Podcast #189 Alpine Transformation

Ken: Good day, and welcome to our Momenta Digital Thread podcast series. Today I'm pleased to host Nicolas Bürer, former Managing Director of Digital Switzerland, a Swiss-wide multi-stakeholder initiative with the mission to make Switzerland a leading digital innovation hub. Nicolas began his career in management consulting after graduating from the renowned EPFL at Lausanne University in Switzerland. He found his passion and consulting startups which led him to co-found MOVU in 2014, which he later sold to the Swiss Insurance Group in 2017. He then took the helm of Digital Switzerland, expanding the organization from a regional initiative to a nationwide one with over 240 sponsoring organizations. He recently turned over the leadership reins after six years in the role to focus on his next startup, digital manufacturing. Nicholas is an active investor in technology startups and has been recognized among the who's who of the Swiss economy and the Swiss Business Angel of the year. Nicolas, welcome to our Digital Thread podcast.

[00:01:46]

Nicolas: Hi, Ken. Thank you for inviting me. Very nice to be here.

[00:01:49]

Ken: Very nice to have you as well. Of course, our listeners will know Momenta is headquartered in Switzerland and proudly calls Engelberg, Switzerland, a home for us, so it is a pleasure and an honor to have you on this podcast. Now a citizen of Switzerland over the last ten years, I have appreciated how far and fast Switzerland has come regarding its digital transformation. Thus, I've long looked forward to interviewing you as a pioneer and leader in that space. Of course, we call this the Digital Thread podcast. The idea, of course, is to start with one's digital thread. What would you consider to be your digital thread? In other words, the one or more thematic threads that define your digital industry journey?

[00:02:36]

Nicolas: It's a good question. I am a typical digital immigrant. Of course, over 40 years old. When I was in university, there were no mobile phones, so we had to do with emails. We didn't even talk about digital when I worked in consulting and corporates 15 years ago; we just talked about IT initiatives. Ten years ago, I saw the startup sector disrupting IT with digital, resulting in increased data use. I've been captivated with ecosystems for the past five years. I think it is not a battle between corporations and startups; it is not a battle between regions or governments, and cities. It is all about collaboration. It all comes down to ecosystems. The next stage of my journey will be digital ecosystems, which I feel will be a hot topic in the next five to ten years.

[00:03:37]

Ken: I appreciate that culmination. In the introduction, you commented on finding your passion for startups. IT startups, the ecosystem, and then bringing all that together with digital. Tell me a little bit about how this came about.

[00:03:51]

Nicolas: At the age of 12, I had no idea what to do with my life, nor did I know what I wanted to study when I was 18. Some people do not realize what they want to do until later. It wasn't until I was 30 years old, in my case. I was doing many different things, consulting, and working on projects, and I realized that I'm better at leading myself than advising others.

I discovered quite late, for various reasons, that I had developed a passion for working for startups when I started to work for DeinDeal, a significant competitor of Groupon. Switzerland was going through a crazy roller coaster and had a fierce competitive spirit at the time. Exciting and unique for Switzerland, but typical in the US. Simply put, I was fascinated by the founders and their people. I was not one of the founders of DeinDeal. I was aware that I at least wanted to survive for the next 20 years. Then MOVU appears; as is always the case in life, entrepreneurs discover the following startup. We're changing the structure, how we hire people, and even our attitude. Together with two other DeinDeal employees, we observed that, at least in Switzerland, the procedure for international relocation was evolving. We decided to invest at that time in MOVU, our startup.

[00:05:21]

Ken: Now, MOVU was focused on relocation. Typical moving, if you will. I have to laugh a little bit, Nicolas; I think you're Swiss hard on yourself in the sense that you talk about- one, you didn't realize you were going to be a startup founder at an early age, and two, you say you took an inordinately long time, but I see, certainly- university graduate, the management consulting, which is always a big plus. I don't know of many founders who told me that at age 10 or 12, they knew they would be startup founders. If I had stuck with my vision, I would be driving a railroad engine. I wanted to be an engineer and ended up being an electrical engineer, so there you go. It's the way life leads you. I appreciate your first startup here, MOVU, in Switzerland. It sounds like it was successful, given that you exited it several years later. What did MOVU teach you about startups and founding companies in Switzerland?

[00:06:16]

Nicolas: Great questions. Maybe two things. First, when you start a business. You know that every day you make mistakes. One must be able to move quickly. One needs to have a lot of inner strength. For example, it's not a good idea to change the direction every day, but you do need to be able to shoot quickly, aim, and make the necessary adjustments. We learned this with MOVU, and it was a fantastic roller coaster. We went into bankruptcy three times and couldn't pay the salaries due in two weeks.

The second point, or maybe the second part of the question, was that Switzerland wasn't yet a good place for startups because you need people with the right mindset, and those people only come for salaries and work from 8 to 5. We need people who can think without being told what to do. People who can think of ideas and put them into action. I think things have gotten a lot better now.

We have a better pool of skilled people in business and product IT. Ten years ago, we were just starting, and I always say that if you look at the biggest hubs in the world, Switzerland is somewhere between 10 and 15. If you look at this, you can see that we are ten years behind Berlin, 15-20 years behind Israel and London, and 30 years behind Silicon Valley and New York.

It's a generation game; it's a wave. You must start building ecosystems and bringing in talented people because these are the next founders. It's a process that takes time. Switzerland has come a long way since we started MOVU ten years ago.

[00:08:05]

Ken: I appreciate that Switzerland is where it's at. I would attribute much of that to your work at Digital Switzerland. Most founders would start their first startup, exit it, do their two years of indentured servitude at the corporate, and then go and do something else. That's a typical pattern. You instead decided to; I'd say, build an ecosystem instead of just building a company based on the insights you had. What I consider your most challenging career is your role in 2016 as Managing Director of Digital Switzerland, again making Switzerland a leading global innovation hub. What attracted you to the role, and what was your remit there?

[00:08:45]

Nicolas: Okay. When I was 13 or 19, I didn't know how an ecosystem would work. The world ecosystem might not have even been around yet.   As you said, let's be ready for whatever the future brings. I've been lucky over the past few years. I don't even remember the last time I looked for a job.

Joyce, a friend, got in touch with me about DeinDeal, and the same thing happened with MOVU. I will never forget that Digital Switzerland wanted to hire me while I was still working for MOVU. The President of Digital Switzerland, whom I knew well because we worked together, called me, and offered me a job saying, "I have the job for you. It's the next step in your startup career. You're still young enough to work for the country/government."

I asked him about it back then. "Christian, are you sure?" At the time, Digital Switzerland was just Digital Zurich. It's not only interesting but also a mission. You have passion when you have a goal and great people to work with. That's all there is to it; it was a great mission. He told me it is like being in the army; you do something for your country. So, that's how I got this job as the head of Digital Switzerland. I recall that when I arrived, only two and a half of us. During my five years there, I worked hard to develop this ecosystem with an incredible mission.

[00:10:25]

Ken: You went from Digital Zurich to Digital Switzerland. From one sponsoring organization to 240, all during your tenure there. What were some of your key focus areas? What are some of the wins you are most proud of during your time there?

[00:10:42]

Nicolas: I think that the founder of Digital Zurich at the time and Mark Wilder, a well-known CEO of the two biggest media companies in Switzerland, had a sense that Switzerland is a village smaller than an average Chinese city and that Zurich, Lausanne, Geneva, and Barcelona should all be one. In 2016, it was a great time to push for digitalization in the country. Right on time

Other hubs, such as Israel and Silicon Berlin, were already performing admirably. We must push people in Switzerland. Not only are startup ecosystems important, but so is having an investor ecosystem, such as a VC early growth PE. Of course, having corporates who support your cause is also essential. There is still a lot to be done in the next five to ten years.

Every corporation must invest in digitalization. When working in ecosystems, it is important to have corporates. I believe that the United States purchases far more ventures than Europe or Switzerland. The mission is not completed. The next level is about government, and I'm looking forward to seeing how Web 3.0 evolves over the next few decades.

As a decentralized framework, I adore the term "3.0." This is what we have in Switzerland: an incredible political structure that I am proud of, a decentralized structure with state governments, income towns, cities, and villages. That is not easy, and when it comes to pushing digitalization in the country—as we saw at the start of the COVID pandemic—it is anything but easy. Building ecosystems, bringing people together to be aligned on submissions, for example, for E-GOV digitalization, as we call it - Functions of E-government.

It is still a huge challenge today. Let's face it: everyone wants to outperform their peers. It's not easy; there's no top-down approach here. I believe we've brought all these guys together. It appeared to be simple, but it was a considerable challenge. Startups outperform corporations. Corporations have more money, and the government is the government—each promise something. Everyone is happy.

However, when you bring them together, you explain, "We share a common goal and mission: to improve this country. We want to attract talent and the public to understand that digitalization is more than just nasty robots."

We did many things, and our awareness is much higher after five years. We've put great projects in place because it's all about projects. The Swiss Digital Day is one of the country's largest projects, with numerous collaborations between the government and companies.

We've brought together hundreds of startups and corporations. We've created ecosystems and numerous projects. In the meantime, the corona pandemic broke out — a huge boost for digitalization.

The pandemic was a huge boost for digitalization because everyone realized how important and necessary it was. Today, you don't need to explain the benefits of digitalization; it was a blessing to our mission, not just here but globally.

[00:14:48]

Ken: Yeah, you've made a real impact on the organization and the nation overall. I heard a commentator once talk about the proliferation of crypto. If you will, Zug is called Crypto Valley. It naturally flourished in Switzerland because Switzerland is very decentralized in its decision-making, as you inferred. Even in its financial systems and as such, a decentralized technology like they distribute ledger technology- Bitcoin, etc., thrives culturally here more so than it would in a top-down driven country. That was an interesting analogy about how culture and technology need to match. What's interesting, Nicolas, is we interview a lot of leading digital industry practitioners on this podcast, especially in this digital industry space. Typically, they're talking about digitally transforming their department, company, clients, companies, or even ecosystems. I'd say a lot of that pales compared to what you had to do- when you were in the team at Digital Switzerland, transforming an Alpine nation. I'm curious, what advice would you offer these other speakers on how they should approach digital transformation based on your learnings?

[00:16:06]

Nicolas: This is, of course, a very tricky matter. Maybe all the answers are wrong. I'll say yes because it's a complex subject, and in the next few years, we'll see significant differences between companies and countries that do well in the ecosystem and those that don't. So far, the only solution I've seen is a straightforward one that needs leaders.

I see it all the time: leaders with a lot of energy and a convincing demeanor who never stop preaching that digital transformation is good for people, not bad. This is true at all levels, whether in government or business. I recall speaking with government and business officials. One thing is certain: the process will halt if they are not convinced of the benefits of digitalization or digital transformation. Simply put, there is no ecosystem, and it will not change.

Second, having leaders around is essential. There are significant differences between industries and governments, depending on whether there is a sense of urgency. There is no need for change if everything is fine. Why change things when there are no threats? Digital transformation necessitates significant change; educating people requires a significant investment of time, energy, and money. As soon as there is a sense of urgency—and, again, if I may return to the tragical pandemic, we had an incredible sense of urgency from one day to the next— We couldn't meet.

The media were already online- working in real-time. They had been disrupted for ten years; they were ready. But many countries were not prepared to have real-time data as an example of COVID or vaccine cases. That was very interesting. You saw papers telling you we don't need real-time connectivity between hospitals in our government space from one day to the next. They had to execute and bring a platform in place to connect and get almost real-time data.

The media was already online and in real-time. They'd been disrupted for ten years and were prepared. However, many countries were unprepared to have real-time data, such as COVID or vaccine cases. That was interesting. You may have read articles claiming that we do not require real-time connectivity between hospitals in our government space. YET, due to the pandemic, they had to set up a platform to connect and receive data in near real-time from one day to the next.

Sense of urgency- I'm always looking around different industries and businesses. That's what investors are doing as well - people who aren't under any real pressure won't change from today to tomorrow.

Third, when it comes to children and their behavior, it is both. It is the union of digitalization and humans; they are much more open and willing to use new technologies because they are growing up with them. Digital transformation entails educating and engaging people. It is supplementing people's skills in some way. Of course, some jobs will be lost because of digitalization. This is unfortunate. But you need more people, new people with different skills. Improving this last point is critical, people and digital working together. It's all about creating a hybrid world in businesses and government. That's what digital transformation entails.

[00:19:51]

Ken: Leadership. I'll call it a burning platform and engagement from a human perspective. I think what's interesting is you refer to the pandemic as a 'black swan,' as many did at the time. But in between the remote working arrangements that needed to be done very quickly, the somewhat resulting supply chain difficulties that came out of that are certainly continuing to be an issue. Now, the invasion of Ukraine by Russia is creating a lot of discomforts relative to energy across Europe. It seems like one black swan after another. We named them the three Rs in remote asset management and reshoring- of course, a hot button now, especially in the US and across Europe, i.e., bringing manufacturing on shore again. Then, of course, the renewables focused on energy independence. We see all that drive, if you will, a continued burning platform across those. One other plug there, and that is what I appreciate about your word on engagement. We've done a lot of work with the EU on Industry 5.0, and what I appreciate about their focus is what I always call the three Ps. Productivity is truly the Industry 4.0 focus; it's people and the planet. How do we balance and bring a coherent focus around all three and make decisions with all three in mind? You're spot on when you talk about the human engagement work that goes with that as well. Now, earlier, you spoke of a key element of the ecosystem is a private equity and venture capital funding- as I guess, a culmination to all the great work that you did, Switzerland recently announced the National Venture Investment Program to invest in Swiss venture capital companies in this- the Swiss founders themselves. How do you see this impacting innovation across Switzerland?

[00:21:49]

Nicolas: It's very much appreciated. Without a doubt, this is a fantastic initiative. Perhaps as an anecdote, I know that Switzerland differs from many other countries in this regard. I recall being at Digital Switzerland at the time, one of our Federal Council states with low taxes and services. This reflects the Swiss government's mindset. It meant that because you don't pay a lot of taxes, we can't invest billions of dollars in everything in the country.

We prefer to delegate some topics, such as innovation, to the private sector. It's an intriguing observation, and why not? The private sector and the academic world are critical in this country. We are blazing the trail to innovation. Crypto Valley is a fantastic example. Three guys get together over a glass of wine and say, "Let's start a new association." You'll see what it became ten years later: innovation-leading by—sometimes private individuals, not even large institutions, or not only.

The government is now advancing the industry by investing funds, which is greatly appreciated. It is, in my opinion, required. Because of my new job, I'm traveling outside of Switzerland more, seeing more, and many other countries are also doing fantastic work. Much larger sums of money are being discussed in Europe and the Middle East. We require far more than just money; we also require many talented individuals. Even though I am not making a political statement, Switzerland needs more flexible immigration policies. You only get half as much if you have money but no talent.

In any case, Switzerland is in the top five or six European countries, 10–15 in the world. Regarding GDP, Switzerland is the 19th largest economy in the world. Our goal is to be in the top 10 to 15 economies.

[00:24:23]

Ken: It's funny. If I go back to your comment earlier, when you were doing MOVU- you probably could not have imagined a Swiss fund funding venture capital and thus the founders themselves. You certainly were at the forefront of making much-needed change within Switzerland. I know you've just handed over the reins of leadership there to Digital Switzerland. I guess to warm my heart. You're focusing your next startup on digital manufacturing, one of the key areas we focus on. What can you tell us about this next phase of your life, particularly the startup?

[00:24:58]

Nicolas: I never know what will happen next – who does! Nonetheless, as fate would have it, I received another phone call from a friend asking me to meet with his friend to discuss potential opportunities. We got together, and this is where I am now.

One of our main points during the Digital Switzerland campaign was that Switzerland couldn't be digital in every way – as we are a tiny village that cannot be everything to everyone.

Switzerland is well-known for its banking, chocolate, pharmaceutical, and manufacturing industries. However, in the last two to three years, we've become known for blockchain and hardware manufacturing—hardware and software being among the main topics.

I was already- let's say- sensitized to the fact that there is something to do in manufacturing hardware or software. Then I got a call, and this industry fascinates me. Manufacturing continues to consume 54% of global energy consumption. You mentioned it before, but who would have predicted that Europe would face an electricity challenge last year after COVID, in addition to the environment? That is amazing, and it's a big topic. It's about combining humans and digital. It is about environmental sustainability. But, in the end, it's all for the sake of our planet and the environment. Here we are again, in the summertime, with terrible weather in some countries and large fires.

It's not just about real-time data; but also about machine learning and augmented intelligence. Bringing together people and computers in a factory setting. We hope to help the manufacturing sector reach the goals of Industry 5.0, which are productivity for people and the planet. We will get there in five to ten years, but we haven't gotten there yet.

[00:27:18]

Ken: I like how you've worded that; for people and the planet. That's a great way to put it. Just curious, what trends are you watching these days since you seem to be an innovation buff?

[00:27:29]

Nicolas: One of the digital trends I see is Web 3.0. Decentralizing the infrastructure of the internet is a very interesting topic. It will take a decade to put this and other new technologies into use, but this is one of them.

Data protection and cybersecurity are recurring trends. Digitalization makes everything transparent and visible, which is exciting and terrifying. Data protection and transparency will be huge in the coming decades, with benefits and drawbacks for institutions and individuals. Of course, this applies to the manufacturing sector as well.

The third trend I'm noticing is still in its early stages. It's all about digital 4.0 sustainability. We need massive investments, entrepreneurs, and investors in the space because the goals we want to achieve by 2030 are ambitious. New technologies, software, and hardware will be required. Consider these three trends, which will undoubtedly influence digital in general and manufacturing in the coming decades.

[00:29:11]

Ken: Web 3.0/ infrastructure, data protection/ transparency, and digital 4.0 sustainability. On the second point, of course, GAIA-X is something we've been following closely, the European Standard for Data Sovereignty, effectively. I know Switzerland has been quite a proponent of that as well. In closing, I'm just curious. Where do you find your inspiration?

[00:29:35]

Nicolas: The value of consistency and discipline cannot be overstated. I listen to podcasts, read online news, and read books when I have time. Speaking with experts and listening to knowledgeable people are also excellent resources, as are learning from my mistakes through customer interactions. When you stop learning, you start dying.

The world is changing at a fast pace. As we all know, digitalization will accelerate everything; we must learn every day. It makes no difference what source it is; consistency and discipline matter.

[00:30:46]

Ken: I'd say constant learning would probably be a good subtitle for your career path and everything you've done. Nicolas, thank you for sharing this time and these insights with us today. I expect that your next step- which again is in- near and dear to our heart, will be even greater for you.

[00:31:05]

Nicolas: Thank you for inviting me again, Ken. It was a fascinating discussion. By the way, I've learned a lot from what you've said. Thank you very much; I appreciate it.

[00:31:15]

Ken: As well. That is the power of an ecosystem, as you said. This has been Nicolas Bürer, former Managing Director of Digital Switzerland and Switzerland's- probably newest entrepreneur, soon to be announced. Thank you for listening, and please join us for the next episode of our Digital Thread podcast series. Thank you, and have a great day.

[The End]