Adrian Bult, the Basel private investor and member of various boards of directors, is an acknowledged expert with an in-depth knowledge of Switzerland’s ICT sector. Since March 2013, he has been engaged on a voluntary basis as head of the i-net Technology Field ICT. In this interview he explains that makes entrepreneur types and why he is convinced that Switzerland could quite easily produce the next Google.
What’s it like being a Business Angel in Switzerland?
Adrian Bult*: Basically I have an exciting life. I am constantly confronted with new ideas and incentives. I have to do with young entrepreneurs, and that is very enriching for me.
Do you also mean that in a literal sense?
Certainly, because I am primarily interested in the content and people. So I also don’t see myself as an investor but as an interested developer of companies.
You invest above all in ICT – are there enough interesting cases?
Yes, in my view there are an awful lot of good ideas in Switzerland and a distinct sense of enterprise. But most is privately funded. In this respect Switzerland is unique. There is probably no other country anywhere in the world where so much in the way of financial resources flows into innovation from private investors or companies. This is also different from Silicon Valley, where enterprise is driven by a highly professional venture capital industry.
So you also have to lower your sights accordingly in Switzerland?
Yes, and Switzerland also has a small domestic market. This therefore begs the question of ambition right at the outset of any start-up. In the B-to-C segment, if you don’t step up to the plate with a global vision, then you usually have little chance from the start. Switzerland is therefore above all a country with lots of interesting niche providers – especially in the B-to-B segment.
What is lacking in most of the cases you encounter?
Switzerland has a distinct pharmaceutical, engineering and chemical culture. But a good sales and marketing culture is also important for the success of a start-up. In this respect, other countries - especially the USA, for example - have a head start. They give much more emphasis to marketing. Young technology-driven entrepreneurs in particular believe the best product will succeed. But that is often just not the case. In most cases it is the product that is marketed best that comes out on top.
But in Silicon Valley aren’t companies still being founded by techies and nerds, not by marketing people?
That’s true, but marketing has the same importance as engineering operations. If you tell someone at a party that you’re a salesman, then the reaction is usually very muted. This has to do with the fact that, in Switzerland, understatement is seen as a great virtue. Self-marketing is nothing like as important as it is in other cultures. That’s something we Swiss have to learn.
Does a start-up founder without salesman qualities have no chance?
Absolutely. How else does he want to attract investors for his project? This is where it starts. And then you also need a certain ambition. There are founders who focus on the global market from the outset. In Switzerland, this is immediately greeted with smiles. But basically this is the right attitude in order to reel in the first customer. This is also a typical approach of many technology-driven start-up founders in Switzerland: pick up the phone and work through a list of leads. Most people feel this is beneath them.
Are there other patterns you often come across in young Swiss entrepreneurs?
Something I always see especially in start-ups is an underestimation of the time that is needed to achieve the desired results. If you underestimate the time and the funding is linked to this time axis, then you have to react in good time when you see that you are going to need longer. Otherwise you run out of steam.
So you should always plan for twice as much time and money as you think?
No, that would be wrong. I’m in favour of setting a tight deadline and keeping funds short. But you have to react in good time if you see that things are getting tight. You need the pressure – otherwise you don’t move.
Can Switzerland and Europe ever produce an ICT giant?
Why not? You always only hear of Google, Airbnb or Uber. But there are also companies that are working very successfully one or two steps below this radar. There are some areas where technologically very advanced solutions are being developed in Switzerland. Such as “Over the Top” internet TV.
Does Switzerland not simply make too little of its opportunities? It is not Zurich but London that is the FinTech centre of the world today.
In Switzerland there have certainly been developments in this direction; for example, companies invested early on in e-private banking, and apps from big Swiss banks lead the field today. But a cluster has not formed around this as it has in London. Why is that? To succeed in the FinTech sector, banks have to cannibalize their own business. Under these conditions it is simply difficult to drive innovation forward within your own organization. This is why I argue in favour of cooperative ventures. Twint from Postfinance is a good example of how this can succeed.
With the coalescence of ICT and Life Sciences, the next opportunity presents itself for Switzerland and the Northwest region in particular. What needs to be done to make sure this opportunity is not missed?
Innovation arises through collaboration. Small companies often lack the know-how and the resources for major roll-outs. Established companies on the other hand lack the agility to achieve the best-possible result with few resources. I would therefore suggest approaching such issues more in project networks. It is typically just a few people in the management of large companies who decide whether an idea is good or bad. A completely different approach is taken in Silicon Valley, where there is a sponsor for any given idea. This sponsor gets together with financial investors and technical experts and interacts with them. If the idea goes down well and there is potential for improvement, then it is on the right track. If the comments are constantly negative, then it is probably the wrong way. The upshot is that, in Silicon Valley, it is the competent people with a competent opinion who are the decisive actors, not an individual in management. It is noticeable that this model is slowly coming to be accepted in Switzerland as well.
And yet Switzerland is world champion in innovation?
I would take the assertion that “Switzerland is world champion in innovation” with a very large dose of salt. Such statements just make you feel comfortable. If an innovation is in the process of redefining a market, then it can never be too soon to notice it. As an entrepreneur you have to be positively paranoid in this respect and should be constantly considering whether you are good enough and what could be improved.
It is often said that enterprise is not highly regarded in Switzerland and the willingness to take risks is given too little regard.
I feel this has changed a lot. In fact I see a lot of young people who set about projects with a very strong appetite for risk. Failure today is also no longer so serious. It is also very valuable for personal development if you have established your own company. I see young entrepreneurs today who are much further on than I was at the same age because they have established their own company.
You said at the start that in Switzerland it is mainly private individuals who invest. What could be done to ensure that even more is invested?
It could be encouraged by giving people the possibility to experience this themselves. For example, instead of investing heavily in training and continuing education, large companies could give management staff the opportunity to invest training money also in a start-up. If an MBA costs 20,000 francs, for example, the company could get the manager to pay up 20,000 francs themselves on top in order to support a small company with this capital. I’m convinced the learning effect in terms of reading balance sheets and profit-and-loss accounts or driving projects is at least as great as it is when compiling a case study at a prestigious university. If you can convey this credibly in a job interview, then this experience is just as valuable as a title.
What do you think of tax incentives for companies that create added value?
Basically I always find it positive when incentives are created for people who are prepared to take a risk. If someone takes a big risk, he should also be rewarded for this. Tax incentives are one possible way of doing this.
*Adrian Bult has worked on an honorary basis for i-net as Head of ICT since March 2013. Bult is an acknowledged expert with an in-depth knowledge of Switzerland’s ICT sector. From 1998 to 2007 he was a member of the group management of Swisscom and from 2007 to April 2012 he was COO of Swiss-based bank software vendor Avaloq. Today Adrian Bult is a consultant and investor. He is Chairman of the Board of Directors at Swissgrid and Enkom Group and a member of the Board of Directors at Adnovum, Swissquote, Regent Beleuchtungskörper and Alfred Müller AG.
Adrian Bult (born in 1959) studied business administration and marketing at the University of St. Gallen.