Interview with Martin Vetterli | Venture

Interview with Martin Vetterli

The Swiss Tech Convention Center on the EPFL Campus

"It's about time"

For the first time the >>venture>> award ceremony will be held in Lausanne. The new president of Ecole polytechnique fédérale de Lausanne (EPFL) Martin Vetterli praises the startup competition and gives insights into the swiss startup ecosystem. 
Mr. Vetterli, what role does >>venture>> play for Switzerland?
It is the country’s most visible startup competition and provides a good overview of what’s happening on the scene. It was Thomas Knecht’s lifetime achievement, and it cannot be praised highly enough. I have known >>venture>> since the first award in 1998 when I took part with a startup myself.
You came second place with the company Ares. 
At the time I was a little disappointed but it was 
Sensiron who came first—and they have close to 700 employees today. Ares is also still around, but it is now called Dartfish, and is much smaller with around 50 employees.
The award ceremony this year will be held in the EPFL for the first time. What does that mean for French-speaking Switzerland?
To be honest: it’s about time (laughs). Seriously though, it provides recognition of the Romandy as a startup location. According to the Swiss Venture Capital Report 2018, 32 percent of venture capital today is invested in Vaud. Zurich is in second place with 29 percent, and Basel is third with 9 percent. According to this study almost 300 million Swiss francs have been invested in our canton in the past year.
We had no idea the competition between Lausanne and Zurich was still so strong…
(Laughs) Now you’ve got me. And you are right, I’m not interested in the rivalry between ETH Zurich and EPFL. We should invest our energy in joining forces against foreign competition.

But is there really room for two top technical universities in Switzerland?
That’s such a Swiss question. At an ETH Day in Zurich, Severin Schwan, the head of Roche, told me how glad he was that EPFL existed. We need the competition, he said, to keep people on their toes. But that doesn’t mean that we don’t work together strategically. Last year, we launched the Swiss Data Science Center in a 50-50 cooperation with ETH Zurich. So we work together very well.
If you compare the competition with international equivalents, how can we make >>venture>> more attractive?
The prize money could be higher, which would raise visibility and make it more attractive.
Between 1973 and 1996 there were at most seven EPFL spin-offs per year. Then when >>venture>> started the numbers increased dramatically. In the last decade there have almost always been at least 15 spinoffs. Is this a coincidence?
It’s obviously difficult to prove the causality here, but there is definitely a correlation. »venture» anticipated the startup trend in Switzerland and reinforced it.

What would you prefer: if an EPFL alumnus won a Nobel Prize or founded a unicorn startup worth over a billion dollars?
The EPFL was only founded in 1969 and so far it has not produced any Nobel Prize winners—so of course, that would make me happy. But we already have a unicorn with Mindmaze. But it’s not an either/or question: entrepreneurs and researchers tend to be very different types of people.

Stanford, your Alma Mater, has earned more than a billion dollars from its spinoffs in four decades. Does the EPFL share in the success of its spinoffs?
That’s an area where there could certainly be some expansion, but we are indeed already profiting from the success of companies that emerged from the EPFL. In general, like most educational institutions, we don’t have shares in the spinoffs but we do own the patents that the startups base their ideas upon, and so we get the license fees in return.

Having been at Stanford you also know Silicon Valley, which is still the often-cited role model for innovation. Does it still deserve this reputation?
Yes and no. Silicon Valley is small like Switzerland, with around three million inhabitants and two excellent technical universities; it’s also extremely international and focused on innovation. But that’s where the parallels end. It would be a mistake for every last village to want to become some Silicon-whatever: there is only one Silicon Valley and it’s in California. You have to develop an innovation culture of your own, or you will be forever two steps behind.

So what would you say is Switzerland’s unique selling proposition?
Silicon Valley is a monoculture: with a few exceptions, everyone there is basically good at software. Switzerland has a lot more range, with expertise in different areas. Today I spent the afternoon at Logitech, the computer appliances producer and an EPFL spinoff. Among other things the company produces specialized ultra-fast computer mice for gamers. Computer science plays only a minor role at Logitech—the rest is high-precision mechanics.

Aside from mechanics, what other areas have potential in Switzerland?
I can think of pharmaceuticals, finance, food, and also perfume. These areas are defined by their complexity, narrow margin for error, and reputation. The US company Medtonic produces pacemakers here—I don’t know if it would be possible anywhere else. Medtronic also develops new products here, and only when they have gotten through all the growing pains do they start producing them elsewhere.

What’s lacking in Switzerland?
Our major companies started in the nineteenth century. I’m thinking of Nestlé, the Schweizerische Kreditanstalt (today Credit Suisse), UBS, BBC (today ABB), Ciba-Geigy (today Novartis), and Roche. That’s all great, but it’s a long time ago now. What are their twenty-first century equivalents?

What is needed for new companies with billion-strong annual turnovers to grow here?
Many of the areas I mentioned are being digitized and software is not our strongpoint, mainly because we lack the IT talent. From a startup point of view, aside from the pharmaceutical industry we lack big international investors capable of supporting a company with financing rounds worth 50 to 100 million. And what makes this so annoying is that as a result the startups we should be holding on to keep moving away.

In the startup strongholds of the United States and Israel, pension funds and the military are strongly involved in financing young companies, but this doesn’t happen here. Does this put Switzerland at a disadvantage?
The military should definitely be investing a lot more of its five billion budget in innovation. And the same goes for pension funds: since a few years now they have been allowed to invest in venture capital but few actually do so—they first have to learn that it works differently from traditional investments.

What should we explicitly not adopt from Silicon Valley?
The prohibitively expensive cost of education. The low cost of university education in Switzerland is a huge competitive advantage: it means we do not lose talent just because a person cannot afford a university education.

Alongside the United States, a major startup scene has emerged in China. What can Switzerland learn from this development?
Most of the young Chinese companies are focused on the domestic market—which has little relevance for us. China, however, could learn quite a lot from Switzerland, particularly when it comes to political systems.

China currently has only half the amount of unicorns as the United States—the ratio stands at 59 to 113. Is this about to change?
Yes, China will become as dominant as the US, if not more so.

And Europe?
We have to position ourselves clearly. Today we are a digital colony of the US—which is not good. We need to cut ourselves free. We have to invest in the areas I mentioned. But it’s not just about money: we need more technology students, and above all we need more women in the field.

What’s the best way to foster new talent?
In the United States people complained for ages that there were no engineers. Then suddenly—wonder of wonders: Google finds them. Why? Because it pays well and provides interesting work. I believe in meritocracy. If people want to get ahead then they should be able to do so. This attitude is deeply entrenched in Silicon Valley. In Europe, on the other hand, background and schooling plays an important role.

How do we get more women to study physics, math, and computer science?
By sensitizing them to it at an early age. In concrete terms this means making university lectures less intimidating, and making sure they are more applicable to real life and have plenty of examples of interesting work. Furthermore the courses should not only be about developing technical prowess but also about competencies in communication, creativity, and social issues. This is already happening successfully in some colleges in the United States.

The Internet was invented at CERN, or at least co-invented there, so why has Switzerland not produced any major Internet companies?
It’s unbelievable, isn’t it? Computer science was not an issue at the beginning of the 1980s. People didn’t really believe in it and, aside from that, researchers at CERN are conducting basic research. They want to win Nobel Prizes, not found a company.

The first Internet wave happened right before your eyes. Did you see the potential immediately?
For certain applications, yes, but I remember in 1993 when a colleague stormed into my office, saying “I have to show you something incredible”. He installed the Netscape browser on my Sun workstation and opened his homepage. And my response was: “So what?” I just couldn’t imagine why anyone would find it interesting.

You’re a tech guy, but you are also very interested in the humanities. Why?
Technology is nice but it has to serve society, not the other way around. This is something we must never forget. Technology is too dominant today. Social media companies should not be able to define global regulations for the private sphere. Do we really want the world to work like this? We cannot allow ourselves to be naïve.

Your doctoral thesis began with a quote from Jean-Jacques Rousseau. Can you explain?
He asked the right questions, and as a thinker he invented the modern Western world. I think about the importance of education, the organization of the state as democracy, and equality among people or in the social contract. Before the French Revolution, between three and five percent of the nobility essentially owned 95 percent of the capital. We all know how that ended. We are not far removed from such a situation today. We should start reading Rousseau again if we want to avoid another revolution.


INTERVIEW Simon Brunner, first published in the 2017 annual report of the Venture Foundation


Martin Vetterli

Martin Vetterli (60) has been president of the EPFL since January 2017. For the past ten years he has worked and conducted research as an electrical engineer in the United States at Columbia University, New York and the University of California, Berkeley. He received his Dipl. El.-Ing. (Diploma in Electrical Engineering) at the ETH in 1981, followed by a Masters in Stanford, and completed his PhD at the EPFL in 1986. His research has resulted in around 50 patents which have benefitted numerous tech companies and startups. From 2013 to 2016 he presided over the Swiss National Science Foundation. Vettterli is married with two adult children.