"Swiss startups need to internationalize and get global quickly" - Patrick Barbey, CEO Innovaud

Patrick Barbey is the director of Innovaud since 2013. He graduated from EPFL in Electrical and Electronic Engineering in 1990 and co-founded two start-ups during his career. He is also a jury member of the TOP 100 Swiss Startup Award for many years. Innovaud has now become a leading vector for innovation in Switzerland, supporting young high-tech firms in the region and encouraging foreign companies to come to Vaud. We spoke with Patrick Barbey to learn more about Innovaud's mission and the recent evolution and challenges of the Swiss startup ecosystem.

Patrick, Innovaud has worked for many years to support startups. Can you give us an overview of your agency’s key initiatives for startups and their results to date?
Since 2013 our innovation advisors have been helping Vaud-based startup founders by meeting them and assessing their needs, to connect them with different types of support tools that exist in our regional innovation ecosystem. So, just like Venturelab and Venture Kick, we have witnessed the creation of many of the startups and scale-ups, that are in the spotlight today.
Helping startups enter our “Innovate” services for Vaud-based, innovative, and technology-driven companies: by understanding the needs of entrepreneurs, we can either connect them to our network of certified coaches (Innosuisse, Platinn, Alliance TT) or financing organizations (the Foundation for Technological Innovation, Venture Kick, etc.) We can also promote startups on our communications channels, or through our networking events in Switzerland and abroad. In 2021 we conducted a record number of company meetings (442 meetings for a total of 367 companies) and 32 startups were created with our support.

When startups start to grow and gain traction, we can support them through our Scale Up Vaud program and label. In 2022, we co-created the LeadiNNg to Scale Up program with IMD, for startups that are about to enter their hyper-growth phase (in other words, before they become scale-ups). There is a call running until 5 October 2022 for the program’s 2023 edition and startups can register here!

Finally, we also support the TOP 100 Best Swiss Startups every year, as well as a number of prizes and competitions in Switzerland and abroad, which allow us to put Vaud startups in the spotlight.

Fundraising is a major challenge that startups face, especially at later stages when they are aiming for larger rounds. What are the essentials aspects you support startups with at this stage?
In addition to financing support tools for startups, we participate in Swiss and international events showcasing Vaud-based startups to investors, such as the TOP 100 Investor Summit in 2022, Tech Tour Growth events, SLUSH, etc. Together with the canton of Vaud, we also support Venturelab’s Venture Leaders programs each year, sometimes as part of the selection jury.

How do you select which startups to support?
Startups generally contact us as they know we can connect them to the right partners and programs, for them to grow. When we meet them, we clarify their needs and innovation potential (a viable product or service, which finds its customers and can be scaled on global markets). When startups don’t enter our eligibility criteria, we connect them with other supporting organizations in our network.

Beyond fundraising, what do you think are the biggest challenges that growing startups face and how are you able to help them?
In Vaud, technology-based startups can find support at every stage of their development thanks to a well-connected innovation ecosystem. As a member of this ecosystem, Innovaud helps startups by either connecting them with the right partners or financing institutions, by proposing hosting solutions in Vaud’s 7 innovation parks, supporting various startup programs and events, promoting them, or having them enter our innovation programs if eligible.

Regarding the founders’ challenges: they can face many challenges and they vary greatly. Successful startup development is a complex subject and if there was a magic formula, everyone would apply it. However, there are a few priorities and key points that can be identified:

• Validate your market: i.e., check that companies or individuals really need the proposed product or service and are willing to pay for it. It is essential to clarify this need as early as possible, through prototypes and paying pilot projects.
• Be able to deliver the product or service in an economically sustainable and profitable way: this business model must be consistent and scalable - i.e., replicable on a large enough scale to ensure the viability of the business.
• Assemble a balanced team capable of implementing the business model and scaling up when the time comes.
• Finding sufficient funds to finance the start-up phase
   

We are observing a strong drop in startup funding at the international level since the year started. How have Innovaud and the startups it supports been impacted? 
Swiss startups showed encouraging results in the first half year 2022 as per the Swiss Venture Capital Report Update: they received CHF 2.6 billion from January to July 2022, which is an increase of almost 50% compared with the very good first half of 2021 – and growth in the number of financing rounds of more than 30%.

Despite 60% of Swiss investors expecting investment in Swiss startups to fall by up to 25% over the next 12 months, which we hope will not happen, startups still get financed: Flyability just received CHF 15 million for example.

Innovaud is also in charge of attracting international companies to the canton of Vaud. How do you convince founders that Vaud is a great place to develop their company?
Companies willing to set up in Vaud can find many assets there: access to a highly skilled and multicultural workforce, a unique innovation ecosystem, a country that is ranked #1 in innovation and talent attraction, close collaborations with the industry or academic institutions, political and economic stability and security, a wide range of sites available, as well as an unparalleled quality of life! Not to mention the support from Innovaud in the process: we act as a one-stop shop for foreign companies and help their founders navigate through all the aspects of setting up a business in Switzerland. For example, by helping them get work permits, a house for their family, or sometimes even a school for their kids. Companies can also benefit from the support of Vaud’s Office for Economic Affairs and Innovation (SPEI), such as advice, direct financial support, and direct access to our regional authorities.
The international startup 110 Industries was for example looking for a politically neutral country with a rather appealing investment climate. Switzerland, and the canton of Vaud in particular, was their perfect choice.
 
Every year, several startups from Vaud make it to the top spots of the TOP 100 ranking. What do you think accounts for the success of these startups? What do you think are their key characteristics?
In the space of ten years, the TOP 100 Swiss Startup Award has become a key event in the Swiss startup ecosystem. The companies that have made it into the ranking have so far created several tens of thousands of highly qualified jobs and brought hundreds of disruptive technologies to the global market. 
The success of the Vaud startups in the TOP 100 stems from an innovation ecosystem that is among the best in Europe, where talented deeptech innovators find the ideal environment to grow and succeed. Proof of this is the 43 Vaud companies in the Scale Up Vaud program - including SOPHiA GENETICS, Nexthink, Frontiers, and Astrocast - and the 14 alumni of the LeadiNNg to Scale Up program (co-organized by Innovaud and IMD), which enables young technology companies to move from the startup to the scale-up phase.
We congratulate once again the 26 companies from Vaud that are among the TOP 100 Swiss Startups in 2022. We are very happy to help pioneering businesses like them innovate and grow in Vaud!

What have you observed as the main difference in growth strategy between international and Swiss startups? Where do you think Swiss startups could draw inspiration?
Swiss startups need to internationalize and get global quickly, as the domestic market is rather limited. In that sense, it is quite useful for them that Switzerland is in the heart of Europe and that they can count on a talented, highly skilled, and multicultural workforce, speaking more than 4 languages, in a very small territory. Swiss startups as opposed to international ones must think globally right from the start.
An area where Swiss startups could draw inspiration is that they must be sharper in their ambitions to go global and commercialize their solution quickly, even before it is perfect.

Similarly, what do you see as the next steps for Innovaud and the canton of Vaud to ensure that Vaud remains a key startup location?
We care a lot about intensifying technology transfer between academia and industry, as well as letting investors know about the incredible investment opportunities in our startups. We want to make sure Vaud is the ideal place for scale-ups to innovate and grow.
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