Welcome to the first episode of New Entente Cordiale, our new podcast exploring the future of European tech through a closer partnership between London and Paris.
In this pilot conversation, we—Nicolas Colin in Paris 🇫🇷 and Saul Klein in London 🇬🇧—discuss what economic sovereignty means today, and how the London–Paris tech corridor could become the backbone of European innovation independence.
Over 45 minutes, we reflect on the historical Entente Cordiale of 1904 and how it might inform a modern framework for tech cooperation. We explore the idea of a ‘New Palo Alto’—how London, Paris, and the Benelux region together form the second-strongest innovation cluster after Silicon Valley. We also talk about what sovereignty really means in a digital age, starting from the individual and local level, not just the nation-state. And we ask why so much European capital still misses the innovation economy—and what must change.
This is a pilot episode. We’re testing the format, and we want your feedback. If you're building a company, investing across borders, shaping policy, or simply curious about the links between tech and politics in Europe, we hope this sparks something. Let us know what you'd like to hear more of—or less of—and who should join us next.
What follows is the full transcript of our conversation, lightly edited for clarity.
Reviving the Entente Cordiale: A Tech Perspective
Nicolas: Hi, I'm Nicolas Colin, co-founder of The Family, a startup accelerator and publisher of the newsletter Drift Signal.
Saul: Hi, I'm Saul Klein, co-founder of Phoenix Court, a venture capital group that includes LocalGlobe, Latitude, Solar and Basecamp firms.
Nicolas: Saul, great to be with you today. A few weeks ago, we discussed launching a podcast to have conversations about the New Entente Cordiale. We'll explain this concept shortly, but the idea is to create discussions of interest to the entire European tech ecosystem. You wanted our first episode to focus on economic sovereignty. We'll introduce these concepts one by one.
Perhaps we should start with a reminder of what the original Entente Cordiale was and how it applies to today's context.
Saul: While it might sound trendy to discuss the Entente Cordiale today in a post-Trump['s reelection], post-Starmer['s election] environment, you and I have been having this conversation for three or four years. This trading relationship between France and the UK is more than a century old. The Entente Cordiale marked a specific agreement between the UK and French governments just over 100 years ago.
We've been trading between London and Paris for probably over a millennium. This link has always been very strong, regardless of politics, economics, or culture. The interaction between London and Paris, between the UK and France, is ancient.
I think it's valuable to remind ourselves of this Entente Cordiale—this close and mutually beneficial relationship that has lasted centuries, perhaps millennia. This concept resonated with you when we first discussed it years ago.
Nicolas: Yes, absolutely. I should remind listeners why it's relevant for us to discuss this together. I'm French and currently in Paris after 10 years in various other countries. You're originally from South Africa but have been in London for many years, with your office located a few hundred metres from Saint Pancras station. You actually tell visitors that you're the closest office to Paris in London.
Saul: Exactly. You once brought Cédric O, who was then France's digital minister, to our office. I'm speaking to you from our Phoenix Court office, specifically from the room I spend most time in, which is called Paris. We very much think of Phoenix Court as the 21st arrondissement—very much part of Paris.
Bridging the Channel: How Transport Changed Everything
Nicolas: The Eurostar has changed everything. I didn't really experience the connection between London and Paris before its arrival, but it makes travel between the two capitals incredibly easy. It's a two-and-a-half-hour train ride from central London to almost central Paris, making business between the two cities very straightforward.
For me, this all began when we started The Family. We originally focused on the Paris tech scene, working with French startups. They constantly complained about the difficulty of raising venture capital in Paris because there were too few local VCs, and those that existed were cautious and reluctant to back ambitious companies.
We told them to explore the London VC scene—just buy a Eurostar ticket and pitch there. But there was reluctance. For French founders, London seemed distant, intimidating, with too high a bar. They had to buy expensive train tickets and hotel rooms, then pitch to London-based VCs in English, which is challenging for many French entrepreneurs.
We worked hard to address this and found allies across the Channel. One ally was you, as a partner at Index Ventures when you backed Index's investment in The Family. Many connections existed between the cities, but we thought we'd found something that would make things easier for everyone—for London-based investors to find interesting targets on the continent, and for continental entrepreneurs to raise capital from London VCs.
France's Entrepreneurial Heritage: From Kelkoo to Xavier Niel
Saul: This connection between the two cities around tech, and the role they've played in elevating the European tech ecosystem, is very strong but not always well understood. When I think about my own experience, one of my partners at Index was Dominique Vidal, who had been a founding team member at Kelkoo. Many people won't remember Kelkoo, but it was one of the great European tech success stories, particularly their exit to Yahoo. Dom went on to run Yahoo in EMEA.
Another mainstay is Bernard Liautaud, now based in London but one of the great European entrepreneurs of the last 20-30 years. He started BusinessObjects, still one of the great enterprise software companies to emerge from Europe. The French innovation mindset and France's ability, like the UK, to punch above its weight globally in innovation is extraordinary.
Xavier Niel is undoubtedly one of the great entrepreneurs of the last 20-30 years. While his impact is best known in France, he's spread his wings as an investor through Kima Ventures. We all know these stories and connections, but since 2016 and Brexit, there's been this narrative that the French and British can't stand each other, that they're at war.
Yes, we can point to football, rugby, historical wars. But the spirit of the Entente Cordiale—which I've just confirmed dates from 1904—was a friendly understanding, not even a formal alliance. There has been this friendly understanding going back centuries, with mutual respect both ways.
Now is an incredibly important time to name and recognise this. That's why I believe this is the moment for aNew Entente Cordiale—to be explicit about this relationship rather than let anecdotes and narratives simply flow by.
What Each City Brings: Talent, Capital, and Ambition
Nicolas: I'm curious about what each city brings to the table. Those well-known French entrepreneurial figures like Xavier Niel and Bernard Liautaud reflect many things about France and Paris. There's an abundance of talent, a scientific culture, the fact that we value university education in science, maths, and physics. This translates into building interesting and promising tech companies.
There's also the role of government in France. The government isn't shy about backing companies or throwing its weight behind ambitious tech challenges. It doesn't always work—often resulting in waste, failures, and humiliation. But over the long term, it translates into higher ambition and the idea that if you need funds, backing, and power, you can access them by forging alliances with authorities.
London is always perceived from a continental perspective as where the money is. We need London because there's no money on the continent, but those London financiers have the legacy of centuries of trade and haute finance. With your New Palo Alto thesis, you insist that London is more than money—there's also a scientific tradition in England, including Oxford and Cambridge. How do you view what these two cities respectively bring to the table?
Saul: One of the former residents of Somers Town, the neighbourhood where we're based between Saint Pancras, King's Cross, and Euston, was Charles Dickens. He wrote A Tale of Two Cities about London and Paris. Thomas Paine migrated between London and Paris in the 18th century. Even during revolutionary moments, British and French activists were aligned and in conversation. This was a neighbourhood where the Huguenots settled.
I think about all this as a much more fluid interface. The Eurostar makes us incredibly connected—we're more connected as cities than Boston and New York from a transport perspective. We're more connected, aligned, and alike in terms of science, maths, and physics. This was the home of Newton, Darwin, Crick, and Rutherford. Across these two cities, there's been massive, constant, ongoing translation of ideas in science, culture, arts, and politics.
I think less about London and Paris separately and more about the connective tissues. The Pasteur Institute is part of Greater Paris, but it's only as much part of Greater Paris as Cambridge is part of Greater London. Both are about 40-45 minutes from their respective city centres.
For me, it's about London and Paris as foundational pillars, then reaching out—Paris connecting with Brussels, Amsterdam, Leuven, Eindhoven. London also connects Birmingham, where much industrial innovation occurred, to Manchester, Bristol, Stoke, and Scotland, which historically has had stronger relationships with France than with England.
There's a complex, interactive relationship going back centuries. I see much more alignment and sharing of systems, particularly at the human level, than differences.
A key point you made is critical to our discussion: the role of the state versus the market. The French state has always played a much more proactive role in shaping markets and taken a more strategic, long-term perspective on critical infrastructure—energy and defence being two areas where France made decisive nuclear-related decisions.
Nicolas: France hated being dependent on the Americans and decided to make huge investments for independence. Nuclear power plants replaced oil as the main energy source. This was launched in the 1950s-60s and came to fruition in the 1970s. France became essentially independent from oil-producing countries and one of the world's most electrified nations—we consume more electricity as a fraction of total energy than most other countries.
For defence, we wanted our own atomic bomb, which we developed shortly after World War II. For a while, France was outside NATO's integrated command—we refused to put French soldiers under American officers' authority. This ended with President Chirac about 20-25 years ago.
Saul: That mentality is very interesting. It's not one the UK has followed, particularly after World War II, where arguably the UK has surrendered more sovereignty over fundamental aspects of our economy and defence, primarily to the US. As we've discussed recently, this has become more visible over the last 5-10 years, even before Trump was re-elected and JD Vance came to Munich telling us all to wake up.
Defining Europe's Super Cluster: The Five-Hour Train Rule
Nicolas: Before we discuss economic sovereignty, let me summarise New Palo Alto. This is the range within which your firm looks for investment opportunities. When you first introduced it to me, the centre was the London-Paris axis, with these connected tissues you've described. The criteria for determining New Palo Alto—Europe's equivalent of Palo Alto—was originally a four-hour train range.
Saul: The New Palo Alto idea emerged about five years ago as a thought experiment. Originally four hours, I've expanded it to five hours to include Edinburgh. The idea was to look at a geo-fence of five hours' train ride from King's Cross, Pancras, and Euston. As a super cluster, what would this amount to in terms of population, venture capital, and outcomes?
As we've tracked the data—now baked into Dealroom's dataset so you can benchmark New Palo Alto against other clusters—after the Bay Area, if you examine three critical inputs of healthy innovation clusters, New Palo Alto ranks second globally.
The first input is availability of capital—early stage, breakthrough stage, scale-up stage. The second is availability of talent measured by university talent and patents. The third is outcomes—billion-dollar companies. Across all three dimensions, New Palo Alto is the second most productive innovation cluster globally.
Nicolas: That's remarkable.
The Numbers Behind New Palo Alto: Capital, Talent, and Outcomes
Saul: It surprises people. First, they've never heard of New Palo Alto. But it's surprising that this region is more powerful as a cluster than Tel Aviv, Beijing, Shanghai, Tokyo, or even the New York-Boston area.
Looking at capital flows into New Palo Alto over the last decade: in 2013, there was $3 billion of venture capital. In 2023, there was $24 billion. In 2014, there was $110 billion of enterprise value. In 2024, there's $1.6 trillion.
This is now an incredibly powerful global innovation leader, built around the spine of this Entente Cordiale between London and Paris—two cities that healthily collaborate and compete while driving innovation within this super cluster.
Beyond London and Paris, most people have never heard of photonics in the Benelux region. But without that cluster, there's no ASML. Without ASML, there's no TSMC. Without TSMC, there's no NVIDIA. This indicates how powerful this cluster is, alongside DeepMind, Arm, the Pasteur Institute, and the Crick Institute.
There are now over 1,000 venture-backed startups in New Palo Alto generating more than $25 million in revenue. Not unicorns, but high-growth companies doing serious revenue—what we call colts, or companies doing over $100 million, thoroughbreds.
Having been in this ecosystem for 20 years, this tells me we've not only arrived, we've arrived at a level where we need to get behind this momentum. Not because we feel abandoned by the US, but because we should be confident about where we are and what we can do.
Nicolas: To be clear, Benelux—Belgium, the Netherlands, and Luxembourg—is included in New Palo Alto, bringing the photonics industry and ASML, obviously valuable assets in the current geopolitical landscape.
Saul: Exactly. Adyen came out of Amsterdam. Booking.com came out of Amsterdam. Many top US tech companies locate their EMEA headquarters in Amsterdam if not London or Paris—Uber's European HQ was in Amsterdam.
This constellation of cities is super powerful. We just haven't done a good job recognising our own strength and capabilities, or aggregating them so outside investors can see that after the Bay Area, the second-best place to allocate capital globally—arguably the best if you're looking for blue oceans rather than red oceans—is New Palo Alto.
You mentioned people come to London for money. While there are many reasons to come to London, the original haute finance centre is Amsterdam. They literally invented capital markets in 1604. It's not just London that knows how to be a global financial centre—Amsterdam was the first. Between London, Amsterdam, Paris, and Brussels, you have a constellation of cities with both historical and contemporary global impact.
Nicolas: Clay Christensen once said it's all about categories. If you rank cities separately, London, Paris, and Amsterdam end up way down in global rankings. But if you aggregate them within a cluster that exists day-to-day—because people travel these routes, partner to build businesses, raise money from each other, and work toward common goals—that's a cluster that truly exists. We just lack a name for it, except for New Palo Alto, which too few people use.
Now, let's discuss economic sovereignty. How does having such a cluster with concentrated resources and potential translate into a lever for securing sovereignty? I see an issue: sovereignty is usually appreciated at the nation-state level. We say France is sovereign, as are Britain or Germany. There are experiments in supranational sovereignty like the European Union.
But the EU no longer includes the UK due to Brexit. Within the EU, some countries share the Eurozone currency, contributing to increased sovereignty, while others remain outside. Yet when JD Vance comes to Munich saying Europeans need to wake up, stunning everyone and triggering sovereignty discussions, this conversation seems to happen at continental level—including the UK and even Norway, which isn't in the EU.
What does economic sovereignty mean when we lack nation-state construction or supranational construction like the EU? What does continental economic sovereignty mean? I think that's the scale at which you're reasoning.
Sovereignty Starts at Home: From Individual Agency to Continental Power
Saul: I'm going to disagree first to agree later. The more I've thought about it, the more I believe this comes down to sovereignty at an individual or human level.
Sovereignty begins with people feeling they control their world—how they receive information, how decisions are made. Then there's family sovereignty, neighbourhood sovereignty, city sovereignty. Even the nation-state is relatively new, not just globally but within Europe.
Many places we're discussing—France, the UK, Belgium, the Netherlands—are really collections of city-states or regions that only became nation-states in the last few hundred years. Then we started discussing super-states or continents. More fundamentally, particularly regarding technology, sovereignty must start at the individual level.
I think you build up from individual to neighbourhood to city to regional to state to interstate levels because we believe these larger entities—family, neighbourhood, city, region, state, super-state—should help improve individual sovereignty or agency.
Nicolas: Agency—I was about to say that.
Saul: What we're responding to now—and I don't mean just today, you can see elements playing out over 10-15 years, even in London streets. I remember the 2011-2012 riots in London when people broke windows of consumer electronics shops on central London high streets. This was the beginning, along with Occupy Wall Street, of people feeling they lacked agency and the world was unfair.
Who do we look to for representation to make the world fairer? Our state, our super-state. Much of what's happening now is people genuinely feeling they lack sovereignty. One of the biggest problems with technology, particularly AI, is that AI almost by definition removes sovereignty from humans and gives more to machines.
It's not just about JD Vance coming to Munich saying if you want defence, pay a higher GDP percentage to NATO, or you've lived in your parents' house for 80 years, pay some rent. That's entirely reasonable, and he wasn't the first senior US politician to say it. I'm thankful to Vance and Trump for saying this clearly.
But they're exhibiting something deeper about how people feel about the world around them. We bring this to the neighbourhood level in our business. We talk about being good long-term neighbours as Phoenix Court, helping people realise their full potential. People say, “Why would a venture fund say that? That's bullshit.”
In economic practice, it means 10% of our management company profits, 2% of fund carry, and 10% of management company ownership goes to our foundation. 18% of foundation grants go within a mile of our office.
The Economist said last October about the “miracle of King's Cross”—if Britain has a future, it's here. You have Nobel Prizes at the Crick Institute, at DeepMind, you have XTX Markets (one of the world's most successful hedge funds), Universal Music, Havas. The Economist called this the best place in Britain to be poor, yet if you live in neighbouring Somers Town, you'll live 20 years less than in Highgate, 15 minutes away. Literally, not metaphorically, Marx, buried in Highgate, would be turning in his grave.
Sovereignty must start at neighbourhood level. The role innovation plays in improving outcomes—neighbourhood, city, state, interstate—is bottom-up, not top-down.
Nicolas: Two things to add. First, this resonates with explanations for why Trump won the last election. Even though the American economy was doing well, people felt deprived of agency. They felt Trump's “Make America Great Again” vision would provide the agency they'd lost. Whether this happens is another question, but there was a strong feeling that people had lost agency or sovereignty, and this candidate would restore it.
Saul: You've seen this for decades with Le Pen and Marine Le Pen in France. Then here with UKIP morphing into Reform in the UK. Germany sees the same narrative. We must honestly recognise that there's only so much you can do top-down. It must be bottom-up as well as top-down.
Regarding Europe and the EU—I'm focused on New Palo Alto rather than Europe, not because I don't think Europe, the European Commission, and EU Inc. are critical projects. But I worry that being too high-level, top-down, and abstract prevents building on solid ground-level foundations.
I'd rather focus on strengthening links between London and Paris, and London-Paris-Amsterdam-Brussels-Cambridge-Oxford-Edinburgh as a super-strong base. Not despite Berlin, Stockholm, Barcelona, Prague—we've been working with these cities since 2007 with Seedcamp, including Tallinn and Zagreb. But I worry we spend too much time at high levels and not enough on the ground.
Nicolas: This has been my view for years. I worked for the French government, for the French Treasury long ago. I know government from inside. Like many who join government expecting it's where you need to be to change things and make the world better, you end up disillusioned.
There's no money to do anything. There's resistance and friction. You work for ministers with very short-term views—how am I doing in the latest poll, what will I say in tomorrow's BBC interview? You don't find long-term thinking. You're not really positioned to achieve anything. Many people leave to try something else.
That's when I got interested in tech. Tech was my original training—I went to engineering school but didn't practise for years until I realised maybe tech is where things happen rather than government.
But what's the connection between restoring sovereignty at individual, family, or neighbourhood levels and building tech companies? I've had conversations for years about why it's important that Europe builds great tech companies, that we need more investment and more supportive ecosystems.
People, especially founders, say, “Why do I care? I just want to build a company. If that requires moving to the US, raising from US VCs, finding US customers, I'll do it. I don't care about Europe, even though it's where I grew up.” What are the checks and balances? What makes it important for European individuals that we have tech companies? How do we make the case that tech companies should realise how supportive New Palo Alto is as an ecosystem and decide to build here?
The 800 Decision-Makers: Why Europe's Elite Missed the Innovation Economy
Saul: It's a combination of factors—these are systems, so there are no silver bullets. I'm struck by what you said about the French government and nuclear power. When I look at modern economies, there are three deep circles representing meaningful power.
First is government and civil service—in the UK, that's Whitehall; in France, broadly the Élysée. Second, in the UK, is what we call the Mansion House group—five or six trillion pounds of capital that banks, insurance companies, and pension funds invest on behalf of savers and citizens for long-term retirement, savings, and insurance policies.
Third would be the FTSE 100 in our case, the CAC in yours. Looking at senior decision-makers across Whitehall, the City, and C-level executives and board members of the FTSE 100, you're looking at maybe 800 people.
A small, tiny, interlocking elite. That elite is responsible for a three-trillion-pound economy (our GDP), a three-trillion-pound stock market, and six trillion pounds of investable assets. Data demonstrates that literally those 800 people who control those trillions have effectively sat out the innovation economy.
Nicolas: They're not interested—or they don't look interested.
Saul: They look interested because they know it's politically important to look interested.
Nicolas: But they don't act accordingly.
Breaking Free: Reducing Dependence on American Capital
Saul: I'd argue they are, as groups not individuals, functionally illiterate about how to allocate capital in the innovation economy and make long-term strategic decisions like energy independence or having a large percentage of domestic capital in innovation systems.
In the UK, we have 20% of scale-up rounds from domestic capital. In the US, it's about 80%. It's not because there's more money in the US necessarily—they're just much more literate about how innovation drives economic growth.
This is the wake-up moment in New Palo Alto, in Europe, including Israel. We need to recognise we now have enough evidence. Five years ago, we didn't have as much evidence. Five, 10, 15 years ago, this was for believers like me. Now it's for people who can literally read.
Nicolas: It's all documented, backed by data.
Saul: Evidence. So now the question is: are these 800 people—you have 800, we have 800, Germany has 800, the Netherlands has 800, Brussels has 800—going to do a good job for individuals, neighbourhoods, cities? Or do we need new leadership in those three buckets: finance, policy, industry?
We can wait because there's natural churn happening. Obviously, there are exceptions—great individuals, companies, politicians, asset allocators—but we need a wholesale revolution of these 800 in each geography. This is what will change. It's not if, it's when.
To me, recognising we're in this together means it's not about having more domestic capital in the UK. It's UK capital in France, French capital in the UK. We don't need American capital to fund our innovation system. Even if we wanted Chinese capital, we probably can't take it. Between America and China, we have a choice of everyone else, basically.
Let's increase our level of agency, or at least what any basic financial adviser would tell you—diversify where your capital comes from.
When the State Should Help: Infrastructure, Education, and Orchestration
Nicolas: Because of my disillusion with government generally, my view has long been that private players—markets, investors, founders—shouldn't expect too much from government. They should work together across borders, take the Eurostar, build things together, raise money across borders, make connections at the largest possible geographic scope.
There are precedents. During most of the 19th century, there was no European Union, no effort to bring nation-states closer together. Yet much business was conducted across European borders, notably by haute finance bankers funding entrepreneurial ventures and infrastructure in many countries, contributing to peace. The longest period without war in Europe was the 19th century.
Saul: But Nicolas, having been in government yourself—my experience working in government for 13 straight years in eight different formal Whitehall roles is that it's not that government doesn't want to help. It's not always clear what government needs to do to help.
We have governments in London, Paris, Brussels, Amsterdam asking us, “How can we help?” The clearer we can be, the better, because it is important. The private sector cannot reengineer energy infrastructure. The private sector cannot and should not reengineer university and science-based infrastructure, because otherwise you lose universal access.
The state has a critical role. Capital allocators have a critical role. Big companies have a critical role. To me, it's about orchestration and recognising the moment we're in—there's enough evidence that we don't need to be disruptors with an “us against them” mentality, like Silicon Valley's “state against entrepreneur” narrative, which was always rubbish.
Nicolas: It was never the truth.
Saul: Never the truth, but always the narrative. To me, what is New Palo Alto really? It's an attitude and state of mind, not just a geographical cluster. It's about having grown-up conversations between different stakeholders, having a human-first neighbourhood lens on innovation, not “move fast and break things.”
That's the real opportunity. That will be the innovation dividend of the 21st century—a New Palo Alto lens on innovation.
Building from Strength: The Path Forward
Nicolas: Paris and London together seem the right scale for making these connections, because we're discussing two very centralised countries where most decision-makers—the 800 you mentioned—are concentrated in one city. This is different from Germany, where I lived for five years and there's no way to have everyone close by.
This calls for doubling down on education efforts. This is how I've seen it for years—we from the private sector, from the tech ecosystem, need to educate those in government, corporate leadership, and finance. What you're saying is we should continue and double down precisely now.
Saul: Absolutely. The thesis is that this is the discussion we can and should be having. How can we support one another? How can we take what's working well in Paris and expand it? How can we take what's working well here? London and Paris are proxies for this broader ecosystem. It's not about excluding other cities—it's about building from an incredibly strong base.
Nicolas: That's a perfect conclusion for our discussion today. This is our first episode focused on economic sovereignty—very much a pilot. We hope to get feedback from as many people as possible and hopefully record a second episode soon. Thank you very much, Saul.
Saul: Thanks, Nicolas.
From Paris, France 🇫🇷, and London, United Kingdom 🇬🇧
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