Innovators get a leg up in the business world

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For more than a decade, young Swiss entrepreneurs have benefited from training aimed at helping them get off on the right foot in the business world. With appropriate coaching, they can reach the market faster and avoid costly mistakes.

A pellet of dough in the top of the machine, press a button, and hey presto, a fresh, warm tortilla comes out the other side. If the founder of a Swiss start-up has his way, his innovation could be coming to a kitchen near you.

Carlo Ruiz is also one of 20 young entrepreneurs taking part this week in the Venture Leaders course in Boston. The aim is to provide them with tuition and business contacts in the United States.

“I expect to learn more about partnerships and about entrepreneurship on the East Coast,” Ruiz told swissinfo.ch. He also wants to network with what he calls the “right people” to test the market for his product and look towards raising funds.

The so-called Swiss national start-up team travelling to the US includes people who want to develop cheap prostheses for the developing world, cancer drugs or help farmers save money on their purchases through an online network.

Venture Leaders is organised by venturelab, which coaches young entrepreneurs in the technological industry and services. The setup, which is part of the Federal Commission for Technology and Innovation (CTI) start-up training programme, is designed to take ideas into the commercial realm according to Jordi Monserrat, head of venturelab in western Switzerland.

“People also need to learn how to sell themselves and their innovations at an early stage, even when they are not completely finished so they can adapt to the market,” he told swissinfo.ch. “We also help them realise that being an entrepreneur is a valid career option.”

Monserrat says potential entrepreneurs need to be drilled to understand the necessity of delivering in a timely manner, i.e. fast. They also have to learn to take risks as well as think big and international.

“The country only has eight million inhabitants, so the market is limited de facto,” he added. “Even so companies keep strong ties with Switzerland either for personal reasons or because of their links to the academic world.

Listening

Arnaud Bertrand, co-founder of a holiday rental website, is one of the more successful Venture Leaders alumni. With $60 million (CHF million) in funding under his belt so far, he has expanded from his Lausanne base to London and Portugal.

Also a recipient of venture kick seed funding – provided by a pool of private foundations and a pharmaceutical group – Bertrand says the coaching he received helped him focus his business plan far more than if left to his own devices.

“We decided to do less than we initially expected and it turned out for the best,” he pointed out. “If we had tried to do everything we planned to, it would have been a mistake because we wouldn’t have had the resources necessary to do it all.”

Fabrice Moscheni, an alumni of NETS, the ancestor of the Venture Leaders, says training can play an important role.

“Courses are there to remind people what is important when you are creating a company,” he told swissinfo.ch. “It helps optimise the decision process.”

Bertrand says that without the coaching it would have taken longer to figure out what wasn’t going to work. However, it doesn’t necessarily replace real-life experience.

“There are some situations where it would have been useful to know how to avoid them,” he added. “On the other hand, an entrepreneur is someone who doesn’t hear what others have to say because if he listened, he wouldn’t get into that business.”

Moscheni reckons though that learning from other people’s experiences is important, and occasionally lacking in most courses.

“We only present successes, when in fact there is more to learn from people’s failures,” he said. “You need to know what mistakes to avoid.”

Venture Leaders

Venture Leaders is also one the programmes offered to young, established or potential, entrepreneurs in Switzerland and organised by venturelab, part of the St Gallen-based company IFJ Institute for Young Entrepreneurs.

More than 100 startups apply annually to participate in this programme. Forty  are invited to pitch in front of a jury of experts, with the top 20 selected to join the Swiss national startup team.

During the ten-day business development trip to Boston that follows, organised for the past decade with the support of Swissnex Boston, members get to present their project to investors and industry experts. They also meet many US startup founders to share their experiences.

The cost, covered by sponsors, is around CHF10,000 per participant.

Funding issues

Settling on the right funding model for such training programmes remains an evolving process however.

venturelab itself relies on a mixture of private and public funding for its activities. With the financial backing of the CTI, a government body, it organises two types of courses at universities, aimed at encouraging awareness about entrepreneurship and helping students develop business ideas.

Business creation and development courses were recently taken away from venturelab and handed to regional consortiums though, a move the CTI said was to replace a top-down with a bottom-up approach.

As a result, the Venture Leaders programme lost much of its funding. Monserrat says that private backers made up the shortfall, ensuring that it went ahead this year.

There is a need to fund the development of ideas, the private Gebert-Rüf Foundation reiterated.

“There is a funding shortfall that is neither covered by taxpayers nor by private investors,” the foundation’s deputy director Pascale Vonmont told swissinfo.ch.

The foundation itelf started out by financing the NETS programme back in 2000 and chose not to continue with its successor when venturelab took over. It did however switch its focus to the venture kick initiative in looking to connect scientists and entrepreneurs.

The latter was a way for foundations and other private money to get involved, she noted.

Whether training and seed funding will help create the major firms of tomorrow remains an open question. venturelab claims to have helped hundreds of companies set up, creating what it calls a critical mass for successful firms to emerge, although when is unclear.

“The big Swiss names like Nestlé have been around for a long time,” said Monserrat. “You can’t tell after just a few years if a company is truly successful.”

Venture kick

Since September 2007, venture kick has provided spin-off projects at Swiss universities with pre-seed capital, coaching and access to professional investors. Members from a jury pool evaluate projects on a regular basis.

Since its inception, more than 250 startup projects have been given financial support with over CHF9.4 million in pre-seed capital (up to CHF130,000 per venture kick recipient), attracting some CHF365 million in finance.

In 2012, 218 projects applied to the venture kick programme, around 20 per month. Nearly half of the supported projects originate from the Federal Institutes of Technology of Zurich and Lausanne. The remaining projects are distributed among 20 different universities.

Funding is provided by five private foundations and a Lausanne-based pharmaceutical group.