There’s a buzz about startups in Switzerland at the moment. In recent months BestMile and Flyability – both spin-offs from the Swiss Federal Institute of Technology in Lausanne (EPFL) – have made global headlines with driverless buses and collision-tolerant drones respectively, while in January the federal government announced Switzerland Innovation, an initiative to create five new technology parks designed as startup incubators.
Meanwhile at January’s World Economic Forum in Davos, St Gallen-based entrepreneurship trainer Dr Peter Vogel waxed lyrical about the country’s suitability for starting a business.
In an interview with TechCrunch he praised the innovation that stems from “a lot of human capital present in a very highly condensed space”.
“It’s the knowledge, the talent, the great educational institutions. It’s a country of great innovation, great r&d,” he said, making it a “trigger” for entrepreneurial activity.
So is it time we all packed in our jobs to start a business? Anyone doing so would be bang on trend.
“When I started in 1988 there wasn’t the same startup spirit that exists today,” Swiss business consultant and coach Martin Gysler tells The Local.
“I became an entrepreneur and I was something unusual. But today becoming an entrepreneur is almost something normal. It’s almost something that society pushes us to do.
“But I don’t think it’s become simpler or more complicated than back then, it’s the vision that people have that’s changed. It’s sexy to be a young startup.”
And luckily for startups, it’s also sexy to offer support to those taking the entrepreneurial leap.
“Startup support has become a hype industry in Switzerland,” says Erich Bucher, President of the StartUp Academy in Basel, a non-profit organization that supports budding entrepreneurs at the beginning of their journey with mentoring and expert advice from industry volunteers.
“Everybody wants to jump on the bandwagon. It’s good to say on your CV that you are supporting startups.”
The StartUp Academy is just one of a huge number of resources here aimed at helping entrepreneurs launch their business, from coaching and training initiatives to business plan competitions and acceleration programmes.
Another such resource is the Startup Weekend, a global initiative whose next Swiss edition – held in Biel/Bienne on March 18th-20th – will bring entrepreneurs together to discuss ideas, receive coaching, build a business case and even present startup concepts to potential investors.
“In 54 hours we do the work that certain startups do in months,” says Gysler, who is a mentor at the event.
Then there’s Venture, an annual Swiss startup competition for entrepreneurs which helps them develop their business ideas, with cash prizes on offer to the winners. This year’s edition begins in Lausanne on February 9th.
“There is a joke in Switzerland that there are more coaches and trainers than entrepreneurs!” says Sébastien Flury, himself an entrepreneur who is highly active in the startup scene and runs the blog startupolic.com
For him, where Switzerland falls down is – somewhat ironically – funding. Even in such a cash-rich country investment can be hard to secure, particularly for startups that are not spin-offs from Switzerland’s universities and world-leading technology institutes such as EPFL and sister school ETH Zurich.
“There is so much money in Switzerland but so little flowing into startups; that’s the contradiction of Switzerland,” he tells The Local.
“There are research grants and all these business plan competitions. But if you are not a spin-off or with high technology and patents and so on you have almost no chance,” he says.
Speaking about Venture, in which he participated with his own startup in 2014, Flury says: “There is money there, but of the ten winners who got money, nine or ten were spin-offs from EPFL, ETH, universities and so on.”
Gysler agrees. “The startup world in Switzerland is mostly dedicated towards the hautes écoles,” he tells The Local.
“They have a lot of money to invest, and there is also a lot of money that goes into projects by companies that are already rich.”
This “obviously takes money away from little startups which are obliged to bootstrap to see their project advance.”
That’s a shame, because an asset of Switzerland’s potential entrepreneurs is the quality of their skillset.
Echoing Vogel’s comments about the strength of “human capital” here Flury says: “What we have here in Switzerland is the ability to make great products. The software skills, technical skills are maybe more expensive but better in comparison to around Europe.”
Despite the coaching support for this talent, statistics show just how difficult it is to make a success of a startup.
According to StartUp Academy President Bucher, one third of entrepreneurs fail to get their company off the ground, one third succeed and one third remain in a state of limbo.
Gysler, meanwhile, quotes a globally recognised statistic which may strike fear into the heart of any budding entrepreneur.
“It’s said that out of 100 businesses there’s one that has big success, there are nine which have some success and the rest, 90 percent, are companies who have totally failed or only just survive. It’s the same in Switzerland.”