I first heard about Bruno Maçães from the team at Stripe Press. They told me there was this guy that was writing interesting things about the West and the growing rift between the US and Europe. I immediately jumped in to learn more, and discovered that the bulk of Bruno’s work so far was in fact about China. I bought and read his first two books, The Dawn of Eurasia and Belt and Road, and eventually met him in Beijing when I visited the city in 2019 and he was spending a year there studying China from the inside.All recent editions:* Why Don't Uber Drivers Own Shares? Now They Could—for everyone.* Where Are America's Wise Men & Women?—for subscribers only.* SaaS Is the New Manufacturing (Round 1)—for subscribers only.* America As a Technological Champion—for subscribers only.* Joe Biden's In. Understanding Capitalism. Customers Doing More.—for everyone.* America As a Technological Laggard—for subscribers only.* Why Local Businesses Can Thrive in the Entrepreneurial Age—for subscribers only.* Your Customers Are More Than Their Collective Purchasing Power—for subscribers only.* Accounting for Capitalism—for subscribers only.* The Billionaire Raj w/ James Crabtree. A Long Week in the USA. Jack Ma and the CCP. Protectionism Back in Style.—for everyone.European Straits is a 5-email-a-week product, and all essays are subscriber-only (with rare exceptions). Join us!From Munich, Germany 🇩🇪 Nicolas This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.driftsignal.com/subscribe