February 04, 2008
Interview: Oliver Jung Business Angel
In a QandA with the alarm:clock euro below, Oliver Jung talks about some of his successful investments, learning from failures, and his criteria for investment.
Oliver Jung is an entrepreneur turned full-time investor and business angel. He started to invest in startups after leaving Deutsche Börse, which had acquired in 2001 his 800-employee Internet and eCommerce consulting company. It had been generating €100M in annual sales at the time of the acquisition.
Since 2003, Jung has invested in more than 50 ventures. In a QandA with the alarm:clock euro below, Jung talks about some of his successful investments, learning from failures, and his criteria for investment.
His first investment was Xing, the now publicly-traded and acquisitive business social network. Jung was one of its initial investors.
Next was Getmobile, a later state investment at a valuation of €10M. His investment "generated 6 times money", Jung said, following a reverse IPO in 2005 in London.
Another early investment was StudiVZ, the youth oriented social networking site, which was acquired in 2007 for a rumored €86M.
Today, Jung said that he has a large number of investments where he is a co-investor and where "networking for the portfolio company" is his role, adding that it is a smaller number where he is actively involved. At any time he is working very closely and actively with five startups, he said.
Q. Most of your investment have been in Germany. Will that continue?
A. I like Poland – it's a good sized economy with 50 to 60 million population. Internet usage is growing. One investments we did there is epuls.pl. But in general I am very active and Germany and will be active in Germany in future.
Q. You have a lot of Internet investments. Is it not risky to have such a concentration of holdings?
A. I am not that into diversification or portfolio management theory. My investments range in size from €10K up to €1M. 50% of all my investments outside the Internet market have failed. So I learned the hard way only to invest where I know my space very well.
Q. What did you learn from the experience of failure - is it possible to turn a startup around?
A. If you have a great team and the idea ends up being a bad one - and the team can change the business scope - it is sometimes possible to turn a startup around. Paypal is such a story, they changed their business scope several times.
If the teams ends up not being great, it is not possible in my opinion. In many cases, I would prefer to
invest in a fresh startup than in a turn-around one, even if the valuation seems to be cheap.
Q. Other recent investments include brands4friends, apomio, adconion, flux.com and lokalisten, all of which we've covered in these pages. You also have a stake in Nanosolar. What is your criteria for an investment?
A. Four things: 1) Does the service solve a problem – make sense? 2) is it a great team ? 3) is there a business model ? 4) does the team know how to generate reach ?
Q. Any dealbreakers?
A. If the service doesn't make any sense to their potential customers.
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January 31, 2008
Top 10 VC-backed IPOs and M&A in Tech in Europe
As a result of last week's Puzzler, your a:c euro reporter, Valerie Thompson, was able to put together this list of top ten VC-backed trade sales and IPOs over the past 12 months. We can't guarantee that it is the last word on the topic but it's pretty close. (Please note that the source for numbers 1,3, 6, and 7 is VentureSource via a reader.)
The companies names bolded in the table were backed to best of our knowledge by VCs that describe their strategy as early stage. We converted the currencies into Euros.
All in all we gathered a list of about twenty transactions above €100M involving privately-owned tech companies (non-life science nor medtech). Twelve are above €200M.
The largest of all was the valuation of MoneySupermarket.com at IPO at about €1126M, which was not venture backed so not on the above list.
Here is another list we compiled from your input (and our archives) involving publicly traded companies). The valuation is for the company name bolded.
M&A of Publicly Traded firms
Navteq acquired by Nokia $8B
TeleAtlas by TomTom $2.56B
Telelogic acquired by IBM for $745M
Boursorama acquired OnVista AG $138M
IXEurope acquired by Equinix $396M
Axel Springer acquired d'AuFeminin.com for €284M
And if you want more, we wrote about the hottest M&A sectors here.
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January 24, 2008
A Chocolate-bar Sized Loudspeaker and More
It's a slow news day today so the Novium news had us thinking about gadgets and gear out of Europe. Here are a couple we recently heard about.
This indoor loudspeaker for MP3 devices is using a sound panel from Plastic Electronic, an Austrian startup that's developing electronics on plastic devices for several types of applications. (images source:Green Lama)
The thin loudspeaker (10mm thick and weighing 90 grams) costs €40 and uses Varta's polyflex micro-batteries that recharge via a USB. Green Lama designed it and also sells the gadget on its website.
d3o Labs is a VC-backed startup in the UK that has developed a new material that changes its rigidity depending on speed. Its being used in motorcycle jackets, footballs, and downhill mountain biking protective apparel.
For example, the Spyder Ultimate Chamois bike short is worn under loose shorts and has d3o padding across the hips, thighs and tailbone "to shield against impact". (image source: 3DO website)
We also heard that sales are on the upwards trajectory at VC-backed Iqua, out of Finland, which just launched its Bluetooth earwig in the US. It recharges via a photovoltaic panel. Engadget published a positive review earlier this month.
We wrote about Iqua back in January 2006 here.
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Give This Pup Some Solar Power
We received news that veterinary products company, Virbac, is offering in France a service to locate lost pups via a GPS-based collar attachment that provides info to the cellphone (using Orange) or the web.
Apparently, 600K dogs a year go missing in France. Most of them make it home again, but 15K don't. To improve that ratio, pet-owners can pay €15 per month to use Virbac's service.
We're looking at the specs on the dog collar unit and thinking it might have been better to create a solar-powered version. If someone is absent-minded enough to lose their dog, they might also forget to recharge the unit. The way it is now, this has to be recharged for four hours a week.
View Backhome GPS
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January 15, 2008
Tips for Getting The Attention of VCs
When we were looking for background info on the recent Fidelity Ventures investment in MFG.com the other day, we came across some presentations from a Fidelity Ventures' portfolio insider networking event.
The pdfs are available for download on topics like The Joy of Fundraising (the slide entitled Qualifying - or how VCs get a free education - is refreshingly frank), and Positioning Technology Companies for Success (pdf). The latter, by the CEO of Neverfail has tips on how to influence analysts and get quoted by "lazy" journalists.
Some VCspeak examples:
•“we’re researching this space” = we want to invest in your competitor
• “we would like to review your model” = I don’t understand the economics of the industry
• “how do you size your market” = I don’t like paying for research
• “we’re in if you can find a lead” = Let’s see if someone else figures out how to make this deal work
And while we're on the topic of advice for entrepreneurs, this video clip has a funny take on pitches. [5min video via]
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December 20, 2007
Halting State's Driverless-Taxi Not Pure SciFi
We just finished reading Charles Stroll's novel Halting State, a trip into the near future where MMORGs have influenced the design of IT systems. The Scottish police force, for example, view the world through CopSpace-coded glasses. What is more, quantum computers are used by the bad guys to crack crypto keys, blacknets are the new black markets, and self-driving taxis cruise the streets of Edinburgh.
It's a fun read where the author has taken emerging tech trends into the fictional future.
We thought the driverless-taxi thing was pure imagination, but a little research yesterday revealed that in fact London's Heathrow Airport is to pilot such a system at the new Terminal 5. It is not remotely controlled by call-center attendants located offshore (as in the novel), rather it runs on a normal road equipped with a sensor-controlled tracking system.
It is supplied by Advanced Transport Systems (ATS), which is privately owned and backed by private investors -- it sold 25% of equity to strategic investor BAA in 2005.
A photo of the first ATS "taxi" delivered fresh from the assembly line of manufacturer ARRK in Basildon Essex
The story of ATS and its founder's quest to turn his vision into a reality makes for some good reading too. We found an article on its corporate finance advisor's website.
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Buy, Hold, or Sell with Graham O'Keeffe
Up today is Graham O'Keeffe, a general partner at Atlas Venture, in the latest installment in the Buy, Hold, or Sell series on the alarm:clock euro.
Active as a venture capitalist in Europe for over 10 years, O'Keeffe is deep into wireless. You can see it in the investment he makes – he did Atlas' early investment in Orthogon Systems, the point to point, high data throughput unwired device-maker that was acquired by Motorola last year; and he's currently on the boards of PicoChip, Ubiquisys, Icera Semiconductor, and Shozu, all developing enabling technologies for more pervasive wireless services.
That interest in unwired tech also influences his hobbies, like flying radio-controlled airplanes. But the next big purchase he will make is for his other interest: photography. (The photo used here is his own).
The UK-based tech investor is looking at acquiring a new Nikon D300 Digital SLR to replace his Nikon D70, a camera that has created "lots of fantastic photos", he said.
The D300 camera has12.3 megapixels, 51 pt autofocus, a lightweight magnesium alloy body, and a 3" LCD with VGA resolution. (Image above sourced from Nikon website).
The Nikon Capture NX software editor, sold as an option is "just a great piece of software". He uses it for colour correction, for example.
Afterwards he will often use Adobe Photoshop for manipulating the digital images. For editing videos, Adobe Premier is the software of choice.
As the owner of a Nokia N95, he often uses that devices camera, which has 5 megapixels and Carl Zeiss Tessar optics.
"For shooting and sharing random events when you're out, the Nokia camera is fine – it goes everywhere," said O'Keeffe.
"Uploading to flickr is part of the fun," he said and he uses portfolio company's software Shozu for that.
We suggested that 5 megapixels is pretty good for cameraphone, but he pointed out that without a great lens, those pixels are not worth a lot.
O'Keeffe's Nikon lens has a vibration reduction feature, said: "Although you can correct focus afterwards, you want to get as much right in analogue before it even goes to digital," he added.
The importance of the analogue was one photography lesson gleaned from Terence Donovan who O'Keeffe met briefly when he was at Oxford (Donovan was a well-known UK fashion photographer. He directed the Robert Palmer "Addicted to Love" video.)
View- Atlas Venture.
Read - Atlas' aggregation of its portfolio company news
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December 15, 2007
Google Zeitgeist: Rise of Badoo, Ebuddy, and Dailymotion
Google's year end Zeitgeist report lists the top ten fastest growing global searches. There are 3 startups from Europe that hit the chart this year: DailyMotion, the French video clip site, along with Ebuddy, multi-platform messaging, and Badoo, a London based socnet.
View - Google Zeitgeist 2007
Fastest Rising (global)
1. iphone
2. badoo
3. facebook
4. dailymotion
5. webkinz
6. youtube
7. ebuddy
8. second life
9. hi5
10. club penguin
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December 10, 2007
Buy, Hold, or Sell with Henri Seydoux
We were hoping that Henri Seydoux, the visionary founder and CEO of 
Bluetooth and wireless gearmaker Parrot SA, would give us a taste of the kind of lavish spending enabled by entrepreneurialism in this latest interview for the Buy, Hold, or Sell series .
After all, he not only co-founded several high-tech companies and is majority shareholder of Parrot, but he is also the co-founder of the lux shoemaker Christian Louboutin, known for its distinctive red soles.
But it turns out that Seydoux doesn't do a lot of acquisitions of the consumer kind. He's up-to-date but not one to throw out a good piece of technology in favour of something new, if what he owns still pleases.
For example, Seydoux is a big fan of his basic black and white plastic Swatch watch, one he's been wearing for "years".
"It is modern, but also a classical, quality watch, a neat design," he said.
Seydoux points out that Swatch was the first to put an analogue face on a digital timepiece, something that was quite innovative for its time. Indeed, the Swatch brand was established back in the eighties and the company behind it is now the largest manufacturer of finished watches in the world.
His laptop is a Sony Vaio that he bought three years ago. "When I bought it," he said, "it was the smallest, lightest unit on the market."
His mobilephone is a Nokia N95. He likes the camera in it, he said. "It lets me enjoy the reporter-effect - like a professional photographer, I always have my camera with me and am taking at least one photo a day."
The N95 is not the absolute latest from the Finnish phonemaker, but it sports a 5 megapixel camera with Carl Zeiss optics. It handles MPEG-4 video capture (30 fps) and supports wireless LAN/UPnP, as well as high speed cellular data services (HDSPA and EGPRS) in addition to a quadband radio for making phone calls around the world.
The images below are from Henri Seydoux. Clouds and reflections are what he likes to photograph.
Thanks for the memory
The most recent purchase, and the one that has given him the most satisfaction is a modest one, a 4GB SanDisk microSD flash memory card for his Nokia. "It stores 2000 pictures, 500 songs, just a great buy," he said.
What might explain Seydoux's relatively conservative approach to personal tech is that he is typically the first end-user of the products that Parrot's R&D team develop. It is a team that reportedly outputs a new product every month of the year.
The latest gadget he's been using is a digital photo frame (model no. Parrot DF7700), a colour LCD TV display with a built-in SIM card and cellphone chipset, which means it can receive images directly from a mobilephone.
"I was in Hong Kong, sending my children photos of the ferry trip to the Mainland in Paris, directly to the picture frame," recounted Seydoux. When it hits stores, the gadget will retail for €189.
Serial Entrepreneur and Business Angel
Forty-six years old, Seydoux trained as a journalist, worked in sales for Le Matin de Paris, and joined the techie ranks in 1982, working as an operating systems software developer at a couple of French software firms. He subsequently started up a company to market Microarchi's operating system.
Seydoux also co-founded B.S.C.A (Buffin Seydoux Computer Animation), now known as BUF Compagnie, which has studios in France and Los Angeles. It did the Spiderman 3 visual effects, for example.
Lately, he joined a group of business angels to back French startup MobiNear , whose first product enables users to download digital audio files to portable devices and mobilephones (mainly Nokia but also at least one SonyEricsson javaphone). It does it via Bluetooth interfaces. You could almost count this investment as corporate venturing. Parrot sells Bluetooth dongles for the PC.
View - Parrot SA
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December 07, 2007
Buy, Hold, or Sell with Joe Cohen
Today we have the second in our series about what is on the shopping list for some of the tech savvy leaders of pioneering, and sometimes disruptive, startups active in Europe.
Joe Cohen, co-founder and CEO of Seatwave, an online marketplace for individuals to buy and sell event and concert tickets, talked to the alarm:clock euro at the recent European Tech Tour Web Summit in Montreux.
Cohen said he is thinking about buying an Apple iPhone, but he said what is holding him back is a worry about the responsiveness of its touch-screen for text input. "I doubt that I can achieve the speed that I can with the Blackberry," he said.
One recent new technology investment he isn't too happy about is an Asterisk VOIP PBX. His comment when we probed about the open source telephony platform was: "You don't want to get me started on that one."
The American born entrepreneur, AC/DC fan, and father of four, has been living in London for the past seven years. Two years at Seatwave. In the five years prior to that he developed the European business for IAC/ Interactive Corp units match.com and Ticketmaster.
View- Seatwave
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December 05, 2007
Europe's Hottest Software Companies
The Truffle 100 for 2007 Listing of Europe's 100 largest software firms is out and online. The good news is that 32 Euro software vendors have revenues greater than €100M (up from 30 one year ago).
The bad news is that all the Truffle 100 combined is generating less annual sales than Microsoft, and not quite double Oracle's annual sales.
Getting back to the positive news is the fact that all of the Truffle 100 companies have sales of greater €20M. And that they make about €2.5B in profits a year (aggregated).
This year Autonomy was the top performing firm according to the researchers. It got credit for its two good sized acquisitions and its mkt cap of $4B. Autonomy bought US rival Verity (US$500 million) and Z, a global leader in content archiving and electronic discovery solutions for $375M.
FAST moved up the ranking 13 spaces due to its sales growth, for example.
The ranking from Truffle is in our opinion the only decent listing of European software companies available. It is based on a survey supplemented by research. It does not include, US/Euro hybrids, unfortunately, but it is as good as it gets.
You cannot use the Software 500 anymore, for example, to track European software vendors. It is a self-nominating list and it ends up filled mainly with US companies - and some of them are doing just two and three million in annual sales.
Interesting that it took a French venture capital firm to finally come up with the idea of getting IDC on board, as well CXP, and the software associations in the region to encourage members to contribute to the ranking, e.g. Agoria (BE), Aitech (IT), Bitkom (GE), Intellect (UK) and Syntec (FR).
View - Truffle 100 website
Read - Truffle 100 listing (pdf)
Read - Our report on last year's ranking
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November 28, 2007
Buy, Hold, or Sell with Alexander Straub
Alexander Straub of UK-based early stage investment companyStraub Ventures is more comfortable talking about the "revolutionary" startup companies he is backing than his personal technology investments, but we did eventually find out about his recent and planned acquisitions of the consumer kind for our new series called Buy, Hold or Sell.
In a telephone interview with alarm:clock euro, Straub said that he recently switched from a Blackberry to a Nokia E61i (above), similar in looks to the Blackberry with email, qwerty keyboard, quad band, Windows support, and Wifi finesse.
Another recent buy was an iMac with a 25 inch screen. Better posture is just one of the benefits he mentioned.
But he's not big on the iPhone. "I tried the iPhone and it is a great gadget, but I find that Nokia voice quality, especially for Voice-over-WLAN using Truphone, is still the best in the world," he said.
The a:c euro notes that Truphone, the UK-based mobile telephony startup is one of his investments.
"I make 90 percent of my calls on VoWLAN so it's been important," he added.
A weakness of the iPhone is that it can only take one SIM card, typically the identity module that is sold along with a subscription to a mobile network operator's service. "You need to re-hack it to use a different SIM card, which gave me a lot of problems," explained Straub.
Today he uses Apple's touch-screen gadget to take pictures of the kids and send them via a Wifi Internet connection to his grandparents. "But I do not make any calls on it," said Straub.
Carbon Neutral Driving
(Image Source: Daimler Press Office)
Beyond communications and gadgets, carbon neutrality is coloring his consumer activities. A sentiment that if shared by others will no doubt gratify readers who are actively investing in cleantech and energy-efficiency.
The German-born, London-dwelling investor wants a hybrid electric vehicle, but a small one. "It has to be even smaller than the Prius," said Straub.
"Perhaps a smart EV," he said. A hybrid variant of the popular German microcar from smart gmbh is expected on the market in two years time, with a rechargeable electric version to follow. (image source: Daimler)
But two things are holding him back, the price tag which he figures will be about £35K, and the fact that he lives in Notting Hill where finding a place to recharge a hybrid's battery pack is not trivial.
"If you don't have off-street parking, it is a no go," said Straub.
He's also looking at upgrading insulation, windows, and the heating/cooling systems in his country home on the Schoeninsel, in northern Germany in the former East German region of Mecklenburg Vorpommern.
The surrounding lake water could provide enough temperature differential to power a heat pump, which could save him some energy costs over the long term, but more important for Straub is the carbon reduction potential.
Straub is an entrepreneur-turned-active early stage investor. Besides his Truphone activities, he's currently the CEO of Pixsta, a visual search startup.
Degrees in engineering have led to a rare career path in the European venture market, specifically Straub has been successful as a startup founder, worked as a partner at Lazard Technology Partners, and worked in the technology team of Goldman Sachs.
View Pixsta
View Pixsta in action at ChezImelda
Read - alarm:clock articles mentioning Truphone
Posted at 08:06 AM | TrackBack | Permalink
alarm:clock euro Goes Shopping
Pioneering tech venture founders and investment professionals don't stop pushing the technology envelope when they go home from work. It's a preoccupation that flows into their off-time too. It is just one of the things that became apparent putting together a new series of articles for the alarm:clock euro, called Buy, Hold, or Sell.
Instead of covering the latest innovative business model out of Paris to attract venture capital, or a hidden gem in Italy exposed by a nine-digit euro acquisition price, we set out to expose value investments of the consumer kind, and maybe help to avoid the duds.
The task was not an easy one for our alarm:clock euro reporter, Valerie Thompson. That's because when people like Graham O'Keeffe of Atlas Venture, Henry Seydoux, the founder and CEO of wireless innovation factory Parrot SA, or Alexander Straub of Straub Ventures, to name some that we talked to, get her on the other end of the phone they have a one-track mind: to promote their investments, their company, or their latest product.
That's the way it should be, no doubt, but this time we had our own agenda.
Inspiring Post
The inspiration was a post by Martin Schaedel in Hello Martin. The Scandinavian business adviser and peripatetic startup executive wrote that he was craving an ultra compact portable Sony Vaio G.
He described it as "weighing in at wispy 0.89 kg... a carbon-fiber baby" and that it is meant to replace his Panasonic W and R series.
Because of who he is and the amount of traveling he does, what he buys is interesting and could be quite useful information for others with similar requirements, went our thinking.
Schaedel is a former partner at Lund Kenner, the Nordic "venture capital firm without the capital". He's currently working with FareCompare, a Dallas-based airfare information publisher that has become a media darling and a port of call for hedge fund managers looking for an edge on their airline investment bets.
Read on for the first in the series Buy, Hold, Sell with Alexander Straub.
Read - Buy, Hold or Sell with Henri Seydoux of Parrot SA
Read - Buy, Hold, or Sell with Joe Cohen (Seatwave)
Posted at 08:03 AM | TrackBack | Permalink
November 16, 2007
Tech Influential: Russia's Serguei Beloussov
Charismatic, ambitious, visionary, stubborn, and humble are some of the founder traits that it takes to build an internationally successful tech venture out of Europe. And from what we saw yesterday, Serguei Beloussov, the Russian-born co-founder of eight year old SWSoft, has that and more.
The CEO of the server virtualization software company told a gathering of about 270 investors, entrepreneurs, and journalists last night that the software brands that belong to SWSoft (Acronis, Parrallels, and SWSoft) currently generate 'hundreds of millions' in sales each year, employ 1,300 people around the globe, are profitable, and achieving 130 percent growth year on year.
(For more see BusinessWeek's Jennifer Schenker-written profile of Beloussov and Russian tech here.)
The alarm:clock euro spoke to Beloussov, who hasn't spent more than two weeks in one place in the past couple of years, briefly about his venture capital experience.
SWSoft was intially self-funded and it was not Beloussov's first venture. He tried to raise VC in the US in 2001, yes that fateful September, but after three weeks he let it go. In hindsight, he said not raising VC at the point was a good thing. It made him build a lean, cash generating business.
It wasn't until 2005 when investors started approaching him that he eventually decided to sell a minority stake to Insight Capital and Bessemer Venture Partners to fund growth.
Beloussov also told us that the his company is only part of the way to achieving the technological vision he has had in mind since day one and he's agreed to disclose more to us in an upcoming interview.
His achievement was recognized last night at the second annual Audemars Piguet Changing Times Award, which is from the same team that runs the European Tech Tour.
It was held this time in Gland, in the Dinemec sound studio. There we learned that for all the buzz about digitization of everything, antique analogue amplifiers are still used in music recording, and that Pink, Phil Collins, Quincy Jones, as well as classical artists like Dimity Sitkovetsky have trecked to this tiny village near Geneva to put down tracks.
Disclosure: This reporter was invited as a guest to the gala dinner after the press conference catered by the Michelin-starred chef Philippe Rochat. But if the alarm:clock euro husband thinks that it lets him off the hook for the anniversary dinner at Rochat's restaurant at l'Hôtel de Ville in Crissier, he is wrong.
Posted at 08:29 AM | TrackBack | Permalink
November 07, 2007
Capital Trickles to France's eCommerce Innovators
Ever since Vente Privée, which sells home-shopping channel-like products on the web, raised capital from Summit Partners at a stellar valuation, we've been keeping an eye on French eCommerce innovators. A couple of deals this week to report along those lines.
Neteven
Six months after it raised a €1M early stage round, Neteven, received €650K from France's economic development organization OSEO to be use for R&D. [source Neteco]
The startup has developed a platform for merchants that enables them to list and sell their products on major ecommerce sites like Amazon, Abebooks, and eBay, along with leading homegrown sites like PriceMinister and Alapage.
It has some nice pixel art on its website and an animated transaction flow diagram to describe its platform. Looks like eBoy work?
MAISMOINSCHER.COM...
After struggling to raise capital for several months to improve its service by delivering purchases to customers faster and with more precision timewise than the competition, maismoincher.com raised €300K from a regional private equity fund.
The Toulouse-based company sells white goods, appliances, and more recently furniture over its website, and has been in business since 1999. (source Neteco)
It's hard to believe that a family-owned company that employs 40 and has grown turnover from zero to €26M without outside financing, in a very difficult segment of the eCommerce market, had a hard time convincing the French venture community to finance such an investment.
But there you go. It had actually been targetting €1M. We snagged that background info from this Decideurs.tv interview on vpod.tv, with additional input from midenews.
Maybe the Hébrards should have taken this unit, which sells at just €82, with them when making the rounds of Paris VCs.
Posted at 05:15 AM | TrackBack | Permalink
November 05, 2007
Lime Green Sofa Trend
We're noticing an uptick in the use of the green sofa among emerging Euro web and mobile startups. Not sure what to make of it yet. It seems to be limited to regions East of Zurich.
United Mobile, a Lichtenstein-based discount mobile operator, which just announced raising a new round of finance today attracting Grazia Equity and some other entrepreneurial heavyweights, is the latest to use the green lounger.
We believe we first spotted it in the logo of Wifi network operator startup SofaNet
Then Smava, the VC-backed German person to person online lending platform, took it to the next level.
Smava Founders Rheinboldt and Artope (image source: smava.de)
And in the meantime, we eyeballed an artist's rendition of it on Croatian social networking site Trosjed.
Posted at 04:18 PM | TrackBack | Permalink
November 02, 2007
Mojowatch: Europe, BitDefender and Netlog
+ Romanian security software startup Bitdefender (belongs to Softwin out of Bucharest) has coverage in several publications, including a Washington Post pro blog pointing out that Bitdefender is ahead of the pack when it comes to identifying the latest spammer and malware nastiness. Dark Reading reports on US election spamming discovery by the Eastern European startup and CRN gives AP regional manager Mihai Rusescu a few inches on the opportunity his firm offers for resellers in the compliance mkt.
Read - BitDefender Now Closer to Google - Expanding company - Softpedia
Read - Spammers Tempt Surfers to Help Solve Captchas
Read - CRN Cashing in on Compliance
For some background on the positioning of several Euro startups (F-Secure, Kaspersky, BitDefender) see - Malware boom puts pressure on second-tier AV labs in InfoWorld
+ The region Europe gets some Mojo this week... CNET pushed one of its source to get some comment on Europe in a feature entitled Tech Without Borders that looks at innovation hotspots beyond Silicon Valley. It is worth a read, and not just for the European content. Lots of interesting things going on globally.
The article highlights Dublin, the whole Scandinavian region, and Russian centers like Nizhny Novgorod and Novosibirsk (we can confirm that there are startups in these centers, based on our site traffic - we're pretty sure our content in the alarm:clock appeals only to tech founders, or founders in the making, and the people that back them). Startups mentioned: Yandex, Polar Rose, Rebtel, and a few others.
At one point the CNET article suggests that Europe lags other regions because "individuals seem content to work at large multinationals". We think that notion is getting a bit old by now.
Recent newsflow on the the alarm:clock euro, suggests there is quite a bit of churn ongoing : TopupTV (former BSkyB team), Blyk (former Nokians), FutureE (former Ballard Germany execs), Webjab (former Yahoos), Webwag (former Googler exec), Looneo (former Microsofties), and Criteo (former Philips, Lucent, and Microsofties).
+ The WSJ has a rare article covering a European startup, Netlog (formerly incrowd/facebox), on how it has handled the region's multi-language market hurdles. It's missing the 'money shot' though, the part of the report where it describes the vast amount of money someone is making, or has made, or is about to make, by being big in Europe.
Read - How Netlog Leaps Language Barriers - WSJ.com
Posted at 07:02 AM | TrackBack | Permalink
October 29, 2007
Cookies For Men Only
Cookies -- the kind you eat, not delete from your browser -- are the latest Swiss product to use a "for men only" promotional campaign.
Wernli, the company that makes this dark-chocolate coated cookie called Gaura is under the management of Michael P Sarp. HIs last gig was with the lux-watch company IWC where the formula worked well.
One of its better known slogans:
She can have the car, the house, and the dog. But not my IWC!
Sarp shows he knows a thing or two about managing his own image too. He is also a 'celebrity' model, along with his wife, for the current Pink Ribbon campaign here to get women to do early breast cancer diagnosis.
Get your manly cookies here.
Posted at 06:36 AM | TrackBack | Permalink
October 14, 2007
Quotable Founders: SimplySwitch and Buddi
"I thought it is all very well pitching up and doing training and then charging up to £2,000 a day, but you are only making money when you are working and I wanted to increase my net worth, so I thought I'll set a business up with the sole purpose of selling it. Apparently that's quite unusual. I would have thought it was pretty obvious."
Who said it? Karen Darby in the Guardian last week. The story goes that in 2002 Darby founded SimplySwitch, a utility rates comparison site, and sold it to the Daily Mail & General Trust last year for £22M. SimplySwitch gave its VC backer a fantastic return too, some £8M on a slightly less than £400K investment.
She banked £5m immediately and was on an earn-out that required her to stay at the company for three years and meet certain targets, reports The Guardian. Shortly after selling the company though, she changed her mind and went down to two days a week, turning her back on the earnout.
She thinks people in education and economic development are not setting the right tone for budding entrepreneurs.
"Even with this college, they put on the prospectus how to set up a small business. I thought, why have you got the word small in there? Why has it got to be fucking small? Excuse me, but why? I think they inadvertently limit people's potential.
Read - Interview: SimplySwitch founder, Karen Darby | City | MediaGuardian.co.uk
These are people who knew me through my previous business... people who could give me access to things other than just money."
Who said it? Sara Murray, who founded and sold the insurance rate comparison site now called confused.com. She was talking about the set of business angels backing her new venture called Buddi Limited, which enables parents to track their kids who have to wear the GPS device. The early backers are Fidelity fund manager Anthony Bolton; Michael Jackson, the former chairman of software group Sage; Sir Nigel Rudd, chairman of airports operator BAA; and Roberto Quarta, ex-chairman of engineer BBA.
Read Confused.com founder in funding hunt | This is Money
Posted at 03:25 PM | TrackBack | Permalink
October 05, 2007
Impatience Is a Virtue
You hear about VCs being impatient with startup teams, but sometimes it's not a bad thing, at least according to entrepreneur Olav Stokke, CEO of NextGenTel, a broadband startup that was active mainly in Norway.
“... The venture capitalists were very helpful in that they were impatient and eager to following up on our performance very closely. This made us more aware of the quick progress we had to make in order to achieve our growth. To that extent, they contributed to the overall development of the company as the company pushed forward towards success …”
The source for the quote and some of the following insights into the VC contribution to the venture is a new report that EVCA, the industry association that most VCs in Europe and private equity firms belong to, sent us.
NextGenTel was founded in March 2000, and grew to 200 employees. It floated in 2004 in Norway and was acquired in 2006 by TeliaSonera, a telecommunications company in the Nordic and Baltic countries, for around $330M.
One of its VCs, Northzone, exited at the acquisition price which was at a 45% premium on the stock price at the time. (That last item was not in the report we picked it up here(pdf).)
In this case, the VCs were impatient but they also brought in a US VC and let the management team follow their hunch about the market for ADSL, and execute on their conviction that it was important to seal the home market before it considered going international.
The report is meant to get the tech VC community to be a bit more "vocal" about their achievement. It is entitled: The European Venture Capital Market: Scaling Beyond Current Boundaries.
There are a few more nuggets like that one, once you get through the lengthy survey methodology and rationale pages.
We couldn't see it up on their website , but expect it to go up soon. It was released yesterday.
Posted at 04:32 PM | TrackBack | Permalink
September 23, 2007
Quotables from Moo, FON, and EVE Online
We're trying out a new section under the Being European tag, posts with selected quotes from Europe's tech trendsetters and founders. It is totally coincidental that all the people quoted come from companies whose services has just three letters.
" We’re in Clerkenwell, which is the literal and spiritual home of print. It’s home to the oldest printing business on the planet, it’s fantastic. We wanted to be somewhere with some significance; Silicon Valley’s not known for its printing..."
Richard Moross co-founder of Moo, the online business card print service backed by Index Ventures
Found in Vitamin
"A lot of people in Europe think entrepreneurs are thieves..."
Martin Varsavsky, FON founder, serial entrerpeneur, and business angel.
Found in Financial Times Tech Blog
"Basically I'm just trying to understand all aspects of the game, but of course I find the trade and marketing aspects of the game most interesting. It's also fun to go out there and shoot at somebody, of course..."
Eyjolfur Gudmundsson CCP's Chief Economist aka EVE Online's Central Banker
Found in Slashdot
(image source: eve online)
Posted at 04:14 PM | TrackBack | Permalink
September 20, 2007
After The Launch Let Down - What To Do About It
Over at Blognation Germany, Markus Spath has written about the after launch let-down and what Web 2.0 founders are experiencing on the way to cracking a real market for their products. It's a common dilemna and not just for Web 2.0 entrepreneurs, if our discussions with pioneering-type tech founders over the years are anything to go by.
Spath says that if you know what to expect, or what is feasible, it could be less frustrating. He offers a link to stats from the creators of mite, an online time-tracking application, which he describes as "an almost paradigmatic example of a small but dedicated startup and probably the most 37signal’ish team from Germany".
Taking a look might help Web 2.0 founders - and maybe some of their backers - to "manage their expectations."
Another resource to add to the mix is a new blog called Kitchen 2.0 from social media marketer and software developer, Gary Reid in the UK. Topcis include how to use RSS, social bookmarking, and corporate blogs to win new customers. It is worth a regular read.
Posted at 06:54 AM | TrackBack | Permalink
September 13, 2007
User Profiling Gets Visual With U-lik and Imagini
If Last.fm (acquired by CBS for $280M) was last year’s taste-matching trendsetter, what will be next year’s? A couple of European sites that are onto something are U.[lik] and imagini.net. Both are taking a more visual approach to creating user profiles based on interests, tastes, and habits.
And both package the profiling - at the moment - in a social network that promise to match users based on similarities.
There is also French startup Criteo, which could probably fit in here, but we profiled it earlier.
Imagini.net is running two ‘personality’ tests at the moment. It is kind of a visual rendition of one of those personality tests that used to be staples in mainstream consumer magazines. There is one based on what you desire and another to determine a personality profile.
No registration is required to do the tests, but if you want to save the selection you have to register. About 4 million people, according to the site ticker, have completed profiles.
At u-lik, after a basic registration step, a user gets into choosing and rating based on things like stuff you already own, or things you’d like to own, see, or have and so on. It doesn’t print you up a personality analysis but it also offers matching with like minded people.
It is a bit more geeky at the moment than imagini.net. We say that not just because of its name, but because the user interface takes a few seconds longer than imagini's to internalize.
We met the founder of U.[lik], Raphaël Labbé, a couple of months ago. He’s been obsessed for the past two or three years with the idea that people are better described by what they want or what they like than what they buy. (Note that sister-site the alarm:clock will be doing a profile of imagini.net soon).
We asked him what the two sites have in common. He said that beyond a new twist on user profiling, there’s a common business model: affiliate marketing based on a personalized list of products, and selling on the aggregate data about users’ consumption habits.
Read on for a Q&A that touches on what Last.fm did right, what Amazon could be doing better, and Labbé’s view on how his technology can contribute to better online sales and online customer conversion. It is based on an edited version of several weeks of email between the a:c euro and Labbé.
What is wrong with Amazon's recommendation engine in your view?
Amazon’s recommendation engine is a very efficient sales booster, since it’s actually their second source of sales representing about a third of total sales, just after their own search engine. Considering a sales volume of $10.7B in 2006, no doubt you’d pay a tribute to Greg Linden, the engine inventor, as Jeff Bezos did.
But Amazon’s recommendation engine is not really user-customized. It’s far from being like the trusted librarian or friend who knows your tastes. That was the kind of experience we were looking for and are currently building with U.[lik].
We started U.[lik] two years ago because we weren’t satisfied with Amazon’s generated recommendations, despite being one of the most visible recommendation systems at that time, built on a large-scale platform and fuelled by a huge number of click streams.
Amazon‘s engine mainly computes selling statistics from their customers’ purchase history. It has flaws like two DVDs that end up being rated as similar because many people bought them at the same time. Flickr provides many such examples.
Also, my purchase history is not a really good proxy of my tastes: I dislike some CDs I ordered and many books I bought were intended as a gift for someone else.
Amazon has actually few social / community features that would entice users to rate items and share them. We even assume that a merchant site can’t do that business well. That could explain why Amazon is launching alternative solutions like Amapedia, or investing in a company like shelfari.
E-retailers have never created such an experience but sites like Last.fm have by providing a social and personalized experience (with a business model based on affiliate marketing and sales revenue sharing).
U.[Lik] is on a similar track, building a trusted place where users can discover entertainment and culture, rate items based on a personal scale and engage with users having similar tastes.
You wrote that the next wave of Web innovation is ‘all about math’ - what do you mean by that?
Due to the sheer wealth of information available on the web, maths and algorithms are essential to organize and filter that huge amount of data humans can’t handle.
Nowadays, the main issue is to give access to less known but relevant content. Existing algorithms are becoming inadequate because they tend to rely on popularity.
To address these problems we need new approaches and math tools that focus less on statistics and more on organizing information at a lower scale -- a few like-minded people is definitely more valuable than having a thousand contacts.
The difficulty is that computing at this micro-scale is harder because you’ve got less data, so you’ve got to be more precise.
How do you address the problem of less data and more precision?
The U.[lik] algorithm tries to mix several sources to gain in precision: computing is mainly based on the votes of users. It is completed when data is lacking with natural links between the items (the casting for movies for example) and tagging (filtering by genres for music for example).
Pandora with its Music Genome is also following this path, what we call “content based” algorithms.
Can you point to any other examples that are not based on statistics like "popularity" or "what else did I buy" ?
Pandora is unfortunately a rare example. But attempts are being made, for example with music by trying to analyse the songs directly in a project at Sun Microsystems from Paul Lamere ). I am not sure if librarything is using its huge amounts of tags in its algorithm, probably not.
You wrote that you agree with the view that we’re coming to the “end of the page view”.
Value is less in eyeballs and more in interactions and leads generation. It’s more valuable to sell “intention” like Google does when it puts related advertising to what people are looking for. Its recent move to introduce “pay per action” PPA where advertisers only pay for a result is creating another challenge for “page views” business models.
Web technologies are changing with rich internet application, Ajax and streaming. All are making pages views less relevant to capture what users really do.
Nielsen’s decision to focus on time spent to measure online engagement is a recent acknowledgment of this change.
Social networks have to deal with two issues when they are monetized by pages views advertising. Doing advertising on a user profile is much harder than advertising on a given topic.
The intention of the user is to engage socially and most social networks don’t have a clear view of what ties people together. The more the network grows, the more complicated it is to sell its inventory, especially when a real energy has been developed to optimize that same number of page views.
These two phenomena can explain why many social networks deliver lower conversion rate on ads as they grow.
Building a social network around socials objects enables to capitalize on affiliation programs, which are the first and main form of PPA.
Building a trusted context where user can opt-in to engage with brands is another possible approach. While building U.[lik] we have always kept in mind that advertising or suggestions when reaching a certain level of personalization will likely be as valuable and useful as information.
Posted at 06:29 AM | TrackBack | Permalink
September 09, 2007
How To Be Habbo Hotel - Tips on Going Global
Sulake Labs, the VC-backed Finnish startup behind Habbo Hotel and IRC Galleria is a success story that by now offers up a few lessons for other social networking and roleplaying business.
Founded way back in 2000, it has come a long way since sister site, the alarm:clock, tipped it two and half year ago as having a business model with some staying power.
The latest insights into its experience and its numbers comes via a techmeme item that started with a Gamasutra report on the tactics Habbo Hotel took in developing its userbase, an article that has plenty of tips on socnet community management, virtual currencies, and handling cultural issues in a global market.
GigaOm commented on Gamasutra's coverage that with an estimated $77M in annual sales its "phenomenal success" continues to be "criminally under-appreciated" by the game industry.
Here are some snippets:
Credit cards and prepay cards are cool -- but they just don't cut it in the global market for selling to kids.... There's a massive difference between selling currency and selling property... Teenagers really do get the fact that you own a piece of property and you get to trade it.
Sulake's software developers have been converted it seems to using the Scrum approach for product development:
"We switched to Scrum last year and it's doubled the productivity of the teams. But Scrum is kind of hard to do. You need to fully embrace it -- that means that people have to really let go."[more on Scrum can be found at the Scrum Alliance]
the [virtual] items on Habbo Hotel in 2007 have a total market value of around 550,000,000.And some insights into the Habbo communities...
How to be popular in a soc net? Be nice."Habbo Hotel also has MySpace-like profile pages. He showed a popular profile of a Finnish user. The guestbook has more than 30,000 comments in it -- and this is just a regular user. She's just doing well in the world and being polite."War of the worlds: single-color versus multicolor. "There's actually this huge war between the single-colored groups and the multicolored groups."
Inexplicable fantasies: This is McDonalds -- there are people who are roleplaying a minimum wage job... it's all roleplay, you can't carry the food or anything. They're just emoting. ...There's lots of armies. Mafias are really popular as well. They can't do anything... they're just wearing the suit and standing there. They'll emote that they're punching something."
Posted at 07:56 AM | TrackBack | Permalink
August 10, 2007
VC Scarcity For Irish Tech
Ireland's ability to attract VC investment has been waning in recent months based on what we've seen in reports from the likes of Tornado Insider and VentureOne. The Irish Venture Capital Association (IVCA) confirms the trend in a recent statement noting that Irish technology companies raised €62.6m in the first half of 2007, down from €83.7M raised in the same period last year.
It is worth noting, however, that the number of deals actually increased, suggesting there's more capital to be ..
It is worth noting, however, that the number of deals actually increased, suggesting there's more capital to be raised as these ventures start to grow. In fact the IVCA is hosting an event for entrepreneurs this Fall with local venture funds, such as ACT Venture Capital and Delta Partners on hand as speakers.
Slowing the market down is the scarcity local venture funds. The local VC sector has yet to raise a lot of new money post-bubble.
As we've noted before, raising VC funds in Europe is a tough sell but things might change in Ireland if more follow the path of Trinity, the investment fund that recently floated portfolio company Norkom Technologies in London. This summer it took the unusual step of raising €50M of new money on the stock exchange. SiliconRepublic.com: Trinity raises €50m in IEX and AIM flotation
If you are asking yourself how just one or two small sized VC funds can move the stats, then the answer is that the tech VC market in Europe is so thinly funded that, especially in smaller markets in like Switzerland and Ireland, even a small amount of new money can move the needle on the dealometer.
At the risk of oversimplifying things, our observations suggest that with new money local VCs are able to source deals again in their markets where there is pent up demand. The effect of the new money is greater because they bring in co-investors, often from abroad, to boost the size of the deals and fund a greater number of new ventures. In the meantime international VCs are picking up some of the slack.
Posted at 05:52 AM | TrackBack | Permalink
August 09, 2007
London Is Startup City But Berlin Is Climbing
Europe doesn't have a center for VCs and founders like Silicon Valley, but it does have some hotspots. Problem is they are not always in the same place, as the latest stats from Dutch venture database publisher Tornado Insider reveal.
In its weekly newsletter Tornado reports today that Germany moved up to second place for attracting venture capital investment in 2007, edging out France which has been number two to the UK's number one of late.
City-wise, London is still the hottest with 8.2% of all deals and Paris is number two, but the surprise is that the German capital, Berlin, climbed up the ranking to the third spot from 8th with 3.5% of all deals in 2007 and fourth place was snagged by another German city, Munich, with 3.1%.
Hamburg-based venture fund Neuhaus Capital is doing some deal sourcing in the region, we hear, so we asked Neuhaus' Paul Jozefak (babblingVC) why the city is attracting founders and their backers. "It's the cheapest place to set up shop and easy to get people to move there. It's cheap living, lots of "action" meaning the under 40 crowd is easy to relocate there, and internationally it even has status, " responded Jozefak. (Image source: germany-tourism.de)
We have reported good-sized rounds raised by Berlin-area ventures in recent months, such as Snom Technologies (VOIP hardware), Nanotron (Wireless Sensor Networks), along with several smaller rounds for growing Web startups like myphotobook.de, qiro, and dawanda. The M&A activity in and around Berlin is probably encouraging investors' choices (See a roundup here)
Tornado Insider also listed cities that are losing out in 2007, such as Cambridge (2.1% in 2007; 3.1% since 2000), Dublin (1.4% in 2007; 3.1% since 2000) and Stockholm (0.9% in 2007; 2.9% since 2000).
While the UK and London have secured the most deals with 30.6% of all technology investments this year, said the Dutch venture data publisher, Germany topped France raising 16.7% to France's 11%. Israel held steady in fourth place with 8.7%, followed by The Netherlands with 6.3% in 2007.
Posted at 06:58 PM | TrackBack | Permalink
July 13, 2007
Seedcamp Speed Brief
(20 founders X 7 days) + mentors + €250K divided by 5 = Seedcamp
Seedcamp, an incubator-like project led by Saul Klein, an Index Ventures venture partner, is getting the word out this week as it accelerates the recruitment drive for its upcoming event. The deadline for application is August 12.
Publications like VentureBeat, PEHub (EVCJ) wrote about it and it’s been in the blogs over here for several weeks now.
At the end of the one week event, the investors (Index Ventures, we presume) will own a 10 percent stake in 5 startups that will benefit from 3 months of support in London thereafter.
The 5 startups will be chosen by the likes of Andreas Schlenker of Partech International in Paris; Avid Larizadeh of Accel Partners, Greg Marsh of Index Ventures in London, Irena Goldenberg of Highland Capital Partners in Geneva, Olivier Schuepbach of Wellington Partners in Germany, Paul Fisher of Advent Ventures, Pierre Festal of Atlas Venture in London, and Sean Seton-Rogers of Balderton Capital.
There are so many sites we could link to, we went random and picked one that is new to us.
Read Saul Klein Launches Seedcamp (intruders.tv)Posted at 06:49 AM | TrackBack | Permalink
July 09, 2007
The Problem With Euro VC
Journalist Tom Allchorne on PeHub asked last week What is Wrong with European Venture Capital?
He writes:
LPs are now apparently asking their US venture fund managers to set-up shop in Europe – they would rather put their money into a European fund run by a US firm than one run by a European house. Is this true?So far only two commenters answered. euroGP wrote:
The only problem with Euro VC is a lack of decent post-bubble data showing the truth, but the trend you mention is real with US LPs asking US GPs to expand globally; they are coming - starting with the multiple co-investments we’ve seen from Sequoia, Granite, DFJ, Doll, Insight, Bessemer etc.Meanwhile, let’s celebrate the 110+ $100m+ exits in Europe by European VCs in last 3 years which have created $25 billion of value - created without US VCs somehow.We see the co-investment trend too, but are not so sure about a lack of "decent post-bubble" data. There was some floating around last year. (Euro vs US exits ).
Henry from Paris, an Index Ventures' fan, writes that the Euro affiliates of US firms "have significant deficiencies and would never get the deal flow if it weren’t for their US brethren. Witness the recent breakup of Benchmark in Europe... "
We think that the dealflow aspect is what the LPs would be counting on - it is not a negative, at least from the institutional investors' point of view.
The response to the post, all two of them, and some of the things that are written in euro VC blogs, reveal how lightly the European market is served with information about its tech venture capital sector: its nature, shape, and size.
Even Allchrome says that he doesn't have the exact numbers on how much capital tech-oriented VCs have raised - and from whom - because the stats that he has access to "don’t break it down into venture and buyouts".
The VCs probably have to do something to get out from behind firewall-protected and steep subscription priced sources. But it won't be here.
The alarm:clock euro reports about new VC funds raised, we'll interview investors, and report on VC trends, because we follow the money. It is just one part of our following the money trip, though. (Who's making it -- bootstrappers and innovateurs, who's raising it, who's burnt it, and who is putting money in the bank as a result of a "liquidity event" are some of the others.)
We'll check back on Allchrome's post to see if anything more happens over there.
Posted at 06:59 AM | TrackBack | Permalink
July 08, 2007
Tech Investing And Marathons
Vator TV is running a series on how to be an entrepreneur. We liked the one from SlingBox founder Blake Krikorian. Vator writes:Blake Krikorian started Sling Media, his idea wasn't cheered at the onset. Rather, it was looked upon as a bit crazy. It took persistence in an idea and vision to convince the market a Slingbox would be in demand, according to Blake.So for all the founders that read this blog, you can take heart from his success. Krikorian also says it's a roller coaster and "it is not a sprint it's a marathon."
The marathon metaphor reminded us of a list we're working on about techie marathon runners. If you look at the names, and if you know the people even in the outsider way a journalist does, persistence and endurance are evident in their workstyle.
Interestingly, our list is mainly investor types. If you're a founder and are into this kind of sport email us valerieatthealarmclock.com
- Julien Codorniou, head of Microsoft's IDEEs in Paris: runs 20ks and gets early stage companies up to speed
- Lois Lemeur, (Paris/San Francisco) vblogger and angel investor runs half marathons and publishes video interviews with his portfolio companies and digerati on both sides of the Atlantic
- Christian Waldvogel, Vinci Capital (Geneva) invests in Swiss IT and telecoms, a most unloved sector
- Marc Goldberg, Occam Capital (Paris) That is him in the photo above. It took him at least three years to raise his turnaround fund for European tech, but he did it and has acquired Mandriva, which was on the brink of insolvency, and Zenops, which combined in-fusio, a well funded mobile games platform company that struggled, and a division of Filao, a CD-ROM/DVD publisher, in its portfolio.Posted at 03:44 PM | TrackBack | Permalink
July 04, 2007
Microsoft's Stake In Early Stage Euro Startups
We looked into the Microsoft's IDEAS program that is active in France and neighbouring countries in June. We have been covering this beat long enough to think of Microsoft, and some of the other tech giants out there as startup killers, rather than catalysts for killer startups.
But a couple of things made us follow up to find out more about the well over one-year old program. Several startups in the IDEAS program raised VC, about €90M worth, according to our interview below, and a couple have been acquired to become part of a large software company - no blockbusters yet, mind you. And we have been hearing that quite a few have hit the ground running in part due to participation in program.
The thinking goes: if the VCs are investing there must be some high-potential companies there that are delivering more than just add-ons to Microsoft platforms and making most of their revenues from providing services.
But it was the candid expression of envy of Microsoft's IDEAS and its platform marketing effort by an IBM executive in Paris that clinched it, and made us look up Microsoft's Julien Codorniou, who heads up the effort in Paris. Read on to find out why Microsoft wants to be startup founders' and VC's best friend.How long has IDEAS been running? And why are you doing it?
IDEAS is a strategic investment in our ISV ecosystem of tomorrow. In France, more than 60% of software developers build applications on the .net platform, many of them work at startups or ISVs, IDEAS' mission is to identify and support the most promising of them. 25 every year.
It's a French initiative, which was launched almost 2 years ago when Bill Gates was in Paris for a conference with the French industry ministry.Microsoft is probably the most partner-oriented company in the world. 95% of our revenues come from our partners like OEM, SIs and ISVs. We do well when our partners do well. That's why it is life-critical for us to develop, support promote but also renew our ecosystem of partners.
How many startups are in the program?We recently recruited the 55th, YouSaaS, based in Reims, founded in 2007. The program lasts 2 years. After that, ISVs usually get Gold Certified and enter the usual partner process at Microsoft, pretty efficient.
It's not an exclusive program, i.e, we work with companies using multiple technologies and platforms like Java, or Linux on interoperability issues. Xcalia, an historical Java player, is a good example of that.
Are they all ISVs or do you have some online ventures in there too?
We're looking for innovative software applications and business models, whether it's on your desktop, your browser, your robot, your mobile or XboX.
We embrace the Software + Service vision, so we do really like the Internet Software space, represented iin IDEAS by companies like Idylis, Criteo, Neocase, Sidetrade or Tellmewhere.com.
The big question for us is can such startups get acquired - for VCs a trade sale is your typical exit in Europe
In the last 2 months, 3 IDEAS companies were acquired (AS Infor, Polyspace and Pertinence), and I know that 3 or 4 of them are in final due diligence now with potential acquirers, so they can for sure get acquired, but not by Microsoft, in theory.
We don't take any equity stake in our partners but we want those partners to grow as much as possible. It might sound optimistic, but we're looking for the next big partner like CEGID or Ilog here.
But , we also know that innovative software companies, with strong management teams, strong IP and triple digits growth will sooner or later gather attention from large players.
What is Microsoft getting out of all this?Well first, it's important to develop a strong and vibrant local software economy. It's important for Microsoft but also for the whole French software industry.
Secondly, IDEAS demonstrate, concretely, that software companies building on the Microsoft platform do much better than the others. It's platform marketing. We get to work with the most promising new software ventures in France, and it brings new and innovative applications for our clients and partners. IDEAS is also a good deal flow for acquisitions. This is, for example, what happened with Screentonic recently. (see our post on the Screentonic deal here)
That's why we want Microsoft France to be the startups and VC's best friend.
What are the benefits for a startup?
The most precious asset of the IDEAS program is the Microsoft Technology Center, in Paris. A place where startups can make software architecture design sessions, stress tests, POC, benchmarks, etc...
This year our MTC Software architects (and their 200 servers) dedicated up to 10% of their agenda to IDEAS Startups. Companies like Seemage or Keeneo receive most of their clients at the MTC.
Then it's a virtuous circle. We observed that our technological caution brings partners, clients, and investors in faster. Most of the IDEAS companies, like Miyowa, Excentive or Brainsonic are on the fast track, doubling or tripling revenues every year.
So far, 2 IDEAS companies went out of business, but that's part of the game, since we bet very early.
Do you know how many have been funded by VCs?
Of course, we measure this very precisely. Almost 30 startups out of the first 50 have raised a first VC round, since entering the program. For an average of 3M€. The lastt one is Bluekiwi, who just raised 4M€ from Sofinnova.
VCs recognize the value of the Microsoft technological platform and ecosystem and we spend a lot of time talking strategy and roadmap with software-friendly VCs like Elaia Partners, Partech, I-Source, Xange, and AXA.
We also want to identify and connect with all potential business angels with a taste for software investments. We believe there are a lot of opportunities on the French market right now.
Can you ame a few of the ones that we should watch for?
Companies like Seemage, Criteo, Excentive, Miyowa, Skyrecon, Sparus, Tellmewhere.com, Total Immersion, Open Portal or Bluekiwi Software are definitely ones to watch.
Thanks for the interview!
You may recognize Codorniou's name from a post we did last year on his book about how Kelkoo went from research project to a half a billion Yahoo acquisition target based on its European price comparison business, which is how we got to know him in the first place. He has a blog called CodorPosted at 05:42 PM | TrackBack | Permalink
June 28, 2007
Top 10 Reasons Why Tech Public Relations Fizzle Rather Than Sizzle
We’re linking today to a post entitled: And Now For Some Unpleasant PR Medicine: Top 10 Reasons PR Fails by Colette Ballou who runs Paris-based Ballou Public Relations.You’d expect the blog of a PR agency owner to put a positive spin on her top 10 list like Top 10 Reasons To Hire A PR Firm or Ten Tips On Being a Media Darling, but Ballou isn’t much like other tech-oriented PR firms in Europe.
We recently met her team at a party for clients in Ballou’s stylish apartement in Paris. Except for the fact that we’re on two different sides (when tech journalists switch to the PR world where the money and the coffee is much better, gossip says they've “moved to the other side”), Ballou and the a:c euro have one thing in common: both are mainly occupied with tech founders in this part of the world and their attempts to make Silicon Valley-style money without the Silicon Valley history and geography.
So if Ballou is not over in France churning out press releases and emailing them to all the names in Gorkana remotely related to its clients market in a spray and pray manner, what does it offer? According to the post, it’s strategic advice. Press releases are barely mentioned.
Ballou writes:
… every once in a while we get a potential client who thinks that PR can make a "me too" business into a Goggle, or who thinks that PR can work wonders for their sales pipeline (when what they really need is another salesperson and not PR).Other insights:
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“The media works on its own timetable, which is usually much longer than the client’s”And she tells clients that they “need to drop everything if the media calls. This may be inconvenient, but the media waits for no one”.
And number 11 goes like this:
Perception is not formed only by the media: it includes analyst relations, attending (not just speaking at) conferences and networking opportunities, submitting awards applications and blogging (whether writing yours, being an active participant/commenter in the community, or both).Read - Top 10 Reasons PR Fails (A View From Abroad blog)
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June 22, 2007
10 Things To Do When Your VC Pitch Flops
There are lots of posts in VC blogs about the art of saying "no". Just run "when vcs say no" through your favourite seach engine to see what we mean. The resulting hitlist is a big hint about what it's like when you deal with the risk capital crowd.
Now the thing is what's next when that happens. For a helpful answer we point to a recent post in the blog of famous founder Marc Andreessen. He suggests at least ten things to do when that happens.
First of all, it all depends on when the VCs said No.
If you were told "no" in 1999, I'm sure you're a wonderful person and you have huge potential and your mother loves you very much, but your plan really was seriously flawed.If you were told "no" in 2002, you probably actually were the next Google, but most of the VCs were hiding under their desks and they just missed it.
If they say 'no' nowadays, in a time when investing is more "rational" than either of those two eras, he offers some practical tips, many of which are about reducing risk for the investors.
Here's a couple of examples:
Try to raise angel money, or bootstrap off of initial customers or consulting contracts, or work on it after hours while keeping your current job, or quit your job and live off of credit cards for a while.The most valuable thing you can do is actually build your product. When in doubt, focus on that.
He ends by pointing out that "no" can turn to a "yes" at any time. Of course by then, the startups are often no long
