Ik snap het niet. Of ja, ik snap het wel. (De financiële wereld ligt natuurlijk ook het dichtst bij de belevingswereld van Minister Dijsselbloem.) Maar als het hele startup Delta plan zo met pensioen gaat met Neelie Kroes, dan heeft Dijsselbloem nu blijkbaar besloten dat Nederland zich op fintech moet storten. Het artikel zegt ook: “Vooral de Verenigde Staten, het Verenigd Koninkrijk en China lopen voorop.” Dus kiezen we als Nederland weer enthousiast de achterstandspositie. Wij moeten als fintech land achter de grote jongens aan, want het bancaire verkeer is belangrijk voor ons. En dat moet gestimuleerd gaan worden met maatregelen die ook niet bijster origineel zijn: “Vooral de bankvergunning light, afgekeken van de Britten, ziet hij als een kans.”
Ik kan me niet voorstellen dat de keuze, om een branche te kiezen waarin anderen al voorlopen, er toe gaat leiden dat Nederland daarin toonaangevend gaat worden in de wereld. Maar misschien ben ik op dat vlak te pessimistisch… Volgens mij kunnen we beter iets pakken waar we goed en uniek in zijn. Dan kunnen we daarop een goede toekomst bouwen. Waar is de logistiek bijvoorbeeld? Waar zijn de bloemen, het water, de handel? Waar zijn de segmenten waarin nog weinig gebeurt, zoals de circulaire economie?
Ik heb altijd geleerd dat als je wilt leiden, je beter het voortouw kunt nemen. Als je vanuit de achterhoede moet komen, dan moet je wel met hele grote innovaties komen om de koplopers voorbij te streven. Nou hebben we wel heel veel innovatiekracht in Nederland, maar ik zou toch liever in de voorhoede starten dan de rest te volgen.
I just came across Pakible, a packaging startup. A what? Yes, a packaging startup. As more and more people are selling making and selling their own products, it does nothing for its appearance to just stick it in a brown box you found at the supermarket. That is why I am really interested in Pakible. It brands 10 boxes for you for $10. That must be a bargain. To be honest, I am kind of annoyed that they do it in the US. I thing there is lots of opportunity for something like this worldwide.
As you will know, I am always interested in meeting new people when I’ve got the time. There have been countless attempts to make that happen. Once, long ago, I even tried to build my own startup around this idea. However, I have yet to find one that is useful.
Yesterday Pick launched. It promises to make the process easier. I am interested to see what it does for me. Are you? Check when I am available at: http://pick.co/arne.hulstein
Cautionary note: No competent VC is actually fooled when you show up after raising $6M in seed financing and say you’re now raising an A!
Obviously he was quickly answered by lots of people offering examples of companies that raised more than 6 million dollars in their seed round. However, if you follow the conversation, I do not think that the amount raised in a seed round was his motivation to tweet about this. It was about making startup founders aware about the way VC’s look at startups. Startup founders need to be aware that VC’s will put you in their own naming of your round, regardless of what you call it yourself.
In one of his later tweets, he puts the limit for seed funding at about 3 million. Saying that if you go beyond that, it will be seen as raising an A round. And with that statement he also shows how he feels competent VC’s should look at a company that has raised beyond that 3M mark. Because even though you might knock on their doors to raise a round A, in his opinion a VC should be looking at you as raising a B. The difference being that you will be judged much harder on your progress, your product and your traction. They need to be up to B standards to be able to raise that extra cash.
To me, this also shows that startups have to be intelligent about the amount of money they are raising at which stage. Even if you have an opportunity to raise more, that might not always be beneficial. Because you might not have the insight that raising 4M will get you ready for being judged to B round standards. Which might mean that raising under 3M and be able to raise more in future rounds might be much more beneficial to your startup.
I read an article on The Next Web today with the title: “Why crowdfunding isn’t funding anything at all“. The author, Yaniv Tross, reasons that crowdfunding is not that at all. He renames it as a group pre-ordering platform and puts it squarely in the marketing corner. And I disagree. Let me tell you why.
I strongly believe that crowdfunding could be great for your startup. You have to read that correctly. I do not believe that crowdfunding is the best way of getting investment into every single startup, but it could be great for yours. Or not. But you will have to read on to find out which is the case.
First off, crowdfunding is different from most other types of funding. Even though both versions include pitching your ideas, products or services, the actual transaction is very different. An investor is a professional. He will judge your startup on a completely different level than end users will ever do. And that, in my opinion is part of the great opportunity that crowdfunding is giving your startup. Lets face it, people that are into crowdfunding rarely do it because they love the team, or because they think you would be great at doing a pivot and building something completely different. Those are two arguments Yaniv Tross holds against crowdfunding. For me, those are solid advantages. It is a clear case of people voting with their wallets.
If you are connected to the startup world in any way, you will have heard about lean startups and minimum viable products. Crowdfunding might be one of the fastest and most effective way to see whether people are willing to spend money on your product or your services. You pitch it and you offer them to be able to take part in what you are achieving or are going to achieve. That, to me, is brilliant. It is not down to the whims of an individual investor, or a group of investors, but it is down to your end user to vote whether or not they think you are important enough to them to survive at all. In many ways, that is the ultimate test. Instant customer feedback, plus the marketing opportunities that go with it.
Depending on the platform you are using, crowdfunding might allow you to pivot sooner than you ever would have otherwise. At Kickstarter, you need to raise your full amount to be able to get it. At other platforms, like Indiegogo, you don’t have to. Even if you raise less than your goal, you can still continue and deliver on your promise. But the great thing is that you can now contact your backers to see what they liked about your product and where they found it lacking. It is market research that is paying you, instead of you paying an agency. With the added bonus that you have early adopters that can introduce their friends to it once it is at a level where they wanted it to be. Plus the added bonus of your early adopters feeling like the in-crowd. They know they have made a difference and that the product they are using is there because of them. That is empowering customers.
And lastly, crowdfunding is not about equity shares, legal structures and other troubles that most startup owners really don’t want to deal with. I know that you will have to at some point. But why rush it? The money you raise is related to the use of your product or your service. That is also where your passion is. And yes, raising more would mean that you have to include all kinds of extra perks. But those can be found in defining extensions to your services or having access to the team and its dreams. After all, if you are building a service or product that addresses your own needs, chances are that you have the same interests as your early adopters. So, use that.
As an added bonus, when you get crowdfunding in, you will have users. They will give you traffic and traction. And there is nothing like having a startup with traffic and traction when the time comes to really raise funds.
Fred Wilson is kicking off the talks at LeWeb. As a VC he is sharing the way in which he is looking at opportunites and how their firm chooses what to invest in. His first statment is one that I absolutely agree on. If you have ready the post I wrote before LeWeb, you will see that I wrote about the fact that I said that society changing is much more important for the next 10 years in technology than the actual technological developments are. And Fred came out and says that they do not think in technologies, but they think in trends. Tech is important, but to him trends in behaviour and society are a lot more important to base their choices on.
The first big macro trend Fred talks about is the move from burocratic hierarchies towards technology driven networks. It is no longer about the hierarchical structure. It is no longer about one person at the top making the decision, then feeding that down through the pyramid to wait for feedback to come back up to help him make more decisions. For a long time, that actually used to be the most efficient way to work. But now we see technology driven networks replace those hierarchies. As an example, Twitter replaces the newspaper. A newspaper is a very bureaucratic product. The content is decided upon by the chief editor of the paper and he filters and decides the content of the things you are reading. That makes it a slow process to produce the news and it also filtered based on the prerferences of the ediitor. And then you have Twitter that allows networks to decide what the news is based on the people they follow, the retweets they do and the way they interact with messages that make it news. News is created by the interest of the crowd and at great speed. The first place we have seen this was in the field of media. But we now see it in hotels with Airbnb and others. We see it with Kickstarter and others. It is in learning with Codecademy and others.
The second big megatrend Fred names is unbundeling. It is a bit about the first trend, but it is even more about how products and services are delivered. In the traditional world, it was expensive to get things packaged up and delivered. But now we are unbundeling that and you can buy products that are much more focussed on what you need. And you pay just for the things you need or want. The product is usually better as well, as it is created and provided to you by people that are doing the things they are best at. Which means that you get the economic news from the guys that specialize in economic news. Or the sports news from the people that are specialized in sports news.
Fred also names the banks as one of the examples of this. And I completely agree with him on that. In fact, back in 2009 I was on a table with a number of bankers in Zürich, Switzerland with a number of bankers and they stated that we would never be able to do without the banks. And at the time I told them that we could if we were to pick separate banking functions from separate startups through the internet. At the time they thought that I was kidding. And now Fred Wilson also states that the unbundeling of banking services has started. You used to go to a bank and then get everything from that single bank. Now you might do international payments through PayPal, get money for a project through Kickstater etcetera. You can now pick parts of what the bank has been providing you as a complete service from other service providers. The same goes for education where you no longer need to have the building and all the equipment for research, but you can also bring those things together from various sources and get to a better result than you could have before.
The third trend is that we are all nodes on the network. We are all connected to each other all of the time through our smartphones. Look at Uber where we are a node on the network and so is the driver. You can connect together and get a ride. Or get transportation. And that will change the way things and people are going to be transported in the future. And that is the same thing with many new services.
Fred obviously sees more opportunities. One of them is on money and new money systems like Bitcoin. Another opportunity will be the way devices are going to monitor our health and wellness and change the way in which we live our lives and improve on our health. Another opportunity is in big data. However, Fred has a very different angle than what we would normally hear. Fred calls big data the pollution of the information age. Our data leakage through online services is also what allows organisations to spy on us. And as trust and identity are big things, or at least should be, this is something that we ought to be aware of. If we would have realized at the start of the industrial revolution that polution would cause so much damage, we would have addressed it from the start. Yet we are allowing Twitter and Facebook our identity services on many other services. We are allowing data leakage that way. So Fred sees a huge opportunity for a identity system that is set up in the same way that Bitcoin has been set up. Not controlled by anyone, but a place where we are the one that controls our own identity and the related data. He has not seen that solution yet, but he is looking forward to finding it.
With startup accelerators popping up all over the world, this might not be the most popular thing to write. However, it is something that has been on my mind for the past year. As a mentor for one startup accelerator and a visitor of many, I have gotten to know the inner workings and discussed them with others. And they all lead me to draw the same conclusion. Most accelerators do not fit the needs of startups.
So where is that gap between the holy grail in startup growth and my own statement? Well, let me put it this way. There is a distinct difference between the way forward for a great startup and the goals of an accelerator. This might sound strange to you, but unfortunately, it is very true. The biggest problem is the way in which most accelerators focus on the business model and their demo day. The success of most accelerators is judged on the performance of its startups on a podium on the last day of the program. And most see the number of startups leaving the accelerator with funding as the biggest factor for success. Unfortunately, this is often much further from true success than you would think.
Through the years, I have worked with, spoken with and advised a lot of startups. They all had their share of challenges and even though many saw their funding as their primary problem, it seldom was. I will not deny that you need money to pay your team and improve on your startup. However, more often than not, money will not solve the problems, but only make them bigger.
As a startup, your first focus should be on product development, finding a connection to your market and launching and developing the leanest product you can. Most accelerators agree with this up to this point. After which they will then go and work with you on your business models and marketing strategy to make sure that you are going to get funding down the road. For most startups, this time is put to much better use if they can focus on product development and finding the connection to their market through the feedback of their users. After all, money will only speed up the process and if the direction of the startup is not 100% right, it will only send your startup on a course to distance yourself from the market more and more.
That, to me, is another problem that comes with startup accelerators. Usually, the founders of the accelerator are paid, but none of the mentors are. And there is a problem with that strategy. Naturally, I am such a philanthropist that it never bugged me. But I know that not getting paid brings out the worst in people. I know that many mentors in accelerators only mentor startups in which they see a possible monetary gain over time. Subsequently, they try to steer the startup onto the course which they believe will bring in the big money. This might not be in the interest of the startup at all, but as the mentors are part of the program, their advise is followed. And before you know it, your startup has turned into something that is chasing the possibility of big money with a super smooth pitch, while alienating itself from its potential user base.
So, are all accelerators evil? No. I think the original idea of a startup accelerator can still be successful. But we need to remember what the original intention of an accelerator was. It was meant to speed up the process of startup development and launch the startup into a higher orbit than it could have obtained in the same timeframe otherwise. If you read this correctly, you will see that there is no specific mention of money or business model in there. Those can be part of the process, but should never be leading. The leading factor in an accelerator is whether they can help you develop both your team as well as your product beyond what you would be capable of yourself.
If you ask me, this is the best -and only- way a good accelerator can work. In my opinion, this is also the only way in which an accelerator can make sure that the startups that go through their program will become exceptional and will achieve great successes. Unlike startups that are built up on a diet of business models and the chase for investment money. It is rare to see those rise beyond average bread and butter companies.
If you are considering joining a startup, make sure you ask the right questions and have a clear idea what is going to happen. And if it is not purely aimed at developing your team and your product, you are better off gathering your own team of mentors around you. It will allow you to grow faster and be a better quicker than you think.
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So, the world is shocked. Or is it? Dropbox pulled off the same stunt in July ’11. Facebook has been sharing your content for their revenue for ages. And most startups are looking for ways to monetize the data on how you use their services. We need to accept that there is no free lunch on the internet.
Though prices of online storage and online technology have been steadily dropping, there still are costs involved in running any internet service. And as everyone is continually asking how you are going to be monetizing your fantastic idea, there is a good chance that you will be coming up with something along these lines as well.
The unfortunate part is that Instagram is now missing out on another great option for monetization. The PRO account. Why did instagram never create a paid account that I can use to share my content? Why did they not allow me to pay them to make their services profitable? And today it is too late. Yes, I have used instagram quite a lot over the past months. But as so many others, I will be removing my account and my images through Instaport. And offering a paid service now is too late. That should have happened before the change of the terms and conditions. Sorry.
If you are working on your startup, please keep this lesson in mind. I know Instagram has got many users, and possibly only a fraction will leave, but it is a trigger that might become the end of rising star Instagram and turn them into a bread and butter startup. So, if you are providing your services to your users for free, please make sure that your monetization will never depend on you selling on their content. Because people never like others to make money off their work.
I talk to a lot of startups about various subjects. I like those talks. Most startup owners are passionate about their ideas. They all believe theirs is the best idea in the world. And they all go for world domination. Unfortunately, many of them are living in a dream world. A world where everyone flocks to their app, service or product. Just because it is so incredibly brilliant. But lets face it, it rarely works like that.
The biggest trigger for people to use an app or a service is when they get invited by their friends. Or if they see their friends use it. This should not come as a suprise to you. So, really, if you are building a service or an app, make sure that you include a way to have your users share it with their friends. Through Facebook, Twitter, Pinterest or other serivces. Integrate Facebook’s Open Graph to give live updates on your users’ timeline. But whatever you build, make sure your users can use it with their friends. Your apps’ life depends on it.
When I saw this, I just had to share it with you. StartupBus is getting ready to roll from 10 cities in the USA today and it is going to be an awesome ride. Besides building startups on the bus, there will also be competition between the buses and an awesome final in Austin where they will pitch in front of a great jury:
Robert Scoble, Rackspace (Emcee)
Elias Bizannes, StartupBus Founder
Guy Kawasaki, Alltop
Dave McClure, 500 Startups
Paul Signh, 500 Startups
Luis Robles, Sequoia Capital
I don’t know about you, but my mailbox is swamped with newsletters, information bulletins and so on. I cannot call it spam, as I might have subscribed to it at some point, given permission through ordering something or it might be of general interest to me. However, it does annoy me. And it annoys me most when I am busy. When I am trying to find that one email, or I am expecting that one response. That is the time when I come across most of them.
All of this got me thinking. Wouldn’t it be great if there would be a startup that offers a service that goes through your email, analyses it, finds all the newsletters and allows you to unsubscribe from them through an easy interface? As a matter of fact, I can think of other things that can come from that email analysis as well.
If you are a developer or a team looking for a new startup idea, here it is. I have got more details if you get in touch with me. And I can be an advisor for your startup to create this. Let me know.
Yes, we are getting ready to leave. On Sunday morning, StartupBus Europe will hit the road and we will not stop until we have launched some great startups. And you can be part of the experience.
To start off, Startupbootcamp and Atlassian are sponsoring the launch party in Amsterdam on Saturday the 3rd of December. If you are in Amsterdam, register tonight to be part of the first StartupBus Europe party.
On Sunday morning everyone is welcome to wave us goodbye as we board the bus in front of the Hotel Victoria in Amsterdam. (Across from Central station.) No reservations are needed. 😉
On Sunday night Startupbootcamp will be hosting us in Copenhagen. We will have drinks, a pitch competition and plenty of time to network with fellow entrepreneurs. Register here!
On Monday afternoon Startupbootcamp will be hosting a startup lunch for us in Berlin around 2pm. Details will come shortly and so will the possibility to register. More pitching and more competition.
On Tuesday morning we will be welcomed to Google’s European headquarters in Zurich for breakfast, a tour and more pitching competitions. If you want to be part of this, please register quickly as the number of places is limited. But it will be a great experience.
If you are at LeWeb, StartupBus Europe will be there as well. You can meet us at the conference, but you can also meet us at the bus. We can show you around and your can meet our startups, get demo’s or offer your investment money to your favorite startup. FInd us at LeWeb!