Mathieu Daix about Branding, Strategy, Work Ethics and Seeing the Invisible
Today, I’m going to interview Mathieu Daix, about his vision of work, strategy, venture capital, time, branding, entrepreneurship and much more. He tells us why marketing might be the most important thing in venture capital and how he tries to see through the eyes of one thousand people every year.
Unusual Place, Unusual Investor
We are in daphni’s office, rue d’Aboukir, in the Sentier, a central district of Paris, where most of the French textile industry was based. The textile is leaving and being replaced by an army of startups… and some VCs that went wild.
Mathieu Daix is wearing shades of blue: electric blue and white custom Nike Air Max sneakers, a dark blue chino, a Lacoste pale blue polo shirt, matching his eyes. The guy love brands. He seats casually in an orange sofa, eating an ice cream cone, his feet on the table, near his mug where a lolcat is riding in the space, a muffin’ in his paw.
The tuners are broadcastings Bon Entendeur, mixes of French celebrities speeches with electro music.
The scene has something amusing, almost irreverent, when you know that this young man is one of the co-founder of a VC fund. Maybe the youngest co-founder of a VC fund.
Anyway, Mathieu was in a good mood, he was quite proud of his bike trip of 50 miles the day before. He missed the finish of Le Tour de France. “Too bad. I had a great day.“
He lost some of his cheerfulness when I reminded him that we were to make the interview. The man has been influenced by his region of origin, Auvergne, a region that French would locate at the crossing of, literally “the two empty diagonals”, in reference to the very low density of the region. In Auvergne, people don’t like to speak about themselves. There, you prove your value by your work, not by your words.
As we were chit-chatting, I asked him which entrepreneur really impressed him. I knew he was deeply admiring Eric Carreel among others, and was quite surprised to hear his answer, which sounded unanticipatedly conventional: “Elon Musk“. Elon Musk!?
Elon Musk, strategy and impact
- When did you join the ranks of Musk’s worshippers?
“You know that I’m not fond of the Silicon Valley’s gurus. But did you read his 10-year masterplan? Honestly, I was amazed. His long term vision was to accelerate the advent of sustainable energy. And to do so he chose to start building very expensive cars. This is so damn counter-intuitive when you look at the short term: (a) aiming at global change and doing low volume and (b) aiming at sustainability and building something that consumes electrical power, whom production pollutes.“
“But in the meantime, he built solar panels. And then he used the cash of his sales to prepare the next generation of cars: a medium volume at a lower price. In the end, he has solar panels and resources to build affordable, high volume cars. Exactly what he needed to make the change he was after. On paper, it looks both revolutionary and old fashioned: who builds a 10, 20-year plan and sticks to it despite everything? “
Who builds a 10, 20-year plan and sticks to it despite everything?
I knew he wishes entrepreneurs took more time to plan, so I asked him:
- But how could you do so in a fast-changing and uncertain environment?
“I believe you need to find the good balance between Elon Musk, making 20-year plans, and the Prussian field marshal Helmuth von Moltke reminding us that: “No plan of operations extends with any certainty beyond the first contact with the main hostile force.“ (On Strategy, 1871). Strategy stays crucial, we just need to make more iterations than we used to.“
Strategy stays crucial, we just need to make more iteration than we used to.
“I regret that strategy is so overlooked by the tech community. Sometimes, very savvy founders, acknowledging uncertainty, conclude that their strategy is to have no strategy. “We’ll stay lean and adapt“, they say. It is an unfortunate legacy of the so-called war between the old and the new world. We, too, often think we need to throw away everything of the past to build the foundation of the future. And you end up either overconfident or unprepared. You know what Michael Porter told in his canonical paper “What is strategy?”:
Strategy is the creation of a unique and valuable position, involving a different set of activities. The essence of strategic positioning is to choose activities that are different from rivals.
“It applies to all companies, including startups. With the lean approach, startups are focusing on operational effectiveness, which is not strategy.“
“Although it’s true that “positioning is rejected as too static for today’s dynamic markets and changing technologies“.“
“Competitive advantage is temporary and startups must move fast. But operational effectiveness, meaning “performing better activities like creating, producing, selling“ can be easily emulated by competitors. So in a word, every company should work at being different and “deliberately choose a different set of activities to deliver a unique mix of value.“
“This is brilliant. Everything is in this paper.“
- And what would be your own version of Musk’s masterplan?
He pauses. Gazes at the ceiling. “You know, we live by default on this time frame in the venture capital industry. This was the most difficult part for me when I co-founded daphni: looking ahead and anticipating what I want for my 10-year-older version of me. We forgot how to do this. It is almost demeaning to do so for our generation.
Looking 10 years ahead is almost demeaning for our generation.
Daphni is a long term move, and our core strategy is to identify and understand the strengths of European entrepreneurs to help them score. We don’t want to change them in any way. We want them to keep their singularities. We don’t follow an external ideology. We trust ourselves, the strengths of our countries and their entrepreneurs.“
Working with entrepreneurs and other rock stars
- Trusting entrepreneurs, finding their strengths… and their weaknesses. How do you consider your relationship to entrepreneurs?
“In a venture fund, you have the means to build a methodology to predict one outcome. Like you try to be a rational version of Nostradamus. Isn’t that super exciting? Everyday I meet entrepreneurs that share their vision about the future. They tell us how the future will unfold, in the next weeks, months, years.“
“Yet, there is a small problem: these people have their skin in the game they analyze. You might know the ignorance veil. This method, described by Rawls, aims at determining the morality of a certain issue (e.g. income distribution). The thought experiment is the following:
“No one knows his place in society, his class position or social status; nor does he know his fortune in the distribution of natural assets and abilities, his intelligence and strength, and the like.“ (Rawls, A Theory of Justice, 1921)
And he has to tell if the system is fair under this veil of ignorance. In startup terms, you’d say it is objectivity-hacked.“
“Well, entrepreneurs are in a very different position. They are market experts and they tell you how value chains will change, how the power is moving and ecosystems evolve. But they are far from being objective. They have so many biases when they look at the market. Their assumptions are their truths.“
“One of our values is “Question, listen, act“. When you are a VC you need to find a balance between suspension of disbelief to listen carefully to entrepreneurs’ stories, asking questions to be sure to have understood everything and to force entrepreneurs to reframe their views. This is the empathy/rationality couple, which is our work ground. When you miss one of the two, you miss the whole story. And let’s be honest: this is not easy. Try to trust and distrust at the same time.“
When you are a VC you need to find a balance between suspension of disbelief and rigor. Try to trust and distrust at the same time.
“I meet more than 1,000 entrepreneurs a year. If you don’t enter in resonance, you just can’t see what they see. If you are over-empathetic, you lose your critical mind. But this job is made for me: all my life I was told I was too empathetic and too critical at the same time.“ He laughs.
- Did you build safeguards?
“The VC game is a collective play. You are never alone. I feel like we have built something very interesting at daphni because our frameworks and heuristics are completely different within our team. We very rarely end a meeting sharing the same impressions and thoughts. “
“I am not as focused on data as some of my partners are. It’s like going to the movies. Some of my partners could draw you the structure of the story very precisely after watching it. I can’t. But I remember the sensations, the soundtrack, what I felt, what happened in the room, the reaction of the people around me, at every stage of the movie. I pay a great deal of attention to my environment and the people around me. “
I pay a great deal of attention to my environment and the people around me.
When I am told that data rules the world, I admit it. But it doesn’t reign alone. We shouldn’t forget the power of intuition and empathy. Look at chess players. You could believe chessmasters are thinking hard to plan their moves. They don’t. They know instinctively what to play. They just recheck to make sure their intuition didn’t betray them. It sometimes happens. But they mostly know beforehand. This is talent, work, experience and the beauty of human mind.“
Data doesn’t reign alone. Chessmasters don’t plan their moves, the just know them. They just recheck to make sure their intuition didn’t betray them.
- Is it easy to communicate intuitions?
“No. It is not.“
“You need to have trust within the group. A sane organization needs both challenge and care. Intuition is not the same as foolish subjectivity. A fireman can detect instantly if something is wrong when he enters a building on fire. This is subjectivity, this is intuition, but this has value. This is very different when the same fireman talks about his intuitions about economic policies.“
“Knowing my tendencies, I put a lot of time into checking the facts, and I really deep dive when I see discordances between what I believe and what I see. It often reminds me the ironic idiom “when the reality doesn’t fit the theory, you need to change the reality”. Don’t do that! Gather facts to build the bottom of your pyramid, then trust yourself: your intuition and your critical mind.“
“The difference between us and a fireman entering a building on fire (put apart the dress) is that we have more time. And that has a great deal of implication. In some competitive deals, you need to choose very fast if you want to invest or not. You’d better have a good intuition, a good trust between the founders and data at hand to take a good decision.“
Eventually, the difficulty is to express and communicate the invisible.
“Eventually, the difficulty is to express and communicate the invisible. Especially when we didn’t share the same invisible vibes or when you work with very analytical people. One thing that really matters is their fundamental assumptions about the world. This has to be felt as much as understood.“
“If I do this job it is also because it is a big leverage. At daphni, we focus on usage. When you speak about usage, you speak about people. And you need to have a vision about social dynamics, human psychology, sense of the history. You don’t just predict it, you build it, stone by stone.“
When I am told that I have a financial job I am always surprised. This job is based upon psychology, sociology, marketing.
“Mark Zuckerberg might not be the most confident public speaker, but he knew what his users wanted. He had the data afterwards, but at the beginning he just knew. When I am told that I have a financial job I am always surprised. This job is based upon psychology, sociology, marketing. This is its core.“
Branding, Myths and Representations
“What’s incredible at daphni, is that we are truly building something new. It is not something the market was waiting for. We want to have a true impact on entrepreneurs, we will have a great impact on the representations.“
“When people think of daphni, they will have things in mind. We are building a repertory of representations, just like when you make a work of art. It is very motivating. It is just the beginning, nothing is done. But I like the beginning of our journey.“
- Are representations born or made?
“I had an Aha moment at the beginning of our work on the daphni brand. We have an amazing designer, that came with the idea of a coloured city, inherited by the European tradition, influenced by the 70s. It was partly our brief, partly his genius.
And at that very moment, when I discovered what he drew, I realized something strong: “we are not bound to make a financial brand. We can make a pop brand, a lifestyle brand.
Entrepreneurs go to daphni like they would go to Starbucks. It is not a mere question of chance. Take the word lifestyle literally. A VC has so much impact on the next 10 years of the entrepreneur life. There is a reciprocal identification. We don’t want to fund the next silly thing; entrepreneurs don’t want a cold brand, a simple deep-pockets partner. It wouldn’t be a partner otherwise. Not for 10 years at least.“
- So… born or made?
“A brand is complicated. It evolves throughout the time. A brand is a style, a tone. We are about proximity, coolness, honesty. We don’t take ourselves too seriously but we are ambitious. This is the base of our identity.“
“This is a mix of identity, planning and outside perception. You can try to become what you’d like to be, but the safest bet is to start with what you are. You are the common vision and natural practices that emerges in the team. It can be the barycenter of the founders identities, it can be a bit different. What matters is to stay true and to start by acknowledging what you are. But it is the same for any brand, even those in the pop culture.“
- Why are you so attached to pop culture?
“I was always amazed to notice how people were strongly linked to products, both cultural products and material ones. You can love your Stan Smith sneakers. Some people even sleep with them when they just bought them. You can wait in lines for hours to go to the first Burger King opening in Paris. You can even spend the night outside to buy the new version of an iPhone. Isn’t it incredible this power that brands have on people’s minds? They have an influence on the behavior of thousands, sometimes millions of people throughout the world.
You can think it’s for the worst. I agree in part with that. Noemie Klein’s arguments are fair [see her book No Logo]. But what a richness of imaginary! When you talk about a movie, you are talking about a product that shaped the world at every stage of its life. Pop brands build contemporary myths. Comics are very interesting in that matter. I would love to organize events with comics authors. They understood what works. They invent universes and sell them. It’s the same for us: we are producers of entrepreneurs that will shape the reality and the myths of many people. They need to build their universe, to understand what people like and what motivates them, to know how to talk to them. And sell!“
Brands have an influence on the behavior of thousands, sometimes millions of people throughout the world.
“Technology is a mean. You don’t sell technology. You sell products. In fact, you don’t really sell only products. You sell a story. You sell meaning, purpose, values. It is tough to build a brand, to have a brand that means something. And a brand is representations, but it is also relationships. You need to build your ecosystem all around you. In France we still have trouble when it comes to bringing a systemic vision.“
You don’t sell technology. You don’t sell products. You sell a story. You sell meaning, purpose, values.
“My first job was in a consulting company specialized in country branding. I worked on the Portuguese shore called Alentejo. It was ideal for tourism on paper, but there were no tourists.
How could we attract tourists? We needed to put Alentejo on the map. For real. We needed to understand the country, what was authentic, sharable and correlate all of this with the economic constraints. We had a blank paper. So what story do we tell? How should the Alentejo shores be in the collective mind for the next 20 years? It was very exciting. In fact it was both freaky and dazzling. It showed me that marketing is not just communication. You need to get the market under your skin. It is much more important than the color of your brand logotype. Marketing is the core of entrepreneurship: how do you bring a product in a market.“
- How do you keep learning about marketing?
“The days I’m lazy, I just enjoy the power of marketing all around me. I walk in the street and look at front windows of shops, maps, ads, cars, clothes. And I start making assumptions. Why are these elements there? Why are they the way they are? This is overall the easy way to learn.“
“The intermediate way is to consume cultural products. Watching series & movies, reading books, listening to music. You just put yourself in front of the cultural production talented people created and broadcast. When you look at the trailer of the new Tarantino, the last cover of Harlan Coben or the way Jay Z have designed TiDal, you grasp an intention and the Zeitgeist of our days.
When you look at cultural products, you grasp an intention and the Zeitgeist of our days.
Or at least you try to guess it. Very talented and intelligent people have offered something. Reverse engineering the different cycle of the production, from the conception to the actual usage is an endless source of inspiration.“
“The hard way is reading books and research papers about marketing. But it is worth it.“
- Your TOP3 of marketing books?
“The first one is The Ladies’ Paradise by Emile Zola. He recounts the rise of the modern department store in late nineteenth-century Paris. The store is a symbol of capitalism, of the modern city, and of the bourgeois family: it is emblematic of changes in consumer culture and the changes in sexual attitudes and class relations taking place at the end of the century.
The department store of the late nineteenth invented marketing as we know it. This is also what I like about marketing. This is not new. This has more than 150 years. Zola wrote with his inimitable style. He likes to describe the world exactly how it is. The product highlights, the sales, the street marketing, the events… The market era was over. Stores were rational. They were planned. They were a form of art that met business. This shift from market to department stores is amazing“
“The second one is The New Strategic Brand Management, by Kapferer. He summarized all the Proctero-Kotlerian marketing [the marketing as it was theorized by Philip Kotler and done by Procter and Gamble] of the 50s to 80s. He put the emphasis on representations. The switch from push to pull? It’s him. David Aaker too, but Kapferer moved it really forward.“
“The third one is Mythologies des marques (“Brand mythologies“), by Georges Lewi. I think it has not been translated yet. He too sums up marketing as we knew it and went beyond. He showed that brands create new myths and both got their power and fed the common representations. Take Nike and the symbol of victory. You can’t understand one without the other in our modern time. And the myths are alive, they still evolve.“
He cogitates. “It might be a pale copy of Roland Barthes. But it still worths it. By the way, this will screw your top3 but let’s make a top4. Roland Barthes is the squaring of the triangle. In his book “Mythologies“ he describes the invisible around the Tour de France, the Citroen DS car, the steak.. He was a semiologist and a sociologist. He had sharp eyes. I love his style. He analyzed the impact of myth. How you create it. It is awesome.“
Early Tipping Points and Dolce Vita
- What were your tipping points?
“I believe that my journey was largely shaped before I entered the professional market. I made two incredible meetings that were my early tipping points.
The first one with a Olivier Torres, an Entrepreneurship professor, specialist of SMEs in France. He was just like Marcel Pagnol speaking about CEOs of SMEs with an outstanding culture and a conceptual richness. I understood that entrepreneurship was a true object of learning and study. I chose to start walking on this path.
He embodied what a true professor is: someone who brings trust and interest to his students.
The second meeting was with another professor, the very same year. His name is François Scheid. He taught digital marketing and innovation. He did two things that I would never forget. The first one was to make me his teaching assistant. I was preparing and facilitating courses with him, to my fellow students. He made me confident. The second thing was to offer me to write a book together. Doing so, he embodied what a true teacher is: someone who brings trust and interest to his students.“
- You are a teacher yourself. How would you describe it?
“Teaching, when it’s done occasionally, is the best activity I know. It wouldn’t be the same if I’d be a regular professor. But when you deal with a subject in depth, when you present it, when you empower your students… It is a great accomplishment.
Teaching, when it’s done occasionally, is the best activity I know.
You are challenged, you need to give, you also receive a lot. These moments are demanding and full of value. In front of a class, you can’t be a fraud. You have 50 people that count on you. I do enjoy these moments. And you need to make it happen, here and now. It may be a glimpse of what an artist can experience onstage.“
- And what would be your dolce vita? What is the good life?
“Eating proper food at Jany’s and Christian’s [his parents].“ He smiles.
“The good life… The good life is when you have the time to do and think freely in the daily life. The good life is when you have the means. Fundamentally, for me, it is to be respected. And to go outside. If I’m honest, the good life is the light of the South. Its warmth, weight, smells, colors.. My good life has these colors. It is the happy moments that you find throughout Sagan and Pagnol. The good life is hedonistic, with a tan and salty skin. And not alone. But this is not the life that I really want. I have too much a work ethics. I’m too conscientious. My real life is good but it is not the good life.“
“I always ask myself “Do I spend my time working for the right things?“ Dispersal and idleness are evils that I always try to avoid. I really entered adulthood when I started avoiding these two evils. When I walk on the street, I feel like I should listen to a podcast. There is a constant search for optimal efficacy. But my secret weapon is my lazy method of learning marketing. I acknowledged my rite of passage in the adult life but I keep having a good time.“
Looking at the invisible and enjoying what he sees? This might be his true Dolce Vita.
Quite an unusual investor.
