An in-depth discussion with Logitech founder Daniel Borel and EPFL president Martin Vetterli.
Practice meets theory: Logitech founder Daniel Borel and Martin Vetterli, president of the École polytechnique fédérale de Lausanne (EPFL), talk about entrepreneurship in Switzerland, the founder gene, and the changes Alfred Escher would probably want to make in Switzerland today.
Mr. Vetterli, Mr. Borel, you rank among the major players in the world of Swiss entrepreneurship …
… Well, he does! MARTIN VETTERLI ( MV)
What are you DANIEL BOREL ( DB) talking about, you’re still active! I’m just a retiree who lives in Silicon Valley and has a certain interest in technology and entrepreneurship.
Well, after all, Mr. Borel, your name is on the building where we’re sitting – not the smallest on the EPFL campus. (laughing) They did that behind my DB back.
“Daniel Borel Innovation Center” – MV that sounds very good to me.
… Here’s what we really wanted to ask you: People often talk about the “founder gene.” Is there such a thing? A new Credit Suisse study* says “yes” – do you agree?
Definitely. It’s the same as in art. MV People can take courses and try really hard. But in the end, there are outstanding painters or dancers – and then there are the rest of us. It’s like that for entrepreneurs as well.
Mr. Vetterli, before you became president of the EPFL, you were involved in a successful startup. But you gave up your career as an entrepreneur. Why? Do you lack this gene?
“Even now, we find it difficult to develop a discovery into a business model”
My father was an entrepreneur, so my MV DNA surely contains some of that trait. At some point you recognize where you can have the greatest impact. I believe that for me, this is in academia, not in a startup. But I feel a strong connection to entrepreneurship. Many of my students have chosen this path, and I strongly support them and pay close attention to what they do. But for myself? No, thank you.
Mr. Borel, what was it like for you? Was your path always clearly marked?
No. I believe that everyone looks for DB something in life that sparks their passion. When I was 27, thanks to a grant from the Swiss National Science Foundation, I went to the United States, where I met many people who were excited about computer science. It was in the late 1970s, and the IT revolution was taking off. I plunged into an environment that wanted to reinvent the future. It would have been hard not to become passionate about it. But if I had stayed in Switzerland, things might have turned out quite differently.
Does entrepreneurship run in your MV family?
My paternal grandfather, who brought DB me up, built two factories and filed 70 patents. My maternal grandfather was Parisian and a director at Saint-gobain, a large corporation.
Aside from the founder gene, what else does it take to become an entrepreneur?
Building a startup is not an individual MV sport; it has to be a team effort. In successful young companies, I often observe this magical combination: The brilliant engineer solves every problem, is super creative and has an IQ of 180 – but he or she lacks the flair for marketing, communication and corporate develop- ment. Then there is a business person who knows that you don’t need to solve every problem to the last decimal point; first, you must find a market. I just read the story of Elon Musk and Peter Thiel at Paypal, where it was also this complementarity that led to success.
It was the same for Bill Gates and DB Paul Allen at Microsoft, or for Steve Jobs, first with Steve Wozniak and later with John Sculley – who gets far too little attention, although he was the crucial business guy at Apple. The life of a company founder is hard; there are many setbacks, a lot of frustration. If you’re also all on your own, the project turns into mission impossible.
If you meet a young person who wants to become an entrepreneur, can you size up the likelihood of success right away?
In my opinion, the most important DB exclusion criterion is immediately obvious: Is the person arrogant? If so, there is no chance of success. The same goes for someone whose head is in the clouds. Then there are people who just like the idea of founding a startup – but in practice, they are fairly clueless. And worst of all are the ones who simply want to get rich.
Why is money a poor motivator?
It has to be only an outcome of DB success, not the driver – otherwise, the company will never survive a relatively long dry spell. After Facebook went public, suddenly there were a handful of billionaires in the company. What did they do the next day? They went to the office as usual. Look at Mark Zuckerberg, Steve Jobs or Tim Cook: What really motivates them is the effort to reach the next stage in inventing the future. It is far more about influence or even about power than about money.
Alfred Escher was one of Switzerland’s greatest entrepreneurs. Next year is the 200th anniversary of his birth. What makes him so important for Switzerland?
Escher accomplished three incredible MV things, each one alone would have been enough to earn him a statue in front of the main railway station in Zurich. He made crucial improvements to Switzerland’s infrastructure by championing the construction of railroads and the Gotthard Tunnel. He introduced risk capital to Switzerland by founding the Schweizerische Kreditanstalt [editor’s note: now Credit Suisse] to finance the new infrastructure. Railroads were something like the startups of that time. And then came the true stroke of genius. He said that we needed a new training facility for the emerging issues: science and technology. He founded the Federal Institute of Technology (Eidgenössische Technische Hochschule, ETH) in Zurich.
When you look at Switzerland now – what would Escher probably do?
He would step up support for the DB technical universities. When you as a society invest in the training of engineers, you can’t go wrong. Too many engineers? There’s no such thing.
In the ambitious 19th century, there MV was a real danger that Switzerland would fall behind and remain stuck in agriculture. This scenario is a threat again now. We are about to miss the boat for the key technologies of the 21st century. Perhaps Escher would found an entirely new institute of technology focused on the promising technologies and business models, or at least completely transform the ETH and the EPFL.
Are you talking about information technology?
Martin Vetterli: Building a startup is not an individual sport; it has to be a team effort.
We call it information technology, and MV that says it all! In the US, this field is called computer science – which has a totally different status. In Stanford and Berkeley, where I studied and worked, the most sought-after fields are electrical engineering and computer science. That’s where you find the most students, the toughest selection process and the most money. In our academic environment, by contrast, people tend to turn up their noses at students and professors in these fields. Daniel is a physicist – I would never say anything against them. But computer science is now the most relevant field in the 21st century.
Most of the companies in the Swiss Market Index (SMI) are more than 100 years old. Is that a danger, or perhaps even an opportunity?
The industrial landscape in Switzerland DB is in urgent need of renewal. Look at how fast the world is turning today. The GAFAM [editor’s note: Google, Apple, Facebook, Amazon, Microsoft] aren’t even 40 years old. Not one company from Europe is involved! As a result, we have missed the opportunity for many new jobs. And our traditional companies are increasingly under pressure.
More than half of Swiss men and MV women work in the service sector. This is where the greatest digital disruption is taking place. Escher would warn our insurance companies and banks: “Pay close attention!”
The World Wide Web was created just around the corner from here. What went wrong?
Yes, about 40 kilometers from here MV as the crow flies, at the European Organization for Nuclear Research (CERN) near Geneva …
But then along came Marc Andreessen, DB a 22-year-old at the University of Chicago. He developed Netscape, the first real web browser, which made the Internet widely accessible. He facilitated the breakthrough of Tim Berners-lee’s invention, the World Wide Web. But this meant that the Internet had left Switzerland.
Here we must be quite clear: We are MV very strong in basic research. Nobody does particle physics better than CERN. But even now, we find it difficult to develop a discovery into a business model.
Switzerland has more patents per capita DB than anywhere else, but we are really bad at innovation output. A patent that doesn’t result in something practical doesn’t count, in my opinion – it’s a dead letter.
You’re both very critical. Do you currently also see opportunities for Switzerland?
You have to look at history, understand DB who we are, and then invest heavily in the right things. Information technology is not embedded in the Swiss DNA. We are good at slow things, but the computer world spins very quickly. We are good at things where you really have to dig deep, such as biotechnology or medical technology. These are fields that suit our DNA.
Right now, an era is beginning that MV could become the golden age for us: Pure information technology is reaching its limits. Much has been fully explored. Now we need to combine it with other fields, with engineering, computer science and physics, as well as with products from the consumer sector. This is known as the Internet of Things. There, we could beat the Americans. But I stand by what I said: The prerequisite is a broad layer of computer scientists. If we only cultivate
Daniel Borel: I plunged into an environment that wanted to reinvent the future.
the traditional disciplines, we will fall by the wayside.
Because of its small size, Switzerland DB has an enormous opportunity. This is particularly true for the EPFL, which is much smaller than its counterparts in the US. The individual departments are supportive of each other and work together. This closeness is unparalleled and amazing. Precisely there, in the transition from one field to another, huge potential lies fallow – for example, between robotics and nanotechnology. Likewise, we survived at Logitech because we brought different things together, without being the best in any one discipline. In Stanford, which I otherwise praise so highly, they live in silos. Each department has its stars, but there is little interaction.
Mr. Vetterli, you don’t consider Silicon Valley a role model for Switzerland. Why not?
Don’t misunderstand me. Silicon MV Valley is great. Entrepreneurs are respected, the best engineers in the world are there. It’s very easy to start a company and find talent. It is – at least so far – very international. But as a social model, it can only go so far. Broad sections of the population do not have access to education. I was recently in San Francisco – the social
divide is alarmingly wide. In Switzerland, every man and woman has access to an education of very high quality. We must pay heed to this, because here too a demographic divide is beginning to open.
My enthusiasm for Silicon Valley is DB strongly related to the fact that I find things there that don’t exist here, though I would very much like to see them here. In any society, there are only a handful of people who can actually create jobs. They should be treated very carefully. America can do this. At the same time, it’s important that the general level of education is sufficiently high – even department store employees need to know something about digital products, or they’ll be out of a job. When it comes to education for all, Switzerland certainly does it better.
Mr. Borel, is Logitech still really a Swiss company?
“All in one in Switzerland” was never DB an option for us. Logitech survived only because we looked worldwide for resources. In 1988, I found that competition for us was arising in Taiwan. And so we formed a team in Taiwan. In turn, the 50 engineers who had been doing this work in Switzerland had to develop something of greater value. And in fact, they discovered wireless technology for us and created a new added value.
Despite your global orientation, Swiss flags hang in your factories in China. Why is that?
Switzerland has an excellent reputation DB in China. We were among the very first to extend diplomatic recognition to that country [editor’s note: 1950] after Mao came to power, and Schindler was the first Western industrial corporation to enter into a joint venture with a Chinese state-owned enterprise [editor’s note: 1980]. The Swiss flag is considered a symbol of technology and quality in China, and all our products there are labeled “Think Swiss.”
Speaking of internationality, many successful startup founders come from immigrant families. Steve Jobs (Syria), Elon Musk (South Africa) or Jeff Bezos (Cuba) are just a few examples. What’s your explanation for that?
They have to fight harder to succeed. DB That’s Darwinism. We see this here as well, at the EPFL: Foreigners win 60 percent of the prizes for the best graduation results.
Also, the startups formed here are MV often founded by foreign students. By the way, when Escher founded the ETH, he started with 60 or 70 percent German professors, and that didn’t bother anyone. It’s part of Swiss tradition to be open to the outside world.
I personally think it’s a pity that DB Swiss politicians, for example, often lack international experience. Few of them have lived abroad for very long. How do they intend to position Switzerland in the EU or in America, or manage our foreign relations? I think, send our young people abroad for two years instead of military service – that would dramatically enhance their competitiveness.
Mr. Borel, Mr. Vetterli, what do you see as “the next big thing”?
Artificial intelligence. It will be DB used everywhere. To be honest, though, I don’t know as much about this as Martin does. Do you agree?
Yes, that’s true, but artificial intelliMV gence is already in use. However, I prefer to call it data science. That term is broader, and ultimately it covers everything that we can do with data – much that is good, but also some that is dangerous. We will be facing many ethical questions, and they will become major societal challenges in this century. However, you asked about the next big thing. I would say: quantum computing [Editor’s note: computers that function according to the laws of quantum mechanics and are intended to solve certain information technology problems very efficiently]. This is going to shake up the world, change everything – but I’m not going to tell you just when this will happen (laughs).
Daniel Borel: Send young people abroad for two years – that would dramatically enhance their competitiveness.