CategoryEvents

Startup Lessons from the States

I knew from the start that the market for Appticles (multi-channel mobile publishing platform) is in US and it was clear that establishing some sort of business presence there is key.

We previously had the accelerator experience in Europe, via Startupbootcamp and we knew that if we have to go through another accelerator, that would have to be a US one. We applied and have been accepted to some US accelerators, but rejected their offer because it didn’t really make sense for us at that time. We wanted to get to US, but we also wanted to be careful on the price we had to pay for it.

We read about Saint Louis having a 342.70% deal growth in 2015, 33.02% average growth since 2012 – in fact they are the fastest-growing city in US when it comes to the startup scene. Neither New York nor Silicon Valley made the top 10 in a recent study.

Alexandra applied to Prosper Women Accelerator – which, as the name implies, is an accelerator dedicated to women entrepreneurs. We got selected, the deal was a really fair one and we accepted.

Now, before actually taking the decision, we talked with our advisors, investors and also other Romanian entrepreneurs. And, obviously, like always, we got conflicting advices. Long story short, the decision was all ours to take and I don’t regret it. Actually it would have been a mistake not to take this opportunity just because it’s not Silicon Valley or New York.

What impressed you the most? What have you learned in US?

3 things:

1. The experience those guys have in creating and managing businesses (mind you, not necessarily tech).

One of the partners and mentors of Prosper is Maxine Clark, founder of Build-A-Bear. What is Build-A-Bear? Well, it’s a teddy-bear themed retail-entertainment experience. In other words, you’d go in with your kid, build a teddy-bear with heart and all, and of course buy that bear.

Today there are more than 400 Build-A-Bear Workshop stores worldwide, including company-owned stores in the U.S., Puerto Rico, Canada, the United Kingdom and Ireland, and franchise stores in Europe, Asia, Australia, Africa, Mexico and the Middle East.

What’s even more surprising is that Build-A-Bear went public in 2004. I think that’s the mind blowing thing and it shows just how powerful the US market can be.

2. The amount of money available – and I’m not talking about corporate money or investor money, but rather personal wealth.

It was the first time I heard about “old money” and I wanted to understand what’s that all about. It seems that we’re approaching an exchange of generations and the accumulated wealth of some people is being split among successors and that, apparently, is a money management problem – there are actually startups trying to solve it.

3. The need for technical talent

Just like we have a lot of technical in Easter Europe and in my opinion we lack business skills, they have a lot of business/sales skills but lack technical resources. We look up to Americans, in general, saying that they’re great business people, but the reality is that they have formal education on these subjects, just like we do on engineering.

From this point of view, I believe there’s definitely an opportunity in US, when it comes to the business side (wether we’re talking about marketing, sales or leadership) just like there’s a huge opportunity in Romania and in the region when it comes to tech talent.

And I kind of knew that’s the case in US, but I didn’t have a good understanding of the magnitude of these things.

What is the difference between US vs. EU startups/entrepreneurs?

I actually asked the same question, a few years back when Matt Mullenweg, CEO and CoFounder of Automattic – the company behind WordPress was in Sofia at WordCamp Europe. In front of around 1,000 developers he said: “Stop comparing yourself to US startups.” and everybody started clapping frantically.

Now, my question is: “Is he right? Is this the correct way of positioning ourselves?

I think that in a sense, he’s right: first of all, there are different markets. On the other hand, coming from Eastern Europe where we have a lot of technical talent, I would look at US startups and entrepreneurs and try to understand and learn the business aspect of building and managing a company. And by that, I mean really understand the business side, sales process and leadership.

I would meet with a lot of entrepreneurs and simply and genuinely ask for help and try to understand the decision making process. I would meet with sales people and try to understand their mindset and process. I would really try to understand how the US customers think, how the market works. Honestly, exaggerating a little bit, but just to prove a point: I would be like in school, viciously hunting for data.

In other words, I would go beyond the shiny story that’s build in the press, because that’s just smoking mirrors. The interesting stuff is behind the scene.

Now, don’t think that all US startups are like FB, Instagram or Twitter. And don’t think that all US is like SV or NY. However, more and more startups from NY and SV are moving their HQ in mid US (STL, Chicago, Austin and other city hubs). And the reason is pretty simple: the living costs in SV and NY are insane: the average AirBnB room for 1 guest is around $3,000 in SV. And to put things into perspective, we paid $1,000 per month, 2 people and a huge house in STL with all amenities. And 2 cats 😃

And in the same time, everybody realized the valuations are hyped in SV and there’s in fact a correction happening as we speak. In SaaS valuations used to be 10X years ago, now there’s about 3-4X. And this is a fact, it’s not just press. In other words, startups that can keep their burn rate under control are in a great advantage this days.

What do US investors or entrepreneurs think about EU startups? How do THEY see us?

What I like about most EU companies is their lower burn and more conservative business outlook. The fact that the company may already be seeing traction and then want to expand into the US with an already established product enhances the opportunity for success as they usually only need to build a US sales and support team. Valuations are more reasonable as well.

– OR –

The understanding of and access to less expensive tech talent seems to be knowledge you bring. I think the ability to manage it is the trickiest.

In other words, we need to be realistic and understand that, as a startup, to get to the next level, you’ll need US business knowledge which is not gained in a few months spent on a trip in US. That can be a start, but to get to the next level, as an Eastern European founder and CEO you might, today, need to think of the bigger picture and realize that it’ll be more beneficial for your company to find a successor, thus hiring a US based CEO.

There are startups in Romania that have done it, because that’s the mature way of thinking.

What do we have to do to be more like them? How can we improve our ecosystem?

I’ve seen a lot of Romanian entrepreneurs disputing developers that they mostly do outsourcing rather than starting their own companies. They go so far as to blame developers for not starting enough companies and going out of their comfort zone. On the other hand, nobody says anything about business graduates that prefer to get a job in a corporate and not start their own company.

I think that this is an unfair way of thinking, an opaque way of dealing with the bigger picture. And it’s a little bit hypocritical: if we look at companies that have gotten to a new level, we see that they keep their R&D head quarters in Romania and that’s a good thing. They get external business management and that, again, is a good thing. We simply have to deeply understand what’s going on, that we’re in a better position than we ever been and instead of throwing blames around I would look at what we can accomplish with what we poses – because we do have some advantages that others don’t.

The reality is that improving our entrepreneurial ecosystem will happen organically. The more entrepreneurs we’ll have (it doesn’t matter if they’re successful or not – we’re talking macro now; some will have to fail for other to succeed) the better and more attractive we’ll become as a region. You can’t gain or build experience over night, it takes time. We just need to realize that and act accordingly.

I think we have to try and be more assertive/proactive, but without revealing too much of that Easter European aggressiveness. Also, I think being humble but acting with confidence goes a long way. If that makes any sense.

My Week in Cluj

In the last year or so I heard a lot of things about Cluj, including being the Silicon Valley of Romania – enough to trigger my interest and make me want to experience firsthand Cluj’s entrepreneurial ecosystem. After finally finding the right excuse to spend an entire week in Cluj: Dev Talks conference that took place on the 13th of May, I packed my bags and off I went, joined by a good friend of mine activating in the IoT space, also intrigued by Cluj’s mirage.

I’m not going to insist on the fact that it took me more than 6 hours to drive from Bucharest to Cluj (450 KM), instead I’m going to concentrate on what I did in Cluj:

  • Networked with local entrepreneurs/startups at Cluj Hub and Cluj Cowork – this is how I found that CatWalk 15 (MVP Academy graduate and recently selected for Startupbootcamp Copenhagen) started in Cluj
  • It was great meeting Daniel Appelquist from Telefonica at Dev Talks conference, this time in my home country instead of UK/London :)
  • During Dev Talks I got to mingle with a lot of people and one thing became clear from day one: developers, entrepreneurs, managers, everybody basically was super excited about Cluj and how the IT&C evolved in the last few years. And when you keep hearing stories about developers in Bucharest being hired and relocated to Cluj you kind of understand that there’s a positive force driving all this magic forward.
  • At beers with Mircea Vadan, an experience startup guy, connected with everything breathing entrepreneurship in Cluj, I learned about seedfortech.ro – a product development fund, including go-to-market support and seed investment. Having a few years of experience at my previous company – providing software services to various customers across the world, I understood that outsourcing companies have to invest in products, not services. As Mircea put it: “the margin nowadays is so low that it’s no longer profitable to offer services like you used to“.
  • And speaking of beers, did you know that Joben Bistro is one of the most spectacular 20 bars in the world when it comes to interior design? It was Diana’s idea to meet there and catchup on things – this is how I found out that Diana had this amazing opportunity to personally interview Natalya Kaspersky. You can read the interview here: http://www.todaysoftmag.com/article/1400/leading-an-information-security-business-and-preventing-system-attacks-the-catch
  • Saturday was dedicated to Spherik Accelerator – a comprehensive and intense 4 months experience, dedicated to Romanian tech startups. Jennifer Austin, Managing Director of the program, invited me to mentor the startups back in February and I was excited to see their progress at the Demo Day.
  • Everything went smooth and for the untrained eyes it looked effortless, but let me tell you that a lot of work went into those presentations. Founders where well prepared and no matter the questions we threw at them they were prepared to knock them out of the park (literally, since the Demo Day took place at Liberty Technology Park in Cluj).
  • All my appreciation goes to Jennifer for doing such an amazing job at helping Romanian entrepreneurs acknowledge the opportunity that’s within our grasp. In her own words, referring to Cluj being (or not) the Silicon Valley of Romania:

    … it wont be Silicon Valley—and that is good. Cluj and Romania both have their own unique culture, history, strengths, challenges, and opportunities. We have to build on these, and dedicate ourselves to making us a better Cluj and a better Romania, rather than emulating another city as if it has all the answers for us. Be yourself—everyone else is already taken! No one achieves greatness trying to copy someone else.

Cluj is a vibrant city with amazingly open people full of initiative, a place filled with positive energy that hopefully I’ll be able to visit at least once every couple of months.

Happy New Year 2015

2015 is just around the corner and every year, during the Winter holiday, I make a short review of the passing year.  2014 was in fact a great year, with a big focus on Appticles – this was made possible right after we got the investment from Launchub.

Imagine that, no more outsourcing!

We went all in with Appticles and this really paid off: we’re now generating revenue and we have awesome opportunities laid out for 2015.  But don’t think this was an easy journey. It never is and in fact, more often then never, it only gets tougher when growth is involved.

2014 was unique from a personal perspective as well, in the sense that I became aware of my intense need to self-discovery. Jim Carrey had a speech earlier this year where he said: “The effect you have on others is the most valuable currency there is!“. This stuck with me and made me think about all the people that I met in the last few years, that had an impact on me, either from a personal or professional point of view.

It’s a privilege to be on the receiver’s side, to get to meet inspiring people, learn from them and hopefully, one day, being able to give that back to others. Personally, I look at 2015 with excitement because I know that it represents the beginning of a new journey, sprinkled with uncertainties and things that are there but waiting to be unraveled. This is the stuff that gets me all hyped up!

A Big New Year Hug to all of you out there and a very special wish: may 2015 be the year of discovering the impact that YOU have on others! 

Trip to Barcelona

Spain, Barcelona, 2013. Said to be a wonderful city, never been there and honestly didn’t know what to expect other than practicing the Spanish I used to know from watching too much soap operas back in high school. In any case, never thought of Barcelona as the world’s capital of mobile, the place where, for a week, everything gravitated around devices, gadgets, operating systems, apps, opportunities and people of all nationalities united under one single but conclusive word: mobile.

And just like when you visit Paris, you have to see the Eiffel Tower, when you go to Berlin you have to see the Wall of Berlin or when you visit Copenhagen your mind immediately thinks of The Little Mermaid, Sagrada Familia has to be the place to visit when in Barcelona. For me that was kind of a treat since the place I’ve rented out from Airbnb had a view from the window directly into this magnificent cathedral. Imagine waking up each morning and seeing this:

Sagrada Fimilia from my window

So, all of the sudden Sagrada Familia and Mobile World Congress was a mix that stuck with me the entire week while I was in Barcelona and while I could go on and on about the two, I would just like to say a bit more about the rest of the things that I did there including pitching Appticles.com at Mobile Premier Awards in front of a jury from Mozilla and Intel.  This was an interesting experience and I have to say that being the first one to pitch out of 20 finalists gave me the opportunity to be more relaxed afterwards and enjoy the rest of the show.

The next day, I’ve pitched at Barca Starta, an event organized by Mobile Marketing Magazine and that was held in a really nice venue and on the third day it was time for me to be in the audience and see 7 startups pitching on stage at Telefonica Tower after going through the Wayra program. All in all the Wayra BCN Demo Day was a good show, although I personally was expecting more from some of the startups that got accelerated for 6 months.

The last day in Barcelona was all about visiting stuff: Sagrada Familia, Camp Nou and La Boqueria. But because I had so little time for visiting, I’ve just promised myself that I’m going to be back in the summer time cause something tells me I have a lot more things to see then :).

 

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