Originally created 04/02/00

Internet entrepreneur spirit takes hold a la francaise



PARIS -- The line winds around the renovated former wine warehouse in a newly chic neighborhood of Paris.

Waiting, France's young Net startup stars cram their pockets with business cards and punctuate their phrases with borrowed American terms like marketing and IPO.

"We're looking for contacts and partners," says telecom student Herve Andrieu, 22, queuing up with friends who founded Comparatel.fr, a months-old site that helps people comparison shop for cellular phones.

The event, First Tuesday, is the much-awaited monthly cocktail party and seminar where young entrepreneurs meet up with investors who offer advice -- and occasionally, big breaks.

The concept started in London and quickly spread. Since its Paris debut in September in a cramped cafe, the event has begun drawing crowds of more than 1,500.

Its unbridled popularity in Paris is a clear signal of France's first big wave of Internet entrepreneurism -- and French willingness to accept the Net and its American-style, unbridled version of capitalism. Not grudgingly, but with gusto.

"In the past six months, something has been unleashed in France," said Jean-Baptiste Labrune, one of the founders of Kabale, soon to launch a community-based Web forum about which Labrune refuses to offer details.

Though wireless technology quickly caught on here and mobile phones are hugely popular, France's acceptance of the Internet lagged behind the United States and much of northern Europe.

Among many French people, there was a fear that the English-dominated Internet might crowd out the French language and diminish its cultural status.

Telephone communications and computer costs were expensive as well. And the French were devoted to their own sophisticated information technology device, the Minitel, launched in 1983.

But suddenly, French buses, taxis and magazine pages are splashed with dot-com ads for flower delivery, for last-minute travel, for online stock trading.

And though the government has tried to "Frenchify" English tech terms, coming up with "cederom" for CD-ROM and "mel" for e-mail, the vocabulary of technology is growing too quickly for the language pundits to keep up.

The number of French Internet subscribers more than doubled during 1999, the Association of French Internet Service Providers says. Today, more than 3 million of France's 60 million people have Internet accounts, and nearly twice as many log on occasionally.

There's plenty of room for growth.

In the United States, 56.5 percent of households had a computer last year, the research group Jupiter Communications Inc. says. Of those, nearly 78 percent had Internet access. In France, just 25 percent of households had a computer, and only 35 percent of those were online, Jupiter says.

The Net buzz has triggered a new culture of young entrepreneurism that was previously unimaginable in a society where red tape and hefty taxes tend to rein in small-business people.

The entrepreneurs are under 35, mostly male and tend to cluster in digital hotspots like "Silicon Sentier," a bustling textile district in central Paris where high tech startups now flourish. Many quit lucrative jobs in consulting or business; others dropped out of college -- a near revolutionary act in a country where double-digit unemployment keeps many young people in school.

"People said I was crazy when I abandoned my studies right after high school," said Jeremie Berrebi, the 21-year-old founder and chairman of www.Net2One.com, a personalized information service that sends its users customized news via e-mail, cellphone or electronic organizer.

But just a few weeks after Berrebi announced the project in July, he and his co-founder had already raised $1.5 million. Their site has since been launched internationally, in French and English, and soon will have garnered investments of $10 million.

"There's ten times more money than there was a year ago," said Philippe O'Rorke of Ireland Fund de France, who has found capital for three different startup groups he met at First Tuesday.

Ordinary French investors are starting to join in, even though traditionally they have been wary of the stock market. Now they feel they can't afford to be left out.

Hubert de Marliave, an analyst with BNP Paribas, says 40 percent of French people signing up with online stock brokers have never owned shares before.

"They tend to buy Internet stocks," Marliave said. "And so do the managers, who missed the train last year."

The "nouveau marche" or new market -- the ensemble of high-growth, mostly high tech stocks -- is up more than 120 percent on the Paris Bourse since January.

The Finance Ministry predicts new information technology will make up 15 percent to 20 percent of the increase in French economic activity this year.

Tiny startups aren't the only stocks fueling the fire.

When giant France Telecom announced plans on March 2 to spin off shares of its Internet business, the group's stock jumped 25 percent, catapulting the Paris stock market to a new high.

Some online concepts work better than others in France. E-commerce is still a fledgling business here, said Pierric Colombier, an analyst with Credit Lyonnais Securities Europe.

"French people don't have a lot of confidence in online security," Colombier said.

Tourism e-commerce tends to break that rule, though information-based sites are the biggest successes.

Some say enthusiasm and venture capital are outpacing development as France tries to quickly to catch up with the United States after a years-long lag. Others fear an imminent crash as Internet stocks skyrocket, seemingly unbounded.

"The hype here is a bit excessive," says Flore Vasseur, a French woman who founded TrendSpotting, a strategic marketing firm in New York that gives Europeans tips on upcoming U.S. trends.

But the enthusiasm is still exciting, says Vasseur, who was in Paris for the First Tuesday gathering in March and was astounded at the crowds.

"A year ago, who could have imagined this craze here?"