North American-inspired, the start-up business model is based on the creation of a new company in a phase of rapid growth to commercialize an innovative product, service or process.

The particularity of a start-up is to seek external funding to support its first steps until its revenues exceed its costs and it can repay, with a profit, its donors. The risk is of course that it never succeeds and that the amounts invested will be lost.

Former head of the EPFL Start-up unit, Hervé Lebret prefers, however, this definition borrowed from Silicon Valley serial entrepreneur Steve Blank: Start-ups are temporary organizations designed to seek a business model that can be replicated across multiple markets (geographic, thematic, etc.) and be able to grow.

In any case, this model has emerged in recent years as a particularly effective way of bringing an innovation to market, in particular by transferring a technology developed in a research laboratory or in the garage of an inventor of a product, service or process.

Today, the five largest market capitalizations in the world are companies that have gone through the start-up phase.

The start-up model has given rise to seven of the world's 10 largest companies

In China, this model gives similar results. The leading stock market places have recently been conquered by former start-ups: Alibaba (439 billion dollars of market capitalization) and Tencent (432 billion dollars). The model is still struggling to produce similar results in Europe.

«In China, the leading stock marcket places have recently been conquered by former start-up»

Successes that hide the forest?

These successes should not obscure the fact that risk is inherent in the start-up model. A 2017 Statistic Brain study estimates the bankruptcy rate of American companies (all categories combined) at 50% five years after their creation and 70% after 10 years. Hervé Lebret has made an assessment of EPFL start-ups. The survival rate of those created over the last 10 years is 85% and remains high (69%) when considering the entire period since 1986.

But the survival rate doesn't say much about success, because a start-up can live. If we measure success by exits - IPOs or acquisitions by a larger player - the success rate of Vaud start-ups is limited. There have been five IPOs in forty years: Logitech, Modex Therapeutics, AC Immune, Biocartis and Bicycle Therapeutics. Acquisitions accounted for 8% of those from EPFL, compared with 25% from MIT and Stanford.

The canton of Vaud is the one with the highest start-up density in Switzerland

It should also be borne in mind that the start-up model does not have a monopoly on innovation. A November 2017 study by the Information Technology & Innovation Foundation estimates that American technology start-ups represent only 2.8% of the country's companies. Similarly, the economic fabric of Vaud is largely composed of large companies and, above all, SMEs.


"A start-up is a company looking for the right business model."

"A liquid world in which we have different hypotheses that we're going to test over time."
The professor at UNIL and co-author of the best-selling book "Business Model, New Generation", insists on the specificities of start-ups.


"What is the definition of a start-up?"

"A young company, rapid growth in employees and possibly revenues, and a U-shaped curve to first lose money before making money in a 5-10 year time frame." Hervé Lebret, former head of Innogrant-EPFL.