French startup founders mostly educated young males

10 May 2016 Consultancy.uk

Startup founders in France are predominantly male, master's degree holders and between the age 25-34, a new study finds. Founders in the country are predominantly motivated by the challenge, changing the rules of the game and independence. While many are operating in markets that are growing quickly, and in which innovations are effective, many startup founders lack access to key business and technical skills for success.

Roland Berger recently performed two studies into the French startup ecosystem: one study focuses on the wider environment in which new enterprises operate, and another on their demographic makeup. The two surveys involved 308 startups applying for NUMA’s business accelerator programme. The aim of the research is to better understand the startup scene in France, thereby providing information from which other entrepreneurs can learn, along with investors, policymakers and sponsors.

Motivation for starting up your own business

Motivation
The research found respondents have a wide range of different motivations for beginning a new enterprise. Top of the list is the challenge, cited by close to 72% of respondents, followed by wanting to change the rules of the game, at 55.6% of respondents. Lastly, independence from the man is cited by 40.4% of respondents as a reason to be their own business person, while 38% said they wanted to create a job for themselves. The factors that were the least motivating, in relation to the survey, were wanting to be famous, at 3.2%, and wanting to make more money, cited by almost 20%. Nicolas Teisseyre, Partner at Roland Berger's Paris office, remarks "In our interviews with respondents we often heard them express the view that being in the position of an employee felt restricting and they could not imagine being able to realise their projects and ideas in that role.”

Demographics
The research explored a number of demographic features of the startup scene in France. Finding, for instance, that the vast majority of respondents (81%) to the survey were male, while the proportion of young adults, those between 25 and 34, stood at almost 60%.

The high level of disparity, between male and female founders, on the startup scene suggests that considerable barriers exists for women. A number of explanations have been put forward as to why women are poorly represented, including a gender-based account of what it is to go into business on one’s own, self-censorship, and the under-representation of women in some industries; the women interviewed for the survey highlighted that an additional barrier is that they are taken less seriously by potential investors. "Women are still not taken seriously much of the time, even in young and open-minded entrepreneur circles," says Philipp Leutiger, Partner and start-up expert from Roland Berger. "That is a shame, because if the French start-up culture is to continue to build momentum, it'll be important to bring more diversity into the ideas and concepts – and especially more diversity into the group of entrepreneurs itself.”

Educational background startup founders

The research also explored the educational background of entrepreneurs in France. Considerable differences, based on age, were found; although a high level of educational attainment was common among respondents of all age groups. In the age categories between 20 and 34, a significant cohort of startup founders had a business school background, at around 32% and 28% respectively. For those aged 30 to 39, the Master’s degree was the most common educational background, at around 37% and 39% respectively. Those with engineering school backgrounds were featured the most in the 30 to 34 age category, at 30.3%, while PhDs, also represented by the largest number in the age category, stood at 3.4%.

Market dynamics
The research also explored the kinds of markets that startup owners are targeting with their new propositions. Top of the list is lifestyle and leisure, at 12.2%, followed by art and design, at 11.8%. Consumer goods comes in at 8.4% of respondents, while media and entertainment is represented by 7.1% of respondents. The areas that see the fewest new entries are security, at 1.4%, and financial services, at 1.7%.

According to the research the reason for new enterprises in the respective new markets are growth opportunities, as cited by 50% of respondents, followed by there being a need that the market wasn’t currently meeting, as cited by 36%. Other reasons for entering markets including innovative offerings for respective market problems, at 36%, as well as the sheer size of the market providing enough room for additional players.

Supporting endeavours
The research also explored what the French startups felt is missing within the market for them to thrive. Top of the list are networking opportunities, cited by 74%, followed by office space, as cited by 61% of respondents. Support for their expansion into international markets was cited by 53% as a need, while 50% would benefit from weekly project support. Only 20% have an advisor with whom to discuss matters of strategy. And just 18% accept advice and help from their networks outside the company "And yet support in setting a business on the right strategic path is so very important in the initial phase," says Teisseyre. "Even though many start-up entrepreneurs have good ideas and a solid background, only 30% make it through the first year. They mostly lack the financial staying power.”

The research found that mentors may provide a range of expertise that is, surprisingly maybe, sometimes missing from the operation. According to the report, “When asked what type of mentor they would need to advise them, 33% of startup founders said they would opt for a market expert, with another 29% choosing a technical expert. At first sight, these responses might seem contradictory, given that most startup founders choose to go into business in what they perceive to be growing markets. In reality, however, young entrepreneurs at the helm of newly created startups have identified – often through a very innovative approach to a market – opportunities in markets in which they lack specialist knowledge, hence the need for expertise.”

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