Getting a new product accepted on the market is hard. Because user growth has a snow ball effect pattern it’s the early actions that start everything, that builds the base of users that will later grow organically and much faster. But where to start?
Here’s a list of good action, most of which we’ve used in my company Everplaces too when we started. It’s compiled by one of our kick ass investors Henning Lange who has founded and exit’ed no less than three internet companies in the last 10 years.
Indulge Early Adopters and Listen
Make it Useful Without Users
Provide the Pickaxe
Create Exclusivity, Scarcity, Urgency
Give Users Tools to Evangelize
Seed Content and Communities
And of course, create a badass product with effective engagement, re-engagement, and viral design.
How your industry effects your chance to raise series A - chart
This is the most interesting graph I’ve seen for months! A factual analysis that shows which industries are raising more easily that others when it comes to the series a crunch.
It also truly represents what I’m seeing in the scenes where I am involved: Search, transport, analytics and finance are the hot potatoes.
Of course you shouldn’t base the topic of your startup based in this, trends change, but knowledge is power and this is good to know for anyone yet to start, or deciding between pivots.
Full article: http://tomtunguz.com/seed-follow-ons-by-sector/
Thanks to Rasmus Bjerngaard, Northcap, for bringing it to my attention
What’s your guess on the top industries for follow on over the next five years?
Tonight I had the pleasure of being a judge and speaker at Elance’s international Big Idea competition, where an event was held here in Copenhagen.
As I was watching the pitches, it struck me again how the quality level of danish startups has gone through the roof the last few years. In my daily life in Founders House I think that often, and today’s finalists were a great example of why.
It started about three years ago. First we saw the ambition level go up, more and more founders got the courage to go for international markets and try to compete with the best. This was an important step, especially to establish a precedent, as it goes the grain of many social democratic values of our local culture.
But tonight we saw signs that we’ve reached the next step. Not only are startups ambitious on a global scale, they are also addressing enormous problem, with huge potential impact, not just financially but also socially.
The winner was Labster (I have to admit I am a little proud on their behalf since they are my co-house mates at Founders House). These guys are addressing the education problem on a global scale. Their software enables better science education, not only making it possible to heighten quality (proven) on the best universities, but also making it possible to have top quality science education in places where it was never possible before, since it’s inexpensive software, compared to hugely costs laboratories. That’s disruption in it’s best form.
Image: The Labster team
But two other startups in the final also pitched big concepts, Discue working to improve democracy and give a voice to the people, and M-Payg to solve energy poverty.
M-Payg has essentially invested a system that can connect solar panels to a payment mechanism in your mobile phone. So poor families in the likes of Nepal can spend their weekly fluctuating $2-$4 budget to top up electricity from a renewable and healthy source, rather than polluting and semi-toxic lamp oil. Great for the planet and those poor families. This is a big idea.
I see ideas of this magnitude all the time these days. It isn’t that this is new in itself, we’ve always had big ideas here, but it’s new that there’s so many, and that the common denominator has really risen. It makes me very proud. Cphftw!
Mobiles are so not for calling any more - Stats
#2 social networks
#5 calls (!)
From presentation by mike short, vp Telefonica Europe.
Last night was a big night for many danish startups. At the top app awards of the country it was great to see so many small startups compete and outcompete the much bigger agencies. In particular Shape, Robocat did well, and I am proud to say that Everplaces did too.
Last night was a good night for team Everplaces. We took home two major prizes and a host of short listings in the prestigious Danish App Awards.
- Winner: Category of transport and navigation
- Shortlisted: Category of Events and Tourism
After the winners in each category were given,…
(full blog post here)
Complexity made simple.
For a decade marketeers have lamented the lack of a good technology to transmit information from offline (posters, magazines) to online so people can get it on their phones.
But now recent trends from Asia, show that we’re closer than we think
Scanning has many forms, the most popular being bar codes and QR codes. It’s likely that the standard hasn’t yet been invented, but that is actually irrelevant. What matters is that consumers accept the habit of scanning.
In my recent blog post about timing I mentioned that QR codes are getting big in Asia, which generated a lot of comments. I’ve now dug deeper and today want to share some stats.
Massive opportunity, virtual shopping
Among the use cases showing most potential is virtual shops. Any cheap wall space in any place with a high pedestrian count can now be used as a shop.
Below is the famous subway wall being converted to a shopping opportunity.
Danish company Qbuy enables any seller to put codes directly on each products in ads, and then people can buy it frictionless via their phone. Imagine wine ads in the paper for example, with this technology you just scan the wine while your reading the morning paper and have it arrive to your door step.
Virtual supermarkets increase profitability and choice
The massive grocery chain Tesco’s made the ultimate test of the adoption of the technology when they opened the first virtual supermarket in Seoul in 2012.
Shoppers scan wares with their phones, but don’t have to worry about buying more than they carry home, as everything is delivered at their home address.
This enables supermarket chain to separate inventory and shopping front, and have shops in more expensive locations (with larger choice than before) and inventory in big depos out of town where real estate is cheaper.
Other industries requiring display space of vast amount of products can use the method too, in this case a library has been “built” in a subway station.
Connect with fans, consumers and clients
The other use case answers every media and marketing person’s biggest wet dream: the ability to convert offline contact to online.
So far it’s been hard to convince Western consumers to scan QR codes, but apparently it’s a different situation in China where even late-adopters are onto it!
Is this coming to the Western World?
The big succes in my part of the world has been utility, rather than commerce or marketing. People in Western Europe is willing to use QR codes if it saves them considerable hassle, such as
- Finding out more (ingredients etc) in a product
- Mobile boarding passes at the airport
Virtual commerce is really new in the Western world, untested. But we’re starting to see good cases popping up, so i’d be surprised if that wasn’t coming too!
Image sources: Mary Meeker of Kleiner Perkins trend report
Do you have any examples of where scanning, with QR codes or other technology is making in roads? Then please share in the comments.
Just out of SoEinDing final, where we chose the best and worst from the technology world in 2013. I can’t reveal the winners, but I promise it was a heated discussion! Should make for a good show.
Steve Jobs is considered a genius in the tech scene. And by all means he was a considerable talent. But he also had the luck, or wisdom, to make talent coincide with the other two requirements for launching new products; Money and Timing.
Money, Talent and Timing
In the business scene we talk a lot about talent “investing in people”, and about raising capital. But we hardly ever talk about timing. Timing in many cases seems to be the missing link.
Most products are too early
In the early stages of a company product failure is often equivalent to company failure. So product adoption is crucial, and while there are numerous reasons why products fail (HBR: Why Most Products Fail) there is a clear winner for startup products: They are too early.
There are two reasons for that:
1) It’s a new category that isn’t established yet
2) The tech works, but people/companies don’t understand why they should use it.
The tech world has an inevitable taste for what’s early and what’s new. Both investors and entrepreneurs like to be associated with something pioneering and exciting. But here’s the thing, what’s hot on the tech scene, often correlates poorly with consumer demand. Because we’re an industry of early adopters, we tend to discard and be bored with technology way before it hits mainstream interest. Like this list of products that failed because they were too early.
And here’s the other thing. Mainstream is where the big money is, whether we’re talking general consumers or typical corporate.
Do you have enough time?
Of course innovation is wonderful, and core to what we do. And taking an early position is clever, I am not arguing against that. But, I am arguing that it takes much longer than most imagine, and that we should be prepared for that when we calculate how much money to raise or whether to generate revenue early.
Because if you know that 1) that early stage tech investors are likely to invest in technology that’s early, and 2) big commercial revenue is likely to come only once the market is mature, your biggest challenge is to stay alive long enough to bridge those two.
Personally I prefer the strategy making money earlier.
I’m learning this lesson myself the hard way. We started a user generated content site for travel three years ago. Early consumers got it straight away. But the B2B side didn’t. So revenue was the problem rather than the users. It’s only now, three years later, we see the travel companies trust UGC enough that it’s commercially viable on a larger scale. So, at a time where myself and the rest of the tech world is well bored and tired with UGC, it’s now mainstream commercial opportunities really arise. At a time when most other startups in this space are closed down now, because they ran out of money.
Waiting for mainstream
The pioneer in Local Search on mobile is Foursquare with their 40m users. They basically still make no money ($2m pa), because it’s still a little to early for shops to really understand the value of Local Search. Search on maps and local / social search on mobile is going to become of tremendous importance, it’s already starting to take off. So can Foursquare can stay afloat long enough to take advantage of it of their early position? Fortunately they just raised $41m, I hope this takes them all the way, they deserve it now, after 5 years. Especially since this is Crowley’s second company in same space.
In Everplaces today, our primary product is a B2B app-making technology that enables marketing managers to make quality location-based apps themselves, easily and inexpensively. When we first entered the market a year ago I was worried we’d missed the boat, that too many companies “already had apps” or that the many similar engines popping up on the market at the same time would sate all demand. But today, with hindsight, I can see it was the opposite, we were early. While the most aggressive corporates have been investing heavily in mobile for 3-4 years, the vast majority are only just starting to consider how to approach mobile. So the big potential is still ahead of us, Great thing for us, we just need to keep going long enough for the mass market to be ready.
The most hilarious example in my opinion is the QR code. This ugly little thing, God forbid, is now on its way into mainstream, in particular in Asia. It may actually become a successful technology, 10 years after the tech world gave up on it!
Viability is as important as cool
Personally, I think “commercial viability” should get way more focus among startups, alongside “new and cool.” After all, were here to build companies, not projects. And despite venture-backed exceptions companies survive because they are financially viable. But in the talk around town there seems to be limited focus on money, other than as an abstract future size.
So that’s my New Years resolution. Focus on timing and the big commercial opportunities that’s right in front of us today. I think of it as the entrepreneurial equivalent of “keeping your eyes on the ball”.
I’d love to hear your thoughts in the comments.
I just said “no” to a big deal, it wasn’t a strategic fit. But it’s still the hardest word in an entrepreneurs vocabulary. My fingers could hardly press the send button!
But over the years I’ve come to realize that saying No is one of the most important aspects to staying focussed, on track, and, some people even believe, happy.
If you say no to deals, features, partners, employees, events, meetings and people that don’t take you in the direction you’ve set for yourself, you’re making the road there a lot shorter. But it’s tough!
How often do you say no?
There’s so much fluff in the startup scene, so many people building concepts and projects rather than businesses. We’re turning our back to that mindset and focussing on revenue. We want to build a real business that’s sustainable and independent.
That doesn’t mean no more external capital but it does mean no for now, first we focus on our ability to make money ourselves.
We’ve come a long way this year. Here’s a post I wrote on Everplaces blog today with more information on what and how:
2013 has been a big year for Everplaces, a year where we’ve changed our focus, built a new core technology and established the perfect team. We’d like to thank all our customers, users, investors, community and contacts and wish you a fantastic new year. You’ve been a big part of making our…
Yesterday a group of 70 entrepreneurs, investors and organizers met to kick start an important mission: uniting the Danish startup scene.
Lots of great companies, events and activities are already being organized and built, and a great momentum is gathering.
So the point isn’t create more activity as such, but to unite more, support each other more, share more, invite new entrepreneurs in, new employees to the country, more corporates to join.
You are invited.
The 70 people present represent most of the major startups, investors and organizations involved with the startup scene. But this isn’t a closed group. It’s a movement that you’re encouraged to join. Whether you’re looking for startups to write about, events to part take in, companies to join or people to meet you can join the fun by following and using the hashtag #CHPFTW - whether you’re located in Copenhagen or anywhere else.
From now on the community will support each other more, and meet regularly in big town hall meetings where everyone is welcome, next one in February.
You can see the pictures of the meeting here
Some of the starting startups and organizations who’ve pledged to support this community
I’m just back from IT Days in Cluj-Napoca in Romania, where I had the pleasure of speaking. And I’m telling you, a shift is happening here, there is a tangible feeling of change in the air. This region is no longer happy to the world’s outsourcing destination. Now they want to play for real!
Cluj-Napoca is the second biggest city in Romania, and the leading tech city due to the big concentration of IT companies and the university. It’s the ancient capital of Transylvania but these days the young people are concerned about other things than garlic; they want to build businesses!
In a city of 300,000 inhabitants, around 40 tech startups have already emerged over the last year, and the community is growing fast. Lots of the cofounders are former developers for outsourcing companies who’ve got experience building software for Western companies.
This of course is bad news for Western European companies who rely heavily on cheap & talented development resources here. But for the locals, this is great news.
Why preferences are shifting
The shift seems to stem from both opportunity and necessity. One entrepreneur told me that the outsourcing opportunity felt like was nearing it’s end, perhaps not before 5 or 10 years but that other countries are getting the gigs as Romania becomes more expensive.
The local authorities are investing €70m in a creative and tech initiative. Formerly the custom has been to support big companies establishing offices here, but now the focus is shifting to helping small and medium sized companies. Nokia recently closed their office here, making hordes or people unemployed so it seems the authorities have changed their mind about big corp being the safe bet.
After my talk, which was about how to make the jump and how to get early traction, loads of eager, optimistic people came up to me to tell me with glaring eyes that “they too now were ready to take the jump and become entrepreneurs”
It would be an amazing development for this part of the world, with its talented engineers, to start producing its own global brand products. The spirit is certainly strong in this one!
The founder of Sonar, Brett Martin, wrote an open and to-the-point post about why his über-hyped and well-funded startup didn’t work out. Anyone trying to start a company can learn a lot from the post, especially if you’re consumer facing.
If you think about it, it’s obvious why any existing business, being Microsoft or a tiny new seedling, has things they can’t share. They have considerations to the market, customers, investors, employees, competitors which means they need to protect the perception about them.
When companies get sold it’s even worse. In the golden light of hindsight every haphazard judgement call becomes visionary foresight “we saw clearly the market was moving this way”. This is bullshit. I know many companies where the story told today is totally different to the reality back then, I was there.
That’s why post-mortem posts like this one is the best way to learn from other entrepreneurs. These are the only people inclined to share what actually happened, good and bad.
It’s my hope that founders can start being more open with other, in confidentiality. In a business like startups where the road ahead is never clear, it’s natural that we make as many mistakes as we do sound decisions. That’s a part of navigating unchartered waters. But we could learn from each other mistakes if we knew them.
But until we get this openness I reckon these posts are the best tools for founders that want to learn what really matters. This one resonated a lot with my experiences, and while I recommend you read the whole post, I can share some highlights:
1 - You don’t have the luxury of side projects in the company, pick your priorities and stick to them
2 - Events are for hiring, raising and networking. But the real work happens in the engine room. Ultimately your results speak for themselves.
3 - Startups don’t get sold, they get bought. So don’t make it a part of your strategy, and don’t spend time on it (aside from partnerships which make sense anyway)
4 - Don’t worry about what your competitors are doing. Worry about things you can change.
5 - Approaches by big brands are unlikely to come to anything. So don’t waste time, or tell anyone about it.
There’s a whole conference devoted to this FailConf, held several places in Europe and the US, good place to learn too.
Kudos to Brett Martin for the guts it took to publish this. Full post here