“Europe doesn’t need a culture of failure, we need a culture of success”
Yesterday, 5 European VC’s took the stage in Brussels to talk about venture capital in Europe. The organisers (Louvain Management School Alumni and the INSEAD Private Equity Network) had assembled an impressive panel, with Richard Pelly of the European Investment Fund, Tony Zappalà from Index Ventures, Alex Brabers from GIMV, Jos Peeters from Capricorn and Maurice Olivier from Nausicaa Partners.
There were a number of interesting points made, but one of the most heartfelt discussions was about the so called “culture of failure”.
Culture of failcons
There is a certain sentiment in Europe lately that what we lack here in Europe is the ability to fail. We’re too risk averse, we don’t want to fail, we don’t encourage failing and most importantly: there’s too much of a stigma attached to failing (and bankruptcy) in Europe.
So in the end we in Europe choose a reasonabely safe middle management job instead of going out on our own to become an entrepreneur. Whereas in Silicon Valley, failure is part of the process. You fall, you pick yourself up again, and you and everyone around you believes that next time, you might hit it big.
It’s the sentiment underpinning most of the “failcon” conferences that are popular in Europe at the moment (Paris in september, Ghent in october, yesterday Berlin). So naturally, when the VC’s were discussing the culture of entrepreneurship in Europe, the question came from the audience whether they thought we lacked a culture of failure.
Tony Zappalà (Index Ventures) thought that this culture is now changing, but agreed that in part this is what’s holding us back in Europe. He said “the perceived cost of failure is too high”. He also highlighted that Index Ventures is taking initiatives to help wantrepreneurs cross the treshold, by initiatives like Seedcamp (cofounded by Index Ventures), and the Silicon Milk Roundabout, an initiative aimed at students, to convince them that entrepreneurship is a viable option.
Jos Peeters of Capricorn Ventures thought it was probably true that Americans are more entrepreneurial than Europeans. But on the other hand, he said, he had never been short of investment opportunities. “There has never been a lack of entrepreneurs. It’s always been a lack of money. Over the last six years, we received 2000 proposals. We made 16 investments. It’s not that those 1984 other projects weren’t good. It’s that we couldn’t fund them.”
“But the biggest problem in Europe as I see it – it’s bad when you fail, but it’s even worse when you succeed.” There was some laughter in the room here. “We have no culture of applauding success.”
“In Europe, we need a culture of success”
“One of our entrepreneurs, Urbain Vandeurzen, just sold his company LMS to Siemens. He will personally take home north of 400 million euros. The reaction in the public opinion here in the country has been: let’s install a capital gains tax and it shouldn’t be allowed to sell your company to a non-Belgian company.”
“This is a visible story of a successful group that has grown over 32 years, a spin off from the university of Leuven that now employes 1200 people worldwide. It was sold for more than 600 million euros to Siemens. And we can’t seem to celebrate that success.”
“You should be allowed to show success. We hide it, in Europe. So I would say that it’s not that we lack a culture of failure – we need a culture of success more.”
Do you agree? Disagree? Let us know!
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