Etude 2016 par EY & ChairEEEE : "Au-delà des licornes : l’industrialisation de la rupture"

B ey ond U nicorns:
The Industrialization
of Disruption
A case for Europe

2
Executive Summary
Introduction: Unicorns are just the tip of the iceberg
Acknowledgments
Study design & method
I. The necessary conditions for a systematic FPC production: Growth enablers
A. Condition 1: Enabling access to large markets
B. Condition 2: Developing adaptive regulations
C. Condition 3: Establishing Network-Based Entrepreneurship Programs (NBEP)
II. Differentiating conditions to foster FPC development: Concentrated and
articulated capitals
A. Condition 1: Investing in and attracting human capital
B. Condition 2: Economic capital fitting the entrepreneurial culture
C. Condition 3: Promoting on- and offline social capital
III. The condition for a sustainable production of FPC: Societal acceptance
A. A societal capacity to absorb the dialectic between creation and destruction
B. The case of job creation and social justice
References
Summary

Executive Summary
Beyond Unicorns, F u t u re P ow er C om p a nies p rof ou ndl y disru p t
ou r econom ies a nd societ ies
Unicorns, companies valued at over 1 billion dollars that were
founded less than 10 years ago, receive extensive media coverage
although they only represent the tip of the iceberg. Beyond Uber,
Blablacar or Airbnb, there are many more companies that are
almost never mentioned although they are critical for economies
and societies: Future Power Companies (FPC). FPC, start-ups that
raised more than 15 million dollars within 8 years of existence,
are booming in numbers. This report encourages Europe to pay
close attention to FPC as the competitiveness gap is increasing
with other regions. There are 3 times more FPC headquartered
in the USA than in Europe. In Israel, sustained investments in
entrepreneurship have been speeding up a solid production of
FPC: between 2013 and 2015, the rate of FPC creation was 9%
higher in Israel than in France while Israel’s GDP is 8 times lower
than France’s. In 2015 the median funding deal value was $2.5M
in Europe compared to $8M in China. This effort is fueling a
greater population of FPC in general and Unicorns in particular:
there are 40% more FPC and almost 3 times more Unicorns in
China than in Europe. FPC contribute to the creation of jobs and
the diffusion of innovation. FPC are affecting the lives of millions
by challenging the ways in which people communicate, work, eat,
travel, shop, develop friendships or love relations. While Unicorns
offer emblematic examples of radical and rapid transformations of
markets, disruption can only be fully apprehended by focusing on
FPC at large.
T h ree condit ions t o indu st ria l iz e t h e p rodu ct ion of F u t u re
P ow er C om p a nies
It is possible to steer and industrialize the “production” of FPC.
Ecosystems such as Silicon Valley in California, Silicon Wadi in
Israel or InnoWay in China are typical cases of territories that
generate a high number of FPC. The present study develops an
international benchmark and outlines the conditions of possibility
for an intensive, high quality, production of FPC in Europe.
Three types of conditions are listed. First, we detail necessary
conditions without which the industrialization of FPC would not
be possible – access to large markets, adaptive regulations and
Network-Based Entrepreneurship Programs. Second, we identify
differentiating conditions that contribute to the development of
FPC performances – the concentration and articulation of human,
social and economic capitals fitting the entrepreneurial culture.
Third, social acceptance is a stabilizing condition, for a sustainable
production of FPC that is virtuous both in economic and social
terms.
Redefining entrepreneurship: from heroic entrepreneurs to
ecosyst em s of p ossib il it ies
Fast growth entrepreneurship is not just a matter of luck nor
solely a question of individual stamina. Entrepreneurship can
be fostered through organized ecosystems made-up of informal
communities, anchored within local territories that are structuring
a plurality of capitals (including highly educated work force,
networks of company founders and investors with entrepreneurial
experiences). Far from being a fully digitalized process,
entrepreneurship occurs through physical interactions in specific
locations where expertise can be fertilized by combining business,
design and engineering; research and practice; national and
multicultural identities. These resources must be, from day one,
dedicated to the development of replicable and sparing business
models and to their expansion across jurisdictions to reach global
markets.
J ean- F ranç ois R oy er
Partner EY, Entrepreneur of the Year Program France Leader
F ranck S eb ag
Partner EY, VC-IPO Leader
S y lv ain B ureau
Scientific Director Chair of Entrepreneurship,
ESCP Europe

4 Beyond Unicorns: The Industrialization of Disruption A case for Europe

5Beyond Unicorns: The Industrialization of Disruption A case for Europe
Key messages and implications
For regulators & the French
government
Encouraging strategies of fast globalization by facilitating linkages and pathways to
large markets
Supporting the concentration of human, economic and social capitals within local
ecosystems
Managing dynamic interactions between creation and destruction through adaptive
regulations
For large corporations Developing solutions to manage uncertainty (rather than risk) to control disruptive
dynamics
Leveraging coopetitive strategies with FPC
Enabling unlearning and processes of subversion through intrapreneurial
organizations
For accelerators & investors Developing Network-Based Programs around informal communities to support FPC
expansion
Diffusing a culture of ambition with global markets as a primary target
Intensifying investments in FPC and developing long standing relationships with
founders
For founders Developing global ambitions by starting with local solutions
Valuing informal relationships and leveraging resources within communities
Getting ready to manage destructive dynamics and face resistance from competition
and society
Im plications for F rance: L ocal concentration of capitals to support g row th tow ards g lob al m ark ets
Based on the analysis, implications are drawn across social levels that address key players of the industrialization of FPC:
start-ups, accelerators, large corporations and regulating bodies in France.

Introduction: Unicorns are just the tip of
the iceberg
In recent years, the unicorn phenomenon has accelerated to a present breakneck pace. From 9 unicorns in January 2011,
the total number of companies valued at over 1 billion dollars and founded within the past 10 years has reached 176 in
September 2016.
The fresh companies worth billions are of high scholarly
interest and receive increasing media coverage.
Virtually, every industry is concerned with the phenomenon:
Hardware, Retail, Media, Transportation, Healthcare or
Financial Services.
Simultaneously, the diffusion and trend of expansion of the
notion of “disruptive innovation” is clear. Content analysis
shows that the notion has become numerically prominent in
the media (Figure 2). The word disruption has Latin origins
and etymologically derives from the verb dis-rumpere. Dis
in this context refers to a strong intensity; rumpere (to
break) means splitting into two pieces or interrupting. In
other words, to pursue disruptive innovation is to break,
in a radical way, with a previous practice deemed socially
and economically acceptable. Clayton Christensen formally
defines disruption as a process by which a product or
service initially takes root in simple applications relating
to mundane activities and then relentlessly moves up
markets, eventually displacing established competitors
(Christensen et al., 2015). Since his first work was published
in 1995 (Christensen & Bower, 1995), books and papers
have flourished and founded an entire industry of attempts
to study the phenomenon. In France, Gilles Babinet
(forhtcoming) addresses at length the question of disruption
as a global phenomenon. Other recent notable issues
include The Disruption Dilemma (Gans, 2016) and Lead
and Disrupt (O’Reilly & Tushman, 2016). The two books
publish extensive works on disruption from the perspective
of incumbents and draw insightful connections on how to
adapt such radical evolutions.
Figure 2. Media occurrences of the term “disruptive innovation” (EY, 2016)
Figure 1. The Unicorn Club (CBInsights, 2016)

,
.
,
Canada
USA
France
Israel
UK
6
2
South korea
3
Singapore
3
India
7
China
1
Germany
5
Sweden
2
101
34
2
Arguably, Europe is lagging behind in terms of the number
of unicorns grown.
Arguably, Europe is lagging behind in terms of the number
of unicorns grown. The gap is even wider against the
valuation of companies. The total capitalization of all US
Unicorns amounts to a quarter of the French stock index
CAC 40. In September 2016, the four of GAFA (Google,
Amazon, Facebook, and Apple) had a combined valuation of
$1,550B compared to the $1,343B of worth of the CAC 40.
The figures suggest that France and other European nations
remain behind the world’s leading places of business when
it comes to the number and the financial value of successful
companies hosted.
Figure 3. Global repartition of Unicorns (CBInsights, 2016)
The present study promotes the idea that unicorns are just
representing the tip of the iceberg of disruptive dynamics.
Beyond the buzzword of “unicorns” lies the core challenge
of understanding how some territories are enabling the
creation of companies that eventually disrupt economies
and societies. There are currently 176 unicorns worldwide
but thousands of Future Power Companies (FPC) largely
unaccounted for and equally producing disruptions at a
fast pace. FPC are defined in this survey as fast-growing
firms with less than 8 years of existence that raised
€15M or more.
We believe that some territories have developed ecosystems
that enable the industrialization of disruptions through the
growth of unicorns and FPC. The picture is quite diverse
across locations. Unicorns are, for one major instance,
densely located in two countries: As of September 2016,
101 unicorns were seated in the USA, 34 in China.
As Figure 4 describes, significantly more start-ups, both for
FPC and Unicorns, were created in the USA as compared to
Europe despite a lower rate of overall company creations.
The crucial gap highlighted between stage 1 (company
early creation phase) and stage 2 (FPC or Unicorn) is
central to the present survey and is analyzed in details
in the following sections. The purpose of developing
an international benchmark is to help Europe to better
understand how it could improve its business environment in
the global context.

International discrepancies clearly appear when considering
the number of FPC funded in 2014: Between China,
the USA and Europe, on the one hand. Within Europe, on
the other hand: France-based companies rose around €13M,
compared to €30M in the UK and €21M in Germany.
The case of Israel is of particular interest in that regard.
Despite its relatively small size in terms of population,
it has managed to become the cradle for two tech unicorns,
Infinidat and IronSource, valued at $1.2B and $1.5B.
Beyond the two companies, Israel is very successful at
promoting start-ups and FPC. The Israeli investment sector
is the most active worldwide as measured relatively to
national GDP (Figure 6)!
French venture capitalists (VC), for instance, would have to
multiply their investment stock by 7 to close the gap with
Israel. Countries like Finland or Sweden, with a comparably
small domestic market of fewer than 10M people, are fairly
active in relative VC investment terms. Sweden invested half
as much as France in FPC in 2014, a significant effort when
considering that its GDP is 5 times lower.
The figures tend to show that countries sizes and GDP
are not tightly correlated to investments in FPC. If not
market size and GDP, what is driving investments and
eventually the emergence of FPC? Far from relying on
random processes of emergence, we suggest it is possible
to industrialize the “production” of FPC, and with it the
production of disruption.
The survey outlines the conditions of possibility for this
process of production and its quality. We list three types
of conditions:
• First, conditions of emergence: the necessary conditions
for a systematic industrialization of FPC creations
• Second, conditions of development: Differentiating
conditions to industrialize FPC performances
improvement
• Third, a stabilizing condition: social acceptance is central
for a sustainable and virtuous industrialization of FPC in
the long run
x1,0
x1,4
x2,3
x0,4
x7,9
x6,9
New companies Future Power Companies Unicorns
Figure 4. Numbers of companies across types
(EY proprietary data)
Figure 5. Funds raised in 2014 by country
(EY proprietary data)
570
120
30 29
21
17
14 13
6 2
United
States
China
United
Kingdom
India
Germ
any
Canada
Israel
France
Sw
eden
Spain
Italy
Figure 6. VC Fund investments in start-ups relative to
domestic GDP (EY proprietary data)
Israel
United
States
United
Kingdom
India
Germ
any
Canada
China
France
Sw
eden
Finland
Italy
140,00
120,00
100,00
80,00
60,00
40,00
20,00

more inclined to think globally from the start and often
consider the USA as a natural market for their expansion.
For Muriel Touaty, Head of Technion France, this observation
has historical and cultural reasons: “The entrepreneurial
mindset is very present in Israel and there is a strong sense
of creating new things on a global scale.”
Political implications for Europe
Even though the UK has only partially been integrated
and connected to the European start-ups scene, the 2016
referendum in favor of a Brexit is arguably casting doubts
on the capacity of the European Union to limit the costs of
growth for European start-ups. Brexit or not, the challenge
would remain identical: Without internationalization and the
capacity for a start-up to enter large and integrated markets
like China or the USA, growth remains difficult and costly,
if not impossible. Highly successful European entrepreneurs
have been actively developing this strategy. Significantly,
to Alexis Fogel, co-founder of Dashlane, a French FPC,
“we needed to go abroad to develop our product, [the]
French market is too small, and now 90 to 95% of our
business is abroad and mainly in the US.” With the prospect
of a hard Brexit, more and more entrepreneurs might follow
different paths for internalization, looking for opportunities
beyond Europe, in the USA or China.
To help more entrepreneurs expanding, acceleration
programs should be designed at an international
and continental scale. As underlined by Peter Bos,
EMEIA Strategic Growth Markets Business Development
Leader at EY, today “programs are nationally oriented
but a start-up needs to scale up. There is a need for more
international ecosystems to help overcome that hurdle.”
B . C ondition 2 : Dev elop adaptiv e
reg ulations
There are different challenges depending on the
subject matter of norms and regulation. We distinguish
two instances:
(i) regulating usual business
(ii) regulating disruption
Regulating usual business refers to the rules that apply to
regular practices of a fast-growing company, relating to
sales, working conditions or taxation. In most countries the
picture is ambivalent. Consider France: on the one hand,
Carlos Diaz, co-founder of The Refiners, believes “France is
A. C ondition 1 : Enab ling access to
larg e m ark ets
FPC, as a particular form of organization, has a distinct
object, disruption, and method of growth, scalability.
FPC are best grasped by measuring their ability to grow.
This capacity relies on two fundamental aspects:
i. Small marginal costs limiting the resources requirement
to support growth
ii. The possibility to replicate a business model
across countries
A large and unified market is adapted and supportive of
fast-growing companies as it limits the need for FPC to
invest and move to other markets. Globally, the USA and
China offer emblematic examples of markets large enough
for fast growth company to expand without committing
too many resources. Conversely, fragmented markets, like
Europe to some extends, require supplementary efforts
to materialize new opportunities. Topical hurdles include
the adaptation to different laws, manufacturing norms or
languages. As underlined by Stéphane MacMillan, Country
Manager for Foodora, this cost of growth is felt with the
“marketing campaigns that we need to translate for every
country in which we are implanted in Europe.” Problems
are of different nature for B2B sales where contracts often
have to be negotiated at multiple points in space and time,
with each country branch. This is a well-known impediment
for the pace of development of a company. However, and
regardless of how constraining boarders may appear, the
current situation of Europe did not prevent some companies
from developing a particular know-how and to grow across
countries through the replication of their business model.
BlaBlaCar operates in more than 20 countries and certainly
is one of the best European examples of this idea.
As suggested with the case of Israel, countries with small
national market size can also be successful at fostering
the creation of FPC. The reasons lie in the resources FPCs
find to connect with large markets beyond their domestic
environment. Some figures aptly illustrate this tendency:
On average companies worth billions that originally
developed in countries with fewer than 50M people took
1.4 years to expand globally, compared to 2.9 years for the
ones that originate from 50–150M people large countries
and 3.3 years for those that emerged in very large countries
of 150M people and above (Atomico & Slush, 2015). It is
worth mentioning that Israeli entrepreneurs would seem
I The necessary conditions for a systematic
FPC production: Growth enablers

a start-up paradise: there are many aids and programs from
the government.” A recent book by Fabrice Cavaretta is
straightforward: Yes! France is a paradise for entrepreneurs
(Cavarretta, 2016). On the other hand, the traditional
regulatory frame remains complex and insufficiently
appreciative of start-ups. Creating a company is easy in
France, but growing a business is more difficult: 72% of
entrepreneurs perceive the inflexibility of the French market
as a hurdle (EY, 2016a). Furthermore, in 2011 only 5% of
French companies have more than 10 employees, against
18% in Germany and 21% in the US (RAISE & BAIN&Co,
2015). Many entrepreneurs experience difficulties when
applying rules that were initially designed for larger and
more stable forms of organizations. Regulation sometimes
appears ill-suited for company forms that are by definition
temporary and growing. Pierre-Henri Deballon, Co-founder
of Weezevent, admits quite explicitly “Working 35 hours
in a growing start-up is just impossible, and I don’t have
time to maintain that, and we don’t want foremen to do it.
Labor legislation is just too heavy, and it’s impossible to read
it fully, a start-up has other fishes to fry.”
Second, regulating disruption, is related to the seemingly
conflicting nature of regulation and innovation.
By definition, disruptive innovations avoid existing norms
of conducts and sometimes to a point of conflict with legal
rules. One example out of many is the lawsuit filed against
Heetch, a mobile app designed to share rides at nights.
Entrepreneurs appreciate the need for regulation. Teddy
Pellerin, founder of Heetch, stated in an interview with
Les Echos, a French quality newspaper, that his company
“belongs to the sharing economy that needs to evolve and
to be defined” (Pogam, 2016) However, in some countries
a slow and political evolutions of regulatory frames is
constraining the growth of many start-ups. In other
countries, like the USA or Israel, the legal environment,
far from being free of constrains1
, is more flexible. The
system of common law has historically seem to better fit
the legal challenges created by FPC as it accommodates
emergent adaptations based on precedents rulings.
Substantive law is key here and researches on the link
between Law & Management (Laufer, 2015a, 2015b) and
between Law & Economics (Supiot, 2015) have triggered
fruitful academic debates.
Legal implications for Europe
For the first type of regulation, efforts could be made
to create a specific regime for start-ups. Muriel Touaty,
President of Technion France, suggests “taxes should be
lowered for start-ups and midsize companies to foster a
thriving entrepreneurial environment.” Taxes are only a
small part of the broader discussion but addressing the
topic would be a recognition of the peculiarity of start-ups
and their need for ad hoc regulation. Moreover, start-ups
could be more integrated in the law-making process in order
to improve current regulatory frames, to limit complexity
or costs relating to the compliance with legal requirements.
They have specific objectives and needs and it could prove
useful to increase the space of their contribution in the
general debate about their regulations.
For the second type of regulation, the problem is larger
and equally complex. Disruptive solutions are massively
produced in contemporary economies. At first, innovation
opens up new spaces of possibility that are yet to be
subjected to legal regulations, as such many responses to
disruption might not even be of legal nature. It is not the
role of regulators to follow pace with the ever-changing
start-up environment. However, new companies tend to
reshape the boundaries and the rules of business sectors
at a seemingly accelerating pace; a reality that needs to
be better accounted for in the law-making process for
innovation to find its best expression. Thus, a balance ought
to be found between blind approval and mere rejection in
light of social and environmental risks.
At any rate, the approach should not be to hinder these
transformations and rather to accompany the evolutions
(Bureau, 2014b). The risk is to prevent European companies
to diffuse their own, new disruptive innovations in an open
world and to prevent fair competition with companies
subjected to other jurisdictions. Later on, innovations might
be so widespread and accepted worldwide that there will
be limited or even no possibility to actively shape them.
In this scenario, the effect is detrimental to Europe: It will
be affected by disruption but most of the value created as a
consequence will be captured by non-European companies.
1
There are well known legal risks that are reflected by the frequency of class
actions trials against companies which cost some start-ups and more established
corporations their existence.

C . C ondition 3 :
Estab lishing N etw ork - B ased
Entrepreneurship P rog ram s
( N B EP )
Start-up programs blossom in every ecosystem. They take
different shapes and sizes. Some are more relevant
than others. The core idea might be best grasped by
the following concept: Network-Based Entrepreneurship
Programs. We define NBEP as programs designed to enable
the production of fast-growing and innovative companies
through the use of reciprocal relationships among
entrepreneurs, investors and experts. These programs rely
on replicable processes while avoiding rigid standardization.
Put differently, they are plastic enough to adapt to the
different local needs and constraints and offer ad hoc
solutions to entrepreneurs. Yet, at the same time, they are
robust enough to maintain a common identity across sites.
NBEP rely on a powerful community where informal support
and networks are paramount and formalization is limited
to a minimum. The driving logic is of reciprocal rather than
transactional nature. Plainly, people are giving resources
to others as they know there will be some form of return
at some point. The type of practices we have in mind are
neither free or uninterested (people indeed are interested
in building fruitful relationships) nor are they utilitarian
(it is not possible to precisely value a return on investment).
Rather, they are hybrid practices that rely on trust. Is
trust lost, reciprocity, as a mechanism for relationships
revolving around gifts and counter-gifts, is stopped and the
individuals who do not play by the rules are excluded from
the community (Bureau, 2014a; Ferrary, 2003).
The reciprocal gift act differs from a transaction-based
relationship since it creates a bond between donors and
recipients that surpasses the value of the gift itself. Material
objects or services are given as a means to create and
nurture the immaterial, spiritual relationship between
the parties (Godbout & Caillé, 2007; Mauss, 1923).
An established relationship is not a prerequisite for
gift-giving to take place. Reciprocal gift-giving establishes an
affective relationship, whereas a pure economic exchange
typically creates unemotional connections between the
buyer and the merchant (Hyde, 1979).
A fruitful example is the Y-Combinator (YC) in Silicon Valley
that helped growing Airbnb, Dropbox, Reddit, Wufoo,
Heroku and others that sold for hundreds of millions
of dollars. Conditions to apply to YC vary: A start-up
may already have raised funds, or may be in need for
some money. Twice a year and over a 3-months period
each time, YC is (financially) supporting a pool of selected
start-ups, and gives them advices on various subjects
ranging from “who to hire?” to “how to best prepare for
the next fundraising?”: “YC is a VC fund that looks and
operates like a guild of geeks, and hardly looks anything like
a traditional fund comprised of VC partners with MBAs or
finance degrees. They are operators, through and through”
(Hansen, 2013). They push founders to perform during
weekly dinners where participants are encouraged to talk
about their recent achievements. There are office hours for
entrepreneurs to talk about their projects with YC partners,
which include some of the most prominent figures of the
scene (e.g., Peter Thiel, Joe Gebbia or Elizabeth Iorns). A lot
is made to help start-ups accelerate, regardless of their
stage of development.

Implications for Europe
First, for local regulators: Europe does need more Network-
Based Programs. The Family or Numa, though different,
are two organizations developing a similar approach in Paris.
The main goal is to help foster a start-up ecosystem where
fundamental questions can be addressed so as to support
growth. “Our objective is to work with entrepreneurs to help
them on the long and difficult road to fund-raising, by giving
them radical advice, which they would not have with more
lenient organizations” details Miguel de Fontenay, partner at
The Family. Similar places in Europe include: SeedCamp in
London, The Factory Berlin for Germany, Wayra in Madrid
or start-up bootcamps based in London (FinTech), Berlin
(HealthTech), Rome (FoodTech), Amsterdam (e-commerce),
Barcelona (DataTech) or Istanbul (various specialties).
Second, for accelerators: we identify a critical need for
NBEP that help entrepreneurs to reach large markets.
The Refiners, co-founded by Géraldine Le Meur, Carlos
Diaz and Pierre Gaubil, is a network helping French start-
ups to develop their companies in the American market.
The Refiners’ founders noted that French entrepreneurs
were in need of three things when entering the Silicon
Valley: (i) guidance to adapt to the local culture, (ii)
assistance to meet with influential people and (iii) help
to receive funding. Their program has been developed
in accordance with that experience: The first month is
dedicated to the fine-tuning of business models and to
gaining familiarity with the US culture. The following two
months are meant to allow time for meetings with influential
experts in their respective fields and with investors as a
preliminary step towards fundraising. In Europe, there are a
few global solutions including the Chair of Entrepreneurship
at ESCP Europe, a business school uniquely positioned
with campuses in 6 large European countries. The Chair
has developed Blue Factory, an established and successful
Pan-European incubation program, which enables
individuals to connect and network with the European
entrepreneurial ecosystem.
Key messages Section 1
Society: For Europe to become an attractive and fecund
place for entrepreneurism means viewing the common
market as much more than a free-trade arena or the
sum of national economies. We identify three necessary
conditions for a systematic industrialization of FPC:
First, a politically integrated continental territory,
that FPC inhabit; second, an adaptive regulatory
framework that mediates given social conventions and
new innovative practices as much as it links up distant
actors, aspirations and arenas; third, network-based
accelerating programs, play a decisive role in promoting
the performance of individual founders and start-
ups and also in helping with failings and failures. The
entanglement of these conditions, we suggest, is what
gives leading ecosystems such as Silicon Valley in the
USA or InnoWay in China their productive force on the
global entrepreneurial scene.
Culture: Entrepreneurialism is universal but locally
is ritualized so that socialization is partly a matter of
learning how to take business actions with or among the
members of your community. The difference between
the past and the present is not about the existence
or the absence of such endeavor but the seemingly
accelerating pace at which entrepreneurs carry out
carefully weighted transactions (utility-based), pursue
their own ideas (liberty-based), encounter as equals,
exchange gifts and network (community-based).

The level of human, economic and social capitals
is instrumental for market entries and subsequent
start-up successes.
A. C ondition 1 : Inv esting in and
attracting hum an capital
Human capital refers to the knowledge and skills a
person uses and articulates to perform labor in creating
economic value (Becker, 1993). Human capital is central to
entrepreneurship.
1 . O n education: The self- m ade m an is
the ex ception
Top entrepreneur and self-made man are two rare individual
qualities. In the USA, 50% of the founders of the first
100 start-ups have a degree from a top US university
(e.g., Stanford, Harvard, MIT or NYU)! 95% of them hold a
university degree.
A similar situation in Europe2
:
• In Germany 1/3 of FPC entrepreneurs hold a degree from
at least one of the top US universities (e.g., Harvard,
MIT or Stanford)
• In the UK 2/3 of FPC entrepreneurs hold a degree from
at least one of the top higher education institutions
worldwide (e.g., Imperial College, Oxford, Cambridge,
Insead, Harvard or MIT)
• In France, 98 % of the entrepreneurs ranked among the
top 100 start-ups of 2015 hold a master degree from at
least one of the top national institutions (e.g., HEC, ESCP
Europe, ESSEC, Ecole Polytechnique, or Ecole Centrale).
Among them, 50% hold a degree from a business school
The figures stress the importance of the education system
to produce FPC entrepreneurs and the quite narrow number
of higher education institutions top entrepreneurs attended.
This is partly due to the level of ambition that drives both
students and their schools. “From the beginning, the
ambition at Devialet was to become the world leader in
audio systems. This has not changed ever since” says Luc
Delambre, Devialet’s Chief Operation Officer. As outlined
in section 1, this kind of vision is key to enable growth.
We now know that this level of ambition is largely supported
in US universities and that it receives increasing acceptance
in Europe.
2 . Entrepreneurship is a team sport
The understanding of team formation and its dynamics
is paramount to the training company founders receive.
Miguel de Fontenay, Partner at The Family, suggests
“investors primarily invest in people and their vision more
than in positive financial metrics.” Many entrepreneurs
follow that line of thought and suggest that the main reason
for raising funds is to be able to hire an A-team, people
with experience and advanced expertise. Significantly,
Tediber, a fast-growing company, hired the former Chief
Marketing Officer of Google France. The case illustrates
the level of expertise required by FPC. The quality of each
individual would not be enough on its own. There is a need
to create fruitful collaborations within and across teams.
This is particularly challenging at periods of fast growth
and international developments. Carlos Diaz, co-founder of
The Refiners, suggests that teams could usefully be devised
against country specificities. He offers the example of a
tech company that is likely to be successful with marketing,
sales and business development located in Silicon Valley
and engineering teams based in France. This is Ricardo’s
comparative advantage theory reloaded. Dashlane, a French
FPC with 90% of the business generated internationally,
uses technology and setting screens in its offices to allow
Paris and New-York based employees to see their colleagues’
real time activity and to improve coordination across
continents. This exemplifies the challenges growth creates
for cohesion when companies remain relatively small and
keep limited resources.
The story of Steve Jobs and some happy exceptions put
aside, higher education seems to be a prerequisite in the
contemporary economic life. Europe shows a great diversity
of situations across and within countries. The study focuses
on but is not limited to one instance in particular: The case
of France.
2
ChairEEEE research data
II Differentiating conditions to foster
FPC development: Concentrated and
a rt icu l a t ed ca p it a l s

First, for higher education institutions: in France,
the Grandes-Ecoles system offers top level programs at low
prices compared to top US universities. National engineering
training is of highest standards and often is considered one
of the best worldwide. Business schools produce 50% of
domestic top entrepreneurs. However, the institutions have
a very limited number of students and they do not seem to
offer sufficient competencies to articulate all their potential.
Grandes-Ecoles have had an historical tendency to work in
silos with few cross-disciplinary programs. Trans-disciplinary
educative programs should be particularly encouraged for
that reason. The Entrepreneurship Major program offered
by the Chair of Entrepreneurship at ESCP Europe provides
a unique cross-disciplinary platform that gathers freshmen
from varying background: Design students (e.g., ENSCI
or Strate), engineering students (e.g., Supélec, Mines
or Centrale) and young developers that received coding
training at 42 or Epitech. Students work in multi-disciplinary
teams for 6 months developing entrepreneurial projects that
combine the variety of their competencies. Take Glowee.
Glowee is a biolighting system that uses the natural
properties of bioluminescent livings. It is particularly
innovative as it does not require electricity to function and
avoids generating light pollution. Sandra Rey, Glowee’s
founder, is a designer and a graduate from Strate who
received an MIT Award in 2016 (Innovators Under 35,
France). She met Geoffroy de Bérail, ESCP Europe alumni
and Glowee’s COO, during the course of their studies at
Option E, an entrepreneurship training program. The
encounter and the education at Option E were critical for
Sandra to go beyond the “design world” and to better
understand the entrepreneurship expertise and ecosystem.
Universities in France, as distinct from Grandes-Ecoles,
are in essence key places to develop human capital for
entrepreneurship: They offer state-of-the-art contents in
their study programs; they develop expertise in a plurality
of disciplines and welcome a large number of increasingly
international students. Yet, they do not seem to provide
sufficient support for entrepreneurial trajectories and
competencies. At the point of writing, only a few of the top
entrepreneurs have received their degree from a French
University: Less than 5% of the founders of France’s top
100 start-ups of 2015 graduated from university while 90%
were trained in a Grande-Ecoles. A recent initiative is worth
mentioning: The Pepites, an acronym for the French Pôles
Etudiants pour l’Innovation, le Transfert et l’Entrepreneuriat,
was created at the level of French Universities to promote
entrepreneurship. This is an encouraging sign. However,
for Olivier Mougenot, Investment Director at Numa,
universities are yet to get properly organized to fully enter
the entrepreneurial world in the digital age (EY, 2016c).
In parallel, FPC have faced continuous hiring challenges
in their search for talented people. A possible entry point
for universities would therefore be to educate middle
managers for fast-growing companies. Access to coding
training at university and elsewhere could also be facilitated
for prospective students as the demand for this type
of competencies is booming. The new entrepreneurial
curriculum at Epitech and the creation of 42 in France are
necessary pioneers. They can only be examples and more
of them would be required to answer the seemingly limitless
demand for developers.
Second, for regulators: Salaries for engineers are
comparatively much higher in the US, which makes
it difficult for French entrepreneurs to attract and
retain talents. There are no particular fiscal benefits, and
the pay is not competitive. India has earned an international
reputation for its training: an Indian engineer seeking for
opportunities abroad would probably choose the US over
Europe as his first destination. Evidently, international
mobility does not solely depend on financial incentives.
It requires also infrastructures and the possibility to
work in close cooperation with top performers and
inspiring people. Family ties are important for the skilled too
(Basri & Box, 2008). To develop enticing working conditions
and offer fulfilling opportunities should be a priority to
decision leaders.
B . C ondition 2 : Econom ic
capital fitting the
entrepreneurial culture
1 . Accessing capital is critical for
em erg ing com panies
The available stock for investment is crucial for the
development of entrepreneurial ventures: Higher
investments enable entrepreneurs to pursue more
ambitious projects. They can also serve as a buffer at times
of development crisis. VC funds have a natural need to
diversify their investments. Consequently, fund size has
a direct effect on the amount VC can invest in one single
company. Countries with the greatest VC amounts invested
are countries where a higher number of unicorns were
founded. In 2015 the median funding deal value was $8M
in China, a figure that compares to $6M in the USA and
$2.5M in Europe. Of greater concern is the observation that
the median values are increasing at different rates: 38% in
Europe, 50% in the USA and 100% China (EY, 2015b). In the

USA, the amount invested is greater and the VC industry is
fueling a higher growth for start-up companies. For a similar
team and project, European companies are offered 5 times
less financing than their American counterparts. In Europe,
the median deal value remained stable at $2.5M from 2014
to 2015, whereas in the USA, the figure leaped from $5M
to $6M. This can be explained by the fact that American
VC raised 5 times more capital than their European
counterparts (Atomico, 2015) and that the growth potential
is comparatively higher in the USA than in Europe.
57936
$70 000
$60 000
$50 000
$40 000
$30 000
$20 000
$10 000
$-
23681
7356
1926 1342 996 335 270
Million dollars raised
Figure 7. Amounts raised by unicorns across countries
Julien-David Nitlech, Investment Manager at Iris Capital,
points out to an interesting phenomenon: There is a growing
number of funds deployed in France. Is this announcing a
soaring investment momentum? France is also experiencing
a growing support from public institutions. Paul Jeannest,
Head of the RAISE endowment fund, insists on how “the
Hub Bpi is helping start-ups a lot. Equally, as it provides a
steady income to most entrepreneurs during two years,
you could say Pôle Emploi3
is France’s main VC fund!”
Bpifrance’s investment style is comparable to the American
Small Business Investment Company program or SBIC
operated by the Small Business Administration (SBA).
Data from 2013 show that the two public institutions hold
a comparable number of funds in portfolio even though the
US market is much larger. Bpifrance is the third most active
fund in Europe. This suggests how significant the support of
public institutions is to the development of FPC in France.
This is a quite positive situation providing the dynamics can
be sustained over time (EY, 2016c).
2 . Dev eloping long – term relationships b etw een
entrepreneurs and inv estors
Peter Bos, EMEIA Strategic Growth Markets Business
Development Leader at EY, remarks that “raising funds is
not an objective in itself, you have to ask for the amount
that your business actually requires, which you’ll know
by thoroughly assessing your needs and your strategy.”
This view is supported by Pierre-Henri Deballon, founder
of Weezevent, who considers it to be remarkable that
there still is a confusion between entrepreneurship and
fundraising: “very often I hear people saying that they want
to raise money because it’s just what a start-up does! (…)
But the truth is you don’t necessarily need to raise money
to develop your company.” Fundraising must be motivated
by clear needs and specific timing. Entrepreneurs ought
to create a momentum to convey the idea that the market
is ready to welcome their product, by showing substantial
metrics such as the number of users. Many investors share
the view of Romain Lavault, General Partner at Partech
Ventures: “We only invest in seed if we see that there’s
already a momentum.”
Early-stage development money is widely available
and this is excellent news. Without cash in hand it is
impossible to consider growing. As Stéphane MacMillan
(Foodora) experienced: “Business is not yet profitable and
operations need to be paid for.” Receiving funding at the
different stages of maturity is vital for start-ups in order
to continuously fuel their growth. Figure 8 is illustrative
of the investment situation in France: Many and an
increasing number of operations take place during the early
stages of development.
Receiving funding at different stages of maturity is vital
for start-ups in order to fuel their growths. Even if there
are discrepancies among European countries, Europe as
a whole, focuses too much on early stage money. After the
Figure 8.France Venture Capital Barometer, EY,
1st Semester 2016
Investments by maturity stage
1st half 2016
Total investments
1st half 2015
Total investments
Average amount
Invested
Average amount
invested
€387m €12,1m
€248m €5,9m
€2,1m
€0,6m
€332m
157deals
66deals
42deals
32deals
€384m €10,4m
37deals
€140m €4,1m
€1,7m
€0,5m
34deals
€210m
122deals
€25m
51deals
€39m
3rd round
2nd round
1st round
Seed capital
3
French national and public job center.

initial investment stage, there seems to be a dearth of
money for follow-on financing. The situation arguably is
better in the UK where a $4.8M in VC activity was recorded
in 2015 compared to $2.9M for Germany and $1.9M for
France at the same date (EY, 2016b). For later stages,
many of the rounds involved here are conducted abroad
and quite likely with American investors. Olivier Mougenot,
Investment Director at Numa, emphasizes that French VC
only invest little money because companies in their view do
not seem to need more at the beginning. As a consequence,
VC tend not to sufficiently push entrepreneurs to further
develop their companies beyond some points. Other
argue that too few European entrepreneurs offer projects
which could pretend to raise large amount of money.
Assuredly this is an issue for both sides: European investors
and entrepreneurs could both have higher ambitions.
3 . S tim ulating an ex it m ark et and prom oting
b ig g er com panies
The perspective of being able to exit at a fair amount is
driving many entrepreneurs. To be able to rely on a dynamic
exit market with low hurdles for exit is an incentive to invest
and to grow companies. In these days, entry tickets are
relatively small. Investors are not keen on putting more
money in subsequent rounds and entrepreneurs easily settle
for small exits. Foreign investors therefore take on follow-up
rounds or start-ups are acquired by bigger companies
for an amount that is satisfying to most founders. Few
IPOs took place in France because the tech sector is not
very developed. However, the European M&A sector is very
active in comparison to the USA: In the USA, the IPO sector
is worth $6B at a ratio of 1:9 with M&A ($54B). In Europe,
the M&A sector is 12 times bigger than the IPO sector (EY,
2015b). Financial markets should be able to integrate tech
companies at an early stage which is not yet the case in
Europe. Additionally, cash-out strategies are widely spread
in the USA where investors put in around 10% of the deal
at each round. This provides some sense of security to
entrepreneurs during the business creation process and
may prevent them from selling as early as they receive an
(interesting) offer. That mechanism helps entrepreneurs
patiently grow their businesses as time requires.
4 . V enture C apitalists: A culture w hich should
not b e lim ited to technical ex pertise
Beyond a new generation of VC and family offices
(e.g., Serena Capital, Alven, 360 Ventures Ventures, Kima,
Jaina, Isai or Elaia) some VC, in Europe in general and in
France in particular, remain more cautious relatively to their
American colleagues. In France and in Germany, where
financial systems are centered on banks, VC firms originated
within banking institutions and insurance companies.
Many investment managers came from the parent bank
company and the tradition of employing banking and
financial professionals as VC took on. Today, many French
banks and insurances have sold their VC activities.4
Recent surveys compare the situations in France and the
USA (Dimov & Shepherd, 2005; Milosevic & Fendt, 2016).
The studies show that VC profiles are less diverse in France
with comparatively fewer MBAs, scientists or entrepreneurs
acting as investors than in the USA. Yet, these profiles
are crucial for scouting and developing the promising
entrepreneurial ventures. Take a look at the figures: Six out
of ten VC partners in the USA have a MBA degree, compared
to less than two in France. 48% of US American VC are
natural scientists and engineers compared to 41% in France.
Among all French VC partners with scientific background, a
majority holds an engineering degree, many started careers
in consulting or finance and only one out of six holds a
degree in natural sciences, including medicine. France has
a low score for graduates in humanities5
compared to
the US where one partner in five received training in that
field. Another noticeable difference concerns the high
proportion of financial and banking specialists in France:
seven out of ten VC partners have experience as investment
professionals, compared to less than six in the USA.
Finally, French VC funds have on average fewer managers
with an entrepreneurial background (14% compared to 18%
in the USA) and nearly two third of the funds even have
no executives members with this type of past experiences.
Finally, a vast proportion of VC managers in France has a
salary or regular incomes. Financial incentives for driving
the success of their portfolios remain underdeveloped.
A proven success factors in the USA is the personal
contribution of VC partners alongside other fund investors.
This practice sends clear and positive signal to other
VC partners who may be solicited to invest in follow-on
financing rounds.
4
For instance, Axa’s Idinvest Partners or Crédit Agricole’s OMNS Capital.
5
excluding law, business and economics

C . C ondition 3 : P rom oting on- and
offline social capital
Social capital as discussed in the present report is defined
as the sum of the resources embedded within, available
through and derived from the network of relationships
nurtured by an individual. It is a critical asset to articulate
resources in a way that promotes growth.
1 . B onding or B ridg ing N etw ork : W ho should
support the creation of F uture P ow er
C om panies?
Two forms of social capital are distinguished. On the one
hand, bonding social capital refers to strong, repeated social
connections that result in norms of reciprocity and yield
trust (Coleman, 1988). This form of social capital is largely
supportive of entrepreneurship as it enables trustworthy
relationships, the emergence of solidarity and gift-giving.
Many entrepreneurs use bootstrapping techniques to
decrease external capital needs. Bootstrapping as a practice
mainly is based on bonding social capital: friends and
family are largely used to obtain resources and informal
support. Young entrepreneurs might use spare spaces at
their parents’ place rather than to rent an office. They might
casually ask friends for expertise or money. Evidently, the
more resourceful one’s close network is, the more one can
rely on it and use it to develop a start-up. As a side-effect,
this capital tends to limit the scope of possibilities: being
bound to one community is limiting the access to a variety
of other abundant resources. On the other hand therefore,
developing a bridging social capita (Burt, 1982) is essential.
The idea is to create connections with distant agents both
in terms of perspectives and backgrounds. For connections
are enabling to develop resources different from the assets
entrepreneurs usually draw on in their regular network.
This is the type of network programs like the Y-Combinator
offer. Social networks or crowdfunding platforms enable to
develop bridging social capital: they help raising the first
dollar or increasing the size of a community of backers and
supporters (André et al., 2015).
2 . O ld B rothers and B usiness Ang els hav e
k ey responsib ilities
Business Angels are typical provider of bridging social
capital. Their role is central to the inception of a growth
project: the European trade Association for Business Angels
or EBAN estimates that business angels account for 73%
of early-stage funding vs. 26% for VC (EBAN, 2014). Apart
from supplying money, angels act as advisors. Beside sheer
absolute return, emotional connections develop between
entrepreneurs and their business angels. This process
generally translates into the willingness to share knowledge
and to mentor the next entrepreneurship generation (Figure
9) (BNPParibas, 2015).
Q : For which of the following reasons did you decide to become an angelinvestor ?
N: 1,759
Source: Scorpio Partnership, BNP Parlbas
Sharing Knowledge
Other
Creating
opportunities
Staying active
Keeping abreast of the industry
Capital led
Making good investments
Solving problems in society
Developing the industry
Mentoring the next generation
36.1%
25.8%
23.6%
18.4%
15.4%1.5% 25.8%
17.7% 15.6%
23.4%
38.1%
12.7%
20.6%
29.1%
26.2%
37.0%
29.3% 6.5%
Advice led
Figure 9. Motives for Business Angel Investments (EY, 2015)
In the USA, business angels are very active. A whole
sector is building upon generations of entrepreneurs
who benefited from it. The founders of Paypal generated
impressive revenues with the sale of their company to
e-Bay. Subsequently, they reinvested some of the money
in the start-up scene; Peter Thiel and Elon Musk, two of
Paypal’s cofounders were the most prolific ones. They
invested in new projects some of which reached leading
business positions in the world (e.g., Facebook, LinkedIn
or Yammer). They are actively supporting incubators like
the Y-Combinator and have become guiding figures in the
Valley. Eventually, Elon Musk created further companies and
potential unicorns (e.g., Tesla Motors, Space X or SolarCity).
Successful entrepreneurs help growing new businesses by
capitalizing on past experiences, personal networks and
fame. The history of Paypal is exemplary in many ways. It is
a case for dense networks of committed entrepreneurs in a
supportive ecosystem.
Figure 10. The Involvement of the Paypal Network in
American start-ups (Laigle, 2016)
Fondation
8
6
4
2
0
Council Financement
nombredemembresdela
PayPalMaﬁa

Figure 11. Four main possibilities for collaboration between
start-ups and large corporations
Investissment
Corporate ventures are growing in the world. Quarterly
investments have jumped in recent years from $1,8B in
Q2/2011 to $4,2B in Q2/2015 (CBInsights, 2015a). This
is dividing up the start-up scene. Some say investments
support the development of new business models and help
incumbents to evolve. Axel Springer was able to successfully
navigate the digital revolution with an acquisition spree.
About 90 companies where bought since 2005. Examples
include Zanox, StepStone, Seloger, or Pixlee. The
approach Axel Springer has followed is to buy existing
and well established digital players with a proven record
of commercial successes, good customers’ relations and a
clearly defined business model. The target companies were
often ranked among the top 5 players in their respective
markets. To name a few6
: idealo.de (2006; #5); Zanox.
(2007; #2); Digital Window (2009; #3); StepStone (2009;
#2). The objective was to develop all acquired companies
into a market leader in their respective field by drawing
on the experience, the reach and the media power of
the purchasing company. The objective was achieved
for all of the aforementioned acquisitions by 2014. Axel
Springer followed the course of action of a true digital
shareholder. The company has guaranteed a full operational
independence to the acquired companies. When possible the
founding partners and the management were retained. Axel
Springer focused on maintaining growth momentum and
has always seemed to look for a real partnership: a cultural
change imposed by ‘colonial masters’ was to be avoided
as the word goes. Around 2014, Axel Springer slightly
changed its strategy. The company started trying to broaden
the scope of its activity and looked for acquisitions of other
companies in a much earlier stage of development than it
had previously been the case. The code of conduct was clear
too. Principles called “Build, Acquire, Partner” were now to
be followed. For Axel Springer an early stage investment
does not necessarily translate into an acquisition. In parallel,
the company has focused on the creation of its own start-
ups and on the development of partnerships with young
start-ups. The main vehicle for this strategy is the Axel
Springer Plug & Play accelerator, a 50/50 joint venture with
Plug & Play. In order to diffuse similar practices in France
and to develop comparable interactions between large
corporations and start-ups, Raise was created by David avec
Goliath, a platform that offers expertise and possibilities to
improve a positive dynamics for all.
Xavier Niel, Jacques-Antoine Granjon, Fabrice Grinda, Marc
Simonci, Pierre Kosciusko-Morizet in France are increasingly
active in the role of old brothers. Xavier Niel’s track record
of 230 investments in various start-ups is certainly leading
the way. “Their past investments grant them with an image
that is reassuring for trade partners. Their success provides
some sort of guarantee. It’s like a stamp that would say that
the project is viable” says Luc Delambre, Managing Director
at Devialet. Successful entrepreneurs create weak ties,
infrequent and intense relationships that are very powerful
to increase the chances for a project to grow.
3 . R elationships b etw een start- ups and larg e
com panies need caring to g enerate g row th
Weiblen and Chesbrough identify 4 roles big corporations
play when collaborating with start-ups (EY, 2015a; Weiblen
& Chesbrough, 2016). Their roles depend on how innovation
is orientated and on the existence of a direct investment:
O rientaion of the innov ation
From the outside to
the inside
From the inside to
the outside
Yes C orporate v enturing Internal incub ator
Axel Springer (2005) People’s Lab BNP
Paribas (2014)
Google Ventures
(2009)
Airbus Business
Innovation Factory
(2014&2015)
No Acceleration
prog ram
P rog ram / platform
Airbus BizLab
(2015)
Paypal Startup
(2013)
Axel Springer
Plug&Play (2013)
Microsoft BizSpark
(2008)
Investissement
6
Company name (Date of acquisition; Last rank known.
Investment ($M) Deals
Q
1’11
Q
2’11
Q
3’11
Q
4’11
Q
1’11
Q
2’11
Q
3’11
Q
4’11
Q
1’11
Q
2’11
Q
3’11
Q
4’11
Q
1’11
Q
2’11
Q
3’11
Q
4’11
Q
1’11
Q
2’11
Quarterly Corporate VC Investment and Deal Volume Trend
Q1’11 to Q2’15
99
$1,399
$1,876 $1,866
$1,204 $1,250
$1,497
$1,892
$1,523 $1,435
$1,829
$2,017 $1,899
$2,905
$4,189
$2,114
$3,397
$3,674
$4,117
145
115
107 103
120
123
130 134
141
157
144
159
194
177 180
185
172
Figure 12. Quarterly corporate VC investment and deal
volume, (CBInsights, 2015)

Others criticize the involvement of large corporations. In
an article published in TechCrunch, Jon Evans, a journalist
and software engineer, worries about the lack of ambition
of French entrepreneurs (Evans, 2016). He observed that
one of the main goals of French entrepreneurs was to get
acquired by big groups rather than to disrupt them and
jeopardize their leadership. Jean-David Chamboredon,
co-CEO of France Digitale, complements this view by
highlighting what he calls a caiman syndrome: corporations
seem to conceive of start-ups as “cute little caimans.” As
soon as they get a little too big for their taste, they try to
turn them into purses (Chamboredon, 2016).
Culture: it is argued the cause of European FPC
comparatively feeble performances is a slow speed
of change in the conception of learning and success.
To raise funds has long seemed to provide a higher
standard of corporate performance, which generations
of European company founders and investors took as the
gold standard of entrepreneurialism, dismissing mere
timely growth and market disruption. Nevertheless, FPC
development by experimenting and failing remains an
important and neglected type of business action in our
European and many other societies. Learning by doing
how to develop a start-up and how to fruitfully spread
innovation is central for founders, investors, incubators
and incumbents. To develop a cultural understanding of
entrepreneurial experiences is key for Europe and has
institutional implications for education systems and the
corporate life.
Management: the development of many start-ups
inspired by the contemporary sharing economy
movement is associated with the disruption of the very
company creation process and the disappearance of
the traditional role of company founders in Europe. We
need more visibility at a European continental level with
entrepreneurial expertise to establish a solid reputation
as to attract increasing talents and resources. A higher
concentration and diversity of capitals is required with a
European coordination in order to develop existing FPC
performances.
Implications for Europe:
First, for start-ups: further generations of entrepreneurs
ought to be produced and a tradition of intergenerational
connections has to start. Successful European
entrepreneurs have a responsibility to help newcomers.
They could usefully leverage their network up to a
continental scale. However, individual trajectories cannot be
sustained without a supportive ecosystem. Representatives
from France Digitale insist: to foster an increasing number
of business angels, the issue of taxation must be tackled.
In 2016 a new plan was implemented in France and a
decreasing tax rate applied: it ranges from 62 % of capital in
the first year of acquisition to 23,75 % after 8 year of share
holding. As a comparison, in the UK the maximum tax rate
is 20 % on the movable capital gains (Ekeland et al., 2016).
Israel is also a good illustration of pro-investors policy where
the “Angel Law” allows a tax deduction of up to €1M for
an investment in a small- to medium-sized tech enterprise
(Perez, 2016). To increase interactions and collaborations
among top European entrepreneurs would also be relevant.
It would help concentrate resources on an international level
and develop bridging social capitals. Israelis are for that
matter tightly connected with the American entrepreneurial
scene. This is key to the development of FPC that operate
beyond their native environment.
Second, for large corporations: collaboration between
start-ups and large corporations is growing in Europe.
Encouraging results should not mask the need to improve
the collaboration’s quality between the two worlds. One
main issue is to increase a mutual understanding and
to avoid the all too often experienced zero sum games
where both parties try to destroy the other. Intel capital,
the Corporate Venture of Intel, is investing 1 billion $ per
year to support the growth of FPC. Companies like Google
or Facebook have acquired many FPC in order to help
create new markets as much as to control an emergent
phenomenon. Further, incumbent companies may offer
critical solutions to help expanding a market. The role of
insurance companies for car sharing offers an inspiring
illustration. Allianz and Axa have considerably facilitated the
growth of Drivy and OuiCar respectively. Europeans need
more of these moments and spaces to learn and develop
these practices.

A. A societal capacity to ab sorb the
dialectic b etw een creation and
destruction
Disruption produces a myriad of creations: new products
and services, new markets and new companies. Disruption
also comes along with multiple destructions. The dynamics
of creation and destruction work together. Creation
cannot be conceived of independently from destruction.
Four main types of destruction are identified when
distinguishing between (i) object and (ii) domain. On the one
hand, disruption might affect the others (e.g., society or
competition) or the self (the entrepreneur and its creation);
On the other hand, disruption has real but differing effects
whether it primarily affects the material or the virtual world.
Before defining each form of destruction and using the
frame to discuss the case of GAFA, the emerging typology is
outlined in Figure 13:
1 . C og nitiv e Destruction and U nlearning
Founders of FPC and Unicorns are entrepreneurs equipped
with a high level of human capital: they learned a lot.
Disruptive entrepreneurship requires learning as much as it
requires unlearning and the ability to question core beliefs
and certainties. When Larry Page and Sergueï Brin created
Google, search engines were perceived as a commodity
market for software analyzing contents and listing relevant
webpages. The growth of their start-up was less enabled
by a deep learning of the existing techniques than it was
triggered by the unlearning of the dominant expertise of
the time. The two founders destroyed knowledge, beliefs,
and routines of a milieu and developed new ways of making
online searches. They shifted the meaning of relevance for
scientific referencing by creating page rank and focusing on
the number of citations. Page rank is based on the number
and the significance of inbound links to the page being
assessed. It goes beyond the mere content analysis.
For existing companies, this capacity to change and unlearn
is made possible through organizational adjustments like
new resource allocations, new recruitment processes or
restructuring and the creation of a separate organizational
unit. Some historic cases have been very well documented:
Intel (Burgelman & Grove, 2002), Swatch (Garel & Mock,
2016) or IBM (Prahalad & Oosterveld, 1999). They help
understanding how a company evolves on the long-term and
sometimes destroys its own historic set of competencies to
survive and grow (Gans, 2016). In many other cases (like
Kodak or Polaroid), successful firms failed precisely because
they rigidly reproduced the choices that had made them
successful.
2 . M aterial Destruction and Deconstruction
At the very beginning, Mark Zuckerberg never thought
of launching Facebook. At first, he created the Facemash
as a joke with his roommates at Harvard University: on
November 19, 2003, Mark Zuckerberg is uploading a game
on the Internet allowing students to vote for the “hottest”
person on campus. To determine a winner, students had
to compare the faces of two different persons of the same
sex and to opine on their attractiveness. Student pictures
stored on the club’s directory webpage were hacked for
that purpose. The effect was significant compared to the
resources used: in only a few hours, around 450 students
took part in the game and tallied 22,000 votes. Based on
this experience, Mark Zuckerberg realized how powerful an
online facebook could be when used within in an existing
community. He understood what would later be labelled the
viral effects of social networks. Thefacebook.com, which
became facebook.com some months later, was launched on
February 4, 2004 based on the Facemash experiment. The
case illustrates how a company can grow only if it manages
to deconstruct its initial form. To create Facebook, the
Facemash and Thefacebook.com had to be deconstructed.
The solution proposed by a start-up is seldom perfect. It
emerges and frequently evolves in an attempt to improve it
based on customers’ feedback and available resources. The
emergent phase implies some difficult choices: what should
be kept? What should be changed? Without a capacity to
Disruption O b j ect
Others (e.g.,
society)
Self (e.g.,
entrepreneur)
Material Competitive
O b sol escence
Amazon destroyed
many bookstores
Deconstruction
Facebook
destroyed the
Facemash
Disruption
Domain
Virtual Subversion
Apple destroyed
the original power
relationships
between computer
scientists and
users
Unlearning
Google destroyed
the original search
engine expertise
Figure 13.The four destructive dynamics
III The condition for a sustainable production
of FPC: Societal acceptance

destroy parts of the original work projects freeze. They
cannot improve nor grow. Rapid prototyping, popularized
by the design-thinking and Lean Start-up methods,
are illustrative of new ways for experimenting with the
numerous deconstructions processes that the entrepreneur
must manage. Large corporations willing to engage in these
processes have many possibilities that include accelerators,
fablabs, co-working spaces or labs. These spaces usually
are crucial for employees to be able to develop emergent
projects that may become profitable. Notable examples
Open Bookstores in the U.S.
40,000
35,000
31,000
26,500
22,000
‘04 ‘06 ‘08 ‘10 ‘12 ‘14 ‘16 ‘18
Figure 14.Number of bookstores in the USA
in France include: La Chocolaterie (EDF), the WAI (BNP
Paribas), the Daher Lab (Daher) or the Airbiz Lab (Airbus).
3 . C reativ e Destruction and C om petitiv e
O b solescence
Creative destruction is defined as the process “that
incessantly revolutionizes the economic structure from
within, incessantly destroying the old one, incessantly
creating a new one” (Schumpeter, 1942). The process is the
driving engine of capitalism. Strategy cannot be approached
independently from creative destruction, Schumpeter
argues. Entrepreneurs develop innovations that make
traditional forms of supplies obsolete in a rather mechanical
way. Do established companies renounce to adapt to the
emergence of new products or practices, their profits will
progressively decrease and their position will eventually
be supplanted in the market. Change is endogenous to
capitalism and operates continuously: creative destruction
constantly pushes away old products and old enterprises,
replacing them with new ones. Between 1999 and 2009,
almost 50% of the Fortune 500 companies disappeared
from the list (Goodburn, 2015). Companies’ discontinuances
partially are explained by the arrival of new corporations
(e.g., FPC, Unicorns or GAFA). Amazon and its model of
online bookstore actively contributed to the destruction of
many libraries in the USA as shown (Figure 14).
Other instances provide a rather different picture and
incumbents might not always be negatively affected by
disruptors. As a matter of fact, Tivo disrupted the American
TV ecosystem by cooperating with the incumbents (Ansari
et al., 2015). This coopetition is not an isolated case as
large corporations are increasingly developing alliances with
start-ups to manage the process of disruption. Partnerships
developing in the car industry to manage the diffusion of
autonomous cars form a recent and practical example of the
effects of this strategy (CBInsights, 2016a).
4 . Institutional Destruction and S ub v ersion
Many entrepreneurs declare they would want to change
the world. Assuredly, some of them are using the rhetoric
principally as a marketing strategy. Others certainly feel
the purpose to change societies and are driven by a strong
political ideological background (Jarrodi & Bureau, 2016).
Many libertarian entrepreneurs aim at creating disruptive
solutions to limit the power of the State (Ferenstein, 2015).
Representatives of the movement include Jimmy Wales
(founder of Wikipedia), Jeff Bezos (founder of Amazon)
or Peter Thiel (co-founder of Paypal). Peter Thiel puts his
intentions plainly: “The basic thought was if you could
lessen the control of government over money and somehow
shift the ability of people to control the money that was in
their wallets, this would be a truly revolutionary shift (…).
Technologies like PayPal have been a major contributing
factor toward the weakening of the nation-state over the
last few decades (…) [and] will lead to a world in which
there’s less government power and therefore more
individual control” (Bailey, 2008). The posture, far from
being just economic, involves a strong political stance and
is of subversive nature. Subversion can be defined as a
behavior, an attitude or an activity that seeks to destroy
the established order (Bureau, 2013). The term carries
strong historical connotations and usually brings to mind
a revolutionary or artistic context. It perfectly fits the
entrepreneurial activities that disrupt systems, although it
is seldom used in the management science literature.
The free software movement counts to the most renowned
cases. Richard Stallman, the movement leader, has
endeavored to open access to the source code of software
as early as the beginning of the 1980s. The idea’s core is
well expressed in a few words from Stallman’s manifesto
published in 1985: “proprietary modifications will not be

Net Job Creation
NumbersOfJobCreated
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
5 million
4 million
3 million
2 million
1 million
0
-1 million
-2 million
-3 million
-4 million
-5 million
-6 million
Source : U.S.Census Bureau Business Dyanamics Statistics
Firm Age
0-5 Years
6-10 Years
11+ Years
Unemployment Rate:Routine Vs. Nonroutine,
Cognitive Vs. Manual
Federal Reserve Bank of St. Louis
Source: current population survaey and author’s calculations.
Jan2013
Jan2011
Jan2009
Jan2007
Jan2005
Jan2003
Jan2001
Jan1999
Jan1997
Jan1995
Jan1993
Jan1991
Jan1989
Jan1987
Jan1985
Jan1983
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
UnemploymentRate
Nonroutine Congnitive
Routine Congnitive
Nonroutine manual
Routine manual
Figure 15. Net job creations in the USA (Wiens & Jackson,
2015)
Figure 16. Unemployment rate: routine vs non-routine;
cognitive vs manual in the USA
allowed” (Stallman, 1985). The project calls into question
the regulation of intellectual property rights by the State,
one of the founding principles of capitalism. At a commercial
level, Google and Facebook offer other examples of
entrepreneurial activities that have challenged some of the
founding principles of our societies such as privacy norms
from their start. It is now useful to turn to the case of Apple.
In the 80’s, Steve Jobs engaged in a battle against IBM
and wanted to change the relationships between computer
scientists and users. His wish was to offer more power to
the final users, an idea he discussed openly. In 1984, he
releases a TV commercial during the Super Bowl as a way to
launch the new Macintosh in reference to Georges Orwell’s
1984. The idea is to make people think and understand that
Apple is going to free people from the “totalitarianism” of
centralized computing. In the add, not a single computer is
displayed but images using symbols of authority and control
– people are wearing the same grey clothes resembling
prisoners and watching a screen from which a man utters
words with a dictatorial tone. The scene is contrasted with
images of liberty and empowerment symbolized by a young
athlete wearing colored clothes and launching a harmer on
the screen to stop the man talking. Eventually a message
appears on the screen: “On January 24th, Apple Computer
will introduce Macintosh and you’ll see why 1984 won’t
be like “1984”.” In the cases discussed, the success of
innovation lies in the destruction of competition. It lies in
the destruction of the very frames and rules that define our
institutions and establish what is legitimate or not, thereby
constraining the way people apprehend novelty. The effects
of disruption cannot be sustained in the long run if one is
unable to accommodate its destructive components.
The effects of disruption cannot be sustained in the long run
if one is unable to accommodate its destructive components
B . The case of j ob creation and
social j ustice
The job market disruption is discussed in the remaining as to
illustrate the more general effects of disruption on society.
Disruption tends to have a positive impact on job quantity
but simultaneously it creates new social inequalities that
have to be addressed for the stability the new economic
model.
1 . A q uantitativ e deb ate: F P C create j ob s in
the short term
Start-ups are creating and destroying jobs at the same
time. They create jobs by hiring a lot of people. They also
destroy jobs by pressing established companies to adapt
their business models7
. Sometimes established companies
go bankrupt. On average, start-ups are said to have a net
positive impact on job creations. According to the Kauffman
Foundation, “when it comes to job-creating power, it is not
the size of the business that matters as much as it is the
age” (Wiens & Jackson, 2015): young companies create
more jobs than old companies. Start-ups have a vital role
in creating jobs and are responsible for around 2/3 of net
job growth among all existing firms in the USA (Figure
15). Several surveys are supporting this figure (Decker et
al., 2014). However, it is crucial to balance the positive
contribution with the sharp job losses facing many firms of a
7
See deconstruction dynamics as detailed in the previous section

market in the first years after a FPC entry. Most start-ups fail
and most of the survivors do not grow. A few “existing start-
ups are high-growth firms that contribute disproportionately
to job growth. These high-growth young firms yield the long-
lasting contribution of start-ups to net job creation” (Decker
et al., 2014, pp. 9–10). Similar ratios were calculated for
Europe, including for France (EY, 2015c).
Beyond the diversity of start-ups, the side effects of
entrepreneurial activities ought to be taken into account.
Many incumbents are facing difficulties due to new, fast
growing entrants. Most of the time and as a result, they
have to lay off people. Borders is a company that could not
find its way in the face of digitalization and the competition
of Amazon. The company went bankrupt in 2011 and is a
typical case of creative destruction. Job creation in essence
is hard to assess in the mid-run. The many adjustments
of the job market render any neat calculation virtually
impossible. There are points of views: maybe start-ups
do not create jobs for the people who lost their jobs as
a consequence of their emergence. Regardless of age,
every individual is concerned with the need to learn new
competencies and to unlearn carefully developed expertise
that may have become obsolete8
.
At last, new technologies like Artificial Intelligence are
creating new opportunities and threats for routine jobs
that have long been the most exposed to unemployment
(Figure 16). Researchers estimate that 45 % of America’s
occupations will be automated within the next 20 years
(Frey & Osborne, 2013), with a more significant impact
on low-qualified and routine jobs (Santens, 2016). Highly
skilled workers are subjected to job automation to a lesser
extent. “Ross”, a lawyer robot, was recently hired by Baker
& Hostetler, a global law firm (Addady, 2016). The robot is
able to understand a legal issue, to dig into a database, and
to articulate answers based on legal articles and past cases.
2 . A q ualitativ e deb ate: F P C tend to create
social ineq ualities
According to a recent survey conducted in the USA, the
average annual earnings for self-employed is higher than
for a salaried workers, while their median annual earnings
is lower (Manso, 2016). The result confirms existing claims
that a limited number of entrepreneurs earn outstanding
amounts of money, while the typical entrepreneur makes
less than he would do in a bigger company. Another and
more recent survey conducted in Denmark shows that
a disproportionate number of low-skilled service jobs
contribute to total job creation (Kuhn et al., 2016). At any
rate, few start-ups are able to make large turnovers to pay
high salaries. In the UK, start-ups on average reach $180K
in revenues after sixth year (Coutu, 2014), a figure that in
most cases does not allow to pay salaries.
The picture is even sharper in Silicon Valley: on the one
hand, the median annual income reached $94K in 2013, far
above the national median of around $53K; On the other
hand, the poverty rate in Santa Clara County, the heart
of Silicon Valley, is around 19 % and an estimated 31 % of
jobs pay a $16 low per hour or less (Rotman, 2014). Many
reasons explain why inequalities are particularly high in this
part of the world. The immediate co-existence of extreme
wealth and poverty in the same place raises moral issues
and question the sustainability of the dynamics. Eventually,
the very notion of work will be challenged by the many
new business models that develop as part of the sharing
economy movement. Virtually anyone can act as a taxi
driver or a hotelkeeper. This challenge a great deal of our
most established conceptions of what a job is or what social
welfare systems should do9
.
8
See unlearning dynamics as discussed in the previous section
9
See subversive dynamics as described in the previous section

Institution: by institution in this report, we chiefly
mean established corporate organizations rather
than matters of practices and customs, although,
of course, organizations have their own practices
that affect the habits of the people with whom they
interact. The institutional disruption that FPC illustrate
relies on a process of destruction as much as on
creation and affects the classical economic way of
conceiving corporate life. Today’s European institutional
context reveals and creates its own obsolescence
(Schumpeterian approach) and raises increasing social
criticism (Political subversion).
Cognition: the movement needs parallel at the level of
the individual to find its best enactment: this means to
acknowledge failing attempts (Deconstruction) and to
question past experiences and beliefs (Unlearning). It
is important to discover how to use these endowments
for start-ups to interact with large corporations and
to trigger virtuous coopetition circles. This implies,
we suggest, to review the traditional understanding of
learning as a continuous process: lifelong learning often
means to dynamically develop expertise and to unlearn
skills and experiences we draw from.
The challenge for Europe is not so much to support creation.
There are many start-ups emerging every year. Based on the
number of company creation, one could even consider that
Europe creates too many start-ups. The most pressing issue
is to manage destruction.
First, for individuals: people ought to be encouraged to
learn new knowledge as much as to learn how to unlearn.
Expertise developed in any field is very likely to become
obsolete within the following 5, 10 or 15 years. At an
individual level, the challenge is to be able to unlearn
expertise and to learn new ways of thinking and doing. This
means viewing learning as much more than a cumulative
and purely incremental process. The ideas outlined in this
report have important implications for many European
educational systems and traditional corporate training, for it
means to critically review the approach to learning with the
goal to unlearn past expertise.10
10
Experiments with art practices offer innovative teaching methods. For an
institutional attempt to develop the practice see the Improbable workshop held by
the Chair of Entrepreneurship. Visit: http://improbable.strikingly.com/
11
For more details about the affordable loss principle, visit http://www.effectuation.
org/learn/principle/3
Second, for management: perfection and excellence
tend to be pursed both in educational systems and in
large corporations. In entrepreneurship the capacity to
experiment, test and deconstruct is critical. Deconstructive
stages should be valued rather than seen as unacceptable
risks and failures. Companies ought to incentivize such
failures and adhere to the idea of affordable loss much
more than to a profit maximization principle11
. We do not
encourage to define an expected profit. We suggest to
define acceptable loss rates at various development stages.
This is instrumental to any deconstruction process.
Third, for the economy: natural resistance of incumbents
and authorities towards new entrants is likely to limit
growth and the spread of innovation dynamics throughout
Europe. Some European start-ups have supported very
valuable projects, not dissimilar to the ones maintained
by fast growing firms in the world, but they actually failed
to continue in the face of heavy oppositions. Heetch is
one example among many. Large corporations too often
consider start-ups as a major risk for their operations. They
fail to consider the opportunity and the value that might
come from collaborating with them. Expertise is required
to improve interactions between the corporate and the FPC
worlds.
Fourth, for society: resistance is experienced beyond the
economic level. Societal and institutional resistances limit
the diffusion of new practices related to the ways in which
we live, educate, love, bond, work, eat or consider our
selves. Resistances are useful and relevant as they enable
a delay to integrate, change and adjust to the emerging
of disruptive solutions within societies. The acceleration
of disruptions presents a potentially high risk for social
cohesion: social inequalities, psychological disorders, racism
(Stiegler, 2016). New forms of collective regulations and
protections are needed to address these issues. Europe
developed solutions to adapt the 19th and 20th centuries.
Facing the industrial revolution and the terrible World Wars
1 and 2, we as Europeans have invented a new labor law
and the Welfare State. Changes of similar magnitude are
required in the 21st century to avoid a dramatic evolution
and to enable the fair sharing of the benefits of disruptive
dynamics.

1. In this survey, we do not refer to the specific concept of
disruptive innovation, defined by Clayton Christensen as a
process by which a product or service takes root in simple
applications at the bottom of a market before relentlessly
moving up market and eventually displacing more
established competitors (http://www.claytonchristensen.
com/key–concepts/)
2. https://hbr.org/2015/12/what–is–disruptive–innovation
3. https://hbr.org/1995/01/disruptive–technologies–
catching–the–wave
4. https://mitpress.mit.edu/books/disruption–dilemma
5. http://www.sup.org/books/title/?id=26534
6. http://www.plon.fr/ouvrage/oui–la–france–est–un–paradis–
pour–entrepreneurs/9782259248471
7. Baromètre de l’attractivité en France, EY, 2016
8. Etude Accompagner les Jeunes Entreprises de
Croissance, RAISE Fondation, 2015
9. Videos.lesechos.fr/lesechos/invite–des–echos/teddy–
pellerin–co–fondateur–de–heetch–nos–propositions–pour–
sortir–du–conflit–avec–les–taxis/lvx0z5#xtor=CS1–33
10. There are many well–known legal risks and practices
related to the use of class actions trials and the like that
against companies which could cost some startups and
more established corporations their existence.
11. Bureau, S. (2014) “Piracy as an avant–gardist deviance:
how do entrepreneurial pirates contribute to the
wealth or misery of nations?” International Journal of
Entrepreneurship & Small Business, Vol. 22, n°4, pp.
426–438.
12. Ferrary, M. (2003) “The Gift Exchange in the Social
Networks of Silicon Valley” California Management
Review, 45(4): 120–138; Bureau, S. (2014) “Essai sur
le don en gestion”, Le Libellio d’Aegis, Vol. 10, n°3,
automne, p. 5–20.
13. http://www.forbes.com/sites/drewhansen/2013/02/18/
whats–the–source–of–y–combinators–success/
14. Becker, G. 1993. A Theoretical and Empirical Analysis,
with Special Reference to Education. Chicago: The
University of Chicago Press.
15. ESCP Europe research data
16. The Global Competition for Talent: Mobility of the Highly
Skilled, OECD Report
17. Global VC Trends, EY, 2015
18. The State of European Tech, Atomico and Dow Jones
Ventures, 2015
19. French national and public job centre
20. Global VC Trends, EY, 2015
21. For instance, Axa with Idinvest Partners or Crédit
Agricole with OMNS Capital
22. To access the full survey on the French situation:
Milosevic, M. & Fendt, J. (2016) Venture Capital
Sourcing and Performance in France, Academy of
Management, Anaheim, USA, Aug. 5–9
23. To access the full survey on the USA: Dimov, D., &
Shepherd, D. (2005). Human capital theory and venture
capital firms: exploring “home runs” and “strike outs.”
Journal of Business Venturing, 20/1:1–21
24. Coleman, J. (1988) ‘Social Capital and the Creation
of Human Capital’, American Journal of Sociology 94:
S95–S120
25. Burt, R. S. 1982. Toward a Structural Theory of Action:
Network Models of Social Structure, Perception, and
Action; Quantitative Studies in Social Relations. New
York.
26. André, K., Bureau, S., Rubel, O. & Gautier, A. (2015)
“Beyond the Opposition between Altruism and
Self–Interest: Thethe Logic of Gift in Reward–Based
Crowdfunding”, EBEN, June 26–28, Istanbul, Turkey.
27. Statistics Compendium, EBAN, 2014
28. Global Entrepreneurialism Report, BNP Paribas, 2015
29. Laigle, R. (2016) Idéologie politique et entrepreneuriat,
Chaire Entrepreneuriat ESCP Europe, Working paper,
Paris.
30. Weiblen, T. & Chesbrough, W. (2015) Engaging with
Startups to Enhance Corporate Innovation, California
Management Review, Vol. 57, n°2, pp. 66–90 and (re)
Naissance, EY, 2015.
31. Benchmarking Corporate Venture Capital, CB Insight,
2015
32. Examples read: Company name (Date of acquisition;
Last rank known)
33. www.techcrunch.com/2016/06/05/vive–la–vive–la–vive
34. www.petitweb.fr/actualites/j–d–chamboredon–ce–nest–
pas–basant–tout–sur–les–entreprises–du–cac–40–quon–
creera–les–nouveaux–criteo–ou–blablacar/
35. To know more about the French context: http://www.
cae–eco.fr/IMG/pdf/cae–note033v2.pdf
36. www.generationlibre.eu/publications/israel–la–longue–
route–du–socialisme–au–liberalisme
37. https://www.gsb.stanford.edu/faculty–research/
books/strategy–destiny–how–strategy–making–shapes–
companys–future
38. http://www.dunod.com/entreprise–economie/
entreprise–et–management/strategie–et–politique–de–
lentreprise/ouvrages–professionnels/la–fabrique–d
References

39. http://sloanreview.mit.edu/article/transforming–
internal–governance–the–challenge–for–multinationals/
40. https://mitpress.mit.edu/books/disruption–dilemma EY’s
attractiveness survey Country 2016 Beyond Unicorns:
The Industrialization of Disruption A case for Europe 27
www.ey.com/attractiveness
41. In France, we can list the following examples: La
Chocolaterie at EDF, the WAI for BNP Paribas, the Daher
Lab, the Airbiz Lab for Airbus…
42. https://www.weforum.org/agenda/2015/01/what–is–
the–life–expectancy–of–your–company/
43. To know more about the case, read Ansari, Shaz and
Garud, Raghu and Kumaraswamy, Arun, The Disruptor’s
Dilemma: TiVo and the U.S. Television Ecosystem
(November 19, 2015). Strategic Management
Journal, 2015. Available at SSRN: http://ssrn.com/
abstract=2718606
44. For a list of examples, see: https://www.cbinsights.com/
blog/autonomous–driverless–vehicles–corporations–list/
45. To go deeper: Jarrodi, H. and Bureau, S. (2016) “Battle
Between Left and Right: Political Ideology and Its
Influence on Entrepreneurship– Qualitative Study From
The Sharing Economy“, Doriot, Best paper ward, May
19–20, Mons, Belgium
46. https://medium.com/the–ferenstein–wire/
silicon–valley–s–political–endgame–summarized–
1f395785f3c1#.jo5kgux5l
47. See Bailey, R. (2008). ‘Technology Is at the Center’.
Culture and Reviews, 1st May.
48. http://www.management–aims.com/fichiers/
publications/en_1430928730.pdf
49. http://www.gnu.org/gnu/manifesto.en.html
50. See deconstruction dynamics as detailed in the previous
section
51. The Importance of Young Firms for Economic Growth,
Kauffman Foundation, updated 2015
52. http://econweb.umd.edu/~haltiwan/JEP_DHJM.pdf
53. http://econweb.umd.edu/~haltiwan/JEP_DHJM.pdf (see
pages 9 and 10)
54. La performance économique et sociale des startups
numériques en France, Baromètre EY France Digitale,
2015
55. See unlearning dynamics as discussed in the previous
section
56. http://www.oxfordmartin.ox.ac.uk/research/
programmes/future–tech/
57. www.medium.com/basic–income/deep–learning–is–
going–to–teach–us–all–the–lesson–of–our–lives–jobs–are–
for–machines–7c6442e37a49#.emu66dyg9
58. www.fortune.com/2016/05/12/robot–lawyer/
59. http://faculty.haas.berkeley.edu/manso/ee.pdf
60. http://www.sciencedirect.com/science/article/
pii/0014292115001865?np=y
61. http://www.scaleupreport.org/scaleup–report.pdf
62. https://www.technologyreview.com/s/531726/
technology–and–inequality/
63. See subversive dynamics as described in the previous
section
64. There are experiments with art practices which enable
such a phenomenon, as does the workshop Improbable
developed by the Chair of Entrepreneurship, ESCP
Europe. For more details, see http://improbable.
strikingly.com/.
65. To know more about this principle, see http://www.
effectuation.org/learn/principle/3
66. See the last book of Bernard Stiegler, Dans la disruption,
comment ne pas devenir fou ? Les liens qui libèrent,
2016.

The authors would like to thank all contributors to the survey, the participants and the experts, for their precious comments
and invaluable insights. Particular thanks go to: Stéphane MacMillan, Muriel Touaty, Alexis Fogel, Peter Bos, Carlos Diaz,
Pierre-Henri Deballon, Miguel de Fontenay, Luc Delambre, Paul Jeannest, Romain Lavault, Marc Fournier, Catherine
Laffineur, Martin Kupp, René Mauer, Miona Milosevic, David Checkroun, Hadrien Bureau, Vladyslav Potapchuk, Louis-David
Benyayer.
The comments from the last reviewers played a decisive and major role in the improvement of the study. The authors are
especially grateful for the research assistance of Jean-Charles Buttolo and Ugo di Mascio. The editing and publishing of the
report benefited from the leadership of Grégoire Petit.
Ab out the C haire Entrepreneurariat ES C P Europe or C hairEEEE
The Chair was inaugurated in February 2007 by former French Prime Minister Jean-Pierre Raffarin, ESCP Europe alumni
(class of 1972), and was cofounded by ESCP Europe and EY. It forms a singular community of Europeans dedicated to the
training and the supporting of entrepreneurs that develop innovative projects in contexts of uncertainty and resources
constraints. Since 2013, the ChairEEEE has benefited from the support of its new partner BNP Paribas. The Chair is
promoting innovative and experiential teaching approaches with Blue Factory, a business incubation program. Through its
activities the Chair has developed unique ties with local entrepreneurial ecosystems and earned a solid academic reputation.
Some 1,000 students yearly including freshmen, government officials, managers, engineers and researchers are receiving
training in entrepreneurship. In addition, the Chair is supporting 150 projects of entrepreneurs and intrapreneurs that
range from sharing economy startups to Airbus space division’s ventures. The ChairEEEE helps stimulating a community of
several thousands of members through about 50 events per year such as the EntreprneurSHIP Festival that takes place in
Paris, London, Berlin, Turin and Madrid. To support its mission, the Chair develops research and development activities that
result put scientific and managerial publications. Numerous studies have been conducted jointly by ESCP Europe and EY,
including the seminal research on intermediate sized companies “Comment Grandir en Europe : Hasard ou état d’esprit ?”
Please visit and follow us online: www.chaireeee.eu
The phenomenon considered is multi-faced and of great complexity: It concerns the individual as much as it affects
societies. A holistic and multidimensional approach is developed in this study in order to fully grasp and to understand
the industrialization of contemporary disruption. The results presented derive from an analysis that borrows from many
domains (financial, social, legal, political) and draws on a plurality of empirical sources and research techniques: qualitative
and quantitative methods were used to study the object’s manifestations at the micro-organizational and the macro-
institutional levels. We adopt a European focus and develop an international perspective.
Data outlined in the report were primarily collected using the following methods:
1. 23 Interviews with informants acting as entrepreneurs, investors, mentors and/or researchers
2. Content analysis applied to open access online information and proprietary databases
3. Benchmark analysis of surveys and reports relating to entrepreneurship and disruption
4. Selective literature review of scientific publications
The propositions developed in this study were tested with 10 experts of the European entrepreneurial ecosystem. After
a careful review of the propositions’ relevance in both relative and absolute terms, the report was written to explicit the
implications for regulators, entrepreneurs and large corporations. The first draft of the full manuscript was submitted for a
second round of review by a set of three new experts. The resulting version of the manuscript formed the basis for the final
form of the report. The reviewing process is central to cover a wide scope of empirical fields, academic disciplines, practical
and research issues and to increase the quality of the analysis.
Study design and method
Acknowledgements

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All Rights Reserved.
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This material has been prepared for general informational purposes only and is not intended to be
relied upon as accounting, tax, or other professional advice. Please refer to your advisors for
specific advice.
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