Xavier Niel - Today’s new economy, is tomorrow’s old economy!
Xavier Niel, Deputy Chairman, CSO, founder and majority shareholder of the Iliad group, the parent company of French telecoms company Free, is also the majority shareholder of the Le Monde group and Nouvel Observateur. Following the opening of Ecole 42 four years ago, he is getting ready to inaugurate “Station F”, a vast 34,000 m2 campus whose purpose is to accommodate a thousand start-ups in the middle of Paris.
As well as your telecommunications activities, you have invested in the media and created a new IT School called Ecole 42. Why?
In 30 years, I’ve enjoyed a highly-profitable career in the telecoms sector, and I don’t think that leaving all of this money to my four children is the best present I could give them! I therefore wanted to become involved in projects close to my heart. What I’ve noticed is that whilst politicians do a great job, they’re not necessarily able to change our country. It is therefore up to civil society to grab the bull by the horns. The first area I decided to become involved with was the press, by acquiring the Le Monde group in 20101. The group is now profitable again, enabling it to spend 190 million euros on new head offices. The second area was youth training. Coming from a fairly modest background myself, I wanted to create a different kind of IT school, free and open to those who hadn’t graduated from high school. Today, Ecole 42 has 3,000 students in France and 1,000 in the United States. It has been a resounding success! Its selection method allows us to find talented young people in places nobody else is looking! We intend to go even further by providing these young people with affordable housing. Moreover, with Societe Generale we are guaranteeing student loans of €15,000. When they leave Ecole 42, these students can find a job paying €42,000 a year – remember that 40% of them left school with no qualifications!
You are shortly going to inaugurate “Station F”, a vast 34,000 m2 campus in Paris entirely devoted to start-ups. Why?
The best way to avoid unemployment is to create your own business. France is a wonderful country in this respect, as it provides substantial support to those creating businesses. For example, you can continue receiving unemployment benefit while you’re setting up your company, and specific financing is available from Bpifrance to help start-ups. However, there was, thus far a lack of leverage to help young people from less privileged backgrounds become entrepreneurs. Station F will be the emblematic place to provide them with the means and desire to do just that. We have bought the former Halle Freyssinet, 3.5 hectares on the left bank of Paris, to create an “entrepreneurs campus” that will accommodate a thousand start-ups. We have designed it to be a modern and trendy place, the world’s largest start-up campus, by joining forces with partners such as HEC, Vente-privée.com, Facebook, etc. Our endgame is not to make a profit, but simply to amortise the costs.
Do you feel France is a welcoming country for developing new businesses?
The word “entrepreneur”, used around the world, is a French word, and that’s no coincidence! We have, in our DNA, this ability and eagerness to undertake, to be entrepreneurial, even after years of sluggish economic growth… The second advantage is that young people receive very good training in scientific subjects. Advantage number three is that our talent costs less in France than it does in the United States, despite our high social charges. Fourth advantage: our quality of life!
Lastly, even though it isn’t to everyone’s liking, France provides numerous tax incentives for entrepreneurs. After 8 years in existence, a business creator will pay around 23% in capital gains tax, whilst across the Atlantic they’d have to pay twice that, and when they pass on their company they only have to pay 6% in inheritance duty.
In what way is this new economy decisive for our economy?
Today’s new economy is tomorrow’s old economy. If you fail to modernise a country’s economy, that country will no longer exist. Our CAC 40 companies – which are long-established companies – were once start-ups too, born of amazing entrepreneurial adventures. In order for us now to be capable of creating businesses ourselves that will still be around in a hundred years, we absolutely need this breeding ground of business creators.
Long-established companies seem to be finding it hard to take the digital transition onboard. What do you think?
It’s very difficult for those companies, because the way they operate doesn’t allow them to ‘disrupt’ their activity. From a purely capitalistic standpoint, I think it is healthy to have companies being created as others disappear – although I’m not saying I would like to see any CAC 40 company disappear! In the past, creating a business required massive investment, often with family resources, making it impossible for newcomers to get going. Today, the world’s largest companies in terms of market cap are mostly tech companies created by just one or two people and with little or no initial equity2.
Your career has been a successful one, so today what drives you on; where do you get the adrenaline from?
I wake up every morning happy and eager to get to work and be entrepreneurial; there’s a lot of adrenaline in what I do…
1 Le Monde libre (Xavier Niel, Pierre Bergé, Matthieu Pigasse) has a 64% stake in the Le Monde group. In 2014, Le Monde Libre took a 65% stake in Nouvel Observateur.
2 According to PWC-Bloomberg’s 2016 rankings, of the 10 highest-valued companies, five are tech giants: Apple, Alphabet (ex-Google), Microsoft, Facebook and Amazon.