So much for "egoistic altruism"....
Lernout & Hauspie
Two Belgian bosses giving back to the community which helped them earn million in the field of speech recognition technology
In a 65-acre plot just outside Ypres, Belgium—the scene of some of the heaviest fighting in World War I—a project called the Flanders Language Valley is taking shape. Its centerpiece is Lernout & Hauspie, a Belgian company that specializes in computer software at the cutting edge: automatic speech recognition, text-to-speech conversion, text-to-text translation, digital speech compression, artificial intelligence. The hope is that other entrepreneurs involved in speech and language technology will transform the area into Europe’s answer to Silicon Valley.
And the driving force behind both Lernout & Hauspie and the Flanders Language Valley is none other than Messrs Lernout and Hauspie themselves—both determined to contribute to the renaissance of the entire Flanders region (an area defined in medieval times that today consists of the Belgian provinces of East Flanders and West Flanders and part of the French administrative district of Nord).
Why? “Because the people and government of this area believed in us and backed us before we were successful and before it was fashionable to do so,” says Pol Hauspie, who along with Jo Lernout is co-founder and co-chairman of Lernout & Hauspie. “Therefore, to give something back to the region seems to me to be entirely natural.” Lernout nods his head in approval: “It really was the least we could do.”
Luc Van den Brande, the Flemish prime minister, credits the two men and their company with creating a beneficial “economic earthquake” in the region. “Lernout & Hauspie and its Flanders Language Valley project are role models for Flemish industry and for the Flemish economy,” he says. “There’s no denying that in the most promising economic sectors one needs enormous capital to survive. But survival isn’t good enough; it’s crucial to be part of the small selection of the crème de la crème. Lernout & Hauspie has proved that this is possible.”
Says Hauspie, “We were looking for a market niche that couldn’t suddenly be swept away by the Americans and Japanese. We thought that speech technology—a combination of high tech and linguistics—corresponded to this region of Flanders in which we have three official languages.”
What’s really impressive, though, is how the two men, way back in the 1980s, perceived that speech would emerge as a prime interface between humans and machines. Up until then, controlling computers and other machines by simply speaking to them had been the stuff of science fiction.
Sure, it’s amazing that the government of Flanders saw the advantages of the company’s technology and helped provide some start-up funds—not bad for a bunch of bureaucrats. But what’s even more remarkable is how the two Belgians were able to sell an idea so far ahead of its time to their fellow citizens, some of them by no means technologically savvy.
“We needed more money than [the Flemish government] was able to provide,” Hauspie explains, “because this technology is extremely expensive to develop. So we went to the people of the region—ordinary people—farmers, family and friends.” They raised over US$20 million in working capital, some of it in US$3,000 increments, the rest in much larger sums. “People could see the technology for themselves—and after all, it’s sexy technology,” Hauspie continues, “and we said to them that it’s not a matter of whether things will take off, but merely when.”
They were right, of course. Over the years, Lernout and Hauspie succeeded in making their company a worldwide market leader in speech and linguistic products, technologies and services. Of course the 600 or so local investors had reason to be extremely grateful to the company’s founders, for they received their money back many times over. But gratitude in return did not feature as high as “logic” on the Lernout & Hauspie agenda.
“We were kept alive by the people of this region, so it was only logical when we became successful for us to further invest in the area,” says Hauspie. “Call it altruistic egoism or egoistic altruism—call it what you like—we feel emotionally indebted to this part of Belgium.”
The Lernout & Hauspie method of paying off debts was the creation of the Flanders Language Valley. Buttressed by a venture capital fund and a support foundation, the idea is simple enough: to create a “unique breeding ground” for the development and commercialization of products based on speech and language technology. The Flanders Language Valley fund (which is independent from both the men and their company) is the world’s first venture capital fund to focus exclusively on applications in speech and language technology. Since December 1995, it has made 20 investments worth US$43.5 million and has attracted high-profile investors such as Microsoft, which has taken a small stake. The fund went public in 1998.
The other core element of the Flanders Language Valley is its foundation, a comprehensive support system whose services are free for companies that settle in the valley. It includes intensive training programs designed to address head-on the shortage of technology workers in Europe, in addition to the organization of infrastructure at the Flanders Language Valley site, such as shops, banks and a day care center for children. So far the valley has attracted 20 high-tech companies, mostly American, with another 100 expected to join. Key to all of this, of course, is the geographic position of the region itself: Not only is Flanders within easy reach of Europe’s most powerful markets, it is also home to unusually high numbers of educated, multilingual people.
“What is most satisfying of all is that hundreds upon hundreds of new jobs are being created here,” Lernout says. And for every job in high tech, three to four other jobs are created.
“It might all seem pretty dazzling right now,” Lernout continues, “but what you see today is just the beginning. In the decades to come we will witness the transformation of every electronic device people work with. Your computer will be in your belt. And you will talk to your belt via your watch.”
“Of course we have become rich,” Hauspie admits. “But what is rich, anyway? You can only ever eat one steak a day. To me it’s all about doing something useful and worthwhile, to see this area coming back to life again after the terrible atrocities of the First World War.
“It’s also to do with employment and education. A couple of months ago we had a job and education event here at our headquarters—on a Saturday morning—and we were expecting a couple of hundred people to turn up. More than 3,200 signed in, and for the first time in the history of Ieper [Flemish for Ypres], we had a traffic jam, right from the highway to our building.”
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