Sum­mit meet­ing

Bulletin - - Contents - In­ter­view Si­mon Brun­ner Photos Anoush Abrar

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.

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