Brand culture: the secret asset to grow French Tech
Last year was a record year for startups in France, raising close to €2 billion, up 10 percent on the previous year. Led by DoctoLib and ManoMano, many of these startups are part of the new BrandZ "French Digital Champions" ranking. In autumn this year, we will also see the launch of the Next 40 index, a kind of CAC for startups, which is one of the 100 flagship measures planned by Secretary of State for Digital Affairs Mounir Mahjoubi. The Next 40 index will identify high-potential startups, to accelerate their growth and reputation both in France and internationally. With all of this going on, how can we best help start-ups today grow from Next40 to CAC 40 businesses tomorrow?
Finding a purpose to accompany growth
It is essential that French Tech companies express a purpose that goes beyond technology, which can so easily be copied and updated. This will allow them to steer their own growth and stay on course in times of turbulence.
To achieve this, it is crucial that businesses recruit the best talent. Effective recruitment means identifying people who share your values, then assessing their personality as well as their skills, and developing a sense of belonging to the shared entrepreneurial adventure. At the same time, it is important to retain those who first contributed to the success of the business, to increase their motivation and prevent them from burning out. To do this, brands must develop a strong talent-engagement program that reinforces their bond with the company. It is therefore the start-up’s ability to develop a culture that is both directive and inclusive, that will determine its success.
The development of such a culture has allowed Zappos, an online shoe company, to quadruple its revenue in just one year. By affirming their intention to "deliver a wow effect through service" and spreading its culture throughout the company – most notably through the creation of specialist training in customer service – Zappos successfully diversified its services to include leather goods, clothing, children's supplies and more. This helped Zappos make Fortune's “Top 100 Companies to Work for", entering the ranking in 23rd place. More importantly, it has allowed the business to maintain the independence of its teams, and its innovative mindset in the years since its acquisition by Amazon for $1.2 billion in 2009. As former Zappos strategist Robert Richman says, "It's not the market. It's not the economy. It's not even your products and services ... it's culture that drives success.”
Continuously reinvent yourself to stand the test of time
Once they have entered the Next 40, the next challenge for start-ups is to stay up and running. This is no small feat considering the average lifespan of a company in 2020 will likely be 20 years, compared with 60 years in 1960. This challenge is even more pronounced for French start-ups; in 2017 the estimated lifespan was just four years…
This is where, again, culture can come into play, but the challenge is threefold:
- Free the company from the "start-up" image. The image many people have of a startup is usually a combination of youth, independence and democracy, in contrast with the reality of long-established businesses. Empowering employees can bring benefits as well as risks, as evidenced by the testimonies of former Google or Facebook employees. For a business to grow to the CAC 40 levels, a trendy workplace and a supply of Haribo sweets will not be enough. Next 40 companies will need to align their culture with their ambitions, and reinterpret both as they evolve.
- Develop a culture that goes beyond the founding figure. This is what CAC 40 companies like Michelin have achieved, whereas the storytelling of startups is too often based on mythology of the visionary hero, who, having started alone, manages to defeat conservatism. Think of Mark Zuckerberg, Jack Ma or Xavier Niel. If the founder remains at the heart of the brand, start-ups must update the mythology over time. This has been the case for Nestlé, that relied on the legacy of the work of chemist Henri Nestlé, to reinforce its position as a leader in child nutrition.
- Bring culture to life, every day: They can do this by establishing rituals that run throughout an organisation – such as the Decathlon Innovation Awards – and by ensuring culture permeates every level, through symbols such as Disney's Cast Member Pins, and finally, by accepting that the brand is constantly evolving at the hands of those who are in contact with it.
We are confident that the French Tech companies that develop their culture to make it a true reservoir of value will be the ones that will stand out, and that we will, one day, see these names in the CAC 40.