Nurturing brands, families and funds (#6)

Structural Shifts with Adrienne Perramond, President of Business Angels Switzerland (BAS)

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Together with Adrienne Perramond, President of Business Angels Switzerland (BAS), we discuss the landscape of angel investing in Switzerland, lessons for entrepreneurs, the changing nature of branding and marketing in the D2C age and more.



Ben Robinson: Welcome to Episode Six. We are with Adrienne Perramond, who is an angel investor, startup advisor and an independent mediator. Adrienne works as the president of the Business Angels Switzerland, a Not-For-Profit Angel Investing Association. It’s the oldest one in Switzerland and before that, Adrienne did many things including a career in marketing in the consumer goods and luxury goods set and she went on to found a company called Transfer Solutions which was a relocation service based in Neuchâtel, which she sold in 2001.

the basics of marketing have not changed. I see the startups. I mean, they still have to identify their target group, but how they’re going to go to market, evaluate the barriers to entry, the pricing strategy. So in that sense, the basics of marketing haven’t changed. The tools have changed, clearly.

Ben: Okay, may we slightly change track now because I want to talk a bit about consumer goods. This is an industry that we’re fascinated by what or at least the transition that this industry is going through has been fascinated because clearly a lot of people talk about how the internet has always changing many industries. Not that many people talk about how it’s changing consumer goods. But to us it’s having a radical impact, I suppose what we’d like to do is ask you to compare your experience today working with startups with the time when you worked at TAG Heuer and Kraft and tell us what you think has changed about marketing in those years, what’s, you know, what’s been a constant and what has radically changed about marketing?

the consumer has a lot more bargaining power

Ben: You know, I think we’ve observed this happening which is you don’t need to have billion dollar marketing budget today to have brands that people would recognize, but I suppose it’s almost the converse of that is theoretically any direct to consumer company stands a chance. But I suppose the converse argument is that people’s attention span has got shorter and shorter, and are bombarded with messaging and marketing every day. So for me, it feels a bit like a double edged sword, which is, in theory, anybody can go direct to the consumer, because the cost of distribution content is practically zero. Having said that, it’s quite difficult for whatever you distribute actually land with the consumer, because the consumer is time-poor, attention-poor. how do you how have you seen that play up?

with DTC, the consumer has changed from physical interaction to much more of a digital hiding… behind the comfort of the digital world, and in that sense there is an opportunity to reach the consumer in a more emotional way and that is being met in the DTC with the influencers.

Adrienne Perramond: Well, I would say if you take DTC, as in direct consumer that automatically is more of a local market because you know, to succeed, you’re going to concentrate on more of a local area. So in that sense, that’s changing. But if I look at mass consumer… the industry like General Electric, for example, or even Procter and Gamble, what they’re doing is I mean, General Electric, their most profitable line of business is, for example, the health sector where they are working on medical diagnostics equipment as in MRI and health data management. And they are spending over 5 billion in R&D compared to for example, Nestle, which has I think about one in 1.7 billion in R&D. So take General Electric, they’re not just selling appliances or they are working on innovation through the R&D and hopefully will buy the startups that are innovating, which will help them keep up with the market the way it is today. And if you take Procter and Gamble, yes, what will happen is you can take, for example, a product of theirs like Clear Blue, which is pregnancy tests where you have Eva, which you may have heard of, which is a startup, which has developed a wristwatch and the mobile app which women can wear and which will give them the nine vital signs of fertility and help them see when they are most fertile. Well, now they want to move on to and use their product as a contraceptive method. So I mean, you have ClearBlue, you have contraceptive methods, which will be replaced by more new, innovative and disruptive products.

So, there is less physical interaction, people need to be entertained, they need to be somehow emotionally touched in another way, then maybe in the past where you would have more physical interaction. And so in that sense, you need to identify yourself with others maybe more so because you’re alone in your digital world. And I would add that brands should actually lead the example of helping consumers move away from this digital filter bubble that we’re in.

Ben: In terms of reaching the consumers. So I guess theoretically, you know, if you think about marketing theory, it shouldn’t be theoretically possible there to be such a multiplicity of small brands in the marketplace. Because the consumer being rational and have limited time and attention, would seek to use a supermarket theoretically or Amazon. But it’s just quite interesting that we now see such proliferation of brands and products. Are platforms like Shopify making this possible. And is it a long term trend? i.e. are we living in this new world of the long tail of very small suppliers? Or is this just a moment in time phenomena? And ultimately, people will buy everything through Amazon and they don’t really care or they can’t manage with quite such a fragmented supplier base.

Actually, our biggest problem was that sometimes they had too bigger budgets, and we couldn’t find expensive enough housing. Twenty years ago, it was totally different.

Ben: Great. Okay, so we’re going to change track again, would ask you about Transfer Solutions. For the benefit of our listeners, what is a relocation agency?

today, parents still need to make choices, they still need to make choices. […] I like to take the example of Helena Morrissey, she’s a very famous CEO of an investment bank in the UK… she had nine children. Well, her husband stayed at home and took care of the children. Great. It’s a decision they made together. But you need to make choices!

Adrienne Perramond: The tough part was working from home, actually. Because it’s very difficult to then separate family and professional. On the other hand, it gives you the flexibility to juggle with both, of course I had an Au Pair girl to help with the children.

I was a little naive, because I had seen how other politicians work around me and I thought “it cannot be that difficult. I’m going to go in there. It’s like a business and I’m going to look at it and we’re going to set it straight and then no problem.” And the fact is, it’s not that easy. And that was a good lesson that took me 13 years. And it was a good lesson because politics is not a business.

Ben: So, you’ve also been involved in local politics for a long time. What, Why did you get so involved in local politics? Was it some of these questions around supporting working parents? You know, what was the motivation for getting into politics?

Business Angels Switzerland, we call ourselves BAS. We are a nonprofit association with about 90 members. We all have one thing in common… we’ve been lucky and we want to give back to young entrepreneurs, share our expertise, invest some of our money, and share our networking.

We are really a club where we… I can say we’re friends. We meet we have a meal together, we listen to startups pitch, we do the due diligence together, we share, we compare, we call, we ask for advice, and the members know each other. And although we then invest individually… we do all of the screening, due diligence, investment process together. And afterwards, we follow the company together. So it’s a close knit community.

Ben: We should talk about Business Angels Switzerland, which is what you’re currently working on. So tell us a bit more about Business Angels Switzerland, what what does the organization do? How did you get involved? What’s the difference between Business Angel Switzerland and some of the other angel investment groups in Switzerland?

one of our criteria for investing in a startup is that they have an exit strategy, exit strategy does not mean that they have to sell their company within so many years, it could be that they will be profitable and buy back our shares. And that is maybe a way to shorten the time to exit.

Ben: Can you point to any great success stories, companies that you’ve invested in that have big exits or pretty large organizations today?

I won’t look at the other angel investing groups as competition at all. Personally, I like to work with them, because let’s say a startup is looking to raise a million, they won’t get a million from BAS. Our investment rounds vary between 150k and 400k. And if you can have another angel investing club who will also invest, then it’s positive for everyone. So I like the idea of working together and there’s enough to go around.

Ben: What’s the value proposition of BAS versus other Angel clubs if there’s competition for angel investing, arethere’s some things that you offer that other clubs don’t?

Switzerland is I would say, compared to other countries, it’s a startup country. The startups are everywhere in Switzerland.

Adrienne Perramond: Okay, so at BAS, what we do is we have a jury and the jury will pre screen the startups before presenting them to the members, our criteria is that they have to be based in Switzerland, they have to have a disruptive technology. So that is, there has to be an innovation. Services all that, less so. I mean, unless they have software, something which is innovative, if possible with an IP… and then they have to have a low valuation and have an exit strategy and offer a place on the board either as a member or an observer. And if they meet this criteria, then usually there’s a pretty big chance that they will be invited to come and present which does not mean that the members will be interested.

Entrepreneurs… keep your valuations low.

Adrienne Perramond: The Swiss startup ecosystem is very dynamic. It’s very dynamic, partly because we have our two engineering schools. We have EPFL in Lausanne, and we have the ETH in Zurich, which has doubled its researchers in the last 20 years. It attracts a lot of foreign brains. So we have excellent schools and parallel to that, we have all the parallel engineering schools and what we call the Haute ecole, the Lausanne Hotel School. Saint Gallen. And then we have the government support, which is very important is industries that enables startups to have grants link to R&D, training mentors, and sometimes not enough matching between the startups and investors, but they have a budget of CHF200 million, which may seem like a lot. In Israel, it’s 1.6 billion. So that’s the big problem in Switzerland, there’s no money in government support. I mean, there’s no money in this was an example of government support.

aperture | Digest

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