Swiss start-ups’ secret weapon: schools for entrepreneurs

As a patent lawyer for Fish & Richardson in Silicon Valley, Richard A. Horning has enough local start-up clients not to need to scout the world in search of new ones. Despite this, he has convinced his firm to allocate $5,000 to fund a new prize for would-be entrepreneurs at the Swiss engineering school EPFL in Lausanne.

As Vittorio Mischi, a Management Finance teacher at EPFL puts it, that is because “[Horning] has been seduced by entrepreneurship teaching that brings together the young founders of 10 start-ups with 24 established professionals. The professionals help set up the companies and eventually jump on board at the end of the programme, leaving their former management, financial or marketing positions.”

This is only one of the numerous initiatives taken recently by Swiss foundations, universities and local authorities in a bid to grow a new class of high tech entrepreneurs. Their success is shown by Switzerland’s elevation to first position in the European Commission’s Innovation Scoreboard, and taking the first place - with 14 laureates in Europe’s 100 leading start-ups - as selected by the technology magazine, Red Herring.

As it happens, two thirds of the entrepreneurs picked by Red Herring attended Venturelab, a private entrepreneurship scheme set up in 2004 by the national Swiss Technology and Innovation Commission (CTI) to teach 100 entrepreneurs per year and promote start-ups as a career as career option amongst students.

Swiss universities, engineering schools like EPFL, and ETHZ in Zurich, and technical schools, are huge providers of technology, and large Swiss companies such as Logitech have their roots in these institutions. But for years Switzerland failed to generate a start-up culture.

This has been changing since the emergence of a buoyant local venture capital community, led by luminaries such as former Roche chief financial officer Henri Meier, or foreign firms, such as Index Ventures. As a result the country is not short of venture funding. Even in the current economic environment, three biotech start-ups, AC Immune, Synosia and NovImmune have secured worth over CHF 130 million (€85.8 million) since the beginning of the year.

“What we were lacking”, explains Jordi Montserrat, leader of Venturelab, which is based in French speaking Switzerland, “was a culture of people willing to take risks.”

That is changing. Since 1998, 130 ETHZ start-up companies have attracted CHF 170 million (€112 million) in funding and gone on to generate an annual consolidated turnover of more than CHF 250 million (€165 million).

EPFL can boast similar results. Once the research centre for watch makers, the Centre Suisse d’Electronique et de Microtechnique (CSEM) in Neuchatel has, in recent times, spun out 26 companies. According to Martin Bopp, head of the start-up programme at CTI, “Switzerland is now giving birth to about 150 start-ups annually.” With a newly established programme called Venturekick, which grants CHF 2 million (€1.2 million) annually as seed money for early stage companies, the country aims to double this number.

According to Jordi Montserra, the chances of achieving this have been boosted by the success of entrepreneurship education in Switzerland. Venturelab is now so popular, it is accepting only one would-be entrepreneur for every four candidates. Between its various programmes, such as one day networking workshops called VentureIdeas, five day crash courses called VenturePlan, or six month classes called VentureChallenge, more than 10,000 students have been through its doors since its beginning in 2004.

Every year, it sends 20 of its most promising entrepreneurs for 10 days training at Babson College in Boston. There, Swissnex, the two Swiss scientific consulates created in San Francisco and Boston in 2000, are introducing the entrepreneurs to networks of US business angels and VCs.

Some of these ‘made not born’ entrepreneurs, such as Ralf Rimer of Secu4, or Carlo Centonze from Heiq Materials, have achieved international recognition, and their innovations are making it to market. Venturelab’s alumni have won 80 per cent of the prizes granted by the 15 business plans competitions held annually in Switzerland. Various wealthy foundations are distributing seed money prizes to the tune of CHF 5 million (€3.3 million) each year.

“Entrepreneurship is not in the genes,” says Montserrat, “it can be taught.” Most of Venturelab’s teachers are high-tech entrepreneurs themselves, meaning the emphasis is on execution. “Start-ups have by nature a small number of employees. The only thing people can take confidence in is the entrepreneurial dynamic. That is execution, be it in prototyping, financing or networking.”

Montserrat and his team need to maintain their success. Venturelab’s entrepreneurship classes are put out for tender every four years to private education firms. And Swiss business schools that have long concentrated on educating managers for large corporations are now starting to teach entrepreneurship. They may compete with Venturelab when its current contract expires in 2011.