6+ Teams, and We’re Off and Running

/in /by

Our Teams Are On Their Way

We closed our application process earlier this month, and we’re excited to announce that we have invited 6 teams to join the next round of acceleration, beginning in April 2014. 

While we work to hammer out the details, and set a finalized schedule for the teams, we’re proud to announce that we have nearly 100 mentors who are interested in contributing to the accelerator this round. Aside from representatives of Credo Ventures, Seznam, and Synot, StartupYard accelerator teams will be taking advantage of perks from StartupYard partners like Microsoft, IBM, and Amazon.

Teams to join StartupYard range from cloud based consumer services, location based mobile apps, and news aggregators, to search engines and data mining tools. The breadth of these projects is tremendous, and the potential we see in these teams, as well as their ideas, is really exciting.

We sent out a questionnaire to our confirmed teams, and here are a selection of our initial responses. We’ll post a more comprehensive set of responses when we’ve heard from all the teams.

How did you find out about StartpYard, and why did you decide to apply?

Mergim Cahani 

Team From: Kosovo 

Project Area: Search

Alin Stanescu

Team From: Romania

Project Area: Location Based App

During my studies in NY I had two roommates, one from Prague and the other from Slovakia. Through them I had an opportunity to meet someone at Credo Ventures. That is how StartupYard was recommended to me. After I reviewed what StartupYard was looking for this year, and what the opportunities and offers were, it was difficult not to inquire further. Considering that Seznam is a partner at StartupYard also played a big role.

We found out about StartupYard from the http://f6s.com platform. After seeing the name pop-
up on the website and seeing that the accelerator is opening its doors, we made a Google search about the program. We loved what we found out about the experience that you guys offer and decided to apply and hope for the best.

What attracted you to the idea of an accelerator, rather than bootstrapping or other sources of income (going directly to investors, crowd funding, etc)?

Cahani

First it was people involved in the StartupYard, including management and mentors. Their experience and impact in the startup community is remarkable, and I cannot wait to meet them. Access to data and staff from Seznam was an excellent attraction (as it relates directly to what we do).

Stanescu: 

The idea of an accelerator sounds as an amazing experience where you can develop your idea in a professional environment, specially designed in boosting your team and the product or service you offer to the market. The mentorship is much more valuable than the money we can receive, that’s one of the most important factors to us.We value experience more than receiving a lot of money and having little experience in what to do next. 

What are you doing to prepare yourself for the accelerator?

Cahani:

There are a few things. Moving logistics is one of them, albeit the easy one. The difficult part is, as we are meeting with the team members, trying to decide how to organize our work and time between Prague and our offices as effective and as efficient as possible. 

Stanescu:

We are currently improving the mobile/web app that we already own and preparing a new UX for the whole concept that we want to work on.We validated the the whole product, our users, our customers want the amazing stuff that my team can build ! 

How did your team come together? How did you meet your cofounders?

Cahani:

I grew up with one co-founder starting from elementary education and throughout high school, and we were roommates during my first year of college. The other team member, was colleague that I meet while teaching computer science at a university. Also, there are a few exceptional students of ours who we have invited to become part of the team.

Stanescu:

We met during the 1st edition of the Startup Weekend that was held here in Cluj-
Napoca, Romania. We were attracted by the idea of entrepreneurship in the IT field and wanted We met during the 1st to know if we can meet other like-minded people who share the same interest as we did. Fortunately we found what would be the future team of evolso and start building the project.

Where do you see yourself and your company in 5 years after StartupYard?

Cahani

I see the company being the leader in our targeted market, and in such time frame, also a profit generating company. I proudly see myself part of it.

Stanescu

In 5 years? We see ourselves spread worldwide with a number of 10 mil. – 50 mil. Downloads on the app markets and the business blooming like never before and still dedicating our time in listening to our users and customers and building exactly what they would use.

 What are you looking forward to most in Prague, both in the accelerator, and in the city? What are you nervous about?

Cahani

Meeting the people who run StartupYard, Mentors, Investors, and people from Seznam. Then, meeting and networking with other startups. Finally, verifying that Prague is as beautiful, great, and opportunistic as my ex roommate claimed it to be; if not, he owns me a three course meal. I am nervous about getting the product to prime-time come the end of the program. We already have an alpha version, but the competitors are very strong, and we need to prove that our product can add more value and meets the demand in our target market. This is a challenge that we have accepted and ready to face, but nonetheless it does make me nervous.

Stanescu

We are looking forward for the amazing experience the people from Prague can offer us during the accelerator program. We want to build,test and monetize the product while staying there and we will do our best to make that happen. As for the city itself, Prague is a wonderful city that hasits mysteries that we want to discover 🙂

How old are the members of your team, and what are their levels of education and professional experience?

Cahani:

The leading team, with business and/or technical background, are on average 30 years young. Each have a master’s degree in their respective area, one has two masters, and another one is a recent PhD. Average experience is around 10 years. The rest of the team, where most are part of the company since the beginning, who also have equity, are on average 23 years old. Little experience with big ambitions and indisputable talent. We have some coding wizards in our team. Worth mentioning one example: a year and a half ago, one was not aware of the “Hello World,” a few months back he wrote its own, fairly acceptable, algorithm on keyword-based document summarization. Granted, he always was great at Math. The intersection of experience from academia, industry, knowledge of the market, and willingness to continuously learn, makes us a competitive team.

Stanescu:

The members of my team are between 22 and 26 years old and the professional background they have is in a perfect harmony with what a successful project with need. Marketing,Sales,Web development, UX design, Design, Mobile development,Business,SEO this is some of the experience my team has, while knowing how to act inside a team while helping eachother with different problems that could occur. They are awesome and they deserve to be noticed in the world for their capabilities and their desire to succeed.

[ssba]

 

The Time Bank of America Stalked Me: Or How Not to Do Social Media

/in /by

It all started innocently enough. I had just made a series of online purchases using my Bank of America debit card, paying for an account on Squarespace, and a couple of related services, for a website I was making. The purchases happened over the weekend, and on tuesday I got the email.

Bank of America card security is the bane of my existence. I live in Europe, but maintain an American bank account for the considerable ease it provides in making online payments, where payments in Europe entail a lot more red tape (plus Netflix!). But Bank of America doesn’t like Europe. Not one bit. My card is shut off for fraud protection on a regular basis. Because I bought an unusual item (a mattress), because I used it in a different city than usual (Karlovy Vary), because I used it too much in one day ($400), and it is shut off, like clockwork, minutes after I arrive in any country, other than the one I was in the last time it was shut off. This has given rise to a little ritual I now have with Bank of America. When I arrive in a new country, I take out the equivalent of $200 from a bank machine, wait a couple of hours, then call their international fraud prevention hotline (toll free), to assure them that it’s really me.

To make a long story short, Bank of America wanted to cancel my debit card because it had been compromised by one of my online transactions, apparently. The only problem was, that I had already been waiting for a replacement to my credit card, also with BofA, for nearly 4 months. Now I would have no cards with which to pay for my beautiful Netflix, Spotify, and… other things that I pay for online.

I made the call, and after various hijinks and extremely long and uncomfortable pauses, the cards were their way: 30 minutes on the phone. Not my worst outing. Not my best. I was annoyed with the whole thing, and the crazy trance music they were playing was bizarre to listen to at 3 in the afternoon on a weekday.

That’s when it got interesting.

I flipped over to Twitter and posted this missive:

To be fair to me, I’m just being cheeky. And the techno music is god-awful. Why do I feel like I need to be on crystal MDMA to enjoy making a business call? But I wasn’t really upset, just bemused. If there was an emoticon I should have employed, it would be that slanty chagrined one like this :/ that indicates something like: “meh…”  I certainly never expected a response. That’s when things got a little weird.

Bank of America representatives, I think at least 2 separate people on the same account, attempted to contact me by DM to get my phone number. That’s a little weird, I thought. I initiated this conversation online, and they want to call me on the phone.

I gave my number, out of bemusement more than anything else, and then they proceeded to call me. 7 times, in 2 days. Each time they called, they also repeated a DM on twitter asking me to get back to them with a better time to call. But I was feeling a little trapped at this point. I had put myself in this situation, and I just wanted out of it.

However, given the time difference between Prague and wherever they were calling from, they only succeeded in actually getting me on the phone once, at about 9 in the evening, when I told them I was at an art class with my wife, and I would not be speaking to bank representatives on the phone. The support person wasn’t clear on the concept of there being different times in different parts of the world. She called me back at about 1am. I didn’t want to just say: “hey, listen, I was just being sarcastic, it’s fine, and please change your horrible holding music.” This was feeling like I had done something wrong, and was being held to account for it.

dms

To be honest, I’m just not ready to commit to a long term relationship.

Your Customers are Not Problems: They Are Opportunities

It just so happens that an alum of StartupYard, Brand Embassy, recently announced a major new round of seed funding. Brand Embassy is very cool, and if you run a medium to large software company, or engage a lot of social media (enough to have a social media team), then you should check it out. I used it myself in a previous position, when it was still very much in early Beta, and it’s gotten even better since then.

I don’t know if Bank of America is a client of theirs (they should be if they aren’t), but even if they were, software can’t protect a company from making grave errors in how it deals with its customers in social media. Software can make sure you don’t miss things; make sure you’re keeping up with the traffic, but it can’t give you a sense of humor. It can’t make you treat people like *people* instead of like points of data. On this front, Bank of America acts just like you’d expect a bank to act.

I think I know what happened though. I think I get why this situation unravelled the way it did. Bank of America is probably using a suite of software similar to Brand Embassy, which assigns social media representatives to specific cases and interactions, and can be monitored by a team leader, producing cool metrics and satisfyingly productive data that tells you how your social media interactions are progressing. There are probably goals involved that try to turn negative initiated interactions, like mine, into positive viral feedback. My tweet had to be about a problem, and that problem had to find a solution. Acknowledgement alone was not in the playbook for them.

At the end of this whole thing, when some poor young person had mollified me on the phone, and promised a muffin basket (or whatever), I was supposed to rave about how great Bank Of America is at handling its customers. Nevermind that they could spend time hiring and training for their inbound call centers so that when you call them, they can handle your actual customer care complaints more effectively. I understand that the social space exists, and is fast eclipsing inbound customer care anyway, for many reasons. And that’s all ok. But a lot of the time, people use social media to be provocative, and sometimes the best reaction to provocation is to be provoked. Mix it up. Toss in a right-hook. It’s a risk, but it might be worth it.

Social Media Should be Used to Excite, not Defuse

message 2

Except in this case, software, or whatever protocol Bank Of America must have to manage it’s doubtlessly vast legion of social media reps, assigned my “case” to a representative, and a case demands “resolution.” I had been made into a number, and that number had to be rounded off, one way or the other. My comments had to be “dealt with,” rather than “engaged with.” I can imagine the number of people involved in shaping the language that goes into what these reps are allowed to tweet to people. And nothing kills creativity faster or deader than a committee. Because it’s always easier to say no to risks, than to take them. 

I’ve managed social media accounts with tens of thousands of followers. And it’s a double-edged sword. I can understand Bank of America not wanting to engage with petty bickering, or wanting to even *attempt* to poke fun at itself by acknowledging my own dry remarks with a bit of humor. The divide and conquer approach is safer, and I’m sure their numbers prove it. With a half million followers on a corporate social media account, the great temptation is to monetize that resource: to turn it into a channel for spreading your marketing message of the day, and to split off and minimize chatter and negativity as much as possible. Most companies can’t resist that siren call in the twitterverse. And that’s a real problem. But Twitter is taking steps to make the “divide and conquer” approach of sock-puppeting corporate accounts less attractive.

There’s a world of milk and honey beyond corporate speak, in the Twitterverse. There is an opportunity in social media to engage with customers, to get to know them, and to talk to them on their own level. Instead of flattening out everything into a bland corporate pancake, Twitter and other social media allow a rep to quickly, and incredibly easily figure out who they’re talking to, and talk back.

My website is listed on my twitter profile. In 30 seconds, a rep could have known what I do, where I work, and what my sense of humor is like. They could have found the StartupYard blog in about 3 clicks, if they thought about it. And then they could have spent a minute personalizing a response, and delighted a long time customer with a little acknowledgement. But they didn’t do that- they spent untold amounts of time trying to get me on the phone, where someone who still didn’t know anything about me would try to “handle” me and my non-problems. That’s an awful shame, really.

Content Matters. Not Just *Your* Content.

The essential issue here is that big companies are comfortable with “marketing,” as a concept, and with “customer care,” as a concept. But they are not ready for “marketing with customer care,” as a new mode of engagement with customers. Solving customer problems is one thing, but sometimes customers just want to feel acknowledged as human beings. And sure, plenty of companies are faking this kind of customer engagement with large-scale “viral” opportunities, but that isn’t the same thing. In that kind of scenario, the company controls the environment, selects customer reactions, and manages the content. Social media is not built for the perfectly polished story: it is built for the rough and ready. It is built for letting consumers create the narrative.

Thus, I present my vision of the ideal tweet: the tweet that is special because it actually accomplishes something new:

By pushing our interaction, which initially consisted of me poking a little fun at their byzantine call center operations, into a “real life,” or at least “real telephone,” interaction where I was being put in the position of explaining myself to someone, BofA made a mistake. They silenced a member of their herd, who will no longer feel comfortable engaging with them in social media again. They pushed the interaction as far as possible to the right: customer care land. They tried, rightly, to acknowledge me, but they didn’t play fair and give something back. Perhaps that’s the point, but consider this: your angry customer is also your most valuable. He or she is going to be the person who tells you what you can do to improve. Instead of being a mouthpiece for your brand (because social media is sadly ALL about brand, and not about real communication for big companies), an angry or a complaining customer is an opportunity for you to learn, and to demonstrate that you *can* learn.

Here’s how I’d have liked to see my “case,” handled at BofA. A customer care account should have tweeted: “thanks for the advice [insert quip about techno music]. We’ll bring that up at the next meeting. Anything else we can help you with?” At 132 characters, that gives me total satisfaction. Hey! A big company noticed me! I’m a hero! If the music ever does change (it’s always possible), I might become an evangelist for the BofA brand anyway. They really listened to me! They care about me! BofA could even highlight the interaction if they did decide to change something, featuring my tweet, and announcing that they were adding some cool bands to their hold music library.

Ok, that’s a little far-fetched, but still. They could do something like that. That would at least be fun, and possibly even funny. Banish the thought of a company that size doing something engaging like that!

But they didn’t listen- they didn’t acknowledge the content of my tweet at all. They just side channelled me away from Twitter entirely. God knows what I could have accomplished by talking to them on the phone. A satisfying coda to my BofA experience, when I had been complaining about having to talk on the phone with them in the first place?

[ssba]

Disclaimer: Bank of America is staffed by nice and helpful people, and they are not in any way meant to be portrayed here as a villain. My opinions are my own, and are not meant to be interpreted as those of StartupYard or its partners.

Hacking the Startup Life: 5 Must Do (Alternative) Things in Prague

/in /by

In a few months, StartupYard teams will descend on Prague for what will hopefully be the most productive three months of their relatively young lives. And while running and growing a startup is serious business, there’s a good reason we’re in Prague, and it’s because we freaking love it here. In terms of tourism, Prague ranks highly with travelers, and according to this nifty database, it stacks up well in terms of cost of living against virtually any other technology hub, ranking just above Kiev (94% as expensive), in terms of price index (for comparison, London is 181% more expensive, while San Francisco is 118% more expensive).

Adding to that, our StartupYard teams will be living on our dime while they’re here. We’re covering the rent, so they can focus on what matters: the startups they will dedicate their time to growing with us.

But it’s not just about how far a Euro (or a Czech Crown), can go in this city. It’s about what you can do here that you can’t do anywhere else. While we won’t pretend not to be biased, we can say with no hint of prevarication that Prague is an awesome place to live, even if it’s only for 3 months. Here are 5 things teams must try while they’re here:

1. The Prague Beer Festival

Prague’s pubs are great, and it’s a time of great change and exciting innovation in Prague’s beer culture. But still, unless you know the city well, you’re likely to find your choices at the average Prague pub to be somewhat limited, and uninspiring. Boring pilsners and ordinary lagers are the order of the day for most Czech beer drinkers (sorry, but that’s a fact), and though Czech beer can’t be reproached for it’s quality, it can be lacking in imagination.

But not to fear. The innovative spirit of Prague has inspired a host of mold-breakers in the past decade, and today, the Prague Beer Festival is a showcase of some incredible brewing talent. Locals will lift their noses at the prices (a scandalous €1.64 for a half liter, or €3.28 for a premium selection), but the selection of adventurous, fresh, and delicious beers, as well as the… appealing style of service, will convince more visitors that it’s time to start shopping for a home in Prague.

1-20120523-13198-9238-pic

Highlights

Traditional costumes, live bands, huge selection of beers and excellent Czech cuisine, a party atmosphere and excellent prices. There’s also a great system here where you buy tokens (called Tolars) at the entrance, and pay for your food and drinks without ever needing to worry about making change.

2. Indoor Skydiving

Prague is home to the only wind tunnel with a circular glass enclosure in the world. That means that with no preparation other than a short briefing with a flight instructor, you can safely simulate a free-fall skydive in a chamber nearly 5 meters wide, and 14 meters high.

Highlights

200km/h winds, inside a tube = fun. Need we say more?

3. The Dox Gallery

The Dox Center looks a lot like startup fairyland. If you dream of the kinds of offices you might design when you go IPO and rake in your huge valuation, it may be just the place to visit. Built on the premises of an old factory in a traditionally industrial sector of the city, Holešovice, the center’s gallery is home to iconoclastic, ironic, and challenging exhibitions like Pharmotopia, an Zone in Motion. It’s a space that will be sure to fire your imagination.

When you’ve been sitting at your keyboard for one too many hours, peel yourself away from your startup to get some inspiration, and browse the design shop for some desktop ornaments.

Highlights

Weird cool architecture, and minimalist design blends the old with the new, waking up the senses and awakening fresh new ideas. Also, there’s a café.

4. Go Blind for a Day

 

I met this really cute girl at a pitch black restaurant.

No, seriously. This is a good idea. Following a fashion introduced in the late 90s, Pod Kridlem Noci offers a pitch black dining experience, in case you’ve ever wondered what it might be like to socialize and dine in a world with absolutely no light.

If dining in pitch black isn’t enough of the blind experience for one day, you can add a visit to the “invisible exhibition,” a sort of museum that simulates the experience of blindness with a set of exercises in a pitch black environment, forcing you to use your senses to tell what’s going on around you, and to navigate an unknown terrain. Again, for programmers and startupers, it can be important to get new perspectives, so opening yourself up to a totally new way of interacting may inspire new thoughts and ideas, taking you out of tunnel thinking and lifting barriers to creativity. Seen in that way, activities like these are a must for a startup accelerator team.

Highlights

None. You won’t be able to see them anyway.

5. Disco Boats, Pub Crawls, and General Mayhem

 

We’d be kidding ourselves if we didn’t mention the reasons so many young people come to Prague in the first place. The accelerator is a place to work, but we won’t deny that Prague itself is a playground of sorts. When you aren’t coding your fingers to the bone, you have our permission to let loose a little bit, and enjoy some of Prague’s nighttime offerings like:

The Party Boat

Pretty much exactly what it sounds like, I can’t say personally that the Party Boat is exactly my thing. But then, when I first moved to Prague at 23 years of age, it was exactly the kind of thing I wanted to try. And if you’re not old and married (and therefore proudly boring), then this might be just the ticket for a night’s relaxation. The party boat follows a traditional pub-crawlish structure, only with a boat added: drink a lot, get on a boat where you drink a lot, get off the boat and go to a club where you drink a lot.

If that sounds like your thing, then you’ve got far more energy -and less sensitive ears- than I do, and you’ll be in good company.

Pub Crawls and General Mayhem

There are a mess of these sorts of outings in Prague, and they generally attract the 18-25 crowd of Erasmus students and tourists. Again, expect heavy drinking and a fair amount of incoherent yelling. As a self-described local, I’m not actually allowed to like the idea of pub crawls, as they are boisterous and annoying, and full of young people having the time of their lives. Old boring married people don’t publicly endorse these kinds of shenanigans, but between you and me, if you’re under 25, this is the sort of thing you’ll hate yourself for doing the next day, but thank yourself for doing 10 years from now. So maybe you should do it. I won’t tell anyone.

[ssba]

StartupYard Mentor Bogomil Shopov Talks “Growth Hacking” and Open Source

/in , , , /by
Bogomil Shopov is a well known open-source developer and renowned growth hacker. He is an active speaker in open-source circles, and a contributor to various projects, including Firefox.
 
Follow him on Twitter @bogomep for valuable updates on the world of Bogo.

WIll you tell us a little bit about your career?

I started my career a long time ago. My first job was, behold … a sheppard! I was at school and I needed money. Believe it or not I have learned a lot from my first job 🙂

After that I used to sell small goods, and when I finished high school I joined the Bulgarian Army.  I spent 5 years in intelligence doing some secret military stuff. After 5 years I realized I needed a change and in order to escape the army’s stupidity, I decided to pursue my dream – to work in IT. If you go through my resume you will find a lot of things – I used to work as a programmer, web architect, IT manager, Product and Project Manager, Open Source consultant, community manager, marketeer. I’ve spend the last 6 years working on startups.  Now I am a “growth hacker” – the only definition that combines all skills I’ve gathered in my entire career … and I am happy! Also I am a Pirate! My signature is on the establishment act of Pirate Parties International.

Bogomil Shopov: Avowed Pirate.

Bogomil Shopov: Avowed Pirate.

You’re interested in open source, and you work part time on Mozilla’s Firefox. What drew you to that project, and open source work in general?

That’s an easy one. I like freedom and I like sharing. At first I started to share my code with other people and then I started to show others how and why to do it. The open source and free software movements are “guilty” of some of the most successful software projects, including the Internet. I contribute also to the Open Data initiative for  opening all government data to the public. Talking about freedom, I even ran for European parliament with the idea to fight for our digital rights and I am proud that I helped the stopping of Sarkozy’s “three strikes” (the EU version of the law). Also I am mentioned in Wikileaks for that. As I said before I like freedom and sharing.

Why did you campaign for MP fall short?

People in Bulgaria were not ready to think deeper about digital rights and green way of living. Those concepts were new to them and that’s why we got so low results.

Ever think of running again?

No, because I think there is a way to do useful work outside of the parliament and to achieve my goals.

256735_10150216207418864_4895877_o

You describe yourself as a “growth hacker.” What does growth hacking mean to you in today’s terms?

It seems there are a lot definitions of the term. I personally prefer this one: A growth hacker is a rare combination: someone with the right marketing and technical skills who can come up with clever marketing hacks and also track their results.

[This is the main topic of Bogomil’s upcoming StartupYard workshop for members of the accelerator]

You’ve been working for a couple of years in education technology. What are some of the unique challenges and opportunities in that field?

The Internet is an open book – you can take whatever you want, but you can also write and contribute. Using the internet for teaching and studying – it’s more than required now. There is huge knowledge collected and if you are a smart teacher you will know how to use it. The challenge is, well, to convince the rest of the teachers that using modern educational technologies is a must.

We worked together as a marketing team for a year, and one of your strengths is email marketing. Is email marketing more or less relevant today than before the rise of social media?

Email marketing never dies. This is the most used channel and it will remain like that for years to come for sure. If you are using it wisely you can get a lot from it. I know a company that used to send millions of e-mails almost every week, without any effect and after changing the strategy with more precise segmentation, A/B/C/D testing and adopting some anti-spam techniques the miracle happened – it works.

Email marketing is not just pushing the “Send” button. I’d love to write a blog post to share more thoughts on that, because is one of my favourite things to talk about.

What about social media? What are some of the common mistakes that people tend to make when trying to leverage social media channels into growth?

I love social media. I love creating experiments on social media as well (do not google me!).

The biggest mistake that most of the companies do is to do everything they can to get more followers. What? Yes! I know a lot of companies, even here in the Czech Republic, whose goal for their social media effort is to have new followers every day and to have more than others.

Well this is not so bad, but this is just step 0 – the work begins after that. You have to talk with your followers, you have to keep them entertained and engaged and you have to give them something they need, not just boring sales messages.

The social media channel is like every other channel – if you use it the smart way – you will get a lot from it.

What can StartupYard teams expect to learn from your input, and what do you hope to gain from mentoring  StartupYard startups?

I will hold a workshop in April about, well, growth hacking. I will show the startups how they can use tools and ideas to find their first clients, how to nurture them, so they can buy again. How to do testing for their ideas and concepts, how to track everything and how to use the data to take business decisions.

Also I will show some growth hacking examples, that they can start using on the next day. Also I will spend some time talking about Behavioral Economics from the Marketing Point of View.

But most of the time there will be discussion, because I don’t believe in workshops where one man does all the talking and the rest of the audience is thinking about something else. We will talk together and grow together.

You can catch Bogo at the Bulgaria Web Summit 2014, and at his upcoming Growth Hacking workshop

[ssba]

16 Interviews With Founders. What Did We All Learn?

/in /by

Last Friday, investors and mentors from Startupyard met with 16 candidates, chosen from the most promising of a total of 60 applicant teams for the upcoming accelerator round.

I was there, not to participate in the interviews or to vote on who would be included, but to see what sorts of teams I might be working with come April. The results were intriguing, and the following are a few of my takeaways from the process.

Many Teams Didn’t Have a “Pitch”

gas-pump-2-745654-m

This is understandable, considering that in a few cases, the teams also didn’t have a real product or a market fit. That’s what we’re here for. Not having a finished pitch at certain stages of the process is fine, but it seemed that a few of the teams ought to have thought longer and paid a little more attention to selling their ideas. When there is, as we say “money in the room,” meaning that people are making real financial decisions about you and your team, and not only your ideas, teams should be prepared to sell whatever they have, even if it is just their own promising talents. In fact, there was interest in some teams based purely on their personal talents, and much less on their specific ideas.

Having a pitch of some kind also signals to the investors in the room that you have at least thought about the marketability of your ideas. A few of the teams had clearly rehearsed precise lines and questions they would use to pitch their ideas, and while our interviewers saw through these ploys, having a bit of a sales spiel is not insulting to an investor. To the contrary, comments on interviewees who attempted honest sales pitches were very positive: “at least he’s clearly thought about the market,” was one comment following such an interview.

Start Thinking About Your Market

business-graph-1415060-m

This was a big one at the table on Friday. Some teams struggled to define who their customers might be. If you can’t imagine who might pay for your services, then it may be difficult to get an investor to agree to anything at all. An interview for an accelerator is not an investor meeting, but the accelerator is still investing some money, and good deal of time and energy, into your ideas. So having some ideas, at least, of potential markets for your products can help to convince the accelerator that you’ll be able to find a market- that you think in those terms when you need to.

You don’t have to have any customers to know something about who might buy your products (most of our applicants don’t have any current customers), but you do need to have any idea of where the value of your product is. In other cases, the products being described filled very crowded markets. If your product is already essentially a feature of a more successful product, that may be fine. However, you have to be able to reasonably justify why your product adds value that the competitor doesn’t. And you have to be prepared for the investors to ask questions about your more visible competition: why would someone end up using your product or service, if it is included in a competing platform? Is it cheaper, more streamlined, more appealing in some other way?

What Problem are You Solving?

workaround

There were two initial questions that Cedric Maloux, our CEO, asked every team, and the answers were probably the most telling about how far along each team was in thinking about their product or services as a real, viable business. “What problem does your product or service solve,” and “what are the extant alternatives?” The ideal answer was clearly that the product solves a serious, possibly costly problem, and that there are no current alternatives. More often the case was that the problem was one of convenience, of cost, or of lost efficiencies, and the alternative was either business as usual, or an alternative product with a different focus.

The most pressing problem that some teams had in answering this question was that they attempted to pose the problem as being related to their exact product, rather than a broader problem.

For example, we heard from founders who said something like this:

Founder : “I make a watch that runs backwards.”
Cedric: “And what problem does that solve.”
Founder: “Well, it solves the problem of someone who is looking for a watch that runs backwards.”
Cedric: “And what are the current alternatives?”
Founder: “Watches that run forwards are pretty much the only option.”
Cedric: “… I’m not sure what the problem is that you are solving.”
Founder: “If you needed a watch that ran backwards, I would be able to give you that.”

In some cases, the interviewers found themselves answering this question for the founder, when it should have been the other way around, finding uses for the backwards running watch that the founder had not proposed. These resulted in negative marks against those applicants- a founder that doesn’t think in terms of the market and in terms of solving problems may not be a desirable candidate for an accelerator.

It clearly wasn’t, for the interviewers, that the founder needed to know all use-cases of their product ideas, but they had to have some use cases for them. And “if you wanted to [do exactly what my product does]” is not a use-case. Products have to be adaptable to different purposes: they have to appeal to customers who themselves need different things.

The Team on Paper and the Team in Person are Two Vastly Different Things

There were a couple of teams that barely made it into the interviews, because on paper, their projects didn’t seem like ideas with a lot of potential. But when they got in front of us, they blew us all away with their energy, and their insights into how they would make their business ideas work. And the opposite was also true: we entered one interview virtually certain that the team would impress us, because the idea sounded great on paper. But the interview proved that while the idea seemed good on paper, the founder in question didn’t have the energy or the interest he needed to convince us to accept him. Cedric, who led the interviews, commented afterwards that it was a powerful example of how much depends upon founders themselves, and not just their ideas.

Gadget Startups Are Very Risky

A gadget based startup, or one that needs a physical product in order to realize their sales, are risky. We had a few pitches for physical products, and they were actually very good pitches, and excellent ideas. The problem is that the burden of proof that such a product will work and will be attractive to a market is much higher than for a purely software product. Not only do the founders need to know much more about their market, including the costs and challenges of manufacturing the product, but they also risk a much larger upfront investment in a technology that may not sell later on. This is in fact why gadget startups with physical products so often turn to preselling and crowdfunding, as has been the case for startups like Pebble, Tile, and Omni. Physical products are very attractive for preselling because the customers can be identified and locked-in long before the investment is actually made, guaranteeing at least a shot at profitability. Building and marketing a device from scratch, without an existing customer base, is therefore doubly unattractive for an accelerator.

Does your Product Have Global Potential? Does it scale?

corruption-1431595-m

Teams were sometimes not aware of what their competition was, especially when asked about the market outside of their home country. Accelerators in general, especially ones like Startupyard, focused on data and analytics, are looking for startups with global potential, so ideas that work in smaller markets that require a great deal of TLC (that’s Tender Loving Care), are not going to fare well in this kind of environment. The elements of a product that can make it a success in a local market can work against it in a larger one, presenting problems like language dependence, organic growth limits, and scalability of service and of sales. This doesn’t mean these products are bad, just that they may not be right for an accelerator. If a product would benefit more from slow local adoption with personalized sales and marketing, then it shouldn’t be in an accelerator at all, and some ideas are best grown city-to-city, gaining their greatest value from their local nature, rather than wider adoption and more aggressive growth.

Do Rapid Prototyping

We’ve written about this before, and it remains important. Teams often didn’t have a product to show us because they were working on the demanding problems that their backends presented. While that’s the right idea, some modest attempt at demonstrating the end-user functionalities involved would have gone miles towards convincing the board of Startupyard to take a second look at a few projects. Even non-functional mockups of the end product can make a product much more tangible and attractive than a description can. A picture is worth a thousand words, not because pictures are better, but because they inspire the imagination. They feel real, even when talking about an abstract idea just doesn’t.

Rapid prototyping can also help founders to define what exactly it is that their products do. A prototype virtually demands that a the designer at least start imagining use cases for the product. This is why rapid-prototyping can be so important: it is more than a demonstration- it is a piece of the process of envisioning your finished product, and the customer who will use it.

Give Specific Answers to Specific Questions

Nerves play a big part in these types of interviews, and the interviewers understand that. But at the same time, not every question is a test, and not every answer needs to be perfect. If an interviewer asks you a simple yes or no question “do you have any paying customer?” for example, you should start by answering yes or no. While for some people, the instinct is to get out ahead of the question, and to answer the concerns they think it raises, often times the interviewer is really interested in something else, and a straightforward answer, followed by a short explanation, is always the best way to go.

Be honest, and trust that the interviewer will seek the information he or she needs to make the appropriate judgements. If you answer a question like that one with “well, right now, we’re not worried about the monetization because we’re still growing the userbase, and we think that…,” the interviewer will not know the answer to the question, and will be frustrated at having to ask it again. And it’s likely the interviewer just wants to know the status of your product or service, not in using that information to judge your competence. The right answer might be “Yes, we have a few paying customers, but growth is slow because…” or “No, however we are still concentrating on growing our user base.”

One of the most pleasing moments during the interviews came when a very young founder answered a question about his company’s scalability by saying: “I’m just not sure about that.” There was a visible reaction from the table of interviewers, and you could see them thinking: “here is someone being honest about himself!”  You run the risk of outsmarting yourself, by trying to figure out what answers the interviewers want to hear: just answer the questions as they are asked.

Appearances Matter

Candidates don't necessarily need to be in black and white.

Candidates don’t necessarily need to be in black and white.

Much study has been done of the links between attractiveness and trust. We don’t consider ourselves shallow judges of character, and the point of being a professional investor and a mentor for startups is having the ability to look beyond appearances and see potential where other people don’t. But all the same, the way you look sends important signals about how you work with other people, what you think about yourself, and how aware you are of these things.

While nobody arrived for their skype interviews in their pajamas, my personal observation was that the more professional looking teams were taken more seriously. While this is as much a function, I think, of how those teams behaved and spoke, and were aware of the questions that needed to be answered, and how they needed to be approached, the psychology of appearance can be just as important for the interviewee as for the interviewer. Taking 10 minutes to think about what shirt you’re wearing, the expression on your face, and even the placement of your webcam and lighting fixtures (for an online interview), can give you confidence and perceived control over the interview, that will translate to answers coming more easily, and with fewer hiccups. An interviewer will remember how you looked when they spoke to you, and you want to look like someone that they could work with for 3 months.

[ssba]

StartupYard Alum Brand Embassy Announces $1M Seed Funding

/in /by
1150687_706236896058372_97851519_o-1

Brand Embassy gets $1M in seed funding as it opens six new offices worldwide

Brand Embassy has closed a $1 million round of seed investment with two funds and is opening six new offices globally. The move comes as customer service moves towards social media and away from traditional channels such as toll-free phone numbers.

Brand Embassy equips companies to answer customer service inquiries through social media channels such as Facebook and Twitter, enabling them to provide “social care” for their customers with its SaaS platform.

Brand Embassy has moved quickly to establish its niche in the evolving customer service industry. “Our platform has been used by over fifty large international companies across the world,” says Vit Horky, Co-founder and CEO of Brand Embassy. “They’ve handled over 7.5 million service issues via Brand Embassy since 2012. Currently our strongest sectors are with telecoms and financial groups – two sectors where customers demand a fast and accurate response to their queries.”

Social media is becoming a more important channel for major brands to have two-way communication with consumers than as a direct marketing tool. According to J.D. Power and Associates’ 2013 Social Media Benchmark report, service issues now outrank marketing when it comes to consumer activity on social media. Younger consumers (18-29 years old) are now nearly twice as likely to use their favorite brands’ social media sites for servicing interactions (43%) than for marketing (23%).

The investment comes as Brand Embassy prepares to take its SaaS platform to a global audience. “We’ve opened offices in the USA, Dubai, Portugal, Slovakia, Spain, and Latin America to complement our offices in Prague and London,” states Vit. “The partnership with new investors will help us expand our sales and product development team and launch new unique product features.”

The two new investors in Brand Embassy –  Rockaway Capital and Spread Capital – see a huge potential for Brand Embassy and its emerging segment. “ I see Brand Embassy as a global project which already has a strong position and I am anticipating substantial growth as this whole segment of caring for customers via social networks grows in importance,” says Jakub Havrlant, internet entrepreneur and investor, who invested through his Rockaway Capital investment vehicle. Josef Chvojka, representing the Spread Capital Fund says: “We believe that Brand Embassy, and its team led by Vit Horky, have the courage and competence to change the world of customer interaction. We are proud to be part of a global success.“

The new investment is an exit deal for two early Brand Embassy investors: StartupYard, a CEE technology accelerator, and Michal Nydrle, owner of the Kindred Group media group. “This is a great confirmation of our trust in the Brand Embassy team. We accelerated them three years ago when they were only two founders with a good idea. We’re thrilled for them and wish them the best with their new partners.” says Cedric Maloux, CEO of StartupYard.

Team - Ustredni Foto

About Brand Embassy:

Brand Embassy brings customer service to social media with its SaaS platform for managing service inquiries posted on Facebook, Twitter and other social networks. Brand Embassy software is used by Vodafone, Telefonica O2, T-Mobile, KIA, ING, Prezi, GE Money and other leading companies. Winner of the Red Herring Europe Award 2013, Brand Embassy was founded in Prague, the Czech Republic and has offices in Dubai, Latin America, Slovakia, Spain, Portugal, the United Kingdom, and the United States.

About Rockaway Capital:

Rockaway Capital was created in mid-2013 by Jakub Havrlant to specialize in web projects that reach over into the offline world and transform user behavior. By end-year, the combined revenue of Rockaway projects was nearly 40 million USD. Rockaway plans to  invest 15 million USD into Czech and international projects through its newly opened Capital Fund during 2014.

 About Spread Capital:

Spread Capital is a new investment company that began building its portfolio in 2013. Its activities are focused on projects which combine technical innovation, market originality, and user enthusiasm. Spread Capital has up to €20m of raised capital available for investment in 2014.

[ssba]

Ondrej Bartos on Talking to VCs: “Focus on Problems”

/in , /by

This week, StartupYard investor and VC, Ondrej Bartos, of Credo Ventures answered some of my questions on venture capital investing, and dealing with early stage startups. Ondrej has recently been cited as one of the top European investors in technology by Nibletz.com, and is a mentor at Startupyard. Here’s what he had to say.

bartos
 Hi Ondrej, can you tell us a bit about how you got involved with Startupyard?
I first got involved as a mentor back when Lukas and Petr founded SY in 2011, and after the first year we decided as Credo Ventures to become an investor and shareholder, as we felt that SY was very well-positioned to support the startup ecosystem in Central Europe which is something we as a venture firm very much hope for and is crucial for our business. So in 2012 we became a very active investor, we supported SY to get into GAN, to extend its mentor group, and to get funding for the following classes. And it’s been great fun as well as inspiration working with both the SY team and the accelerated startups.

You’ve been a VC for a long time. Can you talk a bit about your career, and how the field has changed during your tenure?

Hey, it hasn’t been such a long time… 🙂 I actually first started as a small angel investor, then I worked for a Polish VC MCI Management, but I only co-founded Credo in 2009 – and that’s what I consider the real start of my VC career. I did make some nice venture deals in my MCI days, like Geewa for which we then hired Cedric as a CEO [Cedric Maloux is now CEO of Startupyard] or Nostromo which was a terrible failure due to Mr. Jobs’ genius move with the iPhone. I made successful investments like Retail Info (sold to Mafra) or Invia.cz (which still is the largest online travel commerce player in Central Europe). But only with Credo I really started focusing on what my passion is: seeking and backing the future global stars, the innovators and disruptors who aim to create from scratch something which can change people’s lives.
In the world of startups, I think 5 years may seem like a very long time to some people. Are you settled into this new role, or do you dream of even bigger things? 
Stay hungry, of course I dream. I dream of Credo fund 2 and 3 and 4… I dream of another billion-dollar-company from Central Europe, backed by Credo. I dream of a Czech startup solving world’s poverty or schizophrenia.

What about Credo Ventures (your VC firm)? Why did you decide to found it, and what’s your overall mission?

As already said, my passion are entrepreneurs who aim to disrupt ways markets operate now, with the use of technology which is our main sector focus. We consider venture capital is that it’s a tool to help the smartest and most capable entrepreneurs to make their dreams happen. We are not financiers, we are backers of entrepreneurs. And we are entrepreneurs ourselves.

How has the environment in Central Europe changed for VCs in the in the past 5 years? Good changes, bad changes? How does the tech business here stack up against bigger markets?

This really depends on the point of view. You could say the environment hasn’t changed too much, we as VCs still receive only a couple of hundred projects per year, most of which are really low quality (and I’m being diplomatic here), we still have to explain what we seek in projects and what we look for in entrepreneurs, people generally still don’t understand the basics (of our business), people still don’t understand what startups are (even the ones who claim to be startups). On the other hand, comparing to the situation 5 years ago, we have a NYSE traded tech company AVG from the Czech Republic which attacks $1B market cap, we have a NASDAQ traded company LogMeIn from Hungary which attacks $1B market cap. We have another $1B security company Avast which recently announced investment from CVC Capital Partners. We saw successful exits of local startups Cognitive Security (which we happened to be an investor in) to Cisco Systems or Mdot to GoDaddy. The number of projects we saw in 2010 was a third of what we saw in 2013 (550 projects). There are a number of accelerators and incubators, foreign VCs are looking around and finally are willing to invest into Central European startups – we have coinvested with Atlas, Index, Flybridge, Baseline and other U.S.- and UK-based funds. I am very optimistic…

If you’re comfortable talking about it, what was your all-time biggest mistake as an investor, or as an entrepreneur? The more apocalyptic, the better.

The most apocalyptic one I will skip, sorry. Maybe in a couple of years…
I will say Nostromo was certainly one of them. It was a great team, great entrepreneurs, solid product and vision… if only Steve Jobs didn’t introduce iPhone and change mobile telephony forever. We made the investment at a time when analysts and researchers predicted something totally different than what actually then happened. $1M down the drain, nothing worse, no apocalypse.
 I think startupers do live in fear that Google or Apple or Facebook will introduce a small change (like an added functionality) that will dash their dreams to peaces. Whole businesses have been made obsolete by big players this way. Is that happening more, or is the playing field just getting wider for new ideas? Can you tell us a little more about Nostromo?
Well, when you’re a startup there’s always a risk of someone huge with deep pockets and 64 billion dollars in the bank will launch a product or service which would make you irrelevant. It happens. But I wouldn’t say it happens more often. Also, startups should be carefully not to base the whole business on just a feature addable by Google or Facebook.
About Nostromo… well it was a startup in the pre-iPhone era, mobile phones were dump phones and the only way people could personalize them was through purchases of logos, ringtones, wallpapers and games, mostly through specialized portals and mobile carriers. Nostromo was a producer of such personalization premium branded content, after we invested in 2006 they acquired some big brands like Garfield, TNMT or Kung Fu Panda, started distribute them globally. In 2007 the iPhone came. In 2009 the market which according to analysts’ reports in 2006 was supposed to grow rapidly, was dead. Simple and quick as that.

What are a couple of things startups are most often not prepared for when they meet you, and start talking to your about their products and their future?

In general I must say that startups come to us better prepared than a couple of years back – which could mean that startup founders in Central Europe have more access to information and lessons learnt from other startups from around the world, and are becoming more aware of the whole startup investing thing. On the other hand there are always things to improve – in general I would say that the most common mistake would be insufficient understanding of competition and customers. Who is solving the same problem and how, and who should be buying/using the product, what exactly is the motivation, what is solving the problem now…

What kinds of things can really turn you off from a potential investment? How much does personality matter in the founders, or is it all about the business?

It is all about people! And there are tons of things that turn me off – crazy ambitions, lack of ambitions, inability to listen, lack of knowledge of the target market, laziness, and the list could go on…

Some people are scared of VCs. Are there any good reasons to be wary of dealing with many of them?

There is no rational reason to be scared of VCs, or at least no more than being scared of swimmers. Of course, you need to be aware that venture capital is not for everybody, and it could be uncomfortable for an entrepreneur who doesn’t have the ambition to grow rapidly or change the world, due to unaligned interests. So if you want to create a lifestyle business with organic growth generating steady income, don’t go to VCs. VCs just can be scary as they often provide very direct and brutal feedback, but again – mostly for the ones who don’t want to hear feedback.

What are some things founders are often preoccupied with, but which don’t matter as much as they think?

As cliché and banal this may sound, very often founders are in love with their product or offering, and they spend way too much time on brushing it and playing with it without having any feedback from customers. Then they release their polished product to the market and often realize that it doesn’t solve any problem and there are no customers who would want to pay for the product, or even use it at all – so they spent a lot of time and energy on a beautiful useless product. Just to be clear, we love founders who are passionate about the product – but the passion has to be about the problem–solving attributes of the product, not the product itself.

What’s the best pitch you’ve ever heard, and what made it so great?

Before I answer this, I would just like to remind that a great pitch doesn’t mean it’s a great company and vice versa – I’ve heard really bad pitches from founders who ended up being super successful and I saw an awesome pitch by an entrepreneur who failed badly. When you think about it, pitching is really very much like the sports in which judges make calls – impossible to measure, it is about subjective opinions and feelings – some people feel Sarka Pancochova should have won the olympic medal, judges thought otherwise… But the last pitch I’ve heard was actually from a team we decided to invest in – and it will be announced soon, so I won’t tell you the name. But it was a pitch which gives you goose bumps because you feel this is something potentially world changing. As my colleague Andrej says, that’s the feeling to be a VC for – BTW, I would highly recommend Andrej’s blog, it is great for startup founders who are considering coming to us for funding – it gives them a great recipe.

What are 5 things you want a company to have accomplished before you consider investing?b

Well, there’s pretty much just 1 thing to accomplish: convince us that we should invest. But seriously, we want the founders to convince us on the existence of a problem or pain in the market, show us big enough potential in solving that problem, explain us what the solution is, build a strong and committed team and ideally show us some initial traction proving their point and ability to execute. Not difficult, ay? 🙂

We got some push-back, even from locals, when we declared that Prague was the best new place to start a company and run a startup. How do you see Prague’s future as a cradle of innovation?

Prague is an awesome place, both to run a startup and to live in… 🙂 You can change the world no matter where you’re based. Although it is still the case that for some startups you should at least have access and exposure in places like Silicon Valley, but you can still base your startup anywhere else.

[ssba]

60 Teams Have Applied for StartupYard 2014

/in /by

After 10 intense weeks, we closed our applications last Friday at midnight.

60 different teams have applied to our program. About 60% of the applications are coming from outside the Czech Republic from countries as far as India, Brazil or the USA.  Some of the projects look extremely exciting and we are very glad they decided to apply to our program. It’s going to be a fantastic multicultural group who will join us this Spring and this should make the whole StartupYard experience an even better one for everybody involved.

But we’re not there yet. Not everybody will join of course and not all the projects will be selected.

Only 10% of the applicants will join us and we have already started our evaluation process and will keep you, dear Reader, inform on the progress as we get to know them better and understand what their visions are. The difficult task of making a choice is now upon us. Stay tuned!

[ssba]