How to create more fast growing start-ups in Switzerland

Ken Singer founded several companies and had sold one of them very successfully before he decided to work as professor and Managing Director of the Center for Entrepreneurship and Technology at Berkeley. In his talk at Y-Parc Yverdon he focussed on differences between Switzerland and Silicon Valley and the questions why almost all Swiss start-ups turn into midsized companies and only very few of them grow very fast and go public in the end.

Singer cited two main reasons for this: Firstly a different approach to competition and secondly a different environment for entrepreneurs.

Regarding competition Singer said that “innovation is an act of rebellion.” In Silicon Valley most of the start-ups are founded by experienced business people. And they start there companies to compete with their former employers. This strategy is very rare in Switzerland due to the high employee loyalty.

In addition in the US young companies compete against other start-ups. “In Silicon Valley we have a lot of companies attacking the same industry problems”, Singer said. By contrast, typical Swiss founders try to avoid competition. In most of the cases they are addressing niche markets with unique solutions so that there are very few competitors.

Singer’s second argument focussed on the innovation system. Of course innovative start-ups need entrepreneurs who are willing to take huge risks. But that’s not all. Innovative start-ups need employees, investors and customers who are not risk-averse either. In a country where start-ups are not able to hire the best employees or to attract major companies as customers they cannot grow very fast.

Creating more fast growing start-ups
What can be done to give start-ups an additional impetus? Singer presented four learnings from the Silicon Valley that can be applied in Europe too:

• Create incentives for companies to purchase products from start-ups
• Train engineers and scientists to create new companies. Teach them the value of networking.  
• Introduce engineers, business leaders and designers to each other early in their careers. (Diversity is a strength)
• Teach large corporations that failed entrepreneurs are not damaged goods but valuable assets.

After his keynote Singer was joined by representatives of the Swiss start-up scene. They discussed strengths and weaknesses of Switzerland as a start-up location and were also asked what Switzerland could do to increase the number of fast growing start-ups. Antonio Gambardella, Director of Fongit, and Patrick Barbey, Director of Innovaud, made interesting contributions to the discussion.

Patrick Barbey said that Switzerland should build corridors to markets like Israel does. This would start-ups help to capture markets that are bigger and have customers more willing to buy from young companies.

Antonio Gambardello said that Switzerland should focus on its competitive advantage such as the financial services cluster, Switzerland’s reputation as a secure country or the Swiss medtech cluster. In these fields it is much easier to start global leaders in Switzerland. Gambardello cited fintech companies as examples or Protonmail, a start-up offering a secure e-mail service.